Slide 1: First Quarter 2013 Earnings Presentation
First Quarter 2013 Earnings Presentation May 1, 2013 msci.com
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: Summary of First Quarter 2013 Financial Results
Summary of First Quarter 2013 Financial Results Financial results Operating revenues increased 10.0% to $251.9 million, or 5.8% organically1 Net income increased 34.1% to $58.9 million Adjusted EBITDA2 grew EBITDA by 8.0% to $110.1 million Diluted EPS rose 37.1% to $0.48 Adjusted EPS3 rose 29.5% to
Slide 4: Breakdown of Q1'12 vs Q1'13 Revenue Growth
Breakdown of Q1’12 vs Q1’13 Revenue Growth (Dollars in millions) By Revenue Type $229.1 $22.0 $1.9 ($1.1) $251.9 Q1'12 revenue Subscription revenue Asset‐based fees Non‐recurring revenue Q1'13 revenue By Product Line $229.1 $15.1 $3.2 ($1.4) $4.4 $1.5 $251.9 Q1'12 revenue Index & ESG Risk mgmt. anal
Slide 5: Summary of Operating Results
Summary of First Quarter 2013 Operating Results (Dollars in millions) MSCI Total Run Rate $982 $134 $848 $919 $137 $782 ABF RR Growth: ‐2 % Subscription RR Growth: 8 % Q1'12 Q1'13 Subscription ABF Run rate (RR) grew YoY by 7% to $982 million Subscription run rate grew by 8%, or 3% organically Asset‐
Slide 6: Index and ESG Products
Index and ESG Products (Dollars in millions) First Quarter 2013 Highlights: Revenues grew 14% to $121 million, or 7% organically Seasonally weakest quarter for IPD revenues Run rate grew by 15% YoY to $478 million Subscription run rate grew by 24%, or 10% organically Asset‐based fee run rate decline
Slide 7: Asset-Based Fees
Asset‐Based Fees First Quarter 2013 Highlights: Revenues grew 6% to $37 million Asset‐based fee run rate declined 2% to $134 million, but rose 6% from Q4’12 Excluding Vanguard ETFs: Run rate grew by 17% 3.6 average basis point fee at quarter‐end Total ETF AUM increased by 1% to $357 billion at the e
Slide 8: Risk Management Analytics
Risk Management Analytics (Dollars in millions) First Quarter 2013 Highlights: Revenues grew by 5% to $67 million, or 3% organically Run rate grew by 6% YoY to $275 million, or 3% organically Total sales of $11 million in Q1’13 Uptick in sales in Europe offset by weakness in other regions Business t
Slide 9: Portfolio Management Analytics
Portfolio Management Analytics (Dollars in millions) First Quarter 2013 Highlights: Revenues declined 5% to $28 million Run rate declined by 10% YoY to $106 million F/X remained a drag: $2.3 million YoY, including $1.5 million in Q1’13 Total sales of $3 million flat with prior year Retention rates d
Slide 10: Governance
Governance (Dollars in millions) First Quarter 2013 Highlights: Revenues up 5% to $32 million Run rate declined by 3% YoY to $110 million, but increased 5% organically Driven by success of our advisory compensation data and analytics products Total sales for Q1’13 were $9 million Retention rates str
Slide 11: Compensation and Non-Compensation EBITDA Expense
Compensation and Non‐Compensation EBITDA Expense (Dollars in millions) Comp1 and Non‐comp expenses2 increased 12% to $142 million Compensation expense rose 16% Primarily driven by the impact of the acquisitions of IPD and InvestorForce Total headcount growth of 15% to 2,844 41% of employee base in l
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 34% Interest expense decreased $5 million as a result of lower indebtedness $4 million in discrete tax benefits Adjusted EBITDA1 was $110 million, up 8% Diluted EPS increased 13 cents to $0.48 Adjusted EPS2 i
Slide 13: Summary Balance Sheet and Select Cash Flow Items
Summary Balance Sheet and Select Cash Flow Items Total Cash & Investments $263M Total Debt $829M In thousands As of March 31, 2013 December 31, 2012 Cash and cash equivalents $ 263,029 $ 183,309 Short-term investments - 70,898 Trade receivables, net of allowances 166,915 153,557 Deferred revenue $ 3
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 March 31, 2013 March 31, 2013 December 31, 2012 In thousands, except per share figures Net Income $ 58,937 $ 43,966 $ 54,452 Plus: Non-recurring stock-based compensation - 582 381 Plus: Amortization of intangible assets 14,486
Slide 16: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income Three Months Ended March 31, 2013 Three Months Ended March 31, 2012 In thousands Performance and Risk Governance Total Performance and Risk Governance Total Net Income $ 58,937 $ 43,966 Plus: Provision for income taxes 24,614 24,273 Plus: Other expense
Slide 17: Reconciliation of Operating Expenses
Reconciliation of Operating Expenses Three Months Ended % Change from March 31, 2013 March 31, 2012 December 31, 2012 March 31, 2012 December 31, 2012 In thousands Cost of services Compensation $ 61,149 $ 53,549 $ 55,982 14.2% 9.2% Non-recurring stock based compensation - 268 255 (100.0%) (100.0%) T