Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)			58
Consolidated Statements of Financial Condition as of December 31, 2023 and December 31, 2022			61
Consolidated Statements of Income for the Years Ended December 31, 2023, December 31, 2022, and December 31, 2021			62
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023, December 31, 2022, and December 31, 2021			63
Consolidated Statements of Shareholders’ Equity (Deficit) for the Years Ended December 31, 2023, December 31, 2022, and December 31, 2021			64
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, December 31, 2022, and December 31, 2021			65
Notes to Consolidated Financial Statements			66
1. Introduction and Basis of Presentation			66
2. Recent Accounting Pronouncements			71
3. Revenue Recognition			71
4. Earnings per Common Share			73
5. Acquisitions			73
6. Debt			74
7. Leases			77
8. Property, Equipment and Leasehold Improvements, Net			78
9. Goodwill and Intangible Assets, Net			78
10. Employee Benefits			80
11. Shareholders' Equity (Deficit)			81
12. Income Taxes			85
13. Segment Information			88
14. Subsequent Events			91

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, 2023 and 2022, 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, 2023, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 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, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

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.

As described in Management's Annual Report on Internal Control Over Financial Reporting, management has excluded The Burgiss Group, LLC and Trove Research Ltd from its assessment of internal control over financial reporting as of December 31, 2023, because they were acquired by the Company in purchase business combinations during 2023. We have also excluded The Burgiss Group, LLC and Trove Research Ltd from our audit of internal control over financial reporting. The Burgiss Group, LLC and Trove Research Ltd are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 0.7% and 1.0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

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 matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate 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 matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition - Recurring Subscriptions, Asset-Based Fees, and Non-Recurring Revenues

As described in Notes 1 and 3 to the consolidated financial statements, the Company recognized operating revenues of $2.4 billion for the year ended December 31, 2023, related to recurring subscriptions, asset-based fees, and non-recurring revenues from the Index, Analytics, and ESG and Climate segments. Recurring subscription revenues represent fees earned from clients primarily under renewable contracts or agreements and are generally paid annually in advance and recognized in most cases ratably over the term of the license or service pursuant to the contract terms. Asset-based fees are principally recognized based on the estimated assets under management (AUM) linked to the Company's indexes from independent third-party sources or the most recently reported information provided by the client. Asset-based fees also include revenues related to futures and options contracts linked to the Company’s indexes, which are primarily based on trading volumes and fee levels. Asset-based fees are generally variable based upon AUM or the volume of trades or fee levels and are generally billed quarterly in arrears. Non-recurring revenues primarily represent fees earned on products and services where the Company typically does not have renewal clauses within the contract. Examples of such products and services include one-time license fees, certain derivative financial products, certain implementation services, historical data sets and, occasionally, fees for unlicensed usage of content in historical periods. Based on the nature of the services provided, non-recurring revenues are generally billed either in advance or after delivery and recognized point in time or over the service period.

The principal considerations for our determination that performing procedures relating to revenue recognition for recurring subscriptions, asset-based fees, and non-recurring revenues is a critical audit matter are the significant audit effort in performing procedures and evaluating audit evidence related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to revenue recognition, including controls over revenue transactions recognized as recurring subscriptions, asset-based fees, and non-recurring revenues. These procedures also included, among others, testing a sample of revenue transactions by obtaining and inspecting source documents which included (i) sales contracts or agreements, invoices, and cash receipts, where applicable, for recurring subscriptions and non-recurring revenues, and (ii) sales contracts or agreements, invoices, and cash receipts, where applicable, and AUM data from independent third-party sources or information provided by the Company’s customers, where applicable, to recalculate revenue recognized for asset-based fees.

Acquisition of The Burgiss Group, LLC - Valuation of Customer Relationships and Proprietary Data Intangible Assets

As described in Note 5 to the consolidated financial statements, in October 2023 the Company completed the acquisition of the remaining 66.4% interest in The Burgiss Group, LLC for an aggregate cash purchase price of $696.8 million. Of the acquired intangible assets, $229.9 million of proprietary data and $179.9 million of customer relationships were recorded. The fair values of acquired intangible assets were determined using the relief from royalty method for proprietary data and the multi-period excess earnings method for customer relationships. The significant assumptions used to estimate the fair value of the acquired customer relationships and proprietary data included forecasted cash flows and discount rates.

The principal considerations for our determination that performing procedures relating to the valuation of customer relationships and proprietary data intangible assets acquired in the The Burgiss Group, LLC acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships and proprietary data intangible assets acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to certain forecasted cash flows assumptions and discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships and proprietary data intangible assets. These procedures also included, among others (i) reading the purchase agreement and (ii) testing management’s process for developing the fair value estimate of the customer relationships and proprietary data acquired. Testing management’s process included (i) evaluating the appropriateness of the relief

from royalty and multi-period excess valuation methods used by management; (ii) testing the completeness and accuracy of data provided by management; and (iii) evaluating the reasonableness of the significant assumptions used by management related to certain forecasted cash flows assumptions and discount rates. Evaluating the reasonableness of certain forecasted cash flows assumptions for customer relationships and proprietary data involved considering (i) the company specific factors and the past performance of the acquired business; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the relief from royalty and multi-period excess valuation methods and the reasonableness of certain significant assumptions related to the forecasted cash flows and discount rate assumptions.

/s/ PricewaterhouseCoopers LLP

New York, New York

February 9, 2024

We have served as the Company’s auditor since 2014.

MSCI INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

						As of
(In thousands, except per share and share data)						December 31, 2023						December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents (includes restricted cash of $3,878 and $368 at December 31, 2023 and December 31, 2022, respectively)						$	461,693					$	993,564
Accounts receivable (net of allowances of $3,968 and $2,652 at December 31, 2023 and December 31, 2022, respectively)						839,555						663,236
Prepaid income taxes						59,002						36,654
Prepaid and other assets						57,903						54,520
Total current assets						1,418,153						1,747,974
Property, equipment and leasehold improvements, net						55,920						53,853
Right of use assets						115,243						126,584
Goodwill						2,887,692						2,229,670
Intangible assets, net						956,234						558,517
Equity method investment						—						214,389
Deferred tax assets						41,074						29,207
Other non-current assets						43,903						37,341
Total assets						$	5,518,219					$	4,997,535
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable						$	9,812					$	15,039
Income taxes payable						24,709						8,058
Accrued compensation and related benefits						219,456						182,370
Current portion of long-term debt						10,902						8,713
Other accrued liabilities						168,282						153,461
Deferred revenue						1,083,864						882,886
Total current liabilities						1,517,025						1,250,527
Long-term debt						4,496,826						4,503,233
Long-term operating lease liabilities						120,134						131,575
Deferred tax liabilities						27,028						29,098
Other non-current liabilities						96,970						91,027
Total liabilities						6,257,983						6,005,460
Commitments and Contingencies (see Note 6 and Note 10)
Shareholders' equity (deficit):
Preferred Stock (par value $0.01, 100,000,000 shares authorized, 0 shares issued)						—						—
Common stock (par value $0.01; 750,000,000 common shares authorized; 133,817,332 and 133,623,005 common shares issued and 79,091,212 and 79,959,989 common shares outstanding at December 31, 2023 and December 31, 2022, respectively)						1,338						1,336
Treasury shares, at cost (54,726,120 and 53,663,016 common shares held at December 31, 2023 and December 31, 2022, respectively)						(6,447,101)						(5,938,116)
Additional paid in capital						1,587,670						1,515,874
Retained earnings						4,179,681						3,473,192
Accumulated other comprehensive loss						(61,352)						(60,211)
Total shareholders' equity (deficit)						(739,764)						(1,007,925)
Total liabilities and shareholders' equity (deficit)						$	5,518,219					$	4,997,535

See Notes to Consolidated Financial Statements.

MSCI INC.

CONSOLIDATED STATEMENTS OF INCOME

						Years Ended
(In thousands, except per share data)						December 31, 2023						December 31, 2022						December 31, 2021
Operating revenues						$	2,528,920					$	2,248,598					$	2,043,544
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)						446,581						404,341						358,684
Selling and marketing						276,204						264,583						243,185
Research and development						132,121						107,205						111,564
General and administrative						153,967						146,857						147,893
Amortization of intangible assets						114,429						91,079						80,592
Depreciation and amortization of property, equipment and leasehold improvements						21,009						26,893						28,901
Total operating expenses						1,144,311						1,040,958						970,819
Operating income						1,384,609						1,207,640						1,072,725
Interest income						(34,479)						(11,769)						(1,497)
Interest expense						186,679						171,571						159,614
Gain on remeasurement of equity method investment						(143,029)						—						—
Other expense (income)						6,377						3,997						56,472
Other expense (income), net						15,548						163,799						214,589
Income before provision for income taxes						1,369,061						1,043,841						858,136
Provision for income taxes						220,469						173,268						132,153
Net income						$	1,148,592					$	870,573					$	725,983
Earnings per share:
Basic						$	14.45					$	10.78					$	8.80
Diluted						$	14.39					$	10.72					$	8.70
Weighted average shares outstanding:
Basic						79,462						80,746						82,508
Diluted						79,843						81,215						83,479

See Notes to Consolidated Financial Statements.

MSCI INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

						Years Ended
(In thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Net income						$	1,148,592					$	870,573					$	725,983
Other comprehensive income (loss):
Foreign currency translation adjustments						7,319						(16,016)						(3,624)
Income tax effect						(1,451)						2,722						943
Foreign currency translation adjustments, net						5,868						(13,294)						(2,681)
Pension and other post-retirement adjustments						(8,832)						15,593						3,546
Income tax effect						1,823						(3,715)						(801)
Pension and other post-retirement adjustments, net						(7,009)						11,878						2,745
Other comprehensive (loss) income, net of tax						(1,141)						(1,416)						64
Comprehensive income						$	1,147,451					$	869,157					$	726,047

See Notes to Consolidated Financial Statements.

MSCI INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)						Common Stock						Treasury Stock						Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Total
Balance at December 31, 2020						$	1,328					$	(4,342,535)					$	1,402,537					$	2,554,295					$	(58,859)					$	(443,234)
Net income																								725,983												725,983
Dividends declared ($3.64 per common share)																								(303,761)												(303,761)
Dividends paid in shares																		128																		128
Other comprehensive income (loss), net of tax																														64						64
Shares withheld for tax withholding												(58,794)																								(58,794)
Common stock issued						4																														4
Compensation payable in common stock																		54,958																		54,958
Common stock repurchased and held in treasury												(139,580)																								(139,580)
Common stock issued to Directors and (held in)/released from treasury												765																								765
Balance at December 31, 2021						$	1,332					$	(4,540,144)					$	1,457,623					$	2,976,517					$	(58,795)					$	(163,467)
Net income																								870,573												870,573
Dividends declared ($4.58 per common share)																								(373,898)												(373,898)
Dividends paid in shares																		162																		162
Other comprehensive income (loss), net of tax																														(1,416)						(1,416)
Shares withheld for tax withholding												(112,681)																								(112,681)
Common stock issued						4																														4
Compensation payable in common stock																		58,089																		58,089
Common stock repurchased and held in treasury												(1,284,825)																								(1,284,825)
Common stock issued to Directors and (held in)/released from treasury												(466)																								(466)
Balance at December 31, 2022						$	1,336					$	(5,938,116)					$	1,515,874					$	3,473,192					$	(60,211)					$	(1,007,925)
Net income																								1,148,592												1,148,592
Dividends declared ($5.52 per common share)																								(442,103)												(442,103)
Dividends paid in shares																		152																		152
Other comprehensive income (loss), net of tax																														(1,141)						(1,141)
Shares withheld for tax withholding												(45,469)																								(45,469)
Common stock issued						2																														2
Compensation payable in common stock																		71,644																		71,644
Common stock repurchased and held in treasury												(462,693)																								(462,693)
Common stock issued to Directors and (held in)/released from treasury												(823)																								(823)
Balance at December 31, 2023						$	1,338					$	(6,447,101)					$	1,587,670					$	4,179,681					$	(61,352)					$	(739,764)

See Notes to Consolidated Financial Statements.

MSCI INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Cash flows from operating activities
Net income						$	1,148,592					$	870,573					$	725,983
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on remeasurement of equity method investment						(143,029)						—						—
Amortization of intangible assets						114,429						91,079						80,592
Stock-based compensation expense						71,653						58,094						54,917
Depreciation and amortization of property, equipment and leasehold improvements						21,009						26,893						28,901
Amortization of right of use assets						23,781						24,524						24,632
Loss on impairment of right of use assets, net						477						705						8,385
Amortization of debt origination fees						5,055						5,132						4,923
Loss on extinguishment of debt						—						—						59,103
Deferred taxes						(15,258)						36,436						(111,369)
Other adjustments						6,863						1,361						(146)
Changes in assets and liabilities, net of the effect of acquisitions and dispositions:
Accounts receivable						(149,529)						(6,624)						(99,203)
Prepaid income taxes						(21,931)						(31,684)						15,264
Prepaid and other assets						1,564						(3,781)						(4,240)
Other non-current assets						(8,102)						31,448						(35,445)
Accounts payable						(6,044)						1,337						(2,195)
Income taxes payable						14,721						(49,296)						33,903
Accrued compensation and related benefits						23,218						(22,432)						42,719
Other accrued liabilities						3,536						10,654						(9,249)
Deferred revenue						171,968						72,752						116,863
Long-term operating lease liabilities						(24,062)						(25,467)						(22,078)
Other non-current liabilities						(6,538)						4,106						21,536
Other						3,656						(441)						2,273
Net cash provided by operating activities						1,236,029						1,095,369						936,069
Cash flows from investing activities
Acquisition of a business, net of cash acquired						(727,342)						—						(948,989)
Acquisition of equity method investment						—						(5)						(26,361)
Acquisition of assets, net of cash acquired						—						—						(6,512)
Capital expenditures						(22,757)						(13,617)						(13,509)
Capitalized software development costs						(68,094)						(59,278)						(39,285)
Other						(1,185)						(6,435)						(1,057)
Net cash used in investing activities						(819,378)						(79,335)						(1,035,713)
Cash flows from financing activities
Proceeds from borrowings, inclusive of premium						—						355,000						1,803,750
Repayment of borrowings						(8,750)						(7,188)						(1,051,810)
Repurchase of common stock held in treasury						(504,188)						(1,397,506)						(198,374)
Payment of dividends						(440,993)						(372,915)						(302,449)
Payment of debt issuance costs in connection with debt						—						(2,560)						(21,612)
Payment of contingent consideration						—						(211)						—
Net cash provided by (used in) financing activities						(953,931)						(1,425,380)						229,505
Effect of exchange rate changes						5,409						(18,539)						(8,933)
Net (decrease) increase in cash, cash equivalents and restricted cash						(531,871)						(427,885)						120,928
Cash, cash equivalents and restricted cash, beginning of period						993,564						1,421,449						1,300,521
Cash, cash equivalent and restricted cash, end of period						$	461,693					$	993,564					$	1,421,449
Supplemental disclosure of cash flow information:
Cash paid for interest						$	182,313					$	165,116					$	151,335
Cash paid for income taxes, net of refunds received						$	240,479					$	180,686					$	222,620
Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities						$	2,738					$	1,849					$	3,498
Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid						$	1,941					$	3,748					$	2,599

See Notes to Consolidated Financial Statements.

MSCI INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. INTRODUCTION AND BASIS OF PRESENTATION

Organization

MSCI Inc., together with its wholly owned subsidiaries (the “Company” or “MSCI”) is a leading provider of critical decision support tools and solutions for the global investment community. Our mission-critical offerings help investors address the challenges of a transforming investment landscape and power better investment decisions. Leveraging our knowledge of the global investment process and our expertise in research, data and technology, we enable our clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios. Our products and services include indexes; portfolio construction and risk management tools; environmental, social and governance (“ESG”) and climate solutions; and private asset data and analysis.

Basis of Presentation

The consolidated financial statements and accompanying notes to financial statements, which include the accounts of MSCI Inc. and its wholly owned subsidiaries, are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

On October 2, 2023, the Company acquired the remaining 66.4% interest in The Burgiss Group, LLC (“Burgiss”) for $696.8 million in cash. Prior to the acquisition, Burgiss was a related party and its results were included in the Company’s Burgiss operating segment as an equity method investment based on the Company’s 33.6% ownership. The Company’s existing 33.6% interest had a fair value of $353.2 million at the date of acquisition. This resulted in a non-taxable, one-time gain on the remeasurement of our equity method investment in Burgiss of $143.0 million following the acquisition. During the year ended December 31, 2023, the Company renamed the Burgiss operating segment to Private Capital Solutions. Burgiss’ consolidated results were included in the Company’s All Other – Private Assets reportable segment following the acquisition.

Significant Accounting Policies

Basis of Financial Statements and Use of Estimates

The Company makes certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of operating revenues and expenses during the periods presented. Significant estimates and judgments made by management include such examples as the assessment of the fair value of acquired intangible assets; the assessment of impairment of goodwill and intangible assets; and income taxes. The Company believes that estimates used in the preparation of these consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Inter-company balances and transactions are eliminated in consolidation.

Revenue Recognition

Performance Obligations and Transaction Price

The Company recognizes revenues for products and services when performance obligations are satisfied. For revenue arrangements containing multiple products or services, the Company accounts for the individual products or services as a separate performance obligation if they are distinct. A product or service is distinct if a client can benefit from it either on its own or together with other resources that are readily available to the client, and the Company’s promise to transfer the product or service to the client is separately identifiable from other promises in the contract. If both criteria are not met, the promised products or services are accounted for as a combined performance obligation.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring products or services to the client. The Company allocates the transaction price to each performance obligation identified in the contract based on the best estimate of a relative standalone selling price of each distinct product or service in the contract. To allocate the transaction price to each performance obligation on a relative standalone selling price basis, at contract inception the Company determines the standalone selling prices of the distinct products or services underlying each performance obligation in proportion to the total transaction price. This standalone selling price may be the contract price but is more often than not the best estimate of the price the Company would receive for selling the product or service separately in similar circumstances and to other similar customers. A client can receive a discount for purchasing a bundle of products or services if the sum of the standalone selling price of those promised products or services in the contract exceeds the promised consideration in the contract.

For services where the transaction price is variable such as based upon assets under management (“AUM”), volume of trades or fee levels, the transaction price is based upon pricing models and is not allocated at the inception of the contract but rather falls within the sales and usage-based royalty exception under which the price and associated revenue are based upon actual known performance or best estimates of actual performance during the performance period.

Revenue is recognized when a client obtains control of promised products or services in an amount that reflects the consideration the entity expects to receive in exchange for those products or services. Determining when control has transferred can sometimes require management’s judgment (e.g., implementation services), which could affect the timing of revenue recognition. Revenue is recognized exclusive of any applicable sales or other indirect taxes.

Disaggregation of Revenue

Revenues are characterized by type, which broadly reflects the nature of how they are recognized or earned. Our revenue types are recurring subscriptions, asset-based fees and non-recurring revenues. We also group our revenues by segment.

Revenues By Type

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

Asset-based fees are principally recognized based on the estimated AUM linked to our indexes from independent third-party sources or the most recently reported information provided by the client. Asset-based fees also include revenues related to futures and options contracts linked to our indexes, which are primarily based on trading volumes and fee levels. Asset-based fees are generally variable based upon AUM or the volume of trades or fee levels and are generally billed quarterly in arrears.

Non-recurring revenues primarily represent fees earned on products and services where we typically do not have renewal clauses within the contract. Examples of such products and services include one-time license fees, certain derivative financial products, certain implementation services, historical data sets and, occasionally, fees for unlicensed usage of our content in historical periods. Based on the nature of the services provided, non-recurring revenues are generally billed either in advance or after delivery and recognized point in time or over the service period.

Revenues By Segment

Index segment operating revenues consist of fees earned primarily for licenses of index data subscriptions, performance obligations to deliver the data are satisfied over time and, accordingly, revenue is recognized ratably over the term of the agreement pursuant to the contract terms. With respect to licenses to create indexed investment products, such as ETFs, passively managed funds, or licenses which allow certain exchanges to use MSCI’s indexes as the basis for futures and options contracts, MSCI’s performance obligation allows customers to use the Company’s intellectual property (e.g., the indexes) as the basis of the funds or other investment products the customers create over the term of the agreement. The fees earned for these rights are typically variable, in which case they are accrued under the sales and usage-based royalty exception pursuant to the level of performance achieved, which is primarily measured based on AUM, volume of trades or fee levels. The level of performance achieved is based on information obtained from independent third-party sources or best estimates taking into account the most recently reported information from the client.

Analytics segment operating revenues are recognized as MSCI satisfies performance obligations through providing access to its proprietary models or hosted applications and, in some cases, delivery of managed services, which are typically satisfied over time, and accordingly, operating revenues are recognized ratably over the term of the service period. For implementation services, MSCI meets its performance obligation once the implementation is complete and the related service is available for the client to use. Operating revenues are recognized at the point in time when the implementation service is completed.

ESG and Climate segment operating revenues are recognized as MSCI’s performance obligations to provide data to or update data for clients are satisfied. The majority of these performance obligations are satisfied over the term of the license period, with operating revenues recognized ratably. For custom ESG research data, the performance obligation is typically satisfied, and revenue is recognized, at the point in time when the data is updated and available to the client.

All Other – Private Assets segment operating revenues are recognized as MSCI's performance obligations to provide analysis, insights and data to clients are satisfied. The majority of these performance obligations are satisfied over the term of the license period, with operating revenues recognized ratably. Certain other Real Assets products, including benchmark reports, are recognized at the point in time when the Company satisfies the performance obligation through delivery to the client.

Share-Based Compensation

Certain of the Company’s employees have received share-based compensation under various compensation programs. The Company’s compensation expense reflects the fair value method of accounting for share-based payments under ASC Subtopic 718-10, “Compensation—Stock Compensation.”

Stock-based compensation awards include restricted stock units (“RSUs”), performance stock units (“PSUs”) and performance stock options (“PSOs”). PSUs are subject to market conditions based on the achievement of multi-year total shareholder return targets and PSOs are subject to performance conditions based on the cumulative results of financial targets.

The fair value of RSUs at grant date is measured using the price of MSCI’s common stock. The fair value of PSUs at grant date is determined using a Monte Carlo simulation model that creates a normal distribution of future stock prices, which is then used to value the awards based on their individual terms. The fair value of PSOs at grant date is determined using the Black-Scholes option pricing model. For PSOs, the grant-date fair value is adjusted for any changes in the probability of achievement of (i) a cumulative revenue performance goal and (ii) a cumulative adjusted EPS performance goal (each weighted at 50%).

Research and Development

The Company accounts for research and development costs in accordance with several accounting pronouncements, including ASC Subtopic 730-10, “Research and Development.” ASC Subtopic 730-10 requires that research and development costs generally be expensed as incurred. The majority of the Company’s research and development costs are incurred in developing, reviewing and enhancing the methodologies and data models offered within its product portfolio by monitoring investment trends and drivers globally, as well as analyzing product-specific needs in areas such as capitalization-weighted, factor and specialized indexes, and instrument valuation, risk modeling, portfolio construction, asset allocation and value-at-risk simulation.

Internal Use Software

The Company applies the provisions of ASC Subtopic 350-40, “Internal Use Software,” and accounts for the cost of computer software developed for internal use by capitalizing qualifying costs, which are substantially incurred during the application development stage. The amounts capitalized primarily relate to internally developed software used to provide services to customers and are included in Intangible Assets on the Consolidated Statement of Financial Condition and include external direct costs of services used in developing internal-use software and payroll and payroll-related costs of employees directly associated with the development activities. Additionally, costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements provide additional functionality to the software.

Capitalized software development costs are typically amortized on a straight-line basis over the estimated useful life of the related product, which is typically three to five years, beginning with the date the software is placed into service.

Costs incurred in the preliminary and post-implementation stages of MSCI’s products are expensed as incurred.

Income Taxes

Provision for income taxes is provided for using the asset and liability method, under which deferred tax assets and deferred tax liabilities are determined based on the temporary differences between the financial statement and income tax bases of assets and liabilities using currently enacted tax rates. The Company elects to account for Global Intangible Low-Taxed Income (“GILTI”) in the year the tax is incurred. The Company recognizes interest and penalties related to income tax matters within “Provision for income taxes” in the Consolidated Statement of Income.

The Company regularly evaluates the likelihood of additional assessments in each of the taxing jurisdictions in which it is required to file income tax returns. The Company has recorded additional tax expense related to open tax years, which the Company’s management believes is adequate in relation to the potential for assessments. These amounts have been recorded in “Other non-current liabilities” on the Consolidated Statement of Financial Condition. The Company’s management believes the resolution of tax matters will not have a material effect on the Company’s consolidated financial condition. However, to the extent the Company is required to pay amounts in excess of its reserves, a resolution could have a material impact on its Consolidated Statement of Income for a particular future period. In addition, an unfavorable tax settlement could require use of cash and result in an increase in the effective tax rate in the period in which such resolution occurs.

Deferred Revenue

Deferred revenues represent both cash received and the amounts billed to clients for products and services in advance of satisfying performance obligations. Deferred revenue generally results in ratable recognition of operating revenues over the license or subscription period, as the performance obligations are satisfied.

Accounts Receivable and Allowance for Credit Losses

The Company’s clients generally pay subscription fees annually in advance. MSCI’s policy is to record to a receivable when a client is billed. For products and services that are provided in advance of billing, such as for our asset-based fee products, unbilled revenue is included in Accounts Receivable on the Company’s Consolidated Statement of Financial Condition.

The Company recognizes an allowance for credit losses at the time invoices are sent to clients by applying an estimate of the uncollectable amount based on client profiles, credit considerations and historical write-offs. The Company does not require collateral from clients to mitigate credit risk.

Changes in the allowance for credit losses from December 31, 2020 to December 31, 2023 were as follows:

(in thousands)						Amount
Balance as of December 31, 2020						$	1,583
Addition to credit loss expense						1,210
Write-offs, net of recoveries						(456)
Balance as of December 31, 2021						$	2,337
Addition to credit loss expense						910
Write-offs, net of recoveries						(595)
Balance as of December 31, 2022						$	2,652
Addition to credit loss expense						2,196
Write-offs, net of recoveries						(880)
Balance as of December 31, 2023						$	3,968

Goodwill

Goodwill is recorded as part of the Company’s acquisitions of businesses when the purchase price exceeds the fair value of the net tangible and separately identifiable intangible assets acquired. The Company’s goodwill is not amortized, but rather is subject to an impairment test each year, or more often if conditions indicate impairment may have occurred, pursuant to ASC Subtopic 350-10, “Intangibles—Goodwill and Other.”

The Company tests goodwill for impairment on an annual basis on July 1st and on an interim basis when certain events and circumstances exist. The test for impairment is performed at the reporting unit level. Goodwill impairment is determined by comparing the fair value of a reporting unit with its carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not deemed to be impaired. If the estimated fair value is below carrying value, an impairment charge will be recorded up to, but not more than, the total amount of goodwill allocated to the reporting unit.

The Company completed its annual goodwill impairment test as of July 1, 2023 on its Index, Analytics, ESG and Climate, and Real Assets reporting units, which were also the Company’s operating segments as of July 1, 2023, and no impairments were noted. The Company performed a qualitative test for impairment and determined that it was not more likely than not that the fair value of its reporting units is less than their respective carrying values. See Note 13, “Segment Information,” for further descriptions of the operating segments.

Based on the results of the annual goodwill impairment testing performed and given there were no impairment triggers identified as part of interim assessments, no impairment of goodwill was recorded during the years ended December 31, 2023, 2022 and 2021.

Intangible Assets

The Company amortizes definite-lived intangible assets over their estimated useful lives. Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be

recoverable. The Company also reviews the useful lives on a periodic basis to determine if the period of economic benefit has changed. If the carrying value of an intangible asset exceeds its fair value, an impairment charge would be recognized in an amount equal to the amount by which the carrying value of the intangible asset exceeds its fair value. There were no events or changes in circumstances that would indicate that the carrying value of the definite-lived intangible assets may not be recoverable during the years ended December 31, 2023 and 2022.

The Company had no indefinite-lived intangible assets other than goodwill during the years ended December 31, 2023 and 2022.

Foreign Currency Translation

Assets and liabilities of operations having non-U.S. dollar functional currencies are translated at year-end exchange rates, and income statement accounts are translated at weighted average exchange rates for the year. Gains or losses resulting from translating foreign currency financial statements, net of any related tax effects, are reflected in accumulated other comprehensive loss, a separate component of shareholders’ equity (deficit). Gains or losses resulting from foreign currency transactions incurred in currencies other than the local functional currency are included in non-operating “Other expense (income)” on the Consolidated Statement of Income.

Leases

MSCI leases office space, data centers and certain equipment under non-cancellable operating lease agreements and determines if an arrangement is a lease at inception. The Company does not currently have any financing lease arrangements.

Right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right of use assets are recognized on the commencement date based on the present value of lease payments over the lease term adjusted for initial direct costs and lease incentives received or deemed probable of being received. MSCI uses its incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. The lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Right of use assets and associated leasehold improvements are tested for impairment when there is a trigger for impairment testing at the appropriate asset group level. When a trigger exists, the asset group is tested for recoverability by comparing the estimated undiscounted cash flows to the asset group’s carrying value. If the asset group fails the recoverability test, the Company will measure impairment loss as the difference between the fair value and carrying value of the asset group.

Lease expense is recognized on a straight-line basis over the lease term and is included in “Operating expenses” in the Consolidated Statement of Income. In situations where a right of use asset has been impaired, the subsequent amortization of the right of use asset is then recorded on a straight-line basis over the remaining lease term and is combined with accretion expense on the lease liability to result in single operating lease cost.

Some of the Company’s lease agreements include rental payments adjusted periodically for inflation which are accounted for as variable lease amounts but are not reflected as a component of the Company’s lease liability. Certain leases also require the Company to pay real estate taxes, insurance, maintenance and other operating expenses associated with the leased premises or equipment which are also not reflected as a component of the Company’s lease liability. The Company also subleases a small portion of its leased office space to third parties and thereby applies sublessor accounting. Sublease income is presented in “Operating expenses” as an offset.

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of furniture and fixtures, and computer and communications equipment are accounted for using the straight-line method over the estimated useful life, and for leasehold improvements, over the shorter of the estimated useful life or the lease term.

Treasury Stock

The Company holds repurchased shares of common stock as treasury stock. The Company accounts for treasury stock under the cost method and includes treasury stock as a component of shareholders’ equity (deficit).

Accrued Compensation

A significant portion of the Company’s employee incentive compensation programs are discretionary. The Company makes significant estimates in determining its accrued compensation and benefits expenses. Accrued cash incentive estimates reflect an assessment of performance versus targets and other key performance indicators at the Company, operating segment and employee level. The Company also reviews compensation and benefits expenses throughout the year to determine how overall performance compares to management’s expectations. These and other factors, including historical performance, are taken into account in accruing discretionary cash compensation estimates quarterly.

Concentrations

For the years ended December 31, 2023, 2022 and 2021, BlackRock, Inc. accounted for 9.8%, 10.3%, and 12.7% of the Company’s consolidated operating revenues, respectively. For the years ended December 31, 2023, 2022 and 2021, BlackRock, Inc. accounted for 16.8%, 17.4% and 20.4% of the Index segment’s operating revenues, respectively. No single customer accounted for 10.0% or more of operating revenues within the Analytics, ESG and Climate and All Other – Private Assets segments for the years ended December 31, 2023, 2022 and 2021.

Cash and Cash Equivalents

Cash and cash equivalents include ordinary bank deposits and highly liquid investments with original maturities of three months or less that consist primarily of money market funds with unrestricted daily liquidity and fixed term time deposits.

Restricted Cash

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

2. RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued Accounting Standards Update No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” or ASU 2023-07. The amendments in ASU 2023-07 aim to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” or ASU 2023-09. The amendments in ASU 2023-09 aim to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted. The Company is currently evaluating the impact of this update on its consolidated financial statements.

3. REVENUE RECOGNITION

MSCI’s operating revenues are reported by product type, which generally reflects the timing of recognition. The Company’s operating revenues types are recurring subscriptions, asset-based fees and non-recurring revenues. The Company also disaggregates operating revenues by segment.

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

						For the Year Ended December 31, 2023
						Segments
(in thousands)						Index						Analytics						ESG and Climate						All Other - Private Assets						Total
Operating Revenues Types
Recurring subscriptions						$	814,582					$	603,291					$	282,351					$	171,066					$	1,871,290
Asset-based fees						557,502						—						—												557,502
Non-recurring						79,731						12,665						5,217						2,515						100,128
Total						$	1,451,815					$	615,956					$	287,568					$	173,581					$	2,528,920

						For the Year Ended December 31, 2022
						Segments
(in thousands)						Index						Analytics						ESG and Climate						All Other - Private Assets						Total
Operating Revenues Types
Recurring subscriptions						$	729,710					$	567,004					$	223,160					$	139,649					$	1,659,523
Asset-based fees						528,127						—						—						—						528,127
Non-recurring						45,372						9,103						5,151						1,322						60,948
Total						$	1,303,209					$	576,107					$	228,311					$	140,971					$	2,248,598

						For the Year Ended December 31, 2021
						Segments
(in thousands)						Index						Analytics						ESG and Climate						All Other - Private Assets						Total
Operating Revenues Types
Recurring subscriptions						$	650,629					$	533,178					$	162,609					$	79,624					$	1,426,040
Asset-based fees						553,991						—						—						—						553,991
Non-recurring						47,144						11,121						3,583						1,665						63,513
Total						$	1,251,764					$	544,299					$	166,192					$	81,289					$	2,043,544

The table that follows presents the change in accounts receivable, net of allowances and current deferred revenue between the dates indicated:

(in thousands)						Accounts receivable, net of allowances						Deferred revenue
Opening (December 31, 2022)						$	663,236					$	882,886
Closing (December 31, 2023)						839,555						1,083,864
Increase/(decrease)						$	176,319					$	200,978

(in thousands)						Accounts receivable, net of allowances						Deferred revenue
Opening (December 31, 2021)						$	664,511					$	824,912
Closing (December 31, 2022)						663,236						882,886
Increase/(decrease)						$	(1,275)					$	57,974

The amount of revenue recognized in the period that was included in the opening current deferred revenue, which reflects the contract liability amounts, was $836.7 million, $819.9 million and $672.5 million for the years ended December 31, 2023, 2022 and 2021 respectively. The difference between the opening and closing balances of the Company’s deferred revenue was primarily driven by an increase in billings, partially offset by an increase in amortization of deferred revenue to operating revenues. As of December 31, 2023, 2022 and 2021, the Company carried a long-term deferred revenue balance of $28.8 million, $29.4 million and $23.4 million, respectively, in “Other non-current liabilities” on the Consolidated Statement of Financial Condition.

For contracts that have a duration of one year or less, the Company has not disclosed either the remaining performance obligation as of the end of the reporting period or when the Company expects to recognize the revenue. The remaining performance

obligations for contracts that have a duration of greater than one year and the periods in which they are expected to be recognized are as follows:

						As of
(in thousands)						December 31, 2023
First 12-month period						$	838,863
Second 12-month period						530,258
Third 12-month period						256,911
Periods thereafter						182,052
Total						$	1,808,084

4. EARNINGS PER COMMON SHARE

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the assumed conversion of all dilutive securities, including, when applicable, RSUs, PSUs and PSOs.

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

						Years Ended
(in thousands, except per share data)						December 31, 2023						December 31, 2022						December 31, 2021
Net income						$	1,148,592					$	870,573					$	725,983
Basic weighted average common shares outstanding						79,462						80,746						82,508
Effect of dilutive securities:
PSUs, RSUs, and PSOs						381						469						971
Diluted weighted average common shares outstanding						79,843						81,215						83,479
Earnings per common share:
Basic						$	14.45					$	10.78					$	8.80
Diluted						$	14.39					$	10.72					$	8.70

5. ACQUISITIONS

On October 2, 2023, the Company acquired the remaining 66.4% interest in Burgiss for $696.8 million in cash (the “step acquisition”). The acquisition of Burgiss will provide the Company with comprehensive data and deep expertise in private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics.

The step acquisition has been accounted for as a business combination using the acquisition method of accounting and its results are reported within the Private Capital Solutions operating segment within the All Other – Private Assets reportable segment. With the step acquisition, we renamed the Burgiss operating segment to Private Capital Solutions. The Company’s existing 33.6% interest had a fair value at acquisition date of $353.2 million which resulted in a non-taxable gain of $143.0 million. Prior to the step acquisition, Burgiss was accounted for as an equity-method investment. Therefore, MSCI did not recognize the proportionate share of Burgiss’ operating revenues, rather, the Company’s proportionate share of the income or loss of Burgiss was reported as a component of other (expense) income, net. A portion of Burgiss’s client agreements do not have automatic renewal clauses at the end of the subscription period. Due to the historically high retention rate and expectation that a substantial portion of the client agreements will be renewed and the nature of the subscription service, the associated revenue is recorded as recurring subscription revenue.

The table below represents the preliminary purchase price allocation to total assets acquired and liabilities assumed and the associated estimated useful lives as of the acquisition date.

(in thousands)						Estimated Useful Life						Fair Value
Cash and cash equivalents												$	5,397
Accounts receivable												25,795
Prepaid Income Taxes												30
Other current assets												4,153
Property, equipment and leasehold improvements, net												670
Right of use assets												3,443
Other non-current assets												471
Deferred revenue												(22,181)
Other current liabilities												(13,434)
Long-term operating lease liabilities												(2,525)
Intangible assets:
Proprietary data						11 years						229,900
Customer relationships						21 years						179,900
Acquired technology and software						3 years						19,000
Trademarks						1 year						900
Goodwill												618,415
Net assets acquired												$	1,049,934

The Company, with the assistance of third-party valuation experts, calculated the fair values of intangible assets using the relief from royalty method for proprietary data, acquired technology and software and trademarks and the multi-period excess earnings method for customer relationships. The significant assumptions used to estimate the fair value of the acquired intangible assets included forecasted cash flows, which were determined based on certain assumptions that included, among others, projected future revenues, and expected market royalty rates, technology obsolescence rates and discount rates. The weighted average amortization period of the acquired intangible assets was 14.8 years.

The recorded goodwill is primarily attributable to the utilization of the acquired data as well as expanded market opportunities. Goodwill attributable to the acquisition is deductible for federal income tax purposes to the extent of consideration paid.

Revenue of Burgiss recognized within the consolidated financial statements was $25.4 million for the year ended December 31, 2023.

On November 1, 2023 MSCI completed the acquisition of Trove Research Ltd (“Trove”), a carbon markets intelligence provider for approximately $37.9 million in cash. Trove is a part of the ESG and Climate operating segment.

6. DEBT

As of December 31, 2023, the Company had outstanding an aggregate of $4,200.0 million in senior unsecured notes (collectively, the “Senior Notes”) and an aggregate of $339.1 million in senior unsecured tranche A term loans (the “Tranche A Term Loans”) under the term loan A facility (the “TLA Facility”), as presented in the table below:

(in thousands)						Maturity Date						Principal amount outstanding at December 31, 2023						Carrying value at December 31, 2023						Carrying value at December 31, 2022						Fair Value at December 31, 2023						Fair Value at December 31, 2022
Debt
4.000% senior unsecured notes due 2029						November 15, 2029						$	1,000,000					$	993,637					$	992,546					$	941,090					$	876,240
3.625% senior unsecured notes due 2030						September 1, 2030						900,000						895,587						894,925						815,526						751,113
3.875% senior unsecured notes due 2031						February 15, 2031						1,000,000						992,161						991,067						914,360						833,130
3.625% senior unsecured notes due 2031						November 1, 2031						600,000						594,852						594,195						529,458						500,880
3.250% senior unsecured notes due 2033						August 15, 2033						700,000						693,532						692,862						586,509						542,696
Variable rate Tranche A Term Loans due 2027(1)						February 16, 2027						339,063						337,959						346,352						337,367						346,073
Total debt(2)												$	4,539,063					$	4,507,728					$	4,511,947					$	4,124,310					$	3,850,132

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(1) On January 26, 2024, all Tranche A Term Loans under the Prior Credit Agreement were repaid in full from proceeds from the Revolving Credit Facility under the Credit Agreement.

(2) Includes $10.9 million of current-portion of long-term debt.

Maturities of the Company’s principal debt payments as of December 31, 2023 are as follows:

Maturity of Principal Debt Payments (in thousands)						Amounts
2024(1)						$	10,938
2025(1)						19,688
2026(1)						26,250
2027(1)						282,187
2028						—
Thereafter						4,200,000
Total debt						$	4,539,063

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(1) All principal payments for years 2024-2027 relate to payments on the Company’s Tranche A Term Loans which were repaid in full on January 26, 2024 from proceeds from the Revolving Credit Facility under the Credit Agreement.

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

						Interest payment frequency						First interest payment date
Senior Notes and Tranche A Term Loans
4.000% senior unsecured notes due 2029						Semi-Annual						May 15
3.625% senior unsecured notes due 2030						Semi-Annual						March 1
3.875% senior unsecured notes due 2031						Semi-Annual						June 1
3.625% senior unsecured notes due 2031						Semi-Annual						May 1
3.250% senior unsecured notes due 2033						Semi-Annual						February 15
Variable rate Tranche A Term Loans due 2027(1)						Variable						July 11

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(1) The first payment occurred on July 11, 2022. On January 26, 2024, all Tranche A Term Loans under the Prior Credit Agreement were repaid in full from proceeds from the Revolving Credit Facility under the Credit Agreement.

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

Senior Notes. The $1,000.0 million aggregate principal amount of 4.000% senior unsecured notes due 2029 (the “2029 Senior Notes”) are scheduled to mature on November 15, 2029. At any time prior to November 15, 2024, the Company may redeem all or part of the 2029 Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2029 Senior Notes, together with accrued and unpaid interest, on or after November 15, 2024, at redemption prices set forth in the indenture governing the 2029 Senior Notes.

The $900.0 million aggregate principal amount of 3.625% senior unsecured notes due 2030 (the “2030 Senior Notes”) are scheduled to mature on September 1, 2030. At any time prior to March 1, 2025, the Company may redeem all or part of the 2030 Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2030 Senior Notes, together with accrued and unpaid interest, on or after March 1, 2025, at redemption prices set forth in the indenture governing the 2030 Senior Notes.

The $1,000.0 million aggregate principal amount of 3.875% senior unsecured notes due 2031 (the “2031A Senior Notes”) are scheduled to mature on February 15, 2031. At any time prior to June 1, 2025, the Company may redeem all or part of the 2031A Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, the Company may redeem all or part of the 2031A Senior Notes, together with accrued and unpaid interest, on or after June 1, 2025, at redemption prices set forth in the indenture governing the 2031A Senior Notes.

The $600.0 million aggregate principal amount of 3.625% Senior Unsecured Notes due 2031 (the “2031B Senior Notes”) are scheduled to mature on November 1, 2031. At any time prior to November 1, 2026, the Company may redeem all or part of the 2031B Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2031B Senior Notes, together with accrued and unpaid interest, on or after November 1, 2026, at redemption prices set forth in the indenture governing the 2031B Senior Notes. At any time prior to November 1, 2024, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2031B Senior Notes, including any permitted additional notes, at a redemption price equal to 103.625% of the principal amount plus accrued and unpaid interest, if any, to the redemption date.

The $700.0 million aggregate principal amount of 3.250% Senior Unsecured Notes due 2033 (the “2033 Senior Notes”) are scheduled to mature on August 15, 2033. At any time prior to August 15, 2027, the Company may redeem all or part of the 2033 Senior Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem all or part of the 2033 Senior Notes, together with accrued and unpaid interest, on or after August 15, 2027, at redemption prices set forth in the indenture governing the 2033 Senior Notes. At any time prior to August 15, 2024, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2033 Senior Notes, including any permitted additional notes, at a redemption price equal to 103.250% of the principal amount plus accrued and unpaid interest, if any, to the redemption date.

Credit Agreement. Since November 20, 2014, the Company has maintained a revolving credit agreement with a syndicate of banks. On June 9, 2022, the Company, the guarantors party thereto and the lenders and agents party thereto, entered into an Amended and Restated Credit Agreement (the “Prior Credit Agreement”). On January 26, 2024, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) amending and restating in its entirety the Prior Credit Agreement. The Credit Agreement makes available an aggregate of $1,250.0 million of revolving loan commitments under the Revolving Credit Facility, which may be drawn until January 26, 2029. The Revolving Credit Facility under the Credit Agreement was drawn at closing in an amount sufficient to prepay all term loans outstanding under the TLA Facility under the Prior Credit Agreement. The obligations under the Credit Agreement are general unsecured obligations of the Company.

Interest on the revolving loans under the Credit Agreement accrues, at a variable rate, based on the secured overnight funding rate (“SOFR”) or the alternate base rate (“Base Rate”), plus, in each case, an applicable margin to be determined based on the credit ratings of the Company’s senior, unsecured long-term debt and will be due on each Interest Payment Date (as defined in the Credit Agreement). So long as the credit rating for the Company’s senior, unsecured long-term debt is set at BBB-/BBB- by each of S&P and Fitch, respectively, the applicable margin is 0.50% for Base Rate loans, and 1.50% for SOFR loans.

The Prior Credit Agreement made available to the Company on December 31, 2023 an aggregate of $500.0 million of revolving loan commitments, which could be drawn until February 16, 2027, and the TLA Facility. As of December 31, 2023, the revolving loan commitments were undrawn. As noted above, as of December 31, 2023, the commitments under the TLA Facility were drawn in full. The obligations under the Prior Credit Agreement were general unsecured obligations of the Company and the guarantors party thereto.

Interest on the Tranche A Term Loans under the TLA Facility accrued, at a variable rate, based on SOFR or the Base Rate, plus, in each case, an applicable margin and was due on each Interest Payment Date. The applicable margin was calculated by reference to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and ranged between 1.50% to 2.00% for SOFR loans, and 0.50% to 1.00% for Base Rate loans. At December 31, 2023, the interest rate on the TLA Facility was 7.46%.

In connection with the closings of the Senior Notes offerings, entry into the Prior Revolving Credit Agreement and the subsequent amendments thereto, including entry into the Credit Agreement, the Company paid certain financing fees which, together with the existing fees related to prior credit facilities, are being amortized over their related lives. At December 31, 2023, $33.0 million of the deferred financing fees and premium remain unamortized, $0.6 million of which is included in “Prepaid and other assets,” $1.1 million of which is included in “Other non-current assets” and $31.3 million of which is included in “Long-term debt” on the Consolidated Statement of Financial Condition.

7. LEASES

The components of lease expense (income) of the Company’s operating leases are as follows:

						Twelve Months Ended December 31,
(in thousands)						2023						2022						2021
Operating lease expenses						$	29,240					$	29,724					$	30,615
Variable lease costs						3,876						3,286						3,017
Short-term lease costs						745						477						343
Sublease income						$	(5,127)					$	(4,630)					$	(3,303)
Total lease costs						$	28,734					$	28,857					$	30,672

The Company’s leases have remaining lease terms of up to approximately 9 years. Some of these leases have options to extend which, if exercised, would extend the maximum remaining term to approximately 23 years. Some of the leases also provide for early termination, the exercise of which would shorten the term of those leases by up to 5 years.

The Company recorded pre-tax impairment charges associated with right of use assets of $8.4 million for the year ended December 31, 2021. The impairment charges are included in General and administrative expenses within the consolidated statements of income.

Maturities of the Company’s operating lease liabilities, interest and other relevant line items in the Consolidated Statement of Financial Condition as of December 31, 2023 are as follows:

Maturity of Lease Liabilities (in thousands)						Operating Leases
2024						$	27,167
2025						26,010
2026						23,976
2027						17,913
2028						17,346
Thereafter						50,003
Total lease payments						$	162,415
Less: Interest						(19,852)
Present value of lease liabilities						$	142,563
Other accrued liabilities						$	22,429
Long-term operating lease liabilities						$	120,134

Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows:

						As of
Lease Term and Discount Rate						December 31, 2023						December 31, 2022
Weighted-average remaining lease term (years)						7.04						7.86
Weighted-average discount rate						3.66		%				3.40		%

Other information related to the Company’s operating leases are as follows:

						Years Ended
Other Information (in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Operating cash flows used for operating leases						$	31,249					$	29,385					$	30,972
Right of use assets obtained in exchange for new operating lease liabilities						$	12,568					$	15,979					$	26,004

8. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Property, equipment and leasehold improvements, net at December 31, 2023 and 2022 consisted of the following:

						As of
(in thousands)						Estimated Useful Lives						December 31, 2023						December 31, 2022
Computer & related equipment						2 to 7 years						$	192,008					$	181,710
Furniture & fixtures						7 years						16,169						14,078
Leasehold improvements						1 to 21 years						58,582						54,040
Work-in-process						—						897						2,373
Subtotal												267,656						252,201
Accumulated depreciation and amortization												(211,736)						(198,348)
Property, equipment and leasehold improvements, net												$	55,920					$	53,853

Depreciation and amortization expense of property, equipment and leasehold improvements was $21.0 million, $26.9 million and $28.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

9. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

The following table presents goodwill by reportable segment:

(in thousands)						Index						Analytics						ESG and Climate						All Other - Private Assets						Total
Goodwill at December 31, 2021						$	1,205,443					$	290,976					$	48,047					$	691,920					$	2,236,386
Acquisitions⁽¹⁾						—						—						—						(541)						(541)
Foreign exchange translation adjustment						(3,821)						—						—						(2,354)						(6,175)
Goodwill at December 31, 2022						$	1,201,622					$	290,976					$	48,047					$	689,025					$	2,229,670
Acquisitions⁽2⁾						—						—						34,912						618,415						653,327
Foreign exchange translation adjustment						1,813						—						1,765						1,117						4,695
Goodwill at December 31, 2023						$	1,203,435					$	290,976					$	84,724					$	1,308,557					$	2,887,692

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(1)Reflects the impact of the acquisition of RCA.

(2)Reflects the impact of the acquisitions of Burgiss and Trove.

Intangible Assets, Net

The following table presents the amount of amortization expense related to intangible assets by category for the periods indicated:

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Amortization expense of acquired intangible assets						$	72,303					$	63,370					$	42,242
Amortization expense of internally developed capitalized software						42,126						27,709						22,337
Write-off of internally developed capitalized software						—						—						16,013
Total amortization of intangible assets expense						$	114,429					$	91,079					$	80,592

Following management’s decision to discontinue development and cease related sales activities of certain Analytics segment products and transition existing customers to other product offerings, the Company wrote off $16.0 million of certain internally developed capitalized software intangible assets (consisting of $46.3 million of gross intangible assets less $30.3 million of accumulated amortization) during the year ended December 31, 2021. The non-cash charge is recorded as a component of “Amortization of intangible assets” on the Consolidated Statement of Income.

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

												As of
(in thousands)						Estimated Useful Lives						December 31, 2023						December 31, 2022
Gross intangible assets:
Customer relationships						13 to 21 years						$	712,400					$	532,500
Proprietary data						11 to 13 years						458,717						220,778
Internally developed capitalized software						3 to 5 years						237,760						165,928
Acquired technology and software						3 to 9 years						228,220						209,220
Trademarks						1 to 21.5 years						209,090						208,190
Subtotal												1,846,187						1,336,616
Foreign exchange translation adjustment												(9,410)						(13,214)
Total gross intangible assets												$	1,836,777					$	1,323,402
Accumulated amortization:
Customer relationships												$	(340,922)					$	(308,437)
Proprietary data												(62,590)						(41,783)
Internally developed capitalized software												(118,387)						(77,259)
Acquired technology and software												(189,174)						(179,833)
Trademarks												(171,715)						(162,044)
Subtotal												(882,788)						(769,356)
Foreign exchange translation adjustment												2,245						4,471
Total accumulated amortization												$	(880,543)					$	(764,885)
Net intangible assets:
Customer relationships												$	371,478					$	224,063
Proprietary data												396,127						178,995
Internally developed capitalized software												119,373						88,670
Acquired technology and software												39,046						29,387
Trademarks												37,375						46,146
Subtotal												963,399						567,260
Foreign exchange translation adjustment												(7,165)						(8,743)
Total net intangible assets												$	956,234					$	558,517

Estimated amortization expense for succeeding years is presented below:

Years Ending December 31, (in thousands)						Amortization Expense
2024						$	153,026
2025						127,085
2026						91,753
2027						67,234
2028						65,307
Thereafter						451,829
Total						$	956,234

10. EMPLOYEE BENEFITS

The Company sponsors a 401(k) plan for eligible U.S. employees and defined contribution and defined benefit pension plans that cover substantially all of its non-U.S. employees. Eligible employees may participate in the MSCI 401(k) plan (or any other regional defined contribution plan sponsored by MSCI) immediately upon hire. Eligible employees receive 401(k) and other defined contribution plan matching contributions, which are subject to vesting and certain other limitations.

The following table reflects the employee benefits expense by cost, type and location in the Statement of Income for the periods indicated:

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Employee benefit cost type
401(k) and other defined contribution plans						33,416						30,263						25,740
Pension related net period benefit expense						5,323						6,241						5,785
Total						$	38,739					$	36,504					$	31,525
Location in the Statement of Income
Cost of revenues						$	15,504					$	14,269					$	12,231
Selling and marketing						11,081						10,775						9,489
Research and development						8,435						7,453						6,271
General and administrative						2,949						3,027						2,620
Other expense (income)						770						980						914
Total						$	38,739					$	36,504					$	31,525

The Company uses a measurement date of December 31 to calculate obligations under its pension and postretirement plans. As of December 31, 2023 and 2022, the Company carried a net liability of $31.9 million and $20.1 million, respectively, in “Other non-current liabilities” on the Consolidated Statement of Financial Condition related to its future pension obligations. The fair value of the defined benefit plan assets was $31.8 million and $29.8 million at December 31, 2023 and 2022, respectively.

The Company’s retiree benefit plans include defined benefit plans for employees in Switzerland, as well as other countries where MSCI maintains an operating presence.

Our Switzerland plans are government-mandated retirement funds that provide employees with a minimum investment return, which is determined annually by the Swiss government and was 1.0% in the years ended December 31, 2023, 2022 and 2021. Under the Switzerland plans, the Company and our employees are required to make contributions into a fund managed by an independent investment fiduciary. Employer contributions must be in an amount at least equal to the employee’s contribution. Employee contributions are based on the respective employee’s age, salary and chosen contribution scale. As of December 31, 2023 and 2022, the Switzerland defined benefit plans had a gross pension liability of $30.9 million and $26.5 million, respectively, and plan assets that totaled $27.2 million and $26.3 million, respectively. In the years ended December 31, 2023, 2022 and 2021, we recognized net periodic benefit expense of $0.3 million, $0.4 million and $0.3 million, respectively, related to our Switzerland plans. The discount rate for the Switzerland defined benefit pension plan was 1.40% and 2.40%, respectively, as of December 31, 2023 and 2022.

The investment strategies of the non-U.S. defined benefit plans vary according to the plan provisions and local laws. The majority of the assets in the non-U.S. plans are in the Switzerland plans. The Switzerland plans are associated with an insured collective retirement foundation, whereby assets are held in trust and the assets are comingled with those of other participating companies. Investment decisions are made by a board of the collective retirement foundation, comprised of participating company representatives and representatives from the insurer. The overall strategy is to manage risk while maximizing total returns.

11. SHAREHOLDERS’ EQUITY (DEFICIT)

This note reflects the share repurchases and related activity as well as share-based compensation activity recognized by the Company, for all periods referenced.

Return of capital

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

Share repurchases made pursuant to the 2022 Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice. As of December 31, 2023, there was $845.7 million of available authorization remaining under the 2022 Repurchase Program.

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

Year Ended (in thousands, except per share data)						Average Price Paid Per Share						Total Number of Shares Repurchased						Dollar Value of Shares Repurchased**(1)**
December 31, 2023						$	468.26					980						$	458,721
December 31, 2022						$	470.68					2,730						$	1,284,825
December 31, 2021						$	412.25					339						$	139,580

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

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

						Dividends
(in thousands, except per share data)						Per Share						Declared						Distributed						(Released)/ Deferred
2023
Three Months Ended March 31,						$	1.38					$	111,986					$	112,189					$	(203)
Three Months Ended June 30,						1.38						110,383						110,147						236
Three Months Ended September 30,						1.38						109,847						109,408						439
Three Months Ended December 31,						1.38						109,887						109,399						488
Year Ended December 31,						$	5.52					$	442,103					$	441,143					$	960
2022
Three Months Ended March 31,						$	1.04					$	87,280					$	87,846					$	(566)
Three Months Ended June 30,						1.04						84,593						84,189						404
Three Months Ended September 30,						1.25						101,354						100,849						505
Three Months Ended December 31,						1.25						100,671						100,192						479
Year Ended December 31,						$	4.58					$	373,898					$	373,076					$	822
2021
Three Months Ended March 31,						$	0.78					$	65,947					$	66,153					$	(206)
Three Months Ended June 30,						0.78						64,863						64,489						374
Three Months Ended September 30,						1.04						86,476						85,961						515
Three Months Ended December 31,						1.04						86,475						85,973						502
Year Ended December 31,						$	3.64					$	303,761					$	302,576					$	1,185

Common Stock

The following table presents activity related to shares of common stock issued and repurchased for the periods indicated:

						Common Stock Issued						Treasury Stock						Common Stock Outstanding
Balance At December 31, 2020						132,829,175						(50,255,768)						82,573,407
Dividend payable/paid						268						(156)						112
Common stock issued						331,427						—						331,427
Shares withheld for tax withholding						—						(133,431)						(133,431)
Shares repurchased under stock repurchase programs						—						(338,577)						(338,577)
Shares issued to Directors						1,308						5,203						6,511
Balance At December 31, 2021						133,162,178						(50,722,729)						82,439,449
Dividend payable/paid						124						—						124
Common stock issued						456,425						—						456,425
Shares withheld for tax withholding						—						(209,492)						(209,492)
Shares repurchased under stock repurchase programs						—						(2,729,715)						(2,729,715)
Shares issued to Directors						4,278						(1,080)						3,198
Balance At December 31, 2022						133,623,005						(53,663,016)						79,959,989
Dividend payable/paid						46						—						46
Common stock issued						188,798						—						188,798
Shares withheld for tax withholding						—						(81,789)						(81,789)
Shares repurchased under stock repurchase programs						—						(979,623)						(979,623)
Shares issued to Directors						5,483						(1,692)						3,791
Balance At December 31, 2023						133,817,332						(54,726,120)						79,091,212

Share-based Compensation

The Company regularly issues share-based compensation to its employees and directors who are not employees of the Company. The accounting guidance for share-based compensation requires measurement of compensation cost for share-based awards at fair value and recognition of compensation cost over the service period, net of estimated forfeitures. In connection with awards under its equity-based compensation and benefit plans, the Company is authorized to use newly issued shares or certain shares of common stock held in treasury.

In February 2024, the Company granted a portion of its employees awards in the form of RSUs, PSUs and PSOs. The total number of units and options granted was 264,872. The aggregate fair value of the awards was $99.9 million. The RSUs granted in 2024 vest at the end of a three-year service period. The PSUs granted in 2024 vest at the end of a three-year service period, are subject to a one-year sale restriction and are also subject to the achievement of an absolute total shareholder return compounded annual growth rate, measured over a three-year period. The PSOs granted in 2024 vest and become exercisable at the end of a three-year service period and are subject to a performance condition based on the combined level of achievement of a cumulative revenue performance goal and a cumulative adjusted EPS performance goal, measured over a three-year period. All of these awards are subject to forfeiture under specific criteria set in the award agreements.

The following table presents the amount of share-based compensation expense by category for the periods indicated:

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Cost of revenues						$	19,447					$	15,404					$	17,285
Selling and marketing						17,392						14,218						14,411
Research and development						9,625						6,857						7,913
General and administrative						26,233						20,826						17,463
Other expense (income)						346						738						1,416
Total share-based compensation expense						$	73,043					$	58,043					$	58,488

The windfall tax benefits for share-based compensation expense related to RSUs and PSUs (together, the “Share-based Awards”) granted to Company employees and to directors who are not employees of the Company were $11.4 million, $28.4 million and $22.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, $91.7 million of compensation cost related to MSCI unvested share-based awards granted to the Company’s employees and to directors who are not employees of the Company had not yet been recognized. The unrecognized compensation cost relating to unvested stock-based awards expected to vest will be recognized primarily over the next one to three years.

In connection with awards under its equity-based compensation and benefit plans, the Company is authorized to issue shares of common stock. As of December 31, 2023, 3.1 million shares of common stock were available for future grants under these plans.

Share-based Awards

Certain Company employees have been granted Share-based Awards pursuant to a share-based compensation plan. Outstanding Share-based Awards include RSUs and PSUs. Recipients of Share-based Awards generally have rights to receive dividend equivalents that are subject to vesting.

The Company reports the target number of PSUs granted unless it has determined, based on the actual achievement of performance measures, that an employee will receive a different amount of shares underlying the PSUs, in which case the Company reports the amount of shares employees are likely to receive.

The fair value of the PSUs on the award dates were estimated under the Monte Carlo method using the following weighted average assumptions:

						Years Ended
						December 31, 2023						December 31, 2022						December 31, 2021
Risk free interest rate						3.75		%				1.42		%				0.33		%
Historical stock price volatility						41.10		%				37.29		%				34.13		%
Term (in years)						3.0						3.0						4.0
Discount of Lack of Marketability						9.0		%				8.0		%				4.0		%

The risk-free interest rate was determined based on the yields available on U.S. Constant Maturity Treasury yield curve as of the valuation dates with a maturity commensurate with the terms. The expected stock price volatility was determined using historical volatility. Since the PSU awards are dividend-protected, the assumed dividend yield applied in the valuation was 0.0%.

The following table presents activity concerning the Company’s vested and unvested Share-based Awards applicable to its employees (share data in thousands) for the period indicated:

For the Year Ended December 31, 2023 (in thousands, except fair value data)						Number of Shares						Weighted Average Grant Date Fair Value
Vested and unvested Share-based Awards at December 31, 2022						554						$	283.66
Granted						182						$	457.10
Conversion to common stock						(196)						$	264.88
Canceled						(18)						$	402.02
Vested and unvested Share-based Awards at December 31, 2023						522						$	346.44
Vested and unvested Share-based Awards expected to vest						498						$	340.15

The total fair value of Share-based Awards held by the Company’s employees that converted to MSCI common stock during the years ended December 31, 2023, 2022 and 2021 was $107.8 million, $250.4 million and $152.6 million, respectively.

Stock Option Awards

Certain Company employees have also been granted stock option awards in the form of PSOs. The fair value of PSOs on the award dates were estimated under the Black-Scholes pricing model using the following weighted average assumptions:

						Years Ended
						December 31, 2023						December 31, 2022
Risk-free interest rate						3.44		%				1.71		%
Expected stock volatility						32.81		%				30.37		%
Expected life (in years)						6.5						6.5
Expected dividend yield						1.00		%				0.76		%

The risk-free interest rate was determined based on the yields available on the U.S. Constant Maturity Treasury yield curve as of the valuation dates with a term commensurate with the expected life of the stock option award. The expected stock price volatility was calculated using historical volatility. As we do not have sufficient historical data, we utilized the simplified method provided by the SEC to calculate the expected life as the average of the contractual term and vesting period. The expected dividend yield was calculated by annualizing the most recent cash dividend declared by the Company’s Board of Directors at grant date and dividing by the closing stock price on the grant date.

The following table presents activity concerning the Company’s unvested PSOs related to its employees (share data in thousands):

For the Year Ended December 31, 2023 (in thousands, except fair value data)						Number of Option Awards						Weighted Average Exercise Price						Weighted Average Remaining Life (Years)						Aggregate Intrinsic Value**(1)**
Vested and unvested stock option awards at December 31, 2022						119						$	549.83
Granted						117						$	554.52
Conversion to stock options						—						$	—
Canceled						(5)						$	551.40
Vested and unvested stock option awards at December 31, 2023						231						$	552.18					8.6						$	3,388
Unvested stock option awards expected to vest						219						$	552.15					8.6						$	3,220

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(1)			Calculated using the closing stock price on the last trading day of fiscal 2023, less the option exercise price, multiplied by the number of PSOs multiplied by expected payout %.

There were no stock option awards issued or outstanding for the year ended December 31, 2021. Additionally, there were no stock options outstanding that could be exercised during any of the years ended December 31, 2023, 2022 or 2021.

12. INCOME TAXES

The provision for income taxes (benefits) by taxing jurisdiction consisted of:

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Current
U.S. federal						$	93,475					$	53,517					$	133,281
U.S. state and local						40,567						15,300						49,475
Non U.S.						101,685						68,015						60,766
						235,727						136,832						243,522
Deferred
U.S. federal						(1,985)						25,878						(79,812)
U.S. state and local						(558)						14,634						(25,981)
Non U.S.						(12,715)						(4,076)						(5,576)
						(15,258)						36,436						(111,369)
Provision for income taxes						$	220,469					$	173,268					$	132,153

The following table reconciles the U.S. federal statutory income tax rate to the effective income tax rate:

						Years Ended
						December 31, 2023						December 31, 2022						December 31, 2021
U.S. federal statutory income tax rate						21.00		%				21.00		%				21.00		%
U.S. state and local income taxes, net of U.S. federal income tax benefits						2.40		%				2.71		%				2.90		%
Change in tax rates applicable to non-U.S. earnings						(3.65		%)				(3.96		%)				(5.09		%)
Foreign Derived Intangible Income (FDII), net of GILTI						(0.15		%)				(0.50		%)				(1.09		%)
Domestic tax credits and incentives						(0.53		%)				(0.46		%)				(0.59		%)
Impact of Burgiss Transaction						(1.58		%)				—		%				—		%
Valuation allowance						—		%				—		%				—		%
Excess share-based compensation						(0.84		%)				(2.72		%)				(2.65		%)
Other						(0.55		%)				0.53		%				0.92		%
Effective income tax rate						16.10		%				16.60		%				15.40		%

Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022, were as follows:

						As of
(in thousands)						December 31, 2023						December 31, 2022
Deferred tax assets:
Unearned revenue						$	65,370					$	54,263
Capitalized expenses						52,098						41,176
Lease liabilities						33,321						35,425
Employee compensation and benefit plans						28,781						24,318
Intangible assets						11,586						—
Interest expense carryforwards						10,093						11,283
Other						6,520						18
Loss carryforwards						7,752						13,128
Subtotal						215,521						179,611
Less: valuation allowance						(26)						(31)
Total deferred tax assets						$	215,495					$	179,580
Deferred tax liabilities:
Intangible assets						$	(130,231)					$	(132,705)
Property, equipment and leasehold improvements, net						(35,203)						(15,169)
Right of use assets						(26,016)						(28,213)
Other						(7,796)						—
Unremitted foreign earnings						(2,203)						(2,162)
Pension						—						(1,222)
Total deferred tax liabilities						$	(201,449)					$	(179,471)
Net deferred tax assets						$	14,046					$	109

As presented in the table above, the Company has certain loss and interest carryforward items. The tax value of the U.S. portion of the interest carryforward was zero as of December 31, 2023 and 2022. The tax value of the non-U.S. portion of the interest carryforward was $10.1 million and $11.3 million as of December 31, 2023 and 2022, respectively. This carryforward is subject to an annual limitation on utilization over an indefinite life.

Net operating loss carryforwards in the U.S. were $32.2 million with a tax value of $7.6 million and $48.7 million with a tax value of $10.9 million as of December 31, 2023 and 2022, respectively. These carryforwards are subject to annual limitations and will begin to expire in 2026. The tax value of the non-U.S. portion of the net operating loss was $0.1 million and $2.2 million as of December 31, 2023 and 2022 respectively. These carryforwards are subject to annual limitations and will begin to expire in 2025.

The Company believes the majority of the deferred tax assets at December 31, 2023 are more likely than not to be realized based on expectations as to future taxable income in the jurisdictions in which it operates with the exception of a loss carryforward in one jurisdiction where it has established a valuation allowance of $0.03 million.

The following table presents changes in the Company’s deferred tax asset valuation allowance for the periods indicated:

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Beginning balance						$	31					$	36					$	—
Additions charged to cost and expenses						—						—						36
Deductions						(5)						(5)						—
Ending balance						$	26					$	31					$	36

The following table presents the components of income before provision for income taxes generated by domestic or foreign operations for the periods indicated:

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Domestic						$	643,492					$	525,328					$	417,679
Foreign (1)						725,569						518,513						440,457
Total income before provision for income taxes						$	1,369,061					$	1,043,841					$	858,136

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(1)			Foreign income before provision for income taxes is defined as income generated from operations located outside the U.S., which includes income from foreign branches of U.S. companies.

As of December 31, 2023, the Company has provided for applicable state income and foreign withholding taxes on all undistributed earnings of its foreign subsidiaries.

The Company regularly assesses the likelihood of additional assessments in each of the taxing jurisdictions in which it files income tax returns. The Company has established unrecognized tax benefits that the Company believes are adequate in relation to the potential for additional assessments. Once established, the Company adjusts unrecognized tax benefits only when more information is available or when an event occurs necessitating a change. Based on the current status of income tax audits, the Company believes it is reasonably possible that the total amount of unrecognized benefits may decrease by approximately $23.0 million in the next twelve months as a result of the resolution of tax examinations.

The Company believes the resolution of tax matters will not have a material effect on the Consolidated Statement of Financial Condition of the Company, although a resolution could have a material impact on the Company’s Consolidated Statement of Income for a particular future period and on the Company’s effective tax rate for any period in which such resolution occurs.

The following table presents a reconciliation of the beginning and ending amount of the gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2023, 2022 and 2021:

						Years Ended
Gross unrecognized tax benefits (in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Beginning balance						$	32,523					$	33,039					$	16,621
Increases based on tax positions related to the current period						5,028						640						511
Increases based on tax positions related to prior periods						1,961						3,807						20,321
Decreases based on tax positions related to prior periods						—						(597)						—
Decreases related to settlements with taxing authorities						(5,711)						(4,366)						—
Decreases related to a lapse of applicable statute of limitations						—						—						(4,414)
Ending balance						$	33,801					$	32,523					$	33,039

The total amount of unrecognized tax benefits was $33.8 million, $32.5 million and $33.0 million as of December 31, 2023, 2022 and 2021, respectively, which, if recognized, would favorably affect the effective tax rate in future periods. The Company recognizes the accrual of interest and penalties related to unrecognized tax benefits in the “Provision for income taxes” in the Consolidated Statement of Income. The Company recognized $2.1 million, $(0.5) million and zero interest in the Consolidated Statement of Income with respect to unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021, respectively. Penalties of $1.3 million, $(0.3) million and $0.3 million were recognized in the Consolidated Statement of Income and the Consolidated Statement of Financial Position for the years ended December 31, 2023, 2022 and 2021, respectively. The amount of accrued interest, which includes interest related to uncertain tax positions and accrued income tax expense, recorded on the Consolidated Statement of Financial Condition was $2.5 million, $0.4 million and $0.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company is under examination by tax authorities in certain jurisdictions, including foreign jurisdictions, such as Switzerland, India and states in the U.S. in which the Company has significant operations, such as New York and California. The tax years currently under examination vary by jurisdiction but include years ranging from 2008 onwards.

13. SEGMENT INFORMATION

ASC Subtopic 280-10, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and assess performance. MSCI’s Chief Executive Officer and its President and Chief Operating Officer, who are together considered to be its CODM, review financial information presented on an operating segment basis for purposes of making operating decisions and assessing financial performance.

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

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

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

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

The Company has five operating segments: Index, Analytics, ESG and Climate, Real Assets and Private Capital Solutions, which are presented as the following four reportable segments: Index, Analytics, ESG and Climate and All Other – Private Assets. During the year ended December 31, 2023, the Company renamed the Burgiss operating segment to Private Capital Solutions. The operating segments of Real Assets and Private Capital Solutions do not individually meet the segment reporting thresholds and have been combined and presented as part of All Other – Private Assets reportable segment.

Prior to the step acquisition of Burgiss on October 2, 2023, the Company’s ownership interest in Burgiss was classified as an equity-method investment. Therefore, the All Other – Private Assets segment did not include the Company’s proportionate share of operating revenues and Adjusted EBITDA related to Burgiss. The Company’s proportionate share of the income or loss from its equity-method investment in Burgiss was not a component of Adjusted EBITDA as it was reported as a component of other (expense) income, net. Following the acquisition, the consolidated results of Burgiss were included in the Company’s Private Capital Solutions operating segment.

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

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

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

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

The Private Capital Solutions operating segment offers a suite of tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance of underlying portfolio companies, managing risk and other activities supporting private capital investing.

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

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Operating revenues
Index						$	1,451,815					$	1,303,209					$	1,251,764
Analytics						615,956						576,107						544,299
ESG and Climate						287,568						228,311						166,192
All Other - Private Assets						173,581						140,971						81,289
Total						$	2,528,920					$	2,248,598					$	2,043,544

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

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Index Adjusted EBITDA						$	1,106,973					$	985,407					$	951,312
Analytics Adjusted EBITDA						274,875						247,895						198,799
ESG and Climate Adjusted EBITDA						91,678						61,094						29,748
All Other - Private Assets Adjusted EBITDA						49,425						35,275						16,931
Total operating segment profitability						1,522,951						1,329,671						1,196,790
Amortization of intangible assets						114,429						91,079						80,592
Depreciation and amortization of property, equipment and leasehold improvements						21,009						26,893						28,901
Impairment related to sublease of leased property						477						—						7,702
Acquisition-related integration and transaction costs (1)						2,427						4,059						6,870
Operating income						1,384,609						1,207,640						1,072,725
Other expense (income), net						15,548						163,799						214,589
Provision for income taxes						220,469						173,268						132,153
Net income						$	1,148,592					$	870,573					$	725,983

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

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

						Years Ended
(in thousands)						December 31, 2023						December 31, 2022						December 31, 2021
Operating revenues
Americas:
United States						$	1,044,016					$	934,462					$	836,880
Other						111,965						96,023						85,744
Total Americas						1,155,981						1,030,485						922,624
Europe, the Middle East and Africa (“EMEA”):
United Kingdom						408,087						351,225						344,976
Other						569,032						512,018						454,239
Total EMEA						977,119						863,243						799,215
Asia & Australia:
Japan						100,823						91,263						91,419
Other						294,997						263,607						230,286
Total Asia & Australia						395,820						354,870						321,705
Total						$	2,528,920					$	2,248,598					$	2,043,544

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

						As of
(in thousands)						December 31, 2023						December 31, 2022
Long-lived assets
Americas:
United States						$	204,238					$	179,453
Other						11,585						11,971
Total Americas						215,823						191,424
EMEA:
United Kingdom						18,403						19,674
Other						22,072						23,099
Total EMEA						40,475						42,773
Asia & Australia:
Japan						1,321						652
Other						31,507						32,962
Total Asia & Australia						32,828						33,614
Total						$	289,126					$	267,811

14. SUBSEQUENT EVENTS

On January 29, 2024, the Board of Directors of the Company declared a quarterly dividend of $1.60 per share of common stock to be paid on February 29, 2024 to shareholders of record as of the close of trading on February 16, 2024.

On January 26, 2024, the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent, entered into the Credit Agreement, amending and restating in its entirety the Prior Credit Agreement. The Credit Agreement makes available to the Company an aggregate of $1,250.0 million of revolving loan commitments, which may be drawn until January 26, 2029. The revolving loans under the Credit Agreement were drawn at closing in an amount sufficient to prepay all term loans outstanding under the TLA Facility of the Prior Credit Agreement. The obligations under the Credit Agreement are general unsecured obligations of the Company. Upon the termination of the Prior Credit Agreement on January 26, 2024, the subsidiary guarantors were released from their guarantees under the Prior Credit Agreement and the Indentures.