Slide 1: Second Quarter 2014 Earnings Presentation
2014 MSCI Inc. All rights reserved. msci.com msci.com Second Quarter 2014 Earnings Presentation July 31, 2014
Slide 2: Forward-Looking Statements and Other Information
2014 MSCI Inc. All rights reserved. msci.com 2 msci.com 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
Slide 3: Summary of Second Quarter 2014 Financial Results
2014 MSCI Inc. All rights reserved. msci.com Summary of Second Quarter 2014 Financial Results Summary Financial Results Operating revenues increased 11% to $254 million Income from continuing operations increased 1% to $57 million Net Income rose 76% to $108 million Adjusted EBITDA1 was essentially
Slide 4: Breakdown of Q2'13 vs Q2'14 Revenue Growth
2014 MSCI Inc. All rights reserved. msci.com 4 Breakdown of Q2’13 vs Q2’14 Revenue Growth (Dollars in millions) Year-over-Year Change in Revenues by Type Year-over-Year Change in Revenues by Product $228.4 $254.2 $18.9 $7.1 ($0.3 ) $200 $210 $220 $230 $240 $250 $260 Q2'13 revenue Subscription revenu
Slide 5: Summary of Second Quarter 2014 Operating Metrics
2014 MSCI Inc. All rights reserved. msci.com 5 Summary of Second Quarter 2014 Operating Metrics MSCI Total Run Rate Total Sales and Retention Run Rate grew YoY by 12% to $987 million Subscription Run Rate grew by 8% Asset-based fee Run Rate growth of 34% $7 million currency benefit YoY but minimal s
Slide 6: Index and ESG Run Rate and Revenues
2014 MSCI Inc. All rights reserved. msci.com 6 Index and ESG Run Rate and Revenues Second Quarter Highlights: Revenues grew 14% to $150 million Subscription revenues grew by 12% Seasonally strong revenues from realestate products – expected to decline in Q3’14 Run Rate grew by 18% YoY to $570 millio
Slide 7: Asset-Based Fees
2014 MSCI Inc. All rights reserved. msci.com 7 Asset-Based Fees ABF Revenues versus ETF AUM MSCI-Linked ETF AUM by Market Exposure Second Quarter Highlights: Revenues grew 19% to $44 million Benefited from strong inflows into ETFs and increases in non-ETF passive funds Asset-based fee Run Rate rose
Slide 8: Risk Management Analytics Run Rate and Revenues
2014 MSCI Inc. All rights reserved. msci.com 8 Risk Management Analytics Risk Management Analytics Run Rate and Revenues Second Quarter Highlights: Revenues grew by 11% to $78 million Revenue growth aided by timing of newcontract implementations Run Rate grew by 5% YoY to $310 million Growth stronge
Slide 9: Portfolio Management Analytics Run Rate and Revenues
2014 MSCI Inc. All rights reserved. msci.com $105 $26 $106 $26 $- $20 $40 $60 $80 $100 $120 $140 Run Rate Revenues Q2'13 Q2'14 9 Portfolio Management Analytics Portfolio Management Analytics Run Rate and Revenues Second Quarter Highlights: Revenues grew 1% to $26 million Run Rate grew by 2% YoY to $
Slide 10: Compensation Expense
2014 MSCI Inc. All rights reserved. msci.com 10 Compensation Expense (Dollars in millions) Higher compensation expense driven by higher headcount Headcount rose 18% versus Q2’13 to 2,762 Headcount rose 5% versus Q1’14 Continued growth in number of employees in lower cost emerging markets EMC % rose
Slide 11: Non-Compensation Expense
2014 MSCI Inc. All rights reserved. msci.com 11 Non-Compensation Expense (Dollars in millions) Non-Compensation expense rose 31% YoY Increase in IT expenses linked to investment program IT costs increased to support additional functionality and storage capacity Higher occupancy costs driven by addit
Slide 12: Summary of Profitability Metrics from Continuing Operations
2014 MSCI Inc. All rights reserved. msci.com 12 Income from continuing operations increased 1% Diluted EPS from continuing operations increased 4% to $0.48 Net Income rose 76% to $108 million Adjusted EBITDA1 remainedconstant at $106 million Adjusted EPS2 increased 6% to $0.55 Q2’14 tax rate from co
Slide 13: Select Balance Sheet and Cash Flow Items
2014 MSCI Inc. All rights reserved. msci.com (Dollars in millions) June 30, 2014 December 31, 2013 Total cash and cash equivalents $683 $358 Current maturities of long-term debt $20 $20 Long-term debt, net of current maturities $778 $788 Total $798 $808 Q2'14 H1'14 Net Cash from Operations $69 $94 S
Slide 14: Key Guidance
2014 MSCI Inc. All rights reserved. msci.com Key Guidance Updated 14 2014 Adjusted EBITDA expenses1 projected to be in the range of $595- $605 million Cash Flow from Operations projected to be $275-$325 million in 2014 2014 Capital expenditures projected to be $50-$55 million Full Year 2014 tax rate
Slide 15: Use of Non-GAAP Financial Measures and Operating Metrics
2014 MSCI Inc. All rights reserved. msci.com 15 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 GAA
Slide 16: Reconciliation to Adjusted Net Income and Adjusted EPS
2014 MSCI Inc. All rights reserved. msci.com 16 Reconciliation to Adjusted Net Income and Adjusted EPS Three Months Ended Six Months Ended June 30, June 30, March 31, June 30, June 30, In thousands, except per share data 2014 2013 2014 2014 2013 Net Income 107,660 $ 61,053 $ 80,399 $ 188,059 $ 119,9
Slide 17: Reconciliation to Adjusted EBITDA
2014 MSCI Inc. All rights reserved. msci.com 17 Reconciliation to Adjusted EBITDA June 30, June 30, March 31, June 30, June 30, In thousands 2014 2013 2014 2014 2013 Net Income 107,660 $ 61,053 $ 80,399 $ 188,059 $ 119,990 $ Less: Income from discontinued operations, net of income taxes (50,857) $ (
Slide 18: Reconciliation to Adjusted EBITDA Expenses
2014 MSCI Inc. All rights reserved. msci.com 18 Reconciliation to Adjusted EBITDA Expenses Full Year June 30, June 30, March 31, June 30, June 30, 2014 In thousands 2014 2013 2014 2014 2013 Outlook Total operating expenses 165,695 $ 138,534 $ 160,183 $ 325,878 $ 275,112 $ $665,000 - $677,000 Less: D