Item 1. Financial Statements

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except per share and share data)

		As of
		June 30,				December 31,
		2022				2021
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	842,300			$	1,421,449
Accounts receivable, net of allowances			586,815				664,511
Prepaid income taxes			15,900				5,951
Prepaid and other assets			44,066				51,499
Total current assets			1,489,081				2,143,410
Property, equipment and leasehold improvements, net			59,390				66,715
Right of use assets			128,122				144,584
Goodwill			2,231,154				2,236,386
Intangible assets, net			576,362				593,341
Equity method investment			216,554				218,763
Deferred tax assets			64,216				40,119
Other non-current assets			68,473				63,385
Total assets		$	4,833,352			$	5,506,703
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	9,295			$	13,448
Income taxes payable			38,615				59,635
Accrued compensation and related benefits			106,797				207,640
Current portion of long-term debt			6,532				—
Other accrued liabilities			151,021				145,302
Deferred revenue			808,020				824,912
Total current liabilities			1,120,280				1,250,937
Long-term debt			4,505,338				4,161,422
Long-term operating lease liabilities			132,494				150,029
Deferred tax liabilities			3,841				3,650
Other non-current liabilities			97,845				104,132
Total liabilities			5,859,798				5,670,170
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; 133,604,132 and 133,162,178 common shares issued and 80,496,258 and 82,439,449 common shares outstanding at June 30, 2022 and December 31, 2021, respectively)			1,336				1,332
Treasury shares, at cost (53,107,874 and 50,722,729 common shares held at June 30, 2022 and December 31, 2021, respectively)			(5,699,069	)			(4,540,144	)
Additional paid in capital			1,492,334				1,457,623
Retained earnings			3,243,654				2,976,517
Accumulated other comprehensive loss			(64,701	)			(58,795	)
Total shareholders’ equity (deficit)			(1,026,446	)			(163,467	)
Total liabilities and shareholders’ equity (deficit)		$	4,833,352			$	5,506,703

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021
		(unaudited)
Operating revenues		$	551,806			$	498,180			$	1,111,751			$	976,603
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)			100,768				87,327				203,539				173,107
Selling and marketing			61,073				58,191				127,126				114,658
Research and development			23,916				27,531				52,238				52,393
General and administrative			36,724				30,182				82,291				64,910
Amortization of intangible assets			22,179				30,396				43,899				45,464
Depreciation and amortization of property, equipment and leasehold improvements			6,765				7,020				13,299				14,163
Total operating expenses			251,425				240,647				522,392				464,695
Operating income			300,381				257,533				589,359				511,908
Interest income			(924	)			(347	)			(1,222	)			(733	)
Interest expense			41,085				39,557				81,799				77,141
Other expense (income)			188				22,628				(193	)			23,777
Other expense (income), net			40,349				61,838				80,384				100,185
Income before provision for income taxes			260,032				195,695				508,975				411,723
Provision for income taxes			49,445				30,272				69,965				49,481
Net income		$	210,587			$	165,423			$	439,010			$	362,242
Earnings per share:
Basic		$	2.60			$	2.01			$	5.40			$	4.39
Diluted		$	2.59			$	1.99			$	5.37			$	4.34
Weighted average shares outstanding:
Basic			80,923				82,454				81,255				82,546
Diluted			81,295				83,295				81,789				83,393

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021
		(unaudited)
Net income		$	210,587			$	165,423			$	439,010			$	362,242
Other comprehensive (loss) income:
Foreign currency translation adjustments			(11,796	)			879				(14,746	)			(826	)
Income tax effect			1,606				(35	)			2,468				577
Foreign currency translation adjustments, net			(10,190	)			844				(12,278	)			(249	)
Pension and other post-retirement adjustments			7,376				(59	)			7,486				197
Income tax effect			(1,070	)			22				(1,114	)			(98	)
Pension and other post-retirement adjustments, net			6,306				(37	)			6,372				99
Other comprehensive (loss) income, net of tax			(3,884	)			807				(5,906	)			(150	)
Comprehensive income		$	206,703			$	166,230			$	433,104			$	362,092

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, 2021		$	1,332			$	(4,540,144	)		$	1,457,623			$	2,976,517			$	(58,795	)		$	(163,467	)
Net income															228,423								228,423
Dividends declared ($1.04 per common share)															(87,280	)							(87,280	)
Dividends paid in shares											77												77
Other comprehensive income (loss), net of tax																			(2,022	)			(2,022	)
Common stock issued			4																				4
Shares withheld for tax withholding and exercises							(105,000	)															(105,000	)
Compensation payable in common stock											22,754												22,754
Common stock repurchased and held in treasury							(772,657	)															(772,657	)
Common stock issued to Directors and (held in)/released from treasury							(21	)															(21	)
Balance at March 31, 2022			1,336				(5,417,822	)			1,480,454				3,117,660				(60,817	)			(879,189	)
Net income															210,587								210,587
Dividends declared ($1.04 per common share)															(84,593	)							(84,593	)
Dividends paid in shares											22												22
Other comprehensive income (loss), net of tax																			(3,884	)			(3,884	)
Common stock issued																							—
Shares withheld for tax withholding and exercises							(3,862	)															(3,862	)
Compensation payable in common stock											11,858												11,858
Common stock repurchased and held in treasury							(276,994	)															(276,994	)
Common stock issued to Directors and (held in)/released from treasury							(391	)															(391	)
Balance at June 30, 2022		$	1,336			$	(5,699,069	)		$	1,492,334			$	3,243,654			$	(64,701	)		$	(1,026,446	)
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	)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

		Six Months Ended
		June 30,
		2022				2021
		(unaudited)
Cash flows from operating activities
Net income		$	439,010			$	362,242
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets			43,899				45,464
Stock-based compensation expense			34,419				30,856
Depreciation and amortization of property, equipment and leasehold improvements			13,299				14,163
Amortization of right of use assets			12,491				12,129
Loss on impairment of right of use assets			705				—
Amortization of debt origination fees			2,607				2,340
Loss on extinguishment of debt			—				21,792
Deferred taxes			(22,826	)			(8,488	)
Other adjustments			2,511				4,036
Changes in assets and liabilities:
Accounts receivable			70,131				69,119
Prepaid income taxes			(10,686	)			(37,679	)
Prepaid and other assets			6,768				4,597
Other non-current assets			(5,726	)			354
Accounts payable			(4,906	)			(5,211	)
Accrued compensation and related benefits			(97,272	)			(50,793	)
Income taxes payable			(18,407	)			7,699
Other accrued liabilities			6,703				(10,359	)
Deferred revenue			(2,731	)			(12,668	)
Long-term operating lease liabilities			(13,085	)			(11,135	)
Other non-current liabilities			4,098				4,350
Other			(4,129	)			(2,294	)
Net cash provided by operating activities			456,873				440,514
Cash flows from investing activities
Capitalized software development costs			(29,699	)			(18,937	)
Capital expenditures			(4,737	)			(2,473	)
Other			23				(911	)
Net cash used in investing activities			(34,413	)			(22,321	)
Cash flows from financing activities
Proceeds from borrowings, inclusive of premium			355,000				1,103,750
Repayment of borrowings			(5,000	)			(518,245	)
Repurchase of common stock held in treasury			(1,158,513	)			(187,774	)
Payment of dividends			(171,936	)			(130,557	)
Payment of debt issuance costs in connection with debt			(2,277	)			(10,316	)
Payment of contingent consideration			(210	)			—
Net cash (used in) provided by financing activities			(982,936	)			256,858
Effect of exchange rate changes			(18,673	)			(3,570	)
Net (decrease) increase in cash			(579,149	)			671,481
Cash and cash equivalent, beginning of period			1,421,449				1,300,521
Cash and cash equivalent, end of period		$	842,300			$	1,972,002
Supplemental disclosure of cash flow information:
Cash paid for interest		$	78,185			$	77,076
Cash paid for income taxes, net of refunds received		$	124,034			$	83,139
Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities		$	4,928			$	4,393
Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid		$	2,765			$	1,582

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 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 real estate market and transaction data and analysis.

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 June 30, 2022 and December 31, 2021, the results of operations, comprehensive income and shareholders’ equity (deficit) for the three and six months ended June 30, 2022 and 2021 and cash flows for the six months ended June 30, 2022 and 2021. The unaudited condensed consolidated statement of financial condition and related financial statement information as of December 31, 2021 have been derived from the 2021 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, 2021. 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 judgments made by management include such examples as assessment of impairment of goodwill and intangible assets and income taxes. 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. Inter-company balances and transactions are eliminated in consolidation.

Concentrations

For the six months ended June 30, 2022 and 2021, BlackRock, Inc. (“BlackRock”) accounted for 10.8% and 12.4% of the Company’s consolidated operating revenues, respectively. For the six months ended June 30, 2022 and 2021, BlackRock accounted for 18.0% and 19.8% of the Index segment’s 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 six months ended June 30, 2022 and 2021.

Allowance for Doubtful Accounts

Changes in the allowance for doubtful accounts from December 31, 2020 to June 30, 2022 were as follows:

		Amount
		(in thousands)
Balance as of December 31, 2020		$	1,583
Addition (reduction) to credit loss expense			1,210
Write-offs, net of recoveries			(456	)
Balance as of December 31, 2021		$	2,337
Addition (reduction) to credit loss expense			598
Adjustments and write-offs, net of recoveries			(470	)
Balance as of June 30, 2022		$	2,465

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 operating revenues are reported by product type, which generally reflects the timing of recognition. The Company’s operating revenue 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 Three Months ended June 30, 2022
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Operating Revenue Types
Recurring subscriptions		$	179,711			$	139,497			$	54,037			$	33,804			$	407,049
Asset-based fees			132,216				—				—				—				132,216
Non-recurring			9,022				2,187				1,091				241				12,541
Total		$	320,949			$	141,684			$	55,128			$	34,045			$	551,806

		For the Six Months ended June 30, 2022
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Operating Revenue Types
Recurring subscriptions		$	354,209			$	277,296			$	104,609			$	70,695			$	806,809
Asset-based fees			277,269				—				—				—				277,269
Non-recurring			20,230				4,185				2,548				710				27,673
Total		$	651,708			$	281,481			$	107,157			$	71,405			$	1,111,751

		For the Three Months ended June 30, 2021
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Operating Revenue Types
Recurring subscriptions		$	160,061			$	133,368			$	38,567			$	16,134			$	348,130
Asset-based fees			136,142				—				—				—				136,142
Non-recurring			9,760				2,534				741				873				13,908
Total		$	305,963			$	135,902			$	39,308			$	17,007			$	498,180

		For the Six Months ended June 30, 2021
		Segments
(in thousands)		Index				Analytics				ESG and Climate				All Other - Private Assets				Total
Operating Revenue Types
Recurring subscriptions		$	315,178			$	265,040			$	72,707			$	32,937			$	685,862
Asset-based fees			262,848				—				—				—				262,848
Non-recurring			20,428				4,879				1,351				1,235				27,893
Total		$	598,454			$	269,919			$	74,058			$	34,172			$	976,603

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, 2021)		$	664,511			$	824,912
Closing (June 30, 2022)			586,815				808,020
Increase/(decrease)		$	(77,696	)		$	(16,892	)

		Accounts receivable				Deferred revenue
		(in thousands)
Opening (December 31, 2020)		$	558,569			$	675,870
Closing (June 30, 2021)			488,570				662,168
Increase/(decrease)		$	(69,999	)		$	(13,702	)

The amounts of revenue recognized in the periods that were included in the opening current deferred revenue, which reflects contract liability amounts, were $232.9 million and $572.6 million for the three and six months ended June 30, 2022, respectively and $208.3 million and $478.6 million for the three and six months ended June 30, 2021, respectively. The difference between the opening and closing balances of the Company’s deferred revenue is primarily driven by an increase in amortization of deferred revenue to operating revenues, partially offset by an increase in billings. As of June 30, 2022 and December 31, 2021, the Company carried a long-term deferred revenue balance of $26.5 million and $23.4 million, respectively, in “Other non-current liabilities” on the 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
		June 30,
		2022
		(in thousands)
First 12-month period		$	538,308
Second 12-month period			311,282
Third 12-month period			115,464
Periods thereafter			63,060
Total		$	1,028,114

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, restricted stock units (“RSUs”), performance stock units (“PSUs”) and performance stock options (“PSOs”).

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

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021
(in thousands, except per share data)
Net income		$	210,587			$	165,423			$	439,010			$	362,242
Basic weighted average common shares outstanding			80,923				82,454				81,255				82,546
Effect of dilutive securities:
PSUs, RSUs and PSOs			372				841				534				847
Diluted weighted average common shares outstanding			81,295				83,295				81,789				83,393
Earnings per basic common share		$	2.60			$	2.01			$	5.40			$	4.39
Earnings per diluted common share		$	2.59			$	1.99			$	5.37			$	4.34

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 $949.0 million. 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 has been integrated into the All Other – Private Assets reportable segment, as a component of the Real Assets 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				$	9,700
Other current assets					3,721
Property, equipment and leasehold improvements, net					1,204
Right of use assets					6,441
Other non-current assets					3,408
Deferred revenue					(35,194	)
Other current liabilities					(15,312	)
Long-term operating lease liabilities					(4,849	)
Deferred tax liabilities					(85,196	)
Intangible assets:
Proprietary data		11 years			185,500
Customer relationships		20 years			175,800
Acquired technology and software		9 years			31,500
Trademarks		2 years			890
Goodwill					671,346
Purchase price, net of cash acquired				$	948,959

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 and deferred taxes. In the fourth quarter of 2021, the Company early adopted ASU 2021-08, which resulted in an increase to deferred revenue and goodwill and a decrease in deferred tax liabilities recorded as of the opening balance sheet date.

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 was $19.3 million and $38.5 million for the three and six months ended June 30, 2022, respectively.

6. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

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

		As of
		June 30,				December 31,
		2022				2021
		(in thousands)
Computer & related equipment		$	180,390			$	179,557
Furniture & fixtures			14,679				14,194
Leasehold improvements			56,597				56,308
Work-in-process			2,154				2,699
Subtotal			253,820				252,758
Accumulated depreciation and amortization			(194,430	)			(186,043	)
Property, equipment and leasehold improvements, net		$	59,390			$	66,715

Depreciation and amortization expense of property, equipment and leasehold improvements was $6.8 million and $7.0 million for the three months ended June 30, 2022 and 2021, respectively. Depreciation and amortization expense of property, equipment and leasehold improvements was $13.3 million and $14.2 million for the six months ended June 30, 2022 and 2021, 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, 2021		$	1,205,443			$	290,976			$	48,047			$	691,920			$	2,236,386
Acquisitions (1)			—				—				—				472		(1)		472
Foreign exchange translation adjustment			(3,529	)			—				—				(2,175	)			(5,704	)
Goodwill at June 30, 2022		$	1,201,914			$	290,976			$	48,047			$	690,217			$	2,231,154

(1)	Reflects the impact of measurement period adjustments associated with the acquisition of RCA.

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								Six Months Ended
		June 30,								June 30,
(in thousands)		2022				2021				2022				2021
Amortization expense of acquired intangible assets		$	15,854			$	8,376			$	31,752			$	16,744
Amortization expense of internally developed capitalized software			6,325				6,007				12,147				12,707
Write-off of internally developed capitalized software			—				16,013				—				16,013
Total amortization of intangible assets expense		$	22,179			$	30,396			$	43,899			$	45,464

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

		As of
		June 30,				December 31,
		2022				2021
		(in thousands)
Gross intangible assets:
Customer relationships		$	532,500			$	532,400
Proprietary data			220,778				220,639
Acquired technology and software			209,220				209,220
Trademarks			208,190				208,190
Internally developed capitalized software			135,824				106,181
Subtotal			1,306,512				1,276,630
Foreign exchange translation adjustment			(12,216	)			(5,782	)
Total gross intangible assets		$	1,294,296			$	1,270,848
Accumulated amortization:
Customer relationships		$	(293,163	)		$	(277,865	)
Proprietary data			(32,284	)			(22,678	)
Acquired technology and software			(177,776	)			(175,718	)
Trademarks			(157,256	)			(152,468	)
Internally developed capitalized software			(61,566	)			(49,394	)
Subtotal			(722,045	)			(678,123	)
Foreign exchange translation adjustment			4,111				616
Total accumulated amortization		$	(717,934	)		$	(677,507	)
Net intangible assets:
Customer relationships		$	239,337			$	254,535
Proprietary data			188,494				197,961
Acquired technology and software			31,444				33,502
Trademarks			50,934				55,722
Internally developed capitalized software			74,258				56,787
Subtotal			584,467				598,507
Foreign exchange translation adjustment			(8,105	)			(5,166	)
Total net intangible assets		$	576,362			$	593,341

The following table presents the estimated amortization expense for the remainder of the year ending December 31, 2022 and succeeding years:

Years Ending December 31,		Amortization Expense
		(in thousands)
Remainder of 2022		$	47,345
2023			90,144
2024			83,022
2025			57,191
2026			37,065
Thereafter			261,595
Total		$	576,362

8. COMMITMENTS AND CONTINGENCIES

As of June 30, 2022, the Company had outstanding an aggregate of $4,200.0 million in senior unsecured notes (collectively, the “Senior Notes”) and an aggregate of $350.0 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:

				Principal Amount Outstanding at				Carrying Value at				Carrying Value at				Fair Value at				Fair Value at
		Maturity Date		June 30, 2022				June 30, 2022				December 31, 2021				June 30, 2022				December 31, 2021
		(in thousands)
Debt
4.000% senior unsecured notes due 2029		November 15, 2029			1,000,000				992,000				991,455				889,250				1,047,950
3.625% senior unsecured notes due 2030		September 1, 2030			900,000				894,594				894,263				753,390				924,777
3.875% senior unsecured notes due 2031		February 15, 2031			1,000,000				990,520				989,973				855,950				1,046,620
3.625% senior unsecured notes due 2031		November 1, 2031			600,000				593,867				593,538				498,282				625,536
3.250% senior unsecured notes due 2033		August 15, 2033			700,000				692,528				692,193				559,160				710,906
Variable rate Tranche A Term Loans due 2027		February 16, 2027			350,000				348,361				—				346,500				—
Total debt				$	4,550,000			$	4,511,870			$	4,161,422			$	3,902,532			$	4,355,789

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 20271		Quarterly		October 15

(1)The first payment will occur on October 15, 2022.

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.

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 “Credit Agreement”), amending and restating in its entirety the Company’s prior revolving credit agreement (the “Prior Revolving Credit Agreement”). The Credit Agreement makes available to the Company (x) an aggregate of $500.0 million of revolving loan commitments, which may be drawn until February 16, 2027, and (y) the TLA Facility. At June 30, 2022, the revolving loan commitments were undrawn. As noted above, at June 30, 2022, the commitments under the TLA Facility were drawn in full, and the resulting Tranche A Term Loans mature on February 16, 2027. The obligations under the Credit Agreement are general unsecured obligations of the Company and the guarantors.

Interest on the Tranche A Term Loans under the TLA Facility 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 and will be due on each Interest Payment Date (as defined in the Credit Agreement). Until the delivery of financial statements to the administrative agent for the three months ending June 30, 2022, the applicable margin is 1.00% for Base Rate loans, and 2.00% for SOFR loans. Thereafter, the applicable margin is calculated by reference to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and ranges between 1.50% to 2.00% for SOFR loans, and 0.50% to 1.00% for Base Rate loans. At June 30, 2022, the interest rate on the TLA Facility was 3.28%.

In connection with the closings of the Senior Notes offerings, entry into the Prior Revolving Credit Agreement and the subsequent amendments thereto and 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 June 30, 2022, $40.5 million of the deferred financing fees and premium remain unamortized, $0.5 million of which is included in “Prepaid and other assets,” $1.9 million of which is included in “Other non-current assets” and $38.1 million of which is included in “Long-term debt” on the Unaudited Condensed Consolidated Statement of Financial Condition.

9. LEASES

The Company recognized $7.5 million of operating lease expenses for each of the three months ended June 30, 2022 and 2021. The Company recognized $15.1 million of operating lease expenses for each of the six months ended June 30, 2022 and 2021. The amounts associated with variable lease costs, short-term lease costs and sublease income were not material for any of the three and six months ended June 30, 2022 and 2021.

Maturities of the Company’s operating lease liabilities as of June 30, 2022 are as follows:

Maturity of Lease Liabilities		Operating
(in thousands)		Leases
Remainder of 2022		$	13,895
2023			29,357
2024			22,322
2025			21,153
2026			19,460
Thereafter			73,176
Total lease payments		$	179,363
Less: Interest			(22,152	)
Present value of lease liabilities		$	157,211
Other accrued liabilities		$	24,717
Long-term operating lease liabilities		$	132,494

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

		As of
		June 30,				December 31,
Lease Term and Discount Rate		2022				2021
Weighted-average remaining lease term (years)			7.92				8.16
Weighted-average discount rate			3.14	%			3.09	%

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

		Six Months Ended
Other Information		June 30,
(in thousands)		2022				2021
Operating cash flows used for operating leases		$	14,227			$	15,239
Right of use assets obtained in exchange for new operating lease liabilities		$	2,905			$	5,074

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 June 30, 2022, there was $539.5 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:

Six Months Ended		Average Price Paid Per Share				Total Number of Shares Repurchased				Dollar Value of Shares Repurchased
						(in thousands)
June 30, 2022		$	480.68				2,184			$	1,049,651
June 30, 2021		$	407.70				330			$	134,340

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
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
Total		$	2.08			$	171,873			$	172,035			$	(162	)
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
Total		$	1.56			$	130,810			$	130,642			$	168

Common Stock.

The following table presents activity related to shares of common stock issued and repurchased during the six months ended June 30, 2022:

		Common Stock				Treasury				Common Stock
		Issued				Stock				Outstanding
Balance at December 31, 2021			133,162,178				(50,722,729	)			82,439,449
Dividend payable/paid			82				—				82
Common stock issued			417,508				—				417,508
Shares withheld for tax withholding			—				(190,766	)			(190,766	)
Shares repurchased under stock repurchase programs			—				(1,498,143	)			(1,498,143	)
Shares issued to directors			41				(41	)			—
Balance at March 31, 2022			133,579,809				(52,411,679	)			81,168,130
Dividend payable/paid			23				—				23
Common stock issued			20,178				—				20,178
Shares withheld for tax withholding			—				(9,749	)			(9,749	)
Shares repurchased under stock repurchase programs			—				(685,522	)			(685,522	)
Shares issued to directors			4,122				(924	)			3,198
Balance at June 30, 2022			133,604,132				(53,107,874	)			80,496,258

11. INCOME TAXES

The Company’s provision for income taxes was $70.0 million and $49.5 million for the six months ended June 30, 2022 and 2021, respectively. These amounts reflect effective tax rates of 13.7% and 12.0% for the six months ended June 30, 2022 and 2021, respectively.

The effective tax rate of 13.7% for the six months ended June 30, 2022 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $27.2 million, primarily related to $28.3 million of excess tax benefits recognized on share-based compensation vested during the period.

The effective tax rate of 12.0% for the six months ended June 30, 2021 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $34.2 million, primarily related to $21.4 million of excess tax benefits recognized on share-based compensation vested during the period and $5.6 million related to the tax impact of loss on debt extinguishment recognized during the period on the redemption of the Company’s 4.750% senior unsecured notes due 2026 (the “2026 Senior Notes”). Also included in the discrete items is 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 $2.1 million benefit related to the filing of prior year refund claims and $2.8 million of tax benefits related to other prior year items.

The Company is under or open to examination by the IRS and other tax authorities in certain jurisdictions, including foreign jurisdictions, such as the United Kingdom, Switzerland and India, and states in the United States in which the Company has significant operations, such as New York and California. The tax years currently under or open to examination vary by jurisdiction but include years ranging from 2008 onwards.

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 $29.4 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 Assets and The Burgiss Group, LLC (“Burgiss”), which are presented as the following four reportable segments: Index, Analytics, ESG and Climate and All Other – Private Assets. During the three months ended June 30, 2022, the Company renamed the Real Estate operating segment to Real Assets.

The Index operating segment offers equity and fixed income indexes. The indexes are used in many areas of the investment process, including indexed product creation (e.g., Exchange Traded Funds (“ETFs”), mutual funds, annuities, futures, options, structured products and 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 real estate market and transaction data, benchmarks, return-analytics, climate assessments and market insights for funds, investors, managers and other real estate market participants. 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 Burgiss operating segment represents the Company’s equity method investment in Burgiss, a global provider of investment decision support tools for private capital.

The Chief Operating Decision Maker (“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 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								Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021
		(in thousands)
Operating revenues
Index		$	320,949			$	305,963			$	651,708			$	598,454
Analytics			141,684				135,902				281,481				269,919
ESG and Climate			55,128				39,308				107,157				74,058
All Other - Private Assets			34,045				17,007				71,405				34,172
Total		$	551,806			$	498,180			$	1,111,751			$	976,603

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

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021
		(in thousands)
Index Adjusted EBITDA		$	245,170			$	233,468			$	491,045			$	453,347
Analytics Adjusted EBITDA			62,961				49,814				113,850				95,545
ESG and Climate Adjusted EBITDA			14,332				5,720				26,424				10,765
All Other - Private Assets Adjusted EBITDA			8,681				5,947				18,369				11,878
Total operating segment profitability			331,144				294,949				649,688				571,535
Amortization of intangible assets			22,179				30,396				43,899				45,464
Depreciation and amortization of property, equipment and leasehold improvements			6,765				7,020				13,299				14,163
Acquisition-related integration and transaction costs (1)			1,819				—				3,131				—
Operating income			300,381				257,533				589,359				511,908
Other expense (income), net			40,349				61,838				80,384				100,185
Provision for income taxes			49,445				30,272				69,965				49,481
Net income		$	210,587			$	165,423			$	439,010			$	362,242

(1)	Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction.

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

		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2022				2021			2022				2021
		(in thousands)
Operating revenues
Americas:
United States		$	229,732			$	200,781			$	463,088			$	397,470
Other			23,642				21,026				46,109				41,199
Total Americas			253,374				221,807				509,197				438,669
Europe, the Middle East and Africa ("EMEA"):
United Kingdom			89,187				84,802				176,173				163,883
Other			122,515				113,258				254,088				219,452
Total EMEA			211,702				198,060				430,261				383,335
Asia & Australia:
Japan			22,843				22,993				46,033				44,635
Other			63,887				55,320				126,260				109,964
Total Asia & Australia			86,730				78,313				172,293				154,599
Total		$	551,806			$	498,180			$	1,111,751			$	976,603

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
		June 30,				December 31,
		2022				2021
		(in thousands)
Long-lived assets
Americas:
United States		$	176,146			$	167,870
Other			12,656				13,480
Total Americas			188,802				181,350
EMEA:
United Kingdom			19,230				19,563
Other			25,831				34,240
Total EMEA			45,061				53,803
Asia & Australia:
Japan			791				1,150
Other			26,269				31,873
Total Asia & Australia			27,060				33,023
Total		$	260,923			$	268,176

13. SUBSEQUENT EVENTS

On July 25, 2022, the Board of Directors declared a quarterly cash dividend of $1.25 per share for the three months ending September 30, 2022 (“third quarter 2022”). The third quarter 2022 dividend is payable on August 31, 2022 to shareholders of record as of the close of trading on August 12, 2022.