Item 1. Financial Statements

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Item 1. Financial Statements

MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(in thousands, except per share and share data)


	As of
	March 31,		December 31,
(unaudited)	2024		2023
ASSETS
Current assets:
Cash and cash equivalents (includes restricted cash of $3,842 and $3,878 at March 31, 2024 and December 31, 2023, respectively)	$	519,315	$	461,693
Accounts receivable (net of allowances of $4,326 and $3,968 at March 31, 2024 and December 31, 2023, respectively)	745,611		839,555
Prepaid income taxes	44,027		59,002
Prepaid and other assets	55,964		57,903
Total current assets	1,364,917		1,418,153

Property, equipment and leasehold improvements, net	55,802		55,920
Right of use assets	132,270		115,243
Goodwill	2,890,519		2,887,692
Intangible assets, net	948,479		956,234
Deferred tax assets	38,886		41,074
Other non-current assets	47,716		43,903
Total assets	$	5,478,589	$	5,518,219


LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	12,048	$	9,812
Income taxes payable	44,733		24,709
Accrued compensation and related benefits	84,582		219,456
Current portion of long-term debt	—		10,902
Other accrued liabilities	173,628		168,282
Deferred revenue	1,053,961		1,083,864
Total current liabilities	1,368,952		1,517,025

Long-term debt	4,507,686		4,496,826
Long-term operating lease liabilities	135,043		120,134
Deferred tax liabilities	17,737		27,028
Other non-current liabilities	99,688		96,970
Total liabilities	6,129,106		6,257,983


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; 134,070,097 and 133,817,332 common shares issued and 79,224,049 and 79,091,212 common shares outstanding at March 31, 2024 and December 31, 2023, respectively)	1,341		1,338
Treasury shares, at cost (54,846,048 and 54,726,120 common shares held at March 31, 2024 and December 31, 2023, respectively)	(6,517,130)		(6,447,101)
Additional paid in capital	1,622,638		1,587,670
Retained earnings	4,306,191		4,179,681
Accumulated other comprehensive loss	(63,557)		(61,352)
Total shareholders’ equity (deficit)	(650,517)		(739,764)

Total liabilities and shareholders’ equity (deficit)	$	5,478,589	$	5,518,219

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


	Three Months Ended March 31,
(unaudited)	2024		2023
Operating revenues	$	679,965	$	592,218

Operating expenses:
Cost of revenues (exclusive of depreciation and amortization)	128,514		108,647
Selling and marketing	72,168		66,475
Research and development	40,525		31,323
General and administrative	56,691		41,044
Amortization of intangible assets	38,604		24,667
Depreciation and amortization of property, equipment and leasehold improvements	4,081		5,460
Total operating expenses	340,583		277,616


Operating income	339,382		314,602

Interest income	(6,048)		(10,362)
Interest expense	46,674		46,206
Other expense (income)	2,863		2,386

Other expense (income), net	43,489		38,230


Income before provision for income taxes	295,893		276,372
Provision for income taxes	39,939		37,644
Net income	$	255,954	$	238,728


Earnings per share:
Basic	$	3.23	$	2.98
Diluted	$	3.22	$	2.97

Weighted average shares outstanding:
Basic	79,195		80,041
Diluted	79,508		80,482

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	Three Months Ended March 31,
(unaudited)	2024		2023
Net income	$	255,954	$	238,728
Other comprehensive income (loss):
Foreign currency translation adjustments	(2,542)		4,362
Income tax effect	329		(1,108)
Foreign currency translation adjustments, net	(2,213)		3,254


Pension and other post-retirement adjustments	21		(513)
Income tax effect	(13)		34
Pension and other post-retirement adjustments, net	8		(479)

Other comprehensive (loss) income, net of tax	(2,205)		2,775

Comprehensive income	$	253,749	$	241,503

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(in thousands)


(unaudited)	Common Stock		Treasury Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2023	$	1,338	$	(6,447,101)	$	1,587,670	$	4,179,681	$	(61,352)	$	(739,764)
Net income							255,954				255,954
Dividends declared ($1.60 per common share)							(129,444)				(129,444)
Dividends paid in shares					74						74
Other comprehensive income (loss), net of tax									(2,205)		(2,205)
Common stock issued	3										3
Shares withheld for tax withholding			(69,991)								(69,991)
Compensation payable in common stock					34,894						34,894
Common stock repurchased and held in treasury											—
Common stock issued to Directors and (held in)/released from treasury			(38)								(38)
Balance at March 31, 2024	$	1,341	$	(6,517,130)	$	1,622,638	$	4,306,191	$	(63,557)	$	(650,517)


Balance at December 31, 2022	$	1,336	$	(5,938,116)	$	1,515,874	$	3,473,192	$	(60,211)	$	(1,007,925)
Net income							238,728				238,728
Dividends declared ($1.38 per common share)							(111,986)				(111,986)
Dividends paid in shares					44						44
Other comprehensive income (loss), net of tax									2,775		2,775
Common stock issued	2										2
Shares withheld for tax withholding			(43,960)								(43,960)
Compensation payable in common stock					20,988						20,988
Common stock repurchased and held in treasury											—
Common stock issued to Directors and (held in)/released from treasury			(30)								(30)
Balance at March 31, 2023	$	1,338	$	(5,982,106)	$	1,536,906	$	3,599,934	$	(57,436)	$	(901,364)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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MSCI INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Three Months Ended March 31,
(unaudited)	2024		2023
Cash flows from operating activities
Net income	$	255,954	$	238,728
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	38,604		24,667
Stock-based compensation expense	34,336		21,088
Depreciation and amortization of property, equipment and leasehold improvements	4,081		5,460
Amortization of right of use assets	5,813		5,782
Amortization of debt origination fees	1,280		1,264
Loss on extinguishment of debt	1,510		—
Deferred taxes	(7,625)		(2,254)
Other adjustments	(3,533)		3,906
Changes in assets and liabilities:
Accounts receivable	91,109		22,489
Prepaid income taxes	14,874		3,396
Prepaid and other assets	1,427		(1,194)
Other non-current assets	73		(2,333)
Accounts payable	2,045		(6,327)
Income taxes payable	22,154		19,179
Accrued compensation and related benefits	(132,328)		(108,252)
Other accrued liabilities	3,086		8,305
Deferred revenue	(25,949)		34,427
Long-term operating lease liabilities	(5,666)		(5,047)
Other non-current liabilities	(1,108)		941
Other	—		(84)
Net cash provided by operating activities	300,137		264,141


Cash flows from investing activities
Capitalized software development costs	(19,966)		(15,351)
Capital expenditures	(4,271)		(6,225)
Acquisition of a business, net of cash acquired	(7,820)		—
Other	(276)		(186)
Net cash used in investing activities	(32,333)		(21,762)


Cash flows from financing activities
Repurchase of common stock held in treasury	(69,991)		(43,960)
Payment of dividends	(131,305)		(112,145)
Repayment of borrowings	(339,063)		(2,188)
Proceeds from borrowings	336,875		—
Payment of debt issuance costs	(3,739)		—
Net cash (used in) provided by financing activities	(207,223)		(158,293)


Effect of exchange rate changes	(2,959)		2,958

Net (decrease) increase in cash, cash equivalents and restricted cash	57,622		87,044

Cash, cash equivalents and restricted cash, beginning of period	461,693		993,564
Cash, cash equivalents and restricted cash, end of period	$	519,315	$	1,080,608


Supplemental disclosure of cash flow information:
Cash paid for interest	$	34,050	$	33,803
Cash paid for income taxes, net of refunds received	$	11,393	$	18,965

Supplemental disclosure of non-cash investing activities
Property, equipment and leasehold improvements in other accrued liabilities	$	2,668	$	5,156

Supplemental disclosure of non-cash financing activities
Cash dividends declared, but not yet paid	$	368	$	511

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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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 private asset data and analysis.

Basis of Presentation and Use of Estimates

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. If not materially different, certain note disclosures included therein have been omitted from these interim condensed consolidated financial statements.

In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim consolidated financial statements, have been included. 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 three months ended March 31, 2024 and 2023, BlackRock, Inc. (“BlackRock”) accounted for 10.0% and 10.2% of the Company’s consolidated operating revenues, respectively. For the three months ended March 31, 2024 and 2023, BlackRock accounted for 17.9% and 17.4% 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 or All Other – Private Assets segments for the three months ended March 31, 2024 and 2023.

Allowance for Credit Losses

Changes in the allowance for credit losses from December 31, 2022 to March 31, 2024 were as follows:


(in thousands)	Amount
Balance as of December 31, 2022	$	2,652
Addition to credit loss expense	2,196
Write-offs, net of recoveries	(880)
Balance as of December 31, 2023	$	3,968

Addition to credit loss expense	404
Write-offs, net of recoveries	(46)
Balance as of March 31, 2024	$	4,326

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2. RECENT ACCOUNTING PRONOUNCEMENTS

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

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

3. REVENUE RECOGNITION

MSCI’s operating revenues are reported by product type, which generally reflects the timing of recognition. The Company’s operating 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 March 31, 2024
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	212,952	$	160,551	$	76,418	$	63,134	$	513,055
Asset-based fees	150,259		—		—		—		150,259
Non-recurring	10,661		3,415		1,466		1,109		16,651
Total	$	373,872	$	163,966	$	77,884	$	64,243	$	679,965


	For the Three Months Ended March 31, 2023
	Segments
(in thousands)	Index		Analytics		ESG and Climate		All Other - Private Assets		Total
Operating Revenue Types
Recurring subscriptions	$	196,678	$	144,503	$	65,732	$	38,334	$	445,247
Asset-based fees	133,126		—		—		—		133,126
Non-recurring	9,578		2,567		1,326		374		13,845
Total	$	339,382	$	147,070	$	67,058	$	38,708	$	592,218

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


(in thousands)	Accounts receivable, net of allowances		Deferred revenue
Opening (December 31, 2023)	$	839,555	$	1,083,864
Closing (March 31, 2024)	745,611		1,053,961
Increase/(decrease)	$	(93,944)	$	(29,903)

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(in thousands)	Accounts receivable, net of allowances		Deferred revenue
Opening (December 31, 2022)	$	663,236	$	882,886
Closing (March 31, 2023)	641,584		920,255
Increase/(decrease)	$	(21,652)	$	37,369

The amounts of revenues recognized in the periods that were included in the opening current deferred revenue, which reflects contract liability amounts, were $420.3 million and $356.6 million for the three months ended March 31, 2024 and 2023 respectively. The difference between the opening and closing balances of the Company’s deferred revenue was primarily driven by an increase in amortization of deferred revenue to operating revenues, partially offset by an increase in billings. As of March 31, 2024 and December 31, 2023, the Company carried a long-term deferred revenue balance of $28.2 million and $28.8 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
	March 31,
(in thousands)	2024
First 12-month period	$	843,534
Second 12-month period	519,558
Third 12-month period	246,238
Periods thereafter	171,962
Total	$	1,781,292

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 March 31,
(in thousands, except per share data)	2024		2023
Net income	$	255,954	$	238,728

Basic weighted average common shares outstanding	79,195		80,041
Effect of dilutive securities:
PSUs, RSUs and PSOs	313		441
Diluted weighted average common shares outstanding	79,508		80,482


Earnings per common share:
Basic	$	3.23	$	2.98
Diluted	$	3.22	$	2.97

5. ACQUISITIONS

On October 2, 2023, the Company acquired the remaining 66.4% interest in The Burgiss Group, LLC (“Burgiss”) for $696.8 million in cash (the “step acquisition”). The Company’s existing 33.6% interest in Burgiss had a fair value at acquisition date of

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$353.2 million which resulted in a non-taxable gain of $143.0 million which the Company recognized during the three months ended December 31, 2023. The acquisition of Burgiss will provide the Company with comprehensive data and deep expertise in private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics.

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

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


(in thousands)	Estimated Useful Life	Fair Value
Cash and cash equivalents		$	5,397
Accounts receivable		25,848
Prepaid Income Taxes		30
Other current assets		4,178
Property, equipment and leasehold improvements, net		670
Right of use assets		3,443
Other non-current assets		471
Deferred revenue		(21,479)
Other current liabilities		(13,185)
Long-term operating lease liabilities		(2,525)


Intangible assets:
Proprietary data	11 years	229,900
Customer relationships	21 years	179,900
Acquired technology and software	3 years	19,000
Trademarks	1 year	900
Goodwill		617,386
Net assets acquired		$	1,049,934

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

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

Revenue of Burgiss recognized within the consolidated financial statements was $24.2 million for the three months ended March 31, 2024.

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

On January 2, 2024, MSCI completed the acquisition of Fabric RQ, Inc. (“Fabric”), a wealth technology platform specializing in portfolio design, customization and analytics for wealth managers and advisors. Fabric is a part of the Analytics

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operating segment. The contingent consideration related to Fabric is payable based upon the future product sales of the acquired business.

The Company recognizes the fair value of contingent consideration at the date of acquisition at fair value. The liability associated with any contingent consideration is remeasured to fair value at each reporting date subsequent to the acquisition and changes in the fair value are recorded in the Unaudited Condensed Consolidated Statements of Income.

The following table presents the preliminary acquired balances related to the acquisitions of Trove and Fabric:


(in thousands, except weighted average amortization period of intangible asset)	Trove		Fabric
Acquisition Date	November 1, 2023		January 2, 2024

Cash payments	$	37,473	$	7,959
Contingent consideration liability(1)	—		8,146
Aggregate purchase price	$	37,473	$	16,105


Net tangible assets acquired (liabilities assumed)	$	(4,787)	$	(226)
Intangible assets	7,705		11,300
Goodwill	34,555		5,031
Aggregate purchase price	$	37,473	$	16,105


Weighted average amortization period of intangible assets (years)	13.0		9.1

(1)The fair value of the contingent consideration upon closing of the acquisition of Fabric was $8.1 million. As of March 31, 2024, the fair value of the contingent consideration was $8.3 million, of which $1.8 million is included in “Other accrued liabilities” and $6.5 million is included in “Other non-current liabilities” on the Unaudited Condensed Consolidated Statement of Financial Condition, and is classified as Level 3 within the fair value hierarchy.

The recorded goodwill for Trove is primarily attributable to the utilization of the acquired data as well as expanded market opportunities and for Fabric is primarily attributable to the utilization of the acquired technology platform. Goodwill attributable to the acquisitions of Fabric and Trove are not deductible for federal income tax purposes.

Revenue of Trove and Fabric recognized within the consolidated financial statements was $1.3 million and $0.2 million for the three months ended March 31, 2024, 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
	March 31,		December 31,
(in thousands)	2024		2023
Computer & related equipment	$	170,762	$	192,008
Furniture & fixtures	15,990		16,169
Leasehold improvements	56,636		58,582
Work-in-process	982		897
Subtotal	244,370		267,656

Accumulated depreciation and amortization	(188,568)		(211,736)
Property, equipment and leasehold improvements, net	$	55,802	$	55,920

Depreciation and amortization expense of property, equipment and leasehold improvements was $4.1 million and $5.5 million for the three months ended March 31, 2024 and 2023, respectively.

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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, 2023	$	1,203,435	$	290,976	$	84,724	$	1,308,557	$	2,887,692
Acquisitions (1)	—		5,031		(357)		(1,030)		3,644
Foreign exchange translation adjustment	(291)		—		(347)		(179)		(817)
Goodwill at March 31, 2024	$	1,203,144	$	296,007	$	84,020	$	1,307,348	$	2,890,519

(1)Reflects the impact of the acquisitions of Fabric, Trove and Burgiss.

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 March 31,
(in thousands)	2024		2023
Amortization expense of acquired intangible assets	$	25,267	$	15,831
Amortization expense of internally developed capitalized software	13,337		8,836
Total amortization of intangible assets expense	$	38,604	$	24,667

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


	March 31, 2024						December 31, 2023
(in thousands)	Gross intangible assets:		Accumulated amortization:		Net intangible assets:		Gross intangible assets:		Accumulated amortization:		Net intangible assets:
Customer relationships	$	710,995	$	(349,868)	$	361,127	$	709,299	$	(340,248)	$	369,051
Proprietary data	452,207		(74,675)		377,532		452,543		(64,694)		387,849
Acquired technology and software	238,285		(188,492)		49,793		228,785		(185,583)		43,202
Trademarks	209,090		(174,222)		34,868		209,090		(171,715)		37,375
Internally developed capitalized software	256,288		(131,129)		125,159		237,060		(118,303)		118,757
Total	$	1,866,865	$	(918,386)	$	948,479	$	1,836,777	$	(880,543)	$	956,234

The following table presents the estimated amortization expense for the remainder of the year ending December 31, 2024 and succeeding years:


Years Ending December 31, (in thousands)	Amortization Expense
Remainder of 2024	$	119,766
2025	134,968
2026	99,687
2027	71,025
2028	66,577
Thereafter	456,456
Total	$	948,479

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8. DEBT

As of March 31, 2024, the Company had outstanding an aggregate of $4,200.0 million in senior unsecured notes (collectively, the “Senior Notes”) and $336.9 million under the Revolving Credit Facility (as defined below) as presented in the table below:


		Principal Amount Outstanding at		Carrying Value at		Carrying Value at		Fair Value at		Fair Value at
(in thousands)	Maturity Date	March 31, 2024		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Debt
4.000% senior unsecured notes due 2029	November 15, 2029	$	1,000,000	$	993,909	$	993,637	$	927,200	$	941,090
3.625% senior unsecured notes due 2030	September 1, 2030	900,000		895,752		895,587		799,911		815,526
3.875% senior unsecured notes due 2031	February 15, 2031	1,000,000		992,434		992,161		892,390		914,360
3.625% senior unsecured notes due 2031	November 1, 2031	600,000		595,017		594,852		521,682		529,458
3.250% senior unsecured notes due 2033	August 15, 2033	700,000		693,699		693,532		578,179		586,509
Variable rate Tranche A Term Loans due 2027	February 16, 2027	—		—		337,959		—		337,367
Variable rate revolving loan commitments (1)	January 26, 2029	336,875		336,875		—		333,506		—
Total debt		$	4,536,875	$	4,507,686	$	4,507,728	$	4,052,868	$	4,124,310

(1)As of March 31, 2024 there were $4.8 million in unamortized deferred financing fees associated with the variable rate revolving loan commitments of which $1.0 million is included in “Prepaid and other assets,” and $3.8 million is included in “Other non-current assets” on the Unaudited Condensed Consolidated Statement of Financial Condition.

Maturities of the Company’s principal debt payments as of March 31, 2024 are as follows:


Maturity of Principal Debt Payments (in thousands)	Amounts
Remainder of 2024	$	—
2025	—
2026	—
2027	—
2028	—
Thereafter	4,536,875
Total debt	$	4,536,875

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 Revolving Loan Commitments
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 revolving loan commitments (1)	Variable	February 26

(1)The first payment occurred on February 26, 2024.

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

Credit Agreement. Since November 20, 2014, the Company has maintained a revolving credit agreement with a syndicate of banks. On January 26, 2024, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”), amending and restating in its entirety the Company’s prior Amended and Restated Credit Agreement (the “Prior Credit Agreement”). The Credit Agreement makes available to the Company an aggregate of $1,250.0 million of revolving loan commitments under a

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revolving credit facility (the “Revolving Credit Facility”), which may be drawn until January 26, 2029. At the closing of the Credit Agreement, the Company drew $336.9 million on the Revolving Credit Facility and primarily used the proceeds to prepay all senior unsecured Tranche A Term Loans (the “Tranche A Term Loans”) under the term loan A facility (the “TLA Facility”) under the Prior Credit Agreement. The obligations under the Credit Agreement are general unsecured obligations of the Company. The prepayment of the Tranche A Term Loans and the entry into the Credit Agreement resulted in an approximately $1.5 million loss on extinguishment related to unamortized debt issuance costs. The loss on extinguishment was recorded in “Other expense (income)” on the Unaudited Condensed Consolidated Statement of Income.

Interest on the revolving loans under the Credit Agreement accrues, at a variable rate, based on the secured overnight funding rate (“SOFR”) or the alternate base rate (“Base Rate”), plus, in each case, an applicable margin to be determined based on the credit ratings of the Company’s senior, unsecured long-term debt and will be due on each Interest Payment Date (as defined in the Credit Agreement). So long as the credit rating for the Company’s senior, unsecured long-term debt is set at BBB-/BBB- by each of S&P and Fitch, respectively, the applicable margin is 0.50% for Base Rate loans, and 1.50% for SOFR loans. At March 31, 2024, the interest rate on the revolving loans was 6.93%.

Interest on the Tranche A Term Loans under the TLA Facility accrued, 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 was due on each Interest Payment Date (as defined in the Prior Credit Agreement). The applicable margin was calculated by reference to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and ranged between 1.50% to 2.00% for SOFR loans, and 0.50% to 1.00% for Base Rate loans.

In connection with the closings of the Senior Notes offerings, entry into the Prior 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 March 31, 2024, $33.9 million of the deferred financing fees and premium remain unamortized, $1.0 million of which is included in “Prepaid and other assets,” $3.8 million of which is included in “Other non-current assets” and $29.1 million of which is included in “Long-term debt” on the Unaudited Condensed Consolidated Statement of Financial Condition.

9. LEASES

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


	Three Months Ended March 31,
(in thousands)	2024		2023
Operating lease expenses	$	7,139	$	7,114
Variable lease costs	1,069		891
Short-term lease costs	215		251
Sublease income	(828)		(1,276)
Total lease costs	$	7,595	$	6,980

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Maturities of the Company’s operating lease liabilities as of March 31, 2024 are as follows:


Maturity of Lease Liabilities	Operating
(in thousands)	Leases
Remainder of 2024	$	21,777
2025	31,114
2026	29,499
2027	23,649
2028	23,095
Thereafter	51,854
Total lease payments	$	180,988

Less: Interest	(22,199)
Present value of lease liabilities	$	158,789


Other accrued liabilities	$	23,746
Long-term operating lease liabilities	$	135,043

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


	As of
	March 31,		December 31,
Lease Term and Discount Rate	2024		2023
Weighted-average remaining lease term (years)	6.68		7.04
Weighted-average discount rate	3.94	%	3.66	%

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


Other Information	Three Months Ended March 31,
(in thousands)	2024		2023
Operating cash flows used for operating leases	$	7,626	$	7,408
Right of use assets obtained in exchange for new operating lease liabilities	$	23,237	$	3,432

10. SHAREHOLDERS’ EQUITY (DEFICIT)

Return of capital

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

Share repurchases made pursuant to the 2022 Repurchase Program may take place in the open market or in privately negotiated transactions from time to time based on market and other conditions. This authorization may be modified, suspended or terminated by the Board of Directors at any time without prior notice. As of March 31, 2024, there was $845.7 million of available authorization remaining under the 2022 Repurchase Program. The Company did not repurchase any of the Company’s common stock on the open market during each of the three months ended March 31, 2024 and 2023.

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


	Dividends
(in thousands, except per share data)	Per Share		Declared		Distributed		(Released)/Deferred
Three Months Ended March 31, 2024	$	1.60	$	129,444	$	131,378	$	(1,934)
Three Months Ended March 31, 2023	$	1.38	$	111,986	$	112,189	$	(203)

Common Stock

The following table presents activity related to shares of common stock issued and repurchased during the three months ended March 31, 2024:


	Common Stock		Treasury	Common Stock
	Issued	Stock	Outstanding
Balance at December 31, 2023	133,817,332		(54,726,120)	79,091,212
Dividend payable/paid	61		—	61
Common stock issued	252,637		—	252,637
Shares withheld for tax withholding	—		(119,861)	(119,861)
Shares repurchased under stock repurchase programs	—		—	—
Shares issued to directors	67		(67)	—
Balance at March 31, 2024	134,070,097		(54,846,048)	79,224,049

11. INCOME TAXES

The Company’s provision for income taxes was $39.9 million and $37.6 million for the three months ended March 31, 2024 and 2023, respectively.

The effective tax rate of 13.5% for the three months ended March 31, 2024 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $20.2 million, primarily related to $13.0 million of excess tax benefits recognized on share-based compensation vested during the period and $7.2 million of tax benefits related to prior year items.

The effective tax rate of 13.6% for the three months ended March 31, 2023 reflects the Company’s estimate of the effective tax rate for the period and was impacted by certain favorable discrete items totaling $16.5 million, primarily related to $11.1 million of excess tax benefits recognized on share-based compensation vested during the period and $4.6 million of tax benefits related to the resolution of 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 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 $22.1 million in the next twelve months as a result of the resolution of prior year items.

During the three months ended March 31, 2024, the Company's unrecognized tax benefits decreased by $1.4 million principally due to the resolution of prior year items.

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12. SEGMENT INFORMATION

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

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

The Index operating segment offers equity and fixed income indexes. The indexes are used in many areas of the investment process, including for developing indexed financial products (e.g., 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 data, benchmarks, return-analytics, climate assessments and market insights for tangible assets such as real estate and infrastructure. In addition, Real Assets performance and risk analytics range from enterprise-wide to property-specific analysis. The Real Assets operating segment also provides business intelligence products to real estate owners, managers, developers and brokers worldwide.

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

The 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 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.

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


	Three Months Ended March 31,
(in thousands)	2024		2023
Operating revenues
Index	$	373,872	$	339,382
Analytics	163,966		147,070
ESG and Climate	77,884		67,058
All Other - Private Assets	64,243		38,708
Total	$	679,965	$	592,218

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


	Three Months Ended March 31,
(in thousands)	2024		2023
Index Adjusted EBITDA	$	277,760	$	253,682
Analytics Adjusted EBITDA	72,212		60,780
ESG and Climate Adjusted EBITDA	21,091		17,876
All Other - Private Assets Adjusted EBITDA	12,510		12,391
Total operating segment profitability	383,573		344,729

Amortization of intangible assets	38,604		24,667
Depreciation and amortization of property, equipment and leasehold improvements	4,081		5,460
Acquisition-related integration and transaction costs(1)	1,506		—
Operating income	339,382		314,602

Other expense (income), net	43,489		38,230
Provision for income taxes	39,939		37,644
Net income	$	255,954	$	238,728

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

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Operating revenues by geography are primarily 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 March 31,
(in thousands)	2024		2023
Operating revenues
Americas:
United States	$	280,675	$	238,416
Other	30,358		27,536
Total Americas	311,033		265,952


Europe, the Middle East and Africa (“EMEA”):
United Kingdom	113,294		91,660
Other	151,684		138,319
Total EMEA	264,978		229,979


Asia & Australia:
Japan	26,573		26,017
Other	77,381		70,270
Total Asia & Australia	103,954		96,287


Total	$	679,965	$	592,218

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
	March 31,		December 31,
(in thousands)	2024		2023
Long-lived assets
Americas:
United States	$	231,650	$	204,238
Other	11,068		11,585
Total Americas	242,718		215,823


EMEA:
United Kingdom	17,913		18,403
Other	20,840		22,072
Total EMEA	38,753		40,475


Asia & Australia:
Japan	1,143		1,321
Other	29,524		31,507
Total Asia & Australia	30,667		32,828


Total	$	312,138	$	289,126

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13. SUBSEQUENT EVENTS

On April 22, 2024, the Board of Directors declared a quarterly cash dividend of $1.60 per share for the three months ending June 30, 2024 (“second quarter 2024”). The second quarter 2024 dividend is payable on May 31, 2024 to shareholders of record as of the close of trading on May 17, 2024.

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