Slide 1: Third Quarter 2013 Earnings Presentation
Third Quarter 2013 Earnings Presentation October 31, 2013
Slide 2: Forward-Looking Statements and Other Information
Forward‐Looking Statements and Other Information Forward‐Looking Statements – Safe Harbor Statements This presentation may contain forward‐looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on forward‐looking statements
Slide 3: Third Quarter 2013 Highlights
Third Quarter 2013 Highlights Strong Financial Results Operating revenues increased 10% to $258 million, or by 5% organically1 Net income increased 15% to $55 million Diluted EPS rose 18% to $0.46 Adjusted EBITDA2 grew by 4% to $113 million Adjusted EPS3 rose 8% to $0.53 Run Rate Growth of 12% to ov
Slide 4: Breakdown of Q3'12 vs Q3'13 Revenue Growth
Breakdown of Q3’12 vs Q3’13 Revenue Growth (Dollars in millions) Year‐over‐Year Change in Revenues by Type $235.4 $19.3 $2.8 $0.7 $258.2 $220 $230 $240 $250 $260 Q3'12 revenue Subscription revenue Asset‐based fees Non‐recurring revenue Q3'13 revenue Year‐over‐Year Change in Revenues by Product $235.
Slide 5: Summary of Operating Metrics
Summary of Third Quarter 2013 Operating Metrics (Dollars in millions) MSCI Total Run Rate $800 $115 $915 $879 $147 $1,026 ABF Growth: +28 % Subscription Growth: +10 % Subscription ABF Q3'12 Q3'13 $550 $650 $750 $850 $950 $1,050 Run Rate grew YoY by 12% to over $1 billion Subscription Run Rate grew b
Slide 6: Index and ESG Products
Index and ESG Products (Dollars in millions) Third Quarter 2013 Highlights: Revenues grew 20% to $130 million, or 9% organically Subscription revenue grew by 26%, or by 10% organically Run Rate grew by 24% YoY to $507 million Subscription Run Rate grew by 23%, or 9% organically Asset‐based fee Run R
Slide 7: Asset-Based Fees
Asset‐Based Fees Third Quarter 2013 Highlights: Revenues grew 8% to $37 million Strong inflows into ETFs and increases in non‐ETF passive funds more than offset the loss of Vanguard Asset‐based fee Run Rate rose 28% to $147 million, and rose 12% from Q2’13 3.7 average basis point fee at quarter‐end
Slide 8: Risk Management Analytics
Risk Management Analytics (Dollars in millions) Third Quarter 2013 Highlights: Revenues grew by 7% to $70 million, or 3% organically Run Rate grew by 10% YoY to $288 million, or 6% organically Growth strongest at asset managers and asset owners Total sales of $11 million in Q3’13 Stronger sales in N
Slide 9: Portfolio Management Analytics
Portfolio Management Analytics (Dollars in millions) Third Quarter 2013 Highlights: Revenues declined 10% to $26 million Run Rate declined by 10% YoY to $105 million but up slightly from Q2’13 F/X remained a drag: $3 million YoY, but modest $0.5 million benefit compared to Q2’13 Stable Q3’13 as sale
Slide 10: Governance
Governance (Dollars in millions) Third Quarter 2013 Highlights: Revenues rose 7% organically to $30 million ‐ down 1% due to sale of CFRA Run Rate increased 5% organically to $113 million ‐ declined by 3% as reported Organic growth driven by sales of advisory compensation data and analytics Total sa
Slide 11: Compensation and Non-Compensation EBITDA Expense
Compensation and Non‐Compensation EBITDA Expense (Dollars in millions) Comp1 and Non‐comp expenses2 increased 14% to $145 million Compensation expense rose 12% Increase driven by the impact of the acquisitions of IPD and InvestorForce Total headcount growth of 29% YoY to 3,123, up 6% from Q2’13 Seve
Slide 12: Summary of Profitability Metrics: Net Income, EPS and Adjusted EBITDA
Summary of Profitability Metrics: Net Income, EPS and Adjusted EBITDA1 Net Income increased 15% Interest expense fell due to lower interest cost on the remaining debt and lower debt level Diluted EPS increased 7 cents to $0.46 Adjusted EBITDA1 was $113 million, up 4% Adjusted EPS2 increased 4 cents
Slide 13: Select Balance Sheet, Cash Flow and Other Items
Select Balance Sheet, Cash Flow and Other Items As of September 30, December 31, (in millions) 2013 2012 Cash and cash equivalents $284 $183 Short‐term investments ‐ 71 Total cash and short‐term investments $284 $254 Current maturities of long‐term debt $54 $43 Long‐term debt, net of current maturit
Slide 14: Use of Non-GAAP Financial Measures and Operating Metrics
Use of Non‐GAAP Financial Measures and Operating Metrics MSCI has presented supplemental non‐GAAP financial measures as part of this presentation. A reconciliation is provided that reconciles each non‐GAAP financial measure with the most comparable GAAP measure. The presentation of non‐GAAP financia
Slide 15: Reconciliation of Adjusted Net Income and Adjusted EPS
Reconciliation of Adjusted Net Income and Adjusted EPS Three Months Ended Nine Months Ended September 30, September 30, June 30, September 30, September 30, In thousands, except per share data 2013 2012 2013 2013 2012 Net Income $ 55,310 $ 48,274 $ 61,053 $ 175,300 $ 129,786 Plus: Non-recurring stoc
Slide 16: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income Three Months Ended September 30, 2013 Three Months Ended September 30, 2012 In thousands Performance and Risk Governance Total Performance and Risk Governance Total Net Income $ 55,310 $ 48,274 Plus: Provision for income taxes 30,937 27,320 Plus: Other
Slide 17: Reconciliation of Operating Expenses
Reconciliation of Operating Expenses Three Months Ended % Change from September 30, September 30, June 30, September 30, June 30, In thousands 2013 2012 2013 2012 2013 Cost of services Compensation $ 58,751 $ 50,111 $ 61,768 $ 17.2% (4.9%) Non-recurring stock based compensation - 267 - n/m n/m Total