Slide 1: Fourth Quarter and Full Year 2012 Earnings Presentation
MSCI Fourth Quarter and Full Year 2012 Earnings Presentation February 7, 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 stateme
Slide 3: Summary of Financial Results
Summary of Fourth Quarter 2012 Financial Results = Strong financial results > Net income increased 22.4% to $54.5 million in fourth quarter 2012 > Operating revenues increased 9.3% to $247.1 million in fourth quarter 2012 > Adjusted EBITDA? grew by 12.5% to $116.6 million in fourth quarter 2012 > Di
Slide 4: Breakdown of Q4'11 vs Q4'12 Revenue Growth
Breakdown of Q4’11 vs Q4’12 Revenue Growth (Dollars in millions) = By Product Line $260 doco $4.6 $2.6 $247.1 $16.7 Se oe ($1.5) ($1.4) 3230 ses $220 - a4 Index Riskmgmt. Portfolio Energy& | Governance —qa'12 REVERE: &ESG analytics © mgmt.anal. comm.anal. Revenue = By Revenue Type $260 $1.6 $247.1 $
Slide 5: Summary of Operating Results
Summary of Fourth Quarter 2012 Operating Results (Dollars in millions) MSCI Total Run Rate = Run rate (RR) grew YoY by 10% to aie su $967 million we > Subscription run rate grew by 5% on ssi an organic basis ABF RR 9 Growth: 6% > Asset-based fee (ABF) run rate 000 ‘i increased 6%, even after factori
Slide 6: Index and ESG Products
Index and ESG Products (Dollars in millions) Fourth Quarter 2012 Highlights: Index and ESG Run Rate and Revenue es $500 = Revenues grew 17% to $117 million, 40 awh | 13% organic $400 5350 | m Subscription = Run rate grew by 19% YoY to $465 ea million $250 > Subscription run rate grew by 25%, or ng ‘
Slide 7: Asset-Based Fees Total AUM Linked to MSCI Indices of $402bn
Asset-Based Fees Total AUM Linked to MSCI Indices of $402bn Fourth Quarter 2012 Highlights: Total ABF run rate grew by 6% YoY and 11% sequentially to $127 million > Excluding Vanguard ETFs, run rate grew by 25% = Total ETF AUM increased by 33% YoY and by 11% sequentially to $402 billion at the end o
Slide 8: Risk Management Analytics
Risk Management Analytics (Dollars in millions) Risk Management Analytics Fourth Quarter 2012 Highlights: Run Rate and Revenue = Revenues grew by 7% to $67 million $400 = Run rate grew by 4% YoY to $262 million 30 mast $262 = Totalsales of $11 millionin Q4’12 Zod maa'i2 > Solid sales to U.S. banks/b
Slide 9: Portfolio Management Analytics
Portfolio Management Analytics (Dollars in millions) = : Portfolio Management Analytics Fourth Quarter 2012 Highlights: Rosai = Revenues declined 5% to $29 million S208 = Run rate declined by 7% YoY to $110 million gon movi $110 > Run rate growth hurt by foreign S118 exchange impact of $2 million (p
Slide 10: Governance
Governance (Dollars in millions) Governance Run Rate and Revenue Fourth Quarter 2012 Highlights: $200 = Revenues up 9% to $31 million $150 moet . Run rate grew by 8% YoY to $117 gis $117 — million $100 + = Total sales for Q4’12 were $9 million > Driven by success of our executive | $29 compensation
Slide 11: Summary of Profitability Metrics: Net Income, EPS and Adjusted EBITDA
Summary of Profitability Metrics: Net Income, EPS and Adjusted EBITDA?! = Net Income increased 22% > Driven by index and ESG and WSs bite and Adj. EBITDA* | Dilutedand Adjusted EPS? risk management analytics revenues > Tight expense management kept non-comp costs in check > Interest expense declined
Slide 12: Compensation and Non-Compensation EBITDA Expense
Compensation and Non-Compensation EBITDA Expense (Dollars in millions) = Comp! and Non-comp expenses? increased 7% to $131 million = Compensation expense rose 10% Comp and No: Expenses? ‘omp >» Addition of 312 IPD employees reduced mix of employees in EMCs to 41% from 44% in Q3’12. Still up from 39%
Slide 13: Capital Allocation
Capital Allocation Key Principles of MSCI Capital Allocation * MSCI will require ongoing organic and in-organic investment in order to maintain its leadership position in the marketplace * Funding organic investment is first priority * Focus is on bolt-on transactions that fit with our strategy and
Slide 14: Summary Balance Sheet
Summary Balance Sheet ee Total Cash & Investments December 31, December 31, In thousands 2012 2011 Cash and cash equivalents $ $ 252.2 Short-term investments 140,490 Trade receivables, net of allow ances 153,557 180,566 Deferred revenue $ 308,022 $ 289,217 Total Debt Current maturities of long-term
Slide 15: 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. & reconciliation is provided that reconciles each non-GAAP financial measure with the most comparable GAAP measure. The presentation of non-GAAP financial measures should n
Slide 16: Reconciliation of Adjusted Net Income and Adjusted EPS
Reconciliation of Adjusted Net Income and Adjusted EPS (Dollars in thousands, except pershare figures) ‘Three Months Ended Year Ended December 4, December, September 30, December, December 3, In thousands 2012 2011 2012 2012 2011 Het Income o SDF aie eae 1342 17354 Plus: Non-recurring stock-based co
Slide 17: Reconciliation of Adjusted EBITDA to Net Income
Reconciliation of Adjusted EBITDA to Net Income (Dollars in thousands) ‘Three Months Ended December 34,2012 Three Months Ended December 31, 2011, Performance Performance Inthousands andRisk Governance Total and Risk Governance Tata Het Income B 54452 3 44486 Plus: Provision for income taxes 33,863 2
Slide 18: ©2013. All rights reserved. Fourth Quarter and Full Year 2 ©2013. All rights reserved.
©2013. All rights reserved. Fourth Quarter and Full Year 2012 Earnings Presentation February 7, 2013 ©2013. All rights reserved. msci.com Forward-Looking Statements and Other Information .Forward-Looking Statements – Safe Harbor Statements .This presentation may contain forward-looking statements wi