UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2017~~

2023

☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ~~from to~~

from____________to____________

Commission file number 001-33812

MSCI INC.

(Exact Name of Registrant as Specified in its Charter)

~~Delaware~~	~~13-4038723~~
Delaware		13-4038723
(State or other jurisdiction of ~~Incorporation)~~ Incorporation or Organization)		(I.R.S. Employer Identification Number)

7 World Trade Center 250 Greenwich Street, 49th Floor New York, New York		10007
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 804-3900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

MSCI

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer		☒ x			Accelerated filer		☐ o

Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~ o		Smaller reporting company			☐ o

Emerging growth company	☐			o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October ~~27, 2017,~~24, 2023, there were ~~90,068,843~~79,091,190 shares of the registrant’s common stock, par value $0.01, outstanding.

Table of Contents~~MSCI INC.~~

~~FORM 10-Q~~

FOR THE QUARTER ENDED SEPTEMBER 30, ~~2017~~

2023

TABLE OF CONTENTS

			~~Page~~
				Page
		Part I – Financial Information
Item 1.				Financial Statements		5 4
		Condensed Consolidated Statements of Financial Condition as of September 30, 2023 and December 31, 2022		4
		Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022		5
		Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022		6
		Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for the three and nine months ended September 30, 2023 and 2022		7
		Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022		9
		Notes to Condensed Consolidated Financial Statements		10
Item 2.				Management’s Discussion and Analysis of Financial Condition and Results of Operations		22 23
Item 3.				Quantitative and Qualitative Disclosures About Market Risk		44 42
Item 4.				Controls and Procedures		45 42

				Part II – Other Information
Item 1.				Legal Proceedings		46 43
Item 1A.				Risk Factors		46 43
Item 2.				Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds , and Issuer Purchases of Equity Securities		46 43
Item 3. 5.		O ther Information		~~Defaults Upon Senior Securities~~43		47
~~Item 4.~~			~~Mine Safety Disclosures~~	47
~~Item 5.~~	~~Other Information~~		47
Item 6.			Exhibits		48 44

Table of Contents

AVAILABLE INFORMATION

~~MSCI Inc. files~~

Our corporate headquarters is located at 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, New York, 10007, and our telephone number is (212) 804-3900. We maintain a website on the internet at www.msci.com. The contents of our website are not a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). You may read and copy any document MSCI Inc. files with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for information on the public reference room. The SEC maintains a website that contains ~~annual, quarterly and current~~ reports, proxy and information statements and other information that ~~issuers (including MSCI Inc.)~~we file electronically with the ~~SEC. MSCI Inc.’s electronic~~ SEC ~~filings are available to the public~~ at ~~the SEC’s website,~~ www.sec.gov.

~~MSCI Inc.’s website is~~ ~~www.msci.com.~~ ~~You can access MSCI Inc.’s Investor Relations homepage at~~ ~~http://ir.msci.com.~~ ~~MSCI Inc. makes~~ We also make available free of charge, on or through ~~its Investor Relations homepage, its~~our website, these reports, proxy statements ~~Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K~~ and ~~any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”),~~other information as soon as reasonably practicable ~~after such material is~~following the time they are electronically filed with or furnished to the SEC. ~~MSCI Inc. also makes available, through its~~To access these, click on the “SEC Filings” link under the “Financial Information” tab found on our Investor Relations homepage ~~via a link~~(http://ir.msci.com).

We also use our Investor Relations homepage, Corporate Responsibility homepage and corporate X (formerly Twitter) account (@MSCI_Inc) as channels of distribution of Company information. The information we post through these channels may be deemed material.

Accordingly, investors should monitor these channels, in addition to ~~the SEC’s website, statements of beneficial ownership of MSCI Inc.’s equity securities filed by its directors, officers, 5% or greater shareholders~~following our press releases, SEC filings and ~~others under Section 16 of the Exchange Act.~~

~~You can access~~public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about ~~MSCI Inc.’s corporate governance~~us when you enroll your email address by visiting the “Email Alerts” section of our Investor Relations homepage at ~~http:~~https://ir.msci.com/~~corporate-governance.cfm,~~email-alerts. The contents of our website, including ~~copies of the following:~~

~~Charters for MSCI Inc.’s Audit Committee, Compensation and Talent Management Committee, Nominating~~our Investor Relations homepage and Corporate ~~Governance Committee~~Responsibility homepage, and ~~Strategy and Finance Committee;~~

~~Corporate Governance Policies;~~

~~Procedures for Submission~~our social media channels are not, however, a part of ~~Ethical~~ or ~~Accounting Related Complaints; and~~

~~Code of Ethics and Business Conduct.~~

MSCI Inc.’s Code of Ethics and Business Conduct applies to all directors, officers and employees, including its Chief Executive Officer and its Chief Financial Officer. MSCI Inc. will post any amendments to the Code of Ethics and Business Conduct and any waivers that are required to be disclosed by the rules of either the SEC or the New York Stock Exchange LLC on its website. You can request a copy of these documents, excluding exhibits, at no cost, by contacting Investor Relations, MSCI Inc., 7 World Trade Center, 250 Greenwich Street, 49th Floor, New York, NY 10007; (212) 804-1583. The information on MSCI Inc.’s website is not incorporated by reference ~~into~~in this ~~report~~Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

We have included in this Quarterly Report on Form 10-Q, and from time to time may make in our public filings, press releases or ~~any~~ other ~~report filed or furnished by us with the SEC.~~

~~FORWARD-LOOKING STATEMENTS~~

~~This report~~public statements, certain statements that constitute forward-looking statements. In addition, our management may ~~contain~~make forward-looking statements ~~within the meaning~~to analysts, investors, representatives of the ~~Private Securities Litigation Reform Act of 1995.~~media and others. These forward-looking statements ~~relate to~~are not historical facts and represent only MSCI’s beliefs regarding future events, ~~or to future financial performance~~many of which, by their nature, are inherently uncertain and beyond our control. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause ~~MSCI Inc.’s~~our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these ~~forward-looking~~ statements.

In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology. Statements concerning our financial position, business strategy and plans or objectives for future operations are forward-looking statements. 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, beyond ~~MSCI Inc.’s~~our control and that could materially affect ~~MSCI Inc.’s~~our actual results, levels of activity, performance or achievements.

~~Other factors that could materially affect actual results, levels~~ Such risks and uncertainties include those set forth under “Risk Factors” in Part I, Item 1A of ~~activity, performance or achievements can be found in MSCI Inc.’s~~the 2022 Annual Report on Form 10-K ~~for the fiscal year ended December 31, 2016~~ filed with the SEC on February ~~24, 2017 and in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC.~~10, 2023. If any of these risks or uncertainties materialize, or if ~~our~~MSCI’s underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI ~~Inc.~~ projected. Any forward-looking statement ~~in this report~~ reflects ~~MSCI Inc.’s~~our current views with respect to future events, levels of activity, performance or achievements and is subject to these and other risks, uncertainties and assumptions relating to ~~MSCI Inc.’s~~our operations, results of operations, growth strategy and liquidity. The forward-looking statements in this report speak only as of the time they are made and do not necessarily reflect our outlook at any other point in time. MSCI ~~Inc.~~ assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law.

~~WEBSITE AND SOCIAL MEDIA DISCLOSURE~~

~~MSCI Inc. uses its website~~ Therefore, readers should carefully review the risk factors set forth in the Annual Report on Form 10-K and corporate Twitter account (@MSCI_Inc) as channels of distribution of company information. The information MSCI Inc. posts through these channels may be deemed material. Accordingly, investors should monitor these channels, in ~~addition~~other reports or documents we file from time to following MSCI Inc.’s press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about MSCI Inc. when you enroll your email address by visiting the “Email Alerts Subscription” section of our Investor Relations homepage at ~~http://ir.msci.com/alerts.cfm?. The contents of MSCI Inc.’s website and social media channels are not, however, incorporated by reference into this report or any other report filed or furnished by us~~time with the SEC.

Table of Contents ~~PAR~~T

PART I

– FINANCIAL INFORMATION

~~Item 1.~~

~~Financial Statements~~

Item 1. Financial Statements

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except per share and share data)

	As of
	September 30,			December 31,				As of
	2017			2016				September 30,		December 31,
	(unaudited)
(unaudited)							(unaudited)	2023		2022
ASSETS							ASSETS
Current assets:							Current assets:
Cash and cash equivalents	$	799,015		$	791,834
Accounts receivable (net of allowances of $1,689 and $1,035 at September 30, 2017 and December 31, 2016, respectively)		309,196			221,504
Cash and cash equivalents (includes restricted cash of $3,839 and $368 at September 30, 2023 and December 31, 2022, respectively)							Cash and cash equivalents (includes restricted cash of $3,839 and $368 at September 30, 2023 and December 31, 2022, respectively)	$	928,552	$	993,564
Accounts receivable (net of allowances of $3,030 and $2,652 at September 30, 2023 and December 31, 2022, respectively)							Accounts receivable (net of allowances of $3,030 and $2,652 at September 30, 2023 and December 31, 2022, respectively)	603,266		663,236
Prepaid income taxes		7,420			12,389		Prepaid income taxes	54,544		36,654
Prepaid and other assets		37,450			29,943		Prepaid and other assets	52,967		54,520
Total current assets		1,153,081			1,055,670		Total current assets	1,639,329		1,747,974
Property, equipment and leasehold improvements (net of accumulated depreciation and amortization of $164,804 and $136,841 at September 30, 2017 and December 31, 2016, respectively)		85,680			95,585

Property, equipment and leasehold improvements, net							Property, equipment and leasehold improvements, net	58,036		53,853
Right of use assets							Right of use assets	117,533		126,584
Goodwill		1,560,169			1,555,850		Goodwill	2,230,389		2,229,670
Intangible assets (net of accumulated amortization of $497,114 and $462,860 at September 30, 2017 and December 31, 2016, respectively)		328,326			347,640
Intangible assets, net							Intangible assets, net	536,129		558,517
Equity method investment							Equity method investment	210,657		214,389
Deferred tax assets		11,091			9,531		Deferred tax assets	34,790		29,207
Other non-current assets		16,125			18,302		Other non-current assets	38,631		37,341
Total assets	$	3,154,472		$	3,082,578		Total assets	$	4,865,494	$	4,997,535

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)							LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:							Current liabilities:
Accounts payable	$	2,385		$	568		Accounts payable	$	10,224	$	15,039
Income taxes payable							Income taxes payable	19,536		8,058
Accrued compensation and related benefits		102,581			119,113		Accrued compensation and related benefits	157,227		182,370
Current portion of long-term debt							Current portion of long-term debt	8,719		8,713
Other accrued liabilities		83,821			82,531		Other accrued liabilities	171,458		153,461
Deferred revenue		374,730			334,358		Deferred revenue	837,479		882,886
Total current liabilities		563,517			536,570		Total current liabilities	1,204,643		1,250,527

Long-term debt		2,077,370			2,075,201		Long-term debt	4,500,063		4,503,233
Deferred taxes		84,432			94,067
Long-term operating lease liabilities							Long-term operating lease liabilities	121,941		131,575
Deferred tax liabilities							Deferred tax liabilities	4,220		29,098
Other non-current liabilities		68,839			59,135		Other non-current liabilities	83,723		91,027
Total liabilities		2,794,158			2,764,973		Total liabilities	5,914,590		6,005,460

Commitments and Contingencies (see Note 6 and Note 7)

Shareholders' equity:
Preferred stock (par value $0.01, 100,000,000 share authorized; no shares issued)		—			—
Common stock (par value $0.01; 750,000,000 common shares authorized; 129,505,173 and 128,996,344 common shares issued and 90,067,232 and 91,279,590 common shares outstanding at September 30, 2017 and December 31, 2016, respectively)		1,295			1,290
Treasury shares, at cost (39,437,941 and 37,716,754 common shares held at September 30, 2017 and December 31, 2016, respectively)		(2,321,862	)		(2,170,739	)
Commitments and Contingencies (see Note 7)							Commitments and Contingencies (see Note 7)

Shareholders’ equity (deficit):							Shareholders’ equity (deficit):
Preferred stock (par value $0.01; 100,000,000 shares authorized; no shares issued)							Preferred stock (par value $0.01; 100,000,000 shares authorized; no shares issued)	—		—
Common stock (par value $0.01; 750,000,000 common shares authorized; 133,817,103 and 133,623,005 common shares issued and 79,091,098 and 79,959,989 common shares outstanding at September 30, 2023 and December 31, 2022, respectively)							Common stock (par value $0.01; 750,000,000 common shares authorized; 133,817,103 and 133,623,005 common shares issued and 79,091,098 and 79,959,989 common shares outstanding at September 30, 2023 and December 31, 2022, respectively)	1,338		1,336
Treasury shares, at cost (54,726,005 and 53,663,016 common shares held at September 30, 2023 and December 31, 2022, respectively)							Treasury shares, at cost (54,726,005 and 53,663,016 common shares held at September 30, 2023 and December 31, 2022, respectively)	(6,447,042)		(5,938,116)
Additional paid in capital		1,255,616			1,225,565		Additional paid in capital	1,571,442		1,515,874
Retained earnings		1,475,347			1,322,224		Retained earnings	3,886,188		3,473,192
Accumulated other comprehensive loss		(50,082	)		(60,735	)	Accumulated other comprehensive loss	(61,022)		(60,211)
Total shareholders' equity		360,314			317,605
Total liabilities and shareholders' equity	$	3,154,472		$	3,082,578
Total shareholders’ equity (deficit)							Total shareholders’ equity (deficit)	(1,049,096)		(1,007,925)

Total liabilities and shareholders’ equity (deficit)							Total liabilities and shareholders’ equity (deficit)	$	4,865,494	$	4,997,535

See Notes to ~~Unaudited~~ Condensed Consolidated Financial Statements

(Unaudited)

Table of Contents

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
	2017			2016			2017			2016
	(unaudited)
(unaudited)													(unaudited)	2023		2022		2023		2022
Operating revenues	$	322,097		$	288,433		$	939,393		$	857,857		Operating revenues	$	625,439	$	560,639	$	1,838,814	$	1,672,390

Operating expenses:													Operating expenses:
Cost of revenues		68,491			62,986			204,607			188,288
Cost of revenues (exclusive of depreciation and amortization)													Cost of revenues (exclusive of depreciation and amortization)	105,311		98,418		324,024		301,957
Selling and marketing		44,918			41,514			129,526			125,057		Selling and marketing	66,581		65,545		201,044		192,671
Research and development		17,983			18,750			55,163			56,244		Research and development	31,438		25,941		92,901		78,179
General and administrative		22,103			21,859			64,555			65,768		General and administrative	36,826		30,702		113,527		112,993
Amortization of intangible assets		10,614			11,752			32,987			35,535		Amortization of intangible assets	26,722		23,375		77,543		67,274
Depreciation and amortization of property, equipment and leasehold improvements		9,325			8,312			27,322			24,873		Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		15,911		20,426
Total operating expenses		173,434			165,173			514,160			495,765		Total operating expenses	272,130		251,108		824,950		773,500


Operating income		148,663			123,260			425,233			362,092		Operating income	353,309		309,531		1,013,864		898,890

Interest income		(1,835	)		(799	)		(4,077	)		(2,005	)	Interest income	(10,314)		(3,938)		(31,079)		(5,160)
Interest expense		29,020			26,790			87,071			72,612		Interest expense	46,902		44,162		139,725		125,961
Other expense (income)		675			(253	)		2,300			2,642		Other expense (income)	(935)		103		4,032		(90)

Other expense (income), net		27,860			25,738			85,294			73,249		Other expense (income), net	35,653		40,327		112,678		120,711


Income before provision for income taxes		120,803			97,522			339,939			288,843		Income before provision for income taxes	317,656		269,204		901,186		778,179
Provision for income taxes		35,650			32,241			100,569			96,238		Provision for income taxes	57,997		52,612		155,974		122,577
Net income	$	85,153		$	65,281		$	239,370		$	192,605		Net income	$	259,659	$	216,592	$	745,212	$	655,602

Earnings per basic common share	$	0.94		$	0.69		$	2.65		$	1.99

Earnings per diluted common share	$	0.93		$	0.68		$	2.61		$	1.98

Weighted average shares outstanding used in computing earnings per share
Earnings per share:													Earnings per share:
Basic		90,112			94,823			90,406			96,879		Basic	$	3.28	$	2.69	$	9.36	$	8.09
Diluted		91,868			95,473			91,731			97,445		Diluted	$	3.27	$	2.68	$	9.32	$	8.05

Dividend declared per common share	$	0.38		$	0.28		$	0.94		$	0.72
Weighted average shares outstanding:													Weighted average shares outstanding:
Basic													Basic	79,116		80,500		79,580		81,001
Diluted													Diluted	79,500		80,874		79,959		81,481

See Notes to ~~Unaudited~~ Condensed Consolidated Financial Statements

(Unaudited)

Table of Contents

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
	2017			2016			2017			2016
	(unaudited)
(unaudited)													(unaudited)	2023		2022		2023		2022
Net income	$	85,153		$	65,281		$	239,370		$	192,605		Net income	$	259,659	$	216,592	$	745,212	$	655,602
Other comprehensive income (loss):													Other comprehensive income (loss):
Foreign currency translation adjustments		3,458			(2,627	)		11,362			(15,014	)	Foreign currency translation adjustments	(5,832)		(10,978)		1,046		(25,724)
Income tax effect		—			(101	)		—			44		Income tax effect	771		1,453		(660)		3,921
Foreign currency translation adjustments, net		3,458			(2,728	)		11,362			(14,970	)	Foreign currency translation adjustments, net	(5,061)		(9,525)		386		(21,803)


Pension and other post-retirement adjustments		(69	)		(30	)		(343	)		(262	)	Pension and other post-retirement adjustments	756		293		(1,338)		7,779
Income tax effect		(106	)		13			(366	)		75		Income tax effect	(72)		(79)		141		(1,193)
Pension and other post-retirement adjustments, net		(175	)		(17	)		(709	)		(187	)	Pension and other post-retirement adjustments, net	684		214		(1,197)		6,586
Other comprehensive income (loss), net of tax		3,283			(2,745	)		10,653			(15,157	)

Other comprehensive (loss) income, net of tax													Other comprehensive (loss) income, net of tax	(4,377)		(9,311)		(811)		(15,217)

Comprehensive income	$	88,436		$	62,536		$	250,023		$	177,448		Comprehensive income	$	255,282	$	207,281	$	744,401	$	640,385

See Notes to ~~Unaudited~~ Condensed Consolidated Financial Statements

(Unaudited)

Table of Contents

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)


(unaudited)	Common Stock		Treasury Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2022	$	1,336	$	(5,938,116)	$	1,515,874	$	3,473,192	$	(60,211)	$	(1,007,925)
Net income							238,728				238,728
Dividends declared ($1.38 per common share)							(111,986)				(111,986)
Dividends paid in shares					44						44
Other comprehensive income (loss), net of tax									2,775		2,775
Common stock issued	2										2
Shares withheld for tax withholding			(43,960)								(43,960)
Compensation payable in common stock					20,988						20,988
Common stock repurchased and held in treasury											—
Common stock issued to Directors and (held in)/released from treasury			(30)								(30)
Balance at March 31, 2023	1,338		(5,982,106)		1,536,906		3,599,934		(57,436)		(901,364)

Net income							246,825				246,825
Dividends declared ($1.38 per common share)							(110,383)				(110,383)
Dividends paid in shares					33						33
Other comprehensive income (loss), net of tax									791		791
Common stock issued											—
Shares withheld for tax withholding			(611)								(611)
Compensation payable in common stock					16,426						16,426
Common stock repurchased and held in treasury			(444,655)								(444,655)
Common stock issued to Directors and (held in)/released from treasury			(730)								(730)
Balance at June 30, 2023	1,338		(6,428,102)		1,553,365		3,736,376		(56,645)		(1,193,668)

Net income							259,659				259,659
Dividends declared ($1.38 per common share)							(109,847)				(109,847)
Dividends paid in shares					30						30
Other comprehensive income (loss), net of tax									(4,377)		(4,377)
Common stock issued											—
Shares withheld for tax withholding and exercises			(871)								(871)
Compensation payable in common stock					18,047						18,047
Common stock repurchased and held in treasury			(18,039)								(18,039)
Common stock issued to Directors and (held in)/released from treasury			(30)								(30)
Balance at September 30, 2023	$	1,338	$	(6,447,042)	$	1,571,442	$	3,886,188	$	(61,022)	$	(1,049,096)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)


(unaudited)	Common Stock		Treasury Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total





































Balance at December 31, 2021	$	1,332	$	(4,540,144)	$	1,457,623	$	2,976,517	$	(58,795)	$	(163,467)
Net income							228,423				228,423
Dividends declared ($1.04 per common share)							(87,280)				(87,280)
Dividends paid in shares					77						77
Other comprehensive income (loss), net of tax									(2,022)		(2,022)
Common stock issued	4										4
Shares withheld for tax withholding and exercises			(105,000)								(105,000)
Compensation payable in common stock					22,754						22,754
Common stock repurchased and held in treasury			(772,657)								(772,657)
Common stock issued to Directors and (held in)/released from treasury			(21)								(21)
Balance at March 31, 2022	1,336		(5,417,822)		1,480,454		3,117,660		(60,817)		(879,189)

Net income							210,587				210,587
Dividends declared ($1.04 per common share)							(84,593)				(84,593)
Dividends paid in shares					22						22
Other comprehensive income (loss), net of tax									(3,884)		(3,884)
Common stock issued											—
Shares withheld for tax withholding and exercises			(3,862)								(3,862)
Compensation payable in common stock					11,858						11,858
Common stock repurchased and held in treasury			(276,994)								(276,994)
Common stock issued to Directors and (held in)/released from treasury			(391)								(391)
Balance at June 30, 2022	1,336		(5,699,069)		1,492,334		3,243,654		(64,701)		(1,026,446)

Net income							216,592				216,592
Dividends declared ($1.25 per common share)							(101,354)				(101,354)
Dividends paid in shares					27						27
Other comprehensive income (loss), net of tax									(9,311)		(9,311)
Common stock issued											—
Shares withheld for tax withholding and exercises			(3,741)								(3,741)
Compensation payable in common stock					11,913						11,913
Common stock repurchased and held in treasury			(165,044)								(165,044)
Common stock issued to Directors and (held in)/released from treasury			(27)								(27)
Balance at September 30, 2022	$	1,336	$	(5,867,881)	$	1,504,274	$	3,358,892	$	(74,012)	$	(1,077,391)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended
	September 30,							Nine Months Ended September 30,
	2017			2016
	(unaudited)
(unaudited)							(unaudited)	2023		2022
Cash flows from operating activities							Cash flows from operating activities
Net income	$	239,370		$	192,605		Net income	$	745,212	$	655,602
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets		32,987			35,535		Amortization of intangible assets	77,543		67,274
Stock-based compensation expense		27,668			23,591		Stock-based compensation expense	55,375		46,432
Depreciation and amortization of property, equipment and leasehold improvements		27,322			24,873		Depreciation and amortization of property, equipment and leasehold improvements	15,911		20,426
Amortization of right of use assets							Amortization of right of use assets	17,484		18,555
Loss on impairment of right of use assets, net							Loss on impairment of right of use assets, net	—		705
Amortization of debt origination fees		2,547			2,219		Amortization of debt origination fees	3,791		3,868
Deferred taxes		(11,452	)		(7,638	)	Deferred taxes	(30,973)		59,324
Gain on disposition		—			(449	)
Other non-cash adjustments		294			1,124
Changes in assets and liabilities, net of the effect of acquisitions and dispositions:
Other adjustments							Other adjustments	1,199		(3,654)
Changes in assets and liabilities:							Changes in assets and liabilities:
Accounts receivable		(87,168	)		(31,021	)	Accounts receivable	58,132		127,043
Prepaid income taxes		4,605			32,002		Prepaid income taxes	(17,654)		(77,908)
Prepaid and other assets		(7,132	)		(981	)	Prepaid and other assets	1,687		(1,678)
Other non-current assets							Other non-current assets	(4,837)		32,547
Accounts payable		1,806			(1,263	)	Accounts payable	(5,719)		(8,144)
Income taxes payable							Income taxes payable	11,425		(52,939)
Accrued compensation and related benefits		(19,074	)		(11,177	)	Accrued compensation and related benefits	(25,599)		(58,042)
Other accrued liabilities		756			12,365		Other accrued liabilities	15,118		31,297
Deferred revenue		38,932			27,337		Deferred revenue	(43,571)		(66,982)
Long-term operating lease liabilities							Long-term operating lease liabilities	(16,027)		(19,492)
Other non-current liabilities							Other non-current liabilities	(11,195)		6,105
Other		9,544			4,388		Other	(226)		(397)
Net cash provided by operating activities		261,005			303,510		Net cash provided by operating activities	847,076		779,942


Cash flows from investing activities							Cash flows from investing activities
Disposition, net of cash divested		—			657
Capitalized software development costs							Capitalized software development costs	(50,080)		(44,425)
Capital expenditures		(17,440	)		(24,144	)	Capital expenditures	(18,942)		(8,012)
Capitalized software development costs		(10,777	)		(7,949	)
Proceeds from sale of investments		771			—
Acquisitions, net of cash acquired		—			(60	)
Other							Other	(389)		24
Net cash used in investing activities		(27,446	)		(31,496	)	Net cash used in investing activities	(69,411)		(52,413)


Cash flows from financing activities							Cash flows from financing activities
Proceeds from borrowing		—			500,000
Proceeds from exercise of stock options		1,781			4,221
Repurchase of treasury shares		(150,350	)		(498,863	)
Repurchase of common stock held in treasury							Repurchase of common stock held in treasury	(504,161)		(1,327,298)
Payment of dividends		(85,306	)		(69,933	)	Payment of dividends	(331,640)		(272,759)
Repayment of borrowings							Repayment of borrowings	(6,563)		(5,000)
Proceeds from borrowings, inclusive of premium							Proceeds from borrowings, inclusive of premium	—		355,000
Payment of debt issuance costs in connection with debt		—			(7,183	)	Payment of debt issuance costs in connection with debt	—		(2,559)
Net cash used in financing activities		(233,875	)		(71,758	)
Payment of contingent consideration							Payment of contingent consideration	—		(211)
Net cash (used in) provided by financing activities							Net cash (used in) provided by financing activities	(842,364)		(1,252,827)


Effect of exchange rate changes		7,497			(3,900	)	Effect of exchange rate changes	(313)		(29,039)

Net increase in cash		7,181			196,356
Cash and cash equivalent, beginning of period		791,834			777,706
Net (decrease) increase in cash, cash equivalents and restricted cash							Net (decrease) increase in cash, cash equivalents and restricted cash	(65,012)		(554,337)

Cash and cash equivalent, end of period	$	799,015		$	974,062
Cash, cash equivalents and restricted cash, beginning of period							Cash, cash equivalents and restricted cash, beginning of period	993,564		1,421,449
Cash, cash equivalents and restricted cash, end of period							Cash, cash equivalents and restricted cash, end of period	$	928,552	$	867,112


Supplemental disclosure of cash flow information:							Supplemental disclosure of cash flow information:
Cash paid for interest	$	91,264		$	67,888		Cash paid for interest	$	125,068	$	107,162
Cash paid for income taxes	$	100,161		$	69,471
Cash paid for income taxes, net of refunds received							Cash paid for income taxes, net of refunds received	$	197,746	$	154,725

Supplemental disclosure of non-cash investing activities							Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements accrued, but not yet paid	$	3,501		$	5,093
Property, equipment and leasehold improvements in other accrued liabilities							Property, equipment and leasehold improvements in other accrued liabilities	$	4,734	$	1,926

Supplemental disclosure of non-cash financing activities							Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid	$	900		$	610		Cash dividends declared, but not yet paid	$	1,453	$	3,270

See Notes to ~~Unaudited~~ Condensed Consolidated Financial Statements

(Unaudited)

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MSCI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. INTRODUCTION AND BASIS OF PRESENTATION

MSCI Inc., together with its ~~wholly-owned~~wholly owned subsidiaries (the “Company” or “MSCI”)~~, offers products~~ is a leading provider of critical decision support tools and ~~services~~solutions for the global investment community. Our mission-critical offerings help investors address the challenges of a transforming investment landscape and power better investment decisions. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to ~~support the needs~~understand and analyze key drivers of ~~institutional investors throughout their investment processes. The Company’s~~risk and return and confidently and efficiently build more effective portfolios. Our products and services include ~~the development~~indexes; portfolio construction and ~~production of indexes and analytical models; the provision of ratings and analysis that identify~~risk management tools; environmental, social and governance ~~risks~~(“ESG”) and ~~opportunities~~climate solutions; and ~~the analysis of~~ real estate ~~in both privately~~market and ~~publicly owned portfolios.~~

transaction data and analysis.

Basis of Presentation and Use of Estimates

These unaudited condensed consolidated financial statements include the accounts of MSCI Inc. and its subsidiaries and include all adjustments of a normal, recurring nature necessary to state fairly the financial condition as of September 30, 2017 and December 31, 2016, the results of operations and comprehensive income for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016. The unaudited condensed consolidated statement of financial condition and related financial statement information as of December 31, 2016 have been derived from the 2016 audited consolidated financial statements but do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”).

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes included in ~~MSCI’s~~our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~2022. If not materially different, certain note disclosures included therein have been omitted from these interim condensed consolidated financial statements.

In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim consolidated financial statements, have been included. The results of operations for interim periods are not necessarily indicative of results for the entire year.

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. ~~These accounting principles require the~~The Company ~~to make~~makes certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of ~~revenue~~operating revenues and expenses during the periods presented. Significant estimates and ~~assumptions~~judgments made by management include ~~the deferral and recognition~~such examples as assessment of ~~revenue, research and development and software capitalization,~~ impairment of ~~long-lived~~goodwill and intangible assets ~~accrued compensation,~~and income ~~taxes and other matters that affect the unaudited condensed consolidated financial statements and related disclosures.~~taxes. The Company believes that estimates used in the preparation of these unaudited condensed consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. ~~Intercompany~~Inter-company balances and transactions are eliminated in consolidation.

Concentrations

For the nine months ended September 30, ~~2017,~~2023 and 2022, BlackRock, Inc. (“BlackRock”) accounted for ~~11.1%~~10.1% and 10.5% of the Company’s consolidated operating revenues, ~~while no single customer represented 10.0% or more of the Company’s consolidated operating revenues for the nine months ended September 30, 2016.~~respectively. For the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, BlackRock ~~Inc.~~ accounted for ~~19.6%~~17.0% and ~~17.1%~~17.7% of the Index ~~segment~~segment’s operating revenues, respectively. No single customer represented 10.0% or more of operating revenues within the Analytics, ESG and Climate or All Other – Private Assets segments for the nine months ended September 30, ~~2017~~2023 and ~~2016.~~

2022.

Restricted Cash

Restricted cash primarily relates to security deposits for certain operating leases that are legally restricted and unavailable for our general operations.

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Allowance for Credit Losses

Changes in the allowance for credit losses from December 31, 2021 to September 30, 2023 were as follows:


(in thousands)	Amount
Balance as of December 31, 2021	$	2,337
Addition (reduction) to credit loss expense	910
Write-offs, net of recoveries	(595)
Balance as of December 31, 2022	$	2,652

Addition (reduction) to credit loss expense	1,300
Write-offs, net of recoveries	(922)
Balance as of September 30, 2023	$	3,030

2. RECENT ACCOUNTING ~~STANDARDS UPDATES~~

~~In May 2014, the FASB~~PRONOUNCEMENTS

There are no recently issued ~~Accounting Standards Update 2014-09, “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09. The objective of ASU 2014-09 is~~accounting standards updates that are currently expected to ~~establish~~have a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities have the option of adopting ASU 2014-09 retrospectively to each prior period presented, or retrospectively with a cumulative-effect adjustment recognized as of the date of initial application. In August 2015, the FASB issued ASU 2015-14, “~~Deferral of the Effective Date~~,” which defers the effective date of ASU 2014-09 by one year by changing the effective date to be for annual reporting periods, including interim periods within those periods, beginning after December 15, 2017 from December 15, 2016, with early adoption at the prior date permitted.

~~In March 2016, the FASB issued Accounting Standards Update 2016-08, “Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net).” In April 2016, the FASB issued Accounting Standards Update 2016-10, “Identifying Performance Obligations and Licensing.” In May 2016, the FASB issued Accounting Standards Update 2016-12, “Narrow-Scope Improvements and Practical Expedients.” In December 2016, the FASB issued Accounting Standards Update No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” These updates provide supplemental adoption guidance~~

and clarification to ASU 2014-09 and must be adopted concurrently. The Company intends to adopt the new revenue guidance as of January 1, 2018 using the modified retrospective transition method. Under this adoption method, the Company will record a cumulative adjustment to retained earnings at January 1, 2018 and apply the provisions of the ASU prospectively. Currently, the Company expects that ASU 2014-09 will have anmaterial impact on ~~a number of accounting practices, including but not limited to,~~the Company.

3. REVENUE RECOGNITION

MSCI’s operating revenues are reported by product type, which generally reflects the timing of recognition. The Company’s operating revenue ~~recognition~~types are recurring subscriptions, asset-based fees and costs for implementation services; the timing of revenue recognition of licenses for desktop applications; and accounting for multi-year deals. In addition, the new standard will require enhanced disclosures in relation to (i) disaggregated revenue, (ii) reconciliations of contract balances, (iii) performance obligations, (iv) significant judgments and (v) cost to obtain or fulfill contracts.non-recurring revenues. The Company ~~has not yet determined~~also disaggregates operating revenues by segment.

The tables that follow present the ~~quantitative impact~~disaggregated operating revenues for the periods indicated:


	For the Three Months Ended September 30, 2023
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	206,453	$	151,269	$	71,744	$	35,531	$	464,997
Asset-based fees	141,066		—		—		—		141,066
Non-recurring	14,603		2,999		1,294		480		19,376
Total	$	362,122	$	154,268	$	73,038	$	36,011	$	625,439


	For the Nine Months Ended September 30, 2023
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	603,845	$	443,276	$	207,523	$	111,292	$	1,365,936
Asset-based fees	412,354		—		—		—		412,354
Non-recurring	47,621		7,943		3,792		1,168		60,524
Total	$	1,063,820	$	451,219	$	211,315	$	112,460	$	1,838,814

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	For the Three Months Ended September 30, 2022
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	185,531	$	142,751	$	56,353	$	35,581	$	420,216
Asset-based fees	125,620		—		—		—		125,620
Non-recurring	11,089		2,164		1,242		308		14,803
Total	$	322,240	$	144,915	$	57,595	$	35,889	$	560,639


	For the Nine Months Ended September 30, 2022
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	539,740	$	420,047	$	160,962	$	106,276	$	1,227,025
Asset-based fees	402,889		—		—		—		402,889
Non-recurring	31,319		6,349		3,790		1,018		42,476
Total	$	973,948	$	426,396	$	164,752	$	107,294	$	1,672,390

The tables that follow present the ~~new standard on its condensed consolidated financial statements.~~ change in accounts receivable, net of allowances, and current deferred revenue between the dates indicated:


(in thousands)	Accounts receivable, net of allowances		Deferred revenue
Opening (December 31, 2022)	$	663,236	$	882,886
Closing (September 30, 2023)	603,266		837,479
Increase/(decrease)	$	(59,970)	$	(45,407)


(in thousands)	Accounts receivable, net of allowances		Deferred revenue
Opening (December 31, 2021)	$	664,511	$	824,912
Closing (September 30, 2022)	525,360		735,710
Increase/(decrease)	$	(139,151)	$	(89,202)

The ~~Company is~~amounts of revenues recognized in the ~~process of upgrading its technology infrastructure in order to support the accounting under the new standard as well as assessing the impact~~periods that ~~the new standard will have on its processes and internal controls.~~

~~In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “Leases (Topic 842)~~,” or ASU 2016-02. The FASB issued ASU 2016-02 in order to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. To meet that objective, the FASB amended the FASB Accounting Standards Codification and created Topic 842, Leases. ASU 2016-02 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 requires reporting organizations to take a modified retrospective transition approach (as opposed to a full retrospective transition approach). The Company is continuing to evaluate the potential impact that ASU 2016-02 will have on its condensed consolidated financial statements.

~~In March 2016, the FASB issued Accounting Standards Update No. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,~~” or ASU 2016-09. The FASB issued ASU 2016-09 as part of its Simplification Initiative. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Amendments related to accounting for the income tax consequences have been adopted prospectively, resultingwere included in the ~~recognition of $0.7~~opening current deferred revenue, which reflects contract liability amounts, were $171.8 million and ~~$4.8~~$798.0 million ~~of excess tax benefits within income taxes rather than additional paid in capital~~ for the three and nine months ended September 30, ~~2017, respectively. This increased diluted earnings per share by $0.01~~2023, respectively and ~~$0.05 per share~~$149.4 million and $722.0 million for the three and nine months ended September 30, ~~2017,~~2022, respectively. Excess tax benefits related to share-based compensation are now included in operating cash flows rather than financing cash flows. This change has been applied retrospectively in accordance with ASU 2016-09The difference between the opening and ~~resulted in~~closing balances of the Company’s deferred revenue is primarily driven by an increase in the amortization of ~~$6.5 million~~deferred revenue to operating revenues, partially offset by an increase in ~~net cash provided by operating activities with a matching decrease in net cash used in financing activities for the nine months ended~~billings. As of September 30, ~~2016 compared to previously reported results. The~~2023 and December 31, 2022, the Company carried a long-term deferred revenue balance of $28.0 million and $29.4 million, respectively, in “Other non-current liabilities” on the Unaudited Condensed Consolidated Statement of Financial Condition.

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For contracts that have a duration of one year or less, the Company has ~~previously classified cash paid~~not disclosed either the remaining performance obligation as of the end of the reporting period or when the Company expects to recognize the revenue. The remaining performance obligations for ~~tax withholding purposes as~~contracts that have a ~~financing activity~~duration of greater than one year and the periods in ~~the statement of cash flows, therefore there is no change related to this requirement. The amendments allow for a one-time accounting policy election to either account for forfeitures as~~which they ~~occur or to continue estimating forfeitures. The Company has elected to continue estimating forfeitures under the current guidance.~~

~~In June 2016, the FASB issued Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~,” or ASU 2016-13. The amendments in ASU 2016-13 introduce an approach based on expected losses to estimate credit losses on certain types of financial instruments, modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. ASU 2016-13 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2019, with early adoption permitted beginning after December 15, 2018. The adoption of ASU 2016-13 is notare expected to ~~have a material effect on the Company’s condensed consolidated financial statements.~~

~~In January 2017, the FASB issued Accounting Standards Update No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” or ASU 2017-01. The amendments in ASU 2017-01 provide a screen to assist entities with evaluating whether transactions should~~ be ~~accounted for~~recognized are as acquisitions or disposals of assets or businesses. Under ASU 2017-01, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If it’s not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. ASU 2017-01 also narrows the definition of outputs by more closely aligning it with how outputs are described in Topic 606. ASU 2017-01 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2017, with early adoption permitted. The adoption of ASU 2017-01 is not expected to have a material effect on the Company’s condensed consolidated financial statements.

~~In January 2017, the FASB issued Accounting Standards Update No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~,” or ASU 2017-04. The amendments in ASU 2017-04 simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities. Instead, under the amendments in ASU 2017-04, an entity performs its annual, or interim, goodwill impairment test by comparing the

fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but not more than the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2019, with early adoption permitted. The adoption of ASU 2017-04 is not expected to have a material effect on the Company’s condensed consolidated financial statements.

~~In February 2017, the FASB issued Accounting Standards Update No. 2017-07, “Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~,” or ASU 2017-07. The FASB issued ASU 2017-07 in order to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. ASU 2017-07 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2017, with early adoption permitted. Entities should apply these amendments retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. The adoption of ASU 2017-07 is not expected to have a material effect on the Company’s condensed consolidated financial statements.

~~In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting,” or ASU 2017-09. The FASB issued ASU 2017-09 in order to reduce the diversity in practice, as well as the cost and complexity when applying the guidance in Topic 718,~~ ~~Compensation—Stock Compensation~~, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718, ~~Compensation—Stock Compensation~~. ASU 2017-09 provides that an entity shall account for the effects of a modification of the terms or conditions of an equity award as an exchange of the original award for a new award, unless the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used), the vesting conditions and the classification of the modified award are the same as the original award immediately before the award is modified. ASU 2017-09 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2017, with early adoption permitted. ASU 2017-09 requires reporting organizations to apply the amendments prospectively to an award modified on or after the adoption date. The adoption of ASU 2017-09 is not expected to have a material effect on the Company’s condensed consolidated financial statements.

~~In August 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,~~” or ASU 2017-12. The FASB issued ASU 2017-12 in order to expand and refine hedge accounting for both financial and non-financial risk components and align the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements. ASU 2017-12 also includes certain targeted improvements to simplify the application of current guidance related to the assessment of hedge accounting. ASU 2017-12 is effective for annual reporting periods, including interim periods within those periods, beginning after December 15, 2018, with early adoption permitted. The adoption of ASU 2017-12 is not expected to have a material effect on the Company’s condensed consolidated financial statements.

3.follows:


	As of
	September 30,
(in thousands)	2023
First 12-month period	$	695,027
Second 12-month period	420,056
Third 12-month period	182,375
Periods thereafter	135,442
Total	$	1,432,900

4. EARNINGS PER COMMON SHARE

Basic earnings per share (“EPS”) is computed by dividing net income ~~available to MSCI common shareholders~~ by the weighted average number of common shares outstanding during the period. ~~Common shares outstanding include common stock and vested restricted stock unit awards where recipients have satisfied either the explicit vesting terms or retirement-eligible requirements.~~ Diluted EPS reflects the assumed conversion of all dilutive ~~securities. There were 946~~securities, including, when applicable, restricted stock units (“RSUs”), performance stock units (“PSUs”) and 1,593 anti-dilutive securities excluded from the calculation of diluted EPS for the three months ended September 30, 2017 and 2016, respectively. There were 1,316 and 531 anti-dilutive securities excluded from the calculation of diluted EPS for the nine months ended September 30, 2017 and 2016, respectively.

performance stock options (“PSOs”).

The following table presents the computation of basic and diluted EPS:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016			Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)									(in thousands, except per share data)	2023		2022		2023		2022
Net income	$	85,153	$	65,281	$	239,370	$	192,605	Net income	$	259,659	$	216,592	$	745,212	$	655,602

Basic weighted average common shares outstanding		90,112		94,823		90,406		96,879	Basic weighted average common shares outstanding	79,116		80,500		79,580		81,001
Effect of dilutive securities:									Effect of dilutive securities:
Stock options and restricted stock units		1,756		650		1,325		566
PSUs, RSUs and PSOs									PSUs, RSUs and PSOs	384		374		379		480
Diluted weighted average common shares outstanding		91,868		95,473		91,731		97,445	Diluted weighted average common shares outstanding	79,500		80,874		79,959		81,481

Earnings per basic common share	$	0.94	$	0.69	$	2.65	$	1.99

Earnings per diluted common share	$	0.93	$	0.68	$	2.61	$	1.98
Earnings per common share:									Earnings per common share:
Basic									Basic	$	3.28	$	2.69	$	9.36	$	8.09
Diluted									Diluted	$	3.27	$	2.68	$	9.32	$	8.05

5. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS,

NET

Property, equipment and leasehold improvements, ~~at September 30, 2017 and December 31, 2016~~net consisted of the ~~following:~~

following as of the dates indicated:

	As of
	September 30,			December 31,				As of
	2017			2016				September 30,		December 31,
	(in thousands)
(in thousands)							(in thousands)	2023		2022
Computer & related equipment	$	186,487		$	162,306		Computer & related equipment	$	193,113	$	181,710
Furniture & fixtures		10,316			9,724		Furniture & fixtures	15,643		14,078
Leasehold improvements		50,998			49,442		Leasehold improvements	58,019		54,040
Work-in-process		2,683			10,954		Work-in-process	860		2,373
Subtotal		250,484			232,426		Subtotal	267,635		252,201

Accumulated depreciation and amortization		(164,804	)		(136,841	)	Accumulated depreciation and amortization	(209,599)		(198,348)
Property, equipment and leasehold improvements, net	$	85,680		$	95,585		Property, equipment and leasehold improvements, net	$	58,036	$	53,853

Depreciation and amortization expense of property, equipment and leasehold improvements was ~~$9.3~~$5.3 million and ~~$8.3~~$7.1 million for the three months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

Table of Contents

Depreciation and amortization expense of property, equipment and leasehold improvements was ~~$27.3~~$15.9 million and ~~$24.9~~$20.4 million for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

6. GOODWILL AND INTANGIBLE ASSETS,

NET

Goodwill

The following table presents goodwill by reportable segment:


(in thousands)	Index		Analytics		All Other ⁽¹⁾		Total		(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Goodwill at December 31, 2016	$	1,202,448	$	302,611	$	50,791	$	1,555,850
Goodwill at December 31, 2022									Goodwill at December 31, 2022	$	1,201,622	$	290,976	$	48,047	$	689,025	$	2,229,670
Foreign exchange translation adjustment		2,672		—		1,647		4,319	Foreign exchange translation adjustment	445		—		—		274		719
Goodwill at September 30, 2017	$	1,205,120	$	302,611	$	52,438	$	1,560,169
Goodwill at September 30, 2023									Goodwill at September 30, 2023	$	1,202,067	$	290,976	$	48,047	$	689,299	$	2,230,389

⁽¹⁾The goodwill in All Other at September 30, 2017, consisted of $31.6 million in the ESG segment and $20.8 million in the Real Estate segment and at December 31, 2016 consisted of $31.6 million in the ESG segment and $19.2 million in the Real Estate segment.

The Company completed its annual goodwill impairment test as of July 1, ~~2017~~2023 on its ~~four~~Index, Analytics, ESG and Climate, and Real Assets reporting units, which are also four of the ~~same as its four~~Company’s operating segments, and no impairments were noted. The Company ~~performed a step zero, qualitative impairment test on each of its Index, Analytics and ESG operating segments and~~ determined that it was not more likely than not that the fair value of its reporting units is less than their respective carrying values. See Note 11, “Segment Information,” for ~~each~~further descriptions of the ~~Index, Analytics and ESG~~Company’s operating ~~segments was not less than~~segments.

Intangible Assets, Net

The following table presents the ~~carrying value for each. As revenues have been below~~

management’s expectations for the Real Estate segment, the Company performed a step 1, quantitative impairment test for this segment and determined that the fair value substantially exceeded its carrying value.

~~Intangible Assets~~

~~Amortization~~amount of amortization expense related to intangible assets by category for the three months ended September 30, 2017 and 2016 was $10.6 million and $11.8 million, respectively. Amortization expense related to intangible assets for the nine months ended September 30, 2017 and 2016 was $33.0 million and $35.5 million, respectively.

periods indicated:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Amortization expense of acquired intangible assets	$	15,748	$	15,810	$	47,430	$	47,562
Amortization expense of internally developed capitalized software	10,974		7,565		30,113		19,712
Total amortization of intangible assets expense	$	26,722	$	23,375	$	77,543	$	67,274

Table of Contents

The gross carrying and accumulated amortization amounts related to the Company’s ~~identifiable~~ intangible assets were as follows:

	As of
	September 30,			December 31,				As of
	2017			2016				September 30,		December 31,
	(in thousands)
(in thousands)							(in thousands)	2023		2022
Gross intangible assets:							Gross intangible assets:
Customer relationships	$	361,199		$	361,199		Customer relationships	$	532,500	$	532,500
Trademarks/trade names		223,382			223,382
Technology/software		220,575			210,013
Proprietary data		28,627			28,627		Proprietary data	220,778		220,778
Covenant not to compete		1,225			1,225
Acquired technology and software							Acquired technology and software	209,220		209,220
Trademarks							Trademarks	208,190		208,190
Internally developed capitalized software							Internally developed capitalized software	220,251		165,928
Subtotal		835,008			824,446		Subtotal	1,390,939		1,336,616

Foreign exchange translation adjustment		(9,568	)		(13,946	)	Foreign exchange translation adjustment	(12,478)		(13,214)
Total gross intangible assets	$	825,440		$	810,500		Total gross intangible assets	$	1,378,461	$	1,323,402

Accumulated amortization:							Accumulated amortization:
Customer relationships	$	(183,562	)	$	(166,923	)	Customer relationships	$	(331,275)	$	(308,437)
Trademarks/trade names		(113,784	)		(105,077	)
Technology/software		(190,460	)		(184,290	)
Proprietary data		(9,893	)		(8,571	)	Proprietary data	(56,125)		(41,783)
Covenant not to compete		(1,211	)		(1,089	)
Acquired technology and software							Acquired technology and software	(182,920)		(179,833)
Trademarks							Trademarks	(169,207)		(162,044)
Internally developed capitalized software							Internally developed capitalized software	(106,888)		(77,259)
Subtotal		(498,910	)		(465,950	)	Subtotal	(846,415)		(769,356)

Foreign exchange translation adjustment		1,796			3,090		Foreign exchange translation adjustment	4,083		4,471
Total accumulated amortization	$	(497,114	)	$	(462,860	)	Total accumulated amortization	$	(842,332)	$	(764,885)

Net intangible assets:							Net intangible assets:
Customer relationships	$	177,637		$	194,276		Customer relationships	$	201,225	$	224,063
Trademarks/trade names		109,598			118,305
Technology/software		30,115			25,723

Proprietary data		18,734			20,056		Proprietary data	164,653		178,995
Covenant not to compete		14			136

Acquired technology and software							Acquired technology and software	26,300		29,387

Trademarks							Trademarks	38,983		46,146

Internally developed capitalized software							Internally developed capitalized software	113,363		88,670

Subtotal		336,098			358,496		Subtotal	544,524		567,260

Foreign exchange translation adjustment		(7,772	)		(10,856	)	Foreign exchange translation adjustment	(8,395)		(8,743)
Total net intangible assets	$	328,326		$	347,640		Total net intangible assets	$	536,129	$	558,517

The following table presents the estimated amortization expense for the remainder of the year ending December 31, ~~2017~~2023 and succeeding years:

Years Ending December 31,

Amortization
Expense

(in thousands)

Remainder 2017

$
10,784

2018

43,969

2019

42,233

2020

40,361

2021

38,117

Thereafter

152,862

Total

$
328,326


Years Ending December 31, (in thousands)	Amortization Expense
Remainder of 2023	$	28,555
2024	109,796
2025	84,575
2026	49,965
2027	36,755
Thereafter	226,483
Total	$	536,129

Table of Contents

7. COMMITMENTS AND CONTINGENCIES

~~Legal matters~~. ~~From time to time,~~

As of September 30, 2023, the Company is party to various litigation matters incidental to the conduct of its business. The Company is not presently party to any legal proceedings the resolution of which the Company believes would have a material effect on its business, operating results, financial condition or cash flows.

~~Leases.~~ The Company leases facilities under non-cancelable operating lease agreements. The terms of certain lease agreements provide for rental payments on a graduated basis. The Company recognizes rent expense on the straight-line basis over the lease period and has accrued for rent expense incurred but not paid. Rent expense was $6.1 million for both the three months ended September 30, 2017 and 2016. Rent expense for the nine months ended September 30, 2017 and 2016 was $18.0 million and $18.3 million, respectively.

~~Senior Notes.~~ ~~The Company has issued~~had outstanding an aggregate of ~~$2.1 billion~~$4,200.0 million in senior unsecured notes (collectively, the “Senior Notes”) and an aggregate of $341.3 million in senior unsecured tranche A term loans (the “Tranche A Term Loans”) under the term loan A facility (the “TLA Facility”), as presented in the ~~three discrete private offerings described below.~~

Ontable below:


		Principal Amount Outstanding at		Carrying Value at		Carrying Value at		Fair Value at		Fair Value at
(in thousands)	Maturity Date	September 30, 2023		September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Debt
4.000% senior unsecured notes due 2029	November 15, 2029	$	1,000,000	$	993,364	$	992,546	$	872,670	$	876,240
3.625% senior unsecured notes due 2030	September 1, 2030	900,000		895,421		894,925		755,433		751,113
3.875% senior unsecured notes due 2031	February 15, 2031	1,000,000		991,887		991,067		867,600		833,130
3.625% senior unsecured notes due 2031	November 1, 2031	600,000		594,688		594,195		491,928		500,880
3.250% senior unsecured notes due 2033	August 15, 2033	700,000		693,364		692,862		537,551		542,696
Variable rate Tranche A Term Loans due 2027	February 16, 2027	341,250		340,057		346,352		339,544		346,073
Total debt(1)		$	4,541,250	$	4,508,781	$	4,511,947	$	3,864,726	$	3,850,132

___________________________
(1) Includes $8.7 million of current-portion of long-term debt.

Maturities of the Company’s principal debt payments as of September 30, 2023 are as follows:


Maturity of Principal Debt Payments (in thousands)	Amounts
Remainder of 2023	$	2,187
2024	10,938
2025	19,687
2026	26,250
2027	282,188
Thereafter	4,200,000
Total debt	$	4,541,250

Interest payments attributable to the Company’s outstanding indebtedness are due as presented in the following table:

Interest payment frequency

First interest
payment date

Senior Notes and Tranche A Term Loans

4.000% senior unsecured notes due 2029

Semi-Annual

May 15

3.625% senior unsecured notes due 2030

Semi-Annual

March 1

3.875% senior unsecured notes due 2031

Semi-Annual

June 1

3.625% senior unsecured notes due 2031

Semi-Annual

May 1

3.250% senior unsecured notes due 2033

Semi-Annual

February 15

Variable rate Tranche A Term Loans due 2027

Variable

July 11

The fair market value of the Company’s debt obligations represent Level 2 valuations. The Company utilized the market approach and obtained security pricing from a vendor who used broker quotes and third-party pricing services to determine fair values.

Credit Agreement. Since November 20, 2014, the Company completed its private offering of $800.0 million aggregate principal amount of 5.25% senior unsecured notes due 2024 (the “2024 Senior Notes”). The Company used the net proceeds from the offering of the 2024 Senior Notes, together with cash on hand, to repay in full its then outstanding term loan indebtedness of $794.8 million.

On August 13, 2015, the Company completed its private offering of $800.0 million aggregate principal amount of 5.75% senior unsecured notes due 2025 (the “2025 Senior Notes”). The $789.5 million of net proceeds from the offering of the 2025 Senior Notes were allocated for general corporate purposes.

On August 4, 2016, the Company completed its private offering of $500.0 million aggregate principal amount of 4.75% senior unsecured notes due 2026 (the “2026 Senior Notes”). The $493.3 million of net proceeds from the offering of the 2026 Senior Notes were allocated for general corporate purposes, including, without limitation, buybacks of its common stock and potential acquisitions.

The 2024 Senior Notes are scheduled to mature and be paid in full on November 15, 2024. At any time prior to November 15, 2019, the Company may redeem all or part of the 2024 Senior Notes upon not less than 30 nor more than 60 days’ prior notice athas maintained a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2024 Senior Notes, together with accrued and unpaid interest, on or after November 15, 2019, at redemption prices set forth in the indenture governing the 2024 Senior Notes. At any time prior to November 15, 2017, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2024 Senior Notes, including any permitted additional notes, at a redemption price equal to 105.25% of the principal amount.

The 2025 Senior Notes are scheduled to mature and be paid in full on August 15, 2025. At any time prior to August 15, 2020, the Company may redeem all or part of the 2025 Senior Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2025 Senior Notes, together with accrued and unpaid interest, on or after August 15, 2020, at redemption prices set forth in the indenture governing the 2025 Senior Notes. At any time prior to August 15, 2018, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2025 Senior Notes, including any permitted additional notes, at a redemption price equal to 105.75% of the principal amount.

The 2026 Senior Notes are scheduled to mature and be paid in full on August 1, 2026. At any time prior to August 1, 2021, the Company may redeem all or part of the 2026 Senior Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2026 Senior Notes, together with accrued and unpaid interest, on or after August 1, 2021, at redemption prices set forth in the indenture governing the 2026 Senior Notes. At any time prior to August 1, 2019, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2026 Senior Notes, including any permitted additional notes, at a redemption price equal to 104.75% of the principal amount.

Interest payments attributable to the 2024 Senior Notes are due on May 15 and November 15 of each year. The first interest payment was made on May 15, 2015. Interest payments attributable to the 2025 Senior Notes are due on February 15 and August 15 of each year. The first interest payment was made on February 16, 2016. Interest payments attributable to the 2026 Senior Notes are due on February 1 and August 1 of each year. The first interest payment was made on February 1, 2017.

~~Revolver.~~ ~~On November 20, 2014, the Company entered into a $200.0 million senior unsecured~~ revolving credit agreement ~~(the “2014 Revolving Credit Agreement”)~~ with a syndicate of banks. ~~The 2014 Revolving Credit Agreement had an initial term of five years with an option to extend for two additional one-year terms.~~ On ~~August 4, 2016,~~June 9, 2022, the Company, the guarantors party thereto and the lenders and agents party thereto, entered into ~~Amendment No. 1 (the “Amendment”) to the 2014 Revolving~~an Amended and Restated Credit Agreement (the ~~2014~~“Credit Agreement”), amending and restating in its entirety the Company’s prior revolving credit agreement (the “Prior Revolving ~~Credit Agreement as so amended, the “Revolving~~ Credit Agreement”). The ~~Amendment, among other things, (i) increased aggregate commitments~~Credit Agreement makes available to the Company an aggregate of $500.0 million of revolving loan commitments, which may be ~~borrowed to $220.0 million, (ii) increased~~drawn until February 16, 2027, and the ~~maximum consolidated leverage ratio and (iii) extended~~TLA Facility. At September 30, 2023, the ~~initial term to August 2021~~ ~~with an option to extend for an additional one-year term. No amounts have ever been drawn under the Revolving Credit Agreement.~~

~~Long-term debt~~revolving loan commitments were undrawn. As noted above, at September 30, ~~2017~~2023, the commitments under the TLA Facility were drawn in full, and the resulting Tranche A Term Loans mature on February 16, 2027. The obligations under the Credit Agreement are general unsecured obligations of the Company and the guarantors.

Table of Contents

Interest on the Tranche A Term Loans under the TLA Facility accrues, at a variable rate, based on the secured overnight funding rate (“SOFR”) or the alternate base rate (“Base Rate”), plus, in each case, an applicable margin and will be due on each Interest Payment Date (as defined in the Credit Agreement). The applicable margin is calculated by reference to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and ranges between 1.50% to 2.00% for SOFR loans, and 0.50% to 1.00% for Base Rate loans. At September 30, 2023, the interest rate on the TLA Facility was ~~$2,077.4 million, net of $22.6 million in deferred financing fees. Long-term debt at December 31, 2016 was $2,075.2 million, net of $24.8 million in deferred financing fees.~~

7.42%.

In connection with the closings of the Senior Notes offerings, ~~and~~ entry into the ~~2014~~Prior Revolving Credit Agreement and the ~~Amendment,~~subsequent amendments thereto and entry into the Credit Agreement, the Company paid certain financing fees which, together with the existing fees related to prior credit facilities, are being amortized over their related lives. At September 30, ~~2017, $24.5~~2023, $34.2 million of the deferred financing fees and premium remain unamortized, $0.5 million of which is included in “Prepaid and other assets,” ~~$1.4~~$1.2 million of which is included in “Other non-current assets” and ~~$22.6~~$32.5 million of which is ~~grouped and presented as part of~~included in “Long-term debt” on the Unaudited Condensed Consolidated Statement of Financial Condition.

~~At September 30, 2017 and December 31, 2016, the fair market value~~

8. LEASES

The components of lease expense (income) of the Company’s ~~debt obligations was $2,257.0 million~~operating leases are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Operating lease expenses	$	7,278	$	7,308	$	21,570	$	22,439
Variable lease costs	1,022		808		2,843		2,411
Short-term lease costs	108		123		547		333
Sublease income	(1,276)		$	(1,251)	$	(3,827)	$	(3,354)
Total lease costs	$	7,132	$	6,988	$	21,133	$	21,829

Maturities of the Company’s operating lease liabilities as of September 30, 2023 are as follows:


Maturity of Lease Liabilities	Operating
(in thousands)	Leases
Remainder of 2023	$	6,098
2024	27,182
2025	24,202
2026	22,408
2027	17,691
Thereafter	67,096
Total lease payments	$	164,677

Less: Interest	(20,632)
Present value of lease liabilities	$	144,045


Other accrued liabilities	$	22,104
Long-term operating lease liabilities	$	121,941

Weighted-average remaining lease term and ~~$2,192.5 million, respectively. The fair market value is determined in accordance with accounting standards~~discount rate for the Company’s operating leases are as follows:


	As of
	September 30,		December 31,
Lease Term and Discount Rate	2023		2022
Weighted-average remaining lease term (years)	7.30		7.86
Weighted-average discount rate	3.58	%	3.40	%

Table of Contents

Other information related to the ~~determination of fair value and represents Level 2 valuations, which~~Company’s operating leases are based on one or more quoted prices in markets that are not considered to be active or for which all significant inputs are observable, either directly or indirectly. The Company utilizes the market approach and obtains security pricing from a vendor who uses broker quotes and third-party pricing services to determine fair values.

~~Derivatives and Hedging Activities.~~ The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its debt funding and the use of derivative financial instruments.

Certain of the Company’s foreign operations expose the Company to fluctuations of foreign exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency, the U.S. dollar. The Company enters into derivative financial instruments to protect the value or fix the amount of certain exposures in terms of its functional currency.

~~Non-designated Hedges of Foreign Exchange Risk.~~ ~~Derivatives not designated~~ as hedges are not speculative and are used to manage the Company’s economic exposure to foreign exchange rate movements but do not meet the strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of September 30, 2017, the Company had outstanding foreign currency forwards with a notional amount of $35.6 million that were not designated as hedges in qualifying hedging relationships.

The following table presents the fair values of the Company’s derivative instruments and the location in which they are presented on the Company’s Unaudited Condensed Consolidated Statements of Financial Condition:

follows:

Unaudited Condensed

As of

Consolidated Statements of

September 30,

December 31,

(in thousands)

Financial Condition Location

2017

2016

Non-designated hedging instruments:

Asset derivatives:

Foreign exchange contracts

Prepaid and other assets

$
110

$
27

Liability derivatives:

Foreign exchange contracts

Other accrued liabilities

$
(135
)

$
(124
)


Other Information	Nine Months Ended September 30,
(in thousands)	2023		2022
Operating cash flows used for operating leases	$	22,918	$	22,025
Right of use assets obtained in exchange for new operating lease liabilities	$	8,896	$	14,929

The Company’s foreign exchange forward contracts represent Level 2 valuations as they were valued using pricing models that took into account the contract terms as well as multiple observable inputs where applicable, such as prevailing spot rates and forward points.

~~The following table presents the effect of the Company’s financial derivatives and the location in which they are presented on the Company’s Unaudited Condensed Consolidated Statements of Income:~~

Amount of Gain or (Loss) Recognized

Derivatives Not Designated as

Location of Gain or

in Income on Derivatives for the

Hedging Instruments

(Loss) Recognized

Three Months Ended September 30,

(in thousands)

in Income on Derivatives

2017

2016

Foreign exchange contracts

Other expense (income)

$
(671
)

$
211

Amount of Gain or (Loss) Recognized

Derivatives Not Designated as

Location of Gain or

in Income on Derivatives for the

Hedging Instruments

(Loss) Recognized

Nine Months Ended September 30,

(in thousands)

in Income on Derivatives

2017

2016

Foreign exchange contracts

Other expense (income)

$
(1,791
)

$
1,125

9. SHAREHOLDERS’ EQUITY

(DEFICIT)

Return of capital.

On ~~October~~July 28, ~~2015,~~2022, the Board of Directors ~~approved~~authorized a ~~new~~ stock repurchase program ~~authorizing~~(the “2022 Repurchase Program”) for the purchase of up to ~~$1.0 billion~~$1,000.0 million worth of shares of MSCI’s common stock ~~(the “2015~~in addition to the $539.1 million of authorization then remaining under a previously existing share repurchase program that was replaced by, and incorporated into, the 2022 Repurchase ~~Program”).~~

~~On October 26, 2016, the Board~~Program for a total of ~~Directors approved an additional~~$1,539.1 million of stock repurchase ~~program authorizing the purchase of up to $750.0 million worth of shares of the Company’s common stock (together with the $330.3 million remaining~~ authorization available under the ~~2015~~2022 Repurchase ~~Program, the “2016 Repurchase Program”).~~ Program.

Share repurchases made pursuant to the ~~2016~~2022 Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice. As of September 30, ~~2017,~~2023, there was ~~$733.1~~$845.7 million of available authorization remaining under the ~~2016~~2022 Repurchase Program.

The following table provides information with respect to repurchases of the Company’s common stock made on the open market:

Nine Months Ended

Average
Price
Paid Per
Share

Total
Number of
Shares
Repurchased

Dollar
Value of Shares
Repurchased

(in thousands)

September 30, 2017

$
87.95

1,556

$
136,850

September 30, 2016

$
70.43

6,869

$
483,799


Nine months ended (in thousands, except per share data)	Average Price Paid Per Share		Total Number of Shares Repurchased	Dollar Value of Shares Repurchased(1)
September 30, 2023	$	468.26	980	$	458,721
September 30, 2022	$	473.26	2,567	$	1,214,695

___________________________

(1) As of January 1, 2023, the Company’s share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act. The values in this column exclude the 1% excise tax incurred on share repurchases. Any excise tax incurred is recognized as part of the cost of the shares acquired in the Unaudited Condensed Consolidated Statement of Shareholders’ Equity (Deficit)

The following table presents dividends declared per common share as well as total amounts declared, distributed and deferred for the periods indicated:

	Dividends
(in thousands, except per share amounts)	Per Share		Declared		Distributed		Deferred
2017
										Dividends
(in thousands, except per share data)									(in thousands, except per share data)	Per Share		Declared		Distributed		(Released)/Deferred
2023									2023
Three Months Ended March 31,	$	0.28	$	25,769	$	25,500	$	269	Three Months Ended March 31,	$	1.38	$	111,986	$	112,189	$	(203)
Three Months Ended June 30,		0.28		25,710		25,444		266	Three Months Ended June 30,	1.38		110,383		110,147		236
Three Months Ended September 30,		0.38		34,768		34,403		365	Three Months Ended September 30,	1.38		109,847		109,408		439

Total	$	0.94	$	86,247	$	85,347	$	900	Total	$	4.14	$	332,216	$	331,744	$	472

2016
2022									2022
Three Months Ended March 31,	$	0.22	$	22,046	$	21,889	$	157	Three Months Ended March 31,	$	1.04	$	87,280	$	87,846	$	(566)
Three Months Ended June 30,		0.22		21,588		21,391		197	Three Months Ended June 30,	1.04		84,593		84,189		404
Three Months Ended September 30,		0.28		26,936		26,680		256	Three Months Ended September 30,	1.25		101,354		100,849		505

Total	$	0.72	$	70,570	$	69,960	$	610	Total	$	3.33	$	273,227	$	272,884	$	343

Table of Contents

Common ~~Stock.~~

Stock

The following table presents activity related to shares of common stock issued and repurchased during the nine months ended September 30, ~~2017:~~

2023:

Common Stock

Treasury

Common Stock

Issued

Stock

Outstanding

Balance At December 31, 2016

128,996,344

(37,716,754
)

91,279,590

Dividend payable/paid

114

(114
)

—

Common stock issued and exercise of stock options

389,198

—

389,198

Shares withheld for tax withholding and exercises

—

(139,208
)

(139,208
)
Shares repurchased under stock repurchase programs

—

(1,079,005
)

(1,079,005
)
Shares issued to directors

51

(10
)

41

Balance At March 31, 2017

129,385,707

(38,935,091
)

90,450,616

Dividend payable/paid

126

(126
)

—

Common stock issued and exercise of stock options

82,960

—

82,960

Shares withheld for tax withholding and exercises

—

(16,002
)

(16,002
)
Shares repurchased under stock repurchase programs

—

(389,479
)

(389,479
)
Shares issued to directors

8,329

(7,286
)

1,043

Balance At June 30, 2017

129,477,122

(39,347,984
)

90,129,138

Dividend payable/paid

152

(152
)

—

Common stock issued and exercise of stock options

27,899

—

27,899

Shares withheld for tax withholding and exercises

—

(2,376
)

(2,376
)
Shares repurchased under stock repurchase programs

—

(87,429
)

(87,429
)
Shares issued to directors

—

—

—

Balance At September 30, 2017

129,505,173

(39,437,941
)

90,067,232


	Common Stock	Treasury	Common Stock
	Issued	Stock	Outstanding
Balance at December 31, 2022	133,623,005	(53,663,016)	79,959,989
Dividend payable/paid	24	—	24
Common stock issued	181,875	—	181,875
Shares withheld for tax withholding	—	(78,844)	(78,844)
Shares repurchased under stock repurchase programs	—	—	—
Shares issued to directors	58	(58)	—
Balance at March 31, 2023	133,804,962	(53,741,918)	80,063,044

Dividend payable/paid	—	—	—
Common stock issued	2,698	—	2,698
Shares withheld for tax withholding	—	(1,270)	(1,270)
Shares repurchased under stock repurchase programs	—	(941,360)	(941,360)
Shares issued to directors	5,306	(1,515)	3,791
Balance at June 30, 2023	133,812,966	(54,686,063)	79,126,903

Dividend payable/paid	—	—	—
Common stock issued	4,081	—	4,081
Shares withheld for tax withholding	—	(1,623)	(1,623)
Shares repurchased under stock repurchase programs	—	(38,263)	(38,263)
Shares issued to directors	56	(56)	—
Balance at September 30, 2023	133,817,103	(54,726,005)	79,091,098

10. INCOME TAXES

The Company’s provision for income taxes was ~~$100.6~~$156.0 million and ~~$96.2~~$122.6 million for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively. ~~These amounts reflect~~

The effective tax ~~rates~~rate of ~~29.6% and 33.3%~~17.3% for the nine months ended September 30, 2017 and 2016, respectively. The decrease in the effective tax rate was primarily driven by the change in the mix of profits between tax jurisdictions as well as the impact of discrete items, including the excess tax benefits related to the adoption of ASU 2016-09 during the nine months ended September 30, 2017. See Note 2, “Recent Accounting Standards Updates,” for more information regarding the adoption of ASU 2016-09.

~~The effective tax rate of 29.6% for the nine months ended September 30, 2017~~2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling ~~$4.7~~$19.8 million, ~~primarily~~ related to ~~the $4.8~~$11.4 million of excess tax benefits recognized on share-based compensation ~~recognized~~vested during the period ~~which decreased the Company’s~~and $8.4 million related to prior-year items.

The effective tax rate of 15.8% for the nine months ended September 30, 2022 reflects the Company’s estimate of the effective tax rate for the period and was impacted by ~~1.4 percentage points.~~

certain favorable discrete items totaling $28.2 million, primarily related to $28.4 million of excess tax benefits recognized on share-based compensation vested during the period.

The Company is under or open to examination by the IRS and other tax authorities in certain jurisdictions, including foreign jurisdictions, such as the United Kingdom, Switzerland and India, and states in the United States in which the Company has significant operations, such as New ~~York.~~York and California. The tax years currently under or open to examination vary by jurisdiction but include years ~~ranging~~ from 2005 through 2016. As a result of having previously been a member of the Morgan Stanley consolidated group, the Company may have future settlements with Morgan Stanley related to the ultimate disposition of their New York State and New York City examination relating to the tax years 2007 and 2008 and their IRS examination relating to the tax years 2006 through 2008. The Company does not believe it has any material exposure to the New York State and New York City examinations. Additionally, the Company believes it has adequate reserves for any tax issues that may arise out of the IRS examination relating to the tax years 2006 through 2008 and therefore does not believe any related settlement with Morgan Stanley will have a material impact.

onwards.

The Company regularly assesses the likelihood of additional assessments in each of the taxing jurisdictions in which it files income tax returns. The Company has established unrecognized tax benefits that the Company believes are adequate in relation to the potential for additional assessments. Once established, the Company adjusts unrecognized tax benefits only when more information is available or when an event occurs necessitating a change. ~~As part~~Based on the current status of income tax audits, the Company believes it is reasonably possible that the total amount of unrecognized benefits may decrease by approximately $22.9 million in the next twelve months as a result of the ~~Company’s periodic review~~resolution of ~~unrecognized tax benefits~~prior-year items.

During the three and ~~based on new information regarding the status of federal and state examinations,~~nine months ended September 30, 2023, the Company’s unrecognized tax benefits ~~were~~

remeasured. It is reasonably possible that significant changes in the balance of unrecognized tax benefits may occur within the next 12 months. At this time, however, it is not possible to reasonably estimate the expected changeincreased $0.4 million and decreased $4.4 million, respectively, principally due to the ~~total amount~~resolution of ~~unrecognized tax benefits~~prior-year items.

Table of Contents

11. SEGMENT INFORMATION

The Company has five operating segments: Index, Analytics, ESG and Climate, Real Assets and The Burgiss Group, LLC (“Burgiss”), which are presented as the following four reportable segments: Index, Analytics, ESG and Climate and All Other – Private Assets.

The Index operating segment offers equity and fixed income indexes. The indexes are used in many areas of the investment process, including for developing indexed financial products (e.g., Exchange Traded Funds (“ETFs”), mutual funds, annuities, futures, options, structured products and over-the-counter derivatives), performance benchmarking, portfolio construction and rebalancing, and asset allocation.

The Analytics operating segment offers risk management, performance attribution and portfolio management content, applications and services that provide clients with an integrated view of risk and return and tools for analyzing market, credit, liquidity, counterparty and climate risk across all major asset classes, spanning short-, medium- and long-term time horizons. Clients access Analytics tools and content through MSCI’s proprietary applications and application programming interfaces, third-party applications or directly through their own platforms. Additionally, the Analytics operating segment also provides various managed services to help clients operate more efficiently, including consolidation of client portfolio data from various sources, review and reconciliation of input data and results, and customized reporting.

The ESG and Climate operating segment offers products and services that help institutional investors understand how ESG and climate considerations can impact the long-term risk and return of their portfolio and individual security-level investments. In addition, the ESG and Climate operating segment provides data, ratings, research and tools to help investors navigate increasing regulation, meet new client demands and better integrate ESG and climate elements into their investment processes.

The Real Assets operating segment offers data, benchmarks, return-analytics, climate assessments and market insights for tangible assets such as real estate and infrastructure. In addition, Real Assets performance and risk analytics range from enterprise-wide to property-specific analysis. The Real Assets operating segment also provides business intelligence products to real estate owners, managers, developers and brokers worldwide.

As of September 30, 2023, the Burgiss operating segment represents the Company’s equity method investment in Burgiss, a global provider of investment decision support tools for private capital. See Note 12, “Subsequent Events” for additional information on the ~~effective tax rate over~~Company’s acquisition of the ~~next 12 months.~~

~~9. SEGMENT INFORMATION~~

~~ASC Subtopic 280-10,~~ ~~“Segment Reporting,”~~ establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or CODM,remaining interest in ~~deciding how to allocate resources and assess performance. MSCI’s Chief Executive Officer and~~Burgiss.

The Chief Operating Officer, who are together considered to be its CODM, review financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance.

~~The CODM~~Decision Maker (“CODM”) measures and evaluates reportable segments based on segment operating revenues as well as Adjusted EBITDA and other measures. The Company excludes the following items from segment Adjusted EBITDA: provision for income taxes, other expense (income), net, depreciation and amortization of property, equipment and leasehold improvements, amortization of intangible assets and, at times, certain other transactions or adjustments, including certain non-recurring acquisition-related integration and transaction costs, that the CODM does not consider for the purposes of making decisions to allocate resources among segments or to assess segment performance. Although these amounts are excluded from segment Adjusted EBITDA, they are included in reported consolidated net income and are included in the reconciliation that follows.

The Company’s computation of segment Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies because all companies do not calculate segment Adjusted EBITDA in the same fashion.

Revenues and expenses directly associated with each segment are included in determining its operating results. Other expenses that are not directly attributable to a particular segment are allocated based upon allocation methodologies, including time estimates, headcount, sales targets, data center consumption and other relevant usage measures. Due to the integrated structure of our business, certain costs incurred by one segment may benefit other segments. A segment may use the content and data produced by another segment without incurring an arm’s-length intersegment charge.

The CODM does not review any information regarding total assets on an operating segment basis. Operating segments do not record intersegment revenue, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for MSCI as a whole.

~~The Company has four operating segments: Index, Analytics, ESG and Real Estate.~~

The Index operating segment is primarily a provider of equity indexes. The indexes are used in many areas of the investment process, including index-linked product creation and performance benchmarking, as well as portfolio construction and rebalancing and asset allocation.

The Analytics operating segment uses analytical content to create products and services which offer institutional investors an integrated view of risk and return. Its research-enhanced products and services help institutional investors understand and control for market, credit, liquidity and counterparty risk across all major asset classes, spanning short, medium and long-term time horizons. The Analytics global risk and performance platform is built for scale, enabling clients to conduct complex calculations and stress tests. Analytics offers products and services that assist institutional investors with portfolio construction, risk management, performance attribution and regulatory reporting.

The ESG operating segment offers products and services that help institutional investors understand how environmental, social and governance (“ESG”) factors can impact the long-term risk of their investments. In addition, the ESG operating segment’s data and ratings products are used in the construction of equity and fixed income indexes to help institutional investors benchmark ESG investment performance, issue index-based investment products, as well as manage, measure and report on ESG mandates.

The Real Estate operating segment is a provider of real estate performance analysis for funds, investors, managers and lenders, as well as occupiers through the disposition of the Real Estate occupiers business. This segment provides products and offers services that include research, reporting and benchmarking. During the year ended December 31, 2016, the Company disposed of the Real Estate occupiers business.

~~The operating segments of ESG and Real Estate do not individually meet the segment reporting thresholds and have been combined and presented as part of All Other for disclosure purposes.~~

The following table presents operating ~~revenue~~revenues by reportable segment for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(in thousands)
(in thousands)									(in thousands)	2023		2022		2023		2022
Operating revenues									Operating revenues
Index	$	184,594	$	157,751	$	525,185	$	454,481	Index	$	362,122	$	322,240	$	1,063,820	$	973,948
Analytics		114,972		111,291		340,759		333,947	Analytics	154,268		144,915		451,219		426,396
All Other		22,531		19,391		73,449		69,429
ESG and Climate									ESG and Climate	73,038		57,595		211,315		164,752
All Other - Private Assets									All Other - Private Assets	36,011		35,889		112,460		107,294
Total	$	322,097	$	288,433	$	939,393	$	857,857	Total	$	625,439	$	560,639	$	1,838,814	$	1,672,390

Table of Contents

The following table presents segment profitability and a reconciliation to net income for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(in thousands)
(in thousands)									(in thousands)	2023		2022		2023		2022
Index Adjusted EBITDA	$	134,299	$	111,750	$	379,412	$	318,317	Index Adjusted EBITDA	$	277,672	$	245,967	$	808,424	$	737,012
Analytics Adjusted EBITDA		33,013		31,501		94,290		95,163	Analytics Adjusted EBITDA	71,781		67,634		197,710		181,484
All Other Adjusted EBITDA		1,290		73		11,840		9,020
ESG and Climate Adjusted EBITDA									ESG and Climate Adjusted EBITDA	25,440		15,910		66,114		42,334
All Other - Private Assets Adjusted EBITDA									All Other - Private Assets Adjusted EBITDA	11,396		11,450		36,076		29,819
Total operating segment profitability		168,602		143,324		485,542		422,500	Total operating segment profitability	386,289		340,961		1,108,324		990,649

Amortization of intangible assets		10,614		11,752		32,987		35,535	Amortization of intangible assets	26,722		23,375		77,543		67,274
Depreciation and amortization of property, equipment and leasehold improvements		9,325		8,312		27,322		24,873	Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		15,911		20,426
Acquisition-related integration and transaction costs(1)									Acquisition-related integration and transaction costs(1)	1,006		928		1,006		4,059
Operating income		148,663		123,260		425,233		362,092	Operating income	353,309		309,531		1,013,864		898,890

Other expense (income), net		27,860		25,738		85,294		73,249	Other expense (income), net	35,653		40,327		112,678		120,711
Provision for income taxes		35,650		32,241		100,569		96,238	Provision for income taxes	57,997		52,612		155,974		122,577
Net income	$	85,153	$	65,281	$	239,370	$	192,605	Net income	$	259,659	$	216,592	$	745,212	$	655,602

~~Revenue~~

___________________________

(1)Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition.

Operating revenues by geography isare primarily based on the shipping address of the ultimate customer utilizing the product. The following table presents ~~revenue~~operating revenues by geographic area for the periods indicated:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2017		2016	2017		2016
	(in thousands)
Revenues
(in thousands)									(in thousands)	2023		2022		2023		2022
Operating revenues									Operating revenues
Americas:									Americas:
United States	$	159,123	$	139,376	$	459,958	$	411,740	United States	$	246,089	$	233,196	$	740,939	$	696,284
Other		11,997		11,908		34,949		33,878	Other	28,243		24,450		83,353		70,559
Total Americas		171,120		151,284		494,907		445,618	Total Americas	274,332		257,646		824,292		766,843


Europe, the Middle East and Africa ("EMEA"):									Europe, the Middle East and Africa ("EMEA"):
United Kingdom		48,878		44,689		143,140		131,275	United Kingdom	105,036		88,681		296,388		264,854
Other		61,567		56,317		185,655		173,191	Other	142,826		125,607		420,996		379,695
Total EMEA		110,445		101,006		328,795		304,466	Total EMEA	247,862		214,288		717,384		644,549


Asia & Australia:									Asia & Australia:
Japan		13,577		13,476		39,640		39,679	Japan	24,956		21,784		75,258		67,817
Other		26,955		22,667		76,051		68,094	Other	78,289		66,921		221,880		193,181
Total Asia & Australia		40,532		36,143		115,691		107,773	Total Asia & Australia	103,245		88,705		297,138		260,998


Total	$	322,097	$	288,433	$	939,393	$	857,857	Total	$	625,439	$	560,639	$	1,838,814	$	1,672,390

Table of Contents

Long-lived assets consist of property, equipment and leasehold improvements, ~~goodwill~~right of use assets and ~~intangible assets,~~internally developed capitalized software, net of accumulated depreciation and amortization. The following table presents long-lived assets by geographic area on the dates indicated:

	As of
	September 30,		December 31,			As of
	2017		2016			September 30,		December 31,
	(in thousands)
(in thousands)					(in thousands)	2023		2022
Long-lived assets					Long-lived assets
Americas:					Americas:
United States	$	1,848,890	$	1,876,366	United States	$	201,309	$	179,453
Other		1,764		1,543	Other	11,974		11,971
Total Americas		1,850,654		1,877,909	Total Americas	213,283		191,424


EMEA:					EMEA:
United Kingdom		94,261		89,466	United Kingdom	18,346		19,674
Other		21,707		23,780	Other	21,808		23,099
Total EMEA		115,968		113,246	Total EMEA	40,154		42,773


Asia & Australia:					Asia & Australia:
Japan		235		357	Japan	1,268		652
Other		7,318		7,563	Other	33,017		32,962
Total Asia & Australia		7,553		7,920	Total Asia & Australia	34,285		33,614


Total	$	1,974,175	$	1,999,075	Total	$	287,722	$	267,811

~~10.~~

12. SUBSEQUENT EVENTS

On October ~~31, 2017,~~30, 2023, the Board of Directors declared a quarterly cash dividend of ~~$0.38~~$1.38 per share for the three months ending December 31, 2023 (“fourth quarter ~~2017.~~2023”). The fourth quarter ~~2017~~2023 dividend is payable on November 30, ~~2017~~2023 to shareholders of record as of the close of trading on November ~~17, 2017.~~

~~Report~~9, 2023.

On October 2, 2023, the Company acquired the remaining 66.4% interest in Burgiss for $696.8 million in cash. The Company’s existing 33.6% interest had a fair value at acquisition date of ~~Independent Registered Public Accounting Firm~~

To $353.2 million which resulted non-taxable gain of approximately $140 million, to be recorded during the ~~Board~~three months ending December 31, 2023. The results of ~~Directors~~Burgiss will be included in the Company’s All Other - Private Assets reportable segment.

The acquisition of Burgiss will provide the Company with comprehensive data and ~~Shareholders~~deep expertise in all private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics. The acquisition will also expand the Company’s robust suite of ~~MSCI Inc.~~

~~We have reviewed~~multi-asset class technology solutions with the ~~accompanying condensed consolidated statement~~industry leading Burgiss Caissa Platform, developed exclusively for institutional investors and providing a comprehensive view of ~~financial condition~~the drivers of ~~MSCI Inc.~~performance and ~~its subsidiaries as~~risk in both public and private investments in total portfolios.

Due to the proximity of ~~September 30, 2017, and~~ the ~~related condensed consolidated statements~~closing date of ~~income and~~the acquisition of ~~comprehensive income~~the remaining interest in Burgiss to the date of this filing, the initial accounting for the ~~three-month and nine-month periods ended September 30, 2017 and September 30, 2016, and~~business combination is incomplete. As a result, the ~~condensed consolidated statements of cash flows for~~Company is unable to disclose certain information including the ~~nine-month periods ended September 30, 2017 and September 30, 2016. These interim financial statements are the responsibility~~provisional fair value estimates of the ~~Company’s management.~~

~~We conducted our review in accordance with the standards~~identifiable net assets acquired and goodwill at this time.

Table of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial condition as of December 31, 2016, and the related consolidated statements of income, of comprehensive income, of shareholders’ equity and of cash flows for the year then ended (not presented herein), and in our report dated February 24, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated statement of financial condition as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated statement of financial condition from which it has been derived.

Contents

~~/s/ PricewaterhouseCoopers LLP~~

~~New York, New York~~

~~November 3, 2017~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2022 (the “Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in “Item 1A.—Risk Factors,” in our Form 10-K.

Except as the context otherwise indicates, the terms “MSCI,” the “Company,” “we,” “our” and “us” refer to MSCI Inc., together with its subsidiaries.

Overview

We ~~offer products~~are a leading provider of critical decision support tools and ~~services to support~~solutions for the ~~needs~~global investment community. Our mission-critical offerings help investors address the challenges of ~~institutional investors throughout their~~a transforming investment ~~processes. Clients look to us for an integrated view~~landscape and power better investment decisions. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios. We operate in ~~their portfolios, broad~~four reportable segments as follows: Index, Analytics, ESG and ~~deep asset class coverage, quality data, an objective perspective~~Climate, and ~~innovation.~~

~~Our clients include asset owners (pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices~~All Other – Private Assets. The operating segments of Real Assets and ~~insurance companies), asset management firms (mutual funds, hedge funds, providers of exchange-traded funds~~The Burgiss Group, LLC (“~~ETFs”~~Burgiss”)~~, private wealth managers, real estate investment trusts and financial intermediaries (banks, broker-dealers, exchanges, custodians, trust companies and investment consultants).~~

Our products and services include indexes and analytical models; ratings and analysis that enable institutional investors to integrate ESG factors into their investment strategies; and analysis of real estate in both privately and publicly owned portfolios. Clients use our products and services to help construct portfolios and allocate assets. The analytical content we provide through our products is enabled by applications and are the basis for the services that we provide to clients. Our analytical tools and content help clients measure and manage risk across all major asset classes. Our products and services can also be customized to do not individually meet the ~~specific needs~~segment reporting thresholds and have been combined and presented as part of the All Other – Private Assets reportable segment.

Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of ESG and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and growing into strategic partnerships with clients and (f) executing strategic relationships and acquisitions with complementary content and technology companies. For more information about our ~~clients.~~

Company’s operations, see “Item 1: Business” in our Form 10-K.

As of September 30, ~~2017,~~2023, we ~~had~~served approximately 6,900 clients across 88 countries. To calculate the number of clients, we may count certain affiliates, user locations, or business units within a single organization as separate clients. If we aggregate all related clients under their respective parent entity, the number of clients would be approximately 3,900, as of September 30, 2017. We had offices in 32 cities across 21 countries to help serve our diverse client base, with 52.7% of our revenues coming from6,5001 clients in ~~the Americas, 35.0% in Europe, the Middle East and Africa (“EMEA”) and 12.3% in Asia and Australia.~~

more than 95 countries.

Our principal business model is generally to license annual, recurring subscriptions tofor the majority of our Index, Analytics and ESG and Climate products and services for ~~use at specified locations, often by~~ a ~~given number~~fee due in advance of ~~users or for a certain volume of services,~~the service period. Real Assets products are also licensed annually through subscriptions, which are generally recurring, for a fee which is paid in ~~a majority of cases, paid up front. Additionally, our recurring~~advance when products are generally delivered ratably over the subscription ~~offerings include our managed services offering, whereby we oversee~~period or in arrears after the production of risk and performance reports on behalf of our clients. Fees attributable to annual, recurring subscriptions are recorded as deferred revenues on our Condensed Consolidated Statement of Financial Condition and are recognized on our Condensed Consolidated Statement of Income as the serviceproduct is ~~rendered. Furthermore, a~~delivered. A portion of our ~~revenues~~fees comes from clients who use our indexes as the basis for index-linked investment ~~products such as ETFs or as the basis for passively managed funds and separate accounts. These clients commonly pay us a license fee,~~products. Such fees are primarily ~~in arrears, for the use of our intellectual property,~~ based on ~~the investment product’s assets. We also generate revenues from certain exchanges that use our indexes as the basis for futures~~a client’s assets under management (“AUM”), trading volumes and ~~options contracts and pay us a license~~ fee primarily in arrears, for the use of our intellectual property based on their volume of trades. In addition, we generate revenues from subscription agreements for the receipt of periodic benchmark reports, digests and other publications, which are most often associated with our real estate products, that are recognized upon delivery of such reports or data updates. Fees are primarily paid in arrears after the product is delivered. We also realize one-time fees related to customized reports, historical data sets and certain implementation and consulting services, as well as from certain products and services that are purchased on a non-renewal basis.

levels.

In evaluating our financial performance, we focus on revenue and profit growth, including ~~GAAP and~~results accounted for under generally accepted accounting principles in the United States (“GAAP”) as well as non-GAAP measures, for the Company as a whole ~~as well as~~and by operating segment.

We present revenues disaggregated by types and by segments, which represent our major product lines. We also review expenses by activity, which provides more transparency into how resources are being deployed. In addition, we ~~focus on~~utilize operating metrics including Run Rate, subscription sales and ~~Aggregate~~ Retention Rate to manage and assess performance and to provide deeper insights into the ~~business. Our business is not highly capital intensive and, as such, we expect to continue to convert a high percentage~~recurring portion of our profits into excess cash in the future. Our growth strategy includes: (a) expanding and deepening our relationships with investment institutions worldwide; (b) developing new and enhancing existing product offerings by integrating our content; and (c) seeking to acquire products, technologies, services and companies that will enhance, complement or expand our client base and product offerings.

business.

In the discussion that follows, we provide certain variances excluding the impact of foreign currency exchange rate ~~fluctuations.~~fluctuations and acquisitions. Foreign currency exchange rate fluctuations reflect the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period.

While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have been adjusted for the impact of foreign currency fluctuations, the underlying AUM, which is the primary component of asset-based fees, is not adjusted for foreign currency fluctuations. Approximately three-fifths of the AUM is invested in securities denominated in currencies other than the U.S. dollar, and accordingly, any such impact is excluded from the disclosed foreign currency-adjusted variances.

For the nine months ended September 30, 2023, our largest client organization by revenue, BlackRock, accounted for 10.1% of our consolidated operating revenues, with 95.4% of the operating revenues from BlackRock coming from fees based on the assets in BlackRock’s ETFs and non-ETFs that are based on our indexes.

1 Represents the aggregate of all related clients under their respective parent entity.

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The discussion of our results of operations for the three and nine months ended September 30, ~~2017~~2023 and ~~2016~~2022 are presented below. The results of operations for interim periods may not be indicative of future results.

Recent Developments

Burgiss Acquisition

On October 2, 2023, MSCI acquired the remaining 66.4% interest in Burgiss for $696.8 million in cash. Prior to the acquisition, we held a 33.6% interest in Burgiss and accounted for Burgiss as an equity-method investment. The acquisition of Burgiss will provide MSCI with comprehensive data and deep expertise in all private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics. The acquisition will also expand MSCI’s robust suite of multi-asset class technology solutions with the industry leading Burgiss Caissa Platform, developed exclusively for institutional investors and providing a comprehensive view of the drivers of performance and risk in both public and private investments in total portfolios.

Our existing 33.6% interest had a fair value at acquisition date of $353.2 million which resulted in a pre-tax gain of approximately $140 million, to be recorded during the three months ending December 31, 2023. We used available cash to fund the acquisition of the remaining interest in Burgiss. The results of Burgiss will be included in our All Other - Private Assets reportable segment.

Results of Operations

~~Three Months Ended September 30, 2017 Compared to the Three Months Ended September 30, 2016~~

~~The following table presents the results of operations for the periods indicated:~~

Three Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands, except per share data)

Operating revenues
$
322,097

$
288,433

$
33,664

11.7
%
Operating expenses:

Cost of revenues

68,491

��

62,986

5,505

8.7
%
Selling and marketing

44,918

41,514

3,404

8.2
%
Research and development

17,983

18,750

(767
)

(4.1
%)
General and administrative

22,103

21,859

244

1.1
%
Amortization of intangible assets

10,614

11,752

(1,138
)

(9.7
%)
Depreciation and amortization of property,
equipment and leasehold improvements

9,325

8,312

1,013

12.2
%
Total operating expenses

173,434

165,173

8,261

5.0
%
Operating income

148,663

123,260

25,403

20.6
%
Other expense (income), net

27,860

25,738

2,122

8.2
%
Income before provision for income taxes

120,803

97,522

23,281

23.9
%
Provision for income taxes

35,650

32,241

3,409

10.6
%
Net income
$
85,153

$
65,281

$
19,872

30.4
%

Earnings per basic common share
$
0.94

$
0.69

$
0.25

36.2
%

Earnings per diluted common share
$
0.93

$
0.68

$
0.25

36.8
%

Operating margin

46.2
%

42.7
%

Operating Revenues

Our operating revenues are grouped by the following types: recurring subscriptions, asset-based fees and non-recurring. We also group operating revenues by major product or reportable segment as follows: Index, Analytics, ESG and Climate and All Other – Private Assets, which includes the ~~ESG and~~ Real ~~Estate product lines.~~

Assets operating segment.

The following table presents operating revenues by type for the periods indicated:

	Three Months Ended
	September 30,									Three Months Ended September 30,				% Change			Nine Months Ended September 30,						% Change
	2017		2016		Increase/(Decrease)
	(in thousands)
(in thousands)									(in thousands)	2023		2022				% Change			2023			2022			% Change
Recurring subscriptions	$	243,402	$	226,508	$	16,894	7.5	%	Recurring subscriptions	$	464,997	$	420,216				$	1,365,936		$	1,227,025
Asset-based fees		72,861		56,122		16,739	29.8	%	Asset-based fees	141,066		125,620		12.3	%		412,354			402,889			2.3	%
Non-recurring		5,834		5,803		31	0.5	%	Non-recurring	19,376		14,803		30.9	%		60,524			42,476			42.5	%
Total operating revenues									Total operating revenues	$	625,439	$	560,639	11.6	%		$	1,838,814		$	1,672,390		10.0	%

Total operating revenues	$	322,097	$	288,433	$	33,664	11.7	%

Total operating revenues ~~grew 11.7% to $322.1 million~~increased 11.6% for the three months ended September 30, ~~2017 compared to $288.4 million~~2023. Adjusting for the impact of foreign currency exchange rate fluctuations, total operating revenues would have increased 10.9%.

Operating revenues from recurring subscriptions increased 10.7% for the three months ended September 30, ~~2016.~~

~~Revenues~~2023, primarily driven by strong growth in Index products, which increased $20.9 million, or 11.3%, ESG and Climate products, which increased $15.4 million, or 27.3%, and Analytics products, which increased $8.5 million, or 6.0%. Adjusting for the impact of foreign currency exchange rate fluctuations, operating revenues from recurring subscriptions would have increased ~~7.5% to $243.4 million~~9.8%.

Operating revenues from asset-based fees increased 12.3% for the three months ended September 30, ~~2017 compared~~2023, mainly driven by growth in revenues from ETFs linked to ~~$226.5 million~~MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by a decrease in revenues from exchange traded futures and options contracts linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes increased by 15.3%, primarily driven by increases in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 16.3%, primarily driven by increases in average AUM and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes decreased by 12.1%, driven by volume decreases.

Total operating revenues increased 10.0% for the ~~three~~nine months ended September 30, 2016, resulting from increases of $9.3 million, or 9.5%, in Index recurring subscriptions, $4.0 million, or 3.7%, in Analytics recurring subscriptions, $2.6 million, or 23.9%, in ESG recurring subscriptions and $0.9 million, or 12.3%, in Real Estate recurring subscriptions.2023. Adjusting for the impact ~~from~~of foreign currency exchange rate fluctuations, total operating revenues would have increased 10.3%.

Operating revenues from recurring subscriptions increased 11.3% for the nine months ended September 30, 2023, primarily driven by strong growth in Index products, which increased $64.1 million, or 11.9%, ESG and Climate products, which increased

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$46.6 million, or 28.9%, and Analytics products, which increased $23.2 million, or 5.5%. Adjusting for the impact of foreign currency exchange rate fluctuations, operating revenues from recurring subscriptions would have increased ~~7.7%~~11.7%.

~~Revenues~~

Operating revenues from asset-based fees increased ~~29.8% to $72.9 million~~2.3% for the ~~three~~nine months ended September 30, ~~2017 compared to $56.1 million for the three months ended September 30, 2016. The increase in asset-based fees was~~2023, mainly driven by ~~strong growth across all types of index-linked investment products. A $13.1 million, or 35.4%,~~ growth in ~~revenue~~revenues from ETFs linked to MSCI equity indexes, ~~was driven by a 40.0% increase in average assets under management (“AUM”),~~ partially offset by ~~the impact of~~ a ~~change~~decrease in ~~the product mix. In addition, revenue from non-ETF passive products grew $2.5 million, or 15.0%, driven by higher AUM and an increased contribution from higher fee products. Revenues~~revenues from exchange traded futures and options contracts ~~based on~~linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes increased by 5.0%, primarily driven by increases in average AUM and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes ~~also grew $1.2 million, or 47.2%~~decreased by 9.3%, driven by ~~a strong increase in total trading volumes and a more favorable product mix. Approximately two-thirds of~~volume decreases.

Operating revenues from non-recurring revenues increased 42.5% for the ~~underlying securities included in the AUM of our index-linked investment products are denominated in currencies other than the U.S. dollar and are subject~~nine months ended September 30, 2023, primarily driven by one-time license fees related to ~~foreign currency exchange rate fluctuations.~~

prior periods, as well as non-recurring licensed data products.

The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated:

Period Ended(1)

2016

2017

(in billions)
March
31,

June
30,

September
30,

December
31,

March
31,

June
30,

September
30,

AUM in ETFs linked to MSCI indexes(2)
$
438.3

$
439.7

$
474.9

$
481.4

$
555.7

$
624.3

$
674.3

Sequential Change in Value

Market Appreciation/(Depreciation)
$
(1.7
)

$
(2.5
)

$
23.7

$
(8.7
)

$
35.8

$
23.6

$
32.2

Cash Inflows

6.6

3.9

11.5

15.2

38.5

45.0

17.8

Total Change
$
4.9

$
1.4

$
35.2

$
6.5

$
74.3

$
68.6

$
50.0

~~Source: Bloomberg and MSCI~~

⁽¹⁾

The historical values of the AUM in ETFs linked to our indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to MSCI Indexes” on our Investor Relations homepage at ~~http://ir.msci.com~~. This information is updated on or about the second U.S. business day of each month. Information contained on our website is not incorporated by reference into this Quarterly Report on Form 10-Q or any other report filed with the SEC.

⁽²⁾	~~The value of AUM in ETFs linked to MSCI indexes is calculated by multiplying the ETF net asset value by the number of shares outstanding.~~


	Period Ended
	2022								2023
(in billions)	March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,
AUM in ETFs linked to MSCI equity indexes(1), (2)	$	1,389.3	$	1,189.5	$	1,081.2	$	1,222.9	$	1,305.4	$	1,372.5	$	1,322.8
Sequential Change in Value
Market Appreciation/(Depreciation)	$	(89.7)	$	(207.3)	$	(105.7)	$	118.8	$	75.1	$	48.4	$	(56.1)
Cash Inflows	27.4		7.5		(2.6)		22.9		7.4		18.7		6.4
Total Change	$	(62.3)	$	(199.8)	$	(108.3)	$	141.7	$	82.5	$	67.1	$	(49.7)

The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated:

	Quarterly Average
	2016								2017							2022								2023
(in billions)	March		June		September		December		March		June		September		(in billions)	March		June		September		December		March		June		September
AUM in ETFs linked to MSCI indexes	$	407.9	$	438.8	$	467.3	$	471.1	$	524.1	$	595.0	$	654.4
AUM in ETFs linked to MSCI equity indexes(1), (2)															AUM in ETFs linked to MSCI equity indexes(1), (2)
Quarterly average															Quarterly average	$	1,392.5	$	1,285.4	$	1,208.9	$	1,182.1	$	1,287.5	$	1,333.8	$	1,376.5
Year-to-date average															Year-to-date average	$	1,392.5	$	1,338.9	$	1,295.6	$	1,267.2	$	1,287.5	$	1,310.7	$	1,332.6

~~Non-recurring revenues~~

___________________________

(1)The historical values of the AUM in ETFs linked to our equity indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to MSCI Equity Indexes” on our Investor Relations homepage at http://ir.msci.com. This information is updated mid-month each month. Information contained on our website is not deemed part of or incorporated by reference into this Quarterly Report on Form 10-Q or any other report filed with the SEC. The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented.

(2)The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.

The average value of AUM in ETFs linked to MSCI equity indexes for the three months ended September 30, ~~2017 of $5.8 million remained consistent compared to~~2023, was up $167.6 billion, or 13.9%. For the ~~three~~nine months ended September 30, ~~2016.~~

2023, it was up $37.0 billion, or 2.9%.

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The following table presents operating revenues by reportable segment and revenue type for the periods indicated:

	Three Months Ended
	September 30,										Three Months Ended September 30,				% Change			Nine Months Ended September 30,						% Change
	2017		2016		Increase/(Decrease)
	(in thousands)
(in thousands)										(in thousands)	2023		2022				% Change			2023			2022			% Change
Operating revenues:										Operating revenues:
Index										Index
Recurring subscriptions	$	107,963	$	98,625	$	9,338		9.5	%	Recurring subscriptions	$	206,453	$	185,531	11.3	%		$	603,845		$	539,740		11.9	%
Asset-based fees		72,861		56,122		16,739		29.8	%	Asset-based fees	141,066		125,620		12.3	%		412,354			402,889			2.3	%
Non-recurring		3,770		3,004		766		25.5	%	Non-recurring	14,603		11,089		31.7	%		47,621			31,319			52.1	%
Index total		184,594		157,751		26,843		17.0	%	Index total	362,122		322,240		12.4	%		1,063,820			973,948			9.2	%


Analytics										Analytics
Recurring subscriptions		113,574		109,554		4,020		3.7	%	Recurring subscriptions	151,269		142,751		6.0	%		443,276			420,047			5.5	%
Non-recurring		1,398		1,737		(339	)	(19.5	%)	Non-recurring	2,999		2,164		38.6	%		7,943			6,349			25.1	%
Analytics total		114,972		111,291		3,681		3.3	%	Analytics total	154,268		144,915		6.5	%		451,219			426,396			5.8	%

All Other

ESG and Climate										ESG and Climate
Recurring subscriptions		21,865		18,329		3,536		19.3	%	Recurring subscriptions	71,744		56,353		27.3	%		207,523			160,962			28.9	%
Non-recurring		666		1,062		(396	)	(37.3	%)	Non-recurring	1,294		1,242		4.2	%		3,792			3,790			0.1	%
All Other total		22,531		19,391		3,140		16.2	%
ESG and Climate total										ESG and Climate total	73,038		57,595		26.8	%		211,315			164,752			28.3	%

All Other - Private Assets										All Other - Private Assets
Recurring subscriptions										Recurring subscriptions	35,531		35,581		(0.1	%)		111,292			106,276			4.7	%
Non-recurring										Non-recurring	480		308		55.8	%		1,168			1,018			14.7	%
All Other - Private Assets total										All Other - Private Assets total	36,011		35,889		0.3	%		112,460			107,294			4.8	%

Total operating revenues	$	322,097	$	288,433	$	33,664		11.7	%	Total operating revenues	$	625,439	$	560,639	11.6	%		$	1,838,814		$	1,672,390		10.0	%

Refer to the section titled ~~"Segment Results"~~“Segment Results” that follows for further discussion of segment ~~revenues~~.

revenues.

Operating Expenses

We group our operating expenses into the following activity categories:

•Cost of revenues;

•Selling and marketing;

•Research and development (“R&D”);

•General and administrative (“G&A”);

•Amortization of intangible assets; and

•Depreciation and amortization of property, equipment and leasehold improvements.

Costs are assigned to these activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved.

Cost of revenues, selling and marketing, R&D and G&A all include both compensation as well as non-compensation related expenses.

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The following table presents operating expenses by activity category for the periods indicated:

	Three Months Ended
	September 30,										Three Months Ended September 30,				% Change			Nine Months Ended September 30,						% Change
	2017		2016		Increase/(Decrease)
	(in thousands)
(in thousands)										(in thousands)	2023		2022				% Change			2023			2022			% Change
Operating expenses:										Operating expenses:
Cost of revenues	$	68,491	$	62,986	$	5,505		8.7	%	Cost of revenues	$	105,311	$	98,418	7.0	%		$	324,024		$	301,957		7.3	%
Selling and marketing		44,918		41,514		3,404		8.2	%	Selling and marketing	66,581		65,545		1.6	%		201,044			192,671			4.3	%
Research and development		17,983		18,750		(767	)	(4.1	%)	Research and development	31,438		25,941		21.2	%		92,901			78,179			18.8	%
General and administrative		22,103		21,859		244		1.1	%	General and administrative	36,826		30,702		19.9	%		113,527			112,993			0.5	%
Amortization of intangible assets		10,614		11,752		(1,138	)	(9.7	%)	Amortization of intangible assets	26,722		23,375		14.3	%		77,543			67,274			15.3	%
Depreciation and amortization of property, equipment and leasehold improvements		9,325		8,312		1,013		12.2	%	Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)		15,911			20,426			(22.1	%)
Total operating expenses	$	173,434	$	165,173	$	8,261		5.0	%	Total operating expenses	$	272,130	$	251,108	8.4	%		$	824,950		$	773,500		6.7	%

Total operating expenses increased ~~5.0% to $173.4 million~~8.4% for the three months ended September 30, ~~2017 compared to $165.2 million for the three months ended September 30, 2016.~~2023. Adjusting for the impact of foreign currency exchange rate fluctuations, ~~total~~the increase would have been 6.4%.

Total operating expenses ~~would have~~ increased ~~4.4%~~6.7% for the ~~three~~nine months ended September 30, ~~2017 compared to~~2023. Adjusting for the ~~three months ended September 30, 2016.~~

impact of foreign currency exchange rate fluctuations, the increase would have been 7.1%.

Cost of Revenues

Cost of revenues ~~consists~~expenses consist of costs related to the production and servicing of our products and services and primarily includes related information technology costs, including data center, cloud service, platform and infrastructure costs; costs to acquire, produce and maintain market data information; costs of research to support ~~maintain~~ and ~~rebalance~~maintain existing products; costs of product management teams; costs of client service and consultant teams to support customer needs; ~~and~~as well as other support costs directly attributable to the cost of revenues including certain human resources, finance and legal costs.

Cost of revenues increased ~~8.7% to $68.5 million~~7.0% for the three months ended September 30, ~~2017 compared~~2023, primarily reflecting increases across the Analytics and Index reportable segments, partially offset by decreases in the All Other – Private Assets reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to ~~$63.0 million~~higher wages and salaries, incentive compensation and benefits costs.

Cost of revenues increased 7.3% for the ~~three~~nine months ended September 30, ~~2016, primarily~~2023, reflecting increases across the Index, Analytics and ESG and Climate reportable segments, partially offset by decreases in the All Other – Private Assets reportable segment. The change was driven by ~~higher~~increases in compensation and benefits costs, primarily relating to higher wages and salaries and incentive compensation, as well as ~~higher~~increases in non-compensation ~~information technology and~~costs, primarily reflecting higher market data and recruiting costs.

Selling and Marketing

Selling and marketing ~~consists~~expenses consist of costs associated with acquiring new clients or selling new products or product renewals to existing clients and primarily includes the costs of our sales ~~force~~ and marketing teams, as well as costs incurred in other ~~groups~~departments associated with acquiring new business, including product management, research, technology and sales operations.

Selling and marketing expenses increased ~~8.2% to $44.9 million~~1.6% for the three months ended September 30, ~~2017 compared~~2023, reflecting increases across the Analytics, ESG and Climate and All Other – Private Assets reportable segments, partially offset by decreases in the Index reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to ~~$41.5 million~~higher incentive compensation and wages and salaries, partially offset by lower benefits costs.

Selling and marketing expenses increased 4.3% for the ~~three~~nine months ended September 30, ~~2016.~~2023, reflecting increases across all reportable segments. The ~~increase~~change was ~~primarily~~ driven by ~~higher~~increases in compensation and benefits costs, ~~reflecting~~primarily relating to higher wages and salaries and incentive compensation costs, partially offset by lower ~~severance~~benefits costs, as well as ~~higher~~increases in non-compensation costs, primarily reflecting increased marketing costs and ~~professional fee costs.~~

travel and entertainment expenses.

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Research and Development

R&D ~~consists~~expenses consist of ~~the~~ costs to develop new or ~~to enhance existing,~~enhanced products and the costs to develop new or ~~improved technology~~enhanced technologies and service platforms for the delivery of our products and services and primarily ~~includes~~include the costs of development, research, product management, project management and the technology support directly associated with these ~~efforts.~~ activities.

R&D expenses ~~decreased 4.1% to $18.0 million~~increased 21.2% for the three months ended September 30, ~~2017 compared~~2023, reflecting increases across the ESG and Climate, Index and All Other - Private Assets reportable segments, partially offset by decreases in the Analytics reportable segment. The change was driven by increases in compensation and benefits costs, primarily relating to ~~$18.8 million~~higher wages and salaries and incentive compensation costs, partially offset by increased capitalization of costs related to internally developed software projects. The change was also driven by increases in non-compensation costs, primarily relating to higher information technology costs.

R&D expenses increased 18.8% for the ~~three~~nine months ended September 30, ~~2016, primarily~~2023, reflecting increases across the ESG and Climate, Index and All Other - Private Assets reportable segments, partially offset by decreases in the Analytics reportable segment. The change was driven by ~~lower~~increases in compensation and benefits costs, ~~due, in part,~~primarily relating to higher ~~levels~~wages and salaries and incentive compensation costs, partially offset by increased capitalization of ~~capitalizable~~costs related to internally developed software projects.

The change was also driven by increases in non-compensation costs, primarily relating to higher information technology costs.

General and Administrative

G&A ~~consists~~expenses consist of costs primarily related to finance operations, human resources, ~~the~~ office of the ~~Chief Executive Officer,~~CEO, legal, corporate technology, corporate development and certain other administrative costs that are not directly attributed, but are instead allocated, to a product or service.

G&A expenses increased ~~1.1% to $22.1 million~~19.9% for the three months ended September 30, ~~2017 compared~~2023, reflecting increases across the Index, ESG and Climate and Analytics reportable segments, partially offset by decreases in the All Other - Private Assets reportable segment. The change was driven by increases in compensation and benefits costs primarily related to ~~$21.9 million~~higher incentive compensation and wages and salaries. The change was also driven by higher non-compensation costs, primarily relating to higher non-income tax expenses due to the absence of favorable settlements reached in the prior period, partially offset by a decrease in professional fees.

G&A expenses increased 0.5% for the ~~three~~nine months ended September 30, ~~2016,~~2023, primarily reflecting increases across the ESG and Climate and Index reportable segments, partially offset by decreases in the All Other - Private Assets reportable segment. The change was primarily driven by ~~higher~~increases in compensation and benefits costs, ~~partially~~primarily relating to higher incentive compensation and wages and salaries. The change was offset by ~~lower non-compensation professional fee costs.~~

the absence of non-recurring transaction and integration costs related to the September 2021 acquisition of Real Capital Analytics, Inc. (“RCA”).

The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the periods indicated:

	Three Months Ended
	September 30,										Three Months Ended September 30,				% Change			Nine Months Ended September 30,						% Change
	2017		2016		Increase/(Decrease)
	(in thousands)
(in thousands)										(in thousands)	2023		2022				% Change			2023			2022			% Change
Compensation and benefits	$	109,320	$	102,725	$	6,595		6.4	%	Compensation and benefits	$	171,815	$	155,447				$	527,566		$	489,527
Non-compensation expenses		44,175		42,384		1,791		4.2	%	Non-compensation expenses	68,341		65,159		4.9	%		203,930			196,273			3.9	%
Amortization of intangible assets		10,614		11,752		(1,138	)	(9.7	%)	Amortization of intangible assets	26,722		23,375		14.3	%		77,543			67,274			15.3	%
Depreciation and amortization of property, equipment and leasehold improvements		9,325		8,312		1,013		12.2	%	Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)		15,911			20,426			(22.1	%)
Total operating expenses	$	173,434	$	165,173	$	8,261		5.0	%	Total operating expenses	$	272,130	$	251,108	8.4	%		$	824,950		$	773,500		6.7	%

Compensation and ~~benefits costs are our most~~Benefits

A significant ~~expense and typically represent more than 60%~~portion of the incentive compensation component of operating expenses ~~or more than 70%~~is based on the achievement of ~~Adjusted EBITDA expenses.~~ a number of financial and operating metrics. In a scenario where operating revenue growth and profitability moderate, incentive compensation would be expected to decrease accordingly.

We had ~~3,047 and 2,802~~5,005 employees as of September 30, ~~2017 and 2016, respectively.~~2023, compared to 4,767 employees as of September 30, 2022, reflecting a 5.0% growth in the number of employees. Continued growth of our emerging market centers around the world is an important factor in our ability to manage and

control the growth of our compensation and ~~benefit expenses.~~benefits costs. As of September 30, ~~2017, 57.6%~~2023, 66.5% of our employees were located in emerging market centers compared to ~~55.6%~~65.0% as of September 30, ~~2016.~~

2022.

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Compensation and benefits costs increased 10.5% and 7.8%, for the three and nine months ended September 30, 2023, respectively, driven by an increase in wages and salaries and incentive compensation costs, partially offset by increased capitalization of expenses related to internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations, compensation and benefits costs would have increased by 7.9% and 8.5%, respectively, for the three and nine months ended September 30, 2023.

Non-Compensation Expenses

Fixed costs constitute a significant portion of the non-compensation component of operating expenses. The discretionary non-compensation component of operating expenses could, however, be reduced in the near-term in a scenario where operating revenue growth moderates.

Non-compensation expenses increased ~~6.4% to $109.3 million~~4.9% for the three months ended September 30, ~~2017 compared~~2023, primarily driven by higher non-income tax expenses due to ~~$102.7 million~~the absence of favorable settlements reached in the prior period and higher information technology costs and market data costs, partially offset by a decrease in professional fees.

Non-compensation expenses increased 3.9% for the ~~three~~nine months ended September 30, ~~2016 due to higher incentive compensation and wages and salaries resulting from, in part, growth in the number of employees, partially offset by lower severance costs.~~

~~Non-compensation expenses increased 4.2% to $44.2 million for the three months ended September 30, 2017 compared to $42.4 million for the three months ended September 30, 2016,~~2023, primarily driven by higher information technology ~~other~~costs, market data costs, non-income tax ~~market data~~expenses due to the absence of favorable settlements reached in the prior period, and ~~personnel related~~marketing costs, partially offset by lower professional ~~fee costs.~~

fees and by the absence of non-recurring transaction and integration costs related to the September 2021 acquisition of RCA.

Amortization of Intangible Assets

Amortization of intangible assets expense ~~decreased 9.7%~~relates to ~~$10.6 million~~definite-lived intangible assets arising from past acquisitions and capitalization of internally developed software projects recognized over their estimated useful lives.

Amortization of intangible assets expense increased 14.3% and 15.3% for the three and nine months ended September 30, ~~2017 compared to $11.8 million for the three months ended September 30, 2016,~~2023, respectively, primarily ~~as the result~~driven by higher amortization of ~~certain of the intangible assets associated with the RiskMetrics Group, LLC acquisition becoming fully amortized during the three months ended June 30, 2017.~~

internal use software.

Depreciation and Amortization of Property, Equipment and Leasehold Improvements

Depreciation and amortization of property, equipment and leasehold improvements ~~increased 12.2%~~consists of expenses related to ~~$9.3 million~~depreciating or amortizing the cost of computer and related equipment, leasehold improvements, software and furniture and fixtures over the estimated useful life of the assets.

Depreciation and amortization of property, equipment and leasehold improvements decreased 26.3% and 22.1% for the three and nine months ended September 30, 2023, respectively, primarily driven by lower depreciation on computer and related equipment.

Total Other Expense (Income), Net

The following table shows our other expense (income), net for the periods indicated:


	Three Months Ended September 30,				% Change		Nine Months Ended September 30,				% Change
(in thousands)	2023		2022				2023		2022
Interest income	$	(10,314)	$	(3,938)	161.9	%	$	(31,079)	$	(5,160)	502.3	%
Interest expense	46,902		44,162		6.2	%	139,725		125,961		10.9	%
Other expense (income)	(935)		103		(1007.8	%)	4,032		(90)		(4580.0	%)
Total other expense (income), net	$	35,653	$	40,327	(11.6	%)	$	112,678	$	120,711	(6.7	%)

Total other expense (income), net decreased 11.6% for the three months ended September 30, ~~2017 compared~~2023, primarily driven by higher interest income, reflecting higher yields, and the impact of favorable foreign currency exchange rate fluctuations, partially offset by higher interest expense due to ~~$8.3 million~~higher interest rates.

Total other expense (income), net decreased 6.7% for the nine months ended September 30, 2023, primarily driven by higher interest income, reflecting higher yields and cash balances, partially offset by higher interest expense, due to higher debt levels and interest rates, and the impact of unfavorable foreign currency exchange rate fluctuations.

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Income Taxes

The following table shows our income tax provision and effective tax rate for the periods indicated:


	Three Months Ended September 30,						% Change		Nine Months Ended September 30,						% Change
(in thousands)	2023			2022					2023			2022
Provision for income taxes	$	57,997		$	52,612		10.2	%	$	155,974		$	122,577		27.2	%
Effective tax rate	18.3		%	19.5		%	(6.2)	%	17.3		%	15.8		%	9.5	%

The effective tax rate of 18.3% for the three months ended September 30, ~~2016. The increase was primarily the result of increased hardware depreciation associated with new data center technology.~~

~~Other Expense (Income), Net~~

Other expense (income), net increased 8.2% to $27.9 million for the three months ended September 30, 2017 compared to $25.7 million for the three months ended September 30, 2016. The increase was driven by $2.2 million of higher interest expense resulting from the increased level of indebtedness associated with the 2026 Senior Notes offering, partially offset by higher interest income.

~~Income Taxes~~

The provision for income tax expense increased 10.6% to $35.7 million for the three months ended September 30, 2017 compared to $32.2 million for the three months ended September 30, 2016 on higher income before provision for income taxes, offset in part by a decline in the effective tax rate. These amounts reflect effective tax rates of 29.5% and 33.1% for the three months ended September 30, 2017 and 2016, respectively. The decrease in the effective tax rate was primarily driven by the ongoing efforts to better align our tax profile with our global operating footprint and the impact of discrete items.

~~The effective tax rate of 29.5% for the three months ended September 30, 2017~~2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling ~~$0.8~~$3.4 million, ~~that decreased the Company’s~~primarily related to $3.2 million of prior-year items.

The effective tax rate ~~by 0.7 percentage points. For~~of 19.5% for the three months ended September 30, ~~2017,~~2022 reflects the Company’s estimate of the effective tax rate for the period. The level of discrete items ~~include $0.7~~was not impactful to the effective tax rate for the period.

The effective tax rate of 17.3% for the nine months ended September 30, 2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $19.8 million, related to $11.4 million of excess tax benefits recognized on share-based compensation vested during the period and $8.4 million related to prior-year items.

The effective tax rate of 15.8% for the ~~adoption~~nine months ended September 30, 2022 reflects the Company’s estimate of ~~ASU 2016-09 that occurred~~the effective tax rate for the period and was impacted by certain favorable discrete items totaling $28.2 million, primarily related to $28.4 million of excess tax benefits recognized on share-based compensation vested during the ~~three months ended March 31, 2017. See Note 2, “Recent Accounting Standards Updates,” of~~period.

Net Income

The following table shows our net income for the ~~Notes to Unaudited Condensed Consolidated Financial Statements included herein for more information regarding the adoption of ASU 2016-09.~~

~~Net Income~~

periods indicated:


	Three Months Ended September 30,				% Change		Nine Months Ended September 30,				% Change
(in thousands)	2023		2022				2023		2022
Net income	$	259,659	$	216,592	19.9	%	$	745,212	$	655,602	13.7	%

As a result of the factors described above, net income increased 19.9% for the three months ended September 30, ~~2017~~2023, and increased ~~30.4% to $85.2 million compared to $65.3 million~~13.7% for the ~~three~~nine months ended September 30, ~~2016.~~

2023.

Weighted Average Shares

and Common Shares Outstanding

The following table shows our weighted average shares outstanding ~~used to calculate basic~~for the periods indicated:


	Three Months Ended September 30,		% Change		Nine Months Ended September 30,		% Change
(in thousands)	2023	2022			2023	2022
Weighted average shares outstanding:
Basic	79,116	80,500	(1.7	%)	79,580	81,001	(1.8	%)
Diluted	79,500	80,874	(1.7	%)	79,959	81,481	(1.9	%)

The following table shows our common shares outstanding for the periods indicated:


	As of		% Change
(in thousands)	September 30, 2023	December 31, 2022
Common shares outstanding	79,091	79,960	(1.1	%)

The decrease in weighted average shares and ~~diluted earnings per share~~common shares outstanding for the three and nine months ended September 30, ~~2017 decreased by 5.0% and 3.8%, respectively, compared to the three months ended September 30, 2016. The decreases~~2023 primarily ~~reflect~~reflects the impact of ~~the~~ share repurchases made ~~partially offset by~~pursuant to the ~~impact~~Company’s stock repurchase program.

Table of ~~restricted stock units and stock options that converted to shares.~~

Contents

Adjusted EBITDA

~~“Adjusted~~

“Adjusted EBITDA,” a non-GAAP measure used by management to assess operating performance, is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or ~~adjustments.~~

adjustments, including, when applicable, certain acquisition-related integration and transaction costs.

“Adjusted EBITDA expenses,” ~~another~~a non-GAAP measure used by management to assess operating performance, is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible ~~assets.~~

assets and, at times, certain other transactions or adjustments, including, when applicable, certain acquisition-related integration and transaction costs.

“Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by operating revenues.

Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses are believed to be meaningful measures offor management to assess the operating performance of the Company because they adjust for significant one-time, unusual or non-recurring items as well as eliminate the accounting effects of certain capital spending and acquisitions that do not directly affect what management considers to be the Company’s ~~core~~ongoing operating performance in the period. All companies do not calculate adjusted EBITDA, adjusted EBITDA margin and adjusted EBITDA expenses in the same way. These measures can differ significantly from company to company depending on, among other things, long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. Accordingly, the Company’s computation of the Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses measures may not be comparable to similarly titled measures computed by other companies.

The following table presents ~~the calculation of~~non-GAAP Adjusted EBITDA for the periods indicated:

	Three Months Ended
	September 30,											Three Months Ended September 30,						% Change			Nine Months Ended September 30,								% Change
	2017			2016			Increase/(Decrease)
	(in thousands)
(in thousands)											(in thousands)	2023			2022					% Change				2023				2022			% Change
Operating revenues	$	322,097		$	288,433		$	33,664	11.7	%	Operating revenues	$	625,439		$	560,639					$	1,838,814			$	1,672,390
Adjusted EBITDA expenses		153,495			145,109			8,386	5.8	%	Adjusted EBITDA expenses	239,150			219,678			8.9	%		730,490				681,741				7.2	%
Adjusted EBITDA	$	168,602		$	143,324		$	25,278	17.6	%	Adjusted EBITDA	$	386,289		$	340,961		13.3	%		$	1,108,324			$	990,649			11.9	%

Operating margin %											Operating margin %	56.5		%	55.2		%				55.1		%		53.7		%
Adjusted EBITDA margin %		52.3	%		49.7	%					Adjusted EBITDA margin %	61.8		%	60.8		%				60.3		%		59.2		%
Operating margin %		46.2	%		42.7	%

~~Adjusted EBITDA increased 17.6% to $168.6 million for the three months ended September 30, 2017 compared to $143.3 million for the three months ended September 30, 2016.~~

The change in Adjusted EBITDA margin ~~increased to 52.3% for~~reflects changes in the ~~three months ended September 30, 2017 compared to 49.7% for the three months ended September 30, 2016. The improvement in margin reflects higher~~ rate of growth ~~in operating revenues, primarily attributable to higher asset-based fees within the Index segment,~~of Adjusted EBITDA expenses as compared to the rate of growth of operating revenues, driven by the factors previously described.

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Reconciliation of Net Income to Adjusted EBITDA ~~expenses.~~

~~Reconciliation of Adjusted EBITDA~~and Operating Expenses to ~~Net Income and~~ Adjusted EBITDA Expenses ~~to Operating Expenses~~

The following table presents the reconciliation of net income to Adjusted EBITDA ~~to net income~~ for the periods indicated:

	Three Months Ended
	September 30,					Three Months Ended September 30,				% Change				Nine Months Ended September 30,								% Change
(in thousands)					(in thousands)	2023		2022				2023				2022
Net income					Net income	$	259,659	$	216,592			19.9	%			$	745,212			$	655,602			13.7	%
Provision for income taxes					Provision for income taxes	57,997		52,612		10.2	%			155,974				122,577				27.2	%
Other expense (income), net					Other expense (income), net	35,653		40,327		(11.6	%)			112,678				120,711				(6.7	%)
Operating income					Operating income	353,309		309,531		14.1	%			1,013,864				898,890				12.8	%

Amortization of intangible assets					Amortization of intangible assets	26,722		23,375		14.3	%			77,543				67,274				15.3	%
Depreciation and amortization of property, equipment and leasehold improvements					Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)			15,911				20,426				(22.1	%)
Acquisition-related integration and transaction costs (1)					Acquisition-related integration and transaction costs (1)	1,006		928		8.4	%			1,006				4,059				(75.2	%)
Consolidated Adjusted EBITDA					Consolidated Adjusted EBITDA	$	386,289	$	340,961	13.3	%			$	1,108,324			$	990,649			11.9	%
	2017		2016
	(in thousands)
Index Adjusted EBITDA	$	134,299	$	111,750	Index Adjusted EBITDA	277,672		245,967		12.9	%			808,424				737,012				9.7	%
Analytics Adjusted EBITDA		33,013		31,501	Analytics Adjusted EBITDA	71,781		67,634		6.1	%			197,710				181,484				8.9	%
All Other Adjusted EBITDA		1,290		73
ESG and Climate Adjusted EBITDA					ESG and Climate Adjusted EBITDA	25,440		15,910		59.9	%			66,114				42,334				56.2	%
All Other - Private Assets Adjusted EBITDA					All Other - Private Assets Adjusted EBITDA	11,396		11,450		(0.5	%)			36,076				29,819				21.0	%
Consolidated Adjusted EBITDA		168,602		143,324	Consolidated Adjusted EBITDA	$	386,289	$	340,961	13.3	%			$	1,108,324			$	990,649			11.9	%
Amortization of intangible assets		10,614		11,752
Depreciation and amortization of property, equipment and leasehold improvements		9,325		8,312
Operating income		148,663		123,260
Other expense (income), net		27,860		25,738
Provision for income taxes		35,650		32,241
Net income	$	85,153	$	65,281

___________________________

The following table presents the reconciliation of ~~Adjusted EBITDA~~operating expenses to ~~operating~~Adjusted EBITDA expenses for the periods indicated:

	Three Months Ended
	September 30,					Three Months Ended September 30,				% Change				Nine Months Ended September 30,								% Change
(in thousands)					(in thousands)	2023		2022				2023				2022
Total operating expenses					Total operating expenses	$	272,130	$	251,108			8.4	%			$	824,950			$	773,500			6.7	%
Amortization of intangible assets					Amortization of intangible assets	26,722		23,375		14.3	%			77,543				67,274				15.3	%
Depreciation and amortization of property, equipment and leasehold improvements					Depreciation and amortization of property, equipment and leasehold improvements	5,252		7,127		(26.3	%)			15,911				20,426				(22.1	%)
Acquisition-related integration and transaction costs (1)					Acquisition-related integration and transaction costs (1)	1,006		928		8.4	%			1,006				4,059				(75.2	%)
Consolidated Adjusted EBITDA expenses					Consolidated Adjusted EBITDA expenses	$	239,150	$	219,678	8.9	%			$	730,490			$	681,741			7.2	%
	2017		2016
	(in thousands)
Index Adjusted EBITDA expenses	$	50,295	$	46,001	Index Adjusted EBITDA expenses	84,450		76,273		10.7	%			255,396				236,936				7.8	%
Analytics Adjusted EBITDA expenses		81,959		79,790	Analytics Adjusted EBITDA expenses	82,487		77,281		6.7	%			253,509				244,912				3.5	%
All Other Adjusted EBITDA expenses		21,241		19,318
ESG and Climate Adjusted EBITDA expenses					ESG and Climate Adjusted EBITDA expenses	47,598		41,685		14.2	%			145,201				122,418				18.6	%
All Other - Private Assets Adjusted EBITDA expenses					All Other - Private Assets Adjusted EBITDA expenses	24,615		24,439		0.7	%			76,384				77,475				(1.4	%)
Consolidated Adjusted EBITDA expenses		153,495		145,109	Consolidated Adjusted EBITDA expenses	$	239,150	$	219,678	8.9	%			$	730,490			$	681,741			7.2	%
Amortization of intangible assets		10,614		11,752
Depreciation and amortization of property, equipment and leasehold improvements		9,325		8,312
Total operating expenses	$	173,434	$	165,173

___________________________

The discussion of the segment results ~~for the three months ended September 30, 2017 and 2016~~ is presented below.

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Segment Results

Index Segment

The following table presents the results for the Index segment for the periods indicated:

	Three Months Ended
	September 30,											Three Months Ended September 30,						% Change			Nine Months Ended September 30,								% Change
	2017			2016			Increase/(Decrease)
	(in thousands)
(in thousands)											(in thousands)	2023			2022					% Change				2023				2022			% Change
Operating revenues:											Operating revenues:
Recurring subscriptions	$	107,963		$	98,625		$	9,338	9.5	%	Recurring subscriptions	$	206,453		$	185,531		11.3	%		$	603,845			$	539,740			11.9	%
Asset-based fees		72,861			56,122			16,739	29.8	%	Asset-based fees	141,066			125,620			12.3	%		412,354				402,889				2.3	%
Non-recurring		3,770			3,004			766	25.5	%	Non-recurring	14,603			11,089			31.7	%		47,621				31,319				52.1	%
Operating revenues total		184,594			157,751			26,843	17.0	%	Operating revenues total	362,122			322,240			12.4	%		1,063,820				973,948				9.2	%

Adjusted EBITDA expenses		50,295			46,001			4,294	9.3	%	Adjusted EBITDA expenses	84,450			76,273			10.7	%		255,396				236,936				7.8	%
Adjusted EBITDA	$	134,299		$	111,750		$	22,549	20.2	%	Adjusted EBITDA	$	277,672		$	245,967		12.9	%		$	808,424			$	737,012			9.7	%

Adjusted EBITDA margin %		72.8	%		70.8	%					Adjusted EBITDA margin %	76.7		%	76.3		%				76.0		%		75.7		%

~~Revenues related to~~

Index ~~products~~operating revenues increased ~~17.0% to $184.6 million~~12.4% for the three months ended September 30, ~~2017 compared to $157.8 million~~2023, primarily driven by strong growth from both recurring subscriptions and asset-based fees. Adjusting for the impact of foreign currency exchange rate fluctuations, Index operating revenues would have increased 12.5%.

Operating revenues from recurring subscriptions increased 11.3% for the three months ended September 30, ~~2016.~~

~~Recurring subscriptions were up 9.5% to $108.0 million~~2023, primarily driven by strong growth from market cap-weighted Index products.

Operating revenues from asset-based fees increased 12.3% for the three months ended September 30, ~~2017 compared to $98.6 million for the three months ended September 30, 2016,~~2023, mainly driven by ~~strong~~ growth in core products, growth in new products, including factor indexes, as well as growth in custom index products. The impact on total recurring subscriptions from foreign currency exchange rate fluctuations was negligible.

Revenues from asset-based fees increased 29.8% to $72.9 million for the three months ended September 30, 2017 compared to $56.1 million for the three months ended September 30, 2016. The increase in asset-based fees was driven by strong growth across all types of index-linked investment products. A $13.1 million, or 35.4%, growth in revenuerevenues from ETFs linked to MSCI equity indexes ~~was driven by a 40.0% increase in average AUM,~~and non-ETF indexed funds linked to MSCI indexes, partially offset by ~~the impact of~~ a ~~change~~decrease in ~~the product mix, and a $2.5 million, or 15.0%, increase in revenue from non-ETF passive products that was driven by higher AUM and an increased contribution from higher fee products. In addition,~~ revenues from exchange traded futures and options contracts ~~based on~~linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes increased by 15.3%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes ~~grew $1.2 million, or 47.2%~~increased by 16.3%, primarily driven by increases in average AUM and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes decreased by 12.1%, driven ~~in part~~ by ~~a strong increase in total trading volumes and a more favorable product mix.~~

~~Non-recurring revenues were $3.8 million and $3.0 million~~volume decreases.

Index segment Adjusted EBITDA expenses increased 10.7% for the three months ended September 30, ~~2017~~2023, primarily driven by higher compensation expenses across all expense categories. The increase reflects higher incentive compensation and ~~2016, respectively.~~

wages and salaries. Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased by 8.4%.

Index operating revenues increased 9.2% for the nine months ended September 30, 2023, primarily driven by strong growth from both recurring subscriptions and non-recurring revenues. Adjusting for the impact of foreign currency exchange rate fluctuations, Index operating revenues would have increased 9.4%.

Operating revenues from recurring subscriptions increased 11.9% for the nine months ended September 30, 2023, primarily driven by strong growth from both market cap-weighted and factor, ESG and climate Index products.

Operating revenues from asset-based fees increased 2.3% for the nine months ended September 30, 2023, mainly driven by growth in revenues from ETFs linked to MSCI equity indexes, partially offset by a decrease in revenues from exchange traded futures and options contracts linked to MSCI indexes. Operating revenues from ETFs linked to MSCI equity indexes increased by 5.0%, primarily driven by increases in average AUM and average basis point fees. Operating revenues from exchange traded futures and options contracts linked to MSCI indexes decreased by 9.3%, driven by volume decreases.

Operating revenues from non-recurring revenues increased 52.1% for the nine months ended September 30, 2023, primarily driven by one-time license fees related to prior periods, as well as non-recurring licensed data products.

Index segment Adjusted EBITDA expenses increased ~~9.3% to $50.3 million~~7.8% for the ~~three~~nine months ended September 30, ~~2017 compared to $46.0 million for the three months ended September 30, 2016, primarily reflecting~~2023, driven by higher ~~cost of revenues~~compensation and ~~selling~~non-compensation expenses across all expense categories. The increase reflects higher wages and ~~marketing~~salaries and incentive compensation costs, partially offset by lower benefits costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased ~~8.7% for the three months ended September 30, 2017 compared to the three months ended September 30, 2016.~~

by 8.2%.

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Analytics Segment

The following table presents the results for the Analytics segment for the periods indicated:

	Three Months Ended
	September 30,												Three Months Ended September 30,						% Change			Nine Months Ended September 30,								% Change
	2017			2016			Increase/(Decrease)
	(in thousands)
(in thousands)												(in thousands)	2023			2022					% Change				2023				2022			% Change
Operating revenues:												Operating revenues:
Recurring subscriptions	$	113,574		$	109,554		$	4,020		3.7	%	Recurring subscriptions	$	151,269		$	142,751		6.0	%		$	443,276			$	420,047			5.5	%
Non-recurring		1,398			1,737			(339	)	(19.5	%)	Non-recurring	2,999			2,164			38.6	%		7,943				6,349				25.1	%
Operating revenues total		114,972			111,291			3,681		3.3	%	Operating revenues total	154,268			144,915			6.5	%		451,219				426,396				5.8	%

Adjusted EBITDA expenses		81,959			79,790			2,169		2.7	%	Adjusted EBITDA expenses	82,487			77,281			6.7	%		253,509				244,912				3.5	%
Adjusted EBITDA	$	33,013		$	31,501		$	1,512		4.8	%	Adjusted EBITDA	$	71,781		$	67,634		6.1	%		$	197,710			$	181,484			8.9	%

Adjusted EBITDA margin %		28.7	%		28.3	%						Adjusted EBITDA margin %	46.5		%	46.7		%				43.8		%		42.6		%

Analytics ~~segment~~operating revenues increased ~~3.3% to $115.0 million~~6.5% for the three months ended September 30, ~~2017 compared to $111.3 million for the three months ended September 30, 2016. The increase was~~2023, primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class ~~Analytics~~ products. ~~Adjusting for foreign currency exchange rate fluctuations, Analytics segment revenues would have increased 3.7% for the three months ended September 30, 2017.~~

Analytics segment Adjusted EBITDA expenses increased 2.7% to $82.0 million for the three months ended September 30, 2017 compared to $79.8 million for the three months ended September 30, 2016, primarily driven by higher R&D costs, cost of revenues and selling and marketing costs. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 6.6%.

Analytics segment Adjusted EBITDA expenses ~~would have~~ increased ~~2.1%~~6.7% for the three months ended September 30, ~~2017 compared~~2023, primarily driven by higher compensation expenses across the cost of revenues, G&A and selling and marketing expense activity categories, partially offset by lower compensation expenses in the R&D expense activity category. The increase reflects higher incentive compensation and wages and salaries. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics segment Adjusted EBITDA expenses would have increased 4.7%.

Analytics operating revenues increased 5.8% for the nine months ended September 30, 2023, primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class products. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 6.2%.

Analytics segment Adjusted EBITDA expenses increased 3.5% for the nine months ended September 30, 2023, primarily driven by higher compensation expenses across the cost of revenues, selling and marketing and G&A expense activity categories, partially offset by lower compensation expenses in the R&D expense activity category. The increase reflects higher incentive compensation and wages and salaries. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics segment Adjusted EBITDA expenses would have increased 3.8%.

ESG and Climate Segment

The following table presents the results for the ESG and Climate segment for the periods indicated:


	Three Months Ended September 30,						% Change		Nine Months Ended September 30,						% Change
(in thousands)	2023			2022					2023			2022
Operating revenues:
Recurring subscriptions	$	71,744		$	56,353		27.3	%	$	207,523		$	160,962		28.9	%
Non-recurring	1,294			1,242			4.2	%	3,792			3,790			0.1	%
Operating revenues total	73,038			57,595			26.8	%	211,315			164,752			28.3	%

Adjusted EBITDA expenses	47,598			41,685			14.2	%	145,201			122,418			18.6	%
Adjusted EBITDA	$	25,440		$	15,910		59.9	%	$	66,114		$	42,334		56.2	%

Adjusted EBITDA margin %	34.8		%	27.6		%			31.3		%	25.7		%

ESG and Climate operating revenues increased 26.8% for the three months ended September 30, ~~2016.~~

2023, primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 20.3%.

ESG and Climate segment Adjusted EBITDA expenses increased 14.2% for the three months ended September 30, 2023, primarily driven by higher compensation expenses across all expense activity categories. The increase reflects higher wages and

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salaries and incentive compensation. The increase was partially offset by increased capitalization of expenses related to internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate segment Adjusted EBITDA expenses would have increased 12.1%.

ESG and Climate operating revenues increased 28.3% for the nine months ended September 30, 2023, primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 28.8%.

ESG and Climate segment Adjusted EBITDA expenses increased 18.6% for the nine months ended September 30, 2023, primarily driven by higher compensation and non-compensation expenses across all expense activity categories. The increase reflects higher wages and salaries, incentive compensation, benefits and information technology costs. The increase was partially offset by increased capitalization of expenses related to internally developed software projects. Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate segment Adjusted EBITDA expenses would have increased 19.5%.

All Other – Private Assets Segment

The following table presents the results for the All Other – Private Assets segment for the periods indicated:

	Three Months Ended
	September 30,												Three Months Ended September 30,						% Change			Nine Months Ended September 30,								% Change
	2017			2016			Increase/(Decrease)
	(in thousands)
(in thousands)												(in thousands)	2023			2022					% Change				2023				2022			% Change
Operating revenues:												Operating revenues:
Recurring subscriptions	$	21,865		$	18,329		$	3,536		19.3	%	Recurring subscriptions	$	35,531		$	35,581		(0.1	%)		$	111,292			$	106,276			4.7	%
Non-recurring		666			1,062			(396	)	(37.3	%)	Non-recurring	480			308			55.8	%		1,168				1,018				14.7	%
Operating revenues total		22,531			19,391			3,140		16.2	%	Operating revenues total	36,011			35,889			0.3	%		112,460				107,294				4.8	%

Adjusted EBITDA expenses		21,241			19,318			1,923		10.0	%	Adjusted EBITDA expenses	24,615			24,439			0.7	%		76,384				77,475				(1.4	%)
Adjusted EBITDA	$	1,290		$	73		$	1,217		1667.1	%	Adjusted EBITDA	$	11,396		$	11,450		(0.5	%)		$	36,076			$	29,819			21.0	%

Adjusted EBITDA margin %		5.7	%		0.4	%						Adjusted EBITDA margin %	31.6		%	31.9		%				32.1		%		27.8		%

All Other ~~segment~~– Private Assets operating revenues increased ~~16.2% to $22.5 million~~0.3% for the three months ended September 30, 2017 compared to $19.4 million for the three months ended September 30, 2016. The increase in All Other revenues was driven by a $2.4 million, or 21.2%, increase in ESG revenues to $13.9 million, and a $0.7 million, or 9.0% increase in Real Estate revenues to $8.6 million. The increase in ESG revenues was driven by higher ESG Ratings product revenues, which is benefiting from increased investments. The increase in Real Estate revenues was2023, primarily driven by ~~an increase in Market Information product revenues. Adjusting for the impact of~~growth from recurring subscriptions related to Index Intel, Property Intel and Climate Insights products, as well as favorable foreign currency exchange rate fluctuations, Real Estate revenues would have increased 8.2% and All Other operating revenues would have increased 15.9% for the three months ended September 30, 2017 compared to the three months ended September 30, 2016. The impact on ESG revenues from foreign currency exchange rate fluctuations was negligible.

All Other segment Adjusted EBITDA expenses increased 10.0% to $21.2 million for the three months ended September 30, 2017 compared to $19.3 million for the three months ended September 30, 2016, primarily driven by higher expenses attributable to ESG operations partially offset by lower expenses attributable to Real Estate operations. Adjusting for the impact of foreign currency exchange rate fluctuations, Adjusted EBITDA expenses would have increased 8.8% for the three months ended September 30, 2017 compared to the three months ended September 30, 2016.

~~Nine Months Ended September 30, 2017 Compared to the Nine Months Ended September 30, 2016~~

~~The following table presents the results of operations for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands, except per share data)

Operating revenues
$
939,393

$
857,857

$
81,536

9.5
%
Operating expenses:

Cost of revenues

204,607

188,288

16,319

8.7
%
Selling and marketing

129,526

125,057

4,469

3.6
%
Research and development

55,163

56,244

(1,081
)

(1.9
%)
General and administrative

64,555

65,768

(1,213
)

(1.8
%)
Amortization of intangible assets

32,987

35,535

(2,548
)

(7.2
%)
Depreciation and amortization of property,
equipment and leasehold improvements

27,322

24,873

2,449

9.8
%
Total operating expenses

514,160

495,765

18,395

3.7
%
Operating income

425,233

362,092

63,141

17.4
%
Other expense (income), net

85,294

73,249

12,045

16.4
%
Income from continuing operations
before provision for income taxes

339,939

288,843

51,096

17.7
%
Provision for income taxes

100,569

96,238

4,331

4.5
%
Net income
$
239,370

$
192,605

$
46,765

24.3
%

Earnings per basic common share
$
2.65

$
1.99

$
0.66

33.2
%

Earnings per diluted common share
$
2.61

$
1.98

$
0.63

31.8
%

Operating margin

45.3
%

42.2
%

~~The following table presents operating revenues by type for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Recurring subscriptions
$
723,946

$
684,578

$
39,368

5.8
%
Asset-based fees

197,599

154,455

43,144

27.9
%
Non-recurring

17,848

18,824

(976
)

(5.2
%)

Total operating revenues
$
939,393

$
857,857

$
81,536

9.5
%

~~Total operating revenues grew 9.5% to $939.4 million for the nine months ended September 30, 2017 compared to $857.9 million for the nine months ended September 30, 2016.~~

Revenues from recurring subscriptions increased 5.8% to $723.9 million for the nine months ended September 30, 2017 compared to $684.6 million for the nine months ended September 30, 2016, primarily driven by growth in Index products, which increased $26.4 million, or 9.1%. Adjusting for the impact from foreign currency exchange rate fluctuations, revenues from recurring subscriptions would have increased 6.5%.

Revenues from asset-based fees increased 27.9% to $197.6 million for the nine months ended September 30, 2017 compared to $154.5 million for the nine months ended September 30, 2016. The increase in asset-based fees was driven by several items, including a $31.0 million, or 29.6%, growth in revenue from ETFs linked to MSCI indexes, which was the result of a 34.9% increase in average AUM that was partially offset by the impact of a change in the product mix, and a $9.4 million, or 22.2%, increase in revenue from non-ETF passive products. In addition, revenues from exchange traded futures and options contracts based on MSCI indexes grew $2.7 million, or 37.8%, driven by a strong increase in total trading volumes and a more favorable product mix.

~~The following table presents the average value of AUM in ETFs linked to MSCI indexes for the year-to-date periods indicated:~~

Year-to-Date Average

2016

2017

March

June

September

December

March

June

September

AUM in ETFs linked to MSCI indexes
$
407.9

$
423.5

$
438.1

$
446.4

$
524.1

$
559.5

$
591.1

~~Non-recurring revenues decreased 5.2% to $17.8 million for the nine months ended September 30, 2017 compared to $18.8 million for the nine months ended September 30, 2016.~~

~~The following table presents operating revenues by reportable segment and revenue type for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Operating revenues:

Index

Recurring subscriptions
$
315,786

$
289,409

$
26,377

9.1
%
Asset-based fees

197,599

154,455

43,144

27.9
%
Non-recurring

11,800

10,617

1,183

11.1
%
Index total

525,185

454,481

70,704

15.6
%

Analytics

Recurring subscriptions

336,904

328,636

8,268

2.5
%
Non-recurring

3,855

5,311

(1,456
)

(27.4
%)
Analytics total

340,759

333,947

6,812

2.0
%

All Other

Recurring subscriptions

71,256

66,533

4,723

7.1
%
Non-recurring

2,193

2,896

(703
)

(24.3
%)
All Other total

73,449

69,429

4,020

5.8
%
Total operating revenues
$
939,393

$
857,857

$
81,536

9.5
%

~~Refer to the section titled "Segment Results" that follows for further discussion of segment revenues~~.

~~Operating Expenses~~

~~The following table presents operating expenses by activity category for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Operating expenses:

Cost of revenues
$
204,607

$
188,288

$
16,319

8.7
%
Selling and marketing

129,526

125,057

4,469

3.6
%
Research and development

55,163

56,244

(1,081
)

(1.9
%)
General and administrative

64,555

65,768

(1,213
)

(1.8
%)
Amortization of intangible assets

32,987

35,535

(2,548
)

(7.2
%)
Depreciation and amortization of property,
equipment and leasehold improvements

27,322

24,873

2,449

9.8
%
Total operating expenses
$
514,160

$
495,765

$
18,395

3.7
%

Total operating expenses increased 3.7% to $514.2 million for the nine months ended September 30, 2017 compared to $495.8 million for the nine months ended September 30, 2016. Adjusting for the impact of foreign currency exchange rate fluctuations, operating expenses would have been 4.6% higher for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

~~Cost of Revenues~~

Cost of revenues increased 8.7% to $204.6 million for the nine months ended September 30, 2017 compared to $188.3 million for the nine months ended September 30, 2016, driven by increases in compensation and benefits costs, primarily relating to wages and salaries and incentive compensation, as well as higher non-compensation information technology costs.

~~Selling and Marketing~~

Selling and marketing expenses increased 3.6% to $129.5 million for the nine months ended September 30, 2017 compared to $125.1 million for the nine months ended September 30, 2016, driven by increases in compensation and benefits costs, primarily relating to wages and salaries and incentive compensation, as well as higher marketing costs.

~~Research and Development~~

R&D expenses decreased by 1.9% to $55.2 million for the nine months ended September 30, 2017 compared to $56.2 million for the nine months ended September 30, 2016, primarily due to a decrease in overall compensation and benefits costs, partially offset by an increase in non-compensation information technology costs.

~~General and Administrative~~

G&A expenses decreased 1.8% to $64.6 million for the nine months ended September 30, 2017 compared to $65.8 million for the nine months ended September 30, 2016, primarily driven by lower non-compensation professional fees. Compensation and benefits costs were flat, reflecting lower severance costs, offset by higher wages and salary, benefits and incentive compensation costs.

~~The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Compensation and benefits
$
326,113

$
312,917

$
13,196

4.2
%
Non-compensation expenses

127,738

122,440

5,298

4.3
%
Amortization of intangible assets

32,987

35,535

(2,548
)

(7.2
%)
Depreciation and amortization of property,
equipment and leasehold improvements

27,322

24,873

2,449

9.8
%
Total operating expenses
$
514,160

$
495,765

$
18,395

3.7
%

Compensation and benefits expenses increased 4.2% to $326.1 million for the nine months ended September 30, 2017 compared to $312.9 million for the nine months ended September 30, 2016, primarily due to higher wages and salary expense and incentive compensation costs, partially offset by lower severance costs.

Non-compensation expenses increased 4.3% to $127.7 million for the nine months ended September 30, 2017 compared to $122.4 million for the nine months ended September 30, 2016. The increase was driven by higher information technology, marketing and travel & entertainment costs.

~~Amortization of Intangible Assets~~

Amortization of intangible assets expense decreased 7.2% to $33.0 million for the nine months ended September 30, 2017 compared to $35.5 million for the nine months ended September 30, 2016. The decrease was primarily the result of certain intangible assets associated with the RiskMetrics Group, LLC acquisition becoming fully amortized during the nine months ended September 30, 2017.

~~Depreciation and Amortization of Property, Equipment and Leasehold Improvements~~

Depreciation and amortization of property, equipment and leasehold improvements increased 9.8% to $27.3 million for the nine months ended September 30, 2017 compared to $24.9 million for the nine months ended September 30, 2016. The increase was primarily the result of increased hardware depreciation associated with new data center technology.

~~Other Expense (Income), Net~~

Other expense (income), net increased 16.4% to $85.3 million for the nine months ended September 30, 2017 compared to $73.2 million for the nine months ended September 30, 2016, primarily driven by $14.5 million of higher interest expense resulting from the increased level of indebtedness associated with the 2026 Senior Notes offering, partially offset by higher interest income. The nine months ended September 30, 2016 included a $3.7 million charge for estimated losses associated with miscellaneous transactions.

~~Income Taxes~~

The provision for income tax expense increased 4.5% to $100.6 million for the nine months ended September 30, 2017 compared to $96.2 million for the nine months ended September 30, 2016 on higher income before provision for income taxes, offset in part by a decline in the effective tax rate. These amounts reflect effective tax rates of 29.6% and 33.3% for the nine months ended September 30, 2017 and 2016, respectively.

The decrease in the effective tax rate was primarily driven by the ongoing efforts to better align our tax profile with our global operating footprint and the impact of discrete items, including $4.8 million of excess tax benefits related to the adoption of ASU 2016-09 that first occurred during the three months ended March 31, 2017. See Note 2, “Recent Accounting Standards Updates,” of the Notes to Unaudited Condensed Consolidated Financial Statements included herein for more information regarding the adoption of ASU 2016-09.

~~Net Income~~

As a result of the factors described above, net income for the nine months ended September 30, 2017 increased 24.3% to $239.4 million compared to $192.6 million for the nine months ended September 30, 2016.

~~Weighted Average Shares~~

The weighted average shares outstanding used to calculate basic and diluted earnings per share for the nine months ended September 30, 2017 decreased by 6.7% and 5.9%, respectively, compared to the nine months ended September 30, 2016. The decreases primarily reflect the impact of share repurchases, partially offset by the impact of restricted stock units and stock options that converted to shares.

~~Adjusted EBITDA~~

~~The following table presents the calculation of Adjusted EBITDA for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Operating revenues
$
939,393

$
857,857

$
81,536

9.5
%
Adjusted EBITDA expenses

453,851

435,357

18,494

4.2
%
Adjusted EBITDA
$
485,542

$
422,500

$
63,042

14.9
%
Adjusted EBITDA margin %

51.7
%

49.3
%

Operating margin %

45.3
%

42.2
%

Adjusted EBITDA increased 14.9% to $485.5 million for the nine months ended September 30, 2017 compared to $422.5 million for the nine months ended September 30, 2016. Adjusted EBITDA margin increased to 51.7% for the nine months ended September 30, 2017 compared to 49.3% for the nine months ended September 30, 2016. The improvement in margin reflects higher rate of growth in operating revenues, primarily attributable to higher asset-based fees within the Index segment, as compared to the rate of growth of Adjusted EBITDA expenses.

~~Reconciliation of Adjusted EBITDA to Net Income and Adjusted EBITDA Expenses to Operating Expenses~~

~~The following table presents the reconciliation of Adjusted EBITDA to net income for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

(in thousands)

Index Adjusted EBITDA

$
379,412

$
318,317

Analytics Adjusted EBITDA

94,290

95,163

All Other Adjusted EBITDA

11,840

9,020

Consolidated Adjusted EBITDA

485,542

422,500

Amortization of intangible assets

32,987

35,535

Depreciation and amortization of property,
equipment and leasehold improvements

27,322

24,873

Operating income

425,233

362,092

Other expense (income), net

85,294

73,249

Provision for income taxes

100,569

96,238

Net income

$
239,370

$
192,605

~~The following table presents the reconciliation of Adjusted EBITDA expenses to operating expenses for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

(in thousands)

Index Adjusted EBITDA expenses

$
145,773

$
136,164

Analytics Adjusted EBITDA expenses

246,469

238,784

All Other Adjusted EBITDA expenses

61,609

60,409

Consolidated Adjusted EBITDA expenses

453,851

435,357

Amortization of intangible assets

32,987

35,535

Depreciation and amortization of property,
equipment and leasehold improvements

27,322

24,873

Total operating expenses

$
514,160

$
495,765

~~The discussion of our segment results for the nine months ended September 30, 2017 and 2016 is presented below.~~

~~Segment Results~~

~~Index Segment~~

~~The following table presents the results for the Index segment for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Operating revenues

Recurring subscriptions
$
315,786

$
289,409

$
26,377

9.1
%
Asset-based fees

197,599

154,455

43,144

27.9
%
Non-recurring

11,800

10,617

1,183

11.1
%
Operating revenues total

525,185

454,481

70,704

15.6
%
Adjusted EBITDA expenses

145,773

136,164

9,609

7.1
%
Adjusted EBITDA
$
379,412

$
318,317

$
61,095

19.2
%
Adjusted EBITDA margin %

72.2
%

70.0
%

~~Revenues related to Index products increased 15.6% to $525.2 million for the nine months ended September 30, 2017 compared to $454.5 million for the nine months ended September 30, 2016.~~

Recurring subscriptions increased 9.1% to $315.8 million for the nine months ended September 30, 2017 compared to $289.4 million for the nine months ended September 30, 2016, primarily driven by growth in benchmark and data products. The impact of foreign currency exchange rate fluctuations was negligible for the nine months ended September 30, 2017.

~~Non-recurring revenues increased 11.1% to $11.8 million for the nine months ended September 30, 2017 compared to $10.6 million for the nine months ended September 30, 2016.~~

Index segment Adjusted EBITDA expenses increased 7.1% to $145.8 million for the nine months ended September 30, 2017 compared to $136.2 million for the nine months ended September 30, 2016, primarily reflecting higher compensation and benefits costs, mainly within cost of revenues and selling and marketing, partially offset by lower compensation and benefits costs within R&D expenses. Adjusting for the impact of foreign currency exchange rate fluctuations, Adjusted EBITDA expenses would have increased 8.0% for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

~~Analytics Segment~~

~~The following table presents the results for the Analytics segment for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Operating revenues

Recurring subscriptions
$
336,904

$
328,636

$
8,268

2.5
%
Non-recurring

3,855

5,311

(1,456
)

(27.4
%)
Operating revenues total

340,759

333,947

6,812

2.0
%
Adjusted EBITDA expenses

246,469

238,784

7,685

3.2
%
Adjusted EBITDA
$
94,290

$
95,163

$
(873
)

(0.9
%)
Adjusted EBITDA margin %

27.7
%

28.5
%

Analytics segment revenues increased 2.0% to $340.8 million for the nine months ended September 30, 2017 compared to $333.9 million for the nine months ended September 30, 2016, driven by both Equity and Multi-Asset Class Analytics products. Adjusting for the impact from foreign currency exchange rate fluctuations, total Analytics operating revenues would have increased 2.9% for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

Analytics segment Adjusted EBITDA expenses increased 3.2% to $246.5 million for the nine months ended September 30, 2017 compared to $238.8 million for the nine months ended September 30, 2016, driven by higher wages and salary costs within compensation and benefits, as well as higher non-compensation costs, reflecting information technology, market data and travel & entertainment costs partially offset by lower professional fees. Adjusting for the impact of foreign currency exchange rate fluctuations, Adjusted EBITDA expenses would have increased 4.0% for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

~~All Other Segment~~

~~The following table presents the results for the All Other segment for the periods indicated:~~

Nine Months Ended

September 30,

2017

2016

Increase/(Decrease)

(in thousands)

Operating revenues

Recurring subscriptions
$
71,256

$
66,533

$
4,723

7.1
%
Non-recurring

2,193

2,896

(703
)

(24.3
%)
Operating revenues total

73,449

69,429

4,020

5.8
%
Adjusted EBITDA expenses

61,609

60,409

1,200

2.0
%
Adjusted EBITDA
$
11,840

$
9,020

$
2,820

31.3
%
Adjusted EBITDA margin %

16.1
%

13.0
%

All Other segment revenues increased 5.8% to $73.4 million for the nine months ended September 30, 2017 compared to $69.4 million for the nine months ended September 30, 2016. The increase in All Other revenues was primarily driven by a 21.0% increase in ESG revenues to $40.1 million, partially offset by a ~~decrease in Real Estate revenues of 8.1% to $33.3 million. The increase in ESG revenues was driven by higher ESG Ratings product revenues, reflecting increased investments.~~

The decrease in Real Estate revenues was driven by the timing of report deliveries and the negative impact of foreign currency exchange rate fluctuations. Additionally, Real Estate revenues for the nine months ended September 30, 2017 were lower due to the inclusion of the Real Estate occupiers businessone-time revenue catch-up in the prior period. Adjusting for the impact of foreign currency exchange rate fluctuations, ~~and the divestiture of the Real Estate occupiers business, Real Estate products would have decreased 2.1% and~~ All Other – Private Assets operating revenues would have ~~increased 9.0%~~decreased 1.3%.

All Other – Private Assets segment Adjusted EBITDA expenses were relatively flat across expense activity categories for the ~~nine~~three months ended September 30, ~~2017 compared to the nine months ended September 30, 2016. The impact on ESG revenues from foreign currency exchange rate fluctuations was negligible.~~

All Other segment Adjusted EBITDA expenses increased 2.0% to $61.6 million for the nine months ended September 30, 2017 compared to $60.4 million for the nine months ended September 30, 2016, primarily driven by higher costs attributable to ESG operations partially offset by lower costs attributable to Real Estate operations.2023. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets segment Adjusted EBITDA expenses would have decreased 1.1%.

All Other – Private Assets operating revenues increased ~~3.6%~~4.8% for the nine months ended September 30, ~~2017 compared~~2023, primarily driven by growth from recurring subscriptions related to Index Intel, Property Intel and Climate Insights products, partially offset by a one-time revenue catch-up in the prior period and unfavorable foreign currency exchange rate fluctuations. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other – Private Assets operating revenues would have increased 6.2%.

All Other – Private Assets segment Adjusted EBITDA expenses decreased 1.4% for the nine months ended September 30, ~~2016.~~

2023, primarily driven by lower compensation expenses across the cost of revenues and G&A expense activity categories, partially offset by higher compensation expenses in the R&D expense activity category. The decrease reflects higher capitalization of expenses related to internally developed software projects and lower incentive compensation and wages and salaries. Non-compensation expenses increased, mainly driven by higher expenses in the R&D expense activity category, partially offset by lower expenses in the G&A expense activity category. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets segment Adjusted EBITDA expenses would have decreased 0.1%.

Table of Contents

Operating Metrics

Run Rate

“Run Rate” estimates at a particular point in time the annualized value of the recurring revenues under our client license agreements (“Client Contracts”) for the next 12 months, assuming all Client Contracts that come up for renewal, or reach the end of the committed subscription period, are renewed and assuming then-current currency exchange rates, subject to the adjustments and exclusions described below. For any Client Contract where fees are linked to an investment product’s assets or trading ~~volume,~~volume/fees, the Run Rate calculation reflects, for ETFs, the market value on the last trading day of the period, for futures and options, the most recent quarterly volumes and/or reported exchange fees, and for other non-ETF products, the most recent client-reported assets. Run Rate does not include fees associated with “one-time” and other non-recurring transactions. In addition, we add to Run Rate the annualized fee value of recurring new sales, whether to existing or new clients, when we execute Client Contracts, even though the license start date, and associated revenue recognition, may not be effective until a later date. We remove from Run Rate the annualized fee value associated with products or services under any Client Contract with respect to which we have received a notice of termination, non-renewal or ~~non-renewal~~an indication the client does not intend to continue their subscription during the period and have determined that such notice evidences the client’s final decision to terminate or not renew the applicable products or services, even though such notice is not effective until a later date.

Changes in our recurring revenues typically lag changes in Run Rate. The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including:

•fluctuations in revenues associated with new recurring sales;

•modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements;

•differences between the recurring license start date and the date the Client Contract is ~~executed;~~

executed due to, for example, contracts with onboarding periods or fee waiver periods;

•fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes;

•

~~fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes;~~

•fluctuations in ~~the number~~fees based on trading volumes of ~~hedge funds for which we provide investment information~~futures and ~~risk analysis~~options contracts linked to ~~hedge fund investors;~~

our indexes;

•price ~~changes;~~

changes or discounts;

•revenue recognition differences under U.S. GAAP, including those related to the timing of implementation and report deliveries for certain of our products and services;

•fluctuations in the number of hedge funds for which we provide investment information and risk analysis to hedge fund investors;

•fluctuations in foreign currency exchange rates; and

•the impact of acquisitions and ~~dispositions.~~

divestitures.

Table of Contents

The following table presents ~~the~~ Run Rates by reportable segment as of the dates indicated and the growth percentages over the periods indicated:

	As of
	September 30,		September 30,		June 30,		Year-Over-Year			Sequential				As of				% Change
		2017		2016	2017		Comparison			Comparison								% Change
	(in thousands)
(in thousands)													(in thousands)	September 30, 2023		September 30, 2022		% Change
Index:													Index:					% Change
Recurring subscriptions	$	439,251	$	395,601	$	428,367		11.0	%		2.5	%	Recurring subscriptions	$	835,334	$	750,818	11.3	%
Asset-based fees		289,812		212,224		269,595		36.6	%		7.5	%	Asset-based fees	545,548		479,399		13.8	%
Index total		729,063		607,825		697,962		19.9	%		4.5	%	Index total	1,380,882		1,230,217		12.2	%


Analytics		474,721		452,323		465,339		5.0	%		2.0	%	Analytics	639,462		597,752		7.0	%

All Other		101,253		86,738		97,057		16.7	%		4.3	%
ESG and Climate													ESG and Climate	297,297		237,930		25.0	%

All Other - Private Assets													All Other - Private Assets	150,749		137,401		9.7	%

Total Run Rate	$	1,305,037	$	1,146,886	$	1,260,358		13.8	%		3.5	%	Total Run Rate	$	2,468,390	$	2,203,300	12.0	%


Recurring subscriptions total	$	1,015,225	$	934,662	$	990,763		8.6	%		2.5	%	Recurring subscriptions total	$	1,922,842	$	1,723,901	11.5	%
Asset-based fees		289,812		212,224		269,595		36.6	%		7.5	%	Asset-based fees	545,548		479,399		13.8	%
Total Run Rate	$	1,305,037	$	1,146,886	$	1,260,358		13.8	%		3.5	%	Total Run Rate	$	2,468,390	$	2,203,300	12.0	%

Total Run Rate ~~grew~~increased 12.0%, driven by an 11.5% increase from recurring subscriptions and a 13.8% to $1,305.0 million at September 30, 2017 compared to $1,146.9 million at September 30, 2016. Recurring subscriptions Run Rate grew 8.6% to $1,015.2 million at September 30, 2017 compared to $934.7 million at September 30, 2016.increase from asset-based fees. Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscriptions Run Rate would have increased ~~8.3% at September 30, 2017.~~

10.7%.

Run Rate from Index recurring subscriptions increased 11.3%, primarily driven by growth from market cap-weighted products and custom Index products and special packages. The increase reflected growth across all regions and client segments.

Run Rate from Index asset-based fees increased ~~36.6% to $289.8 million at September 30, 2017 from $212.2 million at September 30, 2016, primarily~~13.8%, driven by higher ~~growth in ETFs linked to MSCI indexes, non-ETF passive funds and futures and options contracts based on MSCI indexes. As of September 30, 2017, the value of~~ AUM in ETFs linked to MSCI indexes was $674.3 billion, up $199.4 billion, or 42.0%, from $474.9 billion as of September 30, 2016. The increase of $199.4 billion consisted of net inflows of $116.5 billion and market appreciation of $82.9 billion.

Index recurring subscriptions Run Rate grew 11.0% to $439.3 million at September 30, 2017 compared to $395.6 million at September 30, 2016, primarily driven by an increase in core products, strong demand for new products, including factor and ESG indexes, as well as growth in custom index products. There was a negligible impact from foreign currency exchange rate fluctuations on Index recurring subscription Run Rate at September 30, 2017.

equity indexes.

Run Rate from Analytics products increased ~~5.0% to $474.7 million at September 30, 2017 compared to $452.3 million at September 30, 2016,~~7.0%, primarily driven by growth in ~~both~~ Multi-Asset Class and Equity Analytics ~~products.~~products, and reflected growth across all regions. Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics Run Rate would have increased ~~4.7% at September 30, 2017.~~

6.2%.

Run Rate from ~~All Other~~ESG and Climate products increased ~~16.7% to $101.3 million at September 30, 2017 compared to $86.7 million at September 30, 2016. The $14.5 million increase was primarily~~25.0%, driven by a $12.1 million, or 25.9%, increase in ESG Run Rate to $59.0 million, and a $2.4 million, or 6.0%, increase in Real Estate Run Rate to $42.3 million. The increase in ESG Run Rate was primarily driven bystrong growth in ~~ESG~~ Ratings, ~~products~~Climate and ~~the increase in Real Estate Run Rate was primarily driven by growth in Market Information~~Screening products. Adjusting for the impact of foreign currency exchange rate fluctuations, ~~Real Estate Run Rate would~~

~~have increased 2.8%,~~ ESG and Climate Run Rate would have increased ~~23.9%~~21.9%.

Run Rate from All Other - Private Assets increased 9.7%, primarily driven by growth in Index Intel, RCA and Performance Insights products, and reflected growth across all regions. Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets Run Rate would have increased ~~14.2% at September 30, 2017 compared~~7.5%.

Sales

Sales represents the annualized value of products and services clients commit to ~~September 30, 2016.~~

purchase from MSCI and will result in additional operating revenues. Non-recurring sales represent the actual value of the customer agreements entered into during the period and are not a component of Run Rate. New recurring subscription sales represent additional selling activities, such as new customer agreements, additions to existing agreements or increases in price that occurred during the period and are additions to Run Rate. Subscription ~~Sales~~

cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate. Net new recurring subscription sales represent the amount of new recurring subscription sales net of subscription cancellations during the period, which reflects the net impact to Run Rate during the period.

Table of Contents

Total gross sales represent the sum of new recurring subscription sales and non-recurring sales. Total net sales represent the total gross sales net of the impact from subscription cancellations.

The following table presents our recurring subscription sales, cancellations and non-recurring sales by reportable segment for the periods indicated:

	Three Months Ended
	September 30,			September 30,			June 30,			Year Over			Sequential				Three Months Ended				% Change			Nine Months Ended						% Change
	2017			2016			2017			Year Comparison			Comparison
	(in thousands)
(in thousands)																(in thousands)	September 30, 2023		September 30, 2022				% Change			September 30, 2023			September 30, 2022			% Change
New recurring subscription sales																New recurring subscription sales
Index	$	15,499		$	11,758		$	13,636			31.8	%		13.7	%	Index	$	23,978	$	24,130	(0.6	%)		$	80,156		$	74,493		7.6	%
Analytics		15,036			13,131			12,050			14.5	%		24.8	%	Analytics	18,787		17,568		6.9	%		50,751			50,391			0.7	%
All Other		4,576			3,877			5,456			18.0	%		(16.1	%)
ESG and Climate																ESG and Climate	12,124		14,270		(15.0	%)		38,497			55,617			(30.8	%)
All Other - Private Assets																All Other - Private Assets	4,788		5,218		(8.2	%)		14,746			16,490			(10.6	%)
New recurring subscription sales total		35,111			28,766			31,142			22.1	%		12.7	%	New recurring subscription sales total	59,677		61,186		(2.5	%)		184,150			196,991			(6.5	%)


Subscription cancellations																Subscription cancellations
Index		(4,605	)		(3,840	)		(3,045	)		19.9	%		51.2	%	Index	(7,402)		(5,388)		37.4	%		(22,617)			(18,468)			22.5	%
Analytics		(7,444	)		(10,530	)		(6,940	)		(29.3	%)		7.3	%	Analytics	(7,543)		(6,029)		25.1	%		(24,094)			(22,523)			7.0	%
All Other		(2,050	)		(1,903	)		(2,030	)		7.7	%		1.0	%
ESG and Climate																ESG and Climate	(2,639)		(1,303)		102.5	%		(7,331)			(3,315)			121.1	%
All Other - Private Assets																All Other - Private Assets	(3,153)		(1,744)		80.8	%		(8,634)			(5,080)			70.0	%
Subscription cancellations total		(14,099	)		(16,273	)		(12,015	)		(13.4	%)		17.3	%	Subscription cancellations total	(20,737)		(14,464)		43.4	%		(62,676)			(49,386)			26.9	%


Net new recurring subscription sales																Net new recurring subscription sales
Index		10,894			7,918			10,591			37.6	%		2.9	%	Index	16,576		18,742		(11.6	%)		57,539			56,025			2.7	%

Analytics		7,592			2,601			5,110			191.9	%		48.6	%	Analytics	11,244		11,539		(2.6	%)		26,657			27,868			(4.3	%)
All Other		2,526			1,974			3,426			28.0	%		(26.3	%)

ESG and Climate																ESG and Climate	9,485		12,967		(26.9	%)		31,166			52,302			(40.4	%)

All Other - Private Assets																All Other - Private Assets	1,635		3,474		(52.9	%)		6,112			11,410			(46.4	%)

Net new recurring subscription sales total		21,012			12,493			19,127			68.2	%		9.9	%	Net new recurring subscription sales total	38,940		46,722		(16.7	%)		121,474			147,605			(17.7	%)


Non-recurring sales																Non-recurring sales
Index		3,704			5,468			4,555			(32.3	%)		(18.7	%)	Index	14,679		13,375		9.7	%		54,365			41,357			31.5	%
Analytics		2,792			2,330			1,609			19.8	%		73.5	%	Analytics	3,206		2,505		28.0	%		8,734			8,412			3.8	%
All Other		829			774			958			7.1	%		(13.5	%)
ESG and Climate																ESG and Climate	1,532		1,375		11.4	%		4,066			3,553			14.4	%
All Other - Private Assets																All Other - Private Assets	262		83		215.7	%		1,069			690			54.9	%
Non-recurring sales total		7,325			8,572			7,122			(14.5	%)		2.9	%	Non-recurring sales total	19,679		17,338		13.5	%		68,234			54,012			26.3	%


Gross sales																Gross sales
Index	$	19,203		$	17,226		$	18,191			11.5	%		5.6	%	Index	$	38,657	$	37,505	3.1	%		$	134,521		$	115,850		16.1	%

Analytics		17,828			15,461			13,659			15.3	%		30.5	%	Analytics	21,993		20,073		9.6	%		59,485			58,803			1.2	%
All Other		5,405			4,651			6,414			16.2	%		(15.7	%)

ESG and Climate																ESG and Climate	13,656		15,645		(12.7	%)		42,563			59,170			(28.1	%)

All Other - Private Assets																All Other - Private Assets	5,050		5,301		(4.7	%)		15,815			17,180			(7.9	%)

Total gross sales	$	42,436		$	37,338		$	38,264			13.7	%		10.9	%	Total gross sales	$	79,356	$	78,524	1.1	%		$	252,384		$	251,003		0.6	%


Net sales																Net sales
Index	$	14,598		$	13,386		$	15,146			9.1	%		(3.6	%)	Index	$	31,255	$	32,117	(2.7	%)		$	111,904		$	97,382		14.9	%

Analytics		10,384			4,931			6,719			110.6	%		54.5	%	Analytics	14,450		14,044		2.9	%		35,391			36,280			(2.5	%)
All Other		3,355			2,748			4,384			22.1	%		(23.5	%)

ESG and Climate																ESG and Climate	11,017		14,342		(23.2	%)		35,232			55,855			(36.9	%)

All Other - Private Assets																All Other - Private Assets	1,897		3,557		(46.7	%)		7,181			12,100			(40.7	%)

Total net sales	$	28,337		$	21,065		$	26,249			34.5	%		8.0	%	Total net sales	$	58,619	$	64,060	(8.5	%)		$	189,708		$	201,617		(5.9	%)

Asignificant portion of MSCI's operating revenues are derived from subscriptions or licenses of products and services, which are provided over contractually-agreed periods of time that are subject to renewal or cancellation at the end of current contract terms.

Table of Contents~~Aggregate~~

Retention Rate

The following table presents our ~~Aggregate~~ Retention Rate by reportable segment for the periods indicated:

	Three Months Ended			Nine Months Ended
	September 30,			September 30,				Three Months Ended September 30,		Nine Months Ended September 30,
		2017	2016		2017	2016		2023	2022	2023	2022
Index		95.5%	95.8%		96.5%	95.9%	Index	96.2%	96.9%	96.1%	96.5%
Analytics		93.4%	90.4%		93.5%	92.2%	Analytics	95.1%	95.9%	94.8%	94.9%
All Other		90.7%	90.8%		91.3%	90.7%
ESG and Climate							ESG and Climate	96.0%	97.4%	96.3%	97.8%
All Other - Private Assets							All Other - Private Assets	91.3%	94.8%	92.1%	95.0%

Total		94.0%	92.7%		94.6%	93.6%	Total	95.4%	96.4%	95.4%	95.9%

Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time. The ~~Aggregate~~annual Retention Rate represents the retained subscription Run Rate (subscription Run Rate at the beginning of the fiscal year less actual cancels during the year) as a percentage of the subscription Run Rate at the beginning of the fiscal year.

The Retention Rate for a non-annual period is calculated by annualizing the cancellations for which ~~(1)~~ we have received a notice of termination or ~~(2)~~for which we believe there is an intention not to ~~not~~ renew or discontinue the subscription during the non-annual period, and we believe that such notice or intention evidences the client’s final decision to terminate or not renew the applicable agreement, even though such notice is not effective until a later date. This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized ~~Aggregate~~ Retention Rate for the period. ~~The Aggregate~~

Retention Rate is computed by operating segment on a ~~product-by-product~~product/service-by-product/service basis. ~~Therefore,~~In general, if a client reduces the number of products or services to which it subscribes within a segment, or switches between ~~our~~ products or services within a segment, we treat it as a ~~cancellation.~~cancellation for purposes of calculating our Retention Rate except in the case of a product or service switch that management considers to be a replacement product or service. In those replacement cases, only the net change to the client subscription, if a decrease, is reported as a cancel. In the Analytics and the ESG and Climate operating segments, substantially all product or service switches are treated as replacement products or services and netted in this manner, while in our Index and Real Assets operating segments, product or service switches that are treated as replacement products or services and receive netting treatment occur only in certain limited instances. In addition, we treat any reduction in fees resulting from ~~renegotiated contracts~~a down-sell of the same product or service as a cancellation ~~in the calculation~~ to the extent of the reduction.

In We do not calculate Retention Rate for that portion of our ~~product lines, the Aggregate~~ Run Rate attributable to assets in index-linked investment products or futures and options contracts, in each case, linked to our indexes.

Retention Rate is generally higher during the first three ~~fiscal~~ quarters and lower in the fourth ~~fiscal quarter.~~

quarter, as the fourth quarter is traditionally the largest renewal period in the year.

Critical Accounting Policies and Estimates

We describe our significant accounting policies in Note 1, “Introduction and Basis of Presentation,” of the Notes to Consolidated Financial Statements included in our Form ~~10-K and also in Note 2, “Recent Accounting Standards Updates,” in the Notes to Unaudited Condensed Consolidated Financial Statements included herein.~~10-K. There have been no significant changes in our accounting policies ~~or critical accounting estimates~~ since the end of the fiscal year ended December 31, ~~2016 other than those described in Note 2, “Recent Accounting Standards Updates,”~~2022 or critical accounting estimates applied in the ~~Notes to Unaudited Condensed Consolidated Financial Statements included herein.~~

fiscal year ended December 31, 2022.

Liquidity and Capital Resources

We require capital to fund ongoing operations, internal growth initiatives and acquisitions. Our primary sources of liquidity are cash flows generated from our operations, existing cash and cash equivalents and credit capacity under our existing credit ~~facilities.~~facility. In addition, we believe we have access to additional funding in the public and private markets. We intend to use these sources of liquidity to, among other things, service our existing and future debt obligations, ~~and~~ fund our working capital requirements for capital expenditures, investments, acquisitions and dividend payments, and make repurchases of our common stock. In connection with our business strategy, we regularly evaluate acquisition ~~opportunities.~~and strategic partnership opportunities, including our acquisition of Burgiss on October 2, 2023. The Company used available cash to fund the acquisition of the remaining interest in Burgiss. We believe our liquidity, along with other financing alternatives, will provide the necessary capital to fund these transactions and achieve our planned growth.

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Senior Notes and Credit Agreement

~~We have issued~~

As of September 30, 2023, we had an aggregate of ~~$2.1 billion~~$4,200.0 million in ~~senior unsecured notes (collectively,~~Senior Notes outstanding. In addition, under the ~~“Senior Notes”)~~Credit Agreement, we had as of September 30, 2023: (i) an aggregate of $341.3 million in Tranche A Term Loans outstanding under the ~~three discrete private offerings described below.~~

~~On November 20, 2014, we completed our private offering~~TLA Facility and (ii) $500 million of ~~$800.0 million aggregate principal amount of 5.25% senior unsecured notes due 2024 (the “2024 Senior Notes”). We used~~undrawn borrowing capacity under the ~~net proceeds from the offering~~revolving credit facility. See Note 7, “Commitments and Contingencies,” of the ~~2024 Senior~~ Notes ~~together with cash~~to Condensed Consolidated Financial Statements (Unaudited) included herein for additional information on ~~hand, to repay in full~~ our outstanding ~~term loan~~ indebtedness ~~of $794.8 million.~~

On August 13, 2015, we completed the 2025 Senior Notes offering of $800.0 million aggregate principal amount of 5.75% senior unsecured notes due 2025. The net proceeds from the offering of the 2025 Senior Notes were allocated for general corporate purposes.

On August 4, 2016, we completed the 2026 Senior Notes offering of $500.0 million aggregate principal amount of 4.75% senior unsecured notes due 2026. The net proceeds from the offering of the 2026 Senior Notes were allocated for general corporate purposes, including, without limitation, buybacks of our common stock and ~~potential acquisitions.~~

The 2024 Senior Notes are scheduled to mature and be paid in full on November 15, 2024. At any time prior to November 15, 2019, we may redeem all or part of the 2024 Senior Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, we may redeem all or part of the 2024 Senior Notes, together with accrued and unpaid interest, on or after November 15, 2019, at redemption prices set forth in the indenture governing our 2024 Senior Notes. At any time prior to November 15, 2017, we may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2024 Senior Notes, including any permitted additional notes, at a redemption price equal to 105.25% of the principal amount.

The 2025 Senior Notes are scheduled to mature and be paid in full on August 15, 2025. At any time prior to August 15, 2020, we may redeem all or part of the 2025 Senior Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, we may redeem all or part of the 2025 Senior Notes, together with accrued and unpaid interest, on or after August 15, 2020, at redemption prices set forth in the indenture governing our 2025 Senior Notes. At any time prior to August 15, 2018, we may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2025 Senior Notes, including any permitted additional notes, at a redemption price equal to 105.75% of the principal amount.

Interest payments attributable to the 2024 Senior Notes are due on May 15 and November 15 of each year, with the first interest payment having been made on May 15, 2015. Interest payments attributable to the 2025 Senior Notes are due on February 15 and August 15 of each year, with the first interest payment having been made on February 16, 2016. Interest payments attributable to the 2026 Senior Notes are due on February 1 and August 1 of each year, with the first interest payment having been made on February 1, 2017.

~~On November 20, 2014, we entered into a $200.0 million senior unsecured~~ revolving credit agreement (the “2014 Revolving Credit Agreement”) with a syndicate of banks. The 2014 Revolving Credit Agreement had an initial term of five years with an option to extend for two additional one-year terms. On August 4, 2016, we entered into Amendment No. 1 (the “Amendment”) to the 2014 Revolving Credit Agreement (the 2014 Revolving Credit Agreement as so amended, the “Revolving Credit Agreement”). The Amendment, among other things, (i) increased aggregate commitments available to be borrowed to $220.0 million, (ii) increased the maximum consolidated leverage ratio from 3.75:1.00 to 4.25:1.00 and (iii) extended the initial term to August 2021 ~~with an option to extend for an additional one-year term~~.

facility.

The Senior Notes and the ~~Revolving~~ Credit Agreement are fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect ~~wholly-owned~~wholly owned domestic subsidiaries that account for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries (the “subsidiary guarantors”). Amounts due under the ~~Revolving~~ Credit Agreement are our and the subsidiary guarantors’ senior unsecured obligations and rank equally with the Senior Notes and any of our other unsecured, unsubordinated debt, senior to any of our subordinated debt and effectively subordinated to our secured debt to the extent of the assets securing such debt.

The ~~Indentures~~indentures governing our Senior Notes (the “Indentures”) among us, each of the subsidiary guarantors, and Computershare, National Association, as trustee and successor to Wells Fargo Bank, National Association, ~~as trustee,~~ contain covenants that limit our and ~~certain of~~ our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets. In addition, the Indentures restrict our non-guarantor subsidiaries’ ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiaries guaranteeing the Senior Notes on a pari passu basis.

The ~~Revolving~~ Credit Agreement ~~contains affirmative~~governing the TLA Facility and ~~restrictive~~the revolving credit facility also contains covenants that limit our and our subsidiaries’ ability to, among other things, ~~limit our ability and the ability of our existing or future subsidiaries to:~~

~~incur liens and further negative pledges;~~

incur additional indebtedness, ~~or prepay, redeem or repurchase indebtedness;~~

•

~~make loans or hold investments;~~

~~merge, dissolve, liquidate, consolidate with or into another person;~~

~~enter into acquisition transactions;~~

~~enter into sale/leaseback transactions;~~

~~issue disqualified capital stock;~~

~~sell, transfer or dispose of assets;~~

incur liens, pay dividends or make other distributions in respect of ~~our~~ capital stock or engage in certain types of stock repurchases, redemptions and other restricted ~~payments;~~

~~create new subsidiaries;~~

~~permit certain restrictions affecting our subsidiaries;~~

~~change the nature~~payments, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our ~~business, accounting policies or fiscal periods;~~

assets.

~~enter into any transactions with affiliates other than on an arm’s-length basis; and~~

~~amend our organizational documents or amend, modify or change the terms of certain agreements relating to our indebtedness.~~

The ~~Revolving~~ Credit Agreement and the Indentures also contain customary events of default, including those relating to non-payment, breach of representations, warranties or covenants, cross-default and cross-acceleration, and bankruptcy and insolvency events, and, in the case of the Credit Agreement, invalidity or impairment of loan documentation, ~~or collateral,~~ change of control and customary ERISA ~~defaults.~~defaults in addition to the foregoing. None of the restrictions detailed above are expected to impact our ability to effectively operate the business.

The ~~Revolving~~ Credit Agreement also requires us and our subsidiaries to achieve financial and operating results sufficient to maintain compliance with the following financial ratios on a consolidated basis through the termination of the ~~Revolving~~ Credit Agreement: (1) the maximum Consolidated Leverage Ratio (as defined in the ~~Revolving~~ Credit Agreement) measured quarterly on a rolling four-quarter basis ~~shall~~ not to exceed 4.25:1.00 (or 4.50:1.00 for two fiscal quarters following a material acquisition) and (2) the minimum Consolidated Interest Coverage Ratio (as defined in the ~~Revolving~~ Credit Agreement) measured quarterly on a rolling four-quarter basis ~~shall be~~of at least 4.00:1.00. As of September 30, ~~2017,~~2023, our Consolidated Leverage Ratio was ~~3.12:~~2.77:1.00 and our Consolidated Interest Coverage Ratio was ~~5.97:~~8.46:1.00. ~~There have been no amounts drawn under the Revolving Credit Facility since its November 20, 2014 inception.~~

Our non-guarantor subsidiaries under the Senior Notes and the Credit Agreement consist of: (i) domestic subsidiaries of the Company that account for 5% or less of consolidated assets of the Company and its subsidiaries and (ii) any foreign or domestic subsidiary of the Company that is deemed to be a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended. Our non-guarantor subsidiaries accounted for approximately ~~$400.5~~$1,498.8 million, or ~~32.5%~~62.1%, of our total revenue for the trailing 12 months ended September 30, ~~2017,~~2023, approximately ~~$187.6~~$656.6 million, or ~~34.0%~~49.6%, of our consolidated operating income for the trailing 12 months ended September 30, ~~2017,~~2023, and approximately ~~$807.7~~$853.5 million, or ~~25.6%~~17.5%, of our consolidated total assets (excluding intercompany assets) and ~~$330.8~~$848.9 million, or ~~11.8%~~14.4%, of our consolidated total liabilities, in each case as of September 30, ~~2017.~~

2023.

Share Repurchases

The following table provides information with respect to repurchases of the Company’s common stock pursuant to open market repurchases:


Nine months ended (in thousands except per share data)	Average Price Paid Per Share		Total Number of Shares Repurchased	Dollar Value of Shares Repurchased(1)
September 30, 2023	$	468.26	980	$	458,721
September 30, 2022	$	473.26	2,567	$	1,214,695

___________________________

Table of Contents

As of September 30, ~~2017,~~2023, there was ~~$733.1~~$845.7 million of available authorization remaining under the ~~2016~~2022 Repurchase Program.

This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice.

Cash ~~Dividend~~

Dividends

On October ~~31, 2017,~~30, 2023, the Board of Directors declared a quarterly cash dividend of ~~$0.38~~$1.38 per share for ~~fourth quarter 2017.~~the three months ending December 31, 2023. The fourth quarter ~~2017~~2023 dividend is payable on November 30, ~~2017~~2023 to shareholders of record as of the close of trading on November ~~17, 2017.~~

9, 2023.

Cash Flows

As of

September 30,

December 31,

2017

2016

(in thousands)

Cash and cash equivalents

$
799,015

$
791,834

~~Cash~~The following table presents the Company’s cash and cash equivalents, ~~were $799.0 million and $791.8 million~~including restricted cash, as of ~~September 30, 2017 and December 31, 2016, respectively.~~the dates indicated:


	As of
(in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents (includes restricted cash of $3,839 and $368 at September 30, 2023 and December 31, 2022, respectively)	$	928,552	$	993,564

We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes. As of September 30, ~~2017~~2023 and December 31, ~~2016, $425.3~~2022, $181.8 million and ~~$208.2~~$344.5 million, respectively, of the Company’s cash and cash equivalents were held by foreign ~~subsidiaries, which could~~subsidiaries. Repatriation of some foreign cash may be subject to ~~U.S. federal income taxation on repatriation to~~certain withholding taxes in local jurisdictions and other distribution restrictions. We believe the ~~U.S.~~global cash and some of which could be subject to local country taxes if repatriated to the United States (“Foreign Cash”). In addition, repatriation of some Foreign Cash is further restricted by local laws. The increase in Foreign Cash since year end primarily reflects our ongoing efforts to better align our tax profile with our global operating footprint. As part of this realignment, Foreign Cash has grown, reflecting growth in invoicing and earnings outside the U.S. and the impact of one-time transitional intercompany payments which will impact the full year ending December 31, 2017. We expect the Foreign Cash balance to continue to grow at a ratecash equivalent balances that ~~is consistent with the growth in earnings of our foreign operations in the year ending December 31, 2018 and beyond. These balances~~are maintained will be available to meet our global needs ~~outside the U.S.~~ whether ~~it be~~ for general corporate purposes or other needs, including acquisitions or expansion of our products.

We believe that ~~domestic~~global cash flows from operations, together with existing cash and cash equivalents and funds available under our existing revolving credit facility and our ability to access ~~the~~bank debt, private debt and the capital markets for additional funds, will continue to be sufficient to fund our ~~domestic~~global operating activities and cash commitments for investing and financing activities, such as material capital expenditures and share repurchases, for at least the next 12 months and for the foreseeable future thereafter. In addition, we expect that foreign cash flows from operations, together with existing cash and cash equivalents, will continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next 12 months and for the foreseeable future thereafter.

Net Cash Provided by (Used In) Operating, Investing and Financing Activities

Nine Months Ended

September 30,

2017

2016

(in thousands)

Net cash provided by operating activities

$
261,005

$
303,510

Net cash used in investing activities

(27,446
)

(31,496
)
Net cash used in financing activities

(233,875
)

(71,758
)
Effect of exchange rate changes

7,497

(3,900
)
Net increase in cash

$
7,181

$
196,356


	Nine Months Ended September 30,
(in thousands)	2023		2022
Net cash provided by operating activities	$	847,076	$	779,942
Net cash (used in) investing activities	(69,411)		(52,413)
Net cash (used in) provided by financing activities	(842,364)		(1,252,827)
Effect of exchange rate changes	(313)		(29,039)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(65,012)	$	(554,337)

Cash Flows From Operating Activities

Cash flows from operating activities consist of net income adjusted for certain non-cash items and changes in assets and liabilities. ~~Cash provided by operating activities was $261.0 million and $303.5 million for the nine months ended September 30, 2017 and 2016, respectively.~~ The year-over-year ~~decrease reflects~~change was primarily driven by higher ~~payments for operating expenses, income taxes and interest,~~cash collections from customers, partially offset by higher ~~collections from customers, despite higher accounts receivable as a result of the timing of invoicing and collections. Cash paid for~~ income ~~taxes for the nine months ended September 30, 2016 was significantly lower than the provision for income taxes for the same period as a result of the impact of~~ tax ~~refunds received.~~

payments.

Our primary uses of cash from operating activities ~~are~~are for the payment of cash compensation expenses, ~~office rent,~~income taxes, interest expenses, technology costs, professional fees, market data costs ~~interest expenses~~ and ~~income taxes. The~~office rent. Historically, the payment of cash for compensation and benefits is ~~historically~~ at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year.

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Cash Flows From Investing Activities

~~Cash used in investing activities~~

The year-over-year change was ~~$27.4 million~~primarily driven by higher capital expenditures and ~~$31.5 million for the nine months ended September 30, 2017 and 2016, respectively, primarily reflecting lower capital expenditures.~~

capitalized software development costs.

Cash Flows From Financing Activities

~~Cash used in financing activities was $233.9 million for the nine months ended September 30, 2017 compared to $71.8 million for the nine months ended September 30, 2016.~~

The year-over-year ~~increase~~change was primarily ~~reflects borrowings made in the prior year,~~driven by lower share repurchases, partially offset by ~~decreased repurchases~~the absence of ~~treasury shares.~~

~~Off-Balance Sheet Arrangements~~

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

proceeds from borrowings and by higher dividend payments..

~~Item 3.~~

~~Quantitative and Qualitative Disclosures about Market Risk~~

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Risk

We are subject to foreign currency exchange fluctuation risk. Exchange rate movements can impact the U.S. dollar-reported value of our revenues, expenses, assets and liabilities denominated in non-U.S. dollar currencies or where the currency of such items is different than the functional currency of the entity where these items were recorded.

We generally invoice our clients in U.S. dollars; however, we invoice a portion of our clients in Euros, British pounds sterling, Japanese yen and a limited number of other non-U.S. dollar currencies. For the nine months ended September 30, ~~2017~~2023 and ~~2016, 13.9%~~2022, 17.0% and ~~17.3%~~15.8%, respectively, of our revenues are subject to foreign currency exchange rate risk and primarily ~~includes~~included clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities. Of the ~~13.9%~~17.0% of non-U.S. dollar exposure for the nine months ended September 30, ~~2017, 39.1%~~2023, 41.7% was in Euros, ~~28.4%~~32.5% was in British pounds sterling and ~~25.9%~~17.6% was in Japanese yen. Of the ~~17.3%~~15.8% of non-U.S. dollar exposure for the nine months ended September 30, ~~2016, 35.1%~~2022, 40.8% was in Euros, 30.2% was in British pounds sterling ~~35.0% was in Euros~~ and ~~24.7%~~19.2% was in Japanese yen.

Revenues from ~~index-linked investment products~~asset-based fees represented ~~21.0%~~22.4% and ~~18.0%~~24.1% of operating revenues for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively. While a substantial portion of our asset-based fees ~~for index-linked investment products~~ are invoiced in U.S. dollars, the fees are based on the assets in investment ~~product’s assets,~~products, of which approximately ~~two-thirds~~three-fifths are invested in securities denominated in currencies other than the U.S. dollar. Accordingly, declines in such other currencies against the U.S. dollar will decrease the fees payable to us under such licenses. In addition, declines in such currencies against the U.S. dollar could impact the attractiveness of such investment products resulting in net fund outflows, which would further reduce the fees payable under such licenses.

We are exposed to additional foreign currency risk in certain of our operating costs. Approximately ~~37.6%~~43.4% and ~~38.9%~~42.9% of our operating expenses for the nine months ended September 30, ~~2017~~2023 and ~~2016,~~2022, respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Euros, Hungarian forints, ~~Hong Kong dollars, Euros, Swiss francs,~~ Mexican pesos and ~~Chinese yuan.~~

Swiss francs.

We have certain monetary assets and liabilities denominated in currencies other than local functional amounts and when these balances ~~were~~are remeasured into their local functional currency, either a gain or a loss ~~resulted~~results from the change of the value of the functional currency as compared to the originating currencies. We manage foreign currency exchange rate risk, in part, through the use of derivative financial instruments comprised principally of forward contracts on foreign currency which are not designated as hedging instruments for accounting purposes. The objective of the derivative instruments is to minimize the impact on the income statement of the volatility of amounts denominated in certain foreign currencies. We recognized total foreign currency exchange losses of ~~$1.8~~$2.9 million and gains of $2.7 million for the nine months ended September 30, ~~2017 compared to foreign currency exchange gains of $0.6 million for the nine months ended September 30, 2016.~~

2023 and 2022, respectively.

~~Item 4.~~

~~Controls~~ ~~and Procedures~~

Item 4. Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures, as defined in Rule 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), as of September 30, ~~2017,~~2023, and have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, ~~2017~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II – OTHER ~~FINANCIAL~~ INFORMATION

The interim financial information included in this Quarterly Report on Form 10-Q for the three and nine month periods ended September 30, 2017 and 2016 has not been audited by PricewaterhouseCoopers LLP (“PwC”). In reviewing such information, PwC has applied limited procedures in accordance with professional standards for reviews of interim financial information. Readers should restrict reliance on PwC’s reports on such information accordingly. PwC is not subject to the liability provisions of Section 11 of the Securities Act of 1933 for its reports on interim financial information, because such reports do not constitute “reports” or “parts” of registration statements prepared or certified by PwC within the meaning of Sections 7 and 11 of the Securities Act of 1933.

~~PART~~ II

~~Item 1.~~

~~Legal Proceedings~~

Item 1. Legal Proceedings

Various lawsuits, claims and proceedings have been or may be instituted or asserted against the Company in the ordinary course of business. While the amounts claimed could be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that MSCI’s business, operating results, financial condition or cash flows in a particular period could be materially affected by certain contingencies. However, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows.

~~Item 1A.~~

~~Risk Factors~~

Item 1A. Risk Factors

For a discussion of the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for fiscal year ended December 31, 2022.

There have been no material changes ~~since December 31, 2016~~ to the ~~significant~~ risk factors and uncertainties known to the Company and disclosed in the Company’s Form 10-K for the fiscal year ended December 31, 2022, that, if they were to materialize or occur, would, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows.

~~For a discussion~~

Item 2. Unregistered Sales of ~~the risk factors affecting the Company, see “Risk Factors” in Part I, Item 1A~~Equity Securities, Use of ~~our Form 10-K for fiscal year 2016.~~

Proceeds, and Issuer Purchases of Equity Securities

~~Item 2.~~

~~Unregistered Sales of Equity Securities and Use of Proceeds~~

There ~~have been~~were no unregistered sales of equity ~~securities.~~

securities during the three months ended September 30, 2023.

The table below presents information with respect to purchases made by or on behalf of the Company of its shares of common ~~shares~~stock during the three months ended September 30, ~~2017.~~

2023.

Issuer Purchases of Equity Securities

Period

Total Number of
Shares Purchased⁽¹⁾

Average Price Paid
Per Share

Total Number of Shares
Purchased As Part of
Publicly Announced
Plans or Programs

Approximate Dollar Value
of Shares that May Yet Be
Purchased Under the
Plans or Programs⁽²⁾

Month #1

(July 1, 2017-July 31, 2017)

72,349

$
103.45

71,233

$
734,869,000

Month #2

(August 1, 2017-August 31, 2017)

16,865

$
108.06

16,196

$
733,122,000

Month #3

(September 1, 2017-September 30, 2017)

743

$
112.09

—

$
733,122,000

Total

89,957

$
104.39

87,429

$
733,122,000


Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share(2)		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(3)
July 1, 2023 - July 31, 2023	39,178	$	468.65	38,263	$	845,668,000
August 1, 2023 - August 31, 2023	487	$	544.39	—	$	845,668,000
September 1, 2023 - September 30, 2023	277	$	535.25	—	$	845,668,000
Total	39,942	$	470.04	38,263	$	845,668,000

⁽¹⁾

Includes (i) shares purchased by the Company on the open market; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; (iii) shares withheld to satisfy tax withholding obligations and exercise price on behalf of employees that occur upon exercise and delivery of outstanding shares underlying stock options; and (iv) shares held in treasury under the MSCI Inc. Non-Employee Directors Deferral Plan. The value of the shares withheld was determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company. The amount also includes shares repurchased under the 2016 Repurchase Program.

___________________________

(1)Includes, when applicable, (i) shares purchased by the Company on the open market under the stock repurchase program; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; and (iii) shares held in treasury under the MSCI Inc. Non-Employee Directors Deferral Plan. The value of shares withheld to satisfy tax withholding obligations was determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company.

(2)Excludes 1% excise tax incurred on share repurchases.

(3)See Note 9, “Shareholders’ Equity (Deficit),” of the Notes to the Unaudited Condensed Consolidated Financial Statements included herein for further information regarding our stock repurchase program.

Item 5. Other Information

During the three months ended September 30, 2023, none of the Company’s directors or officers, as defined in Section 16 of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K of the Exchange Act.

Table of Contents

Item 6. Exhibits

EXHIBIT INDEX

⁽²⁾	~~See Note 7, “Shareholders’ Equity” of the Notes to the Unaudited Condensed Consolidated Financial Statements included herein for further information regarding our stock repurchase programs.~~

~~Item 3.~~

~~Defaults Upon Senior Securities~~

~~None.~~

~~Item 4.~~

~~Mine Safety Disclosures~~

~~Not applicable.~~

~~Item 5.~~

~~Other Information~~

~~None.~~

~~Item 6.~~

~~Exhibits~~

~~An exhibit index is presented below.~~

~~EXHIBIT INDEX~~

~~MSCI INC.~~

~~QUARTER ENDED SEPTEMBER 30, 2017~~

Exhibit
Number

~~Description~~

Exhibit
Number

Description

~~3.1~~

3.1

Third Amended and Restated Certificate of Incorporation (filed as Exhibit 3.1 to the Company’s Form 10-Q (File No. 001-33812), filed with the SEC on May 4, 2012 and incorporated by reference herein)

3.2

~~3.2~~

Amended and Restated ~~By-laws~~Bylaws (filed as Exhibit ~~3.2~~3.1 to the Company’s Form ~~10-Q~~8-K (File No. 001-33812), filed with the SEC on ~~May 4, 2012~~January 11, 2021 and incorporated by reference herein)

31.1

Statement Re: Computation of Earnings Per Common Share (The calculation of per share earnings is in Part I, Item 1, Note 3 to the Condensed Consolidated Financial Statements (Earnings Per Common Share) and is omitted in accordance with Section (b)(11) of Item 601 of Regulation S-K)

~~15.1~~

~~Letter of awareness from PricewaterhouseCoopers LLP, dated November 3, 2017, concerning unaudited interim financial information~~

~~31.1~~

Rule 13a-14(a) Certification of the Chief Executive Officer

31.2

~~31.2~~

Rule 13a-14(a) Certification of the Chief Financial Officer

32.1

~~32.1~~

Section 1350 Certification of the Chief Executive Officer and the Chief Financial Officer

101.INS

~~101.INS~~

Inline XBRL Instance Document

– the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

~~101.SCH~~

Inline XBRL Taxonomy Extension Schema Document

101.CAL

~~101.CAL~~

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

~~101.LAB~~

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

~~101.PRE~~

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

~~101.DEF~~

Inline XBRL Taxonomy Extension Definition Linkbase Document

104

~~Filed herewith.~~

~~Furnished herewith.~~

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

___________________________

*Filed herewith.

**Furnished herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: ~~November 3, 2017~~

October 31, 2023

~~MSCI INC.~~ ~~(Registrant)~~
	MSCI INC. (Registrant)
~~By:~~	~~/s/ Kathleen A. Winters~~
	~~Kathleen A. Winters~~ By:	/s/ Andrew C. Wiechmann
		Andrew C. Wiechmann Chief Financial Officer (Principal Financial Officer and ~~Treasurer~~ (Principal ~~Financial~~Accounting Officer)

Years Ending December 31,	Amortization Expense
	(in thousands)
Remainder 2017	$	10,784
2018		43,969
2019		42,233
2020		40,361
2021		38,117
Thereafter		152,862
Total	$	328,326

	Unaudited Condensed	As of
	Consolidated Statements of	September 30,			December 31,
(in thousands)	Financial Condition Location	2017			2016
Non-designated hedging instruments:
Asset derivatives:
Foreign exchange contracts	Prepaid and other assets	$	110		$	27
Liability derivatives:
Foreign exchange contracts	Other accrued liabilities	$	(135	)	$	(124	)

		Amount of Gain or (Loss) Recognized
Derivatives Not Designated as	Location of Gain or	in Income on Derivatives for the
Hedging Instruments	(Loss) Recognized	Three Months Ended September 30,
(in thousands)	in Income on Derivatives	2017			2016
Foreign exchange contracts	Other expense (income)	$	(671	)	$	211

		Amount of Gain or (Loss) Recognized
Derivatives Not Designated as	Location of Gain or	in Income on Derivatives for the
Hedging Instruments	(Loss) Recognized	Nine Months Ended September 30,
(in thousands)	in Income on Derivatives	2017			2016
Foreign exchange contracts	Other expense (income)	$	(1,791	)	$	1,125

	Period Ended(1)
	2016											2017
(in billions)	March 31,			June 30,			September 30,		December 31,			March 31,		June 30,		September 30,
AUM in ETFs linked to MSCI indexes(2)	$	438.3		$	439.7		$	474.9	$	481.4		$	555.7	$	624.3	$	674.3

Sequential Change in Value
Market Appreciation/(Depreciation)	$	(1.7	)	$	(2.5	)	$	23.7	$	(8.7	)	$	35.8	$	23.6	$	32.2
Cash Inflows		6.6			3.9			11.5		15.2			38.5		45.0		17.8
Total Change	$	4.9		$	1.4		$	35.2	$	6.5		$	74.3	$	68.6	$	50.0

Period	Total Number of Shares Purchased⁽¹⁾		Average Price Paid Per Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽²⁾
Month #1
(July 1, 2017-July 31, 2017)		72,349	$	103.45		71,233	$	734,869,000

Month #2
(August 1, 2017-August 31, 2017)		16,865	$	108.06		16,196	$	733,122,000

Month #3
(September 1, 2017-September 30, 2017)		743	$	112.09		—	$	733,122,000

Total		89,957	$	104.39		87,429	$	733,122,000