Slide 1: Third Quarter 2012 Earnings Presentation
November 6, 2012 Third Quarter 2012 Earnings Presentation Forward‐Looking Statements – Safe Harbor Statement
Slide 2: Forward-Looking Statements – Safe Harbor Statement
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 because they involve known and unknown risks, uncertainties and other factors that are, in some cases
Slide 3: Summary of Third Quarter 2012 Financial Results
Summary of Third Quarter 2012 Financial Results Operating revenues increased 4.6% to $235.4 million in third quarter 2012 Net income declined by 3.0% to $48.3 million in third quarter 2012 Adjusted EBITDA1 grew by 4.3% to $108.1 million in third quarter 2012 Third quarter 2012 Adjusted EBITDA1 margi
Slide 4: Breakdown of Q3'11 vs Q3'12 Revenue Growth
Breakdown of Q3’11 vs Q3’12 Revenue Growth By Product Line By Revenue Type $225.0 $235.4 $6.6 $3.1 ($1.1) $0.5 $1.3 $210 $220 $230 $240 $250 Q3'11 revenue I & E RMA PMA E&CA Gov Q3'12 revenue $225.0 $235.4 $13.9 $210 $220 $230 $240 $250 Q3'11 revenue Subscription revenue Asset‐based fees Non‐recurri
Slide 5: Summary of Third Quarter 2012 Operating Results
(Dollars in millions) $758 $800 $118 $115 $550 $650 $750 $850 $950 Q3 2011 Q3 2012 ABF Subscription ABF RR Growth: ‐3% Subscription RR Growth: 6% Summary of Third Quarter 2012 Operating Results Total YoY Run Rate Growth of 4% Total Sales1 and Retention Q3’12 run rate (RR) grew YoY by 4% to $915 mill
Slide 6: Index and ESG Products
(Dollars in millions) Index and ESG Products Index and ESG Run Rate and Revenue Highlights: Q3’12 run rate grew by 6% YoY to $407 million Subscription run rate grew by 11% Asset‐based fee run rate declined by 3% YoY and by 11% sequentially, reflecting the removal of the anguard run rate Total sales
Slide 7: Index and ESG Subscription
(Dollars in millions) $265 $66 $293 $74 $‐ $100 $200 $300 $400 Run Rate Revenues Q3'11 Q3'12 Index and ESG Subscription Index and ESG Subscription Run Rate and Subscription Revenue Highlights: Q3’12 run rate grew by 11% YoY to $293 million Total sales were $12 million in Q3’12 ESG products sales inc
Slide 8: MSCI-Linked ETF AUM and Asset-Based Fees
(Dollars in millions) 15 22 7 14 0 1 15 0 15.2 $291 $333 $350 $361 $290 $302 $355 $327 $364 $0B $5B $10B $15B $20B $25B $0 $50 $100 $150 $200 $250 $300 $350 $400 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Cash Inflows ETF AUM MSCI‐linked ETFs Total AUM Linked to MSCI Indices of $364bn Sou
Slide 9: Risk Management Analytics
Risk Management Analytics Run Rate and Revenue Highlights: Q3’12 run rate grew by 4% YoY to $262 million Total sales of $9 million in Q3’12 Stronger sales to asset managers were offset by declines in sales to other client types Consolidation among European asset managers negatively affected cancels
Slide 10: Portfolio Management Analytics
(Dollars in millions) Portfolio Management Analytics Portfolio Management Analytics Run Rate and Revenue Highlights: Q3’12 run rate declined by 3% YoY to $116 million New European market stochastic model released in Q3 Total sales of $3 million in Q3’12 Selling environment remains competitive New pr
Slide 11: Governance
(Dollars in millions) Governance Governance Run Rate and Revenue Highlights: Q3’12 run rate grew by 8% YoY to $116 million Total sales for Q3’12 were $6 million Sales of executive compensation data and analytics tool remain strong but at seasonal low Institutional proxy research and voting sales ste
Slide 12: Compensation and Non-Compensation EBITDA Expense
(Dollars in millions) Compensation and Non‐Compensation EBITDA Expense Comp and Non‐Comp Expenses1,2 +9% (Dollars in millions) (1)Compensation expense excludes non‐recurring stock‐based compensation. Please see pages 17‐19 for reconciliation to operating expenses. (2) Non‐compensation excludes the l
Slide 13: Summary of Profitability Metrics: Net Income, EPS and Adjusted EBITDA
Summary of Profitability Metrics: Net Income, EPS and Adjusted EBITDA1 $ per share ‐3% 0% Diluted and Adjusted2 EPS Net Income fell 3% Q3’11 benefited from non‐recurring tax benefit of $4.2 million Interest expense declined $6 million Adjusted EBITDA1 was $108 million Diluted EPS declined 1 cent to
Slide 14: Summary Balance Sheet
September 30, December 31, In thousands 2012 2011 Cash and cash equivalents 340,458 $ 252,211 $ Short-term investments 93,885 140,490 Trade receivables, net of allowances 124,309 180,566 Deferred revenue 323,503 $ 289,217 $ Current maturities of long-term debt 43,082 10,339 Long-term debt, net of cu
Slide 15: IPD Company Overview and Financial Highlights
IPD Company Overview and Financial Highlights 15 IPD Highlights: Complementary Clients: Complementary Products: Complementary Footprint: Founded in 1985 Headquartered in London with ~320 employees globally Database covering over 60,000 properties valued at nearly $2 trillion Investment managers and
Slide 16: Use of Non-GAAP Financial Measures
Use of Non‐GAAP Financial Measures 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 financial measures should not
Slide 17: Reconciliation of Adjusted Net Income and Adjusted EPS
Reconciliation of Adjusted Net Income and Adjusted EPS (Dollars in thousands, except per share figures) September 30, September 30, June 30, September 30, September 30, In thousands 2012 2011 2012 2012 2011 GAAP - Net Income 48,274 $ 49,787 $ 37,546 $ 129,786 $ 128,968 $ Plus: Non-recurring stock-ba
Slide 18: Reconciliation of Adjusted EBITDA
(Dollars in thousands) In thousands Performance and Risk Governance Total Performance and Risk Governance Total Net Income 48,274 $ 49,787 $ Plus: Provision for income taxes 27,320 20,512 Plus: Other expense (income), net 7,935 11,946 Operating income 80,472 $ 3,057 $ 83,529 $ 78,957 $ 3,288 $ 82,24
Slide 19: Reconciliation of Operating Expenses
Reconciliation of Operating Expenses (Dollars in thousands) September 30, September 30, June 30, September 30, June 30, In thousands 2012 2011 2012 2011 2012 Cost of services Compensation 50,111 $ 50,114 $ 55,492 $ (0.0%) (9.7%) Non-recurring stock based compensation 267 470 94 (43.2%) 184.0% Total