Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2021

OR

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

For the transition period from to

Commission file number 001-33812

MSCI INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		13-4038723
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
7 World Trade Center 250 Greenwich Street, 49th Floor New York, New York		10007
(Address of Principal Executive Offices)		(Zip Code)

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		MSCI		New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

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

As of October 19, 2021, there were 82,446,714 shares of the registrant’s common stock, par value $0.01, outstanding.

FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

				Page
		Part I – Financial Information
Item 1.		Financial Statements		4
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		42
Item 4.		Controls and Procedures		43
		Part II – Other Information
Item 1.		Legal Proceedings		44
Item 1A.		Risk Factors		44
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		44
Item 6.		Exhibits		45

AVAILABLE INFORMATION

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

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains a website that contains reports, proxy and information statements and other information that we file electronically with the SEC at www.sec.gov. We also make available free of charge, on or through our website, these reports, proxy statements and other information as soon as reasonably practicable following the time they are electronically filed with or furnished to the SEC. To access these, click on the “SEC Filings” link found on our Investor Relations homepage (http://ir.msci.com).

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

Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about us when you enroll your email address by visiting the “Email Alert Subscription” section of our Investor Relations homepage at http://ir.msci.com/alerts.cfm. The contents of our website, including our Investor Relations homepage, Corporate Responsibility homepage and social media channels are not, however, a part of or incorporated by reference in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

We have included in this Quarterly Report on Form 10-Q, and from time to time may make in our public filings, press releases or other public statements, certain statements that constitute forward-looking statements. In addition, our management may make forward-looking statements to analysts, investors, representatives of the media and others. These forward-looking statements are not historical facts and represent only MSCI’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and beyond our control.

In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” or the negative of these terms or other comparable terminology. Statements concerning our financial position, business strategy and plans or objectives for future operations are forward-looking statements. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect our actual results, levels of activity, performance or achievements. Such risks and uncertainties include those set forth under “Risk Factors” in Part I, Item 1A of the 2020 Annual Report on Form 10-K filed with the SEC on February 12, 2021. Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in quarterly reports on Form 10-Q and current reports on Form 8-K filed or furnished with the SEC. The forward-looking statements in this report speak only as of the time they are made and do not necessarily reflect our outlook at any other point in time. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or for any other reason. Therefore, readers should carefully review the risk factors set forth in other reports or documents we file from time to time with the SEC.

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except per share and share data)

		As of
		September 30,				December 31,
		2021				2020
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	1,284,664			$	1,300,521
Accounts receivable, net of allowances			496,726				558,569
Prepaid income taxes			16,578				20,097
Prepaid and other assets			49,383				46,411
Total current assets			1,847,351				1,925,598
Property, equipment and leasehold improvements, net			70,543				80,446
Right of use assets			153,831				153,330
Goodwill			2,230,404				1,566,022
Intangible assets, net			597,644				234,748
Equity method investment			186,502				190,898
Deferred tax assets			28,720				23,627
Other non-current assets			27,674				23,978
Total assets		$	5,142,669			$	4,198,647
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	9,884			$	14,253
Income taxes payable			36,642				26,195
Accrued compensation and related benefits			164,174				161,557
Other accrued liabilities			162,877				143,894
Deferred revenue			643,352				675,870
Total current liabilities			1,016,929				1,021,769
Long-term debt			4,160,379				3,366,777
Long-term operating lease liabilities			150,519				152,342
Deferred tax liabilities			3,292				12,774
Other non-current liabilities			91,575				88,219
Total liabilities			5,422,694				4,641,881
Commitments and Contingencies (see Note 8)
Shareholders' equity (deficit):
Preferred stock (par value $0.01, 100,000,000 shares authorized; no shares issued)			—				—
Common stock (par value $0.01; 750,000,000 common shares authorized; 133,160,230 and 132,829,175 common shares issued and 82,446,714 and 82,573,407 common shares outstanding at September 30, 2021 and December 31, 2020, respectively)			1,332				1,328
Treasury shares, at cost (50,713,516 and 50,255,768 common shares held at September 30, 2021 and December 31, 2020, respectively)			(4,534,810	)			(4,342,535	)
Additional paid in capital			1,446,001				1,402,537
Retained earnings			2,869,127				2,554,295
Accumulated other comprehensive loss			(61,675	)			(58,859	)
Total shareholders' equity (deficit)			(280,025	)			(443,234	)
Total liabilities and shareholders' equity (deficit)		$	5,142,669			$	4,198,647

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
		(unaudited)
Operating revenues		$	517,099			$	425,333			$	1,493,702			$	1,251,729
Operating expenses:
Cost of revenues			89,674				70,704				262,781				215,769
Selling and marketing			59,819				52,668				174,477				159,834
Research and development			28,352				24,901				80,745				73,997
General and administrative			38,110				27,613				103,020				86,755
Amortization of intangible assets			14,105				14,333				59,569				42,171
Depreciation and amortization of property, equipment and leasehold improvements			6,809				7,494				20,972				22,524
Total operating expenses			236,869				197,713				701,564				601,050
Operating income			280,230				227,620				792,138				650,679
Interest income			(396	)			(475	)			(1,129	)			(4,729	)
Interest expense			42,137				37,536				119,278				118,994
Other expense (income)			37,839				1,516				61,616				45,355
Other expense (income), net			79,580				38,577				179,765				159,620
Income before provision for income taxes			200,650				189,043				612,373				491,059
Provision for income taxes			30,774				6,685				80,255				45,453
Net income		$	169,876			$	182,358			$	532,118			$	445,606
Earnings per basic common share		$	2.06			$	2.18			$	6.45			$	5.30
Earnings per diluted common share		$	2.03			$	2.16			$	6.38			$	5.26
Weighted average shares outstanding used in computing earnings per share
Basic			82,470				83,602				82,521				84,044
Diluted			83,554				84,479				83,446				84,789

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
		(unaudited)
Net income		$	169,876			$	182,358			$	532,118			$	445,606
Other comprehensive (loss) income:
Foreign currency translation adjustments			(3,226	)			7,058				(4,052	)			(3,743	)
Income tax effect			422				(1,124	)			999				965
Foreign currency translation adjustments, net			(2,804	)			5,934				(3,053	)			(2,778	)
Pension and other post-retirement adjustments			186				(245	)			383				(27	)
Income tax effect			(48	)			83				(146	)			88
Pension and other post-retirement adjustments, net			138				(162	)			237				61
Other comprehensive (loss) income, net of tax			(2,666	)			5,772				(2,816	)			(2,717	)
Comprehensive income		$	167,210			$	188,130			$	529,302			$	442,889

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)

																		Accumulated
										Additional								Other
		Common				Treasury				Paid in				Retained				Comprehensive
		Stock				Stock				Capital				Earnings				Income (Loss)				Total
		(unaudited)
Balance at December 31, 2020		$	1,328			$	(4,342,535	)		$	1,402,537			$	2,554,295			$	(58,859	)		$	(443,234	)
Net income															196,819								196,819
Dividends declared ($0.78 per common share)															(65,947	)							(65,947	)
Dividends paid in shares											66												66
Other comprehensive income (loss), net of tax																			(957	)			(957	)
Common stock issued			3																				3
Shares withheld for tax withholding and exercises							(52,814	)															(52,814	)
Compensation payable in common stock											18,842												18,842
Common stock repurchased and held in treasury							(134,340	)															(134,340	)
Common stock issued to Directors and (held in)/released from treasury							(20	)															(20	)
Balance at March 31, 2021			1,331				(4,529,709	)			1,421,445				2,685,167				(59,816	)			(481,582	)
Net income															165,423								165,423
Dividends declared ($0.78 per common share)															(64,863	)							(64,863	)
Dividends paid in shares											20												20
Other comprehensive income (loss), net of tax																			807				807
Common stock issued																							—
Shares withheld for tax withholding and exercises							(620	)															(620	)
Compensation payable in common stock											12,252												12,252
Common stock repurchased and held in treasury																							—
Common stock issued to Directors and (held in)/released from treasury							756																756
Balance at June 30, 2021			1,331				(4,529,573	)			1,433,717				2,785,727				(59,009	)			(367,807	)
Net income															169,876								169,876
Dividends declared ($1.04 per common share)															(86,476	)							(86,476	)
Dividends paid in shares											21												21
Other comprehensive income (loss), net of tax																			(2,666	)			(2,666	)
Common stock issued			1																				1
Shares withheld for tax withholding and exercises							(5,286	)															(5,286	)
Compensation payable in common stock											12,263												12,263
Common stock repurchased and held in treasury																							—
Common stock issued to Directors and (held in)/released from treasury							49																49
Balance at September 30, 2021		$	1,332			$	(4,534,810	)		$	1,446,001			$	2,869,127			$	(61,675	)		$	(280,025	)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT), CONT’D

(in thousands)

																		Accumulated
										Additional								Other
		Common				Treasury				Paid in				Retained				Comprehensive
		Stock				Stock				Capital				Earnings				Income (Loss)				Total
		(unaudited)
Balance at December 31, 2019		$	1,324			$	(3,565,784	)		$	1,351,031			$	2,199,294			$	(62,579	)		$	(76,714	)
Net income															148,125								148,125
Cumulative-effect adjustment															631								631
Dividends declared ($0.68 per common share)															(59,233	)							(59,233	)
Dividends paid in shares											78												78
Other comprehensive income (loss), net of tax																			(9,625	)			(9,625	)
Common stock issued			4																				4
Shares withheld for tax withholding							(47,195	)															(47,195	)
Compensation payable in common stock											15,333												15,333
Common stock repurchased and held in treasury							(325,699	)															(325,699	)
Common stock issued to Directors and (held in)/released from treasury							(36	)															(36	)
Balance at March 31, 2020			1,328				(3,938,714	)			1,366,442				2,288,817				(72,204	)			(354,331	)
Net income															115,123								115,123
Dividends declared ($0.68 per common share)															(57,360	)							(57,360	)
Dividends paid in shares											36												36
Other comprehensive income (loss), net of tax																			1,136				1,136
Shares withheld for tax withholding and exercises							(603	)															(603	)
Compensation payable in common stock											14,294												14,294
Common stock repurchased and held in treasury							(31,071	)															(31,071	)
Common stock issued to Directors and (held in)/released from treasury							1,844																1,844
Balance at June 30, 2020			1,328				(3,968,544	)			1,380,772				2,346,580				(71,068	)			(310,932	)
Net income															182,358								182,358
Dividends declared ($0.78 per common share)															(65,830	)							(65,830	)
Dividends paid in shares											20												20
Other comprehensive income (loss), net of tax																			5,772				5,772
Shares withheld for tax withholding and exercises							(2,433	)															(2,433	)
Compensation payable in common stock											11,045												11,045
Common stock repurchased and held in treasury							(206,566	)															(206,566	)
Common stock issued to Directors and (held in)/released from treasury							(20	)															(20	)
Balance at September 30, 2020		$	1,328			$	(4,177,563	)		$	1,391,837			$	2,463,108			$	(65,296	)		$	(386,586	)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

		Nine Months Ended
		September 30,
		2021				2020
		(unaudited)
Cash flows from operating activities
Net income		$	532,118			$	445,606
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets			59,569				42,171
Stock-based compensation expense			43,218				40,381
Depreciation and amortization of property, equipment and leasehold improvements			20,972				22,524
Amortization of right of use assets			18,255				18,061
Amortization of debt origination fees			3,658				3,338
Loss on extinguishment of debt			59,103				44,930
Deferred taxes			(101,840	)			(4,622	)
Other adjustments			5,706				1,680
Changes in assets and liabilities:
Accounts receivable			69,324				69,848
Prepaid income taxes			4,165				(31,923	)
Prepaid and other assets			(2,178	)			(2,854	)
Accounts payable			(6,347	)			(1,882	)
Accrued compensation and related benefits			(206	)			(33,532	)
Income taxes payable			11,981				6,607
Other accrued liabilities			7,201				9,801
Deferred revenue			(57,932	)			(43,186	)
Long-term operating lease liabilities			(15,644	)			(17,017	)
Other			5,282				5,250
Net cash provided by operating activities			656,405				575,181
Cash flows from investing activities
Acquisition of a business, net of cash acquired			(948,695	)			-
Acquisition of equity method investment			(77	)			(190,816	)
Capitalized software development costs			(29,078	)			(21,931	)
Capital expenditures			(7,119	)			(12,152	)
Other			(910	)			—
Net cash used in investing activities			(985,879	)			(224,899	)
Cash flows from financing activities
Proceeds from borrowings, inclusive of premium			1,803,750				1,405,000
Repayment of borrowings			(1,051,810	)			(1,142,382	)
Repurchase of common stock held in treasury			(193,060	)			(613,566	)
Payment of dividends			(216,496	)			(181,843	)
Payment of debt issuance costs in connection with debt			(21,135	)			(16,693	)
Net cash provided by (used in) financing activities			321,249				(549,484	)
Effect of exchange rate changes			(7,632	)			(4,507	)
Net decrease in cash			(15,857	)			(203,709	)
Cash and cash equivalent, beginning of period			1,300,521				1,506,567
Cash and cash equivalent, end of period		$	1,284,664			$	1,302,858
Supplemental disclosure of cash flow information:
Cash paid for interest		$	101,631			$	109,834
Cash paid for income taxes, net of refunds received		$	163,732			$	73,311
Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities		$	4,821			$	3,281
Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid		$	2,096			$	1,505

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. INTRODUCTION AND BASIS OF PRESENTATION

MSCI Inc., together with its wholly owned subsidiaries (the “Company” or “MSCI”) is a leading provider of critical decision support tools and services for the global investment community. Our expertise in research, data and technology empower better investment decisions by enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios. We create industry-leading research-enhanced products and solutions including indexes; portfolio construction tools and risk-management services; environmental, social and governance (“ESG”) and climate solutions; and real estate data, return analytics services, market insights and climate solutions.

Basis of Presentation and Use of Estimates

These unaudited condensed consolidated financial statements include the accounts of MSCI and its wholly owned subsidiaries and include all adjustments of a normal, recurring nature necessary to state fairly the financial condition as of September 30, 2021 and December 31, 2020, the results of operations, comprehensive income and shareholders’ equity (deficit) for the three and nine months ended September 30, 2021 and 2020 and cash flows for the nine months ended September 30, 2021 and 2020. The unaudited condensed consolidated statement of financial condition and related financial statement information as of December 31, 2020 have been derived from the 2020 audited consolidated financial statements but do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in MSCI’s Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for interim periods are not necessarily indicative of results for the entire year.

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The Company makes certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the unaudited condensed consolidated financial statements, as well as the reported amounts of operating revenues and expenses during the periods presented. Significant estimates and assumptions made by management include the deferral and recognition of revenue, research and development and software capitalization, assessment of impairment of long-lived assets, accrued compensation, income taxes, incremental borrowing rates, valuation of assets acquired and liabilities assumed in a business combination and other matters that affect the unaudited condensed consolidated financial statements and related disclosures. The Company believes that estimates used in the preparation of these unaudited condensed consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Intercompany balances and transactions are eliminated in consolidation.

Certain prior period amounts have been reclassified to conform to the current period presentation. Effective January 1, 2021, the ESG and Climate operating segment is being presented as a separate reportable segment. The operating segments of Real Estate and The Burgiss Group, LLC (“Burgiss”) do not individually meet the segment reporting thresholds and have been combined and presented as part of the All Other – Private Assets reportable segment. The Company’s ownership interest in Burgiss, a global provider of investment decision tools for private capital, is classified as an equity-method investment. Therefore, the All Other – Private Assets segment does 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 is not a component of Adjusted EBITDA as it is reported as a component of other (expense) income, net.

Concentrations

For the nine months ended September 30, 2021 and 2020, BlackRock, Inc. accounted for 12.9% and 10.9% of the Company’s consolidated operating revenues, respectively. For the nine months ended September 30, 2021 and 2020, BlackRock, Inc. accounted for 20.6% and 17.8% of the Index segment operating revenues, respectively. No single customer represented 10.0% or more of operating revenues within the Analytics, ESG and Climate and All Other – Private Assets segments for the nine months ended September 30, 2021 and 2020.

Allowance for Credit Losses on Accounts Receivable

Following the adoption of Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” effective beginning January 1, 2020, the Company records an allowance on customer accounts at the time of billing based on the estimated amount of the billing that will not be collected.

Changes in the allowance for credit losses on doubtful accounts receivable from December 31, 2019 to September 30, 2021 were as follows:

		Amount
		(in thousands)
Balance as of December 31, 2019		$	1,715
Addition (reduction) to credit loss expense			1,712
Write-offs, net of recoveries			(1,844	)
Balance as of December 31, 2020		$	1,583
Addition (reduction) to credit loss expense			1,051
Adjustments and write-offs, net of recoveries			9
Balance as of September 30, 2021		$	2,643

2. RECENT ACCOUNTING STANDARDS UPDATES

There are no pending accounting standards updates that are currently expected to have a material impact on the Company.

3. REVENUE RECOGNITION

MSCI’s revenues are characterized by product type, which broadly reflects the nature of how they are recognized. The Company’s revenue types are recurring subscription, asset-based fees and non-recurring revenues. The Company also reports revenues by segment.

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

		For the Three Months ended September 30, 2021
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Revenue Types
Recurring subscriptions		$	165,310			$	134,320			$	42,592			$	15,418			$	357,640
Asset-based fees			141,745				—				—				—				141,745
Non-recurring			14,448				1,978				1,099				189				17,714
Total		$	321,503			$	136,298			$	43,691			$	15,607			$	517,099

		For the Nine Months ended September 30, 2021
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Revenue Types
Recurring subscriptions		$	480,488			$	399,360			$	115,299			$	48,355			$	1,043,502
Asset-based fees			404,593				—				—				—				404,593
Non-recurring			34,876				6,857				2,450				1,424				45,607
Total		$	919,957			$	406,217			$	117,749			$	49,779			$	1,493,702

		For the Three Months ended September 30, 2020
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Revenue Types
Recurring subscriptions		$	146,387			$	126,251			$	28,152			$	12,400			$	313,190
Asset-based fees			100,371				—				—				—				100,371
Non-recurring			8,933				2,086				399				354				11,772
Total		$	255,691			$	128,337			$	28,551			$	12,754			$	425,333

		For the Nine Months ended September 30, 2020
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Revenue Types
Recurring subscriptions		$	431,631			$	376,505			$	78,961			$	40,402			$	927,499
Asset-based fees			288,642				—				—				—				288,642
Non-recurring			27,582				4,903				1,125				1,978				35,588
Total		$	747,855			$	381,408			$	80,086			$	42,380			$	1,251,729

The tables that follow present the change in accounts receivable and current deferred revenue between the dates indicated:

		Accounts receivable				Deferred revenue
		(in thousands)
Opening (December 31, 2020)		$	558,569			$	675,870
Closing (September 30, 2021)			496,726				643,352
Increase/(decrease)		$	(61,843	)		$	(32,518	)

		Accounts receivable				Deferred revenue
		(in thousands)
Opening (December 31, 2019)		$	499,268			$	574,656
Closing (September 30, 2020)			429,804				531,487
Increase/(decrease)		$	(69,464	)		$	(43,169	)

The amounts of revenue recognized in the periods that were included in the opening current deferred revenue, which reflects contract liability amounts, were $145.2 million and $623.8 million for the three and nine months ended September 30, 2021, respectively and $108.8 million and $494.4 million for the three and nine months ended September 30, 2020, respectively. The difference between the opening and closing balances of the Company’s deferred revenue was primarily driven by an increase in the amortization of deferred revenue to operating revenues, partially offset by an increase in billings. MSCI had an insignificant long-term deferred revenue balance as of September 30, 2021, reflected as a part of “Other non-current liabilities” on its Unaudited Condensed 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
		September 30,
		2021
		(in thousands)
First 12-month period		$	411,996
Second 12-month period			224,765
Third 12-month period			75,756
Periods thereafter			16,102
Total		$	728,619

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. Common shares outstanding include common stock and vested restricted stock unit awards where recipients have satisfied the explicit vesting terms. Diluted EPS reflects the assumed conversion of all dilutive securities.

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

		Three Months Ended							Nine Months Ended
		September 30,							September 30,
		2021				2020			2021				2020
(in thousands, except per share data)
Net income		$	169,876			$	182,358		$	532,118			$	445,606
Basic weighted average common shares outstanding			82,470				83,602			82,521				84,044
Effect of dilutive securities:
Restricted stock units			1,084				877			925				745
Diluted weighted average common shares outstanding			83,554				84,479			83,446				84,789
Earnings per basic common share		$	2.06			$	2.18		$	6.45			$	5.30
Earnings per diluted common share		$	2.03			$	2.16		$	6.38			$	5.26

5. ACQUISITIONS

On September 13, 2021, MSCI acquired all of the issued and outstanding preferred and common shares of Real Capital Analytics, Inc (“RCA”) for an aggregate cash purchase price of $948.7 million, subject to working capital adjustments. This acquisition expands MSCI’s suite of real estate solutions, providing the real estate industry with data, analytics, and support tools to manage investments and understand performance and risk, including climate risk, within their portfolios. RCA has been accounted for as a business combination using the acquisition method of accounting and will be integrated into the All Other – Private Assets reportable segment, as a component of the Real Estate operating segment. A portion of RCA’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, the associated revenue is recorded as recurring subscription revenue.

The components of the preliminary purchase price allocation were as follows:

		Estimated Useful Life		Fair Value
				(in thousands)
Accounts receivable				$	9,751
Other current assets					3,553
Property, equipment and leasehold improvements, net					1,392
Right of use assets					6,441
Other non-current assets					3,215
Deferred revenue					(28,191	)
Other current liabilities					(13,935	)
Long-term operating lease liabilities					(4,849	)
Deferred tax liabilities					(87,513	)
Intangible Assets:
Customer relationships		20 years			175,800
Trademarks		2 years			890
Acquired technology and software		9 years			31,500
Proprietary data		11 years			185,500
Goodwill					665,141
Purchase price, net of cash acquired				$	948,695

The purchase price allocation is based on preliminary valuations and assessments, the estimates and assumptions used may be subject to change within the measurement period, particularly for acquired intangible assets, deferred taxes and certain operating assets and liabilities. 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 not deductible for income tax purposes.

Revenue of RCA recognized within the condensed consolidated financial statements subsequent to the acquisition date was $3.4 million.

6. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

Property, equipment and leasehold improvements, net consisted of the following as of the specified dates:

		As of
		September 30,				December 31,
		2021				2020
		(in thousands)
Computer & related equipment		$	183,688			$	186,786
Furniture & fixtures			14,936				15,276
Leasehold improvements			58,098				56,537
Work-in-process			1,729				2,996
Subtotal			258,451				261,595
Accumulated depreciation and amortization			(187,908	)			(181,149	)
Property, equipment and leasehold improvements, net		$	70,543			$	80,446

Depreciation and amortization expense of property, equipment and leasehold improvements was $6.8 million and $7.5 million for the three months ended September 30, 2021 and 2020, respectively. Depreciation and amortization expense of property, equipment and leasehold improvements was $21.0 million and $22.5 million for the nine months ended September 30, 2021 and 2020, respectively.

7. 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, 2020		$	1,205,758			$	290,976			$	48,047			$	21,241			$	1,566,022
Acquisitions			—				—				—				665,141		(1)		665,141
Foreign exchange translation adjustment			(469	)			—				—				(290	)			(759	)
Goodwill at September 30, 2021		$	1,205,289			$	290,976			$	48,047			$	686,092			$	2,230,404

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

The Company completed its annual goodwill impairment test as of July 1, 2021 on its Index, Analytics, ESG and Climate and Real Estate reporting units, which are also the Company’s operating segments, and no impairments were noted. The Company performed a test for impairment and determined that it was more likely than not that the fair value for each was not less than the carrying value. See Note 12, “Segment Information,” for further descriptions of the operating segments.

Intangible Assets, Net

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands)		2021				2020				2021				2020
Amortization expense of acquired intangible assets		$	9,602			$	8,325			$	26,346			$	25,710
Amortization expense of internally developed capitalized software			4,503				6,008				17,210				16,461
Write-off of internally developed capitalized software			—				—				16,013				—
Total amortization of intangible assets expense		$	14,105			$	14,333			$	59,569			$	42,171

As a result of 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 three months ended June 30, 2021. The non-cash charge is recorded as a component of “Amortization of intangible assets” on the Condensed Consolidated Statement of Income.

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

		As of
		September 30,				December 31,
		2021				2020
		(in thousands)
Gross intangible assets:
Customer relationships		$	532,500			$	356,700
Trademarks			208,190				207,300
Acquired technology and software			209,220				177,720
Internally developed capitalized software			95,972				113,188
Proprietary data			214,127				28,627
Subtotal			1,260,009				883,535
Foreign exchange translation adjustment			(6,026	)			(5,262	)
Total gross intangible assets		$	1,253,983			$	878,273
Accumulated amortization:
Customer relationships		$	(270,212	)		$	(253,465	)
Trademarks			(150,074	)			(143,207	)
Acquired technology and software			(174,690	)			(174,032	)
Internally developed capitalized software			(44,284	)			(57,464	)
Proprietary data			(17,855	)			(15,730	)
Subtotal			(657,115	)			(643,898	)
Foreign exchange translation adjustment			776				373
Total accumulated amortization		$	(656,339	)		$	(643,525	)
Net intangible assets:
Customer relationships		$	262,288			$	103,235
Trademarks			58,116				64,093
Acquired technology and software			34,530				3,688
Internally developed capitalized software			51,688				55,724
Proprietary data			196,272				12,897
Subtotal			602,894				239,637
Foreign exchange translation adjustment			(5,250	)			(4,889	)
Total net intangible assets		$	597,644			$	234,748

The following table presents the estimated amortization expense for the remainder of the year ending December 31, 2021 and succeeding years:

Years Ending December 31,		Amortization Expense
		(in thousands)
Remainder of 2021		$	21,514
2022			83,721
2023			77,814
2024			69,965
2025			50,789
Thereafter			293,841
Total		$	597,644

8. COMMITMENTS AND CONTINGENCIES

Senior Unsecured Notes. The Company had an aggregate of $4,200.0 million in senior unsecured notes (collectively, the “Senior Notes”) outstanding at September 30, 2021, as presented in the table below:

				Principal Amount Outstanding at				Carrying Value at				Carrying Value at				Fair Value at				Fair Value at
		Maturity Date		September 30, 2021				September 30, 2021				December 31, 2020				September 30, 2021				December 31, 2020
		(in thousands)
Long-term debt
4.75% senior unsecured notes due 2026		August 1, 2026			-				-				496,257				-				522,325
5.375% senior unsecured notes due 2027		May 15, 2027			-				-				495,819				-				538,100
4.000% senior unsecured notes due 2029		November 15, 2029			1,000,000				991,182				990,364				1,059,890				1,073,040
3.625% senior unsecured notes due 2030		September 1, 2030			900,000				894,097				395,458				936,603				419,428
3.875% senior unsecured notes due 2031		February 15, 2031			1,000,000				989,700				988,879				1,050,000				1,063,430
3.625% senior unsecured notes due 2031		November 1, 2031			600,000				593,374				-				625,296				-
3.250% senior unsecured notes due 2033		August 15, 2033			700,000				692,026				-				709,268				-
Total long-term debt				$	4,200,000			$	4,160,379			$	3,366,777			$	4,381,057			$	3,616,323

Interest payments attributable to the Senior Notes are due as presented in the following table:

		First semi-annual interest payment date		Second semi-annual interest payment date
Senior Notes
4.75% senior unsecured notes due 2026		February 1		August 1
5.375% senior unsecured notes due 2027		May 15		November 15
4.000% senior unsecured notes due 2029		May 15		November 15
3.625% senior unsecured notes due 2030		March 1		September 1
3.875% senior unsecured notes due 2031		June 1		December 1
3.625% senior unsecured notes due 2031		May 1		November 1
3.250% senior unsecured notes due 2033		February 15		August 15

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

On March 26, 2021, the Company issued $500.0 million aggregate principal amount of 3.625% Senior Unsecured Notes due 2030 (the “2030 Senior Notes”) in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The 2030 Senior Notes constitute a further issuance of, are fully fungible with, rank equally with and form a single series with the $400.0 million aggregate principal amount of the 3.625% senior unsecured notes due 2030 issued on March 4, 2020. In connection with the completion of the offering, the Company announced that it intended to use a portion of the net proceeds from the offering, together with available cash, for the pre-maturity redemption of all $500.0 million aggregate principal amount outstanding of its 4.750% senior unsecured notes due 2026 (the “2026 Senior Notes”). On April 12, 2021 the Company completed the pre-maturity redemption of all of its 2026 Senior Notes. The pre-maturity redemption of the 2026 Senior Notes resulted in an approximately $21.8 million loss on extinguishment that was recorded in other expense (income) during the three months ended June 30, 2021, which includes an applicable premium of approximately $18.2 million (as set forth in the indenture governing the terms of the 2026 Senior Notes) and the write-off of approximately $3.6 million of unamortized debt issuance costs associated with the 2026 Senior Notes.

The 2030 Senior Notes are scheduled to mature and be paid in full 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. At any time prior to March 1, 2023, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2030 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.

On May 14, 2021, the Company issued $600.0 million aggregate principal amount of 3.625% Senior Unsecured Notes due 2031 (the “2031 Senior Notes”) in a private offering that was exempt from the registration requirements of the Securities Act. The 2031 Senior Notes are scheduled to mature and be paid in full on November 1, 2031. At any time prior to November 1, 2026, the Company may redeem all or part of the 2031 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 2031 Senior Notes, together with accrued and unpaid interest, on or after November 1, 2026, at redemption prices set forth in the indenture governing the 2031 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 2031 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.

On August 17, 2021, the Company issued $700.0 million aggregate principal amount of 3.250% Senior Unsecured Notes due 2033 (the “2033 Senior Notes”) in a private offering that was exempt from the registration requirements of the Securities Act. In connection with the completion of the offering, the Company announced that it intended to use a portion of the net proceeds from the offering for the pre-maturity redemption of all $500.0 million aggregate principal amount outstanding of its 5.375% senior unsecured notes due 2027 (the “2027 Senior Notes”). On September 2, 2021 the Company completed the pre-maturity redemption of all of its 2027 Senior Notes, which are reflected in the three months ended September 30, 2021. The pre-maturity redemption of the 2027 Senior Notes resulted in an approximately $37.3 million loss on extinguishment that was recorded in other expense (income) during the three months ended September 30, 2021, which includes an applicable premium of approximately $33.6 million (as set forth in the indenture governing the terms of the 2027 Senior Notes) and the write-off of approximately $3.7 million of unamortized debt issuance costs associated with the 2027 Senior Notes.

The 2033 Senior Notes are scheduled to mature and be paid in full 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.

Revolver. Since November 20, 2014, the Company has maintained a revolving credit agreement with a syndicate of banks (as amended, the “Revolving Credit Agreement”). On March 29, 2021, the Company entered into Amendment No. 4 (the “Fourth Amendment”) to the Revolving Credit Agreement. The Fourth Amendment, among other things, (i) increased aggregate commitments available to be borrowed by $100.0 million to an aggregate of $500.0 million of availability thereunder until November 2024, at which point the aggregate commitments will be $467.5 million, and (ii) extended the term to March 2026. At September 30, 2021, the Revolving Credit Agreement was undrawn.

In connection with the closings of the Senior Notes offerings, entry into the Revolving Credit Agreement and the subsequent amendments, the Company paid certain financing fees which, together with the existing fees related to prior credit facilities, are being amortized over their related lives. At September 30, 2021, $41.8 million of the deferred financing fees and premium remain unamortized, $0.5 million of which is included in “Prepaid and other assets,” $1.7 million of which is included in “Other non-current assets” and $39.6 million of which is included in “Long-term debt” on the Unaudited Condensed Consolidated Statement of Financial Condition.

9. LEASES

The Company recognized $7.6 million and $7.5 million of operating lease expenses for the three months ended September 30, 2021 and 2020, respectively. The Company recognized $22.7 million and $25.4 million of operating lease expenses for the nine months ended September 30, 2021 and 2020, respectively. The amounts associated with variable lease costs, short-term lease costs and sublease income were not material for any of the three and nine months ended September 30, 2021 and 2020.

Future minimum commitments for the Company’s operating leases in place as of September 30, 2021, the interest and other relevant line items in the Unaudited Condensed Consolidated Statement of Financial Condition are as follows:

Maturity of Lease Liabilities		Operating
(in thousands)		Leases
Remainder of 2021		$	6,010
2022			29,889
2023			28,985
2024			23,101
2025			21,623
Thereafter			90,206
Total lease payments		$	199,814
Less: Interest			(25,883	)
Present value of lease liabilities		$	173,931
Other accrued liabilities		$	23,412
Long-term operating lease liabilities		$	150,519

Lease term and discount rate for the Company’s operating leases in place as of September 30, 2021 are as follows:

		As of
		September 30,
Lease Term and Discount Rate		2021
Weighted-average remaining lease term (years)			8.27
Weighted-average discount rate			3.14	%

Other information for the Company’s operating leases in place for the nine months ended September 30, 2021 are as follows:

		Nine Months Ended
Other Information		September 30,
(in thousands)		2021				2020
Operating cash flows used for operating leases		$	23,038			$	22,735
Leased assets obtained in exchange for new operating lease liabilities		$	20,109			$	7,491

10. SHAREHOLDERS’ EQUITY (DEFICIT)

Return of capital

On October 29, 2020, the Board of Directors authorized a stock repurchase program for the purchase of up to $1,000.0 million worth of shares of MSCI’s common stock in addition to the $804.5 million of authorization then remaining under a previously existing share repurchase program (the “2020 Repurchase Program”) for a total of $1,804.5 million of stock repurchase authorization.

Share repurchases made pursuant to the 2020 Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice. As of September 30, 2021, there was $1,594.4 million of available authorization remaining under the 2020 Repurchase Program.

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

Nine Months Ended		Average Price Paid Per Share				Total Number of Shares Repurchased				Dollar Value of Shares Repurchased
						(in thousands)
September 30, 2021		$	407.70				330			$	134,340
September 30, 2020		$	278.69				2,021			$	563,336

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

		Dividends
(in thousands, except per share amounts)		Per Share				Declared				Distributed				(Released)/Deferred
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
Total		$	2.60			$	217,286			$	216,603			$	683
2020
Three Months Ended March 31,		$	0.68			$	59,233			$	59,455			$	(222	)
Three Months Ended June 30,		0.68					57,360				57,068				292
Three Months Ended September 30,		0.78					65,830				65,454				376
Total		$	2.14			$	182,423			$	181,977			$	446

Common Stock.

The following table presents activity related to shares of common stock issued and repurchased during the nine months ended September 30, 2021:

		Common Stock				Treasury				Common Stock
		Issued				Stock				Outstanding
Balance at December 31, 2020			132,829,175				(50,255,768	)			82,573,407
Dividend payable/paid			160				(48	)			112
Common stock issued			301,227				—				301,227
Shares withheld for tax withholding			—				(122,924	)			(122,924	)
Shares repurchased under stock repurchase programs			—				(329,508	)			(329,508	)
Shares issued to directors			—				—				—
Balance at March 31, 2021			133,130,562				(50,708,248	)			82,422,314
Dividend payable/paid			43				(43	)			—
Common stock issued			10,692				—				10,692
Shares withheld for tax withholding			—				(1,303	)			(1,303	)
Shares repurchased under stock repurchase programs			—				—				—
Shares issued to directors			1,308				4,826				6,134
Balance at June 30, 2021			133,142,605				(50,704,768	)			82,437,837
Dividend payable/paid			33				(33	)			—
Common stock issued			17,592				—				17,592
Shares withheld for tax withholding			—				(9,092	)			(9,092	)
Shares repurchased under stock repurchase programs			—				—				—
Shares issued to directors			—				377				377
Balance at September 30, 2021			133,160,230				(50,713,516	)			82,446,714

11. INCOME TAXES

The Company’s provision for income taxes was $80.3 million and $45.5 million for the nine months ended September 30, 2021 and 2020, respectively. These amounts reflect effective tax rates of 13.1% and 9.3% for the nine months ended September 30, 2021 and 2020, respectively.

The effective tax rate of 13.1% for the nine months ended September 30, 2021 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $49.3 million, in relation to pretax income. For the nine months ended September 30, 2021, these discrete items primarily related to $22.7 million of excess tax benefits recognized on share-based compensation vested during the period and $15.2 million related to the tax impact of loss on debt extinguishment recognized during the period on the redemption of the 2027 Senior Notes and 2026 Senior Notes. Also included in the discrete items is a $5.1 million benefit related to prior year settlements, a $2.3 million benefit related to the revaluation of deferred taxes as a result of

the enactment of an increase in the UK corporate tax rate, a $2.0 million benefit related to the filing of prior year refund claims and $2.0 million of tax benefits related to other prior year items. In addition, the effective tax rate was impacted by the level of earnings.

The effective tax rate of 9.3% for the nine months ended September 30, 2020 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $61.7 million. For the nine months ended September 30, 2020, these discrete items primarily related to $21.9 million of excess tax benefits recognized on share-based compensation vested during the period, $20.8 million related to the favorable impact on prior years of final regulations released during the three months ended September 30, 2020 clarifying certain provisions established in the Tax Cuts and Jobs Act that was enacted on December 22, 2017 (“2017 Tax Act”) and $11.5 million related to the tax impact of loss on debt extinguishment recognized during the period. The discrete items also included a $6.3 million benefit related to the revaluation of the cost of deemed repatriation of foreign earnings.

The Company is under examination by tax authorities in certain jurisdictions, including foreign jurisdictions, such as the United Kingdom, Switzerland and India, and states 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 through 2020.

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. During the nine months ended September 30, 2021, the Company’s unrecognized tax benefits increased by $12.6 million principally due to the filing of prior year refund claims, partially offset by the resolution of prior year items. 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 $26.7 million in the next twelve months as a result of the resolution of tax examinations.

12. SEGMENT INFORMATION

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

Effective January 1, 2021, the Company began presenting four reportable segments with the ESG and Climate operating segment being presented as a separate reportable segment. The operating segments of Real Estate and Burgiss do not individually meet the segment reporting thresholds and have been combined and presented as part of All Other – Private Assets reportable segment. The Company’s ownership interest in Burgiss is classified as an equity-method investment. Therefore, the All Other – Private Assets segment does 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 is not a component of Adjusted EBITDA as it is reported as a component of other (expense) income, net. Prior period amounts have been recast to reflect the current presentation.

The Index operating segment offers equity and fixed income indexes. The indexes are used in many areas of the investment process, including index-linked product creation (e.g., Exchange Traded Funds (“ETFs”) and futures and options), performance benchmarking, portfolio construction and rebalancing, broker-dealer structured products 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 an analysis of market, credit, liquidity and counterparty risk across all major asset classes, spanning short-, medium- and long-term time horizons. Clients access Analytics content through MSCI’s own 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, MSCI ESG Research data and ratings, as well as climate solutions, are used in the construction of equity and fixed income indexes to help institutional investors more effectively benchmark ESG and climate investment performance, issue index-based investment products, as well as manage, measure and report on ESG and climate mandates.

The Real Estate operating segment offers research, reporting, market and transaction data and benchmarking and intelligence offerings that provide real estate performance analysis for funds, investors and managers. Real Estate performance and risk analytics, including climate solutions, range from enterprise-wide to property-specific analysis. The Real Estate operating segment also provides business intelligence and market simulation analysis to real estate owners, managers, developers and brokers worldwide. Financial

results related to the acquisition of RCA have been included prospectively as a component of the Real Estate operating segment, presented as a component of the All Other – Private Assets reportable segment, as of September 13, 2021.

The Burgiss operating segment represents the Company’s equity method investment in Burgiss, a global provider of investment decision support tools for private capital.

The change in reportable segments has not resulted in any changes to MSCI’s Chief Operating Decision Maker (“CODM”) or the basis for segment profitability from the information disclosed in our 2020 Annual Report on Form 10-K. The CODM continues to measure and evaluate reportable segments based on segment operating revenues as well as Adjusted EBITDA and other measures. The Company excludes the following items from segment Adjusted EBITDA: provision for income taxes, other expense (income), net, depreciation and amortization of property, equipment and leasehold improvements, amortization of intangible assets and, at times, certain other transactions or adjustments, including certain non-recurring acquisition-related integration and transaction costs, that the CODM does not consider for the purposes of making decisions to allocate resources among segments or to assess segment performance. Although these amounts are excluded from segment Adjusted EBITDA, they are included in reported consolidated net income and are included in the reconciliation that follows.

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
		(in thousands)
Operating revenues
Index		$	321,503			$	255,691			$	919,957			$	747,855
Analytics			136,298				128,337				406,217				381,408
ESG and Climate			43,691				28,551				117,749				80,086
All Other - Private Assets			15,607				12,754				49,779				42,380
Total		$	517,099			$	425,333			$	1,493,702			$	1,251,729

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2021				2020				2021				2020
		(in thousands)
Index Adjusted EBITDA		$	245,587			$	194,720			$	698,934			$	561,563
Analytics Adjusted EBITDA			50,291				45,056				145,836				127,540
ESG and Climate Adjusted EBITDA			9,820				7,658				20,585				16,783
All Other - Private Assets Adjusted EBITDA			897				2,013				12,775				9,488
Total operating segment profitability			306,595				249,447				878,130				715,374
Acquisition-related integration and transaction costs			5,451				—				5,451				—
Amortization of intangible assets			14,105				14,333				59,569				42,171
Depreciation and amortization of property, equipment and leasehold improvements			6,809				7,494				20,972				22,524
Operating income			280,230				227,620				792,138				650,679
Other expense (income), net			79,580				38,577				179,765				159,620
Provision for income taxes			30,774				6,685				80,255				45,453
Net income		$	169,876			$	182,358			$	532,118			$	445,606

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
			2021				2020			2021				2020
		(in thousands)
Operating revenues
Americas:
United States		$	213,756			$	180,206			$	611,226			$	537,071
Other			22,060				18,039				63,259				52,686
Total Americas			235,816				198,245				674,485				589,757
Europe, the Middle East and Africa ("EMEA"):
United Kingdom			87,101				65,155				250,984				193,042
Other			113,102				90,539				332,554				268,677
Total EMEA			200,203				155,694				583,538				461,719
Asia & Australia:
Japan			23,384				19,885				68,019				59,002
Other			57,696				51,509				167,660				141,251
Total Asia & Australia			81,080				71,394				235,679				200,253
Total		$	517,099			$	425,333			$	1,493,702			$	1,251,729

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
		September 30,				December 31,
		2021				2020
		(in thousands)
Long-lived assets
Americas:
United States		$	172,207			$	182,776
Other			13,854				13,949
Total Americas			186,061				196,725
EMEA:
United Kingdom			19,384				19,678
Other			37,046				33,561
Total EMEA			56,430				53,239
Asia & Australia:
Japan			1,347				1,896
Other			32,290				37,946
Total Asia & Australia			33,637				39,842
Total		$	276,128			$	289,806

13. SUBSEQUENT EVENTS

On October 25, 2021, the Board of Directors declared a quarterly cash dividend of $1.04 per share for the three months ending December 31, 2021 (“fourth quarter 2021”). The fourth quarter 2021 dividend is payable on November 30, 2021 to shareholders of record as of the close of trading on November 12, 2021.