MSCI Inc. - Quarter Report: 2021 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2021


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

For the transition period from to

Commission file number 001-33812

MSCI INC.

(Exact Name of Registrant as Specified in its Charter)

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)

Registrant’s telephone number, including area code: (212) 804-3900

Securities registered pursuant to Section 12(b) of the Act:

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

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.

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

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 April 20, 2021, there were 82,422,647 shares of the registrant’s common stock, par value $0.01, outstanding.

FOR THE QUARTER ENDED MARCH 31, 2021

TABLE OF CONTENTS

		Page
	Part I – Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37

	Part II – Other Information
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	39

AVAILABLE INFORMATION

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 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.

FORWARD-LOOKING STATEMENTS

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 2020 Annual Report on Form 10-K filed with the SEC on February 12, 2021. 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 Securities and Exchange Commission (the “SEC”).

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except per share and share data)

	As of
	March 31,			December 31,
	2021			2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,747,147		$	1,300,521
Accounts receivable, net of allowances		506,849			558,569
Prepaid income taxes		13,657			20,097
Prepaid and other assets		38,986			46,411
Total current assets		2,306,639			1,925,598
Property, equipment and leasehold improvements, net		75,712			80,446
Right of use assets		150,716			153,330
Goodwill		1,566,541			1,566,022
Intangible assets, net		229,595			234,748
Equity method investment		187,889			190,898
Deferred tax assets		24,131			23,627
Other non-current assets		24,306			23,978
Total assets	$	4,565,529		$	4,198,647

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	7,259		$	14,253
Income taxes payable		25,764			26,195
Accrued compensation and related benefits		66,392			161,557
Current maturities of long-term debt		496,425			—
Other accrued liabilities		157,433			143,894
Deferred revenue		672,054			675,870
Total current liabilities		1,425,327			1,021,769
Long-term debt		3,369,469			3,366,777
Long-term operating lease liabilities		149,296			152,342
Deferred tax liabilities		14,414			12,774
Other non-current liabilities		88,605			88,219
Total liabilities		5,047,111			4,641,881

Commitments and Contingencies (see Note 7)

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; 133,130,562 and 132,829,175 common shares issued and 82,422,314 and 82,573,407 common shares outstanding at March 31, 2021 and December 31, 2020, respectively)		1,331			1,328
Treasury shares, at cost (50,708,248 and 50,255,768 common shares held at March 31, 2021 and December 31, 2020, respectively)		(4,529,709	)		(4,342,535	)
Additional paid in capital		1,421,445			1,402,537
Retained earnings		2,685,167			2,554,295
Accumulated other comprehensive loss		(59,816	)		(58,859	)
Total shareholders' equity (deficit)		(481,582	)		(443,234	)
Total liabilities and shareholders' equity (deficit)	$	4,565,529		$	4,198,647

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

	Three Months Ended
	March 31,
	2021			2020
	(unaudited)
Operating revenues	$	478,423		$	416,780

Operating expenses:
Cost of revenues		85,780			74,609
Selling and marketing		56,467			55,549
Research and development		24,862			26,562
General and administrative		34,728			30,833
Amortization of intangible assets		15,068			13,776
Depreciation and amortization of property, equipment and leasehold improvements		7,143			7,567
Total operating expenses		224,048			208,896

Operating income		254,375			207,884

Interest income		(386	)		(3,483	)
Interest expense		37,584			40,231
Other expense (income)		1,149			8,287

Other expense (income), net		38,347			45,035

Income before provision for income taxes		216,028			162,849
Provision for income taxes		19,209			14,724
Net income	$	196,819		$	148,125

Earnings per basic common share	$	2.38		$	1.75

Earnings per diluted common share	$	2.36		$	1.73

Weighted average shares outstanding used in computing earnings per share
Basic		82,640			84,870
Diluted		83,493			85,548

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended
	March 31,
	2021			2020
	(unaudited)
Net income	$	196,819		$	148,125
Other comprehensive (loss) income:
Foreign currency translation adjustments		(1,705	)		(12,363	)
Income tax effect		612			2,468
Foreign currency translation adjustments, net		(1,093	)		(9,895	)

Pension and other post-retirement adjustments		256			306
Income tax effect		(120	)		(36	)
Pension and other post-retirement adjustments, net		136			270
Other comprehensive (loss) income, net of tax		(957	)		(9,625	)
Comprehensive income	$	195,862		$	138,500

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)

											Accumulated
						Additional					Other
	Common		Treasury			Paid in		Retained			Comprehensive
	Stock		Stock			Capital		Earnings			Income (Loss)			Total
	(unaudited)
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)									(65,947	)					(65,947	)
Dividends paid in shares							66								66
Other comprehensive income (loss), net of tax												(957	)		(957	)
Common stock issued		3													3
Shares withheld for tax withholding and exercises				(52,814	)										(52,814	)
Compensation payable in common stock							18,842								18,842
Common stock repurchased and held in treasury				(134,340	)										(134,340	)
Common stock issued to Directors and (held in)/released from treasury				(20	)										(20	)
Balance at March 31, 2021	$	1,331	$	(4,529,709	)	$	1,421,445	$	2,685,167		$	(59,816	)	$	(481,582	)

Balance at December 31, 2019	$	1,324	$	(3,565,784	)	$	1,351,031	$	2,199,294		$	(62,579	)	$	(76,714	)
Net income									148,125						148,125
Cumulative-effect adjustment									631						631
Dividends declared ($0.68 per common share)									(59,233	)					(59,233	)
Dividends paid in shares							78								78
Other comprehensive income (loss), net of tax												(9,625	)		(9,625	)
Common stock issued		4													4
Shares withheld for tax withholding				(47,195	)										(47,195	)
Compensation payable in common stock							15,333								15,333
Common stock repurchased and held in treasury				(325,699	)										(325,699	)
Common stock issued to Directors and (held in)/released from treasury				(36	)										(36	)
Balance at March 31, 2020	$	1,328	$	(3,938,714	)	$	1,366,442	$	2,288,817		$	(72,204	)	$	(354,331	)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Three Months Ended
	March 31,
	2021			2020
	(unaudited)
Cash flows from operating activities
Net income	$	196,819		$	148,125
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets		15,068			13,776
Stock-based compensation expense		18,910			15,163
Depreciation and amortization of property, equipment and leasehold improvements		7,143			7,567
Amortization of right of use assets		6,128			5,989
Amortization of debt origination fees		1,107			1,089
Loss on extinguishment of debt		—			9,966
Deferred taxes		1,142			(5,165	)
Other adjustments		3,363			337
Changes in assets and liabilities:
Accounts receivable		50,630			15,926
Prepaid income taxes		6,312			3,330
Prepaid and other assets		5,611			296
Accounts payable		(7,901	)		(1,536	)
Accrued compensation and related benefits		(94,323	)		(98,658	)
Income taxes payable		1,709			2,229
Other accrued liabilities		12,888			(3,563	)
Deferred revenue		(2,790	)		2,252
Long-term operating lease liabilities		(5,898	)		(6,078	)
Other		(461	)		1,725
Net cash provided by operating activities		215,457			112,770

Cash flows from investing activities
Acquisition of equity method investment		—			(190,822	)
Capitalized software development costs		(9,696	)		(7,203	)
Capital expenditures		(664	)		(3,613	)
Net cash used in investing activities		(10,360	)		(201,638	)

Cash flows from financing activities
Proceeds from borrowings, inclusive of premium		503,750			405,000
Repayment of borrowings		—			(307,875	)
Repurchase of common stock held in treasury		(187,154	)		(372,894	)
Payment of dividends		(66,087	)		(59,378	)
Payment of debt issuance costs in connection with debt		(4,967	)		(4,934	)
Net cash provided by (used in) financing activities		245,542			(340,081	)

Effect of exchange rate changes		(4,013	)		(10,762	)

Net increase (decrease) in cash		446,626			(439,711	)
Cash and cash equivalent, beginning of period		1,300,521			1,506,567

Cash and cash equivalent, end of period	$	1,747,147		$	1,066,856

Supplemental disclosure of cash flow information:
Cash paid for interest	$	19,326		$	40,495
Cash paid for income taxes, net of refunds received	$	9,014		$	5,684

Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities	$	3,687		$	4,987

Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid	$	1,208		$	616

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. INTRODUCTION AND BASIS OF PRESENTATION

MSCI Inc., together with its wholly owned subsidiaries (the “Company” or “MSCI”) provides critical decision support tools and services that bring greater transparency to the global financial markets. MSCI’s tools and services include indexes; portfolio construction tools and risk-management services; environmental, social and governance (“ESG”) and climate solutions; and real estate benchmarks, return analytics services and market insights; much of which can be accessed by clients through multiple channels and platforms.

Basis of Presentation and Use of Estimates

These unaudited condensed consolidated financial statements include the accounts of MSCI and its wholly owned subsidiaries and include all adjustments of a normal, recurring nature necessary to state fairly the financial condition as of March 31, 2021 and December 31, 2020, the results of operations, comprehensive income and shareholders’ equity (deficit) for the three months ended March 31, 2021 and 2020 and cash flows for the three months ended March 31, 2021 and 2020. The unaudited condensed consolidated statement of financial condition and related financial statement information as of December 31, 2020 have been derived from the 2020 audited consolidated financial statements but do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in MSCI’s Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for interim periods are not necessarily indicative of results for the entire year.

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. These accounting principles require the Company to make certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of operating revenues and expenses during the periods presented. Significant estimates and assumptions made by management include the deferral and recognition of revenue, research and development and software capitalization, assessment of impairment of long-lived assets, accrued compensation, income taxes, incremental borrowing rates and other matters that affect the unaudited condensed consolidated financial statements and related disclosures. The Company believes that estimates used in the preparation of these unaudited condensed consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Intercompany balances and transactions are eliminated in consolidation.

Certain prior period amounts have been reclassified to conform to the current period presentation. Effective January 1, 2021, the ESG and Climate operating segment is being presented as a separate reportable segment. The operating segments of Real Estate and The Burgiss Group, LLC (“Burgiss”) do not individually meet the segment reporting thresholds and have been combined and presented as part of the All Other – Private Assets reportable segment. The Company’s ownership interest in Burgiss, a global provider of investment decision tools for private capital, is classified as an equity-method investment. Therefore, the All Other – Private Assets segment does not include the Company’s proportionate share of operating revenues and Adjusted EBITDA related to Burgiss. The Company’s proportionate share of the income or loss from its equity-method investment in Burgiss is not a component of Adjusted EBITDA as it is reported as a component of other (expense) income, net.

Concentrations

For the three months ended March 31, 2021 and 2020, BlackRock, Inc. accounted for 12.0% and 11.3% of the Company’s consolidated operating revenues, respectively. For the three months ended March 31, 2021 and 2020, BlackRock, Inc. accounted for 19.2% and 18.5% of the Index segment operating revenues, respectively. No single customer represented 10.0% or more of operating revenues within the Analytics, ESG and Climate and All Other – Private Assets segments for the three months ended March 31, 2021 and 2020.

Allowance for Credit Losses on Accounts Receivable

Following the adoption of Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” effective beginning January 1, 2020, the Company records an allowance on customer accounts at the time of billing based on the estimated amount of the billing that will not be collected.

Changes in the allowance for credit losses on doubtful accounts receivable from December 31, 2019 to March 31, 2021 were as follows:

	Amount
	(in thousands)
Balance as of December 31, 2019	$	1,715
Addition (reduction) to credit loss expense		1,712
Write-offs, net of recoveries		(1,844	)
Balance as of December 31, 2020	$	1,583
Addition (reduction) to credit loss expense		290
Adjustments and write-offs, net of recoveries		(137	)
Balance as of March 31, 2021	$	1,736

2. RECENT ACCOUNTING STANDARDS UPDATES

There are no pending accounting standards updates that are currently expected to have a material impact on the Company.

3. REVENUE RECOGNITION

MSCI’s revenues are characterized by product type, which broadly reflects the nature of how they are recognized. The Company’s revenue types are recurring subscription, asset-based fees and non-recurring revenues. The Company also reports revenues by segment.

The tables that follow present the disaggregated revenues for the periods indicated:

	For the Three Months ended March 31, 2021
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Revenue Types
Recurring subscriptions	$	155,117	$	131,672	$	34,140	$	16,803	$	337,732
Asset-based fees		126,706		—		—		—		126,706
Non-recurring		10,668		2,345		610		362		13,985
Total	$	292,491	$	134,017	$	34,750	$	17,165	$	478,423

	For the Three Months ended March 31, 2020
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Revenue Types
Recurring subscriptions	$	139,840	$	124,065	$	24,901	$	15,619	$	304,425
Asset-based fees		100,196		—		—		—		100,196
Non-recurring		9,220		1,443		332		1,164		12,159
Total	$	249,256	$	125,508	$	25,233	$	16,783	$	416,780

The tables that follow present the change in accounts receivable and in deferred revenue between the dates indicated:

	Accounts receivable			Deferred revenue
	(in thousands)
Opening (12/31/2020)	$	558,569		$	675,870
Closing (03/31/2021)		506,849			672,054
Increase/(decrease)	$	(51,720	)	$	(3,816	)

	Accounts receivable			Deferred revenue
	(in thousands)
Opening (12/31/2019)	$	499,268		$	574,656
Closing (03/31/2020)		481,990			574,472
Increase/(decrease)	$	(17,278	)	$	(184	)

The amounts of revenue recognized in the periods that were included in the opening current deferred revenue, which reflects contract liability amounts, were $270.3 million and $212.4 million for the three months ended March 31, 2021 and 2020, respectively. The difference between the opening and closing balances of the Company’s deferred revenue was primarily driven by an increase in the amortization of deferred revenue to operating revenues, partially offset by an increase in billings. MSCI had an insignificant long-term deferred revenue balance as of March 31, 2021, reflected as a part of “Other non-current liabilities” on its Unaudited Condensed Consolidated Statement of Financial Condition.

For contracts that have a duration of one year or less, the Company has not disclosed either the remaining performance obligation as of the end of the reporting period or when the Company expects to recognize the revenue. The remaining performance obligations for contracts that have a duration of greater than one year and the periods in which they are expected to be recognized are as follows:

	As of
	March 31,
	2021
	(in thousands)
First 12-month period	$	337,369
Second 12-month period		195,485
Third 12-month period		59,023
Periods thereafter		19,339
Total	$	611,216

4. EARNINGS PER COMMON SHARE

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Common shares outstanding include common stock and vested restricted stock unit awards where recipients have satisfied the explicit vesting terms. Diluted EPS reflects the assumed conversion of all dilutive securities.

The following table presents the computation of basic and diluted EPS:

	Three Months Ended
	March 31,
	2021		2020
(in thousands, except per share data)
Net income	$	196,819	$	148,125

Basic weighted average common shares outstanding		82,640		84,870
Effect of dilutive securities:
Stock options and restricted stock units		853		678
Diluted weighted average common shares outstanding		83,493		85,548

Earnings per basic common share	$	2.38	$	1.75

Earnings per diluted common share	$	2.36	$	1.73

5. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Property, equipment and leasehold improvements, net consisted of the following as of the specified dates:

	As of
	March 31,			December 31,
	2021			2020
	(in thousands)
Computer & related equipment	$	185,390		$	186,786
Furniture & fixtures		14,949			15,276
Leasehold improvements		55,993			56,537
Work-in-process		1,118			2,996
Subtotal		257,450			261,595
Accumulated depreciation and amortization		(181,738	)		(181,149	)
Property, equipment and leasehold improvements, net	$	75,712		$	80,446

Depreciation and amortization expense of property, equipment and leasehold improvements was $7.1 million and $7.6 million for the three months ended March 31, 2021 and 2020, respectively.

6. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following table presents goodwill by reportable segment:

(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Goodwill at December 31, 2020	$	1,205,758	$	290,976	$	48,047	$	21,241	$	1,566,022
Foreign exchange translation adjustment		321		—		—		198		519
Goodwill at March 31, 2021	$	1,206,079	$	290,976	$	48,047	$	21,439	$	1,566,541

Intangible Assets, Net

The following table presents the amount of amortization expense related to intangible assets by category for the periods indicated:

	Three Months Ended
	March 31,
(in thousands)	2021		2020
Amortization expense of acquired intangible assets	$	8,368	$	8,778
Amortization expense of internally developed capitalized software		6,700		4,998
Total amortization of intangible assets expense	$	15,068	$	13,776

The gross carrying and accumulated amortization amounts related to the Company’s intangible assets were as follows:

	As of
	March 31,			December 31,
	2021			2020
	(in thousands)
Gross intangible assets:
Customer relationships	$	356,700		$	356,700
Trademarks/trade names		207,300			207,300
Technology/software		300,607			290,908
Proprietary data		28,627			28,627
Subtotal		893,234			883,535
Foreign exchange translation adjustment		(4,795	)		(5,262	)
Total gross intangible assets	$	888,439		$	878,273
Accumulated amortization:
Customer relationships	$	(258,925	)	$	(253,465	)
Trademarks/trade names		(145,490	)		(143,207	)
Technology/software		(238,361	)		(231,496	)
Proprietary data		(16,202	)		(15,730	)
Subtotal		(658,978	)		(643,898	)
Foreign exchange translation adjustment		134			373
Total accumulated amortization	$	(658,844	)	$	(643,525	)
Net intangible assets:
Customer relationships	$	97,775		$	103,235
Trademarks/trade names		61,810			64,093
Technology/software		62,246			59,412
Proprietary data		12,425			12,897
Subtotal		234,256			239,637
Foreign exchange translation adjustment		(4,661	)		(4,889	)
Total net intangible assets	$	229,595		$	234,748

The following table presents the estimated amortization expense for the remainder of the year ending December 31, 2021 and succeeding years:

Years Ending December 31,	Amortization Expense
	(in thousands)
Remainder of 2021	$	46,478
2022		55,353
2023		44,685
2024		36,164
2025		21,026
Thereafter		25,889
Total	$	229,595

7. COMMITMENTS AND CONTINGENCIES

Senior Unsecured Notes. The Company had an aggregate of $3,900.0 million in senior unsecured notes (collectively, the “Senior Notes”) outstanding at March 31, 2021, as presented in the table below:

		Principal Amount Outstanding at		Carrying Value at		Carrying Value at		Fair Value at		Fair Value at
	Maturity Date	March 31, 2021		March 31, 2021		December 31, 2020		March 31, 2021		December 31, 2020
	(in thousands)
Long-term debt
4.75% senior unsecured notes due 2026	August 1, 2026		500,000		496,425		496,257		518,240		522,325
5.375% senior unsecured notes due 2027	May 15, 2027		500,000		495,982		495,819		535,995		538,100
4.000% senior unsecured notes due 2029	November 15, 2029		1,000,000		990,637		990,364		1,029,700		1,073,040
3.625% senior unsecured notes due 2030	September 1, 2030		900,000		893,697		395,458		917,955		419,428
3.875% senior unsecured notes due 2031	February 15, 2031		1,000,000		989,153		988,879		1,022,250		1,063,430
Total long-term debt		$	3,900,000	$	3,865,894	$	3,366,777	$	4,024,140	$	3,616,323

Interest payments attributable to the Senior Notes are due as presented in the following table:

	First semi-annual interest payment date	Second semi-annual interest payment date
Senior Notes
4.75% senior unsecured notes due 2026	February 1	August 1
5.375% senior unsecured notes due 2027	May 15	November 15
4.000% senior unsecured notes due 2029	May 15	November 15
3.625% senior unsecured notes due 2030	March 1	September 1
3.875% senior unsecured notes due 2031	June 1	December 1

The fair market value of the Company’s debt obligations represent Level 2 valuations. The Company utilizes the market approach and obtains security pricing from a vendor who uses broker quotes and third-party pricing services to determine fair values.

On March 26, 2021, the Company issued $500.0 million aggregate principal amount of 3.625% Senior Unsecured Notes due 2030 (the “2030 Senior Notes”), which constitute a further issuance of, are fully fungible with, rank equally with and form a single series with the $400.0 million aggregate principal amount of the 3.625% senior unsecured notes due 2030 issued on March 4, 2020. In connection with the completion of the offering, the Company announced that it intended to use a portion of the net proceeds from the offering, together with available cash, for the pre-maturity redemption or repurchase of all $500.0 million aggregate principal amount outstanding of its 4.750% senior unsecured notes due 2026 (the “2026 Senior Notes”). On April 12, 2021 the Company completed the pre-maturity redemption of all of its 2026 Senior Notes, which will be reflected in the three months ending June 30, 2021. The pre-maturity redemption of the 2026 Senior Notes will result in an approximately $21.8 million loss on extinguishment that will be recorded in other expense (income) during the three months ending June 30, 2021, which includes an applicable premium of approximately $18.2 million (as set forth in the indenture governing the terms of the 2026 Senior Notes) and the write-off of approximately $3.6 million of unamortized debt issuance costs associated with the 2026 Senior Notes.

The 2030 Senior Notes are scheduled to mature and be paid in full on September 1, 2030. At any time prior to March 1, 2025, the Company may redeem all or part of the 2030 Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2030 Senior Notes, together with accrued and unpaid interest, on or after March 1, 2025, at redemption prices set forth in the indenture governing the 2030 Senior Notes. At any time prior to March 1, 2023, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2030 Senior Notes, including any permitted additional notes, at a redemption price equal to 103.625% of the principal amount plus accrued and unpaid interest, if any, to the redemption date.

Revolver. Since November 20, 2014, the Company has maintained a revolving credit agreement with a syndicate of banks (as amended, the “Revolving Credit Agreement”). On March 29, 2021, the Company entered into Amendment No. 4 (the “Fourth Amendment”) to the Revolving Credit Agreement. The Fourth Amendment, among other things, (i) increased aggregate commitments available to be borrowed by $100.0 million to an aggregate of $500.0 million of availability thereunder until November 2024, at which

point the aggregate commitments will be $467.5 million, and (ii) extended the term to March 2026. At March 31, 2021, the Revolving Credit Agreement was undrawn.

In connection with the closings of the Senior Notes offerings, entry into the Revolving Credit Agreement and the subsequent Amendments, the Company paid certain financing fees which, together with the existing fees related to prior credit facilities, are being amortized over their related lives. At March 31, 2021, $36.5 million of the deferred financing fees and premium remain unamortized, $0.5 million of which is included in “Prepaid and other assets,” $1.9 million of which is included in “Other non-current assets,” $3.6 million of which is included in “Current maturities of long-term debt” and $30.5 million of which is included in “Long-term debt” on the Unaudited Condensed Consolidated Statement of Financial Condition.

8. LEASES

The Company recognized a total of $7.6 million and $9.0 million of operating lease expenses for the three months ended March 31, 2021 and 2020, respectively. The amounts associated with variable lease costs, short-term lease costs and sublease income were not material for any of the three months ended March 31, 2021 and 2020.

Future minimum commitments for the Company’s operating leases in place as of March 31, 2021, the interest and other relevant line items in the Unaudited Condensed Consolidated Statement of Financial Condition are as follows:

Maturity of Lease Liabilities	Operating
(in thousands)	Leases
Remainder of 2021	$	20,543
2022		26,447
2023		25,334
2024		20,008
2025		19,528
Thereafter		88,134
Total lease payments	$	199,994
Less: Interest		(28,363	)
Present value of lease liabilities	$	171,631

Other accrued liabilities	$	22,335
Long-term operating lease liabilities	$	149,296

Lease term and discount rate for the Company’s operating leases in place as of March 31, 2021 are as follows:

	As of
	March 31,
Lease Term and Discount Rate	2021
Weighted-average remaining lease term (years)		8.83
Weighted-average discount rate		3.32	%

Other information for the Company’s operating leases in place for the three months ended March 31, 2021 are as follows:

	Three Months Ended
Other Information	March 31,
(in thousands)	2021
Operating cash flows used for operating leases	$	7,632
Leased assets obtained in exchange for new operating lease liabilities	$	4,144

9. SHAREHOLDERS’ EQUITY (DEFICIT)

Return of capital

On October 29, 2020, the Board of Directors authorized a stock repurchase program for the purchase of up to $1,000.0 million worth of shares of MSCI’s common stock in addition to the $804.5 million of authorization then remaining under a previously existing share repurchase program (the “2020 Repurchase Program”) for a total of $1,804.5 million of stock repurchase authorization.

Share repurchases made pursuant to the 2020 Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice. As of March 31, 2021, there was $1,594.4 million of available authorization remaining under the 2020 Repurchase Program.

The following table provides information with respect to repurchases of the Company’s common stock made on the open market:

Three Months Ended	Average Price Paid Per Share		Total Number of Shares Repurchased		Dollar Value of Shares Repurchased
			(in thousands)
March 31, 2021	$	407.70		330	$	134,340
March 31, 2020	$	248.65		1,310	$	325,699

The following table presents dividends declared per common share as well as total amounts declared, distributed and deferred for the periods indicated:

	Dividends
(in thousands, except per share amounts)	Per Share		Declared		Distributed		(Released)/Deferred
Three Months Ended March 31, 2021	$	0.78	$	65,947	$	66,153	$	(206	)
Three Months Ended March 31, 2020	$	0.68	$	59,233	$	59,455	$	(222	)

Common Stock.

The following table presents activity related to shares of common stock issued and repurchased during the three months ended March 31, 2021:

	Common Stock		Treasury			Common Stock
	Issued		Stock			Outstanding
Balance at December 31, 2020		132,829,175		(50,255,768	)		82,573,407
Dividend payable/paid		160		(48	)		112
Common stock issued		301,227		—			301,227
Shares withheld for tax withholding		—		(122,924	)		(122,924	)
Shares repurchased under stock repurchase programs		—		(329,508	)		(329,508	)
Shares issued to directors		—		—			—
Balance at March 31, 2021		133,130,562		(50,708,248	)		82,422,314

10. INCOME TAXES

The Company’s provision for income taxes was $19.2 million and $14.7 million for the three months ended March 31, 2021 and 2020, respectively. These amounts reflect effective tax rates of 8.9% and 9.0% for the three months ended March 31, 2021 and 2020, respectively.

The effective tax rate of 8.9% for the three months ended March 31, 2021 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $22.3 million. For the three months ended March 31, 2021, these discrete items primarily related to $20.4 million of excess tax benefits recognized on share-based compensation vested during the period.

The effective tax rate of 9.0% for the three months ended March 31, 2020 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $22.4 million. For the three months ended March 31, 2020, these discrete items primarily related to $18.9 million of excess tax benefits recognized on share-based compensation vested during the period and $2.6 million related to the tax impact of loss on debt extinguishment recognized during the period. The discrete items also included a $0.8 million benefit related to the revaluation of the cost of deemed repatriation of foreign earnings.

The Company is under examination by the IRS and other tax authorities in certain jurisdictions, including foreign jurisdictions, such as the United Kingdom, Switzerland and India, and states in which the Company has significant operations, such as New York. The tax years currently under examination vary by jurisdiction but include years ranging from 2008 through 2020.

The Company regularly assesses the likelihood of additional assessments in each of the taxing jurisdictions in which it files income tax returns. The Company has established unrecognized tax benefits that the Company believes are adequate in relation to the potential for additional assessments. Once established, the Company adjusts unrecognized tax benefits only when more information is available or when an event occurs necessitating a change. Based on the current status of income tax audits, the Company believes it is reasonably possible that the total amount of unrecognized benefits may decrease by approximately $14.8 million in the next twelve months as a result of the resolution of tax examinations.

11. SEGMENT INFORMATION

The Company has five operating segments: Index, Analytics, ESG and Climate, Real Estate and Burgiss, which are presented as the following four reportable segments: Index, Analytics, ESG and Climate and All Other – Private Assets.

Effective January 1, 2021, the Company began presenting four reportable segments with the ESG and Climate operating segment being presented as a separate reportable segment. The operating segments of Real Estate and Burgiss do not individually meet the segment reporting thresholds and have been combined and presented as part of All Other – Private Assets reportable segment. The Company’s ownership interest in Burgiss is classified as an equity-method investment. Therefore, the All Other – Private Assets segment does not include the Company’s proportionate share of operating revenues and Adjusted EBITDA related to Burgiss. The Company’s proportionate share of the income or loss from its equity-method investment in Burgiss is not a component of Adjusted EBITDA as it is reported as a component of other (expense) income, net. Prior period amounts have been recast to reflect the current presentation.

The Index operating segment offers equity and fixed income indexes. The indexes are used in many areas of the investment process, including index-linked product creation (e.g., Exchange Traded Funds (“ETFs”) and futures and options), performance benchmarking, portfolio construction and rebalancing, broker-dealer structured products and asset allocation.

The Analytics operating segment offers risk management, performance attribution and portfolio management content, applications and services that provide clients with an integrated view of risk and return and an analysis of market, credit, liquidity and counterparty risk across all major asset classes, spanning short-, medium- and long-term time horizons. Clients access Analytics content through MSCI’s own proprietary applications and application programming interfaces, third-party applications or directly through their own platforms. Additionally, the Analytics operating segment also provides various managed services to help clients operate more efficiently, including consolidation of client portfolio data from various sources, review and reconciliation of input data and results, and customized reporting.

The ESG and Climate operating segment offers products and services that help institutional investors understand how ESG and climate considerations can impact the long-term risk and return of their portfolio and individual security-level investments. In addition, MSCI ESG Research data and ratings, as well as climate solutions, are used in the construction of equity and fixed income indexes to help institutional investors more effectively benchmark ESG and climate investment performance, issue index-based investment products, as well as manage, measure and report on ESG and climate mandates.

The Real Estate operating segment offers research, reporting, market data and benchmarking offerings that provide real estate performance analysis for funds, investors and managers. Real Estate performance and risk analytics range from enterprise-wide to property-specific analysis. The Real Estate operating segment also provides business intelligence to real estate owners, managers, developers and brokers worldwide.

The Burgiss operating segment represents the Company’s equity method investment in Burgiss, a global provider of investment decision support tools for private capital.

The change in reportable segments has not resulted in any changes to MSCI’s Chief Operating Decision Maker (“CODM”) or the basis for segment profitability from the information disclosed in our 2020 Annual Report on Form 10-K. The CODM continues to measure and evaluate reportable segments based on segment operating revenues as well as Adjusted EBITDA and other measures. The Company excludes the following items from segment Adjusted EBITDA: provision for income taxes, other expense (income), net, depreciation and amortization of property, equipment and leasehold improvements, amortization of intangible assets and, at times, certain other transactions or adjustments, that the CODM does not consider for the purposes of making decisions to allocate resources among segments or to assess segment performance. Although these amounts are excluded from segment Adjusted EBITDA, they are included in reported consolidated net income and are included in the reconciliation that follows.

The following table presents operating revenues by reportable segment for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020
	(in thousands)
Operating revenues
Index	$	292,491	$	249,256
Analytics		134,017		125,508
ESG and Climate		34,750		25,233
All Other - Private Assets		17,165		16,783
Total	$	478,423	$	416,780

The following table presents segment profitability and a reconciliation to net income for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020
	(in thousands)
Index Adjusted EBITDA	$	219,879	$	183,587
Analytics Adjusted EBITDA		45,731		36,317
ESG and Climate Adjusted EBITDA		5,045		3,626
All Other - Private Assets Adjusted EBITDA		5,931		5,697
Total operating segment profitability		276,586		229,227
Amortization of intangible assets		15,068		13,776
Depreciation and amortization of property, equipment and leasehold improvements		7,143		7,567
Operating income		254,375		207,884
Other expense (income), net		38,347		45,035
Provision for income taxes		19,209		14,724
Net income	$	196,819	$	148,125

Operating revenues by geography are based on the shipping address of the ultimate customer utilizing the product. The following table presents revenue by geographic area for the periods indicated:

	Three Months Ended
	March 31,
		2021		2020
	(in thousands)
Operating revenues
Americas:
United States	$	196,689	$	181,046
Other		20,173		17,756
Total Americas		216,862		198,802

Europe, the Middle East and Africa ("EMEA"):
United Kingdom		79,081		65,061
Other		106,194		87,929
Total EMEA		185,275		152,990

Asia & Australia:
Japan		21,642		19,392
Other		54,644		45,596
Total Asia & Australia		76,286		64,988

Total	$	478,423	$	416,780

Long-lived assets consist of property, equipment and leasehold improvements, right of use assets and internally developed capitalized software, net of accumulated depreciation and amortization. The following table presents long-lived assets by geographic area on the dates indicated:

	As of
	March 31,		December 31,
	2021		2020
	(in thousands)
Long-lived assets
Americas:
United States	$	180,605	$	182,776
Other		14,852		13,949
Total Americas		195,457		196,725

EMEA:
United Kingdom		19,508		19,678
Other		33,101		33,561
Total EMEA		52,609		53,239

Asia & Australia:
Japan		1,621		1,896
Other		35,835		37,946
Total Asia & Australia		37,456		39,842

Total	$	285,522	$	289,806

12. SUBSEQUENT EVENTS

On April 26, 2021, the Board of Directors declared a quarterly cash dividend of $0.78 per share for the three months ending June 30, 2021 (“second quarter 2021”). The second quarter 2021 dividend is payable on May 28, 2021 to shareholders of record as of the close of trading on May 14, 2021.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Item 1A.—Risk Factors,” in our Form 10-K.

Except as the context otherwise indicates, the terms “MSCI,” the “Company,” “we,” “our” and “us” refer to MSCI Inc., together with its subsidiaries.

Overview

We are a leading provider of critical decision support tools and services for the global investment community. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, our actionable solutions power better investment decisions by enabling our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios.

Investors all over the world use our tools and services to gain insight and improve transparency throughout their investment processes, including to help define their investment universe, inform and analyze their asset allocation and portfolio construction decisions, measure and manage portfolio performance and risk, conduct performance attribution, implement sustainable and other investment strategies, design and issue ETFs and other indexed financial products, and facilitate reporting to stakeholders.

Our leading research-enhanced products and services include indexes; portfolio construction and risk management analytics; ESG and climate solutions; and real estate benchmarks, return-analytics and market insights. Through our integrated franchise we provide solutions across our products and services to support our clients’ dynamic and complex needs. Our content and capabilities can be accessed by our clients through multiple channels and platforms.

We are focused on product innovation to address the evolving needs of our clients in light of changing investment trends and an increasingly complex industry. In order to most effectively serve our clients, we are committed to driving an integrated solutions-based approach, achieving service excellence, enhancing our differentiated research and content, and delivering flexible, cutting-edge technology and platforms.

Our clients comprise a wide spectrum of the global investment industry and include the following key client types:

•

Asset owners (pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance companies)

•

Asset managers (institutional funds and accounts, mutual funds, hedge funds, ETFs, insurance products, private banks and real estate investment trusts)

•

Financial intermediaries (banks, broker-dealers, exchanges, custodians, trust companies and investment consultants)

•

Wealth managers (including robo-advisors and self-directed brokerages)

•

Corporates

As of March 31, 2021, we served over 4,400¹ clients in more than 90 countries. As of March 31, 2021, we had offices in more than 30 cities across more than 20 countries to help serve our diverse client base, with 45.4% of our revenues coming from clients in the Americas, 38.7% in EMEA and 15.9% in Asia and Australia.

Our principal business model is generally to license annual, recurring subscriptions for the majority of our Index, Analytics and ESG and Climate products and services for a fee due in advance of the service period. We also license annual recurring subscriptions for the majority of our Real Estate products for a fee which is primarily paid in arrears after the product is delivered, with the exception of the Market Information product for which the fees are generally paid in advance. A portion of our fees comes from clients who use our indexes as the basis for index-linked investment products. Such fees are primarily based on a client’s assets under management (“AUM”), trading volumes and fee levels.

¹	Represents the aggregate of all related clients under their respective parent entity.

In evaluating our financial performance, we focus on revenue and profit growth, including results accounted for under accounting principles generally accepted in the United States (“GAAP”) as well as non-GAAP measures, for the Company as a whole and by operating segment. In addition, we focus on operating metrics, including Run Rate, subscription sales and Retention Rate, to manage the business. Our business is not highly capital intensive and, as such, we expect to continue to convert a high percentage of our profits into excess cash in the future. Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) enhancing distribution and content-enabling technology, (c) expanding solutions that empower client customization, (d) strengthening existing and developing new client relationships and (e) executing strategic relationships and acquisitions with complementary content and technology companies.

In the discussion that follows, we provide certain variances excluding the impact of foreign currency exchange rate fluctuations. Foreign currency exchange rate fluctuations reflect the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period. While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have been adjusted for the impact of foreign currency fluctuations, the underlying AUM, which is the primary component of asset-based fees, is not adjusted for foreign currency fluctuations. More than three-fifths of the AUM is invested in securities denominated in currencies other than the U.S. dollar, and accordingly, any such impact is excluded from the disclosed foreign currency-adjusted variances.

The discussion of our results of operations for the three months ended March 31, 2021 and 2020 are presented below. The results of operations for interim periods may not be indicative of future results.

Results of Operations

The following table presents the results of operations for the periods indicated:

	Three Months Ended
	March 31,
	2021			2020
	(in thousands, except per share data)
Operating revenues	$	478,423		$	416,780		14.8	%
Operating expenses:
Cost of revenues		85,780			74,609		15.0	%
Selling and marketing		56,467			55,549		1.7	%
Research and development		24,862			26,562		(6.4	%)
General and administrative		34,728			30,833		12.6	%
Amortization of intangible assets		15,068			13,776		9.4	%
Depreciation and amortization of property, equipment and leasehold improvements		7,143			7,567		(5.6	%)
Total operating expenses		224,048			208,896		7.3	%
Operating income		254,375			207,884		22.4	%
Other expense (income), net		38,347			45,035		(14.9	%)
Income before provision for income taxes		216,028			162,849		32.7	%
Provision for income taxes		19,209			14,724		30.5	%
Net income	$	196,819		$	148,125		32.9	%

Earnings per basic common share	$	2.38		$	1.75		36.0	%

Earnings per diluted common share	$	2.36		$	1.73		36.4	%

Operating margin		53.2	%		49.9	%

Operating Revenues

Our revenues are grouped by the following types: recurring subscriptions, asset-based fees and non-recurring. We also group revenues by major product or reportable segment as follows: Index, Analytics, ESG and Climate and All Other – Private Assets, which includes the Real Estate product line.

The following table presents operating revenues by type for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020		% Change
	(in thousands)
Recurring subscriptions	$	337,732	$	304,425		10.9	%
Asset-based fees		126,706		100,196		26.5	%
Non-recurring		13,985		12,159		15.0	%

Total operating revenues	$	478,423	$	416,780		14.8	%

Total operating revenues for the three months ended March 31, 2021 increased 14.8% to $478.4 million compared to $416.8 million for the three months ended March 31, 2020. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 14.0% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Operating revenues from recurring subscriptions for the three months ended March 31, 2021 increased 10.9% to $337.7 million compared to $304.4 million for the three months ended March 31, 2020, primarily driven by growth in Index products, which increased $15.3 million, or 10.9%, strong growth in ESG and Climate products, which increased $9.2 million, or 37.1%, and growth in Analytics products, which increased $7.6 million, or 6.1%. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 9.9% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Operating revenues from asset-based fees for the three months ended March 31, 2021 increased 26.5% to $126.7 million compared to $100.2 million for the three months ended March 31, 2020. The increase in asset-based fees was driven by growth in revenues from all of our indexed investment product categories, including an increase in revenues from ETFs linked to MSCI equity indexes that was primarily driven by a 33.3% increase in average AUM in ETFs, partially offset by a change in fee levels of certain products. The increase in revenues from asset-based fees was also driven by higher revenues from non-ETF indexed funds linked to MSCI indexes resulting from new funds and increased demand in ESG products and climate products. Revenues from exchange traded futures and options contracts linked to MSCI indexes also increased, primarily driven by price increases, partially offset by lower volume. The impact of foreign currency exchange rate fluctuations on revenues from asset-based fees was negligible.

The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated:

	Period Ended
	2020										2021
(in billions)	March 31,			June 30,			September 30,		December 31,		March 31,
AUM in ETFs linked to MSCI equity indexes⁽^{1), (2)}	$	709.5		$	825.4		$	908.9	$	1,103.6	$	1,209.6

Sequential Change in Value
Market Appreciation/(Depreciation)	$	(216.5	)	$	117.4		$	57.0	$	135.7	$	43.2
Cash Inflows		(8.4	)		(1.5	)		26.5		59.0		62.8
Total Change	$	(224.9	)	$	115.9		$	83.5	$	194.7	$	106.0

The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated:

	2020								2021
(in billions)	March		June		September		December		March
AUM in ETFs linked to MSCI equity indexes⁽^{1), (2)}
Quarterly average	$	877.1	$	776.9	$	893.4	$	999.2	$	1,169.2
Year-to-date average	$	877.1	$	827.0	$	849.1	$	886.7	$	1,169.2

⁽¹⁾

The historical values of the AUM in ETFs linked to our equity indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to MSCI Equity Indexes” on our Investor Relations homepage at http://ir.msci.com. This information is updated mid-month each month. Information contained on our website is not incorporated by reference into this Quarterly Report on Form 10-Q or any other report filed with the SEC. The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented.

⁽²⁾	The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.

The average value of AUM in ETFs linked to MSCI equity indexes for the three months ended March 31, 2021 was $1,169.2 billion, up $292.1 billion, or 33.3%, from $877.1 billion for the three months ended March 31, 2020.

Non-recurring revenues for the three months ended March 31, 2021 increased 15.0% to $14.0 million compared to $12.2 million for the three months ended March 31, 2020, primarily driven by growth in Index products, which increased $1.4 million, or 15.7%.

The following table presents operating revenues by reportable segment and revenue type for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020		% Change
	(in thousands)
Operating revenues:
Index
Recurring subscriptions	$	155,117	$	139,840		10.9	%
Asset-based fees		126,706		100,196		26.5	%
Non-recurring		10,668		9,220		15.7	%
Index total		292,491		249,256		17.3	%

Analytics
Recurring subscriptions		131,672		124,065		6.1	%
Non-recurring		2,345		1,443		62.5	%
Analytics total		134,017		125,508		6.8	%

ESG and Climate
Recurring subscriptions		34,140		24,901		37.1	%
Non-recurring		610		332		83.7	%
ESG and Climate total		34,750		25,233		37.7	%

All Other - Private Assets
Recurring subscriptions		16,803		15,619		7.6	%
Non-recurring		362		1,164		(68.9	%)
All Other - Private Assets total		17,165		16,783		2.3	%
Total operating revenues	$	478,423	$	416,780		14.8	%

Refer to the section titled "Segment Results" that follows for further discussion of segment revenues.

Operating Expenses

We group our operating expenses into the following activity categories:

•

Cost of revenues;

•

Selling and marketing;

•

Research and development (“R&D”);

•

General and administrative (“G&A”);

•

Amortization of intangible assets; and

•

Depreciation and amortization of property, equipment and leasehold improvements.

Costs are assigned to these activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved.

The following table presents operating expenses by activity category for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020		% Change
	(in thousands)
Operating expenses:
Cost of revenues	$	85,780	$	74,609		15.0	%
Selling and marketing		56,467		55,549		1.7	%
Research and development		24,862		26,562		(6.4	%)
General and administrative		34,728		30,833		12.6	%
Amortization of intangible assets		15,068		13,776		9.4	%
Depreciation and amortization of property, equipment and leasehold improvements		7,143		7,567		(5.6	%)
Total operating expenses	$	224,048	$	208,896		7.3	%

Total operating expenses for the three months ended March 31, 2021 increased 7.3% to $224.0 million compared to $208.9 million for the three months ended March 31, 2020. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 5.4% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Cost of Revenues

Cost of revenues expenses consist of costs related to the production and servicing of our products and services and primarily includes related information technology costs, including data center, cloud service, platform and infrastructure costs; costs to acquire, produce and maintain market data information; costs of research to support and maintain existing products; costs of product management teams; costs of client service and consultant teams to support customer needs; as well as other support costs directly attributable to the cost of revenues including certain human resources, finance and legal costs.

Cost of revenues for the three months ended March 31, 2021 increased 15.0% to $85.8 million compared to $74.6 million for the three months ended March 31, 2020, reflecting increases across all four reportable segments. The change was driven by increases in compensation and benefits costs, primarily relating to higher incentive compensation, wages and salaries and benefits costs, as well as higher non-compensation costs, reflecting higher information technology costs, professional fees and market data costs, partially offset by lower travel and entertainment costs.

Selling and Marketing

Selling and marketing expenses consist of costs associated with acquiring new clients or selling new products or product renewals to existing clients and primarily includes the costs of our sales and marketing teams, as well as costs incurred in other groups associated with acquiring new business, including product management, research, technology and sales operations.

Selling and marketing expenses for the three months ended March 31, 2021 increased 1.7% to $56.5 million compared to $55.5 million for the three months ended March 31, 2020, driven by higher costs in the ESG and Climate reportable segment, partially offset by lower costs in the Analytics reportable segment. The change was driven by increases in compensation and benefits costs, including severance costs, wages and salaries and incentive compensation, partially offset by decreases in non-compensation costs, primarily relating to lower travel and entertainment costs, marketing costs and recruiting costs.

Research and Development

R&D expenses consist of the costs to develop new or enhance existing products and the costs to develop new or improved technology and service platforms for the delivery of our products and services and primarily include the costs of development, research, product management, project management and the technology support associated with these efforts.

R&D expenses for the three months ended March 31, 2021 decreased 6.4% to $24.9 million compared to $26.6 million for the three months ended March 31, 2020, reflecting higher allocation of resources to projects eligible for capitalization across all of the segments, leading to a decline in compensation and benefits costs, primarily wages and salaries, expensed as R&D.

General and Administrative

G&A expenses consist of costs primarily related to finance operations, human resources, office of the CEO, legal, corporate technology, corporate development and certain other administrative costs that are not directly attributed, but are instead allocated, to a product or service.

G&A expenses for the three months ended March 31, 2021 increased 12.6% to $34.7 million compared to $30.8 million for the three months ended March 31, 2020, reflecting increases across all four reportable segments. The change was driven by increases in compensation and benefits costs, primarily relating to higher incentive compensation.

The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020		% Change
	(in thousands)
Compensation and benefits	$	151,517	$	137,262		10.4	%
Non-compensation expenses		50,320		50,291		0.1	%
Amortization of intangible assets		15,068		13,776		9.4	%
Depreciation and amortization of property, equipment and leasehold improvements		7,143		7,567		(5.6	%)
Total operating expenses	$	224,048	$	208,896		7.3	%

Compensation and Benefits

Compensation and benefits costs are our most significant expense and typically represent approximately 65% of operating expenses or more than 70% of Adjusted EBITDA expenses. We had 3,728 and 3,459 employees as of March 31, 2021 and 2020, respectively, reflecting a 7.8% growth in the number of employees. Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefit expenses. As of March 31, 2021, 64.9% of our employees were located in emerging market centers compared to 63.3% as of March 31, 2020.

Compensation and benefits costs for the three months ended March 31, 2021 increased 10.4% to $151.5 million compared to $137.3 million for the three months ended March 31, 2020, driven by higher incentive compensation, wages and salaries and benefits costs, partially offset by lower severance costs.

A significant portion of the incentive compensation component of operating expenses is based on the achievement of a number of financial and operating metrics. In a scenario where operating revenue growth and profitability moderate, incentive compensation would be expected to decrease accordingly.

Non-Compensation Expenses

Non-compensation expenses of $50.3 million for the three months ended March 31, 2021 remained consistent compared to the three months ended March 31, 2020.

Fixed costs constitute a significant portion of the non-compensation component of operating expenses. The discretionary non-compensation component of operating expenses could, however, be reduced in the near-term in a scenario where operating revenue growth moderates.

Amortization of Intangible Assets

Amortization of intangible assets expense relates to definite-lived intangible assets arising from past acquisitions and internal capitalized software projects recognized over their estimated useful lives. Amortization of intangible assets expense for the three months ended March 31, 2021 increased 9.4% to $15.1 million compared to $13.8 million for the three months ended March 31, 2020, primarily driven by higher amortization of internally developed capitalized software.

Depreciation and Amortization of Property, Equipment and Leasehold Improvements

Depreciation and amortization of property, equipment and leasehold improvements consists of expenses related to depreciating or amortizing the cost of furniture and fixtures, computer and related equipment and leasehold improvements over the estimated useful life of the assets. Depreciation and amortization of property, equipment and leasehold improvements for the three months ended March 31, 2021 decreased 5.6% to $7.1 million compared to $7.6 million for the three months ended March 31, 2020. The decrease was primarily the result of lower depreciation on computer and related equipment, software and leasehold improvements, partially offset by higher depreciation on furniture.

Other Expense (Income), Net

Other expense (income), net for the three months ended March 31, 2021 decreased 14.9% to $38.3 million compared to $45.0 million for the three months ended March 31, 2020. The decrease in net expenses was primarily driven by the absence of the $10.0 million loss on debt extinguishment associated with the redemption of all of the $300.0 million aggregate principal amount of 5.250% senior unsecured notes due 2024 that remained outstanding (the “2024 Senior Notes Redemption”) during the three months ended March 31, 2020.

Income Taxes

The Company’s provision for income taxes for the three months ended March 31, 2021 and 2020 was $19.2 million and $14.7 million, respectively. These amounts reflect effective tax rates of 8.9% and 9.0% for the three months ended March 31, 2021 and 2020, respectively.

The effective tax rate of 8.9% for the three months ended March 31, 2021 reflects the Company’s estimate of the effective tax rate for the period which was impacted by certain favorable discrete items totaling $22.3 million. For the three months ended March 31, 2021, these discrete items primarily related to $20.4 million of excess tax benefits recognized on share-based compensation vested during the period.

The effective tax rate of 9.0% for the three months ended March 31, 2020 reflects the Company’s estimate of the effective tax rate for the period which was impacted by certain favorable discrete items totaling $22.4 million. For the three months ended March 31, 2020, these discrete items primarily related to $18.9 million of excess tax benefits recognized on share-based compensation vested during the period and $2.6 million related to the tax impact of loss on debt extinguishment recognized during the period. The discrete items also included a $0.8 million benefit related to the revaluation of the cost of deemed repatriation of foreign earnings.

Net Income

As a result of the factors described above, net income for the three months ended March 31, 2021 increased 32.9% to $196.8 million compared to $148.1 million for the three months ended March 31, 2020.

Weighted Average Shares

The weighted average shares outstanding used to calculate basic and diluted earnings per share for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 decreased by 2.6% and 2.4%, respectively. The decreases primarily reflect the impact of share repurchases made pursuant to the stock repurchase program.

Adjusted EBITDA

“Adjusted EBITDA,” a non-GAAP measure used by management to assess operating performance, is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or adjustments.

“Adjusted EBITDA expenses,” a non-GAAP measure used by management to assess operating performance, is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets and, at times, certain other transactions or adjustments.

Adjusted EBITDA and Adjusted EBITDA expenses are believed to be meaningful measures of the operating performance of the Company because they adjust for significant one-time, unusual or non-recurring items as well as eliminate the accounting effects of certain capital spending and acquisitions that do not directly affect what management considers to be the Company’s ongoing operating performance in the period. All companies do not calculate adjusted EBITDA and adjusted EBITDA expenses in the same way. These measures can differ significantly from company to company depending on, among other things, long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Accordingly, the Company’s computation of the Adjusted EBITDA and Adjusted EBITDA expenses measures may not be comparable to similarly titled measures computed by other companies.

The following table presents the calculation of Adjusted EBITDA for the periods indicated:

	Three Months Ended
	March 31,
	2021			2020			% Change
	(in thousands)
Operating revenues	$	478,423		$	416,780			14.8	%
Adjusted EBITDA expenses		201,837			187,553			7.6	%
Adjusted EBITDA	$	276,586		$	229,227			20.7	%
Adjusted EBITDA margin %		57.8	%		55.0	%
Operating margin %		53.2	%		49.9	%

Adjusted EBITDA for the three months ended March 31, 2021 increased 20.7% to $276.6 million compared to $229.2 million for the three months ended March 31, 2020. Adjusted EBITDA margin for the three months ended March 31, 2021 increased to 57.8% compared to 55.0% for the three months ended March 31, 2020. The increase in Adjusted EBITDA margin reflects a higher rate of growth in operating revenues as compared to the rate of growth of Adjusted EBITDA expenses.

Reconciliation of Adjusted EBITDA to Net Income and Adjusted EBITDA Expenses to Operating Expenses

The following table presents the reconciliation of Adjusted EBITDA to net income for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020
	(in thousands)
Index Adjusted EBITDA	$	219,879	$	183,587
Analytics Adjusted EBITDA		45,731		36,317
ESG and Climate Adjusted EBITDA		5,045		3,626
All Other - Private Assets Adjusted EBITDA		5,931		5,697
Consolidated Adjusted EBITDA		276,586		229,227
Amortization of intangible assets		15,068		13,776
Depreciation and amortization of property, equipment and leasehold improvements		7,143		7,567
Operating income		254,375		207,884
Other expense (income), net		38,347		45,035
Provision for income taxes		19,209		14,724
Net income	$	196,819	$	148,125

The following table presents the reconciliation of Adjusted EBITDA expenses to operating expenses for the periods indicated:

	Three Months Ended
	March 31,
	2021		2020
	(in thousands)
Index Adjusted EBITDA expenses	$	72,612	$	65,669
Analytics Adjusted EBITDA expenses		88,286		89,191
ESG and Climate Adjusted EBITDA expenses		29,705		21,607
All Other - Private Assets Adjusted EBITDA expenses		11,234		11,086
Consolidated Adjusted EBITDA expenses		201,837		187,553
Amortization of intangible assets		15,068		13,776
Depreciation and amortization of property, equipment and leasehold improvements		7,143		7,567
Total operating expenses	$	224,048	$	208,896

The discussion of the segment results is presented below.

Segment Results

Index Segment

The following table presents the results for the Index segment for the periods indicated:

	Three Months Ended
	March 31,
	2021			2020			% Change
	(in thousands)
Operating revenues:
Recurring subscriptions	$	155,117		$	139,840			10.9	%
Asset-based fees		126,706			100,196			26.5	%
Non-recurring		10,668			9,220			15.7	%
Operating revenues total		292,491			249,256			17.3	%
Adjusted EBITDA expenses		72,612			65,669			10.6	%
Adjusted EBITDA	$	219,879		$	183,587			19.8	%
Adjusted EBITDA margin %		75.2	%		73.7	%

Revenues related to Index products for the three months ended March 31, 2021 increased 17.3% to $292.5 million compared to $249.3 million for the three months ended March 31, 2020.

Recurring subscriptions for the three months ended March 31, 2021 increased 10.9% to $155.1 million compared to $139.8 million for the three months ended March 31, 2020. The increase was primarily driven by strong growth in market cap-weighted index products. The impact of foreign currency exchange rate fluctuations on revenues from recurring subscriptions was negligible.

Revenues from asset-based fees for the three months ended March 31, 2021 increased 26.5% to $126.7 million compared to $100.2 million for the three months ended March 31, 2020. The increase in asset-based fees was driven by growth in revenues from all of our indexed investment product categories, including an increase in revenues from ETFs linked to MSCI equity indexes that was primarily driven by a 33.3% increase in average AUM in ETFs, partially offset by a change in fee levels of certain products. The increase in revenues from asset-based fees was also driven by higher revenues from non-ETF indexed funds linked to MSCI indexes resulting from new funds and increased demand in ESG products and climate products. Revenues from exchange traded futures and options contracts linked to MSCI indexes also increased, primarily driven by price increases, partially offset by lower volume. The impact of foreign currency exchange rate fluctuations on revenues from asset-based fees was negligible.

Index segment Adjusted EBITDA expenses for the three months ended March 31, 2021 increased 10.6% to $72.6 million compared to $65.7 million for the three months ended March 31, 2020, reflecting higher expenses across the cost of revenues and G&A expense activity categories. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 8.4% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Analytics Segment

The following table presents the results for the Analytics segment for the periods indicated:

	Three Months Ended
	March 31,
	2021			2020			% Change
	(in thousands)
Operating revenues:
Recurring subscriptions	$	131,672		$	124,065			6.1	%
Non-recurring		2,345			1,443			62.5	%
Operating revenues total		134,017			125,508			6.8	%
Adjusted EBITDA expenses		88,286			89,191			(1.0	%)
Adjusted EBITDA	$	45,731		$	36,317			25.9	%
Adjusted EBITDA margin %		34.1	%		28.9	%

Analytics segment revenues for the three months ended March 31, 2021 increased 6.8% to $134.0 million compared to $125.5 million for the three months ended March 31, 2020, primarily driven by growth in Multi-Asset Class and Equity Analytics products. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 6.6% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Analytics segment Adjusted EBITDA expenses for the three months ended March 31, 2021 decreased 1.0% to $88.3 million compared to $89.2 million for the three months ended March 31, 2020, primarily driven by lower expenses across the R&D and selling and marketing expense activity categories, partially offset by higher expenses across the G&A and cost of revenues expense activity categories. Adjusting for the impact of foreign currency exchange rate fluctuations, the decrease would have been 2.4% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

ESG and Climate Segment

The following table presents the results for the ESG and Climate segment for the periods indicated:

	Three Months Ended
	March 31,
	2021			2020			% Change
	(in thousands)
Operating revenues:
Recurring subscriptions	$	34,140		$	24,901			37.1	%
Non-recurring		610			332			83.7	%
Operating revenues total		34,750			25,233			37.7	%
Adjusted EBITDA expenses		29,705			21,607			37.5	%
Adjusted EBITDA	$	5,045		$	3,626			39.1	%
Adjusted EBITDA margin %		14.5	%		14.4	%

ESG and Climate segment revenues for the three months ended March 31, 2021 increased 37.7% to $34.8 million compared to $25.2 million for the three months ended March 31, 2020. The increase in ESG and Climate revenues was primarily driven by strong growth from Ratings and Climate products. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 31.8%, for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

ESG and Climate segment Adjusted EBITDA expenses for the three months ended March 31, 2021 increased 37.5% to $29.7 million compared to $21.6 million for the three months ended March 31, 2020, reflecting higher expenses across all expense activity categories. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 34.0% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

All Other – Private Assets Segment

The following table presents the results for the All Other – Private Assets segment for the periods indicated:

	Three Months Ended
	March 31,
	2021			2020			% Change
	(in thousands)
Operating revenues:
Recurring subscriptions	$	16,803		$	15,619			7.6	%
Non-recurring		362			1,164			(68.9	%)
Operating revenues total		17,165			16,783			2.3	%
Adjusted EBITDA expenses		11,234			11,086			1.3	%
Adjusted EBITDA	$	5,931		$	5,697			4.1	%
Adjusted EBITDA margin %		34.6	%		33.9	%

All Other – Private Assets segment revenues for the three months ended March 31, 2021 increased 2.3% to $17.2 million compared to $16.8 million for the three months ended March 31, 2020. The increase in All Other – Private Assets revenues was primarily driven by favorable foreign currency exchange rate fluctuations, partially offset by the absence of a previously disclosed one-time data license fee recognized during the three months ended March 31, 2020. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other – Private Assets operating revenues would have decreased 5.6% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

All Other – Private Assets segment Adjusted EBITDA expenses for the three months ended March 31, 2021 increased 1.3% to $11.2 million compared to $11.1 million for the three months ended March 31, 2020, primarily driven by higher expenses across the cost of revenues and G&A expense activity categories, partially offset by lower expenses across the R&D and selling and marketing expense activity categories. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other – Private Assets segment Adjusted EBITDA expenses would have decreased 2.2% for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Run Rate

“Run Rate” estimates at a particular point in time the annualized value of the recurring revenues under our client license agreements (“Client Contracts”) for the next 12 months, assuming all Client Contracts that come up for renewal are renewed and assuming then-current currency exchange rates, subject to the adjustments and exclusions described below. For any Client Contract where fees are linked to an investment product’s assets or trading volume/fees, the Run Rate calculation reflects, for ETFs, the market value on the last trading day of the period, for futures and options, the most recent quarterly volumes and/or reported exchange fees, and for other non-ETF products, the most recent client-reported assets. Run Rate does not include fees associated with “one-time” and other non-recurring transactions. In addition, we add to Run Rate the annualized fee value of recurring new sales, whether to existing or new clients, when we execute Client Contracts, even though the license start date, and associated revenue recognition, may not be effective until a later date. We remove from Run Rate the annualized fee value associated with products or services under any Client Contract with respect to which we have received a notice of termination or non-renewal during the period and have determined that such notice evidences the client’s final decision to terminate or not renew the applicable products or services, even though such notice is not effective until a later date.

Changes in our recurring revenues typically lag changes in Run Rate. The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including:

•

fluctuations in revenues associated with new recurring sales;

•

modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements;

•

differences between the recurring license start date and the date the Client Contract is executed due to, for example, contracts with onboarding periods or fee waiver periods;

•

fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes;

•

fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes;

•

fluctuations in the number of hedge funds for which we provide investment information and risk analysis to hedge fund investors;

•

price changes or discounts;

•

revenue recognition differences under U.S. GAAP, including those related to the timing of implementation and report deliveries for certain of our products and services;

•

fluctuations in foreign currency exchange rates; and

•

the impact of acquisitions and divestitures.

The following table presents the Run Rates as of the dates indicated and the growth percentages over the periods indicated:

	As of
	March 31,		March 31,		%
		2021		2020	Change
	(in thousands)
Index:
Recurring subscriptions	$	634,565	$	574,132		10.5	%
Asset-based fees		503,207		348,218		44.5	%
Index total		1,137,772		922,350		23.4	%

Analytics		556,997		528,378		5.4	%

ESG and Climate		147,334		103,781		42.0	%

All Other - Private Assets		56,900		49,671		14.6	%

Total Run Rate	$	1,899,003	$	1,604,180		18.4	%

Recurring subscriptions total	$	1,395,796	$	1,255,962		11.1	%
Asset-based fees		503,207		348,218		44.5	%
Total Run Rate	$	1,899,003	$	1,604,180		18.4	%

Total Run Rate grew 18.4% to $1,899.0 million as of March 31, 2021 compared to $1,604.2 million as of March 31, 2020. Recurring subscriptions Run Rate grew 11.1% to $1,395.8 million as of March 31, 2021 compared to $1,256.0 million as of March 31, 2020. Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscriptions Run Rate would have increased 10.3% as of March 31, 2021 compared to March 31, 2020.

Run Rate from asset-based fees increased 44.5% to $503.2 million as of March 31, 2021 from $348.2 million as of March 31, 2020, primarily driven by higher AUM in ETFs linked to MSCI equity indexes, higher prices in non-ETF indexed funds linked to MSCI indexes and higher prices in futures and options. Partially offsetting the impact of the increase in AUM in ETFs linked to MSCI equity indexes was a change in fee levels of certain products, which was the primary driver of a decline in average basis point fees to 2.61 as of March 31, 2021 from 2.71 as of March 31, 2020. As of March 31, 2021, the value of AUM in ETFs linked to MSCI equity indexes was $1,209.6 billion, up $500.1 billion, or 70.5%, from $709.5 billion as of March 31, 2020. The increase of $500.1 billion consisted of market appreciation of $353.3 billion and net inflows of $146.8 billion.

Index recurring subscriptions Run Rate grew 10.5% to $634.6 million as of March 31, 2021 compared to $574.1 million as of March 31, 2020, primarily driven by growth in market cap-weighted index products and reflected growth across all regions and all client segments.

Run Rate from Analytics products increased 5.4% to $557.0 million as of March 31, 2021 compared to $528.4 million as of March 31, 2020, primarily driven by growth in both Multi-Asset Class and Equity Analytics products. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics Run Rate would have increased 4.7% as of March 31, 2021.

Run Rate from ESG and Climate products increased 42.0% to $147.3 million as of March 31, 2021 compared to $103.8 million as of March 31, 2020, primarily driven by strong growth in both Ratings and Climate products. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate Run Rate would have increased 38.8% as of March 31, 2021 compared to March 31, 2020.

Run Rate from All Other – Private Assets products increased 14.6% to $56.9 million as of March 31, 2021 compared to $49.7 million as of March 31, 2020, primarily driven by strong growth in both Enterprise Analytics and Global Intel products and growth from new sales of Real Estate Climate Value-at-Risk products. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other – Private Assets Run Rate would have increased 7.4% as of March 31, 2021 compared to March 31, 2020.

Sales

Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues. Non-recurring sales represent the actual value of the customer agreements entered into during the period and are not a component of Run Rate. New recurring subscription sales represent additional selling activities, such as new customer agreements, additions to existing agreements or increases in price that occurred during the period and are additions to Run Rate. Subscription cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate. Net new recurring subscription sales represent the amount of new recurring subscription sales net of subscription cancellations during the period, which reflects the net impact to Run Rate during the period.

Total gross sales represent the sum of new recurring subscription sales and non-recurring sales. Total net sales represent the total gross sales net of the impact from subscription cancellations.

The following table presents our recurring subscription sales, cancellations and non-recurring sales by reportable segment for the periods indicated:

	Three Months Ended
	March 31,			March 31,			%
	2021			2020			Change
	(in thousands)
New recurring subscription sales
Index	$	20,856		$	19,054			9.5	%
Analytics		12,210			11,218			8.8	%
ESG and Climate		11,640			6,994			66.4	%
All Other - Private Assets		1,684			1,175			43.3	%
New recurring subscription sales total		46,390			38,441			20.7	%

Subscription cancellations
Index		(5,198	)		(5,116	)		1.6	%
Analytics		(5,879	)		(8,244	)		(28.7	%)
ESG and Climate		(1,052	)		(1,503	)		(30.0	%)
All Other - Private Assets		(698	)		(550	)		26.9	%
Subscription cancellations total		(12,827	)		(15,413	)		(16.8	%)

Net new recurring subscription sales
Index		15,658			13,938			12.3	%
Analytics		6,331			2,974			112.9	%
ESG and Climate		10,588			5,491			92.8	%
All Other - Private Assets		986			625			57.8	%
Net new recurring subscription sales total		33,563			23,028			45.7	%

Non-recurring sales
Index		11,205			10,283			9.0	%
Analytics		2,973			3,265			(8.9	%)
ESG and Climate		697			151			361.6	%
All Other - Private Assets		886			880			0.7	%
Non-recurring sales total		15,761			14,579			8.1	%

Gross sales
Index	$	32,061		$	29,337			9.3	%
Analytics		15,183			14,483			4.8	%
ESG and Climate		12,337			7,145			72.7	%
All Other - Private Assets		2,570			2,055			25.1	%
Total gross sales	$	62,151		$	53,020			17.2	%

Net sales
Index	$	26,863		$	24,221			10.9	%
Analytics		9,304			6,239			49.1	%
ESG and Climate		11,285			5,642			100.0	%
All Other - Private Assets		1,872			1,505			24.4	%
Total net sales	$	49,324		$	37,607			31.2	%

A significant portion of MSCI's operating revenues are derived from subscriptions or licenses of products and services, which are provided over contractually-agreed periods of time that are subject to renewal or cancellation at the end of current contract terms.

Retention Rate

The following table presents our Retention Rate by reportable segment for the periods indicated:

	Three Months Ended
	March 31,
		2021		2020
Index	96.6%		96.3%
Analytics	95.8%		93.7%
ESG and Climate	97.0%		94.1%
All Other - Private Assets	95.1%		95.7%

Total	96.3%		95.0%

The annual Retention Rate represents the retained subscription Run Rate (subscription Run Rate at the beginning of the fiscal year less actual cancels during the year) as a percentage of the subscription Run Rate at the beginning of the fiscal year. Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time.

The Retention Rate for a non-annual period is calculated by annualizing the cancellations for which we have received a notice of termination or for which we believe there is an intention not to renew during the non-annual period, and we believe that such notice or intention evidences the client’s final decision to terminate or not renew the applicable agreement, even though such notice is not effective until a later date. This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Retention Rate for the period.

Retention Rate is computed by operating segment on a product/service-by-product/service basis. In general, if a client reduces the number of products or services to which it subscribes within a segment, or switches between products or services within a segment, we treat it as a cancellation for purposes of calculating our Retention Rate except in the case of a product or service switch that management considers to be a replacement product or service. In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancel. In the Analytics and the ESG and Climate operating segments, substantially all product or service switches are treated as replacement products or services and netted in this manner, while in our Index and Real Estate operating segments, product or service switches that are treated as replacement products or services and receive netting treatment occur only in certain limited instances. In addition, we treat any reduction in fees resulting from a down-sell of the same product or service as a cancellation to the extent of the reduction. We do not calculate Retention Rate for that portion of our Run Rate attributable to assets in index-linked investment products or futures and options contracts, in each case, linked to our indexes.

Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year.

Critical Accounting Policies and Estimates

We describe our significant accounting policies in Note 1, “Introduction and Basis of Presentation,” of the Notes to Consolidated Financial Statements included in our Form 10-K. There have been no significant changes in our accounting policies or critical accounting estimates since the end of the fiscal year ended December 31, 2020.

Liquidity and Capital Resources

We require capital to fund ongoing operations, internal growth initiatives and acquisitions. Our primary sources of liquidity are cash flows generated from our operations, existing cash and cash equivalents and credit capacity under our existing credit facility. In addition, we believe we have access to additional funding in the public and private markets. We intend to use these sources of liquidity to, among other things, service our existing and future debt obligations, fund our working capital requirements for capital expenditures, investments, acquisitions and dividend payments, and repurchases of our common stock. In connection with our business strategy, we regularly evaluate acquisition and strategic partnership opportunities. We believe our liquidity, along with other financing alternatives, will provide the necessary capital to fund these transactions and achieve our planned growth.

Senior Notes and Credit Agreement

We have an aggregate of $3,900.0 million in Senior Notes outstanding and a $500.0 million undrawn Revolving Credit Agreement with a syndicate of banks. On April 12, 2021, we paid $518.2 million, which included a premium of $18.2 million, for the pre-maturity redemption all of the outstanding 2026 Senior Notes. See Note 7, “Commitments and Contingencies,” of the Notes to Condensed Consolidated Financial Statements (Unaudited) included herein for additional information on our Senior Notes and Revolving Credit Agreement.

The Senior Notes and the Revolving Credit Agreement are fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect wholly owned domestic subsidiaries that account for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries (the “subsidiary guarantors”). Amounts due under the Revolving Credit Agreement are our and the subsidiary guarantors’ senior unsecured obligations and rank equally with the Senior Notes and any of our other unsecured, unsubordinated debt, senior to any of our subordinated debt and effectively subordinated to our secured debt to the extent of the assets securing such debt.

The indentures governing our Senior Notes (the “Indentures”) among us, each of the subsidiary guarantors, and Wells Fargo Bank, National Association, as trustee, contain covenants that limit our and certain of our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets. In addition, the Indentures restrict our non-guarantor subsidiaries’ ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiaries guaranteeing the Senior Notes on a pari passu basis.

The Revolving Credit Agreement contains affirmative and restrictive covenants that, among other things, limit our ability and the ability of our existing or future subsidiaries to:

•

incur liens;

•

in the case of our subsidiaries that are not guarantors under the Revolving Credit Agreement, incur additional indebtedness;

•

merge, dissolve, liquidate, consolidate with or into another person or sell all or substantially all assets of the Company and its subsidiaries on a consolidated basis;

•

enter into sale/leaseback transactions;

•

pay dividends or make other distributions in respect of our capital stock or engage in stock repurchases, redemptions and other restricted payments; or

•

change the nature of our business.

The Revolving Credit Agreement and the Indentures also contain customary events of default, including those relating to non-payment, breach of representations, warranties or covenants, cross-default and cross-acceleration, and bankruptcy and insolvency events, and, in the case of the Revolving Credit Agreement, invalidity or impairment of loan documentation, change of control and customary ERISA defaults in addition to the foregoing. None of the restrictions above are expected to impact our ability to effectively operate the business.

The Revolving Credit Agreement also requires us and our subsidiaries to achieve financial and operating results sufficient to maintain compliance with the following financial ratios on a consolidated basis through the termination of the Revolving Credit Agreement: (1) the maximum Consolidated Leverage Ratio (as defined in the Revolving Credit Agreement) measured quarterly on a rolling four-quarter basis shall not exceed 4.25:1.00 (or 4.50:1.00 for two fiscal quarters following a material acquisition) and (2) the minimum Consolidated Interest Coverage Ratio (as defined in the Revolving Credit Agreement) measured quarterly on a rolling four-quarter basis shall be at least 4.00:1.00. As of March 31, 2021, our Consolidated Leverage Ratio was 3.53:1.00 and our Consolidated Interest Coverage Ratio was 7.57:1.00. As of March 31, 2021, there were no amounts drawn and outstanding under the Revolving Credit Agreement.

Our non-guarantor subsidiaries under the Senior Notes consist of: (i) domestic subsidiaries of the Company that account for 5% or less of consolidated assets of the Company and its subsidiaries and (ii) any foreign or domestic subsidiary of the Company that is deemed to be a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended. Our non-guarantor subsidiaries accounted for approximately $1,035.4 million, or 58.9%, of our total revenue for the trailing 12 months ended March 31, 2021, approximately $375.2 million, or 40.3%, of our consolidated operating income for the trailing 12 months ended March 31, 2021, and approximately $1,058.0 million, or 23.2%, of our consolidated total assets (excluding intercompany assets) and $688.3 million, or 13.6%, of our consolidated total liabilities, in each case as of March 31, 2021.

Share Repurchases

The following table provides information with respect to repurchases of the Company’s common stock pursuant to open market repurchases:

Three Months Ended	Average Price Paid Per Share		Total Number of Shares Repurchased		Dollar Value of Shares Repurchased
			(in thousands)
March 31, 2021	$	407.70		330	$	134,340
March 31, 2020	$	248.65		1,310	$	325,699

As of March 31, 2021, there was $1,594.4 million of available authorization remaining under the 2020 Repurchase Program.

Cash Dividend

On April 26, 2021, the Board of Directors declared a quarterly cash dividend of $0.78 per share for the three months ending June 30, 2021. The second quarter 2021 dividend is payable on May 28, 2021 to shareholders of record as of the close of trading on May 14, 2021.

Cash Flows

	As of
	March 31,		December 31,
		2021		2020
	(in thousands)
Cash and cash equivalents	$	1,747,147	$	1,300,521

Cash and cash equivalents were $1,747.1 million and $1,300.5 million as of March 31, 2021 and December 31, 2020, respectively. We typically seek to maintain minimum cash balances globally of approximately $200.0 million to $250.0 million for general operating purposes. As of March 31, 2021 and December 31, 2020, $473.7 million and $423.3 million, respectively, of the cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions. The global cash and cash equivalent balances that are maintained will be available to meet our global needs whether for general corporate purposes or other needs, including acquisitions or expansion of our products.

We believe that global cash flows from operations, together with existing cash and cash equivalents and funds available under our existing credit facility and our ability to access the debt and capital markets for additional funds, will continue to be sufficient to fund our global operating activities and cash commitments for investing and financing activities, such as material capital expenditures and share repurchases, for at least the next 12 months and for the foreseeable future thereafter. In addition, we expect that foreign cash flows from operations, together with existing cash and cash equivalents will continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next 12 months and for the foreseeable future thereafter.

Net Cash Provided by (Used In) Operating, Investing and Financing Activities

	Three Months Ended
	March 31,
		2021		2020
	(in thousands)
Net cash provided by operating activities	$	215,457		$	112,770
Net cash used in investing activities		(10,360	)		(201,638	)
Net cash provided by (used in) financing activities		245,542			(340,081	)
Effect of exchange rate changes		(4,013	)		(10,762	)
Net increase (decrease) in cash	$	446,626		$	(439,711	)

Cash Flows From Operating Activities

Cash flows from operating activities consist of net income adjusted for certain non-cash items and changes in assets and liabilities. Cash provided by operating activities was $215.5 million and $112.8 million for the three months ended March 31, 2021 and 2020, respectively. The year-over-year increase was primarily driven by higher cash collections from customers.

Our primary uses of cash from operating activities are for the payment of cash compensation expenses, office rent, technology costs, market data costs, interest expenses and income taxes. Historically, the payment of cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year.

Cash Flows From Investing Activities

Cash used in investing activities was $10.4 million for the three months ended March 31, 2021 compared to $201.6 million for the three months ended March 31, 2020. The year-over-year change was primarily driven by the absence of the $190.8 million equity method investment in Burgiss.

Cash Flows From Financing Activities

Cash provided by financing activities was $245.5 million for the three months ended March 31, 2021 compared to cash used in financing activities of $340.1 million for the three months ended March 31, 2020. The year-over-year change was primarily driven by the absence of the 2024 Senior Notes Redemption, lower share repurchases and the impact of higher proceeds from the new senior notes offerings made during the three months ended March 31, 2021.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Risk

We are subject to foreign currency exchange fluctuation risk. Exchange rate movements can impact the U.S. dollar-reported value of our revenues, expenses, assets and liabilities denominated in non-U.S. dollar currencies or where the currency of such items is different than the functional currency of the entity where these items were recorded.

We generally invoice our clients in U.S. dollars; however, we invoice a portion of our clients in Euros, British pounds sterling, Japanese yen and a limited number of other non-U.S. dollar currencies. For the three months ended March 31, 2021 and 2020, 15.0% and 14.0%, respectively, of our revenues are subject to foreign currency exchange rate risk and primarily includes clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities. Of the 15.0% of non-U.S. dollar exposure for the three months ended March 31, 2021, 40.9% was in Euros, 24.8% was in British pounds sterling and 24.7% was in Japanese yen. Of the 14.0% of non-U.S. dollar exposure for the three months ended March 31, 2020, 38.9% was in Euros, 26.6% was in Japanese yen and 23.3% was in British pounds sterling.

Revenues from asset-based fees represented 26.5% and 24.0% of operating revenues for the three months ended March 31, 2021 and 2020, respectively. While a substantial portion of our asset-based fees are invoiced in U.S. dollars, the fees are based on the assets in investment products, of which more than three-fifths are invested in securities denominated in currencies other than the U.S. dollar. Accordingly, declines in such other currencies against the U.S. dollar will decrease the fees payable to us under such licenses. In addition, declines in such currencies against the U.S. dollar could impact the attractiveness of such investment products resulting in net fund outflows, which would further reduce the fees payable under such licenses.

We are exposed to additional foreign currency risk in certain of our operating costs. Approximately 42.7% and 41.3% of our operating expenses for the three months ended March 31, 2021 and 2020, respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Hungarian forints, Euros, Swiss francs, Hong Kong dollars and Mexican pesos. Expenses incurred in foreign currency may increase as we expand our business outside the U.S.

We have certain monetary assets and liabilities denominated in currencies other than local functional amounts and when these balances are remeasured into their local functional currency, either a gain or a loss results from the change of the value of the functional currency as compared to the originating currencies. We manage foreign currency exchange rate risk, in part, through the use of derivative financial instruments comprised principally of forward contracts on foreign currency which are not designated as hedging instruments for accounting purposes. The objective of the derivative instruments is to minimize the impact on the income statement of the volatility of amounts denominated in certain foreign currencies. We recognized total foreign currency exchange losses of $0.6 million and gains of $1.9 million for the three months ended March 31, 2021 and 2020, respectively.

Item 4.

Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures, as defined in Rule 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), as of March 31, 2021, and have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

Various lawsuits, claims and proceedings have been or may be instituted or asserted against the Company in the ordinary course of business. While the amounts claimed could be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that MSCI’s business, operating results, financial condition or cash flows in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows.

Item 1A.

Risk Factors

There have been no material changes to the significant risk factors and uncertainties known to the Company and disclosed in the Company’s Form 10-K for the fiscal year ended December 31, 2020 that, if they were to materialize or occur, would, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows.

For a discussion of the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for fiscal year 2020.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

There have been no unregistered sales of equity securities.

The table below presents information with respect to purchases made by or on behalf of the Company of its common shares during the three months ended March 31, 2021.

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased⁽¹⁾		Average Price Paid Per Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
January 1, 2021-January 31, 2021		719	$	446.43		—	$	1,728,753,000
February 1, 2021-February 28, 2021		121,941	$	429.57		—	$	1,728,753,000
March 1, 2021-March 31, 2021		329,772	$	407.71		329,508	$	1,594,416,000
Total		452,432	$	413.66		329,508	$	1,594,416,000

⁽¹⁾

Includes (i) shares purchased by the Company on the open market under the stock repurchase program; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; (iii) shares withheld to satisfy tax withholding obligations and exercise price on behalf of employees that occur upon exercise and delivery of outstanding shares underlying stock options; and (iv) shares held in treasury under the MSCI Inc. Non-Employee Directors Deferral Plan. The value of shares withheld to satisfy tax withholding obligations was determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company.

⁽²⁾	See Note 9, “Shareholders’ Equity (Deficit)” of the Notes to the Unaudited Condensed Consolidated Financial Statements included herein for further information regarding our stock repurchase program.

Item 6.

Exhibits

EXHIBIT INDEX

	Exhibit Number	Description

	3.1	Third Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Form 10-Q (File No. 001-33812), filed with the SEC on May 4, 2012 and incorporated by reference herein)

	3.2	Amended and Restated Bylaws (filed as Exhibit 3.1 to the Company’s Form 8-K (File No. 001-33812), filed with the SEC on January 11, 2021 and incorporated by reference herein)
	4.1	Form of Note for MSCI Inc. 3.625% Senior Notes due September 1, 2030 (included in Exhibit 4.1 of MSCI Inc.’s Current Report on Form 8-K (File No. 001-33812), filed with the SEC on March 4, 2020).

	10.1	Amendment No. 4 to the Revolving Credit Agreement, dated as of March 29, 2021, among MSCI Inc., each of the subsidiary guarantors party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent and L/C Issuer and the other lenders party thereto (incorporated by reference to Exhibit 10.1 of MSCI Inc.’s Current Report on Form 8-K, filed on March 30, 2021).


*	10.2†	Employment Letter, entered into on April 27, 2021, between MSCI Inc. and C.D. Baer Pettit.
	11	Statement Re: Computation of Earnings Per Common Share (The calculation of per share earnings is in Part I, Item 1, Note 4 to the Condensed Consolidated Financial Statements (Earnings Per Common Share) and is omitted in accordance with Section (b)(11) of Item 601 of Regulation S-K)

*	31.1	Rule 13a-14(a) Certification of the Chief Executive Officer

*	31.2	Rule 13a-14(a) Certification of the Chief Financial Officer

**	32.1	Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer


*	101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

*	101.SCH	Inline XBRL Taxonomy Extension Schema Document

*	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

*	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

*	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

*	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

*	104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith.
†	Indicates a management compensation plan, contract or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: April 28, 2021

	MSCI INC. (Registrant)

	By:	/s/ Andrew C. Wiechmann
		Andrew C. Wiechmann Chief Financial Officer (Principal Financial Officer)