filings.toolsMSCI (MSCI) 10-K risk factor changes: FY2020 vs FY2019
The 2020-12-31 10-K against the 2019-12-31 one, compared heading by heading and sentence by sentence.
Item 1A118 rewritten113 added34 removed165 unchanged
All filing items684 rewritten1,625 added1,266 removed900 unchanged
Summary
counted, not written
- Item 1A headings could not be compared: only 0 carried over between the two years, which usually means one filing was read wrongly, so none is reported as new or removed.
- Sentence by sentence, 1,625 added, 1,266 removed, 684 rewritten and 900 unchanged across 19 items that differ.
Sentences by item
22 items, with every count and a link to each item that changed
Underlined words on a shaded ground are new in FY2020; struck-through words were in FY2019. Sentences that are wholly new or wholly gone are labelled rather than marked.
Item 1A. Risk Factors
118 rewritten, 113 added, 34 removed, 165 unchanged
We rely on third-party suppliers of data, applications and services, including data from stock exchanges (“Vendor Products”), and depend on the accuracy and quality of Vendor Products and the ability and willingness of such suppliers to deliver, support, enhance and develop new Vendor Products on a timely and cost-effective basis, and respond to emerging industry [removed: standards] [added: needs] and other [removed: technological] changes in order to produce, deliver and develop our products and services.
[removed: From] [added: Some of our agreements with third-party suppliers allow them to cancel on short notice and from] time to time we receive notices from [removed: third party suppliers, including stock exchanges,] [added: third-party suppliers] threatening to terminate the provision of their products or services to us, and some data [removed: suppliers, including at least one stock exchange,] [added: suppliers] have terminated the provision of their data to us.
Our business could be materially adversely affected if we are unable to timely or effectively replace the [added: data or] functionality provided by Vendor Products that [removed: becomes] [added: become] unavailable or [removed: fails] [added: fail] to operate effectively for any reason.
Should any of our key vendors refuse to distribute our data for any reason or require that we pay them [added: new or additional] fees in connection with the distribution of our data, we would need to find alternative ways to distribute our data or lose revenue [removed: in connection with paying distribution fees,] [added: or profitability for certain products,] which may have a material adverse effect on our business, financial condition or results of operations.
Products [added: or services] we develop or license may contain undetected errors or defects despite testing.
Use of our products or services as part of the investment process creates the risk that our clients, the parties whose assets are managed by our [removed: clients or] [added: clients, investors in investment products linked to our indexes,] the companies that we rate or assess in our ESG [removed: segment] [added: solutions or the shareholders of those companies,] may pursue claims against us based on even a small error in our data, calculations, methodologies or analysis or a malfunction or failure in our systems, products or services.
Errors or defects can exist at any point in a product’s [removed: life cycle,] [added: lifecycle,] but are frequently found after introduction of new products or [added: services or] enhancements to existing products.
We continually introduce new methodologies and products, and new versions of and updates to our [removed: products.][added: existing products or services.]
Despite internal testing and in some cases testing or use by clients, our products [added: or services] may contain errors in our data, calculations, methodologies or analysis, including serious defects or malfunctions.
If we detect any errors before we release or deliver a product or [added: service or] publish a methodology or analysis, we might have to suspend or delay the product [added: or service] release or delivery for an extended period of time while we address the problem.
We may not discover errors that affect our products or [added: services or] enhancements until after they are deployed, and we may need to provide enhancements or corrections to address such errors, and in certain cases it may be impracticable to do so.
If undetected errors exist in our [removed: products,] [added: products] or [added: services, or] if our products [added: or services] fail to perform properly due to defects, malfunctions or similar problems, it could result in harm to our brand or reputation, significantly increased costs, lost sales, delays in commercial release, [removed: third party] [added: third\-party] claims, contractual disputes, negative publicity, delays in or loss of market acceptance of our [removed: products,] [added: products or services,] license terminations or renegotiations and/or unexpected expenses and diversion of resources to remedy or mitigate such errors, defects or malfunctions.
While we have provisions in our client contracts that are designed to limit our [removed: exposure to potential] liability [added: from] claims brought by our clients or third parties [removed: based on the use of] [added: relating to] our products or [removed: services or our delay or failure to provide] services, these provisions could be invalidated or fail to [removed: eliminate liability resulting from the occurrence of any of these events,] [added: adequately limit our liability,] which could result in the provision of credits, [removed: contractual penalties and] adverse monetary [removed: judgments.][added: judgments and other penalties and damages.]
Our clients that pay us a fee based on the assets under management or total expense ratio of an [removed: index-linked] [added: indexed] investment product may seek to negotiate a lower asset-based fee percentage or lower the total expense ratio of such products or may cease using our indexes, which could limit the growth of or decrease our revenues from asset-based fees.
Additionally, competition is intense among our clients that offer or manage [removed: index-linked] [added: indexed] investment products, including ETFs, and low fees are one of the competitive differentiators.
Moreover, clients that have licensed our indexes to serve as the basis of [removed: index-linked] [added: indexed] investment products are generally not required to continue to use our indexes and could elect to cease offering the product or switch to a lower fee index.
Additionally, we have a differentiated licensing strategy for our indexes and from time to time experience faster growth from lower fee products, resulting in a lower average asset-based fee percentage from [removed: index-linked] [added: indexed] investment products.
Results for any given quarter could be materially adversely affected by stronger growth in assets in [removed: index-linked] [added: indexed] investment products with lower than average fees not sufficiently offset by growth in assets in [removed: index-linked] [added: indexed] investment products with higher than average fees.
Finally, to the extent that multiple investment products are based on the same index, (i) assets under management in one product could shift to products that pay MSCI lower fee levels, (ii) the products could compete for the same assets such that none of the products becomes large enough to be successful or sustained, or (iii) the failure or discontinuance of one product [removed: (e.g.,] [added: (*e.g.*,] derivatives used for hedging) could have a detrimental effect on the use of the other products [removed: (e.g.,] [added: (*e.g.*,] ETFs).
For the fiscal year ended December 31, [removed: 2019,] [added: 2020,] our largest client organization by revenue, BlackRock, accounted for [removed: 11.5%] [added: 11.0%] of our total revenues.
For the fiscal year ended December 31, [removed: 2018,] [added: 2019,] BlackRock, accounted for [removed: 11.9%] [added: 11.5%] of our total revenues.
Our revenue growth depends on our ability to obtain new [added: clients, sell additional services to existing] clients and achieve and sustain a high level of renewal rates with respect to our existing licenses.
Similarly, some of our clients who currently license our risk [added: or ESG and climate] data to analyze their portfolio risk may develop their own tools to collect data and assess [removed: risk,] [added: risk or embed ESG and climate considerations into their investment processes,] making our products or services unnecessary for them.
Any failures, disruptions, instability or vulnerabilities in our information technology architecture, platforms, [added: vendors and service providers,] production and delivery systems, software, code, internal network, the Internet or other systems or applications may [added: disrupt our operations,] cause our products to be unavailable or fail and impose delays or additional costs in deploying our products, or impose conditions or restrictions on our ability to commercialize our products or keep them confidential and result in reputational and other harm and have a material adverse effect on our business, financial condition or results of operations.
We depend heavily on the capacity, reliability and security of our information technology systems and platforms and their components, including our data [removed: centers] [added: centers, cloud providers] and [added: other vendors and service providers,] production and delivery systems as well the Internet, to create and deliver our products and service our clients.
Heavy use of our electronic delivery systems and other factors such as loss of service from third parties, operational failures, human error, terrorist or other attacks affecting systems or sites where we are located, climate or weather related events [removed: (e.g.,] [added: (*e.g.*,] 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.
Our ability to effectively use the [removed: Internet] [added: Internet, including our remote work force’s ability to access the Internet,] may also be impaired due to infrastructure failures, service outages at third-party Internet providers or increased government regulation.
There is no assurance that we will be able to successfully defend against such disruptions or that our disaster recovery or business continuity plans will be effective in mitigating the risks and associated costs, which could [added: be exacerbated by our shift to an increasingly remote working environment, and which could] have a material impact on our business, financial condition or results of operations.
Many of our products provide for the exchange of sensitive information with our clients through a variety of [removed: media,] [added: media and channels,] such as the Internet, applications and dedicated transmission lines.
In addition, we [added: believe that when we] change the composition of our [removed: indexes from time to time and we believe that,] [added: indexes,] in some [removed: cases, such] [added: cases the] changes can have an indirect effect on the prices of constituent securities and on certain [removed: index-linked] [added: indexed] investment products [removed: based on our indexes] as a result of trading activity related to replicating our indexes.
If our internal processes, confidentiality policies, conflict of interest policies or information barrier procedures fail or are insufficient, including as a result of human error or manual processes, or if an employee purposely circumvents or violates our internal controls, policies or procedures, then unauthorized access to, or disclosure or misappropriation of, data, including material non-public or other confidential information [removed: (e.g.,] [added: (*e.g.*, certain] index composition [added: data or ESG rating] data), our brand and reputation may suffer and we may become subject to litigation, regulatory actions, sanctions or other penalties, leading to a loss of client confidence, which could have a material adverse effect on our business, financial condition or results of operations.
Successful cyber-attacks and the failure of cyber-security [added: plans,] systems and procedures could have a material adverse effect on our business, financial condition or results of operations.
The Company’s operations rely on the secure processing, storage and transmission of confidential, sensitive, proprietary and other types of data and information, and on those of [removed: its] [added: our] third-party vendors.
Our and our vendors’ use of mobile and cloud technologies may [added: also] increase our risk for such threats.
The Company may be exposed to more targeted and more sophisticated cyber-attacks aimed at accessing certain information on our systems because of our [added: role or] prominence in the global marketplace, including client portfolio data, the composition of our indexes and MSCI ESG Research ratings of corporate issuers.
Any such threats may cause material interruptions or malfunctions in our or our vendors’ products or services, networks, systems, websites, applications, data or data processing, or may otherwise compromise the availability, [removed: confidentiality or integrity of data or information in our possession.]
Cyber-attacks, security breaches or third-party reports of perceived security vulnerability to the Company’s systems, even if no breach has occurred, could damage our brand and reputation, result in litigation, regulatory actions, sanctions or other penalties, lead to loss of client [removed: confidence in our security measures and reliability,] [added: confidence,] which would harm our ability to retain clients and gain new ones, and lead to financial losses.
Migration of our applications, systems, processes and infrastructure to new technologies, [added: cloud providers,] data centers, processes, platforms or applications could result in unanticipated [removed: interruption and delay] [added: failures, interruptions or delays] in the performance and delivery of our [removed: products which could impair our ability to provide clients with products] [added: products, services] and [removed: customer service.][added: client support.]
Such [removed: impairment may] [added: incidents could] have a material adverse effect on our financial condition or results of operations.
[removed: We] [added: In the past, we] have experienced unanticipated interruption and delay in the performance and delivery of certain products after we migrated applications and infrastructure to new data centers.
Summary of Risk Factors
Our business is subject to numerous risks and uncertainties, discussed in more detail in the following section.
These risks include, among others, the following key risks:
| | • | Our dependence on third parties to supply data, applications and services for our products and services and on certain vendors to distribute our products; |
| | • | Undetected errors, defects, malfunctions or similar problems in our products leading to increased costs or liability; |
| | • | The impact of the COVID-19 pandemic or other widespread health crises; |
| | • | Our exposure to potential reputational and credibility concerns; |
| | • | The possibility that our clients seek to negotiate lower asset-based fees or cease using our indexes as the basis for indexed investment products; |
| --- | --- | --- |
| | • | Cancellations or reductions by any of our largest clients and/or reduced demand for our products or services; |
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| | • | The impact of failures, disruptions, instability or vulnerabilities in our information technology systems or applications; |
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| | • | Our inability to ensure and protect the confidentiality of data; |
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| | • | Our exposure to cyber-attacks or failures of our cyber-security plans, systems or procedures; |
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| | • | Unanticipated failures, interruptions or delays in the performance or delivery of our products as a result of the adoption of new technologies; |
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| | • | Security vulnerabilities in our internal network, systems or applications resulting from our use of open source code; |
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| | • | The impact of changes in the global capital markets; |
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| | • | The effects on us from competition and financial and budgetary pressures affecting our clients; |
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| | • | The impact of our global operations and any future expansion on management and our exposure to additional issues from our increased global footprint; |
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| | • | New regulations or changes to current regulations; |
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| | • | Our inability to protect our intellectual property rights; |
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| | • | The impact of foreign currency exchange rate fluctuation; |
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| | • | The impact of our indebtedness on our financial flexibility; |
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| | • | The impact of changes in our credit ratings; and |
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| | • | Our exposure to tax liabilities in various jurisdictions. |
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Additionally, we depend on clients to supply certain data in order to provide our services to them.
The following discussion of risks is not all-inclusive but is designed to highlight what we believe are important factors to consider when evaluating our business and expectations.
Some of our agreements with third party suppliers allow them to cancel on short notice and we have not completed formal agreements for all our Vendor Products, such as certain stock exchanges.
For example, on September 20, 2016, Blackrock received exemptive relief from the SEC to create certain indexes for use as the basis of ETFs that it would manage.
Our equity indexes serve as equity benchmarks against which our clients can measure the performance of their investments and are also used by clients as the basis for certain index-linked investment products for a fee based on the value of the investment product’s assets.
Our Analytics segment offers performance attribution and portfolio management content, applications and services and MAC models that provide clients with an integrated view of risk and return of their portfolios across markets and asset classes.
Additionally, equity models developed in our Analytics segment are used to construct MSCI Factor Indexes.
Our ESG segment offers ESG ratings and research on companies worldwide to provide clients with an understanding of how ESG factors can impact the long-term risk of their investments.
Such research is also used in the construction of equity and fixed income indexes, which help investors more effectively benchmark ESG investment performance and manage and measure ESG mandates.
Any acquisition or strategic partnership could present a number of risks, including incorrect assumptions regarding the future results of acquired operations or assets or strategic partnerships, failure to achieve assumed synergies or successful integration of operations and management, increased debt associated with such transactions, dilution of our common stock, loss of key personnel and diversion of management’s attention from existing operations.
For example, as of December 31, 2019, 62.9% of our employees were located in emerging market locations.
Many countries have not fully developed laws and regulations regarding risk management and ESG and, in many cases, institutions in these countries have not developed widely accepted best practices regarding the same.
business and our clients’ businesses.
| | • | *Brexit.* The United Kingdom (“UK”) exited the European Union (“EU”) on January 31, 2020 (commonly referred to as “Brexit”) and is currently in the transition period under the Brexit Withdrawal Agreement, which ends as of the end of 2020 (but could be extended). Negotiations on the terms of the UK’s future relationship with the EU are ongoing, leading to increased legal uncertainty. Any formal agreement or other developments regarding Brexit could lead to additional legal uncertainty and potentially divergent national laws and regulations that negatively affect our business and 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. |
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.
For example, changes in labor, immigration and tax laws could increase the cost to our staff of living and working in the UK or the EU and may impact our ability to hire and retain non-UK staff in the UK or UK staff in the EU.
The enforceability of intellectual property
In connection with our initial public offering and separation from Morgan Stanley, we entered into agreements with Morgan Stanley where we agreed to indemnify Morgan Stanley for, among other things, certain past, present and future liabilities related to our business.
Pursuant to certain agreements we entered into with Morgan Stanley relating to the provision of services and other matters, we agreed to indemnify Morgan Stanley for, among other matters, certain past, present and future liabilities related to our business.
Such liabilities include certain unknown liabilities, which could be significant.
For example, we provide assumptions regarding our ability to achieve certain subscription revenue growth, manage our expenses, generate free cash flow, achieve an effective tax rate within a certain range and achieve our profitability targets.
While we believe that our annual financial guidance and long-term targets provide investors and analysts with insight to our view of the Company’s future performance, such financial guidance and long-term targets are based on assumptions that may not always prove to be accurate and may vary from actual results.
For additional information on our foreign currency exchange rate risk, see Part II, Item 7A “—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Risk.”
If we are unable to generate sufficient cash flow from operations or access offshore cash, we may need to refinance all or a portion of our indebtedness on or before maturity and we may not be able to secure additional financing on terms favorable or acceptable to us or at all.
Absent sufficient cash flow from our operations and the ability to refinance, we could also be forced to sell assets to make up for any shortfall in our payment obligations.
See Part II, Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” for a description of the restrictive covenants in our debt agreements.
For example, on July 28, 2015, the Board of Directors authorized corporate action that led to a change in the Company’s target leverage and interest expense, allowing for the issuance of our 2025 Senior Notes on August 13, 2015.
Following the Board of Directors’ authorization, one of the ratings agencies described the increase as substantially higher than current leverage levels and as a result downgraded our credit rating.
In particular, Brexit could create uncertainty with respect to our corporate tax rate as well as the tax rates of our employees based in the UK.
The 2017 U.S. Tax Cuts and Jobs Act (“Tax Reform”) was enacted on December 22, 2017, and significantly affected U.S. tax law by changing how the U.S. imposes income tax on multinational corporations.
Tax Reform requires complex computations not previously provided in U.S. tax law.
Further, compliance with Tax Reform and the accounting for such provisions require accumulation of information not previously required or regularly produced.
The U.S. Department of Treasury has broad authority, and is continuing, to issue regulations and interpretative guidance that may significantly impact how we will apply the law and may impact our results of operations.
We have goodwill and intangible assets of $1,824.4 million recorded on our balance sheet as of December 31, 2019.
An excerpt. Shown here: 40 of 118 rewritten, 40 of 113 added and all 34 removed. The counts are complete. For every sentence, read Item 1A. Risk Factors in the FY2020 filing and the FY2019 filing.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
193 rewritten, 125 added, 83 removed, 337 unchanged
The following discussion and analysis of the financial condition and results of our operations for the year ended December 31, [removed: 2019] [added: 2020] should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
The discussion summarizing the significant factors affecting the results of operations and financial condition of MSCI for the year ended December 31, [removed: 2018] [added: 2019] can be found in Part II, “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, [removed: 2018] [added: 2019] (the [removed: “2018] [added: “2019] Annual Report”), which was filed with the Securities and Exchange Commission on February [removed: 22, 2019.][added: 18, 2020.]
Investors all over the world use our tools and services to gain insight and improve transparency throughout their investment processes, including to help define their investment universe, inform and analyze their asset allocation and portfolio construction decisions, measure and manage portfolio performance and risk, conduct performance attribution, implement sustainable and other investment strategies, design and issue ETFs and other [removed: index-enabled] [added: indexed] financial products, and facilitate reporting to stakeholders.
Our [removed: industry-leading,] [added: leading,] research-enhanced products and services include indexes; portfolio construction and risk management analytics; ESG research and [removed: ratings;] [added: ratings, as well as climate solutions;] and real estate benchmarks, return-analytics and market insights.
[removed: We are flexible in the delivery of our] [added: Our] content and [removed: capabilities, much of which] [added: capabilities] can be accessed by our clients through multiple channels and platforms.
We are focused on [removed: staying at the forefront of investment trends] [added: product innovation] to address the evolving needs of our clients in [removed: a] [added: light of] changing [added: investment trends and an increasingly complex] industry.
| | • | Wealth managers (including [removed: an increasing number of “robo-advisors”)] [added: robo-advisors and self-directed brokerages)] |
As of December 31, [removed: 2019,] [added: 2020,] we had offices in more than 30 cities across more than 20 countries to help serve our diverse client base, with [removed: 49.0%] [added: 46.9%] of our revenues coming from clients in the Americas, [removed: 36.0%] [added: 37.0%] in Europe, the Middle East and Africa (“EMEA”) and [removed: 15.0%] [added: 16.1%] in Asia and Australia.
Our growth strategy includes: (a) [removed: expanding] [added: extending] leadership in research-enhanced [removed: content,] [added: content across asset classes,] (b) [added: enhancing distribution and content-enabling technology, (c) expanding solutions that empower client customization, (d)] strengthening existing [removed: and new] client relationships [removed: by providing solutions, (c) improving access to our solutions through cutting-edge technology] and [removed: platforms, (d) expanding value-added service offerings] [added: growing by developing new ones] and (e) executing strategic relationships and acquisitions with complementary content and technology companies.
In addition, we utilize operating metrics including Run Rate, subscription sales and Retention Rate to analyze past performance and to provide insight into our latest reported [removed: portfolio of] recurring business.
[removed: Approximately two-thirds] [added: More than three-fifths] 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.
Our revenue types are recurring [removed: subscription,] [added: subscriptions,] asset-based fees and non-recurring revenues.
[removed: Cost] [added: Cost] of [removed: Revenues][added: Revenues]
Cost of revenues expenses consist of costs related to the production and servicing of our products and services and primarily includes related information technology costs, including data center, [added: cloud,] platform and infrastructure costs; costs to acquire, produce and maintain market data information; costs of research to 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.
This category consists primarily of interest we pay on our outstanding indebtedness, interest we collect on cash and short-term investments, foreign currency exchange rate gains and losses as well as other non-operating income and expense [removed: items.][added: items, such as losses on early extinguishment of debt and income and losses associated with our equity method investment.]
Adjusted EBITDA and Adjusted EBITDA expenses are believed to be meaningful measures of the operating performance of the Company because they adjust for significant one-time, unusual or non-recurring items as well as eliminate the accounting effects of [added: certain] capital spending and acquisitions that do not directly affect what management considers to be the Company’s [removed: core] [added: ongoing] operating performance in the period.
See “—*Operating [removed: Metrics*—*Subscription Sales*”] [added: Metrics*— *Sales*”] below for additional information.
The weighted average shares outstanding used to calculate our diluted earnings per share for the year ended December 31, [removed: 2019] [added: 2020] decreased by [removed: 4.6%] [added: 1.2%] compared to the year ended December 31, [removed: 2018.][added: 2019.]
The decrease primarily reflects the impact of share repurchases made [removed: prior to March 31, 2019] pursuant to the [removed: 2016 and 2018 Repurchase Programs] [added: stock repurchase program] and the vesting of the restricted stock units that were included in the dilutive share count in the prior year.
We have an aggregate [removed: $3,100.0] [added: $3,400.0] million of Senior Notes outstanding as of December 31, [removed: 2019.][added: 2020.]
Year Ended December 31, [removed: 2019] [added: 2020] Compared to Year Ended December 31, [removed: 2018][added: 2019]
| | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | Increase/(Decrease) | | | | | | |
| General and administrative | | | [removed: 110,093] [added: 114,627] | | | | [removed: 99,882] [added: 110,093] | | | | [removed: 10,211] [added: 4,534] | | | | [removed: 10.2] [added: 4.1] | % |
| Amortization of intangible assets | | | [removed: 49,410] [added: 56,941] | | | | [removed: 54,189] [added: 49,410] | | | | [removed: (4,779] [added: 7,531] | [removed: )] | | | [removed: (8.8] [added: 15.2] | [removed: %)] [added: %] |
| Depreciation and amortization of property, equipment and leasehold improvements | | | [removed: 29,999] [added: 29,805] | | | | [removed: 31,346] [added: 29,999] | | | | [removed: (1,347] [added: (194] | ) | | | [removed: (4.3] [added: (0.6] | %) |
| Other expense (income), net | | | [removed: 152,383] [added: 198,539] | | | | [removed: 57,002] [added: 152,383] | | | | [removed: 95,381] [added: 46,156] | | | | [removed: 167.3] [added: 30.3] | % |
| Income before provision for income taxes | | | [removed: 603,318] [added: 686,225] | | | | [removed: 629,896] [added: 603,318] | | | | [removed: (26,578] [added: 82,907] | [removed: )] | | | [removed: (4.2] [added: 13.7] | [removed: %)] [added: %] |
| Provision for income taxes | | | [removed: 39,670] [added: 84,403] | | | | [removed: 122,011] [added: 39,670] | | | | [removed: (82,341] [added: 44,733] | [removed: )] | | | [removed: (67.5] [added: 112.8] | [removed: %)] [added: %] |
| Earnings per basic common share | | $ | [removed: 6.66] [added: 7.19] | | | $ | [removed: 5.83] [added: 6.66] | | | $ | [removed: 0.83] [added: 0.53] | | | | [removed: 14.2] [added: 8.0] | % |
| Earnings per diluted common share | | $ | [removed: 6.59] [added: 7.12] | | | $ | [removed: 5.66] [added: 6.59] | | | $ | [removed: 0.93] [added: 0.53] | | | | [removed: 16.4] [added: 8.0] | % |
| Operating margin | | | [removed: 48.5] [added: 52.2] | % | | | [removed: 47.9] [added: 48.5] | % | | | | | | | | |
Our revenues are grouped by the following types: recurring [removed: subscription,] [added: subscriptions,] asset-based fees and [removed: non-recurring revenues.][added: non-recurring.]
We also group revenues by major product lines [added: or reportable segment] as follows: Index, Analytics and All Other, which includes the ESG and Real Estate product lines.
The following table presents operating revenues by [removed: recurring subscriptions, asset-based fees and non-recurring revenues] [added: type] for the years indicated:
| | | [removed: 2019] [added: 2020] | | | | | [removed: 2018] [added: 2019] | | | Increase/(Decrease) | | | | | | |
| Recurring subscriptions | | $ | [removed: 1,154,040] [added: 1,248,175] | | | $ | [removed: 1,066,536] [added: 1,154,040] | | | $ | [removed: 87,504] [added: 94,135] | | | | 8.2 | % |
Total operating revenues grew [removed: 8.6%] [added: 8.8%] to [removed: $1,557.8] [added: $1,695.4] million for the year ended December 31, [removed: 2019] [added: 2020] compared to [removed: $1,434.0] [added: $1,557.8] million for the year ended December 31, [removed: 2018.][added: 2019.]
Adjusting for the impact of foreign currency exchange rate fluctuations, total operating revenues would have increased [removed: 8.9%] [added: 8.7%] for the year ended December 31, [removed: 2019] [added: 2020] compared to the year ended December 31, [removed: 2018.][added: 2019.]
[removed: Revenue] [added: Revenues] from recurring subscriptions increased 8.2% to [removed: $1,154.0] [added: $1,248.2] million for the year ended December 31, [removed: 2019] [added: 2020] compared to [removed: $1,066.5] [added: $1,154.0] million for the year ended December 31, [removed: 2018,] [added: 2019,] primarily driven by growth in Index products, which increased [removed: $53.4] [added: $49.4] million, or [removed: 11.2%,] [added: 9.3%, growth in ESG products, which increased $20.4 million, or 22.8%,] and growth in [removed: All Other] [added: Analytics] products, which increased [removed: $22.2] [added: $20.0] million, or [removed: 19.4%.][added: 4.1%.]
| | • | Corporates |
| Operating revenues | | $ | 1,695,390 | | | $ | 1,557,796 | | | $ | 137,594 | | | | 8.8 | % |
| Cost of revenues | | | 291,704 | | | | 294,961 | | | | (3,257 | ) | | | (1.1 | %) |
| Selling and marketing | | | 216,496 | | | | 219,298 | | | | (2,802 | ) | | | (1.3 | %) |
| Research and development | | | 101,053 | | | | 98,334 | | | | 2,719 | | | | 2.8 | % |
| Total operating expenses | | | 810,626 | | | | 802,095 | | | | 8,531 | | | | 1.1 | % |
| Operating income | | | 884,764 | | | | 755,701 | | | | 129,063 | | | | 17.1 | % |
| Net income | | $ | 601,822 | | | $ | 563,648 | | | $ | 38,174 | | | | 6.8 | % |
| Asset-based fees | | | 399,771 | | | | 361,927 | | | | 37,844 | | | | 10.5 | % |
| Non-recurring | | | 47,444 | | | | 41,829 | | | | 5,615 | | | | 13.4 | % |
| Total operating revenues | | $ | 1,695,390 | | | $ | 1,557,796 | | | $ | 137,594 | | | | 8.8 | % |
| | | 2019 | | | | | | | | | | | | | | | | 2020 | | | | | | | | | | | | | | |
| | | 2019 | | | | | | | | | | | | | | | | 2020 | | | | | | | | | | | | | | |
| Recurring subscriptions | | $ | 580,393 | | | $ | 530,968 | | | $ | 49,425 | | | | 9.3 | % |
| Asset-based fees | | | 399,771 | | | | 361,927 | | | | 37,844 | | | | 10.5 | % |
| Non-recurring | | | 36,331 | | | | 28,042 | | | | 8,289 | | | | 29.6 | % |
| Index total | | | 1,016,495 | | | | 920,937 | | | | 95,558 | | | | 10.4 | % |
| Recurring subscriptions | | | 506,301 | | | | 486,282 | | | | 20,019 | | | | 4.1 | % |
| Non-recurring | | | 7,507 | | | | 10,643 | | | | (3,136 | ) | | | (29.5 | %) |
| Analytics total | | | 513,808 | | | | 496,925 | | | | 16,883 | | | | 3.4 | % |
| Recurring subscriptions | | | 161,481 | | | | 136,790 | | | | 24,691 | | | | 18.1 | % |
| Non-recurring | | | 3,606 | | | | 3,144 | | | | 462 | | | | 14.7 | % |
| Total operating revenues | | $ | 1,695,390 | | | $ | 1,557,796 | | | $ | 137,594 | | | | 8.8 | % |
| Cost of revenues | | $ | 291,704 | | | $ | 294,961 | | | $ | (3,257 | ) | | | (1.1 | %) |
| Selling and marketing | | | 216,496 | | | | 219,298 | | | | (2,802 | ) | | | (1.3 | %) |
| Research and development | | | 101,053 | | | | 98,334 | | | | 2,719 | | | | 2.8 | % |
| General and administrative | | | 114,627 | | | | 110,093 | | | | 4,534 | | | | 4.1 | % |
| Amortization of intangible assets | | | 56,941 | | | | 49,410 | | | | 7,531 | | | | 15.2 | % |
| Depreciation and amortization of property, equipment and leasehold improvements | | | 29,805 | | | | 29,999 | | | | (194 | ) | | | (0.6 | %) |
| Total operating expenses | | $ | 810,626 | | | $ | 802,095 | | | $ | 8,531 | | | | 1.1 | % |
Cost of revenues for the year ended December 31, 2020 decreased 1.1% to $291.7 million compared to $295.0 million for the year ended December 31, 2019.
Cost of revenues reflects increases across the All Other and Index reportable segments, partially offset by a decrease in the Analytics reportable segment.
Selling and marketing expenses reflect increases across the All Other and Analytics reportable segments, partially offset by a decrease in the Index reportable segment.
R&D expenses for the year ended December 31, 2020 increased 2.8% to $101.1 million compared to $98.3 million for the year ended December 31, 2019.
The change was driven by increases in compensation and benefits costs, including wages and salaries and benefits costs.
R&D expenses reflect higher investments in the All Other and Index reportable segments, partially offset by lower investment in the Analytics reportable segment.
G&A expenses reflect increases across all three reportable segments.
| | | 2020 | | | | 2019 | | | | Increase/(Decrease) | | | | | | |
| Compensation and benefits | | $ | 527,641 | | | $ | 518,730 | | | $ | 8,911 | | | | 1.7 | % |
| Non-compensation expenses | | | 196,239 | | | | 203,956 | | | | (7,717 | ) | | | (3.8 | %) |
| --- | --- |
Divestitures
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, 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.
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.
| Operating revenues | | $ | 1,557,796 | | | $ | 1,433,984 | | | $ | 123,812 | | | | 8.6 | % |
| Cost of revenues | | | 294,961 | | | | 287,335 | | | | 7,626 | | | | 2.7 | % |
| Selling and marketing | | | 219,298 | | | | 192,923 | | | | 26,375 | | | | 13.7 | % |
| Research and development | | | 98,334 | | | | 81,411 | | | | 16,923 | | | | 20.8 | % |
| Total operating expenses | | | 802,095 | | | | 747,086 | | | | 55,009 | | | | 7.4 | % |
| Operating income | | | 755,701 | | | | 686,898 | | | | 68,803 | | | | 10.0 | % |
| Net income | | $ | 563,648 | | | $ | 507,885 | | | $ | 55,763 | | | | 11.0 | % |
| Asset-based fees | | | 361,927 | | | | 336,565 | | | | 25,362 | | | | 7.5 | % |
| Non-recurring | | | 41,829 | | | | 30,883 | | | | 10,946 | | | | 35.4 | % |
| Total operating revenues | | $ | 1,557,796 | | | $ | 1,433,984 | | | $ | 123,812 | | | | 8.6 | % |
The increase in revenues from futures and options contracts was driven by approximately $5.0 million in additional fees associated with prior periods attributed to a retrospective price increase from a renegotiated contract entered into during the year ended December 31, 2019, as well as the cumulative impact of price and volume increases.
| | | 2018 | | | | | | | | | | | | | | | | 2019 | | | | | | | | | | | | | | |
| Recurring subscriptions | | $ | 530,968 | | | $ | 477,612 | | | $ | 53,356 | | | | 11.2 | % |
| Non-recurring | | | 28,042 | | | | 21,298 | | | | 6,744 | | | | 31.7 | % |
| Index total | | | 920,937 | | | | 835,475 | | | | 85,462 | | | | 10.2 | % |
| Recurring subscriptions | | | 486,282 | | | | 474,334 | | | | 11,948 | | | | 2.5 | % |
| Non-recurring | | | 10,643 | | | | 5,605 | | | | 5,038 | | | | 89.9 | % |
| Analytics total | | | 496,925 | | | | 479,939 | | | | 16,986 | | | | 3.5 | % |
| Recurring subscriptions | | | 136,790 | | | | 114,590 | | | | 22,200 | | | | 19.4 | % |
| Non-recurring | | | 3,144 | | | | 3,980 | | | | (836 | ) | | | (21.0 | %) |
| Cost of revenues | | $ | 294,961 | | | $ | 287,335 | | | $ | 7,626 | | | | 2.7 | % |
| Total operating expenses | | $ | 802,095 | | | $ | 747,086 | | | $ | 55,009 | | | | 7.4 | % |
Cost of revenues for the year ended December 31, 2019 increased 2.7% to $295.0 million compared to $287.3 million for the year ended December 31, 2018, reflecting increases across the Index and the All Other reportable segments.
R&D expenses for the year ended December 31, 2019 increased 20.8% to $98.3 million compared to $81.4 million for the year ended December 31, 2018, reflecting higher investments across all three reportable segments.
The change was driven by increases in compensation and benefits costs which includes an insignificant amount of payroll tax expense associated with the vesting of the 2016 Multi-Year PSUs.
Additionally, there were increases in non-compensation costs, including professional fees, information technology costs, occupancy costs, recruiting costs and travel and entertainment costs.
| Compensation and benefits | | $ | 518,730 | | | $ | 471,655 | | | $ | 47,075 | | | | 10.0 | % |
| Non-compensation expenses | | | 203,956 | | | | 189,896 | | | | 14,060 | | | | 7.4 | % |
The increase was primarily driven by the absence of the $46.6 million and $10.6 million of gains realized from the InvestorForce and FEA divestitures, respectively, which occurred in 2018.
In addition, the increase also reflects higher interest expense associated with higher outstanding debt and higher foreign currency exchange losses.
An excerpt. Shown here: 40 of 193 rewritten, 40 of 125 added and 40 of 83 removed. The counts are complete. For every sentence, read Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the FY2020 filing and the FY2019 filing.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
7 rewritten, 1 added, 0 removed, 12 unchanged
For the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018, 13.5%] [added: 2019, 14.1%] and [removed: 12.9%,] [added: 13.5%,] respectively, of our revenues [removed: are] [added: were] subject to foreign currency exchange rate risk and primarily [removed: includes] [added: included] clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities.
Of the [removed: 12.9%] [added: 14.1%] of non-U.S dollar exposure for the year ended December 31, [removed: 2018, 42.2%] [added: 2020, 40.2%] was in Euros, [removed: 29.4%] [added: 27.2%] was in Japanese yen and [removed: 17.8%] [added: 24.6%] was in British pounds sterling.
Revenues from [removed: index-linked investment] [added: asset-based fee (“ABF”)] products represented [removed: 23.2%] [added: 23.6%] and [removed: 23.5%] [added: 23.2%] of operating revenues for the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.
While a substantial portion of our fees for [removed: index-linked investment] [added: ABF] products are invoiced in U.S. dollars, the fees are based on the investment product’s assets, of which [removed: two-thirds] [added: more than three-fifths] are invested in securities denominated in currencies other than the U.S. dollar.
[removed: Accordingly, declines in such other] currencies against the U.S. dollar will decrease the fees payable to us under such licenses.
Approximately [removed: 41.2%] [added: 40.8%] and [removed: 40.4%] [added: 41.2%] of our operating expenses for the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Hungarian forints, Euros, Hong Kong dollars, Swiss francs and Mexican pesos.
We recognized total foreign currency exchange losses of [removed: $4.0] [added: $2.8] million for the year ended December 31, [removed: 2019] [added: 2020] and foreign currency exchange [removed: gains] [added: losses] of [removed: $0.4] [added: $4.0] million for the year ended December 31, [removed: 2018.][added: 2019.]
Accordingly, declines in such other
Item 1. Business
84 rewritten, 117 added, 40 removed, 159 unchanged
Leveraging our knowledge of the global investment process and our expertise in research, data and technology, our actionable [removed: solutions1] [added: solutions] power better investment decisions by enabling our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios.
Investors all over the world use our tools and services to gain [removed: insight] [added: insights] and improve transparency throughout their investment processes, including to help define their investment universe, inform and analyze their asset allocation and portfolio construction decisions, measure and manage portfolio performance and risk, conduct performance attribution, implement sustainable and other investment strategies, design and issue exchange traded funds (“ETFs”) and other [removed: index-enabled] [added: indexed] financial products, and facilitate reporting to stakeholders.
Our [removed: industry-leading,] [added: leading,] research-enhanced products and services include indexes; portfolio construction and risk management analytics; environmental, social and governance (“ESG”) [removed: research] and [removed: ratings;] [added: climate solutions;] and real estate benchmarks, return-analytics and market insights.
[removed: We are flexible in the delivery of our] [added: Our] content and [removed: capabilities, much of which] [added: capabilities] can be accessed by our clients through multiple channels and platforms.
We are focused on [removed: staying at the forefront of investment trends] [added: product innovation] to address the evolving needs of our clients in [removed: a] [added: light of] changing [added: investment trends and an increasingly complex] industry.
[removed: Clients][added: Clients]
| | • | Wealth managers (including [removed: an increasing number of “robo-advisors”)] [added: robo-advisors and self-directed brokerages)] |
As of December 31, [removed: 2019,] [added: 2020,] we served over [removed: 7,500 clients2] [added: 4,400 clients1] in more than [removed: 85] [added: 95] countries.
For the year ended December 31, [removed: 2019,] [added: 2020,] our largest client organization by revenue, BlackRock, accounted for [removed: 11.5%] [added: 11.0%] of our total revenues, with [removed: 94.5%] [added: 94.3%] of the revenue from BlackRock coming from fees based on the assets in BlackRock’s ETFs that are based on our indexes.
As a result, the investment process is transforming, reflected in a number of [removed: significant changes,] [added: trends we have observed,] including:
| | • | Changing client operating models and business strategies, [removed: including an increased focus on ESG, factors and private asset investments,] driven in part by fee compression, changing [removed: demographics] [added: demographics, the regulatory environment] and [removed: economics] [added: economics;] |
| | • | Continuing growth of [removed: index-based] [added: indexed] investing [added: through indexed investment products such as ETFs, mutual/UCITS funds] and [removed: assets in ETFs] [added: annuities, as well as indexed derivatives such as futures, options, structured products] and [added: over-the-counter swaps, and] other vehicles that seek to [removed: replicate] [added: track] an index as investors increasingly seek lower-cost investment [removed: strategies] [added: strategies;] |
| | • | Growing use of advanced technologies to enhance investment [removed: analytics and] [added: analytics,] streamline [removed: operations] [added: operations, create efficiencies and gain competitive advantages.] |
| | • | *Differentiated research-enhanced content*, which is integral to the solutions we provide to clients to help them adapt to a fast-changing marketplace. We are continually developing a wide range of differentiated content and have amassed an extensive database of historical global market data, proprietary equity index data, factor models, private real estate assets benchmark data, risk algorithms and ESG [added: and climate] data, all of which are critical components of our clients’ investment processes. This content is grounded in our deep knowledge of the global investment process and fueled by experienced research and product development and data management teams. We consult with clients and other market participants to discuss their needs, investment trends and implications for our business. |
| | • | *Strong client relationships* supported by a client coverage team with significant [removed: experience in the industry. This] [added: industry experience. The coverage] team [removed: builds] [added: develops] and maintains strong and trusted [removed: client] relationships with senior executives and investment professionals at the world’s largest investment institutions. We believe that these relationships and our global operating footprint [removed: are competitive advantages that] enable us to [added: better understand our clients’ unique needs and] tailor our coverage initiatives to better serve our clients in the markets in which they operate. |
| | • | *Flexible, scalable, cutting-edge technology* that is [added: used,] developed and enhanced by a global team of sophisticated [added: and innovative] technology and data professionals. Our technology enables clients to use content created by MSCI, themselves and third parties in an efficient manner and thereby helps them be more cost-effective in their own operations. Our technology allows us to continually improve our overall products and services by more efficiently processing data for distribution and ensuring advanced platform flexibility that provides for easy integration of our solutions into [removed: clients’ workflows. We continue to attract experienced talent within our technology team by hiring employees who will help us accelerate the pace of innovation, expand our program management capabilities] [added: distribution channels] and [removed: enhance the technology driving] our [removed: content creation.] [added: clients’ workflows.] |
We provide [removed: the] [added: critical] tools and solutions that enable investors to [removed: take advantage of] [added: manage] the [removed: transformation] [added: transformations] taking place in the investment industry, [removed: helping them] better understand performance and risk, [removed: become more effective] and [removed: efficient at building] [added: build] portfolios [added: more effectively] and [added: efficiently to] achieve their investment objectives.
[removed: In particular, we] [added: We] are focused on [removed: delivering] [added: the following key initiatives to deliver] actionable and integrated client [removed: solutions with the following key initiatives:][added: solutions:]
| | • | [removed: *Expand] [added: *Extend] leadership in research-enhanced content across asset classes.* We continue to deliver solutions that incorporate [removed: multiple areas of content] [added: proprietary] and [removed: are supported by] [added: highly differentiated content based on] rich insights from our research and product development team. In addition to continuing to enhance our position as a leader with respect to tools and services for equity investors globally, our strategic priorities with respect to content [removed: are global equities, ESG,] [added: also include ESG and climate, thematics,] factors, fixed [removed: income] [added: income, liquidity] and private assets, all of which [added: we believe] represent significant growth opportunities. We [removed: have invested in] [added: are focused on] expanding [added: our] performance and risk capabilities and content across asset classes, which will allow us to provide more tools to our clients that help them pursue and achieve their investment objectives. |
| | • | [removed: *Improve] [added: *Enhance] distribution and content-enabling technology.* We [removed: have and will continue to invest in the development] [added: are deploying] and [removed: use of] [added: developing] advanced technology to drive integration and efficiencies, accelerate [added: the pace of] innovation and enhance [added: distribution and] the client experience. [removed: In addition, we] [added: We] increasingly [removed: employ] [added: utilize] proprietary and third-party [added: technologies, including] machine learning and artificial intelligence [added: tools,] to enhance our ability to gather and analyze [removed: data] [added: data, create content] and automate and enhance the efficiency of many of our data processes. [removed: See Part I, Item 1. “Business—Technology” below for additional information.] |
| | • | [removed: *Strengthen] [added: *Growth through strengthening] existing client relationships and [removed: grow by] developing new ones.* In support of our solutions-driven strategy, we continue to grow our existing offerings by cultivating and expanding relationships across our client base and serving the needs of different client types across multiple asset classes. We remain focused on building the strength and knowledge of our client coverage team to enable them to [added: understand our clients’ needs and] educate our clients on the full breadth of our content and capabilities and how using complementary tools can help clients analyze performance and risk across asset [removed: classes] [added: classes, investment strategies] and geographies. We continue to [removed: prioritize] [added: develop] relationships with [removed: key growth] [added: the following] client [removed: groups such as private assets,] [added: segments that we believe offer significant growth opportunities:] wealth [removed: and listed derivatives,] [added: managers, corporates, insurance companies] and [added: exchanges, as well as clients] in fast-growing [removed: regions,] [added: regions] such as Asia. [removed: In 2019, we made a significant key senior hire in Asia and transitioned other senior management in the region, which we believe will help expand our presence in the market. We also entered into agreements with key strategic clients who are creating exchange-listed and index-based futures and options based on our indexes to help industry participants manage investment risk.] |
| | • | *Execute strategic relationships and acquisitions with complementary content and technology companies.* We regularly evaluate and selectively pursue strategic relationships with, and acquisitions of, providers of unique and differentiated content, products and technologies that we believe have the potential to complement, enhance or expand our offerings and client base. 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: In 2019,] [added: For example, in January 2020,] we [removed: completed the acquisition] [added: entered into a strategic relationship with The Burgiss Group, LLC (“Burgiss”), a global provider] of [removed: Carbon Delta AG, an environmental fintech] [added: investment decision support tools for private capital, that is intended to accelerate] and [removed: data] [added: expand the data,] analytics [removed: company. This acquisition enhanced our existing ESG offerings] [added: and other investment decision support tools available to investors in private assets.] |
For reporting purposes, the ESG and Real Estate operating segments [removed: are] [added: were] combined and presented as All Other as they [removed: do] [added: did] not meet the thresholds for separate presentation.
A portion of our [removed: fees comes] [added: revenues come] from clients who use our indexes as the basis for [removed: index-linked] [added: indexed] investment products.
Such fees are primarily based on a client’s assets under management (“AUM”) [removed: and] [added: or] trading [removed: volumes.][added: volumes and are referred to herein as asset-based fees.]
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview” and Note 1, “Introduction and Basis of Presentation—*Significant Accounting* *Policies*—*Revenue Recognition*,” of the Notes to the Consolidated Financial Statements included herein for [removed: further] information on how we generate revenue and our revenue recognition policy.
Clients use our indexes in many areas of the investment process, including [removed: index-linked] [added: for indexed] product creation (*e.g.*, [removed: ETFs and futures and options),] [added: ETFs, mutual funds, annuities, futures, options, structured products, over-the-counter derivatives),] performance benchmarking, portfolio construction and rebalancing, [removed: broker-dealer structured products] and asset allocation.
We currently calculate more than [removed: 226,0003] [added: 246,0002] end-of-day indexes daily and more than [removed: 12,000] [added: 14,000] indexes in real [removed: time for a variety of markets and industries.][added: time.]
| | • | *MSCI Global Equity [removed: Indexes*] [added: Indexes.* MSCI Global Equity Indexes] are designed to measure returns across a wide variety of equity markets, size segments, sectors and industries. As of December 31, [removed: 2019,] [added: 2020,] we calculated indexes that covered more than [removed: 85] [added: 80] countries in developed, emerging, frontier and standalone markets, as well as various regional indexes built from the component [added: country] indexes. |
| | • | *Factor [removed: Indexes*] [added: Indexes.* Factor Indexes] are created using the Barra Equity Models from our Analytics segment to address a growing trend among institutional investors and asset managers to target systematic style factors, such as volatility, size and momentum. |
| [removed: 3] [added: 2] | The number of indexes includes [added: different] return versions [removed: (e.g.,] [added: (*e.g.*,] price, net and gross returns) but does not include different currency versions. |
| | • | *ESG [removed: Indexes*] [added: and Climate Indexes.* ESG and Climate Indexes] are constructed using data from our ESG segment to meet the growing demand for indexes that integrate ESG [added: and climate] criteria to facilitate sustainable investing strategies. |
| | • | [removed: *Custom Indexes*] [added: *Customized Indexes.* Customized Indexes] are calculated by applying a client’s criteria such as stock [removed: exclusions,] [added: exclusion lists,] currency [removed: hedging,] [added: hedging rules,] tax rates or special weighting to an existing MSCI index. |
| | • | *Thematic [removed: Indexes*] [added: Indexes.* Thematic Indexes] are designed to measure the performance of specific social, economic, industrial, environmental or demographic investment strategies. |
| | • | [removed: *Private] [added: *Real Assets Indexes*.] Real Assets [removed: Indexes*] [added: Indexes] provide transparency and insight to private real estate investment strategies. |
In [removed: 2019,] [added: 2020,] we launched the following indexes:
GICS Direct is a [removed: database] [added: dataset] comprised of active companies and securities classified by sector, industry group, industry and sub-industry in accordance with the proprietary GICS methodology.
The MSCI [removed: US and Global] Sector Indexes are comprised of GICS sector, industry group, and industry indexes across countries and regions in Developed, Emerging and select Frontier markets.
Our Analytics segment offers risk management, performance attribution and portfolio management content, applications and services that provide clients with an integrated view of risk and return and [removed: an analysis of] [added: tools for analyzing] market, credit, liquidity and counterparty risk across all major asset classes, spanning [removed: short-medium-] [added: short-, medium-] and long-term time horizons.
[removed: The content we create in our] [added: Our] Analytics [removed: segment includes] [added: tools and capabilities include:] models to support factor-based analytics (*e.g.*, Barra equity models and fixed income and [removed: multi-asset-class] [added: multi-asset class] (“MAC”) models), pricing [removed: models,] [added: models and single security analytics,] time series-based analytics, stress [removed: testing] [added: testing, performance attribution, portfolio optimization] and liquidity risk analytics, as well as underlying [removed: content that is used as] inputs [removed: to these models] such as interest rate and credit curves.
| | • | Corporates |
| | • | Increasing use of global and multi-asset class strategies, incorporating private asset investments and factor objectives, as investors seek specific, customized outcomes; |
| | • | Accelerating integration of ESG and climate considerations into investment processes, reporting and products as sustainable investing goes increasingly mainstream and investors increasingly focus on companies with strong sustainability practices as an indicator of long-term resilience especially in light of events such as the COVID-19 pandemic; |
| | • | Increasing demand for data and tools that can be customized by clients to support their unique portfolio construction needs and to provide transparency into their investment objectives; and |
| 1 | Represents the aggregate of all related clients under their respective parent entity. |
| | • | *Expand solutions that empower client customization*. We will further enhance how we support our clients’ investment objectives by embedding our highly differentiated research into solutions that allow clients to incorporate their custom preferences. For example, we will leverage existing capabilities and applications to deliver solutions that will allow clients to reflect their unique risk and return, ESG and climate and thematic preferences, as well as tax optimization strategies in a scalable way. |
For the year ended December 31, 2020, we had five operating segments - Index, Analytics, ESG, Real Estate and Burgiss.
The Burgiss operating segment represented the Company’s equity method investment in Burgiss.
Effective January 1, 2021, we revised our reportable segment structure.
While our strategy, organizational structure and day-to-day operations remain largely unchanged, we believe the new segment reporting structure provides additional and helpful transparency into our operations.
See Note 16.
“Subsequent Events,” of the Notes to the Consolidated Financial Statements included herein for additional information.
| | • | *Fixed Income Indexes*. Fixed Income Indexes use broad market corporate bond universes to create indexes that track the performance of investment strategies based upon (i) the credit market (MSCI Corporate Bond Indexes), (ii) systematic style factor exposures such as carry, value, size and low risk (MSCI Factor Fixed Income Indexes), (iii) certain ESG metrics and companies’ ESG profiles (MSCI Fixed Income ESG Universal Indexes), (iv) fixed income securities from issuers that have high ESG ratings relative to their sector peers (MSCI Fixed Income ESG Leaders Indexes) and (v) the opportunities and risks associated with the transition to a lower carbon economy (MSCI Climate Change Fixed Income Indexes). |
| | • | *Innovation-Focused Thematic Indexes.* Innovation-Focused Thematic Indexes expand MSCI’s megatrend index suite to include indexes that are focused on disruptive innovation. These indexes are designed to track the performance of companies in dynamic fields such as autonomous technologies, genomics, fintech, future education and next generation internet. These indexes are used by investors to realign their portfolios to capture structural economic changes. |
| | • | *MSCI Climate Paris Aligned Indexes.* MSCI Climate Paris Aligned Indexes are designed to help investors mitigate transition and physical risks, identify potential opportunities and allocate resources in a way that supports the decarbonization of the economy while being compatible with the Paris Agreement. The MSCI Climate Paris Aligned Indexes incorporate the recommendations of the EU Task Force on Climate-related Financial Disclosures (“TCFD”) and are designed to exceed the minimum standards for EU Paris-aligned Benchmarks. |
For the year ended December 31, 2020, 60.0% of our revenues were attributable to our Index segment.
A majority of those revenues are attributable to annual, recurring subscriptions.
Since market movement and investment trends impact our asset-based fees, our revenues from asset-based fees are subject to volatility.
For the year ended December 31, 2020, asset-based fees accounted for 39.3% of the total revenues for our Index segment.
For example, in 2020 we released multi-period stress testing capabilities that allow investors to model the impact of long horizon scenarios on their portfolios.
Our Analytics solutions provide clients with tools to construct and manage portfolios, including integrated market data from multiple third parties as well as content from MSCI’s other segments, which significantly reduces the operational burden on clients to independently source this information and populate it in our Analytics products.
Our key Analytics products include:
For the year ended December 31, 2020, 30.3% of our revenues were attributable to our Analytics segment.
| | • | *MSCI Climate Solutions*. MSCI’s Climate VaR metric provides investors with an estimation of how the value of their investment portfolios could be impacted (up or down) by climate policy risk, technology transition opportunities and extreme weather (physical climate risks). A company's Climate VaR, expressed as a percentage change from its current market valuation, is derived from financial modeling of potential future costs and profits associated with climate-related risks and opportunities. |
For the year ended December 31, 2020, 6.5% of our revenues were attributable to our ESG segment.
| | • | *MSCI Real Estate Climate Value-at-Risk (“RE Climate VaR”).* Our *RE Climate VaR* solution provides forward-looking and return-based valuation assessments to measure climate-related risks for real estate assets in an investment portfolio. By calculating both transition risk from changing legislation due to climate action and physical risk from extreme weather impacts, RE Climate VaR offers a framework for investors to improve portfolio performance, risk management, regulatory reporting and progress towards broader sustainability goals. |
For the year ended December 31, 2020, 3.2% of our revenues were attributable to our Real Estate segment.
Current areas of focus include:
| | • | *Migrating products, data and services* *onto a cloud platform* to accelerate the delivery of new capabilities that will help investors more swiftly and efficiently manage data and understand the drivers of risk and performance, drive automation across our corporate processes and minimize data center risks. |
| | • | *Modernizing our workplace* to better support a remote workforce that can collaborate and productively work from anywhere. |
| --- | --- | --- |
| | • | *Improving the client experience* by enhancing the way clients access, interact with and use our data, applications and other tools. |
| --- | --- | --- |
| --- | --- | --- |
| --- | --- | --- |
For example, our ESG offerings compete with those from a range of competitors, including Sustainalytics Holding B.V. (now a part of Morningstar, Inc.), Institutional Shareholder Services Inc. and Refinitiv Holdings Limited.
Human Capital Management
MSCI is committed to creating a performance culture with high employee engagement.
Our talent and leadership development programs are designed to ensure we have the people and skills in place to deliver on MSCI’s strategy, including a workplace that values and promotes diversity, equality and inclusion.
MSCI is an international company with a highly diverse footprint.
| --- | --- |
| 1 | The term “solutions” as used throughout this Annual Report on Form 10-K refers to the use of our products or services by our clients to help them achieve their objectives. |
| | • | Increasing focus on global and multi-asset class investing as investors seek outcome-oriented results |
| | • | Increasing integration of ESG considerations into investment processes and products as sustainable investing goes mainstream |
| 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 over 4,200 as of December 31, 2019. |
| | | with expert climate change scenario analysis and allowed us to expand our climate risk assessment and reporting offerings. |
As the investment industry becomes more global and investors become increasingly focused on multi-asset-class portfolios, we believe we are well positioned to help our clients achieve their investment objectives by powering a more comprehensive analysis of their investment strategies using the content, applications and services across our four operating segments — Index, Analytics, ESG and Real Estate.
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 business model is susceptible to market movements that affect our AUM revenue, which generally have more influence on our revenues than seasonality.
| | • | *Climate Change Indexes* designed to enable investors to holistically integrate climate risk considerations into their investment processes. The indexes are based on other MSCI indexes (e.g., the MSCI ACWI index) and reweights the securities based on a transition to a lower carbon economy, while seeking to minimize exclusions from the parent index. |
| | • | *Adaptive Multiple-Factor Indexes* designed to reflect a strategy that adapts multi-factor allocations to changing market environments based on four pillars: macro cycle, momentum, valuation and market sentiment. |
| | • | *Megatrend Indexes* designed to systematically identify companies based on the linkage of their business lines with the trend or theme being modeled. For example, the MSCI ACWI IMI Digital Economy Index tracks companies that derive significant revenues from the digital economy value chain, including digital payments and robotics, and the MSCI ACWI IMI Disruptive Technologies Index tracks “disruptive technology” companies that are broadly classified under the subthemes of 3D printing, the Internet of Things, cloud computing, fintech, digital payments, healthcare innovations, robotics, cybersecurity, clean energy and smart grids. |
| | • | *Fixed Income Indexes* designed to reflect the investment opportunity set of US Dollar-denominated investment grade corporate bonds. The issuance-weighted constituents meet certain issuance minimums and certain other criteria in the fixed income sector. The *USD Investment Grade Corporate Bond Factor Fixed Income Indexes* are constructed using constituent weights that reflect systematic style factor exposures such as carry, value, size and low risk. The *USD Investment Grade Corporate Bond ESG Fixed Income Indexes* are constructed using data from our ESG segment and expand existing ESG methodologies in equities such as ESG Leaders and ESG Universal to the Fixed Income USD investment grade corporate sector, enabling clients to construct multi-asset-class portfolios with a consistent ESG approach. |
For example, MSCI continued its innovation in the factor space by introducing Tiers 1 through 4 of our Multi-Asset Class Factor Model in 2019.
The tiered structure allows for multiple levels of granularity, providing consistency throughout the investment process.
MSCI’s Analytics applications provide clients with integrated market data and constituent-level indexes aggregated from multiple third-party and proprietary sources.
This integrated market and benchmark data significantly reduces the operational burden on clients for both the implementation and ongoing operation of our Analytics products.
Our major applications include the following:
investments.
“Business—Government Regulation.”
| | • | *Global MSCI Real Estate Analytics Portal* is a dynamic platform for real estate performance and risk analysis, which enables real estate investors to gain market-level insights and evaluate the performance of their individual portfolios using relevant analytical filters. |
In addition to leveraging cutting-edge technology to distribute our content, we aim to:
| | • | *Enhance data center capabilities* by evaluating our data center architecture and implementing recovery strategies that ensure the stability of our data center networks. |
For a description of the risks associated with legal protection of our intellectual property and other rights, infringement claims and the ability to obtain or renew licenses for third-party intellectual property, see Part I, Item 1A.
“Risk Factors*”* below.
For a description of the risks associated with our dependence on third-party data suppliers, see Part I, Item 1A.
Employees
We had 3,396 and 3,112 employees as of December 31, 2019 and 2018, respectively.
As of December 31, 2019 and 2018, 62.9% and 61.4% of our employees, respectively, were located in emerging markets.
For a description of the risks associated with government regulation, see Part I, Item 1A.
“Risk Factors” below.
Executive Officers of the Registrant
Linda S.
Huber
As Chief Financial Officer, Ms. Huber manages the Company’s global finance and investor relations functions.
She previously served as the Executive Vice President and Chief Financial Officer of Moody’s Corporation from May 2005 to June 2018, where she had executive responsibility for the company’s global finance activities, information technology, communications and corporate services functions, as well as the Moody’s Foundation.
Prior to joining Moody’s, she served in several increasingly senior roles in financial services, having served as Executive Vice President and Chief Financial Officer at U.S. Trust Company, a subsidiary of Charles Schwab & Company, Inc.; Managing Director at Freeman & Co.; Vice President of Corporate Strategy and Development and Assistant Treasurer at PepsiCo.; Vice President of the Energy Investment Banking Group at Bankers Trust Co.; and an Associate in the Natural Resources Group at The First Boston Corp. She also held the rank of Captain in the U.S. Army, where she served from 1980 to 1984.
Ms. Huber holds an M.B.A. from the Stanford Graduate School of Business and a B.S. degree in business and economics from Lehigh University.
Ms. Huber currently serves on the board of directors of the Bank of Montreal.
An excerpt. Shown here: 40 of 84 rewritten, 40 of 117 added and all 40 removed. The counts are complete. For every sentence, read Item 1. Business in the FY2020 filing and the FY2019 filing.
Item 3. Legal Proceedings
2 rewritten, 0 added, 0 removed, 3 unchanged
Therefore, it is possible that [removed: our] [added: MSCI’s] business, operating results, financial condition or cash flows in a particular period could be materially [removed: adversely] affected by certain contingencies.
However, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on [removed: our] [added: MSCI’s] business, operating results, financial condition or cash flows.
Cover and table of contents
27 rewritten, 1 added, 0 removed, 72 unchanged
For the fiscal year ended December 31, [removed: 2019][added: 2020]
See [added: the] definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting [removed: company”] [added: company,”] and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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: 2019)] [added: 2020)] was [removed: $19,627,001,148.][added: $27,134,141,425.]
As of February [removed: 11, 2020,] [added: 5, 2021,] there were [removed: 84,808,104] [added: 82,574,643] 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 April [removed: 28, 2020,] [added: 27, 2021,] are incorporated herein by reference into Part III of this Form 10-K.
[removed: MSCI INC.][added: MSCI INC.]
FOR THE YEAR ENDED DECEMBER 31, [removed: 2019][added: 2020]
| Item 1A. | | [Risk Factors](#ITEM_1A_RISK_FACTORS) | | [removed: 12] [added: 14] |
| Item 1B. | | [Unresolved Staff Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS) | | [removed: 26] [added: 29] |
| Item 2. | | [Properties](#ITEM_2_PROPERTIES) | | [removed: 26] [added: 30] |
| Item 3. | | [Legal Proceedings](#ITEM_3_LEGAL_PROCEEDINGS) | | [removed: 26] [added: 30] |
| Item 4. | | [Mine Safety Disclosures](#ITEM_4_MINE_SAFETY_DISCLOSURES) | | [removed: 26] [added: 30] |
| 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: 27] [added: 31] |
| Item 6. | | [Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | | [removed: 31] [added: 35] |
| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ITEM_7_MANAGEMENTS_DISCUSSION_ANALYSIS_F) | | [removed: 33] [added: 36] |
| Item 7A. | | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM_7A_QUANTITATIVE_QUALITATIVE_DISCLOS) | | [removed: 55] [added: 56] |
| Item 8. | | [Financial Statements and Supplementary Data](#ITEM_8_FINANCIAL_STATEMENTS_SUPPLEMENTAR) | | [removed: 55] [added: 57] |
| Item 9. | | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](#ITEM_9_CHANGES_IN_DISAGREEMENTS_WITH_ACC) | | [removed: 55] [added: 93] |
| Item 9A. | | [Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURES) | | [removed: 56] [added: 93] |
| Item 9B. | | [Other Information](#ITEM_9B_OR_INFORMATION) | | [removed: 56] [added: 94] |
| Item 10. | | [Directors, Executive Officers and Corporate Governance](#ITEM_10_DIRECTORS_EXECUTIVE_FICERS_CORPO) | | [removed: 57] [added: 95] |
| Item 11. | | [Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | | [removed: 57] [added: 95] |
| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12_SECURITY_OWNERSHIP_CERTAIN_BENEF) | | [removed: 57] [added: 95] |
| Item 13. | | [Certain Relationships and Related Transactions, and Director Independence](#ITEM_13_CERTAIN_RELATIONSHIPS_RELATED_TR) | | [removed: 57] [added: 95] |
| Item 14. | | [Principal [removed: Accounting] [added: Accountant] Fees and Services](#ITEM_14_PRINCIPAL_ACCOUNTING_FEES_SERVIC) | | [removed: 57] [added: 95] |
| Item 15. | | [removed: [Exhibits,] [added: [Exhibit and] Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STATEMENT_SCH) | | [removed: 58] [added: 96] |
| Item 16. | | [Form 10-K Summary](#ITEM_16_FORM_10K_SUMMARY) | | [removed: 74] [added: 112] |
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Item 2. Properties
5 rewritten, 1 added, 1 removed, 11 unchanged
As of December 31, [removed: 2019,] [added: 2020,] our principal offices consisted of the following leased properties:
| Berkeley, California | | | [removed: 34,178] [added: 19,808] | | | February 28, 2030 |
| Manila, Philippines | | | [removed: 31,543] [added: 31,544] | | | February 28, 2027 |
As of December 31, [removed: 2019,] [added: 2020,] we have more than 30 leased and occupied locations of which the principal offices are listed above.
We also have additional office locations, including but not limited to, the following leased locations (in descending order of square footage): [added: Boston, Massachusetts;] Chicago, Illinois; Geneva, Switzerland; San Francisco, California; [removed: Beijing, China;] Frankfurt, Germany; Shanghai, China; [added: Paris, France;] Hong Kong, China; [removed: Paris, France;] Tokyo, Japan; [removed: Portland, Maine;] [added: Beijing, China;] Sydney, Australia; Toronto, Canada; and Singapore.
| Pune, India | | | 24,434 | | | February 14, 2026 |
| Boston, Massachusetts | | | 13,506 | | | November 30, 2021 |
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
13 rewritten, 9 added, 17 removed, 45 unchanged
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: 11, 2020,] [added: 5, 2021,] there were [removed: 118] [added: 116] shareholders of record of our common stock.
Non-employee directors are entitled to receive an annual grant of [removed: $160,000] [added: $165,000] and the lead director is entitled to an additional $50,000 in stock units (a total of [removed: $210,000),] [added: $215,000),] in each case, subject to a one-year vesting schedule.
Despite the changes implemented by [added: the] Tax [removed: Reform,] [added: Cuts and Jobs Act on December 22, 2017 (“Tax Reform”),] the Company will continue to maintain the Performance Plan and may make awards pursuant to it.
The following table presents certain information with respect to our equity compensation plans at December 31, [removed: 2019:][added: 2020:]
| MSCI Inc. 2016 Non-Employee Directors Compensation Plan | | | [removed: 6,603] [added: 4,689] | | | $ | [removed: 225.38] [added: 327.00] | | | | [removed: 290,500] [added: 283,177] | |
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: 2019.][added: 2020.]
[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]
| (1) | Includes (i) shares purchased by the Company on the open market under the [removed: 2019 Repurchase Program;] [added: stock repurchase program;] (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; (iii) shares withheld to satisfy tax withholding obligations and exercise price on behalf of employees that occur upon exercise and delivery of outstanding shares underlying stock options; and (iv) shares held in treasury under the MSCI Inc. Non-Employee Directors Deferral Plan. The value of shares withheld to satisfy tax withholding obligations was determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company. |
| (2) | See Note 10, “Shareholders’ [removed: Equity”] [added: Equity (Deficit)”] of the Notes to the Consolidated Financial Statements included herein for further information regarding our stock repurchase [removed: programs.] [added: program.] |
There were no unregistered sales of equity securities in the year ended December 31, [removed: 2019.][added: 2020.]
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: 2014] [added: 2015] assuming an investment of $100 at the closing price on December 31, [removed: 2014.][added: 2015.]
[removed: ][added: ]
| | | [removed: 2014 | | | |] 2015 | | | | 2016 | | | | 2017 | | | | 2018 | | | | 2019 | | | [added: | 2020 | | |]
| MSCI Inc. 2016 Omnibus Plan | | | 734,811 | | | $ | 162.95 | | | | 4,530,563 | |
| Total | | | 739,500 | | | $ | 163.99 | | | | 4,813,740 | |
| October 1, 2020-October 31, 2020 | | | 297,103 | | | $ | 347.39 | | | | 297,103 | | | $ | 1,789,547,000 | |
| November 1, 2020-November 30, 2020 | | | 177,181 | | | $ | 348.45 | | | | 174,488 | | | $ | 1,728,753,000 | |
| December 1, 2020-December 31, 2020 | | | 6 | | | $ | 402.25 | | | | \- | | | $ | 1,728,753,000 | |
| Total | | | 474,290 | | | $ | 347.79 | | | | 471,591 | | | $ | 1,728,753,000 | |
| MSCI Inc. | | $ | 100 | | | $ | 111 | | | $ | 180 | | | $ | 212 | | | $ | 376 | | | $ | 656 | |
| S&P 500 | | $ | 100 | | | $ | 112 | | | $ | 136 | | | $ | 130 | | | $ | 171 | | | $ | 203 | |
| NYSE Composite Index | | $ | 100 | | | $ | 112 | | | $ | 133 | | | $ | 121 | | | $ | 152 | | | $ | 162 | |
Effective May 1, 2020, non-employee directors will be entitled to receive an annual grant of $165,000 and the lead director will be entitled to an additional $50,000 in stock units (a total of $215,000), which will also be subject to a one-year vesting schedule.
| MSCI Amended and Restated 2007 Equity Incentive Compensation Plan | | | 21,386 | | | $ | 54.55 | | | | — | |
| MSCI Inc. 2016 Omnibus Plan | | | 729,226 | | | $ | 123.48 | | | | 4,945,088 | |
| Total | | | 757,215 | | | $ | 122.42 | | | | 5,235,588 | |
There were no other share repurchases during the quarter outside of the repurchases noted below.
| October 1, 2019-October 31, 2019 | | | 137 | | | $ | 222.58 | | | | \- | | | $ | 1,456,072,000 | |
| November 1, 2019-November 30, 2019 | | | 2,989 | | | $ | 245.86 | | | | \- | | | $ | 1,456,072,000 | |
| December 1, 2019-December 31, 2019 | | | 19,217 | | | $ | 261.21 | | | | \- | | | $ | 1,456,072,000 | |
| Total | | | 22,343 | | | $ | 258.92 | | | | \- | | | $ | 1,456,072,000 | |
Since January 1, 2017, the Company has issued an aggregate principal amount of $1,500.0 million in senior unsecured notes in the amounts of $500.0 million during the year ended December 31, 2018 and $1,000.0 million during the year ended December 31, 2019, 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 private placement offering of $500.0 million aggregate principal amount of 5.375% senior unsecured notes due 2027 (the “2027 Senior Notes”) on May 15, 2018.
The Company issued $1,000.0 million aggregate principal amount of 4.000% senior unsecured notes due 2029 (the “2029 Senior Notes”) in November 2019 by completing a private placement offering of $500.0 million aggregate principal amount of the 2029 Senior Notes on November 7, 2019 with an add-on of $500.0 million aggregate principal amount of the 2029 Senior Notes on November 20, 2019.
The Company used a portion of the net proceeds from the 2029 Senior Notes, together with available cash, for the partial pre-maturity redemption of $500.0 million aggregate principal amount of the $800.0 million aggregate principal amount of 5.250% senior unsecured notes due 2024 (the “2024 Senior Notes”).
The 2024 Senior Notes, the 2027 Senior Notes and the 2029 Senior Notes have not been registered under the Securities Act or any state securities laws.
| MSCI Inc. | | $ | 100 | | | $ | 154 | | | $ | 170 | | | $ | 277 | | | $ | 327 | | | $ | 579 | |
| S&P 500 | | $ | 100 | | | $ | 101 | | | $ | 114 | | | $ | 138 | | | $ | 132 | | | $ | 174 | |
| NYSE Composite Index | | $ | 100 | | | $ | 96 | | | $ | 107 | | | $ | 127 | | | $ | 116 | | | $ | 146 | |
Item 6. Selected Financial Data
24 rewritten, 2 added, 11 removed, 12 unchanged
Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto [removed: beginning on page F-1 of this Annual Report on Form 10-K.][added: provided under Part II, Item 8.]
| | | [removed: As of or] For the [added: Years Ended] | | | | | | | | | | | | | | | | | | | |
| | | | [added: 2020 | | | |] 2019 | | | 2018 (1) | | | | | 2017 | | | | 2016 | | | [removed: 2015 (2) | | | |]
| Operating revenues | | $ | [removed: 1,557,796] [added: 1,695,390] | | | $ | [removed: 1,433,984] [added: 1,557,796] | | | $ | [removed: 1,274,172] [added: 1,433,984] | | | $ | [removed: 1,150,669] [added: 1,274,172] | | | $ | [removed: 1,075,013] [added: 1,150,669] | | |
| Total operating expenses | | | [removed: 802,095] [added: 810,626] | | | | [removed: 747,086] [added: 802,095] | | | | [removed: 694,402] [added: 747,086] | | | | [removed: 662,565] [added: 694,402] | | | | [removed: 671,115] [added: 662,565] | | |
| Operating income | | | [removed: 755,701] [added: 884,764] | | | | [removed: 686,898] [added: 755,701] | | | | [removed: 579,770] [added: 686,898] | | | | [removed: 488,104] [added: 579,770] | | | | [removed: 403,898] [added: 488,104] | | |
| Other expense (income), net | | | [removed: 152,383] [added: 198,539] | | | | [removed: 57,002] [added: 152,383] | | | | [removed: 112,871] [added: 57,002] | | | | [removed: 102,166] [added: 112,871] | | | | [removed: 54,344] [added: 102,166] | | |
| Provision for income taxes | | | [removed: 39,670] [added: 84,403] | | | | [removed: 122,011] [added: 39,670] | | | | [removed: 162,927] [added: 122,011] | | | | [removed: 125,083] [added: 162,927] | | | | [removed: 119,516] [added: 125,083] | | |
| [removed: Income from continuing operations, net of] [added: Net] income [removed: taxes] | | [added: $] | [removed: 563,648] [added: 601,822] | | | [added: $] | [removed: 507,885] [added: 563,648] | | | [added: $] | [removed: 303,972] [added: 507,885] | | | [added: $] | [removed: 260,855] [added: 303,972] | | | [added: $] | [removed: 230,038] [added: 260,855] | | |
| Operating margin | | | [removed: 48.5] [added: 52.2] | % | | | [removed: 47.9] [added: 48.5] | % | | | [removed: 45.5] [added: 47.9] | % | | | [removed: 42.4] [added: 45.5] | % | | | [removed: 37.6] [added: 42.4] | % | |
| [removed: Basic earnings] [added: Earnings] per [removed: share:] [added: basic common share] | | [added: $] | [added: 7.19] | | | [added: $] | [added: 6.66] | | | [added: $] | [added: 5.83] | | | [added: $] | [added: 3.36] | | | [added: $] | [added: 2.72] | | |
| [removed: Diluted earnings] [added: Earnings] per [removed: share:] [added: diluted common share] | | [added: $] | [added: 7.12] | | | [added: $] | [added: 6.59] | | | [added: $] | [added: 5.66] | | | [added: $] | [added: 3.31] | | | [added: $] | [added: 2.70] | | |
| Basic | | | [removed: 84,644] [added: 83,716] | | | | [removed: 87,179] [added: 84,644] | | | | [removed: 90,336] [added: 87,179] | | | | [removed: 95,986] [added: 90,336] | | | | [removed: 109,124] [added: 95,986] | | |
| Diluted | | | [removed: 85,536] [added: 84,517] | | | | [removed: 89,701] [added: 85,536] | | | | [removed: 91,914] [added: 89,701] | | | | [removed: 96,540] [added: 91,914] | | | | [removed: 109,926] [added: 96,540] | | |
| Dividends declared per common share | | $ | [removed: 2.52] [added: 2.92] | | | $ | [removed: 1.92] [added: 2.52] | | | $ | [removed: 1.32] [added: 1.92] | | | $ | [removed: 1.00] [added: 1.32] | | | $ | [removed: 0.80] [added: 1.00] | | |
| | | [added: | 2020 | | |] 2019 [removed: (3)] [added: (2)] | | | | 2018 (1) | | | | | 2017 | | | | 2016 | | | [removed: 2015 (2) | | | |]
| Cash and cash equivalents | | $ | [removed: 1,506,567] [added: 1,300,521] | | | $ | [removed: 904,176] [added: 1,506,567] | | | $ | [removed: 889,502] [added: 904,176] | | | $ | [removed: 791,834] [added: 889,502] | | | $ | [removed: 777,706] [added: 791,834] | | |
| Accounts receivable (net of allowances) | | $ | [removed: 499,268] [added: 558,569] | | | $ | [removed: 473,433] [added: 499,268] | | | $ | [removed: 327,597] [added: 473,433] | | | $ | [removed: 221,504] [added: 327,597] | | | $ | [removed: 208,239] [added: 221,504] | | |
| Goodwill and intangibles, net of accumulated amortization | | $ | [removed: 1,824,355] [added: 1,800,770] | | | $ | [removed: 1,826,564] [added: 1,824,355] | | | $ | [removed: 1,882,457] [added: 1,826,564] | | | $ | [removed: 1,903,490] [added: 1,882,457] | | | $ | [removed: 1,957,111] [added: 1,903,490] | | |
| Total assets | | $ | [removed: 4,204,439] [added: 4,198,647] | | | $ | [removed: 3,387,952] [added: 4,204,439] | | | $ | [removed: 3,275,668] [added: 3,387,952] | | | $ | [removed: 3,082,578] [added: 3,275,668] | | | $ | [removed: 3,146,987] [added: 3,082,578] | | |
| Deferred revenue | | $ | [removed: 574,656] [added: 675,870] | | | $ | [removed: 537,977] [added: 574,656] | | | $ | [removed: 374,365] [added: 537,977] | | | $ | [removed: 334,358] [added: 374,365] | | | $ | [removed: 317,552] [added: 334,358] | | |
| Long-term debt, net of current maturities | | $ | [removed: 3,071,926] [added: 3,366,777] | | | $ | [removed: 2,575,502] [added: 3,071,926] | | | $ | [removed: 2,078,093] [added: 2,575,502] | | | $ | [removed: 2,075,201] [added: 2,078,093] | | | $ | [removed: 1,579,404] [added: 2,075,201] | | |
| Total shareholders' equity (deficit) | | $ | [removed: (76,714] [added: (443,234] | ) | | $ | [removed: (166,494] [added: (76,714] | ) | | $ | [removed: 401,012] [added: (166,494] | [added: )] | | $ | [removed: 317,605] [added: 401,012] | | | $ | [removed: 901,487] [added: 317,605] | | |
| [removed: (3)] [added: (2)] | Reflects the impact of the adoption on January 1, 2019 of Accounting Standards Update 2016-02, "Lease (Topic 842)," the impact of which was the inclusion of $166.4 million of right-of-use assets on the Company's Consolidated Statement of Financial Condition as of December 31, 2019. |
“Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
| | | As of | | | | | | | | | | | | | | | | | | | |
| --- | --- |
| | | Years Ended | | | | | | | | | | | | | | | | | | | |
| Income (loss) from discontinued operations, net of income taxes | | | — | | | | — | | | | — | | | | — | | | | (6,390 | ) | |
| Net income | | $ | 563,648 | | | $ | 507,885 | | | $ | 303,972 | | | $ | 260,855 | | | $ | 223,648 | | |
| Earnings per basic common share from continuing operations | | $ | 6.66 | | | $ | 5.83 | | | $ | 3.36 | | | $ | 2.72 | | | $ | 2.11 | | |
| Earnings per basic common share from discontinued operations | | | — | | | | — | | | | — | | | | — | | | | (0.06 | ) | |
| Earnings per basic common share | | $ | 6.66 | | | $ | 5.83 | | | $ | 3.36 | | | $ | 2.72 | | | $ | 2.05 | | |
| Earnings per diluted common share from continuing operations | | $ | 6.59 | | | $ | 5.66 | | | $ | 3.31 | | | $ | 2.70 | | | $ | 2.09 | | |
| Earnings per diluted common share from discontinued operations | | | — | | | | — | | | | — | | | | — | | | | (0.06 | ) | |
| Earnings per diluted common share | | $ | 6.59 | | | $ | 5.66 | | | $ | 3.31 | | | $ | 2.70 | | | $ | 2.03 | | |
| (2) | Includes the impact of the Insignis business (“Insignis”) from the October 16, 2015 acquisition date, which was not material. |
Item 8. Financial Statements and Supplementary Data
0 rewritten, 1,207 added, 1 removed, 1 unchanged
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Consolidated Financial Statements | Page | |
| --- | --- | --- |
| [Report of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | | 58 |
| [Consolidated Statements of Financial Condition as of December 31, 2020 and December 31, 2019](#CONSOLIDATED_STATEMENTS_FINANCIAL_CONDIT) | | 60 |
| [Consolidated Statements of Income for the Years Ended December 31, 2020, December 31, 2019, and December 31, 2018](#CONSOLIDATED_STATEMENTS_INCOME) | | 61 |
| [Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2020, December 31, 2019, and December 31, 2018](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN) | | 62 |
| [Consolidated Statements of Shareholders’ Equity (Deficit) for the Years Ended December 31, 2020, December 31, 2019, and December 31, 2018](#CONSOLIDATED_STATEMENTS_SHAREHOLDERS_EQU) | | 63 |
| [Consolidated Statements of Cash Flows for the Years Ended December 31, 2020, December 31, 2019, and December 31, 2018](#CONSOLIDATED_STATEMENTS_CASH_FLOWS) | | 64 |
| [Notes to Consolidated Financial Statements](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN) | | 65 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of MSCI Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial condition of MSCI Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income, of comprehensive income, of shareholders' equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.
Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
Our audits also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
The information required by this Item is set forth beginning on page F-1 of this Annual Report on Form 10-K.
An excerpt. Shown here: all 0 rewritten, 40 of 1,207 added and all 1 removed. The counts are complete. For every sentence, read Item 8. Financial Statements and Supplementary Data in the FY2020 filing and the FY2019 filing.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
0 rewritten, 0 added, 1 removed, 1 unchanged
| --- | --- |
Item 9A. Controls and Procedures
5 rewritten, 0 added, 0 removed, 19 unchanged
Based on their evaluation, as of December 31, [removed: 2019,] [added: 2020,] 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: 2019] [added: 2020] 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: 2019,] [added: 2020,] 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: 2019,] [added: 2020,] which appears on page [removed: F-2] [added: 58] 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: 2019] [added: 2020] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 10. Directors, Executive Officers and Corporate Governance
2 rewritten, 0 added, 0 removed, 3 unchanged
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: 2019.][added: 2020.]
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: 2019.][added: 2020.]
Item 11. Executive Compensation
1 rewritten, 0 added, 0 removed, 1 unchanged
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: 2019.][added: 2020.]
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
1 rewritten, 0 added, 0 removed, 3 unchanged
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: 2019.][added: 2020.]
Item 13. Certain Relationships and Related Transactions, and Director Independence
1 rewritten, 0 added, 0 removed, 1 unchanged
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: 2019.][added: 2020.]
Item 14. Principal Accountant Fees and Services
2 rewritten, 0 added, 0 removed, 1 unchanged
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: 2019.][added: 2020.]
[removed: PART IV][added: PART IV]
Item 15. Exhibit and Financial Statement Schedules
186 rewritten, 44 added, 13 removed, 12 unchanged
[removed: The financial statements begin on page F-1] [added: “Financial Statements and Supplementary Data”] of this Annual Report on Form 10-K.
No financial statement schedules are provided because the information called for is not applicable or not required or is included in the consolidated financial statements or the notes thereto [removed: beginning on page F-1 of this Annual Report on Form 10-K.][added: provided under Part II, Item 8.]
| Exhibit Number | Description | Form | File No. | [added: |] Exhibit No. | [added: |] Filing Date | [added: |]
| 3.1 | [Third Amended and Restated Certificate of Incorporation](http://www.sec.gov/Archives/edgar/data/1408198/000119312512212354/d324997dex31.htm) | 10-Q | 001-33812 | [added: |] 3.1 | [added: |] 5/4/2012 | [added: |]
| 3.2 | [Amended and Restated [removed: By-laws](http://www.sec.gov/Archives/edgar/data/1408198/000119312512212354/d324997dex32.htm)] [added: By-laws](http://www.sec.gov/Archives/edgar/data/0001408198/000156459021000865/msci-ex31_6.htm)] | [removed: 10-Q] [added: 8-K/A] | 001-33812 | [removed: 3.2] | [removed: 5/4/2012] [added: 3.1] | [added: | 1/11/2021 | |]
| 4.1 | [Form of Senior Indenture](http://www.sec.gov/Archives/edgar/data/1408198/000095010315006360/dp58253_ex0401.htm) | S-3 | 333-206232 | [added: |] 4.1 | [added: |] 8/7/2015 | [added: |]
| 4.2 | [Form of Subordinated Indenture](http://www.sec.gov/Archives/edgar/data/1408198/000095010315006360/dp58253_ex0402.htm) | S-3 | 333-206232 | [added: |] 4.2 | [added: |] 8/7/2015 | [added: |]
| 4.3 | [Form of Common Stock Certificate](http://www.sec.gov/Archives/edgar/data/1408198/000119312512212354/d324997dex41.htm) | 10-Q | 001-33812 | [added: |] 4.1 | [added: |] 5/4/2012 | [added: |]
| 4.4 | [Indenture, dated as of [removed: November 20, 2014,] [added: August 4, 2016,] among MSCI Inc., each of the Subsidiary Guarantors party thereto and Wells Fargo Bank, National Association, as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312514420084/d823985dex41.htm)] [added: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312516672119/d236625dex41.htm)] | 8-K | 001-33812 | [added: |] 4.1 | [removed: 11/20/2014] | [added: 8/5/2016 | |]
| 4.5 | [Form of Note for MSCI Inc. [removed: 5.250%] [added: 4.750%] Senior Notes due [removed: November 15, 2024] [added: August 1, 2026] (included in Exhibit [removed: 4.4)](http://www.sec.gov/Archives/edgar/data/1408198/000119312514420084/d823985dex41.htm)] [added: 4.4)](http://www.sec.gov/Archives/edgar/data/1408198/000119312516672119/d236625dex41.htm)] | 8-K | 001-33812 | [added: |] 4.2 | [removed: 11/20/2014] | [added: 8/5/2016 | |]
| 4.6 | [Indenture, dated as of [removed: August 13, 2015,] [added: May 18, 2018,] among MSCI Inc., each of the [removed: Subsidiary Guarantors] [added: subsidiary guarantors] party thereto and Wells Fargo Bank, National Association, as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312515290101/d63256dex41.htm)] [added: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312518167727/d582789dex41.htm)] | 8-K | 001-33812 | [added: |] 4.1 | [removed: 8/13/2015] | [added: 5/18/2018 | |]
| 4.7 | [Form of Note for MSCI Inc. [removed: 5.750%] [added: 5.375%] Senior Notes due [removed: August 13, 2025] [added: May 15, 2027] (included in Exhibit [removed: 4.6)](http://www.sec.gov/Archives/edgar/data/1408198/000119312515290101/d63256dex41.htm)] [added: 4.6)](http://www.sec.gov/Archives/edgar/data/1408198/000119312518167727/d582789dex41.htm)] | 8-K | 001-33812 | [added: |] 4.2 | [removed: 8/13/2015] | [added: 5/18/2018 | |]
| 4.8 | [Indenture, dated as of [removed: August 4, 2016,] [added: November 7, 2019,] among MSCI Inc., each of the [removed: Subsidiary Guarantors] [added: subsidiary guarantors] party thereto and Wells Fargo Bank, National Association, as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312516672119/d236625dex41.htm)] [added: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312519286824/d828551dex41.htm)] | 8-K | 001-33812 | [added: |] 4.1 | [removed: 8/5/2016] | [added: 11/7/2019 | |]
| 4.9 | [Form of Note for MSCI Inc. [removed: 4.750%] [added: 4.000%] Senior Notes due [removed: August 1, 2026] [added: November 15, 2029] (included in Exhibit [removed: 4.8)](http://www.sec.gov/Archives/edgar/data/1408198/000119312516672119/d236625dex41.htm)] [added: 4.8)](http://www.sec.gov/Archives/edgar/data/1408198/000119312519286824/d828551dex41.htm)] | 8-K | 001-33812 | [added: |] 4.2 | [removed: 8/5/2016] | [added: 11/7/2019 | |]
| 4.10 | [Indenture, dated as of [removed: May 18, 2018,] [added: March 4, 2020,] among MSCI Inc., each of the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312518167727/d582789dex41.htm)] [added: Trustee.](http://www.sec.gov/Archives/edgar/data/0001408198/000119312520061718/d871635dex41.htm)] | 8-K | 001-33812 | [added: |] 4.1 | [removed: 5/18/2018] | [added: 3/04/2020 | |]
| 4.11 | [Form of Note for MSCI Inc. [removed: 5.375%] [added: 3.625%] Senior Notes due [removed: May 15, 2027] [added: September 1, 2030] (included in Exhibit [removed: 4.10)](http://www.sec.gov/Archives/edgar/data/1408198/000119312518167727/d582789dex41.htm)] [added: 4.10).](http://www.sec.gov/Archives/edgar/data/0001408198/000119312520061718/d871635dex41.htm)] | 8-K | 001-33812 | [added: |] 4.2 | [removed: 5/18/2018] | [added: 3/04/2020 | |]
| 4.12 | [Indenture, dated as of [removed: November 7, 2019,] [added: May 26, 2020,] among MSCI Inc., each of the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/1408198/000119312519286824/d828551dex41.htm)] [added: Trustee.](http://www.sec.gov/Archives/edgar/data/0001408198/000119312520151613/d829084dex41.htm)] | 8-K | 001-33812 | [added: |] 4.1 | [removed: 11/7/2019] | [added: 5/26/2020 | |]
| 4.13 | [Form of Note for MSCI Inc. [removed: 4.000%] [added: 3.875%] Senior Notes due [removed: November] [added: February] 15, [removed: 2029] [added: 2031] (included in Exhibit [removed: 4.1)](http://www.sec.gov/Archives/edgar/data/1408198/000119312519286824/d828551dex41.htm)] [added: 4.12).](http://www.sec.gov/Archives/edgar/data/0001408198/000119312520151613/d829084dex41.htm)] | 8-K | 001-33812 | [added: |] 4.2 | [removed: 11/7/2019] | [added: 5/26/2020 | |]
| 4.14 | [Description of [removed: Securities](https://www.sec.gov/Archives/edgar/data/1408198/000156459020004992/msci-ex414_565.htm)] [added: Securities](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex414_745.htm)] | Filed Herewith | | | | [added: | | |]
| [removed: 10.1†] [added: 10.1††#] | [Index License Agreement for Funds, dated as of March 18, 2000, between Morgan Stanley Capital International and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312515069699/d832959dex101.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex101_172.htm)] | [removed: 10-K] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.1] | [removed: 2/27/2015] | [added: | | |]
| [removed: 10.2†] [added: 10.8] | [Amendment to Index License Agreement for [removed: Funds] [added: Funds, dated as of June 5, 2007,] between Morgan Stanley Capital International [added: Inc.] and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex102.htm)] [added: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312511017728/dex108.htm)] | 10-K | 001-33812 | [removed: 10.2] | [removed: 2/29/2012] [added: 10.8] | [added: | 1/31/2011 | |]
| [removed: 10.3†] [added: 10.3††#] | [Letter Agreement to Amend MSCI-BGI Fund Index License Agreement, dated as of June 21, 2001, between Morgan Stanley Capital International Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312511017728/dex103.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex103_170.htm)] | [removed: 10-K] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.3] | [removed: 1/31/2011] | [added: | | |]
| [removed: 10.4†] [added: 10.4††#] | [Addendum to the Index License Agreement for Funds, dated as of September 18, 2002, between Morgan Stanley Capital International Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312507207372/dex104.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex104_169.htm)] | [removed: S-1/A] [added: Filed Herewith] | [removed: 333-144975] | [removed: 10.4] | [removed: 9/26/2007] | [added: | | |]
| [removed: 10.5†] [added: 10.5††#] | [Amendment to the Index License Agreement for Funds, dated as of December 3, 2004, between Morgan Stanley Capital International Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312507226305/dex105.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex105_168.htm)] | [removed: S-1/A] [added: Filed Herewith] | [removed: 333-144975] | [removed: 10.5] | [removed: 10/26/2007] | [added: | | |]
| [removed: 10.6†] [added: 10.6††#] | [Amendment to the Index License Agreement for Funds, dated as of May 1, 2005, between Morgan Stanley Capital International Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312507207372/dex106.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex106_167.htm)] | [removed: S-1/A] [added: Filed Herewith] | [removed: 333-144975] | [removed: 10.6] | [removed: 9/26/2007] | [added: | | |]
| [removed: 10.7†] [added: 10.7††#] | [Amendment to the Index License Agreement for Funds, dated as of July 1, 2006, between Morgan Stanley Capital International Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312507207372/dex107.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex107_166.htm)] | [removed: S-1/A] [added: Filed Herewith] | [removed: 333-144975] | [removed: 10.7] | [removed: 10/26/2007] | [added: | | |]
| [removed: 10.8] [added: 10.56] | [Amendment to [added: the] Index License Agreement for Funds, dated as of [removed: June 5, 2007,] [added: December 16, 2011, by and] between [added: MSCI Inc. (formerly,] Morgan Stanley Capital [removed: International Inc.] [added: International, Inc.)] and [added: BlackRock Institutional Trust Company, N.A. (formerly,] Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312511017728/dex108.htm)] [added: N.A.)](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex1067.htm)] | 10-K | 001-33812 | [removed: 10.8] | [removed: 1/31/2011] [added: 10.67] | [added: | 2/29/2012 | |]
| 10.9 | [Amendment to Index License Agreement for Funds, dated as of November 7, 2008, between MSCI Inc. and Barclays Global Investors, N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex109.htm) | 10-K | 001-33812 | [added: |] 10.9 | [added: |] 2/29/2012 | [added: |]
| [removed: 10.10†] [added: 10.13] | [Amendment to Index License Agreement for Funds, dated as of [removed: December 9, 2008,] [added: September 30, 2009,] between MSCI Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000095010310001952/dp18350_ex1002.htm)] [added: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000095010310001952/dp18350_ex1004.htm)] | 10-Q | 001-33812 | [removed: 10.2] | [added: 10.4 | |] 7/2/2010 | [added: |]
| 10.11 | [Amendment to Index License Agreement for Funds, dated as of April 1, 2009, between MSCI Inc. and Barclays Global Investors, N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312510017074/dex1011.htm) | 10-K | 001-33812 | [added: |] 10.11 | [added: |] 1/29/2010 | [added: |]
| [removed: 10.12†] [added: 10.14] | [Amendment to Index License Agreement for Funds, dated as of [removed: May 21,] [added: October 6,] 2009, between MSCI Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000095010310001952/dp18350_ex1003.htm)] [added: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312510017074/dex1014.htm)] | [removed: 10-Q] [added: 10-K] | 001-33812 | [removed: 10.3] | [removed: 7/2/2010] [added: 10.14] | [added: | 1/29/2010 | |]
| [removed: 10.13] [added: 10.12††#] | [Amendment to Index License Agreement for Funds, dated as of [removed: September 30,] [added: May 21,] 2009, between MSCI Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000095010310001952/dp18350_ex1004.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex1012_164.htm)] | [removed: 10-Q] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.4] | [removed: 7/2/2010] | [added: | | |]
| [removed: 10.14] [added: 10.54] | [Amendment to [added: the] Index License Agreement for Funds, dated as of October [removed: 6, 2009,] [added: 4, 2011, by and] between MSCI Inc. and [added: BlackRock Institutional Trust Company, N.A. (formerly known as] Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312510017074/dex1014.htm)] [added: N.A.)](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex1065.htm)] | 10-K | 001-33812 | [removed: 10.14] | [removed: 1/29/2010] [added: 10.65] | [added: | 2/29/2012 | |]
| [removed: 10.15†] [added: 10.15††#] | [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, Barclays Global Investors, N.A.). Replaces in its entirety the Amendment to Index License Agreement for Funds, dated as of October 27, 2009, between MSCI Inc. and Barclays Global Investors, N.A. filed as Exhibit 10.15 to Form 10-K (001-33812) filed with the SEC on February 29, [removed: 2012](http://www.sec.gov/Archives/edgar/data/1408198/000119312513087988/d448124dex1015.htm)] [added: 2012](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex1015_163.htm)] | [removed: 10-K] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.15] | [removed: 3/1/2013] | [added: | | |]
| [removed: 10.29*] [added: 10.31*] | [MSCI Inc. [removed: Amended] [added: Performance Formula] and [removed: Restated 2007 Equity] Incentive [removed: Compensation Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312513087988/d448124dex1030.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312508040718/ddef14a.htm#tx37954_49)] | [removed: 10-K] [added: Proxy] | 001-33812 | [removed: 10.30] | [removed: 3/1/2013] [added: Annex C] | [added: | 2/28/2008 | |]
| [removed: 10.46†] [added: 10.47] | [Amendment to Index License Agreement for Funds, dated as of [removed: December 15, 2009,] [added: June 13, 2011,] between MSCI Inc. and [removed: Blackrock] [added: BlackRock] Institutional Trust Company, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312511017728/dex1057.htm)] [added: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex1058.htm)] | 10-K | 001-33812 | [removed: 10.57] | [removed: 1/31/2011] [added: 10.58] | [added: | 2/29/2012 | |]
| [removed: 10.47] [added: 10.51] | [Amendment to [added: the] Index License Agreement for Funds, dated as of June [removed: 13,] [added: 21,] 2011, [added: by and] between MSCI Inc. and BlackRock Institutional Trust Company, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex1058.htm)] [added: N.A. (formerly known as Barclays Global Investors, N.A.)](http://www.sec.gov/Archives/edgar/data/1408198/000119312512086989/d264713dex1062.htm)] | 10-K | 001-33812 | [removed: 10.58] | [added: 10.62 | |] 2/29/2012 | [added: |]
| 10.48 | [Amendment to Index License Agreement for Funds, dated as of May 20, 2010](http://www.sec.gov/Archives/edgar/data/1408198/000119312511017728/dex1059.htm) | 10-K | 001-33812 | [added: |] 10.59 | [added: |] 1/31/2011 | [added: |]
| [removed: 10.49†] [added: 10.49††#] | [Schedule No. 11043 to the Master Index License Agreement for Index Based Funds, between MSCI Inc. and BlackRock Institutional Trust Company, N.A. (formerly, Barclays Global Investors, N.A.), dated as of September 1, [removed: 2010](http://www.sec.gov/Archives/edgar/data/1408198/000119312511017728/dex1060.htm)] [added: 2010](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex1049_161.htm)] | [removed: 10-K] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.60] | [removed: 1/31/2011] | [added: | | |]
| [removed: 10.50†] [added: 10.50††#] | [Amendment to the Index License Agreement for Funds, dated as of November 19, 2010, between MSCI Inc. and Barclays Global Investors, [removed: N.A.](http://www.sec.gov/Archives/edgar/data/1408198/000119312515069699/d832959dex1050.htm)] [added: N.A.](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex1050_160.htm)] | [removed: 10-K] [added: Filed Herewith] | [removed: 001-33812] | [removed: 10.50] | [removed: 2/27/2015] | [added: | | |]
The financial statements are provided under Part II, Item 8.
“Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
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| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
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| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
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| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
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| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
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| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 10.193* | [Change of Employment Status and Release Agreement, entered into on October 5, 2020, between MSCI Inc. and Linda S. Huber](http://www.sec.gov/Archives/edgar/data/0001408198/000156459020046029/msci-ex101_6.htm) | 8-K | 001-33812 | | 10.1 | | 10/07/2020 | |
| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 10.222 | [Amendment to the Schedules to the Index License Agreement for Funds, dated as of February 3, 2020, by and between MSCI Inc. and BlackRock Fund Advisors](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex10222_206.htm) | Filed Herewith | | | | | | |
| 10.223 | [Amendment to the Schedules to the Index License Agreement for Funds, dated as of February 3, 2020, by and between MSCI ESG Research LLC and BlackRock Fund Advisors](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex10223_205.htm) | Filed Herewith | | | | | | |
| 10.224 | [Amendment to the Schedules to the Index License Agreement for Funds, dated as of March 9, 2020, by and between MSCI Inc. and BlackRock Fund Advisors](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex10224_203.htm) | Filed Herewith | | | | | | |
| 10.225††# | [Amendment to the Schedules to the Index License Agreement for Funds, dated as of March 9, 2020, by and between MSCI Inc. and BlackRock Fund Advisors](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex10225_202.htm) | Filed Herewith | | | | | | |
| 10.227††# | [Amendment to the Previous Amendment to the Index License Agreement for Funds, dated as of April 13, 2020, by and between MSCI Inc. (formerly, Morgan Stanley Capital International Inc.) and BlackRock Fund Advisors](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex10227_201.htm) | Filed Herewith | | | | | | |
| Exhibit Number | Description | Form | File No. | | Exhibit No. | | Filing Date | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 10.228††# | [Amendment No. 5 to the Index License Agreement for Funds, dated as of June 15, 2020, by and between MSCI ESG Research LLC and BlackRock Fund Advisors](https://www.sec.gov/Archives/edgar/data/1408198/000156459021005811/msci-ex10228_200.htm) | Filed Herewith | | | | | | |
| --- | --- | --- | --- | --- | --- |
| 10.23 | [Tax Sharing Agreement, dated as of November 20, 2007, between Morgan Stanley and MSCI Inc.](http://www.sec.gov/Archives/edgar/data/1408198/000119312508040715/dex1012.htm) | 10-K | 001-33812 | 10.12 | 2/28/2008 |
| 10.30* | [MSCI Independent Directors’ Equity Compensation Plan as amended and restated on January 12, 2011](http://www.sec.gov/Archives/edgar/data/1408198/000119312511017728/dex1039.htm) | 10-K | 001-33812 | 10.39 | 1/31/2011 |
| 10.31* | [MSCI Inc. Performance Formula and Incentive Plan](http://www.sec.gov/Archives/edgar/data/1408198/000119312508040718/ddef14a.htm#tx37954_49) | Proxy | 001-33812 | Annex C | 2/28/2008 |
| 10.84 | [Stock Purchase Agreement, dated as of March 17, 2014, among MSCI Inc., RiskMetrics Group Holdings, LLC and VISS Acquisition Corp.](http://www.sec.gov/Archives/edgar/data/1408198/000095010314002004/dp44916_ex0201.htm) | 8-K | 001-33812 | 2.1 | 3/20/2014 |
| 10.98 | [Cooperation Agreement, dated as of January 29, 2015 (amended by Letter Agreement to Cooperation Agreement, dated as of March 10, 2016, by and among MSCI Inc., Value Act Capital Management, L.P. and D. Robert Hale)](http://www.sec.gov/Archives/edgar/data/1408198/000095010315000731/dp53045_ex9901.htm) | 8-K | 001-33812 | 99.1 | 1/30/2015 |
| 10.193* | [Offer Letter, executed May 15, 2018, between MSCI Inc. and Jigar Thakkar](http://www.sec.gov/Archives/edgar/data/1408198/000156459019015544/msci-ex101_117.htm) | 10-Q | 001-33812 | 10.1 | 5/3/2019 |
| 10.194* | [Offer Letter, executed May 16, 2012, between MSCI Inc. and Andrew C. Wiechmann](http://www.sec.gov/Archives/edgar/data/1408198/000156459019015544/msci-ex102_122.htm) | 10-Q | 001-33812 | 10.2 | 5/3/2019 |
| 10.196* | [Special Restricted Stock Unit Award Agreement Under the MSCI Inc. 2016 Omnibus Incentive Plan](http://www.sec.gov/Archives/edgar/data/1408198/000156459019015544/msci-ex105_119.htm) | 10-Q | 001-33812 | 10.5 | 5/3/2019 |
| 10.198* | [Form of 2019 Special Performance Award Agreement for Performance Stock Units Under the MSCI Inc. 2016 Omnibus Incentive Plan](http://www.sec.gov/Archives/edgar/data/1408198/000156459019013792/msci-ex102_7.htm) | 10-Q | 001-33812 | 10.1 | 8/1/2019 |
| 10.216* | [Form of 2020 Award Agreement for Restricted Stock Units For Employees Under the MSCI Inc. 2016 Omnibus Incentive Plan](https://www.sec.gov/Archives/edgar/data/1408198/000156459020004992/msci-ex10216_692.htm) | Filed Herewith | | | |
| 10.217* | [Form of 2020 Annual Performance Award Agreement for Performance Stock Units for Managing Directors Under the MSCI Inc. 2016 Omnibus Incentive Plan](https://www.sec.gov/Archives/edgar/data/1408198/000156459020004992/msci-ex10217_690.htm) | Filed Herewith | | | |
| 10.218* | [Form of 2020 Annual Performance Award Agreement for Performance Stock Units for Managing Directors Under the MSCI Inc. 2016 Omnibus Incentive Plan](https://www.sec.gov/Archives/edgar/data/1408198/000156459020004992/msci-ex10218_693.htm) | Filed Herewith | | | |
An excerpt. Shown here: 40 of 186 rewritten, 40 of 44 added and all 13 removed. The counts are complete. For every sentence, read Item 15. Exhibit and Financial Statement Schedules in the FY2020 filing and the FY2019 filing.
Item 16. Form 10-K Summary
13 rewritten, 5 added, 1,065 removed, 34 unchanged
Date: February [removed: 18, 2020][added: 12, 2021]
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints [removed: Linda S.][added: Andrew C.]
| /S/ HENRY A. FERNANDEZ | | Chairman and Chief Executive Officer | | February [removed: 18, 2020] [added: 12, 2021] |
| /S/ [removed: LINDA S. HUBER] [added: ANDREW C. WIECHMANN] | | Chief Financial Officer | | February [removed: 18, 2020] [added: 12, 2021] |
| [removed: Linda S. Huber] [added: Andrew C. Wiechmann] | | (principal financial officer) | | |
| /S/ JENNIFER MAK | | Global Controller and Head of Finance Operations | | February [removed: 18, 2020] [added: 12, 2021] |
| /S/ ROBERT G. ASHE | | Director | | February [removed: 18, 2020] [added: 12, 2021] |
| /S/ BENJAMIN F. DUPONT | | Director | | February [removed: 18, 2020] [added: 12, 2021] |
| /S/ WAYNE EDMUNDS | | Director | | February [removed: 18, 2020] [added: 12, 2021] |
| /S/ CATHERINE R. KINNEY | | Director | | February [removed: 18, 2020] [added: 12, 2021] |
| /S/ JACQUES P. PEROLD | | Director | | February [removed: 18, 2020] [added: 12, 2021] |
| [removed: Jacques P. Perold] [added: Sandy C. Rattray] /S/ LINDA H. RIEFLER | | Director | | February [removed: 18, 2020] [added: 12, 2021] |
| /S/ MARCUS L. SMITH | | Director | | February [removed: 18, 2020] [added: 12, 2021] |
Wiechmann, Robert J.
| Jacques P. Perold | | | | |
| /S/ SANDY C. RATTRAY | | Director | | February 12, 2021 |
| /S/ PAULA VOLENT | | Director | | February 12, 2021 |
| Paula Volent | | | | |
| --- | --- |
Huber, Robert J.
| --- | --- | --- | --- | --- |
| | | | | |
| /S/ ALICE W. HANDY | | Director | | February 18, 2020 |
| Alice W. Handy | | | | |
| /S/ GEORGE W. SIGULER | | Director | | February 18, 2020 |
| George W. Siguler | | | | |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| Consolidated Financial Statements | Page | |
| --- | --- | --- |
| [Report of Independent Registered Public Accounting Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_ACC) | | F-2 |
| [Consolidated Statements of Financial Condition as of December 31, 2019 and December 31, 2018](#CONSOLIDATED_STATEMENTS_FINANCIAL_CONDIT) | | F-5 |
| [Consolidated Statements of Income for the Years Ended December 31, 2019, December 31, 2018, and December 31, 2017](#CONSOLIDATED_STATEMENTS_INCOME) | | F-6 |
| [Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2019, December 31, 2018, and December 31, 2017](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN) | | F-7 |
| [Consolidated Statements of Shareholders’ Equity (Deficit) for the Years Ended December 31, 2019, December 31, 2018, and December 31, 2017](#CONSOLIDATED_STATEMENTS_SHAREHOLDERS_EQU) | | F-8 |
| [Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, December 31, 2018, and December 31, 2017](#CONSOLIDATED_STATEMENTS_CASH_FLOWS) | | F-9 |
| [Notes to Consolidated Financial Statements](#NOTES_TO_CONSOLIDATED_FINANCIAL_STATEMEN) | | F-10 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of MSCI Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial condition of MSCI Inc. and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of income, of comprehensive income, of shareholders' equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2019, including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A.
Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.
Our audits also included performing such other procedures as we considered necessary in the circumstances.
We believe that our audits provide a reasonable basis for our opinions.
An excerpt. Shown here: all 13 rewritten, all 5 added and 40 of 1,065 removed. The counts are complete. For every sentence, read Item 16. Form 10-K Summary in the FY2020 filing and the FY2019 filing.