msci-10q_20220630.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 19, 2022, there were 80,502,940 shares of the registrant’s common stock, par value $0.01, outstanding.

Our corporate headquarters is located at 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York, 10007, and our telephone number is (212) 804-3900. We maintain a website on the internet at www.msci.com. The contents of our website are not a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains reports, proxy and information statements and other information that we file electronically with the SEC at www.sec.gov. We also make available free of charge, on or through our website, these reports, proxy statements and other information as soon as reasonably practicable following the time they are electronically filed with or furnished to the SEC. To access these, click on the “SEC Filings” link found on our Investor Relations homepage (http://ir.msci.com).

We also use our Investor Relations homepage, Corporate Responsibility homepage and corporate Twitter account (@MSCI_Inc) as channels of distribution of Company information. The information we post through these channels may be deemed material.

Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about us when you enroll your email address by visiting the “Email Alert Subscription” section of our Investor Relations homepage at http://ir.msci.com/alerts.cfm. The contents of our website, including our Investor Relations homepage, Corporate Responsibility homepage and social media channels are not, however, a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

We have included in this Quarterly Report on Form 10-Q, and from time to time may make in our public filings, press releases or other public statements, certain statements that constitute forward-looking statements. In addition, our management may make forward-looking statements to analysts, investors, representatives of the media and others. These forward-looking statements are not historical facts and represent only MSCI’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and beyond our control.

In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology. Statements concerning our financial position, business strategy and plans or objectives for future operations are forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect our actual results, levels of activity, performance or achievements. Such risks and uncertainties include those set forth under “Risk Factors” in Part I, Item 1A of the 2021 Annual Report on Form 10-K filed with the SEC on February 11, 2022. Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. The forward-looking statements in this report speak only as of the time they are made and do not necessarily reflect our outlook at any other point in time. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or for any other reason. Therefore, readers should carefully review the risk factors set forth in other reports or documents we file from time to time with the SEC.

	As of
	June 30,			December 31,
	2022			2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	842,300		$	1,421,449
Accounts receivable, net of allowances		586,815			664,511
Prepaid income taxes		15,900			5,951
Prepaid and other assets		44,066			51,499
Total current assets		1,489,081			2,143,410
Property, equipment and leasehold improvements, net		59,390			66,715
Right of use assets		128,122			144,584
Goodwill		2,231,154			2,236,386
Intangible assets, net		576,362			593,341
Equity method investment		216,554			218,763
Deferred tax assets		64,216			40,119
Other non-current assets		68,473			63,385
Total assets	$	4,833,352		$	5,506,703

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	9,295		$	13,448
Income taxes payable		38,615			59,635
Accrued compensation and related benefits		106,797			207,640
Current portion of long-term debt		6,532			—
Other accrued liabilities		151,021			145,302
Deferred revenue		808,020			824,912
Total current liabilities		1,120,280			1,250,937
Long-term debt		4,505,338			4,161,422
Long-term operating lease liabilities		132,494			150,029
Deferred tax liabilities		3,841			3,650
Other non-current liabilities		97,845			104,132
Total liabilities		5,859,798			5,670,170

Commitments and Contingencies (see Note 8)

Shareholders’ equity (deficit):
Preferred stock (par value $0.01, 100,000,000 shares authorized; no shares issued)		—			—
Common stock (par value $0.01; 750,000,000 common shares authorized; 133,604,132 and 133,162,178 common shares issued and 80,496,258 and 82,439,449 common shares outstanding at June 30, 2022 and December 31, 2021, respectively)		1,336			1,332
Treasury shares, at cost (53,107,874 and 50,722,729 common shares held at June 30, 2022 and December 31, 2021, respectively)		(5,699,069	)		(4,540,144	)
Additional paid in capital		1,492,334			1,457,623
Retained earnings		3,243,654			2,976,517
Accumulated other comprehensive loss		(64,701	)		(58,795	)
Total shareholders’ equity (deficit)		(1,026,446	)		(163,467	)
Total liabilities and shareholders’ equity (deficit)	$	4,833,352		$	5,506,703

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
	(unaudited)
Operating revenues	$	551,806		$	498,180		$	1,111,751		$	976,603

Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)		100,768			87,327			203,539			173,107
Selling and marketing		61,073			58,191			127,126			114,658
Research and development		23,916			27,531			52,238			52,393
General and administrative		36,724			30,182			82,291			64,910
Amortization of intangible assets		22,179			30,396			43,899			45,464
Depreciation and amortization of property, equipment and leasehold improvements		6,765			7,020			13,299			14,163
Total operating expenses		251,425			240,647			522,392			464,695

Operating income		300,381			257,533			589,359			511,908

Interest income		(924	)		(347	)		(1,222	)		(733	)
Interest expense		41,085			39,557			81,799			77,141
Other expense (income)		188			22,628			(193	)		23,777

Other expense (income), net		40,349			61,838			80,384			100,185

Income before provision for income taxes		260,032			195,695			508,975			411,723
Provision for income taxes		49,445			30,272			69,965			49,481
Net income	$	210,587		$	165,423		$	439,010		$	362,242

Earnings per share:
Basic	$	2.60		$	2.01		$	5.40		$	4.39
Diluted	$	2.59		$	1.99		$	5.37		$	4.34

Weighted average shares outstanding:
Basic		80,923			82,454			81,255			82,546
Diluted		81,295			83,295			81,789			83,393

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
	(unaudited)
Net income	$	210,587		$	165,423		$	439,010		$	362,242
Other comprehensive (loss) income:
Foreign currency translation adjustments		(11,796	)		879			(14,746	)		(826	)
Income tax effect		1,606			(35	)		2,468			577
Foreign currency translation adjustments, net		(10,190	)		844			(12,278	)		(249	)

Pension and other post-retirement adjustments		7,376			(59	)		7,486			197
Income tax effect		(1,070	)		22			(1,114	)		(98	)
Pension and other post-retirement adjustments, net		6,306			(37	)		6,372			99
Other comprehensive (loss) income, net of tax		(3,884	)		807			(5,906	)		(150	)
Comprehensive income	$	206,703		$	166,230		$	433,104		$	362,092

											Accumulated
						Additional					Other
	Common		Treasury			Paid in		Retained			Comprehensive
	Stock		Stock			Capital		Earnings			Income (Loss)			Total
	(unaudited)
Balance at December 31, 2021	$	1,332	$	(4,540,144	)	$	1,457,623	$	2,976,517		$	(58,795	)	$	(163,467	)
Net income									228,423						228,423
Dividends declared ($1.04 per common share)									(87,280	)					(87,280	)
Dividends paid in shares							77								77
Other comprehensive income (loss), net of tax												(2,022	)		(2,022	)
Common stock issued		4													4
Shares withheld for tax withholding and exercises				(105,000	)										(105,000	)
Compensation payable in common stock							22,754								22,754
Common stock repurchased and held in treasury				(772,657	)										(772,657	)
Common stock issued to Directors and (held in)/released from treasury				(21	)										(21	)

Balance at March 31, 2022		1,336		(5,417,822	)		1,480,454		3,117,660			(60,817	)		(879,189	)
Net income									210,587						210,587
Dividends declared ($1.04 per common share)									(84,593	)					(84,593	)
Dividends paid in shares							22								22
Other comprehensive income (loss), net of tax												(3,884	)		(3,884	)
Common stock issued															—
Shares withheld for tax withholding and exercises				(3,862	)										(3,862	)
Compensation payable in common stock							11,858								11,858
Common stock repurchased and held in treasury				(276,994	)										(276,994	)
Common stock issued to Directors and (held in)/released from treasury				(391	)										(391	)
Balance at June 30, 2022	$	1,336	$	(5,699,069	)	$	1,492,334	$	3,243,654		$	(64,701	)	$	(1,026,446	)

Balance at December 31, 2020	$	1,328	$	(4,342,535	)	$	1,402,537	$	2,554,295		$	(58,859	)	$	(443,234	)
Net income									196,819						196,819
Dividends declared ($0.78 per common share)

Delaware		13-4038723
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

7 World Trade Center 250 Greenwich Street, 49^th Floor New York, New York		10007
(Address of Principal Executive Offices)		(Zip Code)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		MSCI		New York Stock Exchange

		Page
	Part I – Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40

	Part II – Other Information
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6.	Exhibits	42


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐