MSCI (MSCI) 10-K risk factor changes: FY2016 vs FY2015

[removed: _You] [added: You] should carefully consider the following risks and all of the other information set forth in this Annual Report on Form 10-K.

You should read the section titled “Forward-Looking Statements” on page 1 for a description of the types of statements that are considered forward-looking statements, as well as the significance of such statements in the context of this Annual Report on Form [removed: 10-K._][added: 10-K.]

[removed: Risks] [added: Risks] Related to Our [removed: Business][added: Business]

[removed: Throughout our businesses,] [added: As of December 31, 2016,] we [removed: utilize certain data provided by third party] [added: relied on the] data [removed: sources in a variety] of [removed: ways,] [added: over 200 suppliers,] including large volumes of data from certain stock exchanges around the world.

If the data [added: and software products] from our suppliers [removed: has] [added: have] errors, [removed: is] [added: are] delayed, [removed: has] [added: have] design defects, [removed: is] [added: become incompatible with future versions of our products, are] unavailable on acceptable terms or [removed: is] [added: are] not available at all, [added: we may not be able to deliver] our [added: products and services and our] business, financial condition or results of operations could be materially adversely affected.

Many of our data [added: and software] suppliers compete with one another and, in some cases, with us.

[removed: _Our] [added: Our] clients that pay us a fee based on the assets of an investment product may seek to negotiate a lower asset-based fee percentage or [added: lower the total expense ratio of their funds linked to MSCI indexes or] may cease using our indexes, which could limit the growth of or decrease our revenues from asset-based [removed: fees._][added: fees.]

A portion of our revenues are from asset-based fees and these revenue streams are concentrated in some of our largest clients, including BlackRock, [removed: Inc.] and [removed: its affiliates (“BlackRock”), and] in our largest market, the U.S. Our clients, including our largest clients, may seek to negotiate a lower asset-based fee percentage for a variety of reasons.

As the assets of index-linked investment products managed by our clients change, they may request to pay us lower asset-based fee [removed: percentages.][added: percentages, which are sometimes calculated as a percentage of the relevant fund’s total expense ratio (“TER”).]

The fees ETF providers charge their clients are one of the competitive differentiators for [removed: these ETF managers.]

Moreover, clients that have licensed our indexes to serve as the basis of index-linked investment products are generally not required to continue to use our indexes and could elect to cease offering the product or [removed: could change the index] [added: switch] to a [removed: non-MSCI] [added: lower fee] index, and at least one large client has ceased using MSCI indexes as the basis for a significant number of its index funds in the past.

In [removed: such instances,] [added: the instances described above,] our asset-based fees could dramatically decrease, which could have a material adverse effect on our business, financial condition or results of operations.

The ability of our licensees to cease using our indexes [added: or switch to lower fee indexes] is generally true not just with respect to an index’s use as the basis of an ETF but also with respect to its use as the basis of other financial products, including mutual funds and institutional funds.

[removed: _Our] [added: Our] revenues attributable to asset-based fees may be affected by changes in the capital markets, particularly the equity capital markets.

A decrease in our revenues attributable to these [removed: products] [added: fees] could have a material adverse effect on our business, financial condition or results of [removed: operations._][added: operations.]

[removed: In addition,] [added: As noted above,] in many cases our fees can be affected by an increase or decrease in a product provider’s [removed: total expense ratio (“TER”).][added: TER.]

They accounted for [removed: 18.4%] [added: 18.3%] and [removed: 17.8%] [added: 18.4%] of revenues for the fiscal years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively.

These asset-based fees accounted for [removed: 48.3%] [added: 47.4%] and [removed: 47.6%] [added: 48.3%] of the [added: total] revenues from our ten largest clients for the fiscal years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively.

Accordingly, the value of assets linked to ETFs can fluctuate significantly over short periods of [removed: time.][added: time and such volatility may be further impacted by fluctuations in foreign currency exchange rates.]

See [removed: “—_Our] [added: “— Our] financial condition and results of operations may be negatively impacted to the extent that our current and potential future clients are affected by adverse changes in the financial [removed: markets_”] [added: markets”] below.

We depend heavily on the capacity, reliability and security of our information technology platform, electronic delivery systems and its components, including our data centers, and the [removed: Internet.][added: internet to seamlessly provide clients with products and customer service.]

Heavy use of our electronic delivery systems and other factors such as loss of service from third parties, operational failures, sabotage, break-ins and similar disruptions from unauthorized [removed: tampering] [added: tampering, intrusions] or hacking, human error, cyber-terrorism, [added: terrorist attacks affecting sites where we are located,] natural disasters, power [removed: loss] [added: loss, telecommunications failures, technical breakdowns, internet failures] or computer viruses could impair our systems’ operations or interrupt their availability for extended periods of time.

If disruptions, failures or slowdowns occur with respect to our [removed: electronic delivery systems, the Internet or] [added: operations, including to] our information technology platform, our [added: electronic delivery systems or the internet, our] reputation and our ability to distribute our products effectively and to serve our clients, including those clients for whom we provide managed services or to whom we distribute index and constituent data on a real time basis that is used to manage funds that replicate MSCI indexes, may be materially adversely affected.

While we have [added: implemented disaster recovery and business continuity plans and have] been able to defend our systems against such [added: disruptions and] attacks in the past, there is no assurance that we will be able to do so successfully in the [removed: future.][added: future or that our disaster recovery or business continuity plans will be effective in mitigating the risks and costs associated with the particular event that has occurred.]

We have also experienced unanticipated interruption and delay in the performance and delivery of certain of our products after we migrated certain of our applications and infrastructure to new data centers and may experience such interruptions and delays in the future with respect to [removed: the] migrations within existing data centers or to new data centers.

We may also incur increased operating expenses to [added: recover data,] repair, replace or remediate systems, equipment or facilities, and to protect ourselves from and defend against such disruptions and attacks.

[removed: _Any] [added: Any] failure to ensure and protect the confidentiality of client data could adversely affect our [added: brand and] reputation and have a material adverse effect on our business, financial condition or results of [removed: operations._][added: operations.]

Many of our products provide for the exchange of sensitive information with our clients through a variety of media, such as the [removed: Internet, software] [added: internet,] applications and dedicated transmission lines.

Such unauthorized access, disclosure or misappropriation may result in claims against us by our clients or regulatory inquiry or censure, which could, individually or in the aggregate, damage our [added: brand and] reputation and/or have a material adverse effect on our business, financial condition or results of operations.

[removed: See “_—Changes in government] regulations, including the implementation of new or pending financial [added: regulations or the repeal of existing financial] regulations, could materially adversely affect our business, financial condition or results of [removed: operations—Data Privacy Legislation_”] [added: operations”] below.

[removed: _We] [added: We] have confidentiality policies in place regarding changes to the composition of our indexes and have implemented information barrier procedures to protect the confidentiality of the material, non-public information regarding changes to our equity indexes.

If our confidentiality policies or information barrier procedures fail, our reputation could be damaged and our business, financial condition or results of operations could be materially adversely [removed: affected._][added: affected.]

Clients’ loss of trust and confidence in our confidentiality policies or information barrier policies and procedures could [removed: lead to a negative] [added: negatively impact our brand or] reputation throughout the investment community, which could have a material adverse effect on our business, financial condition or results of operations.

In addition, certain exchanges permit our clients to list ETFs or other financial products based on our equity indexes only if we provide a representation to the exchange that we have [removed: reasonable] information barrier procedures in place [added: designed] to address the unauthorized disclosure and misuse of material, non-public information about changes to the composition of our equity indexes.

[removed: _Increased] [added: Increased] competition [added: and financial and budgetary pressures affecting clients] in our industry may cause price reductions or loss of market share, which may materially adversely affect our business, financial condition or results of [removed: operations._][added: operations.]

We face competition across all markets for our [removed: products.][added: products and services.]

In addition, barriers to entry may be low in many of the markets for our [removed: products,] [added: products and services,] including for single-purpose product companies.

Recent [removed: developments] [added: developments,] including [added: increases in the availability of free or relatively inexpensive information,] advances in public cloud computing and the increase in open source [added: code,] as well as proprietary software in specific areas, such as pricing, high volume computing, orchestration layers for services, and visualization, have increasingly allowed free or relatively inexpensive access to information sources, which has reduced barriers to entry even further.

[removed: See “—_Increased accessibility to free or relatively inexpensive information sources] [added: Our clients] may [added: become more self-sufficient, which may] reduce demand for our products [added: or services] and materially adversely affect our business, financial condition or results of [removed: operations_” below.][added: operations.]

Financial and budgetary pressures affecting our clients, including those resulting from weak or volatile economic conditions, may lead certain clients to reduce their overall spending on our [removed: products,] [added: products or services,] including by seeking [added: similar] products [added: or services] at a lower cost than what we are able to provide, by consolidating their spending with fewer providers or by self-sourcing certain of their informational needs.

these ETF managers with some ETF providers seeking to win or retain business by charging their clients lower fees.

We offer a diversified pricing structure for our indexes and from time-to-time experience faster growth in lower fee product areas, resulting in a lower average asset-based fee percentage for licensing our indexes.

While we look to maximize the price/volume trade-off over the long-term there can be no assurance that we will be able to do so and results for any given quarter could be materially adversely affected by stronger growth in lower fee products areas that is not sufficiently off-set by growth in the volume of AUM in ETFs or other products that are based on our indexes.

If we are unable to offset the impact of decreased values of assets linked to ETFs, including by managing our operating costs, our profitability could be materially adversely affected.

See “—Our growth and profitability may not continue at the same rate as we have experienced in the past for several reasons, including if our operating costs are higher than expected, which could have a material adverse effect on our business, financial condition or results of operations” below.

Certain events could lead to interruptions in our operations, including interruptions affecting our information technology platform, electronic delivery systems and the internet, that could impair our ability to provide clients with products and customer service.

Any resulting failures, disruptions or instability may have a material adverse effect on our financial condition or results of operations.

See “ —Changes in government

We also implemented the CIP initiative in 2016 to further incentivize our client coverage personnel by aligning each eligible employee’s target annual incentive with key performance metrics in accordance with our overall goals and strategy.

key employees or are not competitive, we may lose key personnel.

These regulations are complex, evolve frequently, and are subject to administrative interpretation and judicial construction in ways that could materially adversely affect our business.

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| | • | Dodd-Frank Act and Other Financial Regulations. We may be materially adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S. or foreign governmental regulatory authorities or self-regulatory organizations that supervise the financial markets around the world. Uncertainty caused by political change in the United States and Europe (particularly Brexit) heightens regulatory uncertainty. The enactment of the Dodd-Frank Act on July 21, 2010 had a significant impact on many aspects of the way in which the financial services industry conducts business. However, the full effect of the Dodd-Frank Act is still unknown given that certain rules and regulations promulgated under the Dodd-Frank Act have yet to take effect or may be largely repealed or modified. As a result of the regulatory uncertainty surrounding the Dodd-Frank Act, complying with its existing and future requirements could negatively impact the business, operations and financial viability of many of our clients which, in turn, could have a negative impact on our business, and results of operations. |

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For example, on September 20, 2016, Blackrock received exemptive relief from the SEC to create certain indexes for use as the basis of ETFs that it would manage.

protect our products and services.

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| | • | Third-Party Litigation —There have been a number of lawsuits in multiple jurisdictions, including in the U.S. and Germany, regarding whether issuers of index-linked investment products are required to obtain a license from the index owner or whether issuers may issue investment products based on publicly-available index level data without obtaining permission from (or making payment to) the index owner. The outcome of these cases depends on a number of factors, including the governing law, the |

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See “— Certain events could lead to interruptions in our operations, including interruptions affecting our information technology platform, electronic delivery systems and the internet, that could impair our ability to provide clients with products and customer service.

Any resulting failures, disruptions or instability may have a material adverse effect on our financial condition or results of operations” above.

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Most recently, on June 23, 2016, the

United Kingdom voted to leave the European Union through the Referendum of the United Kingdom’s Membership of the European Union, an event commonly referred to as “Brexit.” While the full effects of Brexit will not be known for some time, the Brexit vote caused significant volatility in currency exchange rates, especially between the U.S. dollar and the British pound sterling.

For example, the exchange rate as of December 31, 2016 was £0.81/$1 compared with a rate on June 23, 2016 of £0.68/$1 and a rate on June 1, 2016 of £0.69/$1.

_If we lose key outside suppliers of data and products or if the data or products of these suppliers have errors or are delayed, we may not be able to provide our clients with the information and products they desire._

Our ability to produce our products and develop new products is dependent upon the products of other suppliers, including certain data, software and service suppliers.

Our Index, Analytics, Real Estate, and ESG products are dependent upon and of little value without updates from our data suppliers.

Similarly, most of our software products are dependent upon and of little value without continuing access to historical and current data.

As of December 31, 2015, there were over 200 such data suppliers.

For example, Standard & Poor’s competes with us in index products, supplies index data that we distribute in our portfolio analytics software products and jointly developed and maintains GICS and GICS Direct with us.

Some data suppliers have sought and others may seek to increase licensing fees for providing their content to us.

If we are unable to negotiate acceptable licensing arrangements with these data suppliers or find alternative

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sources of equivalent content, we may be required to reduce our profit margins or experience a reduction in our market share.

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_Our business relies heavily on electronic delivery systems, the Internet and our information technology platform, and any failures, disruptions or instability may materially adversely affect our ability to serve our clients._

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_If we are unable to manage our operating costs as anticipated or our operating costs are higher than expected, our operating results may fluctuate significantly._

If operating costs exceed our expectations and cannot be adjusted accordingly, our anticipated profitability may be reduced and our anticipated results of operations and financial position may be materially adversely affected.

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We must plan and manage our expansion effectively to increase revenue and profitability.

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| | • | | _Dodd-Frank Act and Other Financial Regulations_. As a result of the global financial crisis, the U.S. Congress undertook major financial reform which led to the enactment on July 21, 2010 of the Dodd-Frank Act. The Dodd-Frank Act could have a significant impact on many aspects of the way in |

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| | which the financial services industry conducts business and has and will continue to impose substantial new regulation on, and regulatory oversight of, a wide variety of financial services institutions. Although many of the effects of the Dodd-Frank Act will be largely unknown until all of the regulations have been finalized and implemented, complying with its existing and future requirements could negatively impact the business, operations and financial viability of many of our clients which, in turn, could have a negative impact on our business, and results of operations. |

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We may also be materially adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S. or foreign governmental regulatory authorities or self-regulatory organizations that supervise the financial markets around the world.

In addition, we may be materially adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and self-regulatory organizations.

It is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether any of the proposals will become law.

Compliance with any new laws or regulations could make compliance more difficult and expensive and affect the manner in which we conduct business.

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On October 20, 2011, the European Commission issued its proposal for MiFID/MiFIR 2 (COM (2011) 0652 and COM (2011) 0656).

Agreement in principle has been reached among the European Commission, Parliament and Council, and we expect that the regulation when it becomes effective and when our compliance is required (expected in 2019), will, among other things, mandate that, where the

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Because final guidance on the relevant technical standards has not yet been issued by ESMA, it is difficult to predict its full effect on our index business.

Additionally, in August 2011, BlackRock announced that it was seeking regulatory clearance to create indexes for use as the basis of ETFs that it would manage.

A growing number of asset managers and investment banks, in

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[removed: _The] [added: The] following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.

“Risk Factors,” within this Annual Report on Form [removed: 10-K._][added: 10-K.]

[removed: Overview][added: Overview]

[removed: MSCI offers content, applications] [added: We offer products] and services to support the needs of institutional investors throughout their investment processes.

[removed: MSCI] [added: Our] clients include asset [removed: owners, such as pension] [added: owners (pension] funds, endowments, foundations, central banks, [added: sovereign wealth funds,] family offices and insurance [removed: companies;] [added: companies),] asset management [removed: firms, such as mutual] [added: firms (mutual] funds, hedge funds, providers of exchange-traded funds [removed: (“ETFs”);] [added: (“ETFs”),] private wealth [removed: managers;] [added: managers, real estate investment trusts] and financial [removed: intermediaries, such as banks,] [added: intermediaries (banks,] broker-dealers, exchanges, custodians, trust companies and investment [removed: consultants.][added: consultants).]

Our products and services include indexes and analytical models; ratings and analysis that enable institutional investors to integrate [removed: environmental, social and governance (“ESG”)] [added: ESG] factors into their investment strategies; and analysis of real estate in both privately and publicly owned portfolios.

Clients use our [removed: content] [added: products] and [removed: applications] [added: services] to help construct portfolios and allocate assets.

Our analytical tools [added: and content] help [removed: them] [added: clients] measure and manage risk across all major asset classes.

[removed: MSCI] [added: Our] products and services can also be customized to meet the specific needs of our clients.

As of December 31, [removed: 2015,] [added: 2016,] we had [removed: approximately 6,400] [added: over 6,500] clients across [removed: 86] [added: 87] countries.

If we aggregate all related clients under their respective parent entity, the number of clients would be approximately [removed: 3,850,] [added: 3,900] as of December 31, [removed: 2015.][added: 2016.]

We had offices in [removed: 35] [added: 33] cities in [removed: 22] [added: 21] countries to help serve our diverse client base, with [removed: 52.2%] [added: 52.3%] of our revenues coming from clients in the Americas, [removed: 35.5%] [added: 35.2%] in Europe, the Middle East and Africa (“EMEA”) and [removed: 12.3%] [added: 12.5%] in Asia and Australia.

Our principal business model is to license annual, recurring subscriptions to our products and services for use at specified locations, often by a given number of users or for a certain volume of services, for [removed: an annual fee] [added: a fee, which is, in a majority of cases,] paid [removed: up-front.][added: up front.]

Additionally, our recurring [removed: subscriptions] [added: subscription offerings] include our managed services offering, whereby we oversee the production of risk and performance reports on behalf of our clients.

These clients commonly pay us a license [removed: fee] [added: fee, primarily in arrears,] for the use of our intellectual [removed: property] [added: property, primarily in arrears,] based on the investment product’s assets.

We also generate revenues from certain exchanges that use our indexes as the basis for futures and options contracts and pay us a license [removed: fee] [added: fee, primarily in arrears,] for the use of our intellectual property based on their volume of trades.

We also [removed: receive revenues from] [added: realize] one-time fees related to [removed: certain implementation services, historical or] customized reports, [removed: advisory] [added: historical data sets] and [removed: consulting services] [added: certain implementation] and [added: consulting services, as well as] from certain products and services that are [removed: designed for one-time usage.][added: purchased on a non-renewal basis.]

Our business is not highly capital intensive and, as such, we expect to continue to convert a high percentage of our profits into [removed: 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, including combining existing product features or data derived from our products to create new [added: products; and (c) seeking to acquire products, technologies, services and companies that will enhance, complement or expand our client base and product offerings.]

See Note 1, “Introduction And Basis Of [removed: Presentation,”] [added: Presentation—Significant Accounting Policies,”] of the Notes to the Consolidated Financial Statements included herein for [removed: further information.][added: a listing of our accounting policies.]

[removed: Key] [added: Key] Financial Metrics and [removed: Drivers][added: Drivers]

[removed: _Revenues_][added: Revenues]

“Business—Our [removed: Product] [added: Operating] Segments” above for additional details on the products and services that we offer.

Recurring subscription revenues represent fees earned from clients primarily under renewable contracts or agreements and are recognized in most cases ratably over the term of the license or service pursuant to the [added: contract terms.]

Revenues associated with [removed: the] implementation services, which are allocated based on MSCI’s best estimated sales price for such implementation services, are recognized ratably over the useful life of those services.

Non-recurring revenues primarily represent fees earned on products and services where we do not have renewal contracts and primarily include revenues for providing historical data, certain implementation [removed: services,] [added: services] and other special client requests.

Based on the nature of the services provided, non-recurring revenues are recognized upon [removed: delivery, invoicing] [added: delivery] or over the service period.

[removed: _Operating Expenses_][added: Operating Expenses]

| | • | [removed: |] Cost of revenues; |

| | • | [removed: |] Selling and marketing; |

| | • | [removed: |] Research and development (“R&D”); |

| | • | [removed: |] General and administrative (“G&A”); |

| | • | [removed: |] Amortization of intangible assets; and |

| | • | [removed: |] 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 estimate is allocated based on the type of [removed: the] effort involved.

[removed: _Cost] [added: Cost] of [removed: Revenues_][added: Revenues]

[removed: _Selling] [added: Selling] and [removed: Marketing_][added: Marketing]

[removed: _Research] [added: Research] and [removed: Development_][added: Development]

R&D expenses consists of the costs to develop new or enhance existing products and the costs to develop new or improved technology and service platforms for the delivery of our products and services and primarily includes the costs of application development, [added: quality and assurance,] research, product management, project management and the technology support associated with these efforts.

[removed: _General] [added: General] and [removed: Administrative_][added: Administrative]

Clients look to us for an integrated view of the drivers of risk and return in their portfolios, broad and deep asset class coverage, quality data, an objective perspective and innovation.

The analytical content we provide through our products is enabled by applications and are the basis for the services that we provide to clients.

Fees are primarily paid in arrears after the product is delivered.

excess cash in the future.

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Adjusted EBITDA and Adjusted EBITDA expenses are believed to be meaningful measures of 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 capital spending and acquisitions that do not directly affect what management considers to be the Company’s core operating performance in the period.

Run Rate is a key operating metric and is important because an increase or decrease in our Run Rate ultimately impacts our operating revenues.

Acquisition of Insignis

On October 16, 2015, the Company completed the purchase of Insignis for $6.5 million through its subsidiary InvestorForce.

Insignis is a financial data provider, including data on positions, transactions and complex instruments such as exchange-traded futures and options, OTC swaps and foreign exchange spot and forward contracts.

Financial results for Insignis are included within the Analytics segment from the time of acquisition.

Disposition of Real Estate occupiers

On August 1, 2016, MSCI completed the sale of its Real Estate occupiers business.

The value of the disposed assets and liabilities and the resulting gain on disposal were not material to the Company.

For the year ended December 31, 2015, the Company repurchased approximately 10.7 million shares at an average price of $62.63 per share for a total value of $670.8 million pursuant to open market repurchases.

For the year ended December 31, 2016, the Company repurchased approximately 10.3 million shares at an average price of $73.71 per share for a total value of $759.4 million pursuant to open market repurchases.

The weighted average shares outstanding used to calculate our diluted earnings per share for the year ended December 31, 2016 decreased by 12.2% compared to the year ended December 31, 2015.

The decreases in both periods reflect the impact of the share repurchase programs, partially offset by the impact of restricted stock units and stock options that converted to shares.

On August 4, 2016, we completed a private offering of $500.0 million aggregate principal amount of 4.75% Senior Notes due 2026 (the “2026 Senior Notes”) and received $493.3 million, net of $6.7 million of debt issuance costs.

The annual interest expense related to these offerings for the year ended December 31, 2016 was $101.7 million.

| | | December 31, | | | | December 31, | | | | | | | | | | |

| | | 2016 | | | | 2015 | | | | Increase/(Decrease) | | | | | | |

| Operating revenues | | $ | 1,150,669 | | | $ | 1,075,013 | | | $ | 75,656 | | | | 7.0 | % |

| Cost of revenues | | | 252,107 | | | | 267,695 | | | | (15,588 | ) | | | (5.8 | %) |

| Selling and marketing | | | 166,666 | | | | 162,294 | | | | 4,372 | | | | 2.7 | % |

| Amortization of intangible assets | | | 47,033 | | | | 46,910 | | | | 123 | | | | 0.3 | % |

| Total operating expenses | | | 662,565 | | | | 671,115 | | | | (8,550 | ) | | | (1.3 | %) |

| Operating income | | | 488,104 | | | | 403,898 | | | | 84,206 | | | | 20.8 | % |

| Other expense (income), net | | | 102,166 | | | | 54,344 | | | | 47,822 | | | | 88.0 | % |

| Provision for income taxes | | | 125,083 | | | | 119,516 | | | | 5,567 | | | | 4.7 | % |

| Income from continuing operations | | | 260,855 | | | | 230,038 | | | | 30,817 | | | | 13.4 | % |

| Net income | | $ | 260,855 | | | $ | 223,648 | | | $ | 37,207 | | | | 16.6 | % |

| From continuing operations | | $ | 2.72 | | | $ | 2.11 | | | $ | 0.61 | | | | 28.9 | % |

| From discontinued operations | | | — | | | | (0.06 | ) | | | 0.06 | | | | (100.0 | %) |

| Earnings per basic common share | | $ | 2.72 | | | $ | 2.05 | | | $ | 0.67 | | | | 32.7 | % |

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products; and (c) seeking to acquire products, technologies and companies that will enhance, complement or expand our client base and product offerings.

During the years ended December 31, 2014 and 2013, we significantly invested in and expanded our operating functions and infrastructure, including additional product management, sales and client support staff and facilities in locations around the world as well as our research and our data operations and technology functions.

The purpose was to maximize our medium-term revenue and profit growth, while at the same time ensuring that MSCI would remain a leading provider of investment decision support tools into the future.

As a result, the rate of growth of our investments and expenses had, in recent years, exceeded that of our revenues, which had slowed the growth of, or even reduced, our earnings.

For example, for the year ended December 31, 2014, our revenues grew by 9.1% but our operating income decreased by 0.9% compared to the year ended December 31, 2013 due, in part, to increased investment in our business.

We completed our incremental level of investment in the year ended December 31, 2014, and have again achieved operating margin expansion for the year ended December 31, 2015.

Changes in Presentation

Effective during the year ended December 31, 2015, we changed our reportable segments to reflect certain changes made to the management of our product lines.

This presentation better aligns our financial reporting with how our products and services are offered to our clients and offers additional insight into how we manage the Company.

We previously disclosed one reportable segment.

Following the change, we began disclosing three reportable segments: Index, Analytics and All Other.

The All Other segment consists of ESG and Real Estate.

See Note 13, “Segment Information,” of the Notes to the Consolidated Financial Statements included herein for further information about MSCI’s reportable segments.

Effective during the year ended December 31, 2015, we changed our presentation of operating expenses in order to provide more transparency into our underlying cost base, consistent with how we manage the Company.

Prior to the change, operating expenses were grouped and presented as cost of services and selling, general and administrative.

The previously issued financial information has been recast to conform to the current presentation.

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contract terms.

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The intangible assets have remaining useful lives ranging from one to 20 years.

The Company believes the Adjusted EBITDA and Adjusted EBITDA expenses measures are important in highlighting trends because these measures exclude costs that are more fixed from period to period.

In addition, these measures provide more comparability between the historical operating results and recent operating results that reflect changes due to acquisitions, investments and capital structure.

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in which companies operate and capital investments.

See Note 1, “Introduction And Basis Of Presentation—_Significant Accounting Policies,_” of the Notes to the Consolidated Financial Statements included herein for a listing of our accounting policies.

_Acquisition of GMI Ratings_

On August 11, 2014, we completed the acquisition of GMI Ratings for $15.5 million through our subsidiary MSCI ESG Research Inc. GMI Ratings is a provider of corporate governance research and ratings on over 6,000 companies worldwide.

Clients of GMI Ratings include leading institutional investors, banks, insurers, auditors, regulators and corporations seeking to incorporate ESG factors into risk assessment and decision-making.

We utilized $200.0 million of the repurchase authority through December 31, 2013.

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On February 6, 2014, we utilized the remaining $100.0 million repurchase authorization provided by the 2012 Repurchase Program by entering into an ASR agreement to initiate share repurchases aggregating $100.0 million (the “February 2014 ASR Agreement”).

Through December 31, 2015, we paid $670.8 million to receive approximately 10.7 million shares of our common stock on the open market as part of the 2014 Repurchase Program and the 2015 Repurchase Program.

[removed: _Foreign] [added: Foreign] Currency [removed: Risk_][added: Risk]

For the years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014, 17.8%] [added: 2015, 16.9%] and [removed: 20.2%,] [added: 17.8%,] respectively, of our revenues are subject to foreign currency exchange rate risk and primarily includes clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities.

Of the 17.8% of [removed: non-U.S] [added: non-U.S.] dollar exposure for the year ended December 31, 2015, 37.0% was in British pounds sterling, 35.8% was in Euros and 21.6% was in Japanese yen.

Of the [removed: 20.2%] [added: 16.9%] of [removed: non-U.S] [added: non-U.S.] dollar exposure for the year ended December 31, [removed: 2014, 38.3% was in Euros, 34.0%] [added: 2016, 35.5%] was in British pounds [removed: sterling] [added: sterling, 34.4% was in Euros] and [removed: 21.7%] [added: 24.9%] was in Japanese yen.

Revenues from index-linked investment products represented [removed: 18.4%] [added: 18.3%] and [removed: 17.8%] [added: 18.4%] of operating revenues for the years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively.

Approximately [removed: 41.3%] [added: 38.3%] and [removed: 43.1%] [added: 41.3%] of our operating [removed: expenses, including operating expense attributable to income (loss) from discontinued operations, net of income taxes,] [added: expenses] for the years ended December 31, [removed: 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Swiss francs, [removed: Euros,] Hungarian forints, Hong Kong dollars, [removed: Chinese yuan and] [added: Euros,] Mexican [removed: pesos.][added: pesos and Chinese yuan.]

The objective of the derivative instruments is to minimize the [added: impact on the] income statement [removed: impact associated with] [added: of the volatility of] amounts denominated in certain foreign currencies.

We recognized total foreign currency exchange losses of [removed: $2.2] [added: $0.2] million, [removed: $3.0] [added: $2.2] million and [removed: $2.4] [added: $3.0] million for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013,] [added: 2014,] respectively.

For all operations outside the U.S. where the Company has designated the local non-U.S. dollar currency as the functional currency, revenue and expenses are translated using average monthly exchange rates and assets and liabilities are translated into U.S. dollars using month-end exchange rates.

For these operations, currency translation adjustments arising from a change in the rate of exchange between the functional currency and the U.S. dollar are accumulated in a separate component of shareholders’ equity.

In addition, transaction gains and losses arising from a change in exchange rates for transactions denominated in a currency other than the functional currency of the entity are reflected in non-operating “Other expense (income), net” in our Consolidated Statement of Income.

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[removed: Overview][added: Overview]

[removed: MSCI offers content, applications] [added: We offer products] and services to support the needs of institutional investors throughout their investment processes.

[removed: MSCI] [added: Our] clients include asset owners (pension funds, endowments, foundations, central banks, [added: sovereign wealth funds,] family offices and insurance companies), asset management firms (mutual funds, hedge funds, providers of exchange-traded funds (“ETFs”)), private wealth [removed: managers] [added: managers, real estate investment trusts] and financial intermediaries (banks, broker-dealers, exchanges, custodians, trust companies and investment consultants).

Equity factor investing was pioneered in the 1970s based on research, data and analytics developed by Barra – part of [removed: MSCI] [added: our company] since 2004.

Clients use our [removed: content] [added: products] and [removed: applications] [added: services] to help construct portfolios and allocate assets.

Our analytical tools [added: and content] help [removed: them] [added: clients] measure and manage risk across all major asset classes.

Our powerful computational and reporting [removed: engine] [added: platform] can process large multi-asset class portfolios on an intra-day basis.

We offer clients the flexibility to tailor [removed: MSCI] [added: our] products and services and integrate them into their own workflows.

[removed: Primary] [added: Primary] Uses of [removed: MSCI] [added: Our] Products and [removed: Services][added: Services]

Institutional investors use [removed: MSCI’s] [added: our] offerings to achieve a wide range of objectives.

[removed: _Benchmarking_—Institutional] [added: Benchmarking —Institutional] investors worldwide use [added: our] indexes [removed: from MSCI] to evaluate the performance of their funds.

[removed: MSCI] [added: Our] indexes are among the most widely used benchmarks for multi-country passive and active equity strategies worldwide.

[removed: _Index-linked] [added: Index-linked] product [removed: creation_—MSCI] [added: creation —Our] indexes are used as the basis for products such as ETFs.

[removed: MSCI is] [added: We are] a leading provider of equity indexes to the [removed: equity] ETF industry, with approximately [removed: 800] [added: 900] ETFs based on [removed: MSCI] [added: our] equity indexes listed around the world.

[removed: _Portfolio construction_—Asset] [added: Portfolio construction —Asset] managers use our research, data and multi-asset class and multi-currency models to help build portfolios and allocate assets.

Asset managers also construct portfolios by replicating or tracking [removed: MSCI] [added: our] indexes.

[removed: _Risk management_—MSCI’s tools] [added: Risk management —Our products and services] for statistical analysis provide clients with a broad range of risk calculations on a daily [removed: and weekly] basis.

We offer an extensive library of stress testing scenarios [added: and a suite of stress testing tools] that enable clients to design and run stress tests that reflect their own investment [removed: parameters.][added: views.]

[removed: _ESG integration_—MSCI] ESG [added: integration —MSCI ESG] Research provides in-depth ratings and analysis of ESG-related business practices of thousands of companies worldwide.

[removed: _Performance attribution_—MSCI offers] [added: Performance attribution —We offer] a suite of performance attribution models with which to analyze the sources of portfolio performance on an absolute or relative [removed: basis.][added: basis, including a platform that helps analyze the strengths and weaknesses of a real estate portfolio’s performance relative to its benchmark.]

Our [removed: tools] [added: products] are multi-asset class and multi-currency, and we collect market and [removed: asset] [added: portfolio] data daily.

[removed: _Regulatory reporting_—We] [added: Regulatory reporting —Our products] help institutional investors comply with regulatory reporting requirements around the world.

[removed: Our] [added: Our] Business [removed: Model][added: Model]

Our principal business model is to license annual, recurring subscriptions to our products and services for [removed: an annual] [added: a] fee, [added: which is, in a majority of cases,] paid [removed: up-front.][added: in advance.]

Recurring [removed: subscriptions] [added: subscription offerings] include [removed: MSCI’s] [added: our] managed services offering, whereby we oversee the production of risk and performance reports on behalf of clients.

We also [removed: derive revenue from] [added: charge] clients [removed: who] [added: to] 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 [removed: fee] [added: fee, primarily in arrears,] for the use of our intellectual property [added: primarily] based on the assets under management (“AUM”) in their investment product.

Certain exchanges use our indexes as the basis for futures and options contracts and pay us a license [removed: fee] [added: fee, primarily paid in arrears,] for the use of our intellectual property [added: primarily] based on their volume of trades.

We also realize one-time fees related to customized reports, historical data [removed: sets,] [added: sets] and certain implementation and consulting services, as well as from certain products and services that are purchased on a non-renewal basis.

Revenues for the year ended December 31, [removed: 2015] [added: 2016] totaled [removed: $1,075.0] [added: $1,150.7] million, up [removed: 7.9%] [added: 7.0%] from the prior year period.

Sources of revenue consisted of [removed: $857.5] [added: $913.7] million in recurring subscriptions, [removed: $198.0] [added: $210.2] million in revenue from asset-based fees, and [removed: $19.5] [added: $26.8] million in non-recurring revenue.

[removed: Our Product Segments][added: Our Operating Segments]

[removed: MSCI operates] [added: We operate] in four segments: Index, Analytics, ESG and Real Estate.

Because the [removed: operating segments of] ESG and Real Estate [added: operating segments] do not meet segment disclosure reporting thresholds, ESG and Real Estate are combined and presented as part of the All Other segment for reporting purposes.

See Note [removed: 1, “Introduction and Basis of Presentation,” and Note] 13, “Segment Information,” of the Notes to Consolidated Financial [removed: Statements] [added: Statements,] included [removed: herein] [added: herein,] for additional information on our current segment reporting structure.

The following table presents operating [removed: revenue] [added: revenues] and Adjusted EBITDA by reportable segment for the year ended December 31, [removed: 2015:][added: 2016:]

| | | [removed: Year] [added: Year] Ended December 31, [removed: 2015] [added: 2016] | | | | | | | | | | | | | | | [added: |]

| | | [removed: Operating Revenues] [added: Operating] | | | | [removed: Percentage] [added: Percentage] of [removed: total (%)] | | | | [removed: Adjusted EBITDA(1)] | [added: Adjusted] | | | [removed: Percentage] [added: | Percentage] of [removed: total (%)] | | |

[removed: _Index Segment_][added: Index Segment]

[removed: MSCI’s] [added: Our] 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 analytical content we provide through our products is enabled by applications and are the basis for the services that we provide to clients.

Our Real Estate offerings include risk analytics for a variety of sectors, including residential and retail properties.

Fees are primarily paid in arrears after the product is delivered.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.”

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| (in thousands) | | Revenues | | | | Total | | | | | EBITDA (1) | | | | Total | | |

| Index | | $ | 613,551 | | | | 53.3 | % | | | $ | 431,478 | | | | 75.8 | % |

| Analytics | | | 448,353 | | | | 39.0 | % | | | | 128,507 | | | | 22.6 | % |

| All Other | | | 88,765 | | | | 7.7 | % | | | | 9,472 | | | | 1.7 | % |

| Total | | $ | 1,150,669 | | | | 100.0 | % | | | $ | 569,457 | | | | 100.0 | % |

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| | | constraints. They can be used for back-testing strategies or developing specialized investment products, minimizing portfolio tracking error and constructing index-linked products. |

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| | • | MSCI ACWI Sustainable Impact Index that aims to identify companies that derive revenues from products and services that address environmental and social challenges aligned with the Sustainable Development Goals adopted by the United Nations; |

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| | • | Socially Responsible Investment (“SRI”) Indexes that exclude companies based on certain values, norms or ethical standards; |

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| | • | Environmental Indexes, including Low Carbon Indexes, Fossil Fuels Exclusion Indexes and benchmarks that represent the markets for renewable energy and clean technology; and |

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| | • | custom indexes based on client-defined ESG specifications. |

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We also continue to enhance and expand successful product offerings, as evidenced by the launch of new indexes (e.g., the MSCI WMA Private Investor Index Series, MSCI Governance-Quality Indexes, MSCI Women’s Leadership Indexes, MSCI Sustainable Impact Index, and MSCI Human & Physical Investment Index) to be used as the basis for ETFs and other financial products.

Analytics offers products and services that assist institutional investors with portfolio construction, risk management, performance attribution and regulatory reporting.

| | • | RiskMetrics RiskManager. We believe that RiskMetrics RiskManager is an industry leader in VaR simulation, stress testing and single security analytics. Clients use RiskManager for daily analysis, measuring and monitoring of market and liquidity risk at fund and firm levels, sensitivity and stress |

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This segment structure reflects a change that we made to our reportable and operating segments during the year ended December 31, 2015 to better align our financial reporting with how our products and services are offered to our clients, as well as to offer additional insight into how the Company is being managed.

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| | | (in thousands) | | | | | | | | | | | | | | |

| Index | | $ | 558,964 | | | | 52.0 | % | | $ | 392,987 | | | | 81.6 | % |

| Analytics | | | 433,424 | | | | 40.3 | % | | | 95,468 | | | | 19.8 | % |

| All Other | | | 82,625 | | | | 7.7 | % | | | (6,758 | ) | | | (1.4 | %) |

| | | | | | | | | | | | | | | | | |

| Total | | $ | 1,075,013 | | | | 100.0 | % | | $ | 481,697 | | | | 100.0 | % |

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MSCI’s global equity indexes are designed to measure returns across a wide variety of equity markets (_e.g._, Europe, Japan, USA, emerging markets), sizes (_e.g._, small and large capitalization), styles (_e.g._, growth, value), industries (_e.g._, banks, media), strategies (_e.g_., active, passive, factors) and themes (_e.g.,_ economic exposure).

MSCI-branded ESG indexes are designed to help clients incorporate ESG considerations into their investment processes.

MSCI’s real estate indexes are designed to measure the performance and risk indicators of our clients against their peers.

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| | offer GICS Direct, a joint product of MSCI and Standard & Poor’s. GICS Direct is a database comprising over 44,000 active companies and more than 54,000 securities classified by sector, industry group, industry and sub-industry in accordance with the proprietary GICS methodology. |

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MSCI’s Analytics platform includes Barra multi-factor models; pricing models; methodologies for performance attribution; RiskMetrics models for statistical analysis, such as VaR; and tools for security analysis, portfolio optimization, back testing and stress testing.

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MSCI’s ESG products offer research and ratings that enable institutional investors to assess risks and opportunities arising from ESG issues, as well as evaluate both individual securities and investment portfolios.

Therefore, it is possible that our business, operating results, financial condition or cash flows in a particular period could be materially adversely affected [added: by certain contingencies.]

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by certain contingencies.

[removed: 10-K 1 d20757d10k.htm] FORM 10-K

[removed: ##### [Table of Contents](#toc)][added: TABLE OF CONTENTS]

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM 10-K]

[removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR [removed: 15(d)][added: 15(d)]

[removed: OF] [added: OF] THE SECURITIES EXCHANGE ACT OF [removed: 1934][added: 1934]

[removed: For] [added: For] the fiscal year ended December 31, [removed: 2015][added: 2016]

[removed: Commission] [added: Commission] file number [removed: 001-33812][added: 001-33812]

[removed: MSCI INC.][added: MSCI INC.]

[removed: (Exact] [added: (Exact] Name of Registrant as Specified in Its [removed: Charter)][added: Charter)]

| [removed: Delaware] [added: Delaware] | | [removed: 13-4038723] [added: 13-4038723] |

| [removed: (State] [added: (State] or Other Jurisdiction [removed: of Incorporation] [added: of Incorporation] or [removed: Organization)] [added: Organization)] | | [removed: (I.R.S. Employer Identification Number)] [added: (I.R.S. Employer Identification Number)] |

[removed: 7] [added: 7] World Trade [removed: Center][added: Center]

[removed: 250] [added: 250] Greenwich Street, 49th [removed: Floor][added: Floor]

[removed: New] [added: New] York, New York [removed: 10007][added: 10007]

[removed: (Address] [added: (Address] of Principal Executive Offices, zip [removed: code)][added: code)]

[removed: (212) 804-3900][added: (212) 804-3900]

[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | | [removed: Name] [added: Name] of Each Exchange on Which [removed: Registered] [added: Registered] |

| [removed: Common] [added: Common] stock, par value $0.01 per [removed: share] [added: share] | | [removed: New] [added: New] York Stock [removed: Exchange] [added: Exchange] |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the Act: [removed: None][added: None]

YES [removed: x] [added: ☒] NO [removed: ¨][added: ☐]

YES [removed: ¨] [added: ☐] NO [removed: x][added: ☒]

YES [removed: x] [added: ☒] NO [removed: ¨][added: ☐]

YES [removed: x] [added: ☒] NO [removed: ¨][added: ☐]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [removed: x]

| Large accelerated filer | | [removed: x] [added: ☒] | | Accelerated filer | | [removed: ¨] [added: ☐] |

| Non-accelerated filer | | [removed: ¨] [added: ☐] (Do not check if a smaller reporting company) | | Smaller Reporting Company | | [removed: ¨] [added: ☐] |

YES [removed: ¨] [added: ☐] NO [removed: x][added: ☒]

The aggregate market value of Common Stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter (based on the closing price of these securities as reported by The New York Stock Exchange on June 30, [removed: 2015)] [added: 2016)] was [removed: $6,693,433,307.][added: $7,080,925,883.]

As of February [removed: 19, 2016,] [added: 17, 2017,] there were [removed: 98,786,211] [added: 90,545,374] shares of the registrant’s Common Stock, par value $0.01 per share, outstanding.

Documents incorporated by reference: Portions of the registrant’s proxy statement for its annual meeting of stockholders, to be held on [removed: April 28, 2016,] [added: May 11, 2017,] are incorporated herein by reference into Part III of this Form 10-K.

[removed: MSCI INC.][added: MSCI INC.]

[removed: FOR] [added: FOR] THE YEAR ENDED DECEMBER 31, [removed: 2015][added: 2016]

| [removed: [PART I](#toc20757_21) | |] [added: [PART I](#PART_I)] | | | | [removed: [](#toc20757_21)] |

| Item 1. | | [removed: [Business](#toc20757_1) |] [added: [Business](#ITEM_1_BUSINESS)] | | 1 | [removed: |]

| Item 1A. | | [Risk [removed: Factors](#toc20757_2) | |] [added: Factors](#ITEM_1A_RISK_FACTORS)] | [removed: 19] | [added: 18] |

10-K 1 msci-10k_20161231.htm 10-K

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| | | | | |

| Item 16. | | [Form 10-K Summary](#ITEM_16_FORM_10K_SUMMARY) | | 86 |

| | | |

| | | |

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| | | | | | | |

##### [Table of Contents](#toc)

FORM 10-K

TABLE OF CONTENTS

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##### [Table of Contents](#toc)

As of December 31, [removed: 2015,] [added: 2016,] our principal offices consisted of the following leased properties:

| [removed: Location] [added: Location] | | [removed: Square Feet] [added: Square Feet] | | | | [removed: Number of Offices] [added: Offices] | | | | [removed: Expiration Date] [added: Expiration Date] |

| London, England | | | [removed: 32,365] [added: 30,519] | | | | 1 | | | December [removed: 25,] [added: 26,] 2026 |

As of December 31, [removed: 2015,] [added: 2016,] we also leased and occupied offices in the following locations: [added: Hong Kong, China; Chicago, Illinois;] San Francisco, California; [removed: Chicago, Illinois; Hong Kong,] [added: Beijing,] China; Frankfurt, Germany; Paris, France; [removed: Shanghai, China;] Sydney, Australia; Tokyo, Japan; Ann Arbor, Michigan; Portland, Maine; Toronto, Canada; [added: Shanghai, China;] Singapore; Amsterdam, Netherlands; [removed: Johannesburg, South Africa;] [added: Seoul, Korea;] Gaithersburg, Maryland; Cape Town, South Africa; [removed: Milan, Italy;] Stockholm, Sweden; Sao Paolo, Brazil; [added: and] Dubai, United Arab [removed: Emirates; Seoul, Korea; Taipei, Taiwan; and Santiago, Chile.][added: Emirates.]

| | | | | | | Number of | | | | |

| | | | | | | | | | | |

| Beijing, China | | | 10,757 | | | | 1 | | | December 31, 2016 |

[removed: PART II][added: PART II]

##### [Table of Contents](#toc)

[removed: Stock] [added: Stock] Price and [removed: Dividends][added: Dividends]

Our common stock has traded on the New York Stock Exchange since November 15, 2007 and trades under the symbol “MSCI.” As of February [removed: 19, 2016,] [added: 17, 2017,] there were [removed: 146] [added: 136] shareholders of record of our common stock.

The following table presents the high and low closing [removed: sales] prices per share and cash dividends declared and distributed per share of our common stock from January 1, [removed: 2014] [added: 2015] through December 31, [removed: 2015.][added: 2016.]

| [removed: Years Ended] [added: Years Ended] | | [removed: High] [added: High] | | | | [removed: Low] [added: Low] | | | | [removed: Dividends] [added: Dividends] per Share of Common [removed: Stock] [added: Stock] | | |

| [removed: December] [added: December] 31, [removed: 2015] [added: 2015] | | | | | | | | | | | | |

| [removed: December] [added: | | December] 31, [removed: 2014] | | | | [added: December 31,] | | | | [added: December 31,] | | | | [added: December 31,] | [added: | | | December 31, | | | | December 31, | | |]

On February [removed: 19, 2016,] [added: 17, 2017,] the per share closing price of our common stock on the New York Stock Exchange was [removed: $71.55.][added: $94.27.]

[removed: _Dividend Policy_][added: Dividend Policy]

On February [removed: 2, 2016,] [added: 1, 2017,] our Board of Directors declared our [removed: next quarterly] [added: first quarter] cash dividend, in an amount of [removed: $0.22] [added: $0.28] per share of common stock, to be paid on March [removed: 11, 2016] [added: 15, 2017] to shareholders of record as of the close of trading on February [removed: 19, 2016.][added: 17, 2017.]

[removed: Equity] [added: Equity] Compensation [removed: Plans][added: Plans]

Under the [removed: IDECP, the] [added: Directors Plan,] directors that are not employees of the Company receive annual Board retainer fees and fees for serving on the Company’s committees, if applicable, and pursuant to the terms of the [removed: IDECP,] [added: Directors Plan,] a director may make an election to receive all or any portion of such director’s retainer and committee fees in shares of our common [removed: stock.][added: stock in lieu of cash.]

[removed: Directors who are not employees of the Company] [added: Non-employee directors] are entitled to receive an annual grant of $140,000 each in stock units and the lead director is entitled to an additional $25,000 in stock units, which are typically subject to a one-year vesting schedule.

Under the MSCI Inc. [removed: Director] [added: Non-Employee Directors] Deferral Plan, directors may elect to defer receipt of all or any portion of any shares of our common stock issuable upon conversion of any stock unit or any retainer elected to be paid in shares of our common stock until (i) 60 days following separation of service or (ii) the earlier of a specified date or 60 days [added: following separation of service.]

On February 18, 2016, the Board of Directors, upon the recommendation of the Compensation Committee, approved the MSCI Inc. 2016 Non-Employee [removed: Director Equity] [added: Directors] Compensation Plan (the [removed: “2016 Director] [added: “Directors] Plan”), a new cash and equity incentive compensation plan that [removed: the Company will propose for approval] [added: was approved by shareholders] at the Company’s 2016 annual meeting of shareholders.

[removed: On April 9, 2008, our shareholders approved] [added: The Omnibus Plan replaced] the [added: Company’s existing equity compensation plan—the] MSCI [added: Inc.] Amended and Restated 2007 Equity Incentive Compensation Plan (as [removed: further] amended, the [removed: “MSCI EICP”) and the MSCI Inc. Performance Formula and Incentive Plan (the “Performance] [added: “2007] Plan”).

The [removed: MSCI EICP] [added: Omnibus Plan] permits the Compensation Committee to make grants of a variety of equity based awards (such as [removed: stock,] [added: stock options, stock appreciation rights,] restricted [removed: stock,] stock [removed: units] [added: units, restricted stock, performance awards] and [removed: options)] [added: other stock-based awards)] totaling up to [removed: 12,500,000 shares] [added: 7,565,483 and other cash-based awards] to eligible recipients, including employees and consultants.

On February 18, 2016, the Board of Directors, upon the recommendation of the Compensation Committee, approved the MSCI Inc. 2016 Omnibus Plan (“Omnibus Plan”), a new equity incentive compensation plan that [removed: the Company will propose for approval] [added: was approved by shareholders] at the Company’s 2016 annual meeting of shareholders.

Pursuant to the Omnibus Plan, the Company [removed: will reserve additional] [added: reserved 7,565,483] shares of common stock for [removed: issuance (resulting in an expected aggregate reserve of 7.5 million shares (inclusive of the share reserve remaining under the MSCI EICP); _plus_] [added: issuance; plus] any additional shares which become available due to forfeiture, expiration or cancellation of outstanding awards, [removed: as described in Note 1, “Introduction and Basis of Presentation,” of the Notes to Consolidated Financial Statements included herein),] which [removed: will be] [added: were] registered under the Securities Act [removed: if the plan is approved] [added: following approval] by the Company’s shareholders.

This is in addition to currently outstanding awards under the [removed: MSCI EICP.][added: 2007 Plan.]

The following table presents certain information with respect to our equity compensation plans at December 31, [removed: 2015:][added: 2016:]

| | | [removed: Number] [added: Number] of Securities to be Issued Upon Vesting of Restricted Stock Units and Exercise of Outstanding [removed: Options a] [added: Options a] | | | | [removed: Weighted] [added: Weighted] Average Unit Award Value of Restricted Stock Units and [removed: Weighted-Average] [added: Weighted \-Average] Exercise Price of Outstanding [removed: Options b] [added: Options b] | | | | [removed: Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans] [added: Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans] (excluding securities reflected in column [removed: (a)) c] [added: (a)) c] | | |

| [removed: _Equity] [added: Equity] Compensation Plans Approved by Security [removed: Holders_] [added: Holders] | | | | | | | | | | | | |

| MSCI Amended and Restated 2007 Equity Incentive [removed: Compensation Plan] | | | [removed: 1,259,124] | | | [removed: $] | [removed: 43.71] | | | | [removed: 6,372,957] | |

| RiskMetrics Group, Inc. 2007 Omnibus Incentive Compensation Plan | | | [removed: 196,210] [added: 165,902] | | | $ | 22.22 | | | | — | |

[removed: Stock Repurchases][added: Stock Repurchases]

Share repurchases made pursuant to the [removed: 2015] [added: 2016] Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions.

The following table provides information with respect to purchases made by or on behalf of the Company of its common stock during the quarter ended December 31, [removed: 2015.][added: 2016.]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

| [removed: Period] [added: Period] | | [removed: Total Number of] [added: Total Number of] Shares Purchased [removed: (1)] [added: (1)] | | | | [removed: Average Price] [added: Average Price] Paid Per [removed: Share] [added: Share] | | | | [removed: Total] [added: Total] Number of Shares Purchased As Part of Publicly Announced Plans or [removed: Programs] [added: Programs] | | | | [removed: Approximate] [added: Approximate] Dollar Value of Shares [removed: that May] [added: that May] Yet [removed: Be Purchased Under the Plans] [added: Be Purchased Under the Plans] or Programs [removed: (2)] [added: (2)] | | |

| (1) | Includes (i) shares [added: purchased by the Company in the open market; (ii) shares] withheld to satisfy tax withholding obligations on behalf of employees [removed: that occur upon] [added: in connection with the] vesting and delivery of outstanding shares underlying restricted stock units; [removed: (ii)] [added: (iii)] shares withheld to satisfy tax withholding obligations [added: on behalf of employees in connection with the vesting] and [added: delivery of outstanding shares underlying performance stock units; (iv) shares withheld to satisfy tax withholding obligations and] exercise price on behalf of employees [removed: that occur upon] [added: in connection with the] exercise and delivery of outstanding shares underlying stock options; and [removed: (iii)] [added: (v)] shares held in treasury under the MSCI Inc. [removed: Director] [added: Non-Employee Directors] Deferral Plan. The value of the shares withheld were 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 [removed: 2014] [added: 2016] Repurchase Program. |

| (2) | See Note [removed: 10,] [added: 8,] “Shareholders’ Equity” of the Notes to the Consolidated Financial Statements included herein for further information regarding our stock repurchase programs. |

[removed: Recent] [added: Recent] Sales of Unregistered [removed: Securities][added: Securities]

The Company has issued an aggregate [removed: principal] [added: principle] amount of [removed: $1.6] [added: $2.1] billion in senior unsecured notes [added: (collectively, the “Senior Notes”)] in [removed: two] [added: three] discrete private [removed: placements, each] [added: offerings] in the [removed: amount] [added: amounts] of $800.0 million, [added: $800.0 million and $500.0 million,] to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.

The Company completed its offering of the [added: 2026 Senior Notes on August 4, 2016, the] 2025 Senior Notes on August 13, 2015 and its offering of the 2024 Senior Notes on November 20, 2014.

There were no unregistered sales of equity securities in the year ended December 31, [removed: 2015.][added: 2016.]

[removed: Use] [added: Use] of Proceeds from Sale of Registered [removed: Securities][added: Securities]

[removed: FIVE-YEAR] [added: FIVE-YEAR] STOCK PERFORMANCE [removed: GRAPH][added: GRAPH]

The following graph compares the cumulative total shareholders’ return on our common stock, the Standard & Poor’s 500 Stock Index and the NYSE Composite Index since December 31, [removed: 2010] [added: 2011] assuming an investment of $100 at the closing price on December 31, [removed: 2010.][added: 2011.]

[removed: ][added: ]

[removed: Total] [added: Total] Investment [removed: Value][added: Value]

| December 31, 2016 | | | | | | | | | | | | |

| First Quarter | | $ | 74.08 | | | $ | 63.16 | | | $ | 0.22 | |

| Second Quarter | | $ | 79.79 | | | $ | 71.86 | | | $ | 0.22 | |

| Third Quarter | | $ | 90.12 | | | $ | 76.78 | | | $ | 0.28 | |

| Fourth Quarter | | $ | 83.51 | | | $ | 77.14 | | | $ | 0.28 | |

The Directors Plan replaced the Company’s then existing non-employee director compensation plan—the MSCI Inc. Independent Directors’ Equity Compensation Plan (the “2011 Plan”).

The total number of shares authorized to be awarded under the Directors Plan is 352,460, which is equal to the number of shares that remained available for issuance under the 2011 Plan.

Compensation paid to the Company’s executive officers historically complied with the performance-based compensation exception under 162(m) of the IRC (“162(m)”) by being granted pursuant to the MSCI Inc. Performance Formula and Incentive Plan (the “Performance Plan”).

Shareholder approval of the Omnibus Plan constituted approval of the material terms of the performance goals under the Omnibus Plan for purposes of 162(m).

No awards will be granted under the Omnibus Plan after the earliest to occur of (i) April 28, 2026, (ii) the maximum number of shares available for issuance having been issued and (iii) the Board of Directors terminating the Omnibus Plan in accordance with its terms.

| Equity Compensation Plans Not Approved by Security Holders | | | — | | | | — | | | | — | |

| Compensation Plan | | | 1,288,660 | | | $ | 55.76 | | | | — | |

| MSCI Inc. 2016 Omnibus Plan | | | 303,790 | | | $ | 74.79 | | | | 7,261,273 | |

| MSCI Inc. 2016 Non-Employee Directors Compensation Plan | | | 18,657 | | | $ | 76.36 | | | | 330,948 | |

| Total | | | 1,777,009 | | | $ | 56.10 | | | | 7,592,221 | |

On October 26, 2016, the Board of Directors approved an additional stock repurchase program authorizing the purchase of up to $750.0 million worth of shares of our common stock (together with the $330.3 million remaining authorization under the 2015 Repurchase Program, the “2016 Repurchase Program”).

For the year ended December 31, 2016, the Company repurchased approximately 10.3 million shares at an average price of $73.71 per share for a total value of $759.4 million pursuant to open market repurchases under the 2015 Repurchase Program and the 2016 Repurchase Program.

| Month #1 (October 1, 2016-October 31, 2016) | | | 794,092 | | | $ | 82.27 | | | | 793,777 | | | $ | 1,080,255,000 | |

| Month #2 (November 1, 2016-November 30, 2016) | | | 1,472,756 | | | $ | 79.81 | | | | 1,472,168 | | | $ | 962,771,000 | |

| Month #3 (December 1, 2016-December 31, 2016) | | | 1,167,609 | | | $ | 79.50 | | | | 1,167,609 | | | $ | 869,959,000 | |

| Total | | | 3,434,457 | | | $ | 80.27 | | | | 3,433,554 | | | $ | 869,959,000 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| MSCI Inc. | | $ | 246 | | | $ | 222 | | | $ | 145 | | | $ | 133 | | | $ | 94 | | | $ | 100 | |

| S&P 500 | | $ | 198 | | | $ | 177 | | | $ | 175 | | | $ | 154 | | | $ | 116 | | | $ | 100 | |

| NYSE Composite Index | | $ | 168 | | | $ | 150 | | | $ | 156 | | | $ | 146 | | | $ | 116 | | | $ | 100 | |

| --- | --- |

| | | | | | | | | | | | | |

| | | | | | | | | | | | | |

| | | | | | | | | | | | | |

| First Quarter | | $ | 46.27 | | | $ | 40.28 | | | $ | — | |

| Second Quarter | | $ | 45.85 | | | $ | 40.54 | | | $ | — | |

| Third Quarter | | $ | 48.98 | | | $ | 43.90 | | | $ | — | |

| Fourth Quarter | | $ | 48.92 | | | $ | 42.20 | | | $ | 0.18 | |

On November 2, 2007 and November 5, 2007, our shareholders and Board of Directors approved, respectively, the implementation of the MSCI Independent Directors’ Equity Compensation Plan (as amended and restated on January 12, 2011, the “IDECP”).

##### [Table of Contents](#toc)

following separation of service.

The total number of shares authorized to be awarded under the plan is 500,000.

The Company does not expect to reserve any additional shares of common stock for issuance in connection with the 2016 Director Plan.

On November 2, 2007 and November 5, 2007, our shareholders and Board of Directors approved, respectively, the implementation of the MSCI 2007 Equity Incentive Compensation Plan.

No awards are permitted to be granted under this plan after April 9, 2018.

| | | | | | | | | | | | | |

| MSCI Independent Directors’ Equity Compensation Plan(1) | | | 42,229 | | | $ | 52.20 | | | | 352,564 | |

| RiskMetrics Group, Inc. 2000 Stock Option Plan | | | — | | | $ | — | | | | — | |

| RiskMetrics Group, Inc. 2004 Stock Option Plan | | | 62,689 | | | $ | 19.72 | | | | — | |

| | | | | | | | | | | | | |

| Total | | | 1,560,252 | | | $ | 40.27 | | | | 6,725,521 | |

| (1) | The MSCI Independent Directors’ Equity Compensation Plan does not authorize the issuance of options to purchase MSCI common stock. |

##### [Table of Contents](#toc)

On December 13, 2012, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $300.0 million worth of shares of MSCI’s common stock beginning immediately and continuing through December 31, 2014 (the “2012 Repurchase Program”).

Prior to 2014, the Company repurchased an aggregate of $200.0 million worth of shares of MSCI’s common stock through multiple accelerated share repurchase (“ASR”) agreements under the 2012 Repurchase Program.

On February 6, 2014, MSCI utilized the remaining $100.0 million repurchase authorization provided by the 2012 Repurchase Program.

On February 4, 2014, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $300.0 million worth of shares of MSCI’s common stock, which was increased to $850.0 million on September 17, 2014 (the “2014 Repurchase Program”).

On October 14, 2015, the Company exhausted the $850.0 million share repurchase authorization under the 2014 Repurchase Program.

On September 18, 2014, as part of the 2014 Repurchase Program, the Company entered into an ASR agreement to initiate share repurchases aggregating $300.0 million (the “September 2014 ASR Agreement”).

As a result of the September 2014 ASR Agreement, the Company received approximately 4.5 million shares of MSCI’s common stock on September 19, 2014 and approximately 1.2 million shares of MSCI’s common stock on May 21, 2015 for a combined average price of $52.79 per share.

On June 2, 2015, the Company began purchasing shares of its common stock on the open market in accordance with SEC Rule 10b5-1.

Through December 31, 2015, the Company paid $670.8 million to receive approximately 10.7 million shares of MSCI’s common stock on the open market as part of both the 2014 Repurchase Program and the 2015 Repurchase Program.

Pursuant to the 2014 Repurchase Program and the 2015 Repurchase Program, as of December 31, 2015, the Company purchased a total of 16.4 million shares of MSCI’s common stock for an average purchase price of $59.22 per share.

Since September 2014 and through December 31, 2015, approximately $1.1 billion was returned through share repurchases and cash dividends and a total of $1.4 billion was returned to shareholders since 2012.

##### [Table of Contents](#toc)

| | | | | | | | | | | | | | | | | |

| Month #1 (October 1, 2015-October 31, 2015) | | | 2,273,483 | | | $ | 59.29 | | | | 2,269,186 | | | $ | 1,000,000,000 | |

| Month #2 (November 1, 2015-November 30, 2015) | | | 695,301 | | | $ | 68.33 | | | | 688,223 | | | $ | 952,974,000 | |

| Month #3 (December 1, 2015-December 31, 2015) | | | 1,047,474 | | | $ | 70.44 | | | | 1,046,354 | | | $ | 879,283,000 | |

| | | | | | | | | | | | | | | | | |

The selected Consolidated Statement of Income data for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] and the selected Consolidated Statement of Financial Condition data as of December 31, [removed: 2015] [added: 2016] and [removed: 2014] [added: 2015] are derived from our audited consolidated financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Our consolidated financial statements for the years ended December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] have been audited and reported upon by an independent registered public accounting firm in each period.

[removed: The selected Consolidated] Statement of Income data for the years ended December 31, [removed: 2012] [added: 2013] and [removed: 2011] [added: 2012] and the selected Consolidated Statement of Financial Condition data as of December 31, [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2011] [added: 2012] are derived from our audited consolidated financial statements not included in this Annual Report on Form 10-K.

| | | [removed: As] [added: As] of or For the [removed: Years Ended] | | | | | | | | | | | | | | | | | | |

| | | [removed: December 31, 2015 (1)] | [added: 2016] | | | [removed: December 31, 2014 (2)] [added: 2015 (1)] | | | | [removed: December 31, 2013 (4)] [added: 2014 (2)] | | | | [removed: December 31, 2012 (5)] [added: 2013 (4)] | | | | [removed: December 31, 2011] [added: 2012 (5)] | | |

| | | [removed: (in] [added: (in] thousands, except operating margin and per share [removed: data)] [added: data)] | | | | | | | | | | | | | | | | | | |

| Operating revenues | | $ | [removed: 1,075,013] [added: 1,150,669] | | | $ | [removed: 996,680] [added: 1,075,013] | | | $ | [removed: 913,364] [added: 996,680] | | | $ | [removed: 826,990] [added: 913,364] | | | $ | [removed: 781,355] [added: 826,990] | |

| Total operating expenses | | | [removed: 671,115] [added: 662,565] | | | | [removed: 659,514] [added: 671,115] | | | | [removed: 573,033] [added: 659,514] | | | | [removed: 508,755] [added: 573,033] | | | | [removed: 484,193] [added: 508,755] | |

| Operating income | | | [removed: 403,898] [added: 488,104] | | | | [removed: 337,166] [added: 403,898] | | | | [removed: 340,331] [added: 337,166] | | | | [removed: 318,235] [added: 340,331] | | | | [removed: 297,162] [added: 318,235] | |

| Other expense (income), net | | | [removed: 54,344] [added: 102,166] | | | | [removed: 28,828] [added: 54,344] | | | | [removed: 27,503] [added: 28,828] | | | | [removed: 57,434] [added: 27,503] | | | | [removed: 59,592] [added: 57,434] | |

| Provision for income taxes | | | [removed: 119,516] [added: 125,083] | | | | [removed: 109,396] [added: 119,516] | | | | [removed: 112,918] [added: 109,396] | | | | [removed: 96,010] [added: 112,918] | | | | [removed: 78,634] [added: 96,010] | |

| Income from continuing [removed: operations] [added: operations, net of income taxes] | | | [removed: 230,038] [added: 260,855] | | | | [removed: 198,942] [added: 230,038] | | | | [removed: 199,910] [added: 198,942] | | | | [removed: 164,791] [added: 199,910] | | | | [removed: 158,936] [added: 164,791] | |

| Income (loss) from discontinued operations, net of income taxes | | | [added: — | | | |] (6,390 | ) | | | 85,171 | [removed: (3)] | [added: (3)] | | 22,647 | | | | 19,447 | | [removed: | | 14,518 | |]

| Net income | | $ | [removed: 223,648] [added: 260,855] | | | $ | [removed: 284,113] [added: 223,648] | | | $ | [removed: 222,557] [added: 284,113] | | | $ | [removed: 184,238] [added: 222,557] | | | $ | [removed: 173,454] [added: 184,238] | |

| Operating margin | | | [removed: 37.6] [added: 42.4] | % | | | [removed: 33.8] [added: 37.6] | % | | | [removed: 37.3] [added: 33.8] | [removed: %] | [added: %] | | [removed: 38.5] [added: 37.3] | % | | | [removed: 38.0] [added: 38.5] | % |

| Earnings per basic common share from continuing operations | | $ | [removed: 2.11] [added: 2.72] | | | $ | [removed: 1.72] [added: 2.11] | | | $ | [removed: 1.66] [added: 1.72] | | | $ | [removed: 1.34] [added: 1.66] | | | $ | [removed: 1.31] [added: 1.34] | |

| Earnings per diluted common share from [removed: continuing] [added: discontinued] operations | | | [added: — | | | |] (0.06 | ) | | | 0.73 | | | | 0.19 | | | | 0.16 | | [removed: | | 0.12 | |]

| Earnings per basic common share | | $ | [removed: 2.05] [added: 2.72] | | | $ | [removed: 2.45] [added: 2.05] | | | $ | [removed: 1.85] [added: 2.45] | | | $ | [removed: 1.50] [added: 1.85] | | | $ | [removed: 1.43] [added: 1.50] | |

| Earnings per [removed: basic] [added: diluted] common share from continuing operations | | $ | [removed: 2.09] [added: 2.70] | | | $ | [removed: 1.70] [added: 2.09] | | | $ | [removed: 1.64] [added: 1.70] | | | $ | [removed: 1.32] [added: 1.64] | | | $ | [removed: 1.29] [added: 1.32] | |

| Earnings per [removed: diluted] [added: basic] common share from [removed: continuing] [added: discontinued] operations | | | [added: — | | | |] (0.06 | ) | | | 0.73 | | | | 0.19 | | | | 0.16 | | [removed: | | 0.12 | |]

| Earnings per [removed: basic] [added: diluted] common share | | $ | [removed: 2.03] [added: 2.70] | | | $ | [removed: 2.43] [added: 2.03] | | | $ | [removed: 1.83] [added: 2.43] | | | $ | [removed: 1.48] [added: 1.83] | | | $ | [removed: 1.41] [added: 1.48] | |

| Basic | | | [removed: 109,124] [added: 95,986] | | | | [removed: 115,737] [added: 109,124] | | | | [removed: 120,100] [added: 115,737] | | | | [removed: 122,023] [added: 120,100] | | | | [removed: 120,717] [added: 122,023] | |

| Diluted | | | [removed: 109,926] [added: 96,540] | | | | [removed: 116,706] [added: 109,926] | | | | [removed: 121,074] [added: 116,706] | | | | [removed: 123,204] [added: 121,074] | | | | [removed: 122,276] [added: 123,204] | |

| Dividends declared per common share | | $ | [removed: 0.80] [added: 1.00] | | | $ | [removed: 0.18] [added: 0.80] | | | $ | [removed: —] [added: 0.18] | | | $ | — | | | $ | — | |

| Cash and cash equivalents | | $ | [removed: 777,706] [added: 791,834] | | | $ | [removed: 508,799] [added: 777,706] | | | $ | [removed: 358,434] [added: 508,799] | | | $ | [removed: 183,309] [added: 358,434] | | | $ | [removed: 252,211] [added: 183,309] | |

| Short-term investments | | $ | — | | | $ | — | | | $ | — | | | $ | [removed: 70,898] [added: —] | | | $ | [removed: 140,490] [added: 70,898] | |

| Accounts receivable (net of allowances) | | $ | [removed: 208,239] [added: 221,504] | | | $ | [removed: 178,717] [added: 208,239] | | | $ | [removed: 169,490] [added: 178,717] | | | $ | [removed: 153,557] [added: 169,490] | | | $ | [removed: 180,566] [added: 153,557] | |

| | | [removed: As of or For the] Years [removed: Ended] [added: Ended] | | | | | | | | | | | | | | | | | | |

| | | [removed: December 31, 2015 (1)] [added: 2016] | | | | [removed: December 31, 2014 (2)] [added: 2015 (1)] | | | | [removed: December 31, 2013 (4)] [added: 2014 (2)] | | | | [removed: December 31, 2012 (5)] [added: 2013 (4)] | | | | [removed: December 31, 2011] [added: 2012 (5)] | | |

| Goodwill and [removed: intangible assets,] [added: intangibles,] net of accumulated amortization | | $ | [removed: 1,957,111] [added: 1,903,490] | | | $ | [removed: 1,998,532] [added: 1,957,111] | | | $ | [removed: 2,408,871] [added: 1,998,532] | | | $ | [removed: 2,438,827] [added: 2,408,871] | | | $ | [removed: 2,367,809] [added: 2,438,827] | |

| Total assets | | $ | [removed: 3,146,987] [added: 3,082,578] | | | $ | [removed: 2,882,533] [added: 3,146,987] | | | $ | [removed: 3,129,286] [added: 2,882,533] | | | $ | [removed: 3,013,118] [added: 3,129,286] | | | $ | [removed: 3,072,849] [added: 3,013,118] | |

| Deferred revenue | | $ | [removed: 317,552] [added: 334,358] | | | $ | [removed: 310,775] [added: 317,552] | | | $ | [removed: 319,735] [added: 310,775] | | | $ | [removed: 308,022] [added: 319,735] | | | $ | [removed: 289,217] [added: 308,022] | |

| Current maturities of long-term debt | | $ | — | | | $ | — | | | $ | [removed: 18,301] [added: —] | | | $ | [removed: 40,654] [added: 18,301] | | | $ | [removed: 5,964] [added: 40,654] | |

| Long-term debt, net of current maturities | | $ | [removed: 1,579,404] [added: 2,075,201] | | | $ | [removed: 788,358] [added: 1,579,404] | | | $ | [removed: 782,652] [added: 788,358] | | | $ | [removed: 805,227] [added: 782,652] | | | $ | [removed: 1,048,462] [added: 805,227] | |

| Total [removed: shareholders’] [added: shareholders'] equity | | $ | [removed: 901,487] [added: 317,605] | | | $ | [removed: 1,432,833] [added: 901,487] | | | $ | [removed: 1,564,347] [added: 1,432,833] | | | $ | [removed: 1,413,950] [added: 1,564,347] | | | $ | [removed: 1,294,151] [added: 1,413,950] | |

| (1) | Includes the impact of Insignis from the October 16, 2015 acquisition date, which was not material. Deferred taxes have been presented in accordance with [removed: ASU 2015-17] [added: new accounting guidance] prospectively beginning on December 31, 2015. Prior periods have not been retrospectively restated to match this presentation. |

The selected Consolidated

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| | | December 31, | | | | December 31, | | | | December 31, | | | | December 31, | | | | December 31, | | |

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##### [Table of Contents](#toc)

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##### [Table of Contents](#toc)

Evaluation of Disclosure Controls and [removed: Procedures][added: Procedures]

Based on their evaluation, as of December 31, [removed: 2015,] [added: 2016,] the end of the period covered by this Annual Report on Form 10-K, the Company’s CEO and CFO have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Management’s Annual Report On Internal Control Over Financial [removed: Reporting][added: Reporting]

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers or persons performing similar functions and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with [removed: generally accepted accounting principles (“GAAP”)] [added: GAAP] and includes those policies and procedures that:

| | • | [removed: | Pertain] [added: pertain] to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets, |

| | • | [removed: | Provide] [added: provide] reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company, and |

| | • | [removed: | Provide] [added: provide] reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2015] [added: 2016] based on the criteria described in [removed: _Internal] [added: Internal] Control—Integrated Framework [removed: (2013)_] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, management, including the Company’s CEO and CFO, concluded that, as of December 31, [removed: 2015,] [added: 2016,] our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

PricewaterhouseCoopers, LLP, our independent registered public accounting firm, has audited and issued a report on the effectiveness of our internal control over financial reporting as of December 31, [removed: 2015,] [added: 2016,] which appears on page F-2 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial [removed: Reporting][added: Reporting]

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 fiscal quarter ended December 31, [removed: 2015] [added: 2016] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(a).

(b).

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(c).

(a).

(b).

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##### [Table of Contents](#toc)

(c).

[removed: PART III][added: PART III]

##### [Table of Contents](#toc)

Except for the information relating to our Executive Officers set forth in Part I of this Annual Report on Form 10-K, we incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than 120 days after December 31, [removed: 2015.][added: 2016.]

Information regarding our Code of Ethics and Business Conduct and Corporate Governance Policies is incorporated herein by reference from our Proxy Statement, which will be filed no later than 120 days after December 31, [removed: 2015.][added: 2016.]

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We incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than 120 days after December 31, [removed: 2015.][added: 2016.]

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We incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than 120 days after December 31, [removed: 2015.][added: 2016.]

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We incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than 120 days after December 31, [removed: 2015.][added: 2016.]

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We incorporate by reference the information responsive to this Item appearing in our Proxy Statement, which will be filed no later than 120 days after December 31, [removed: 2015.][added: 2016.]

[removed: PART IV][added: PART IV]

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##### [Table of Contents](#toc)

[removed: (a)(1) _Financial Statements_][added: (a)(1) Financial Statements]

[removed: (a)(2) _Financial] [added: (a)(2) Financial] Statement [removed: Schedules_][added: Schedules]

[removed: (a)(3) _Exhibits_][added: (a)(3) Exhibits]