MSCI (MSCI) 10-K risk factor changes: FY2018 vs FY2017

We rely on the accuracy and quality of third-party data and software products and depend on the ability and willingness of third-party data and software providers to deliver and support reliable products, enhance their current products, develop new products on a timely and cost-effective basis, and respond to emerging industry standards and other technological changes [removed: in order] to produce and deliver our products, provide services and develop new products and services.

While some of our vendors generate revenue in connection with distributing our data, others do not derive a direct financial [removed: benefit from doing so.][added: benefit.]

As of December 31, [removed: 2017,] [added: 2018,] we relied on the data of over 200 suppliers, including large volumes of data from certain stock exchanges around the world.

Termination of [added: the] provision of data by one or more of our significant data suppliers or exclusion from, or restricted use of, or litigation in connection with a data provider’s information could decrease the information available for us to use (and offer our clients) and may have a material adverse effect on our business, financial condition or results of operations.

Our business could be materially adversely affected if we are unable to timely or effectively replace the functionality provided by data or [added: software that becomes unavailable or fails to operate effectively for any reason.]

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

[removed: In those cases, a] [added: A] reduction in the TER [added: or an elimination of TER] may negatively impact our revenues.

We have a differentiated licensing strategy for our indexes and from [removed: time-to-time] [added: 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 [removed: price/volume] [added: price and volume] trade-off over the long-term, there can be no assurance that we will be able to do [removed: so.][added: so in the future.]

Results for any given quarter could be materially adversely affected by stronger growth in AUM in index-linked investment products with lower than average product fees not sufficiently [removed: off-set] [added: offset] by growth in AUM in index-linked investment products in higher than average product fees.

Finally, to the extent that an asset manager finds it beneficial to offer clients multiple kinds of index-linked investment products based on the same indexes, a shift away from use of an index as the basis of one type of product may lead to a corresponding shift away from the use of the same index as the basis of [removed: an other] [added: another] type of product.

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

[removed: Clients that use our] [added: Our equity] indexes [added: serve] as [added: equity benchmarks against which our clients can measure] the [added: performance of their investments and are also used by clients as the] basis for certain index-linked investment products, such as ETFs and mutual funds, [removed: commonly pay us] [added: for] a fee based on the value of the investment product’s assets.

[removed: They] [added: Asset-based fees] accounted for [removed: 21.7%] [added: 23.5%] and [removed: 18.3%] [added: 21.7%] of revenues for the fiscal years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

[removed: These asset-based fees accounted] for [removed: 55.5%] [added: 56.1%] and [removed: 47.4%] [added: 55.5%] of the total revenues from our ten largest clients for the fiscal years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

[removed: For example, a] [added: While we offer products and services to both active and passive investment managers, an economic] trend that [added: significantly] favors active investment [removed: management over passive investment management] could lead to [removed: a] decreased demand for index-linked investment [removed: products, and thus decreased revenue attributable to assets in index-linked] [added: products or equity based] investment [removed: products.][added: strategies, which could decrease our revenues.]

If we are unable to offset the impact of decreased [removed: values of assets linked to index-linked investment] [added: revenues associated with our indexes and Analytics] products, including by managing our operating costs, our profitability could be materially adversely affected.

[removed: Certain events could lead to interruptions in our operations, including interruptions affecting] [added: We depend heavily on the capacity, reliability and security of] our information technology platform, electronic delivery systems and [removed: the internet, which could impair] [added: their components, including] our [removed: ability] [added: data centers, and the internet] to [added: seamlessly] provide clients with products and customer service.

[removed: Any resulting failures, disruptions or instability] [added: Such impairment] may have a material adverse effect on our financial condition or results of operations.

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: changes (tampering,] intrusions or [removed: hacking,] [added: hacking),] human error, [removed: cyber-terrorism,] [added: cyberterrorism, cybercrime,] ransomware, terrorist attacks affecting sites where we are located, natural disasters, power loss, telecommunications failures, technical breakdowns, internet failures or computer viruses could impair our systems’ operations or interrupt their availability for extended periods of time.

While we have [removed: implemented disaster recovery and business continuity plans, increased our protection measures in response to global cyber-attacks and] been able to defend our systems against such disruptions and attacks in the past, there is no assurance that we will be able to do so successfully in the 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 [removed: 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 [removed: centers and may experience such interruptions and delays in the future with respect to migrations within existing data centers or to new data] centers.

We could also experience cancellations and reduced demand for our products and [removed: services, resulting] [added: services due to such interruptions and delays, which may result] in decreased revenues.

[removed: Accordingly, any significant failures, disruptions or instability affecting our information technology platform, electronic delivery systems or the internet] may have a material adverse effect on our financial condition or results of operations and our insurance may not be adequate to compensate us for all losses, failures, or breaches.

[removed: Unexpected] [added: Any of the foregoing could lead to unexpected] or higher than estimated costs [removed: could] [added: and] have a material adverse effect on our [added: business,] financial condition or results of operations.

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

We rely on a complex system of internal processes and software controls along with policies, procedures and training to protect [removed: client] data that we receive in the ordinary course of business, including sensitive and confidential client data such as material non-public information and client portfolio data that may be provided to us or hosted on our systems, against unauthorized data access or disclosure.

If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls, [removed: or] if we experience difficulties in the implementation of our internal controls, policies or [removed: procedures,] [added: procedures] or [added: additional security measures requested by clients,] if [added: we experience cyberattacks that lead to a security or data privacy breach or if] an employee purposely circumvents or violates our internal controls, policies or procedures, then unauthorized access to, or disclosure or misappropriation of, [removed: client] data could occur.

Such [added: breaches,] 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 brand and reputation and/or have a material adverse effect on our business, financial condition or results of operations.

If a failure of our internal controls, policies or procedures [added: or a cyberattack] results in a security or data privacy breach, we could also incur increased operating expenses to remediate the problems caused by the breach and prevent future breaches, which could have a material adverse effect on our business, financial condition or results of operations.

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

If our confidentiality [added: policies, conflict of interest] 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]

If our confidentiality [added: policies, conflict of interest] policies or information barrier procedures fail or we are delayed in implementing such procedures as necessary with respect to a newly acquired business and an employee inadvertently discloses, or deliberately misuses material non-public information related to one of our [removed: indexes,] [added: indexes in violation of such policies,] our reputation may suffer.

Clients’ loss of trust and confidence in our confidentiality [added: policies, conflict of interest] policies or information barrier policies and procedures could 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.

[removed: In addition, certain] [added: Certain] exchanges permit our clients to list index-linked investment products based on our equity indexes only if we provide a representation to the exchange that we have information barrier procedures in place designed to address the unauthorized disclosure and misuse of material non-public information related to our equity indexes.

[removed: Increased] [added: Rapidly increasing] competition 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 operations.

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

[added: Our larger] competitors may have access to more resources and may be able to achieve greater economies of scale, and our specialized competitors that are focused on a narrower product line may be more effective in devoting technical, marketing and financial resources to compete with us with respect to a particular product.

[removed: Larger] [added: Some] competitors may offer price incentives [added: or different pricing structures that are more attractive] to [added: clients to] expand their market share, and may also consolidate with one another or form joint ventures or other business arrangements, which could allow for a narrower pool of competitors that are better capitalized or that are able to gain a competitive advantage through synergies resulting from an expanded suite of products and services.

[removed: Low barriers to entry could lead to the emergence of new competitors; for] [added: For] example, more broker-dealers and data suppliers could begin developing their own proprietary risk analytics or indexes.

Additionally, our clients, including our largest clients, may seek to lower or eliminate AUM floors (i.e., minimum asset-based fee percentages) or impose or lower AUM ceilings (i.e., maximum asset-based fee percentages).

Such changes in our fee structure could individually, or in the aggregate, negatively impact our revenues.

For example, cash inflows into an ETF may be offset by a decline in the performance of the ETF and vice versa.

These asset-based fees accounted

Our Analytics segment offers performance attribution and portfolio management content, applications and services that provide clients with an integrated view of risk and return of their equity portfolios.

Additionally, equity models developed in our Analytics segment are used to construct MSCI Factor Indexes.

A move away from equity investing could decrease demand for such products.

Volatile capital markets, which may impact whether investors choose to invest in developed or emerging markets, or in the U.S. or non-U.S. markets, as well as changing investment styles, among other factors, may influence an investor’s decision to invest in and maintain an investment in an index-linked investment product or lead clients to significantly deemphasize equity securities in their investment strategies, which could have a material adverse effect on our business, financial condition or results of operations.

Any resulting failures, disruptions or instability of our information technology platform, electronic delivery systems, or the internet, including a cybersecurity breach or cyberattack, may result in reputational harm and have a material adverse effect on our business, financial condition or results of operations.

While we have and continue to invest in risk management and information security measures, including employee training, disaster recovery and business continuity plans, the total cost of ongoing development and implementation may increase over time given enhanced government and regulatory scrutiny of the measures taken by companies to protect against cybersecurity breaches.

Any material breaches of cybersecurity or third-party reports of perceived security vulnerability to the Company’s systems, even if no breach has occurred, could cause the Company to suffer reputational harm, loss of

customers and revenue, regulatory actions and scrutiny, litigation or financial losses that are either not insured against or not fully covered through any insurance maintained by the Company.

See “—Any failure to ensure and protect the confidentiality of data could adversely affect our brand and reputation and have a material adverse effect on our business, financial condition or results of operations” below.

The Company may also be exposed to more targeted cyberattacks aimed at accessing certain information on our systems because of our prominence in the global marketplace, including client data, our ESG ratings of corporate issuers and the composition of our indexes.

As a result of increased cyber threats and cybersecurity and privacy regulations, clients have increasingly requested additional security measures on the products we provide and details about our internal processes and software controls, policies and procedures related to security, processing integrity and confidentiality or privacy.

Such requests may increase our cost of implementation and expose us to additional cybersecurity risks.

Additionally, while we believe our internal controls, policies and procedures are currently adequate in protecting the confidentiality of data, breaches of confidentiality may still occur as a result of human error, particularly in connection with a more manual process for processing such data.

Migration of our applications and infrastructure to new technologies, data centers and software could result in unanticipated interruption and delay in the performance and delivery of our products which could impair our ability to provide clients with products and customer service.

While we have taken steps to mitigate such interruptions and delays, we cannot provide assurance that they will not occur again in the future even after extensive testing of new software and hardware.

We may also experience unanticipated interruption and delay in the performance and delivery of certain of our products after adopting new technologies and software, including cloud computing, virtualization and Agile software development, in place of more traditional methods of development and support.

Accordingly, any significant failures, disruptions or instability affecting our information technology platform, electronic delivery systems or the internet

These policies are designed to limit dissemination of information not only between MSCI and the rest of the world, but also within MSCI.

We have conflict of interest policies in place to ensure that employees act with integrity, including not putting their own personal interests or financial gain above the interests of the Company and our clients.

Low barriers to entry could lead to the emergence of new competitors.

allowed free or relatively inexpensive access to information sources, which has reduced barriers to entry even further.

financial condition and operating results.

A contract with BlackRock from which we derive a material portion of our revenues has a term which ends in March 2020 with auto-renewal for successive one-year periods unless either party provides advanced written notice of termination.

information systems to keep pace with the prior expansion of our business.

| | • | Brexit. In March 2017, the United Kingdom (“UK”) triggered Article 50 and notified the European Union (“EU”) of its intention of leaving the EU following the UK’s June 2016 referendum vote to leave the EU (commonly referred to as “Brexit”). Negotiations on the terms of the UK’s future relationship with the EU have been ongoing, with the UK due to exit the EU on March 29, 2019 (unless an extension is agreed). Depending on the final terms reached between the UK and the EU, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations that affect our business. As described below, our business, particularly the Index business, is subject to increasing regulation, and potential changes in EU regulation and/or additional regulation in the UK could cause additional operating obligations and increased costs for our business. In particular, we will need to ensure that post-Brexit we are licensed to provide indexes in the EU as well as the UK under each of the EU and UK benchmark regulations by the end of the transition period set out in the regulations (by January 1, 2020). |

There is also uncertainty as to how the UK’s access to the EU Single Market and the wider trading, legal, regulatory, tax and labor environments, especially in the UK and EU, will be impacted, including the resulting impact on our business and that of our clients.

Any such changes may adversely affect our operations and financial results because we have significant operations in Europe and certain members

of our senior management team are based in London.

For example, changes in labor and tax laws which increase the cost to our staff of living and working in the UK or the EU, in particular changes that result in increased tax obligations or changes in immigration regulations, may impact the ability to hire and retain non-UK staff in the UK or UK staff in the EU.

See also “— We may have exposure to additional tax liabilities in various jurisdictions” below.

Additionally, any changes to the passporting or other regulations relating to doing business in various EU countries by relying on a regulatory permission in the UK (or doing business in the UK by relying on a regulatory permission in an EU country) could increase our costs of doing business, or our ability to do so.

See also “— Our revenues, expenses, assets and liabilities are subject to foreign currency exchange rate fluctuation risk” for additional information on the impact of Brexit on our revenues and expenses that are denominated in British pounds sterling.

The regulation governs index development, calculation, dissemination, governance, maintenance and recordkeeping, as well as input data licensing, collection and dissemination.

Additionally, the European Securities and Markets Authority (“ESMA”) issues guidance from time to time regarding interpretations of the regulation and new proposals to amend the benchmark regulation are in process.

On March 5, 2018, MSCI Limited (a subsidiary of MSCI Inc.) was granted authorization by the United Kingdom Financial Conduct Authority as a UK administrator for all MSCI equity indexes.

The Company is currently implementing the EU benchmark regulation for a limited set of the UK MSCI private real estate indexes.

software that becomes unavailable or fails to operate effectively for any reason.

Our revenues attributable to asset-based fees may be affected by changes in the capital markets, particularly the equity capital markets.

Asset-based fees make up a significant portion of our revenues.

Volatile capital markets, which may impact whether investors choose to invest in developed or emerging markets, or in the U.S. or non-U.S. markets, as well as changing

investment styles, among other factors, may influence an investor’s decision to invest in and maintain an investment in an index-linked investment product.

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 internet to seamlessly provide clients with products and customer service.

In response to such issues, we have in the past and could again be required to provide service credits.

Our larger

adversely affected.

“Business—Company History” above.

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.” Brexit could lead to legal uncertainty and potentially divergent national laws and regulations that affect our business.

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

In the event that compliance with this regulation (expected to be required in 2019) leads to a change in our business practices or our ability to offer our indexes, increases our cost of doing business or diminishes our intellectual property rights, it could have a material adverse effect on our index product line.

The Guidelines became effective as of February 17, 2013 with respect to newly launched UCITS funds.

They became effective for all UCITS funds on February 17, 2014.

To the extent that ESMA issues new guidance or different or new interpretations with respect to the Guidelines, complying with such guidance could have a negative impact on our business and results of operations, including a material negative impact on our licensing of index data and/or our indexes as the basis of ETFs and other UCITS.

Additionally, other jurisdictions outside of Europe have adopted, and others could adopt, similar concepts, proposals or regulations.

For 2017, we continued to rely on our 2016 compliance statement as updated in light of the Regulation (EU) 2016/1011.

To the extent that IOSCO issues new principles or different or new interpretations with respect to the existing IOSCO Principles and/or any individual jurisdictions adopt similar, new or different concepts, proposals or regulations, complying with such principles, concepts, proposals or regulations could lead to a change in our business practices or our ability to offer our indexes, including without limitation, by increasing our costs of doing business, diminishing our intellectual property rights, imposing constraints on our ability to meet our commitments to our data providers or causing our data providers to refuse to provide data to us, any of which could have material adverse effect on our equity and real estate index product lines.

If additional rules or interpretations are issued that expand the definition of investment research services in such a way that causes our clients in the EU to believe other of our products and services constitute investment research, these negative impacts could increase which could materially adversely affect our business, financial condition or results of operations.

To the extent that our clients are subject to increased

Third parties may infringe on our intellectual property rights, and third-party litigation may materially adversely affect our ability to protect our intellectual property rights.

As we have experienced, even if we attempt to protect our intellectual property rights through litigation, it may require considerable cost, time and resources to do so, and there is no guarantee that we will be successful.

Third parties may claim we infringe upon their intellectual property rights.

Such claims would likely be costly to defend, could require us to pay damages or limit our future use of certain technologies, which could have a material adverse effect on our business, financial condition or results of operations.

The number of these claims may grow.

Businesses operating in the financial services sector, including our competitors and potential competitors, have increasingly pursued or may consider pursuing patent protection for their technologies and business methods.

If any third parties were to obtain a patent on a relevant index methodology, risk model, software application or other relevant product or process, we could be sued for infringement.

Furthermore, there is always a risk that third parties will sue us for infringement or misappropriation of other intellectual property rights, such as trademarks, copyrights or trade secrets.

we would prevail in any litigation arising from such claims if such claims are not settled.

delays in or loss of market acceptance of our products, license terminations or renegotiations and/or unexpected expenses and diversion of resources to remedy or mitigate such errors.

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

If investment in equity markets declines, if our clients significantly reduce their investments in equity securities, or if they discontinue the use of equity benchmarks to measure performance, our business, financial condition or results of operations could be materially adversely affected.

Volatility in equity markets over an extended period or other factors may lead to an overall decline in the viability of such markets, which could reduce new business opportunities for us and our clients.

Additionally, while we offer products and services to both active and passive investment managers, an economic trend that significantly favors either active investment management or passive investment management could lead to a decrease in our revenues that would not be fully offset by revenues generated from products and services sold to passive or active investment managers.

See “— 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 fees could have a material adverse effect on our business, financial condition or results of operations” above.

Additionally, our equity indexes serve as equity benchmarks against which our clients can measure the performance of their investments.

Any such decrease in demand for our equity indexes could have a material adverse effect on our business, financial condition or results of operations.

our acquired businesses will perform at the levels we anticipate.

Our clients comprise a wide spectrum of the global investment industry and include [added: the following key client segments:] asset owners (pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance companies), asset managers (institutional, mutual funds, hedge funds, ETFs, [added: insurance,] private wealth, private banks and real estate investment trusts), [removed: private wealth managers, private banks, real estate investment trusts,] financial intermediaries (banks, broker-dealers, exchanges, custodians, trust companies and investment consultants) and [removed: data distributors.][added: wealth managers (including an increasing number of “robo-advisors”).]

As of December 31, [removed: 2017,] [added: 2018,] we had over 7,000 clients across [removed: 88] [added: 90] countries.

If we aggregate all related clients under their respective parent entity, the number of clients would be [removed: approximately] [added: over] 4,000 as of December 31, [removed: 2017.][added: 2018.]

[removed: We] [added: As of December 31, 2018, we] had offices in [removed: 32] [added: 31] cities in 21 countries to help serve our diverse client base, with [removed: 52.6%] [added: 50.2%] of our revenues coming from clients in the Americas, [removed: 34.9%] [added: 35.4%] in Europe, the Middle East and Africa (“EMEA”) and [removed: 12.5%] [added: 14.4%] in Asia and Australia.

[removed: Fees] [added: Recurring fees] may vary [added: based on a number of factors including] by [removed: offering,] [added: product or service,] number of users or volume of services.

[removed: Furthermore, a] [added: A] portion of our [removed: revenues] [added: fees are variable and] comes from clients who use our indexes as the basis for index-linked investment products, such as ETFs, [removed: or as the basis for] passively managed funds and separate accounts.

These clients commonly pay us a license fee, typically in arrears, [removed: for the use of our intellectual property] primarily based on the AUM in their investment [removed: product.][added: products and these fees are typically variable.]

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

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

In addition, we focus on operating metrics, including Run [added: Rate, subscription sales and Retention Rate to manage the business.]

Our growth strategy includes: (a) [removed: creating broad and innovative research-driven] [added: expanding leadership in research-enhanced] content, (b) [removed: expanding our client base and deepening] [added: strengthening] existing [added: and new] client [removed: relationships,] [added: relationships by providing solutions,] (c) [removed: developing flexible] [added: improving access to our solutions through cutting-edge technology] and [removed: scalable technology,] [added: platforms,] (d) expanding value-added service offerings and (e) executing strategic relationships and [removed: acquisitions.][added: acquisitions with complementary content and technology companies.]

In addition, we utilize operating metrics including Run Rate, subscription sales and [removed: Aggregate] Retention [removed: Rate,] [added: Rate] to analyze past performance and to provide insight into our latest reported portfolio of recurring business.

In the discussion that follows, we provide [added: certain] variances excluding the impact of foreign currency exchange rate [removed: fluctuations when the impact is not considered negligible.][added: fluctuations.]

Asset-based fees [removed: are principally recognized based] [added: represent fees earned] on the [removed: estimated] AUM linked to our indexes from independent third-party sources or the most recently reported information provided by the client.

Asset-based fees [added: also] include revenues related to futures and options contracts linked to our indexes, which are primarily based on trading volumes.

Effective January 1, 2018, MSCI adopted the new revenue standard as set forth under ASC Subtopic 606-10, “Revenue from Contracts with Customers.” See [removed: “—Recent] [added: Note 1, “Introduction and Basis of Presentation—Significant] Accounting [removed: Standards Updates” below] [added: Policies—Revenue Recognition,” of the Notes to the Consolidated Financial Statements included herein] for [removed: additional information.][added: further information on our revenue recognition policy.]

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

R&D expenses consist of [removed: 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 [removed: includes] [added: include] the costs of development, research, product management, project management and the technology support associated with these efforts.

We have no indefinite-lived [removed: intangibles.][added: intangible assets.]

This category consists of expenses related to depreciating or amortizing the cost of furniture [removed: &] [added: and] fixtures, computer and related equipment and leasehold improvements over the estimated useful life of the assets.

This category consists primarily of interest we pay on our outstanding indebtedness, interest we collect on cash and short-term investments, [removed: transition services income associated with our sale of ISS,] foreign currency exchange rate gains and losses as well as other non-operating income and expense items.

“Adjusted EBITDA,” a measure used by management to assess operating performance, is defined as net income before (1) [removed: income (loss) from discontinued operations, net of income taxes, (2)] provision for income taxes, [removed: (3)] [added: (2)] other expense (income), net, [removed: (4)] [added: (3)] depreciation and amortization of property, equipment and leasehold improvements, [removed: (5)] [added: (4)] amortization of intangible assets and, at times, [removed: (6)] [added: (5)] certain other transactions or adjustments.

[removed: Aggregate] Retention Rate

Another key operating metric is [removed: Aggregate] Retention Rate which is important because subscription cancellations decrease our Run Rate and ultimately our operating revenues over time.

See “—Operating [removed: Metrics—Aggregate Retention] [added: Metrics—Retention] Rate” below for additional information on the calculation of this metric.

See Note 1, “Introduction And Basis Of Presentation—Significant Accounting Policies,” [added: and Note 2, “Recent Accounting Standards Updates,”] of the Notes to the Consolidated Financial Statements included herein for a listing of our accounting [removed: policies and Note 2, “Recent Accounting Standards Updates.”][added: policies.]

[removed: On October 28, 2015, our] [added: The] Board of Directors [added: has] approved a [removed: new] stock repurchase program [removed: authorizing] [added: for] the purchase of [removed: up to $1.0 billion worth of shares of our] [added: the Company’s] common [removed: stock (the “2015 Repurchase Program”).][added: stock.]

For the year ended December 31, [removed: 2015,] [added: 2018,] the Company repurchased approximately [removed: 10.7] [added: 6.2] million shares at an average price of [removed: $62.63] [added: $148.34] per share for a total value of [removed: $670.8] [added: $925.0] 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, [removed: 2017] [added: 2018] decreased by [removed: 4.8%] [added: 2.4%] compared to the year ended December 31, [removed: 2016,] [added: 2017,] and by [removed: 12.2%] [added: 4.8%] for the year ended December 31, [removed: 2016] [added: 2017] compared to the year ended December 31, [removed: 2015.][added: 2016.]

Tax Reform significantly [removed: revises] [added: revised] the U.S. corporate income tax by, among other things, lowering U.S. corporate income tax rates, implementing a territorial tax system and imposing a one-time tax on deemed repatriation of historic earnings of foreign subsidiaries (the “Toll Charge”).

[removed: As] [added: In the year ended December 31, 2017, as] part of Tax Reform, the Company recorded a provisional net charge to the provision for income taxes of $34.5 million for the year ended December 31, 2017.

The net charge of $34.5 million primarily included an estimated tax charge of approximately $47.5 million related to the Toll Charge and an estimated tax charge of approximately $16.0 million related to a change in assertion that [removed: those] profits were permanently reinvested overseas as of December 31, 2017, partially offset by an estimated tax benefit of approximately $29.0 million related to the revaluation of deferred taxes at the [removed: now lower] [added: now-lower] statutory corporate rate.

| Cost of revenues | | | [removed: 273,913] [added: 273,681] | | | | 252,107 | | | | [removed: 21,806] [added: 21,574] | | | | 8.6 | % |

| Selling and marketing | | | [removed: 177,297] [added: 177,121] | | | | 166,666 | | | | [removed: 10,631] [added: 10,455] | | | | [removed: 6.4] [added: 6.3] | % |

| Research and development | | | [removed: 75,884] [added: 75,849] | | | | 75,204 | | | | [removed: 680] [added: 645] | | | | 0.9 | % |

| General and administrative | | | [removed: 87,903] [added: 87,764] | | | | 87,235 | | | | [removed: 668] [added: 529] | | | | [removed: 0.8] [added: 0.6] | % |

| Total operating expenses | | | [removed: 694,984] [added: 694,402] | | | | 662,565 | | | | [removed: 32,419] [added: 31,837] | | | | [removed: 4.9] [added: 4.8] | % |

| Operating income | | | [removed: 579,188] [added: 579,770] | | | | 488,104 | | | | [removed: 91,084] [added: 91,666] | | | | [removed: 18.7] [added: 18.8] | % |

| Other expense (income), net | | | [removed: 112,289] [added: 112,871] | | | | 102,166 | | | | [removed: 10,123] [added: 10,705] | | | | [removed: 9.9] [added: 10.5] | % |

| Income [removed: from continuing operations] before provision for income taxes | | | 466,899 | | | | 385,938 | | | | 80,961 | | | | 21.0 | % |

We are a leading provider of mission-critical investment decision support tools and services — we power investors to make better decisions about their investment portfolios.

Our tools and services help investors better understand the drivers of risk and return and build portfolios to more effectively and efficiently achieve their investment objectives.

We are able to do this by leveraging our knowledge of the global investment process and our expertise in research, data, and technology in order to deliver actionable solutions to our clients.

We are dynamic and flexible in the delivery of our content and capabilities, such as our indexes; portfolio construction tools and risk-management services; ESG research and ratings; and real estate benchmarks, return analytics services and market insights; much of which can be accessed by our clients through multiple channels and platforms.

Through a combined use of the content and capabilities provided by each of our operating segments — Index, Analytics, ESG and Real Estate — our clients gain a broad view of the global investment industry, which enables them to manage their investment objectives across multiple asset classes in an increasingly integrated manner.

Our principal business model is generally to license annual, recurring subscriptions for the majority of our Index, Analytics and ESG products and services for a fee due in advance of the service period.

We also license annual recurring subscriptions for the majority of our Real Estate products for a fee which is primarily paid in arrears after the product is delivered, with the exception of the Market Information product for which the fees are generally paid in advance.

Our recurring client contracts do not have a financing component and the consideration received is typically not variable.

While operating revenues adjusted for the impact of foreign currency fluctuations includes asset-based fees that have been adjusted for the impact of foreign currency fluctuations, the underlying AUM, which is the primary component of asset-based fees, is not adjusted for foreign currency fluctuations.

Approximately two-thirds of the AUM are invested in securities denominated in currencies other than the U.S. dollar, and accordingly, any such impact is excluded from the disclosed foreign currency adjusted variances.

Divestitures

On August 1, 2016, we completed the divestiture of our Real Estate occupiers business, which was included as a component of the All Other segment through the date of divestiture.

On April 9, 2018, we completed the divestiture of FEA for $21.0 million in cash, which resulted in a gain of $10.6 million.

FEA was included as a component of the Analytics segment through the date of divestiture.

The results of operations from FEA were not material to the Company.

On October 12, 2018, we completed the divestiture of InvestorForce and received $62.8 million in cash, subject to a working capital adjustment, which resulted in a gain of $46.6 million.

InvestorForce was included as a component of the Analytics segment through the date of divestiture.

The results of operations from InvestorForce were not material to the Company.

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

The decreases in both periods primarily reflect the impact of share repurchases made pursuant to the 2016 and 2018 Repurchase Programs, partially offset by the impact of higher dilution, primarily caused by restricted stock units for which the ultimate payout is tied to the achievement of multi-year total shareholder return targets.

We have issued an aggregate of $2.6 billion in Senior Notes and entered into a $250 million Revolving Credit Agreement with a syndicate of banks.

See “–Liquidity and Capital Resources–Senior Notes and Credit Agreement” below and Note 5, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements included herein for additional information on our Senior Notes and Revolving Credit Agreement.

In the year ended December 31, 2018, the Company finalized the Toll Charge and determined the final impact of Tax Reform resulting in a net benefit of $11.2 million that included a benefit of $5.7 million on the true-up of the Toll Charge and a benefit of $2.6 million for a reduction in the expected withholding taxes from foreign subsidiaries.

The Company also recorded a benefit of $2.9 million related to the revaluation of deferred taxes at the lower statutory rate as a result of tax planning.

The cumulative net charge of Tax Reform was $23.3 million.

Basis of Presentation

Certain prior period amounts have been reclassified to conform to the current period presentation.

| | | 2018 | | | | 2017 | | | | Increase/(Decrease) | | | | | | |

| Operating revenues | | $ | 1,433,984 | | | $ | 1,274,172 | | | $ | 159,812 | | | | 12.5 | % |

| Cost of revenues | | | 287,335 | | | | 273,681 | | | | 13,654 | | | | 5.0 | % |

| Selling and marketing | | | 192,923 | | | | 177,121 | | | | 15,802 | | | | 8.9 | % |

| Research and development | | | 81,411 | | | | 75,849 | | | | 5,562 | | | | 7.3 | % |

| General and administrative | | | 99,882 | | | | 87,764 | | | | 12,118 | | | | 13.8 | % |

| Amortization of intangible assets | | | 54,189 | | | | 44,547 | | | | 9,642 | | | | 21.6 | % |

| Total operating expenses | | | 747,086 | | | | 694,402 | | | | 52,684 | | | | 7.6 | % |

| Operating income | | | 686,898 | | | | 579,770 | | | | 107,128 | | | | 18.5 | % |

| Other expense (income), net | | | 57,002 | | | | 112,871 | | | | (55,869 | ) | | | (49.5 | %) |

| Income before provision for income taxes | | | 629,896 | | | | 466,899 | | | | 162,997 | | | | 34.9 | % |

| Provision for income taxes | | | 122,011 | | | | 162,927 | | | | (40,916 | ) | | | (25.1 | %) |

| Net income | | $ | 507,885 | | | $ | 303,972 | | | $ | 203,913 | | | | 67.1 | % |

We are an innovative and leading provider of mission-critical investment decision support tools, including indexes; portfolio construction and risk management products and services; ESG research and ratings; and real estate research, reporting and benchmarking offerings.

Our research-derived intellectual property includes methodologies, models, derived data and algorithms (collectively, “content”), as well as applications and services, which help our clients manage their investment processes and address their investment, risk and regulatory challenges.

Our offerings are used by our clients across multiple asset classes to achieve a wide range of objectives, including benchmarking, index-linked product creation, portfolio construction, performance measurement and attribution, risk management, as well as investor and regulatory reporting.

In addition, our clients are increasingly integrating the content developed across our company, such as factor and ESG data and indexes, into their investment processes.

Our principal business model is to license annual, recurring subscriptions to our offerings for a fee, which is, in a majority of cases, paid in advance.

Fees attributable to annual, recurring subscriptions are recorded as deferred revenues on our Consolidated Statement of Financial Condition and are recognized on our Consolidated Statement of Income as the service is rendered.

In addition, we generate revenues from subscription agreements for the receipt of periodic benchmark reports, digests and other publications, which are most often associated with our Real Estate offerings that are recognized upon delivery of such reports or data updates.

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

Rate, subscription sales and Aggregate Retention Rate to manage the business.

It should be noted that while a substantial portion of our fees for index-linked investment products are invoiced in U.S. dollars, the fees are based on the investment product’s assets, of which two-thirds are invested in underlying securities that are dominated in currencies other than the U.S. dollar.

The underlying impact of such will not be reflected in the variances excluding the impact of foreign currency exchange rate fluctuations.

When implementation services are included, we recognize revenues ratably from the date the application is put into production through the end of the license period.

Revenues associated with 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.

Revenues from subscription agreements for the receipt of periodic benchmark reports, digests, and other publications, which are most often associated with our real estate offerings, are recognized upon delivery of such reports or data updates.

Based on the nature of the services provided, non-recurring revenues are recognized upon delivery or over the service period.

No impairment of acquired intangible assets has been identified during any of the periods presented.

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.

The purchase price allocations for the Insignis acquisition were $4.2 million for goodwill, $2.2 million of identifiable intangible assets and $0.1 million for assets other than identifiable intangible assets.

The results of Insignis were included in our results of operations from its acquisition date of October 16, 2015.

The Insignis acquisition has not had a significant impact on our results of operations.

Disposition of Real Estate occupiers

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

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

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

On September 18, 2014, as part of the 2014 Repurchase Program, we 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, we repurchased approximately 4.5 million shares of our common stock on September 19, 2014 and received approximately 1.2 million shares of our common stock on May 21, 2015 for a combined average price of $52.79 per share.

On October 26, 2016, our 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”).

Share repurchases made pursuant to the 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.

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

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

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 as well as increased dilution from employee stock awards outstanding.

On November 20, 2014, we completed our first private offering of $800.0 million aggregate principal amount of 5.25% senior unsecured notes due 2024 (the “2024 Senior Notes”) and also entered into a new $200.0 million senior unsecured revolving credit agreement (the “2014 Revolving Credit Agreement”).

We used the net proceeds from the offering of the 2024 Senior Notes, together with cash on hand, to repay in full our outstanding term loan indebtedness of $794.8 million, which bore interest at LIBOR plus a margin of 2.25%.

On August 13, 2015, we completed a private offering of $800.0 million aggregate principal amount of 5.75% senior unsecured notes due 2025 (the “2025 Senior Notes”) and received $789.5 million, net of $10.5 million of debt issuance costs.

On August 4, 2016, we completed a private offering of $500.0 million aggregate principal amount of 4.75% senior unsecured notes due 2026 (the “2026 Senior Notes” and, together with the 2024 Senior Notes and the 2025 Senior Notes, the “Senior Notes”) and received $493.3 million, net of $6.7 million of debt issuance costs.

While we believe our provisional estimates are reasonable, the changes included in Tax Reform are broad and complex.

The final impacts of Tax Reform may differ from the above estimates, possibly materially, due to, among other things, changes in interpretations of Tax Reform, guidance from regulatory agencies, any legislative action to address questions that arise because of Tax Reform, any changes in accounting standards for income taxes or related interpretations in response to Tax Reform, or any updates or changes to estimates the Company has utilized to calculate the impact of Tax Reform, including the impact from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries.

Exchange rate movements can impact the U.S. [removed: dollar reported] [added: dollar-reported] value of our revenues, expenses, assets and liabilities denominated in non-U.S. dollar currencies or where the currency of such items is different than the functional currency of the entity where these items were recorded.

For the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016, 13.4%] [added: 2017, 12.9%] and [removed: 16.9%,] [added: 13.4%,] 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 [removed: 16.9%] [added: 12.9%] of [removed: non-U.S.] [added: non-U.S] dollar exposure for the year ended December 31, [removed: 2016, 35.5%] [added: 2018, 42.2%] was in [removed: British pounds sterling, 34.4%] [added: Euros, 29.4%] was in [removed: Euros] [added: Japanese yen] and [removed: 24.9%] [added: 17.8%] was in [removed: Japanese yen.][added: British pounds sterling.]

Revenues from index-linked investment products represented [removed: 21.7%] [added: 23.5%] and [removed: 18.3%] [added: 21.7%] of operating revenues for the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

[removed: While a substantial portion of our fees for index-linked] investment products are invoiced in U.S. dollars, the fees are based on the investment product’s assets, of which two-thirds are invested in securities denominated in currencies other than the U.S. dollar.

Approximately [removed: 36.9%] [added: 40.4%] and [removed: 38.3%] [added: 36.9%] of our operating expenses for the years ended December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, [removed: Swiss francs, Euros,] Hungarian forints, [added: Euros,] Hong Kong dollars, [removed: Chinese yuan] [added: Swiss francs] and Mexican pesos.

We recognized total foreign currency exchange losses of [removed: $2.2] [added: $0.4] million, [removed: $0.2] [added: $2.2] million and [removed: $2.2] [added: $0.2] million for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively.

While a substantial portion of our fees for index-linked

Our [added: clients access our Analytics] content [removed: is delivered] through [removed: multiple channels, including through] our [added: own] proprietary [removed: applications,] [added: applications and] application programming [removed: interfaces (“API”) and] [added: interfaces, or through] third-party applications [removed: and is] [added: or] directly [removed: embedded into client] [added: on their own] platforms.

[removed: Our clients comprise a wide spectrum of the global investment industry and include] [added: | | (1) |] asset owners (pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance [removed: companies), asset managers (institutional, mutual funds, hedge funds, exchange-traded funds (“ETFs”), private wealth, private][added: companies); |]

[removed: banks and real estate investment trusts),] [added: | | (3) |] financial intermediaries (banks, broker-dealers, exchanges, custodians, trust companies and investment [removed: consultants)] [added: consultants);] and [removed: data distributors.][added: |]

See Part [removed: II,] [added: I,] Item [removed: 7.][added: 1.]

“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview” and Note 1, “Introduction and Basis of Presentation—Significant Accounting [removed: Policies, Concentrations”] [added: Policies—Revenue Recognition,”] of the Notes to [added: the] Consolidated Financial [removed: Statements,] [added: Statements] included [removed: herein,] [added: herein] for [removed: additional] [added: further] information on [removed: clients] [added: how we generate revenue] and [removed: the concentration of clients.][added: our revenue recognition policy.]

[removed: We aim to expand our position as] [added: As] a leading [removed: source for] [added: provider of] mission critical content, applications and services that support the investment processes of [removed: the largest and most sophisticated] [added: a variety of] participants in the global investment [removed: industry.][added: industry, we are well positioned to grow our relationships with existing clients as well as expand to new clients.]

[removed: Against the backdrop of these industry trends, we are well positioned to leverage] [added: Our growth is being fueled by] our competitive [removed: advantages to help] [added: advantages, which are helping] investment institutions create sustainable business models today and into the future.

Our growth strategy is focused on a number of key initiatives that optimize the value of [removed: One MSCI] [added: our integrated company] and capitalize on our competitive advantages to address the changing needs of our clients and the investment industry.

| | • | [removed: Create broad and innovative research-driven] [added: Expand leadership in research-enhanced] content. Our research-driven content plays a key role in our ability to [removed: deliver offerings required to] help our clients develop relevant, global and sustainable investment strategies in an efficient [removed: manner and with the highest standards for data quality.] [added: manner.] We [removed: have proprietary applications] [added: are continually developing a wide range of differentiated content] and [removed: databases that house data from more than 200 third-party sources in addition to our proprietary data. We] have [removed: also] amassed an extensive database of historical global market data, proprietary equity index data, [added: factor models,] private real estate benchmark data, risk algorithms and [removed: models and] ESG data, all of which are critical components of our clients’ investment processes. |

We take an integrated team approach to developing [removed: offerings] [added: content] across our [added: operating] segments.

Our product management, [removed: research,] [added: research and product development,] data operations and technology and application development departments are at the center of this process.

Our content is developed by a [removed: cross-functional] research [added: and product development] team [added: (“research team”) comprised] of mathematicians, economists, statisticians, financial engineers and investment industry experts.

[removed: We] [added: Through our relationships with the world’s largest investment institutions, we] monitor investment trends and their drivers globally and support instrument valuation, risk modeling, portfolio construction, [added: portfolio attribution,] asset allocation and Value at Risk (“VaR”) simulation.

Our [removed: EAB, which was established in 1999,] [added: EAB] meets twice a year to discuss industry and emerging trends and is comprised of senior investment professionals from around the world and senior members of our research team.

By focusing on cross-product and cross-functional innovation, we can maximize the capabilities of each of our [removed: four] operating [removed: segments—Index, Analytics, ESG and Real Estate—in] [added: segments in] order to bring greater value to our clients.

We expect to grow as [removed: One MSCI] [added: one integrated company] through the ongoing integration of the full suite of offerings provided by each of our [removed: four] [added: operating] segments.

For example, we have [removed: incorporated] [added: leveraged] our new global equity model (from the Analytics segment) as well as our ESG ratings research into [removed: our Index offerings.][added: the indexes we offer.]

| | • | [removed: Expand the client base and deepen] [added: Strengthen] existing [added: and new] client [removed: relationships.] [added: relationships by providing solutions.] Our global vantage point enables us to view financial markets in terms of what matters to global investors and financial institutions. We believe our global operating footprint is a competitive advantage that enables us to tailor our coverage initiatives to better serve our clients in the markets where they operate. [removed: From over 30 offices in the Americas, EMEA and Asia, we] [added: We] consult with clients and other market participants to develop content and provide [removed: insights about global risk-taking and opportunity.] [added: insights.] Our research and product management teams seek to understand our clients’ investment processes and needs in order to generate content and design offerings that help clients understand the dimensions of performance and risk in their portfolios and make better-informed investment decisions. Our consultative approach to content development, dedication to client support and range of offerings enable us to build strong relationships with investment professionals and institutions around the world. [removed: As of December 31, 2017, we served over 7,000 clients across 88 countries worldwide.1] |

[removed: In 2017, we] [added: We] repositioned the role of the Chief Operating Officer to be more aligned with our client and go-to-market strategies.

[removed: To] [added: Additionally, to] ensure that we provide world-class service to our largest accounts, as of December 31, [removed: 2017,] [added: 2018,] we have [removed: assigned senior account managers to more than 50] [added: expanded the number] of [removed: our largest accounts by revenue, and appointed key] account managers [removed: to cover more than 90 of] [added: across] our [removed: other large] [added: largest strategic] accounts.

| [removed: 1] [added: 2] | To calculate the number of clients, we use the shipping address of the ultimate customer utilizing the product which counts affiliates, user locations, or business units within a single organization as separate clients. If we aggregate all related clients under their respective parent entity, the number of clients would be approximately 4,000 as of December 31, [removed: 2017.] [added: 2018.] |

[removed: We have invested] [added: | | 5) | continue to invest] in [removed: our data centers,] technology platforms and applications to provide scalable solutions for the processing of large volumes of asset and portfolio [removed: data.][added: data; and |]

| | • | Execute strategic relationships and [removed: acquisitions.] [added: acquisitions with complementary content and technology companies.] We regularly evaluate and selectively pursue strategic relationships with, and acquisitions of, providers of [added: unique and differentiated content,] products and technologies [removed: and companies] that we believe have the potential to complement, enhance or expand our offerings and client base, as well as improve our ability to provide mission critical content, applications and services to enhance the investment decision processes of investment institutions, and the intermediaries that serve such institutions. In order to drive value, we target acquisitions and strategic relationships that can be efficiently integrated into our existing operational structure and global sales network. |

[removed: We] [added: A portion of our fees] also [removed: charge] [added: come from] clients [removed: to] [added: who] use our indexes as the basis for index-linked investment [removed: products, such as ETFs, or as the basis for passively managed funds and separate accounts.][added: products.]

As the investment industry becomes more global and investors become increasingly focused on multi-asset class portfolios, we are well positioned to help our clients achieve their investment objectives by delivering a more comprehensive analysis of their investment strategies using the content, applications and services across our four [removed: operating segments—Index, Analytics, ESG and Real Estate.]

We currently calculate more than [removed: 200,0001] [added: 215,5003] end-of-day indexes daily and more than [removed: 11,000] [added: 11,500] indexes in real [removed: time.][added: time for a variety of markets and industries.]

Clients receive data directly from us or from [removed: one or more] third-party providers of financial information [removed: worldwide that distribute our equity indexes.][added: worldwide.]

In addition, we use content generated by our [removed: Analytics, ESG] [added: Analytics] and [removed: Real Estate] [added: ESG] segments to help construct some of our equity indexes, including some with the highest revenue growth rates.

| | • | MSCI Global Equity Indexes. MSCI Global Equity Indexes are designed to measure returns across a wide variety of equity markets (e.g., [removed: Europe, Japan, USA,] [added: World, EAFE,] Emerging [removed: Markets),] [added: Markets, USA, Europe, Japan),] size segments (e.g., [removed: mid] [added: Large, Mid] and [removed: large] [added: Small] capitalization), [added: sectors (e.g., Utilities, Financials)] and industries (e.g., [removed: banks, media).] [added: Banks, Media).] As of December 31, [removed: 2017,] [added: 2018,] we calculated indexes that covered more than 80 countries in developed, [removed: emerging and] [added: emerging,] frontier [added: and standalone] markets, as well as various regional indexes built from the component country indexes. These indexes include the MSCI ACWI IMI, MSCI World, MSCI EAFE, MSCI Emerging Markets and MSCI USA Indexes. We believe that MSCI Global Equity Indexes are the most widely used benchmarks by cross-border equity [removed: funds.] [added: investors.] A large number of asset owners use the MSCI ACWI IMI Indexes [added: or their component parts] as the [removed: policy] [added: asset allocation] benchmark for their equity portfolios. [removed: More than 85% of international equity assets are benchmarked to MSCI Global Equity Indexes.] |

| [removed: 1] [added: 3 |] The number of indexes [removed: does not take] [added: takes] into consideration different currency [removed: or] [added: and] return versions [removed: of the index] (e.g., price, net and gross returns). | [removed: |]

| | [added: •] | [added: MSCI Custom Indexes. We currently calculate more than 12,000 custom indexes by applying a client’s criteria to an existing MSCI index. Examples of customization criteria include stock exclusions, currency] hedging, tax rates, [removed: stock exclusions] or special weighting. Custom indexes can reflect specific investment criteria, such as socially responsible investment requirements or regulatory constraints. They can be used for back-testing strategies, developing [removed: specialized] investment products, minimizing portfolio tracking error or constructing index-linked products. [added: In certain cases, we design an index methodology to reflect a client’s investment strategy, then brand the index under the client’s name. In other cases, we license an index to a client to use as a starting point to reflect its investment strategy within its own proprietary index.] |

| | • | MSCI Factor Indexes. MSCI Factor Indexes, which are [removed: constructed] [added: built] using the Barra Equity Models [removed: generated] [added: created] in our Analytics segment, seek to address a growing trend among institutional investors and asset managers whose [removed: asset allocation] [added: investment] processes include [added: allocation to systematic] risk [removed: groupings such as volatility, income, value and momentum.] [added: factors.] MSCI Factor Indexes reflect components of equity [removed: return] [added: returns] that can be attributed to [removed: sources of systematic risk and return] [added: factors] such as [removed: value, size, momentum, volatility, yield] [added: Volatility, Yield, Value, Quality, Size] and [removed: quality.] [added: Momentum.] We offer a broad suite of factor indexes that have been developed using the expertise of our Analytics segment, including high-exposure factor indexes (e.g., the MSCI Minimum Volatility Index), high capacity factor indexes (e.g., MSCI Value Weighted Indexes), combinations of [removed: single factor] [added: single-factor] indexes (e.g., MSCI Factor Mix A-Series Indexes) and multi-factor indexes (e.g., MSCI Diversified Multiple-Factor Indexes). [added: Clients benefit from a consistent modeling framework across Factor Indexes and the Analytics segment’s offerings using Barra Equity Models in portfolio construction, risk management and performance attribution tools.] |

| | • | MSCI ESG Indexes. MSCI ESG Indexes, which are constructed using research from our ESG segment, are designed to meet the growing demand for indexes that integrate ESG criteria into [removed: benchmarks] [added: portfolio construction. Investors that wish] to measure performance [removed: for] [added: across various aspects of Environmental (e.g., climate change), Social (e.g., human capital) and Governance (e.g., corporate governance) metrics can] use [removed: by institutional investors who wish] [added: these benchmarks] to [removed: adopt] [added: inform] a long-term sustainable investment view. They enable clients to [removed: issue index-based ESG investment products, to] benchmark the performance of ESG [removed: portfolios and] [added: portfolios,] to [removed: measure and report on] [added: monitor] compliance with ESG [removed: mandates.] [added: mandates and serve as the basis for index-based ESG investment products and portfolios.] The MSCI ESG Indexes include: |

| | o | ESG Integration Indexes that are designed to help investors incorporate ESG criteria into their core asset allocation and investment process. These include the MSCI [added: ESG Universal Indexes (e.g., MSCI] ACWI ESG Universal [removed: Index] [added: Index)] or MSCI ESG Leaders [removed: Index,] [added: Indexes (e.g., MSCI USA ESG Leaders Index),] which use MSCI ESG Ratings to identify companies that have demonstrated an ability to manage their ESG risks and opportunities; |

| | o | Values-based Indexes that [removed: select] [added: include] companies with the highest ESG Ratings but also exclude companies based on certain values, norms or ethical standards. These include the [added: broad] MSCI SRI [removed: Index and] [added: Indexes,] the KLD 400 Social [removed: Index;] [added: Index as well as Values-based Indexes focused on specific themes (e.g., MSCI World ex-Tobacco Involvement Index);] |

| | o | Environmental Indexes, including Low Carbon [added: Target] Indexes, Global Environment Indexes, and Fossil Fuels Exclusion Indexes that [removed: help] [added: include] investors [added: aiming to] reduce their carbon exposure or capture opportunities in renewable energy and clean technology; |

| | o | Impact Indexes, such as the Sustainable Impact [removed: Index] [added: Indexes,] that [removed: aims to identify] [added: include] 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; and |

| | • | MSCI Real Assets Indexes. MSCI [removed: provides a comprehensive suite of] Real Assets Indexes [removed: that] provide investors [added: with] transparency and insight [removed: for] [added: into] this asset class. MSCI’s Real Assets Indexes include MSCI Real Estate Indexes (e.g., MSCI US REIT Index; MSCI Sector/Core/Factor/Liquid Real Estate Indexes), MSCI Infrastructure Indexes, MSCI Agriculture Producers Indexes, MSCI Timber Select Index, MSCI Commodity Producers Indexes and MSCI Natural Resources Indexes. |

| | • | Global Industry Classification Standard (“GICS”®). GICS [removed: was] [added: and GICS Direct were] developed and [removed: is] [added: are] maintained jointly by MSCI and Standard & Poor’s Financial Services, LLC, a subsidiary of S&P Global Inc. (“Standard & Poor’s”). This classification system was designed to respond to clients’ needs for a comprehensive, consistent and accurate framework for classifying companies into industries. GICS is widely accepted as an industry analysis framework for investment research, portfolio management and asset allocation. [removed: We offer] GICS [removed: Direct, a joint offering of MSCI and Standard & Poor’s. GICS] Direct is a database comprised of [removed: over 45,000] active companies and [removed: 58,000] securities classified by sector, industry group, industry and sub-industry in accordance with the proprietary GICS methodology. [removed: 90] [added: The MSCI US and Global Sector Indexes are comprised] of [removed: the top 100] [added: GICS sector, industry group, and industry indexes across countries and regions in Developed, Emerging and select Frontier markets. The MSCI Global Sector Indexes provide a] global [removed: asset managers] [added: structure for benchmarking sectors and can also serve as the basis for index-linked structured products and other investment vehicles, such as ETFs and exchange traded notes.] |

[removed: Further, this] [added: For example, our new] fixed income [added: factor] model [added: (FI400)] has been combined with models that cover currencies, commodities, equities, mutual funds, hedge funds and private assets – private real estate and private equity – to deliver our next generation multi-asset class factor model (the MSCI [removed: Integrated] [added: Multi-Asset Class (“MAC”) Factor] Model) providing clients with greater insights into the drivers of risk in their portfolios.

MSCI is a leading provider of mission critical investment decision support tools and services — we power investors to make better decisions about their investment portfolios.

Our tools and services help investors better understand the drivers of risk and return and build portfolios to more effectively and efficiently achieve their investment objectives.

We are able to do this by leveraging our knowledge of the global investment process and our expertise in research, data, and technology in order to deliver actionable solutions1 to our clients.

We are dynamic and flexible in the delivery of our content and capabilities, such as our indexes; portfolio construction tools and risk-management services; environmental, social and governance (“ESG”) research and ratings; and real estate benchmarks, return analytics services and market insights; much of which can be accessed by our clients through multiple channels and platforms.

Professionally managed investment assets generally continue to grow at a rapid pace as global economies and markets continue to evolve, and both individuals and sovereign entities are increasing their savings.

In addition to this growth, the investment industry continues to transform, as evidenced by a number of notable trends, including:

| | (1) | Transformation of clients’ operating models and business strategies, including an increased focus on factor and indexed investments, to address the changing competitive landscape characterized by an intense focus by investors on the drivers of risk and return, manager fee compression and industry consolidation; |

| | (2) | Continuing growth of index-based investing and assets linked to exchange traded funds (“ETFs”); |

| | (3) | Growing use of advanced technologies to enhance investment analytics and streamline operations; |

| | (4) | Increasing outsourcing of non-core functions and vendor/supply chain consolidation; and |

| | (5) | Increasing integration of ESG considerations into investment processes and products. |

| 1 | The term “solutions” as used throughout this Annual Report on Form 10-K refers to the usage of our products and/or services by our clients to help them achieve their specific investment objectives. |

We are uniquely positioned to benefit from these trends and to help our clients adapt to the changing industry.

Our clients rely on us to provide consistent, scalable and integrated solutions across their entire investment process, driving more informed investment decisions and increased operational efficiency.

These solutions increasingly involve multiple areas of content or services and may also be supported by insights from our research team to help our clients understand how our tools can be utilized alone or in combination.

The differentiated research insights and content embedded in our innovative tools are central to the MSCI franchise.

Through the content developed in each of our operating segments — Index, Analytics, ESG and Real Estate — our clients gain a broad view of the global investment industry, which enables them to manage their investment objectives across multiple asset classes in an increasingly integrated manner.

Our clients use the offerings from each of our operating segments to achieve a wide range of objectives:

| | • | Index and Analytics help investors define investment universes, measure performance, analyze returns, set asset allocations, construct portfolios, conduct portfolio attribution and manage risk. Additionally, our indexes serve as a basis for index-linked investment products such as ETFs; |

| | • | ESG’s research and ratings provide unique insights that help investors identify and measure ESG risks and opportunities; and |

| | • | Real Estate offers data-driven analytics and research of global and individual property markets as well as benchmarks for performance measurement. |

We remain keenly focused on staying at the forefront of investment trends to address the evolving needs of our clients in a changing industry.

In order to most effectively serve our clients and remain differentiated from competition, we remain committed to driving a solutions-based approach, achieving service excellence, enhancing our differentiated research and content and delivering flexible, cutting-edge technology and platforms.

As a client-centric company, we offer innovative solutions to help our clients adapt to a fast-changing marketplace.

As the needs of our clients change, so do our offerings.

Our clients comprise a wide spectrum of the global investment industry and include the following key client segments:

| | (2) | asset managers (institutional, mutual funds, hedge funds, ETFs, insurance, private wealth, private banks and real estate investment trusts); |

| | (4) | wealth managers (including an increasing number of “robo-advisors”). |

The clients described above have unique investment objectives and turn to us for an integrated set of tools that help them effectively and efficiently achieve these objectives.

For example:

| | (1) | Asset owners and, increasingly, wealth managers, are seeking to better understand the drivers of risk and return as well as the value provided by active managers (versus their passive counterparts). Additionally, they are seeking tools for model portfolio creation and to gain a complete and detailed picture of their entire portfolio. These investors include those with long time horizons who are turning to private assets, such as real estate, private equity and hedge funds, as they seek uncorrelated and above-market returns. |

| | (2) | Active asset managers must enhance and explain their investment processes and strategies, and find ways to differentiate themselves from their competitors in order to attract assets and justify their fees. |

| | (3) | Asset managers are increasingly developing index-based products, such as ETFs, to more efficiently implement their investment strategies and continue to attract assets. |

| | (4) | Financial intermediaries, such as exchanges and broker dealers, are creating exchange-listed and over-the-counter index-based products such as futures, options, swaps and structured products to help industry participants manage investment risk and efficiently achieve their investment objectives. |

| | (5) | Asset owners, asset managers and wealth managers are looking to integrate ESG considerations into their investment processes. |

| | (6) | Clients are seeking customized solutions and high-touch support from their tools providers to help them operate more effectively and efficiently. |

Through a combined use of the content and capabilities provided by each of our Index, Analytics, ESG and Real Estate operating segments, our clients are better able to achieve their multi-faceted investment objectives.

“Business—Operating Segments” for additional information on the content, applications and services provided by each operating segment that fuel the solutions we provide to our clients.

As of December 31, 2018, we served over 7,000 clients across 90 countries worldwide.2 For the fiscal years ended December 31, 2018 and 2017, revenues from our ten largest clients accounted for 28.6% and 27.8% of our total revenues, respectively.

For the fiscal year ended December 31, 2018, our largest client organization by revenue, BlackRock, accounted for 11.9% of our total revenues.

We are an innovative and leading provider of mission-critical investment decision support tools, including indexes; portfolio construction and risk management products and services; Environmental, Social and Governance (“ESG”) research and ratings; and real estate research, reporting and benchmarking offerings.

Our research-derived intellectual property includes methodologies, models, derived data and algorithms (collectively, “content”), as well as applications and services, which help our clients manage their investment processes and address their investment, risk and regulatory challenges.

We leverage our knowledge of the global investment process and our expertise in research and data collection to deliver content to our clients that helps them make more efficient and informed investment decisions.

We also offer services that help clients use our content and applications more effectively and operate more efficiently.

We operate as “One MSCI” and as a client-centric company.

We achieve this by managing our client coverage, research, data and technology groups in an integrated manner to best leverage our unique intellectual property and differentiated know-how across product lines to deliver innovative and high quality content to our clients.

As the needs of our clients change, we respond with offerings that address their evolving strategic and investment objectives (our “go-to-market strategy”).

Our clients use our offerings across multiple asset classes to achieve a wide range of objectives, including benchmarking, index-linked product creation, portfolio construction, performance measurement and attribution, risk management, as well as investor and regulatory reporting.

In addition, our clients are increasingly integrating the new content developed across our company, such as factor and ESG data and indexes, into their investment processes.

As of December 31, 2017, our clients included:

| | • | 99 of the top 100 global asset managers (as ranked by Pensions & Investments (“P&I”) in its report dated April 2017); |

| | • | 90 of the top 100 global pension funds (as ranked by P&I/Tower Watson in their report dated September 2017); |

| | • | 83 of the top 100 global banks (as ranked by S&P Global Market Intelligence in its report dated July 2017); |

| | • | 75 of the top 100 global hedge funds (as ranked by Preqin in its report dated April 2017). |

The investment industry is experiencing a number of notable trends that are transforming the landscape of investment institutions and the manner in which they operate.

These trends, which are creating attractive opportunities for us, include: (1) increased globalization, which is driving demand for global indexes and factor models, (2) increased investing complexity, which is driving demand for sophisticated portfolio and risk management products, (3) an increased focus by investment institutions on designing and implementing lower cost and outcome-oriented strategies, which often take the form of index-based products and necessitate an understanding of the factors driving risk and return, (4) an increased integration of factor and ESG criteria into the investment process, which is driving demand for our factor and ESG content and applications, and (5) the outsourcing by investment institutions of non-core functions and the consolidation of external systems, content and vendors in order to leverage technology and services to scale efficiently, which benefits our managed service offerings and leverages our footprint across a client organization.

We have a number of competitive advantages, including deep knowledge of the global investment process, experienced research, product development and data management teams that create and promote relevant and high quality content and offerings and a client coverage team that helps build and maintain strong and trusted client relationships with the world’s largest investment institutions.

Additionally, we have a knowledgeable information technology team that develops scalable technology and data infrastructure that allow us to scale our operations, as well as help our clients be more cost-effective in their own operations through the use of our applications and services.

We have the opportunity to provide innovative content, strengthen our go-to-market strategy, and deliver enhanced capabilities through our flexible applications and outstanding client offerings and services as One MSCI.

Over the past three years, we have directed the majority of our investments toward research, data production systems and technology infrastructure and applications to enable us to develop new content more quickly and deliver new and previously existing content more cost-effectively.

For more information about our research and development and associated costs, see Note 1, “Introduction and Basis of Presentation—Significant Accounting Policies, Research and Development” of the Notes to Consolidated Financial Statements included herein and “Research and development” in the Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015.

In 2017, we appointed a new Global Head of Research and Product Development who leads a team of more than 180 employees, many of whom have obtained PhDs in fields that are relevant to our business.

For example we hosted more than 650 seminars, webinars, conferences and workshops in various locations around the world in 2017.

| | • | Develop flexible and scalable technology. Technology enhances access to our content and enables us to better meet our clients’ needs. Many of our proprietary risk analytics are made available to clients through our proprietary applications. Our application development methodology leverages best practices from the software industry, including agile development, testing protocols, iterative development cycles and beta releases. Our application development projects involve extensive collaboration with our product management team and our clients. |

We plan to continue improving the user experience of our clients and the accessibility of our full suite of content, applications and services by enhancing the functionality of our technology and increasing the performance, stability and scalability of our platforms.

In doing so, we are not only able to operate in a more cost-effective manner as a firm, but are also able to offer clients computing capacity that they would not be able to access in a cost-effective manner through internal development.

We will also continue to invest in developing a platform that integrates our technology and content into a single interface and client experience.

For example, we are building the MSCI Analytics Platform with an open architecture that will provide clients with greater flexibility to access content across the Company’s four operating segments, create new formulas and calculations, add their own data and analytical engines, and connect with other client and vendor systems.

Elements of this new platform were launched in 2017, and we continue to allocate resources to developing additional functionality within the platform in order to better meet the needs of our clients.

Our Business Model

Our principal business model is to license annual, recurring subscriptions to our offerings for a fee, which is, in a majority of cases, paid in advance.

Fees may vary by offering, number of users or volume of services.

These clients commonly pay us a license fee, typically in arrears, for the use of our intellectual property 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 fee, typically paid in arrears, for the use of our intellectual property primarily based on their volume of trades.

Clients also subscribe to periodic benchmark reports, digests and other publications associated with our Real Estate offerings.

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

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

“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Results” for a break-down of revenues attributable to recurring subscriptions, asset-based fees and non-recurring revenue for our Index, Analytics and All Other reporting segments.

See Note 12, “Segment Information,” of the Notes to Consolidated Financial Statements, included herein, for additional information on our current segment reporting structure and financial information for each segment.

As of June 30, 2017, more than $12.4 trillion of assets under management were benchmarked to MSCI indexes (as reported on September 30, 2017 by eVestment, Morningstar and Bloomberg).

10-K 1 [removed: msci-10k_20171231.htm] [added: msci-10k_20181231.htm] 10-K

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

For the fiscal year ended December 31, [removed: 2017][added: 2018]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T [removed: (§ 232.405] [added: (§232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

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

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: 2017)] [added: 2018)] was [removed: $9,086,723,896.][added: $14,368,769,114.]

As of February [removed: 16, 2018,] [added: 15, 2019,] there were [removed: 89,944,256] [added: 84,323,295] 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: May 10, 2018,] [added: April 25, 2019,] are incorporated herein by reference into Part III of this Form 10-K.

FOR THE YEAR ENDED DECEMBER 31, [removed: 2017][added: 2018]

| Item 1A. | | [Risk Factors](#ITEM_1A_RISK_FACTORS) | | [removed: 16] [added: 14] |

| Item 1B. | | [Unresolved Staff Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS) | | [removed: 34] [added: 32] |

| Item 2. | | [Properties](#ITEM_2_PROPERTIES) | | [removed: 34] [added: 33] |

| Item 3. | | [Legal Proceedings](#ITEM_3_LEGAL_PROCEEDINGS) | | [removed: 34] [added: 33] |

| Item 4. | | [Mine Safety Disclosures](#ITEM_4_MINE_SAFETY_DISCLOSURES) | | [removed: 34] [added: 33] |

| Item 5. | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ITEM_5_MARKET_FOR_REGISTRANTS_COMMON_EQU) | | [removed: 35] [added: 34] |

| Item 6. | | [Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | | [removed: 39] [added: 37] |

| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ITEM_7_MANAGEMENTS_DISCUSSION_ANALYSIS_F) | | [removed: 42] [added: 40] |

| Item 7A. | | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM_7A_QUALITATIVE_QUANTITATIVE_DISCLOS) | | [removed: 74] [added: 71] |

| Item 8. | | [Financial Statements and Supplementary Data](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR) | | [removed: 75] [added: 72] |

| Item 9. | | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC) | | [removed: 75] [added: 72] |

| Item 9A. | | [Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURES) | | [removed: 75] [added: 72] |

| Item 9B. | | [Other Information](#ITEM_9B_OR_INFORMATION) | | [removed: 76] [added: 73] |

| Item 10. | | [Directors, Executive Officers and Corporate Governance](#ITEM_10_DIRECTORS_EXECUTIVE_FICERS_CORPO) | | [removed: 78] [added: 74] |

| Item 11. | | [Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | | [removed: 78] [added: 74] |

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12_SECURITY_OWNERSHIP_CERTAIN_BENEF) | | [removed: 78] [added: 74] |

| Item 13. | | [Certain Relationships and Related Transactions, and Director Independence](#ITEM_13_CERTAIN_RELATIONSHIPS_RELATED_TR) | | [removed: 78] [added: 74] |

| Item 14. | | [Principal Accounting Fees and Services](#ITEM_14_PRINCIPAL_ACCOUNTING_FEES_SERVIC) | | [removed: 78] [added: 74] |

| Item 15. | | [Exhibits, Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STATEMENT_SCH) | | [removed: 79] [added: 75] |

| Item 16. | | [Form 10-K Summary](#ITEM_16_FORM_10K_SUMMARY) | | [removed: 95] [added: 93] |

We have included in this Annual Report on Form [removed: 10-K] [added: 10-K,] and from time to time may make in our public filings, press releases or other public statements, certain statements that constitute forward-looking statements.

(Mark One)

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

| | | | | | | |

In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology.

You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect our actual results, levels of activity, performance or achievements.

(Check one):

In some cases you can identify these statements by forward-looking words such as “may,” “might,” “should,” “anticipates,” “expects,” “intends,” “plans,” “seeks,” “estimates,” “potential,” “continue,” “believes” and similar expressions, although some forward-looking statements are expressed differently.

These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict and may cause actual results to differ materially from the forward-looking statements and from management’s current expectations.

As of December 31, [removed: 2017,] [added: 2018,] our principal offices consisted of the following leased properties:

| Mumbai, India | | | 126,286 | | | | 1 | | | [removed: September 30, 2018] [added: August 31, 2023] |

| Berkeley, California | | | 34,178 | | | | 1 | | | February [removed: 29, 2020] [added: 28, 2030] |

As of December 31, [removed: 2017,] [added: 2018,] we also leased and occupied offices in the following locations (in descending order of square footage): [removed: Chicago, Illinois;] San Francisco, California; Beijing, China; Frankfurt, Germany; Shanghai, China; Hong Kong, China; Paris, France; [removed: Sydney, Australia;] Tokyo, Japan; Ann Arbor, Michigan; Portland, Maine; [added: Sydney, Australia;] Toronto, Canada; Singapore; [removed: Almere, Netherlands;] Seoul, Korea; Milan, Italy; Gaithersburg, Maryland; Cape Town, South Africa; Stockholm, Sweden; Sao Paolo, Brazil; [removed: and] Dubai, United Arab [removed: Emirates.][added: Emirates; Barcelona, Spain; and Taipei, Taiwan.]

| Monterrey, Mexico | | | 46,569 | | | | 1 | | | October 31, 2028 |

| Manila, Philippines | | | 25,750 | | | | 1 | | | February 29, 2024 |

| Chicago, Illinois | | | 8,859 | | | | 1 | | | August 31, 2025 |

| Geneva, Switzerland | | | 8,826 | | | | 1 | | | August 31, 2028 |

| Monterrey, Mexico | | | 28,933 | | | | 1 | | | December 31, 2020 |

| Manila, Philippines | | | 25,747 | | | | 1 | | | July 31, 2022 |

| Conshohocken, Pennsylvania | | | 15,590 | | | | 1 | | | June 30, 2019 |

| Geneva, Switzerland | | | 11,883 | | | | 1 | | | March 31, 2019 |

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: 16, 2018,] [added: 15, 2019,] there were [removed: 128] [added: 121] shareholders of record of our common stock.

On January 30, [removed: 2018,] [added: 2019,] our Board of Directors declared a quarterly cash dividend, in an amount of [removed: $0.38] [added: $0.58] per share of common stock, to be paid on March 15, [removed: 2018] [added: 2019] to shareholders of record as of the close of trading on February [removed: 16, 2018.][added: 22, 2019.]

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

Under the 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 [removed: pursuant to the terms of the 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 stock in lieu of cash.

Non-employee directors are entitled to receive an annual grant of [removed: $140,000 each in stock units] [added: $160,000] and the lead director is entitled to an additional [removed: $25,000] [added: $50,000] in stock units (a total of [removed: $165,000), which are typically] [added: $210,000), in each case,] subject to a one-year vesting schedule.

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

Pursuant to the Omnibus Plan, the Company reserved 7,565,483 shares of common stock for issuance; plus any additional shares which become available due to forfeiture, expiration or cancellation of outstanding awards, [removed: which were registered under the Securities Act following approval by the Company’s shareholders.]

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

In connection with the acquisition of [removed: RiskMetrics,] [added: RiskMetrics Group, LLC (“RiskMetrics”) in 2010,] we filed a registration statement registering under the Securities Act the 4,257,779 shares of MSCI common stock reserved for issuance in respect of incentive awards to officers and certain employees of RiskMetrics pursuant to the RiskMetrics Group, Inc. 2000 Stock Option Plan, RiskMetrics Group, Inc. 2004 Stock Option Plan, Institutional Shareholder Services Holdings, Inc. Equity Incentive Plan and RiskMetrics Group, Inc. 2007 Omnibus Incentive Compensation Plan (collectively, the “RMG Plans”).

The following table presents certain information with respect to our equity compensation plans at December 31, [removed: 2017:][added: 2018:]

| MSCI Amended and Restated 2007 Equity Incentive Compensation Plan | | | [removed: 903,539] [added: 611,374] | | | $ | [removed: 58.61] [added: 58.98] | | | | — | |

| RiskMetrics Group, Inc. 2007 Omnibus Incentive Compensation Plan | | | [removed: 95,311] [added: 61,977] | | | $ | [removed: 21.13] [added: 22.74] | | | | — | |

| MSCI Inc. 2016 Non-Employee Directors Compensation Plan | | | [removed: 16,181] [added: 11,004] | | | $ | [removed: 100.95] [added: 149.83] | | | | [removed: 311,870] [added: 297,688] | |

On October 26, 2016, the Board of Directors approved [removed: an additional] [added: a] stock repurchase program [removed: authorizing] [added: for] the purchase of up to $750.0 million worth of shares of [removed: our] [added: the Company’s] common stock (together with the [removed: $330.3 million] [added: amount then] remaining [removed: authorization] under [removed: the 2015 Repurchase Program,] [added: a previously existing share repurchase program,] the “2016 Repurchase Program”).

[removed: Share] repurchases made pursuant to the [removed: 2016] [added: 2018] Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions.

For the year ended December 31, [removed: 2017,] [added: 2018,] the Company repurchased approximately [removed: 1.6] [added: 6.2] million shares at an average price of [removed: $87.96] [added: $148.34] per share for a total value of [removed: $136.9] [added: $925.0] million pursuant to open market repurchases under the [removed: 2016] [added: 2018] Repurchase Program.

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: 2017.][added: 2018.]

| (1) | Includes (i) shares purchased by the Company [removed: in] [added: on] the open [removed: market;] [added: market under the 2018 Repurchase Program;] (ii) shares withheld to satisfy tax withholding obligations on behalf of employees [removed: in connection with the] [added: that occur upon] vesting and delivery of outstanding shares underlying restricted stock units; (iii) shares withheld to satisfy tax withholding obligations [removed: on behalf of employees in connection with the vesting] and [removed: delivery of outstanding shares underlying performance stock units; (iv) shares withheld to satisfy tax withholding obligations and] exercise [removed: prices] [added: price] on behalf of employees [removed: in connection with the] [added: that occur upon] exercise and delivery of outstanding shares underlying stock options; and [removed: (v)] [added: (iv)] shares held in treasury under the MSCI Inc. Non-Employee Directors Deferral Plan. The value of [removed: the] shares withheld [removed: were] [added: to satisfy tax withholding obligations was] determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company. [removed: The amount also includes shares repurchased under the 2016 Repurchase Program.] |

[removed: The] [added: Since January 1, 2016, the] Company has issued an aggregate principle amount of [removed: $2.1] [added: $1.0] billion in [removed: senior unsecured notes (collectively, the “Senior Notes”)] [added: Senior Notes] in [removed: three] [added: two] discrete private offerings in the amounts of [removed: $800.0 million, $800.0 million and] $500.0 [removed: million,] [added: million each,] 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 [removed: 2026 Senior Notes on August 4, 2016, the 2025] [added: 2027] Senior Notes on [removed: August 13, 2015] [added: May 15, 2018] and the [removed: 2024] [added: 2026] Senior Notes on [removed: November 20, 2014.][added: August 4, 2016.]

There were no unregistered sales of equity securities in the year ended December 31, [removed: 2017.][added: 2018.]

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: 2012] [added: 2013] assuming an investment of $100 at the closing price on December 31, [removed: 2012.][added: 2013.]

This graph is not “soliciting material,” is not to be deemed filed with the SEC and is not to be incorporated by reference in any of our filings under the Securities Act [removed: of 1933] or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

[removed: ][added: ]

| | | [removed: 2017] [added: 2013] | | | | [removed: 2016] [added: 2014] | | | | 2015 | | | | [removed: 2014] [added: 2016] | | | | [removed: 2013] [added: 2017] | | | | [removed: 2012] [added: 2018] | | |

| MSCI Inc. | | $ | [removed: 424] [added: 100] | | | $ | [removed: 261] [added: 154] | | | $ | 236 | | | $ | [removed: 154] [added: 261] | | | $ | [removed: 141] [added: 424] | | | $ | [removed: 100] [added: 502] | |

| S&P 500 | | $ | [removed: 208] [added: 100] | | | $ | [removed: 171] [added: 151] | | | $ | 153 | | | $ | [removed: 151] [added: 171] | | | $ | [removed: 132] [added: 208] | | | $ | [removed: 100] [added: 199] | |

| NYSE Composite Index | | $ | [removed: 172] [added: 100] | | | $ | [removed: 145] [added: 135] | | | $ | 129 | | | $ | [removed: 135] [added: 145] | | | $ | [removed: 126] [added: 172] | | | $ | [removed: 100] [added: 157] | |

which were registered under the Securities Act of 1933, as amended (the “Securities Act”) following approval by the Company’s shareholders.

| MSCI Inc. 2016 Omnibus Plan | | | 716,726 | | | $ | 97.64 | | | | 6,740,573 | |

| Total | | | 1,401,081 | | | $ | 77.87 | | | | 7,038,261 | |

On May 1, 2018, the Board of Directors authorized an additional stock repurchase program for the purchase of up to $1.0 billion worth of shares of the Company’s common stock (together with the $523.1 million of authorization then remaining under the 2016 Repurchase Program, the “2018 Repurchase Program”).

Share

As of December 31, 2018, there was $808.1 million of available authorization remaining under the 2018 Repurchase Program.

| Month #1 (October 1, 2018-October 31, 2018) | | | 777,349 | | | $ | 153.92 | | | | 777,030 | | | $ | 1,344,652,000 | |

| Month #2 (November 1, 2018-November 30, 2018) | | | 2,297,622 | | | $ | 148.57 | | | | 2,294,078 | | | $ | 1,003,839,000 | |

| Month #3 (December 1, 2018-December 31, 2018) | | | 1,371,422 | | | $ | 142.86 | | | | 1,370,023 | | | $ | 808,146,000 | |

| Total | | | 4,446,393 | | | $ | 147.74 | | | | 4,441,131 | | | $ | 808,146,000 | |

The following table presents the high and low closing prices per share and cash dividends declared and distributed per share of our common stock from January 1, 2016 through December 31, 2017.

| Years Ended | | High | | | | Low | | | | Dividends per Share of Common Stock | | |

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

| December 31, 2017 | | | | | | | | | | | | |

| First Quarter | | $ | 99.31 | | | $ | 78.71 | | | $ | 0.28 | |

| Second Quarter | | $ | 106.17 | | | $ | 96.26 | | | $ | 0.28 | |

| Third Quarter | | $ | 117.74 | | | $ | 102.28 | | | $ | 0.38 | |

| Fourth Quarter | | $ | 129.35 | | | $ | 116.98 | | | $ | 0.38 | |

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

| 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 | |

On February 16, 2018, the per share closing price of our common stock on the New York Stock Exchange was $145.00.

Effective May 1, 2018, non-employee directors will be entitled to receive an annual grant of $160,000 and the lead director will be entitled to an additional $50,000 in stock units (a total of $210,000), which will also be subject to a one-year vesting schedule.

| MSCI Inc. 2016 Omnibus Plan | | | 548,826 | | | $ | 80.94 | | | | 7,002,387 | |

| Total | | | 1,563,857 | | | $ | 64.60 | | | | 7,314,257 | |

On October 28, 2015, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $1.0 billion worth of shares of MSCI’s common stock (the “2015 Repurchase Program”).

| Month #1 (October 1, 2017-October 31, 2017) | | | 494 | | | $ | 121.13 | | | | \- | | | $ | 733,122,000 | |

| Month #2 (November 1, 2017-November 30, 2017) | | | 400 | | | $ | 124.00 | | | | 400 | | | $ | 733,073,000 | |

| Month #3 (December 1, 2017-December 31, 2017) | | | \- | | | $ | \- | | | | \- | | | $ | 733,073,000 | |

| Total | | | 894 | | | $ | 122.41 | | | | 400 | | | $ | 733,073,000 | |

The selected Consolidated Statement of Income data for the years ended December 31, [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] and the selected Consolidated Statement of Financial Condition data as of December 31, [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] 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: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] have been audited and

The selected Consolidated Statement of Income data for the years ended December 31, [removed: 2014] [added: 2015] and [removed: 2013] [added: 2014] and the selected Consolidated Statement of Financial Condition data as of December 31, [removed: 2015, 2014] [added: 2016, 2015] and [removed: 2013] [added: 2014] are derived from our audited consolidated financial statements not included in this Annual Report on Form 10-K.

| | | Years Ended | | | | | | | | | | | | | | | | | | | [added: |]

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

| | | [added: 2018 (1)] | [removed: 2017] | | | [added: 2017 (2)] | [removed: 2016] | | | [removed: 2015 (1)] | [added: 2016] | | | [removed: 2014 (2)] [added: 2015 (3)] | | | | [removed: 2013] [added: 2014] (4) | | | [added: |]

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

| Operating revenues | | $ | [removed: 1,274,172] [added: 1,433,984] | | | $ | [removed: 1,150,669] [added: 1,274,172] | | | $ | [removed: 1,075,013] [added: 1,150,669] | | | $ | [removed: 996,680] [added: 1,075,013] | | | $ | [removed: 913,364] [added: 996,680] | | [added: |]

| Total operating expenses | | | [removed: 694,984] [added: 747,086] | | | | [removed: 662,565] [added: 694,402] | | | | [removed: 671,115] [added: 662,565] | | | | [removed: 659,514] [added: 671,115] | | | | [removed: 573,033] [added: 659,514] | | [added: |]

| Operating income | | | [removed: 579,188] [added: 686,898] | | | | [removed: 488,104] [added: 579,770] | | | | [removed: 403,898] [added: 488,104] | | | | [removed: 337,166] [added: 403,898] | | | | [removed: 340,331] [added: 337,166] | | [added: |]

| Other expense (income), net | | | [removed: 112,289] [added: 57,002] | | | | [removed: 102,166] [added: 112,871] | | | | [removed: 54,344] [added: 102,166] | | | | [removed: 28,828] [added: 54,344] | | | | [removed: 27,503] [added: 28,828] | | [added: |]

| Provision for income taxes | | | [added: 122,011 | | | |] 162,927 | | | | 125,083 | | | | 119,516 | | | | 109,396 | | | [removed: | 112,918 | |]

| Income from continuing operations, net of income taxes | | | [added: 507,885 | | | |] 303,972 | | | | 260,855 | | | | 230,038 | | | | 198,942 | | | [removed: | 199,910 | |]

| Income (loss) from discontinued operations, net of income taxes | | | — | | | | — | | | | [removed: (6,390] [added: —] | [removed: )] | | | [removed: 85,171] [added: (6,390] | [removed: (3)] [added: )] | | | [removed: 22,647] [added: 85,171] | | [added: (5) |]

| Net income | | $ | [removed: 303,972] [added: 507,885] | | | $ | [removed: 260,855] [added: 303,972] | | | $ | [removed: 223,648] [added: 260,855] | | | $ | [removed: 284,113] [added: 223,648] | | | $ | [removed: 222,557] [added: 284,113] | | [added: |]

| Operating margin | | | [removed: 45.5] [added: 47.9] | % | | | [removed: 42.4] [added: 45.5] | % | | | [removed: 37.6] [added: 42.4] | % | | | [removed: 33.8] [added: 37.6] | % | | | [removed: 37.3] [added: 33.8] | % | [added: |]

| Basic earnings per share: | | | | | | | | | | | | | | | | | | | | | [added: |]

| Earnings per basic common share from continuing operations | | $ | [removed: 3.36] [added: 5.83] | | | $ | [removed: 2.72] [added: 3.36] | | | $ | [removed: 2.11] [added: 2.72] | | | $ | [removed: 1.72] [added: 2.11] | | | $ | [removed: 1.66] [added: 1.72] | | [added: |]

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

| Earnings per basic common share | | $ | [removed: 3.36] [added: 5.83] | | | $ | [removed: 2.72] [added: 3.36] | | | $ | [removed: 2.05] [added: 2.72] | | | $ | [removed: 2.45] [added: 2.05] | | | $ | [removed: 1.85] [added: 2.45] | | [added: |]

| Diluted earnings per share: | | | | | | | | | | | | | | | | | | | | | [added: |]

| Earnings per diluted common share from continuing operations | | $ | [removed: 3.31] [added: 5.66] | | | $ | [removed: 2.70] [added: 3.31] | | | $ | [removed: 2.09] [added: 2.70] | | | $ | [removed: 1.70] [added: 2.09] | | | $ | [removed: 1.64] [added: 1.70] | | [added: |]

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

| Earnings per diluted common share | | $ | [removed: 3.31] [added: 5.66] | | | $ | [removed: 2.70] [added: 3.31] | | | $ | [removed: 2.03] [added: 2.70] | | | $ | [removed: 2.43] [added: 2.03] | | | $ | [removed: 1.83] [added: 2.43] | | [added: |]

| Weighted average shares outstanding used in computing earnings per share | | | | | | | | | | | | | | | | | | | | | [added: |]

| Basic | | | [added: 87,179 | | | |] 90,336 | | | | 95,986 | | | | 109,124 | | | | 115,737 | | | [removed: | 120,100 | |]

| Diluted | | | [added: 89,701 | | | |] 91,914 | | | | 96,540 | | | | 109,926 | | | | 116,706 | | | [removed: | 121,074 | |]

| Dividends declared per common share | | $ | [removed: 1.32] [added: 1.92] | | | $ | [removed: 1.00] [added: 1.32] | | | $ | [removed: 0.80] [added: 1.00] | | | $ | [removed: 0.18] [added: 0.80] | | | $ | [removed: —] [added: 0.18] | | [added: |]

| | | As of or For the | | | | | | | | | | | | | | | | | | | [added: |]

| | | [removed: 2017] [added: 2018 (1)] | | | | [added: 2017] | [removed: 2016] | | | [removed: 2015 (1)] | [added: 2016] | | | [removed: 2014 (2)] [added: 2015 (3)] | | | | [removed: 2013] [added: 2014] (4) | | | [added: |]

| Cash and cash equivalents | | $ | [removed: 889,502] [added: 904,176] | | | $ | [removed: 791,834] [added: 889,502] | | | $ | [removed: 777,706] [added: 791,834] | | | $ | [removed: 508,799] [added: 777,706] | | | $ | [removed: 358,434] [added: 508,799] | | [added: |]

| Accounts receivable (net of allowances) | | $ | [removed: 327,597] [added: 473,433] | | | $ | [removed: 221,504] [added: 327,597] | | | $ | [removed: 208,239] [added: 221,504] | | | $ | [removed: 178,717] [added: 208,239] | | | $ | [removed: 169,490] [added: 178,717] | | [added: |]

| Goodwill and intangibles, net of accumulated amortization | | $ | [removed: 1,882,457] [added: 1,826,564] | | | $ | [removed: 1,903,490] [added: 1,882,457] | | | $ | [removed: 1,957,111] [added: 1,903,490] | | | $ | [removed: 1,998,532] [added: 1,957,111] | | | $ | [removed: 2,408,871] [added: 1,998,532] | | [added: |]

| Total assets | | $ | [removed: 3,275,668] [added: 3,387,952] | | | $ | [removed: 3,082,578] [added: 3,275,668] | | | $ | [removed: 3,146,987] [added: 3,082,578] | | | $ | [removed: 2,882,533] [added: 3,146,987] | | | $ | [removed: 3,129,286] [added: 2,882,533] | | [added: |]

| Deferred revenue | | $ | [removed: 374,365] [added: 537,977] | | | $ | [removed: 334,358] [added: 374,365] | | | $ | [removed: 317,552] [added: 334,358] | | | $ | [removed: 310,775] [added: 317,552] | | | $ | [removed: 319,735] [added: 310,775] | | [added: |]

| Long-term debt, net of current maturities | | $ | [removed: 2,078,093] [added: 2,575,502] | | | $ | [removed: 2,075,201] [added: 2,078,093] | | | $ | [removed: 1,579,404] [added: 2,075,201] | | | $ | [removed: 788,358] [added: 1,579,404] | | | $ | [removed: 782,652] [added: 788,358] | | [added: |]

| Total shareholders' equity [added: (deficit)] | | $ | [removed: 401,012] [added: (166,494] | [added: )] | | $ | [removed: 317,605] [added: 401,012] | | | $ | [removed: 901,487] [added: 317,605] | | | $ | [removed: 1,432,833] [added: 901,487] | | | $ | [removed: 1,564,347] [added: 1,432,833] | | [added: |]

| [removed: (1)] [added: (3)] | Includes the impact of the Insignis business (“Insignis”) from the October 16, 2015 acquisition date, which was not material. Deferred taxes have been presented in accordance with new accounting guidance prospectively beginning on December 31, 2015. Prior periods have not been retrospectively restated to match this presentation. |

| [removed: (2)] [added: (4)] | Includes the results of GMI Ratings from the August 11, 2014 acquisition date, the impact of which was not material. |

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

| | | As of or For the | | | | | | | | | | | | | | | | | | | |

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

| | | Years Ended | | | | | | | | | | | | | | | | | | | |

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

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

| (1) | Includes the impact of the Financial Engineering Associates, Inc. (“FEA”) and Investor Force Holdings, Inc. (“InvestorForce”) divestitures. |

| (2) | As a result of the adoption of Accounting Standards Update 2017-07, the Company has restated its Consolidated Statements of Income by reclassifying $0.6 million of non-service related pension costs from Operating Expenses to Other expense (income) for the year ended December 31, 2017. |

| (5) | Includes the net gain resulting from the divestiture of Institutional Shareholder Services Inc. in 2014. |

| --- | --- |

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

| Current maturities of long-term debt | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 18,301 | |

| (3) | Includes the net gain resulting from the disposition of ISS, the impact of which was not material. |

| (4) | Includes the results of Investor Force Holdings, Inc. (“InvestorForce”) from the January 29, 2013 acquisition date, the impact of which was not material. |

Based on their evaluation, as of December 31, [removed: 2017,] [added: 2018,] 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 assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2017] [added: 2018] based on the criteria described in Internal Control—Integrated Framework (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: 2017,] [added: 2018,] 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: 2017,] [added: 2018,] which appears on page F-2 of this Annual Report on Form 10-K.

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: 2017] [added: 2018] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

None.

Annual Incentive Plan

The Compensation and Talent Management Committee (the “Committee”) of the Board of Directors of MSCI Inc. (the “Company”) adopted the MSCI Inc. Annual Incentive Plan (the “AIP”), effective February 23, 2018, which will govern the terms of annual cash incentive awards granted to eligible employees of the Company (including each of the Company’s current named executive officers), as determined by the Committee from time to time.

The terms and conditions set forth in the AIP are consistent with the Company’s historical practices with respect to granting annual cash incentive awards to eligible employees.

Employees who participate in the Company’s Coverage Incentive Plan (or any other cash incentive plan) maintained by the Company will not be eligible to participate in the AIP.

The Committee (or its delegate) will administer the AIP and will have the authority to determine all of the terms of the awards granted under the AIP.

Annual cash incentive awards granted under the AIP will be payable based on the achievement of specified performance measures, including financial criteria and/or key performance indicators (as may be adjusted pursuant to the AIP).

The performance measures for the Company’s named executive officers will be described in the Company’s annual proxy statement.

Following the end of each performance period, the Committee (or its delegate) will determine the degree of achievement of the performance measures and may adjust the final award payable to a participant upward or downward, subject to and in accordance with the requirements of any applicable plan, program, policy or arrangement maintained or entered into by the Company that may be in effect and to the extent applicable to any such participant.

Awards granted under the AIP will be paid in cash as soon as practicable following the Committee’s (or its delegate’s) determination of the final award payable to a participant (but in no event later than March 15th of the year following the end of the applicable performance period).

Unless otherwise provided, the payment of a final award is subject to the participant’s continuous service with the Company or its subsidiaries through the applicable payment date.

In the event of a participant’s termination of service prior to the payment date, unless otherwise provided by the Committee, any unpaid portion of any award will be forfeited in its entirety; however, in the event of a participant’s termination of service due to death or disability, the participant will be eligible to receive his or her award based on (i) actual achievement of the applicable underlying financial and operational metrics and (ii) 100% achievement of the target Key Performance Indicators (“KPIs”) for such performance period.

Awards paid to a participant following a termination of service due to death or disability will be payable at the same time as awards payable to other participants.

In the event of a change in control (as defined in the AIP), unless otherwise determined by the Committee, (i) the performance period applicable to any outstanding award will cease as of the date immediately prior to the change in control, (ii) (A) with respect to the portion of any award based on performance measures (other than KPIs), such award will be payable based on the higher of (x) the Company’s actual achievement of the performance measures (other than KPIs) for the period commencing on the first day of the performance period and ending on the date immediately prior to such change in control and (y) 100% and (B) with respect to the portion of any award based on KPIs, such award will be payable at 100% of the target KPIs and (iii) any such award shall be payable by

the Company (or the successor or survivor entity (or its parent)) within 60 days of the date of the change in control, prorated for the portion of the applicable performance period that elapsed prior to the change in control.

If the Company’s successor will not be implementing a comparable annual incentive plan for the remaining portion of the year in which the change in control occurs, the Committee may, in its discretion, elect to pay 100% of the award or such other amount the Committee determines appropriate based upon the achievement of the performance measures and the KPIs as described in the previous sentence.

If any AIP participant is eligible to receive a prorated annual bonus pursuant to any change in control severance plan that is maintained by the Company and in effect at the time of a change in control (any such plan, a “CIC Plan”), any prorated annual bonus payable to a participant pursuant to a CIC Plan in respect of the year in which the change in control occurs will be reduced (but in no event reduced to less than zero) by any awards paid to the participant under the AIP in respect of such year.

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: 2017.][added: 2018.]

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: 2017.][added: 2018.]

Any amendments to, or waivers from, a provision of our [removed: Codes] [added: Code] of Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and that relates to any element of the Code of Ethics enumerated in paragraph (b) of Item 406 of Regulation S-K shall be disclosed by posting such information on our website at www.msci.com.

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: 2017.][added: 2018.]

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: 2017.][added: 2018.]

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: 2017.][added: 2018.]

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: 2017.][added: 2018.]

| 4.8 | [Indenture, dated as of August 4, 2016, among MSCI Inc., each of the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312516672119/d236625dex41.htm) | 8-K | 001-33812 | 4.1 | [removed: 8/05/2016] [added: 8/5/2016] |

| 4.9 | [Form of Note for MSCI Inc. 4.750% Senior Notes due August 1, 2026 (included in Exhibit 4.8)](http://www.sec.gov/Archives/edgar/data/1408198/000119312516672119/d236625dex41.htm) | 8-K | 001-33812 | 4.2 | [removed: 8/05/2016] [added: 8/5/2016] |

| 10.31* | [MSCI Inc. Performance Formula and Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312508040718/ddef14a.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312508040718/ddef14a.htm#tx37954_49)] | Proxy | 001-33812 | Annex C | 2/28/2008 |

| 10.54 | [Amendment to the Index License Agreement for Funds, dated as of October 4, 2011, by and between MSCI Inc. and BlackRock Institutional Trust Company, N.A. (formerly known as Barclays Global Investors, N.A.)](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex1065.htm) [added: [ ](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex1065.htm)] | 10-K | 001-33812 | 10.65 | 2/29/2012 |

| [removed: 10.74*] [added: 10.165*] | [Form of [added: Annual] Performance Award Agreement for Performance Stock Units for [removed: Executive Officers] [added: Managing Directors] under the MSCI Inc. [removed: 2007 Amended and Restated Equity] [added: 2016 Omnibus] Incentive [removed: Compensation Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312514077882/d640965dex1079.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/1408198/000156459018003147/msci-ex10165_164.htm)] | 10-K | 001-33812 | [removed: 10.79] [added: 10.165] | [removed: 2/28/2014] [added: 2/26/2018] |

| [removed: 10.75*] [added: 10.164*] | [Form of [removed: Performance] Award Agreement for [removed: Performance] [added: Restricted] Stock Units for [removed: Chief Executive Officer] [added: Managing Directors] under the MSCI Inc. [removed: 2007 Amended and Restated Equity] [added: 2016 Omnibus] Incentive [removed: Compensation Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312514077882/d640965dex1080.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/1408198/000156459018003147/msci-ex10164_163.htm)] | 10-K | 001-33812 | [removed: 10.80] [added: 10.164] | [removed: 2/28/2014] [added: 2/26/2018] |

| [removed: 10.76*] [added: 10.168*] | [Form of [removed: Performance] Award Agreement for [removed: Performance] [added: Restricted] Stock Units for [removed: Executive Officers under] [added: Directors Under] the MSCI Inc. [removed: 2007 Amended and Restated Equity Incentive] [added: 2016 Non-Employee Directors] Compensation [removed: Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312514077882/d640965dex1081.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/1408198/000156459018010882/msci-ex102_97.htm)] | [removed: 10-K] [added: 10-Q] | 001-33812 | [removed: 10.81] [added: 10.2] | [removed: 2/28/2014] [added: 5/4/2018] |

| [removed: 10.77*] [added: 10.185*] | [Form of [added: 2019] Award Agreement for Restricted Stock Units [removed: for Executive Officers under] [added: For Employees Under] the MSCI Inc. [removed: 2007 Amended and Restated Equity] [added: 2016 Omnibus] Incentive [removed: Compensation Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312514077882/d640965dex1082.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/1408198/000156459019003885/msci-ex10185_715.htm)] | [removed: 10-K] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.82] | [removed: 2/28/2014] |

| 10.88* | [Summary of Non-Employee Director [removed: Compensation](https://www.sec.gov/Archives/edgar/data/1408198/000156459018003147/msci-ex1088_26.htm)] [added: Compensation](http://www.sec.gov/Archives/edgar/data/1408198/000156459018003147/msci-ex1088_26.htm)] | [removed: Filed Herewith] [added: 10-K] | [added: 001-33812] | [added: 10.88] | [added: 2/26/2018] |

| 10.97 | [Revolving Credit Agreement, dated as of November 20, 2014, among MSCI Inc., as the Borrower, each of the Subsidiary Guarantors party thereto, JPMorgan Chase Bank, N.A., as the Administrative Agent and L/C Issuer, the [added: Other] Lenders [removed: party thereto] [added: Party Thereto] and [removed: J.P. Morgan Securities LLC,] [added: JPMorgan Chase Bank, N.A.,] as Lead Arranger and Bookrunner [removed: (amended] [added: (as amended as of May 18, 2018] by Amendment No. [removed: 1] [added: 2] to the Revolving Credit [removed: Agreement, dated August 4, 2016, among MSCI Inc., each of the Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A.,] [added: Agreement) (included] as [removed: Administrative Agent)](http://www.sec.gov/Archives/edgar/data/1408198/000119312514420084/d823985dex101.htm)] [added: Exhibit A to Amendment No. 2 in Exhibit 10.174)](http://www.sec.gov/Archives/edgar/data/1408198/000119312518167727/d582789dex101.htm)] | 8-K | 001-33812 | 10.1 | [removed: 11/20/2014] [added: 5/18/2018] |

| 10.113† | [Amendment (to amend the Amendments dated January 23, 2014 and April 15, 2014) to the Index License Agreement for Funds, dated as of June 4, 2015, by and between MSCI Inc. (formerly, Morgan Stanley Capital International Inc.) and BlackRock Fund Advisors (as successor to Barclays Global Investors, [removed: N.A.)](http://www.sec.gov/Archives/edgar/data/1408198/000119312516482334/d20757dex10113.htm)] [added: N.A.)](https://www.sec.gov/Archives/edgar/data/1408198/000156459019003885/msci-ex10113_950.htm)] | [removed: 10-K] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.113] | [removed: 2/26/2016] |

| 10.129† | [Amendment to the Index License Agreement for Funds, dated as of February 29, 2016, by and between MSCI Inc. (formerly, Morgan Stanley Capital International Inc.) and BlackRock Fund Advisors (as successor to Barclays Global Investors, [removed: N.A.)](https://www.sec.gov/Archives/edgar/data/1408198/000156459018003147/msci-ex10129_23.htm)] [added: N.A.)](http://www.sec.gov/Archives/edgar/data/1408198/000156459018003147/msci-ex10129_23.htm)] | [removed: Filed Herewith] [added: 10-K] | [added: 001-33812] | [added: 10.129] | [added: 2/26/2018] |

| [removed: 10.139*] [added: 10.167*] | [Offer Letter, [removed: effective as of May 15, 2011,] [added: executed March 11, 2014,] by and between MSCI Inc. and [removed: Peter Zangari](http://www.sec.gov/Archives/edgar/data/1408198/000119312516567595/d158720dex1014.htm)] [added: Scott Crum](http://www.sec.gov/Archives/edgar/data/1408198/000156459018010882/msci-ex101_98.htm)] | 10-Q | 001-33812 | [removed: 10.14] [added: 10.1] | [removed: 4/29/2016] [added: 5/4/2018] |