What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-09 compared with 2023-02-10 · 194 added, 109 removed, 975 unchanged (24% of the section changed)

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Notes to Consolidated Financial Statements

Introduction and Basis of Presentation

Recent Accounting Pronouncements

Revenue Recognition

Earnings per Common Share

Property, Equipment and Leasehold Improvements, Net

Goodwill and Intangible Assets, Net

Employee Benefits

Shareholders' Equity (Deficit)

Segment Information

Subsequent Events

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management's Annual Report on Internal Control Over Financial Reporting, management has excluded The Burgiss Group, LLC and Trove Research Ltd from its assessment of internal control over financial reporting as of December 31, 2023, because they were acquired by the Company in purchase business combinations during 2023.

We have also excluded The Burgiss Group, LLC and Trove Research Ltd from our audit of internal control over financial reporting.

The Burgiss Group, LLC and Trove Research Ltd are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 0.7% and 1.0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023.

Definition and Limitations of Internal Control over Financial Reporting

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of

critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

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

As described in Notes 1 and 3 to the consolidated financial statements, the Company recognized operating revenues of $2.1 billion for the year ended December 31, 2022, related to recurring subscriptions, asset-based fees, or non-recurring revenues from the Index, Analytics, and ESG and Climate segments.

As described in Notes 1 and 3 to the consolidated financial statements, the Company recognized operating revenues of $2.4 billion for the year ended December 31, 2023, related to recurring subscriptions, asset-based fees, and non-recurring revenues from the Index, Analytics, and ESG and Climate segments.

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

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Non-recurring revenues primarily represent fees earned on products and services where the Company typically does not have renewal clauses within the contract.

Examples of such products and services include one-time license fees, certain derivative financial products, certain implementation services and historical data sets.

Examples of such products and services include one-time license fees, certain derivative financial products, certain implementation services, historical data sets and, occasionally, fees for unlicensed usage of content in historical periods.

Based on the nature of the services provided, non-recurring revenues are generally billed either in advance or after delivery and recognized point in time or over the service period.

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

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to revenue recognition, including controls over revenue transactions recognized as recurring subscriptions, asset-based fees, and non-recurring revenues.

These procedures also included, among others, evaluating revenue transactions by testing a sample of revenue transactions by obtaining and inspecting source documents which included (i) sales contracts or agreements, invoices, and cash receipts, where applicable, for recurring subscriptions and non-recurring revenues and (ii) sales contracts or agreements, invoices, and cash receipts, where applicable, and AUM data from independent third-party sources or information provided by the Company’s customers, where applicable, to calculate revenue recognized for asset-based fees.

These procedures also included, among others, testing a sample of revenue transactions by obtaining and inspecting source documents which included (i) sales contracts or agreements, invoices, and cash receipts, where applicable, for recurring subscriptions and non-recurring revenues, and (ii) sales contracts or agreements, invoices, and cash receipts, where applicable, and AUM data from independent third-party sources or information provided by the Company’s customers, where applicable, to recalculate revenue recognized for asset-based fees.

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

As described in Note 5 to the consolidated financial statements, in October 2023 the Company completed the acquisition of the remaining 66.4% interest in The Burgiss Group, LLC for an aggregate cash purchase price of $696.8 million.

Of the acquired intangible assets, $229.9 million of proprietary data and $179.9 million of customer relationships were recorded.

The fair values of acquired intangible assets were determined using the relief from royalty method for proprietary data and the multi-period excess earnings method for customer relationships.

The significant assumptions used to estimate the fair value of the acquired customer relationships and proprietary data included forecasted cash flows and discount rates.

The principal considerations for our determination that performing procedures relating to the valuation of customer relationships and proprietary data intangible assets acquired in the The Burgiss Group, LLC acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships and proprietary data intangible assets acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to certain forecasted cash flows assumptions and discount rates;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships and proprietary data intangible assets.

These procedures also included, among others (i) reading the purchase agreement and (ii) testing management’s process for developing the fair value estimate of the customer relationships and proprietary data acquired.

Testing management’s process included (i) evaluating the appropriateness of the relief

from royalty and multi-period excess valuation methods used by management;

(ii) testing the completeness and accuracy of data provided by management;

and (iii) evaluating the reasonableness of the significant assumptions used by management related to certain forecasted cash flows assumptions and discount rates.

Evaluating the reasonableness of certain forecasted cash flows assumptions for customer relationships and proprietary data involved considering (i) the company specific factors and the past performance of the acquired business;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the relief from royalty and multi-period excess valuation methods and the reasonableness of certain significant assumptions related to the forecasted cash flows and discount rate assumptions.

/s/ PricewaterhouseCoopers LLP

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Current assets:

Cash and cash equivalents $ 993,564 $ 1,421,449

Accounts receivable, net of allowances 663,236 664,511

Cash and cash equivalents (includes restricted cash of $ 3,878 and $ 368 at December 31, 2023 and December 31, 2022, respectively)

$ 461,693 $ 993,564

Accounts receivable (net of allowances of $ 3,968 and $ 2,652 at December 31, 2023 and December 31, 2022, respectively)

839,555 663,236

Prepaid income taxes 59,002 36,654

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Shareholders' equity (deficit):

Preferred Stock (par value $ 0.01 , 100,000,000 shares authorized, no shares issued)

Preferred Stock (par value $ 0.01 , 100,000,000 shares authorized, 0 shares issued)

Common stock (par value $ 0.01 ;

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Interest expense 186,679 171,571 159,614

Gain on remeasurement of equity method investment ( 143,029 ) — —

Other expense (income) 6,377 3,997 56,472

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Net income $ 1,148,592 $ 870,573 $ 725,983

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments 7,319 ( 16,016 ) ( 3,624 )

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Net income 725,983 725,983

Cumulative-effect adjustment 631 631

Dividends declared ($ 3.64 per common share)

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Other comprehensive income (loss), net of tax 64 64

Shares withheld for tax withholding and exercises ( 51,176 ) ( 51,176 )

Shares withheld for tax withholding

( 58,794 ) ( 58,794 )

Common stock issued 4 4

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Other comprehensive income (loss), net of tax ( 1,416 ) ( 1,416 )

Shares withheld for tax withholding and exercises ( 58,794 ) ( 58,794 )

Shares withheld for tax withholding

( 112,681 ) ( 112,681 )

Common stock issued 4 4

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Common stock issued to Directors and (held in)/released from treasury

( 466 ) ( 466 )

Balance at December 31, 2022

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Other comprehensive income (loss), net of tax ( 1,141 ) ( 1,141 )

Shares withheld for tax withholding and exercises ( 112,681 ) ( 112,681 )

Shares withheld for tax withholding

( 45,469 ) ( 45,469 )

Common stock issued 2 2

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Adjustments to reconcile net income to net cash provided by operating activities:

Gain on remeasurement of equity method investment ( 143,029 ) — —

Amortization of intangible assets 114,429 91,079 80,592

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Effect of exchange rate changes 5,409 ( 18,539 ) ( 8,933 )

Net (decrease) increase in cash ( 427,885 ) 120,928 ( 206,046 )

Cash and cash equivalent, beginning of period 1,421,449 1,300,521 1,506,567

Cash and cash equivalent, end of period $ 993,564 $ 1,421,449 $ 1,300,521

Net (decrease) increase in cash, cash equivalents and restricted cash ( 531,871 ) ( 427,885 ) 120,928

Cash, cash equivalents and restricted cash, beginning of period 993,564 1,421,449 1,300,521

Cash, cash equivalent and restricted cash, end of period $ 461,693 $ 993,564 $ 1,421,449

Supplemental disclosure of cash flow information:

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environmental, social and governance (“ESG”) and climate solutions;

and real estate market and transaction data and analysis.

and private asset data and analysis.

Basis of Presentation

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and its wholly owned subsidiaries, are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Certain prior period amounts have been reclassified to conform to the current period presentation.

Effective January 1, 2021 , the ESG and Climate operating segment is being presented as a separate reportable segment.

The operating segments of Real Assets and The Burgiss Group, LLC (“Burgiss”) do not individually meet the segment reporting thresholds and have been combined and presented as part of the All Other – Private Assets reportable segment.

As of December 31, 2022 , the Company had an approximately $ 214.4 million equity method investment in Burgiss, representing a 33.6 % equity ownership.

On October 2, 2023, the Company acquired the remaining 66.4 % interest in The Burgiss Group, LLC (“Burgiss”) for $ 696.8 million in cash.

Prior to the acquisition, Burgiss was a related party and its results were included in the Company’s Burgiss operating segment as an equity method investment based on the Company’s 33.6 % ownership.

The Company’s existing 33.6 % interest had a fair value of $ 353.2 million at the date of acquisition.

This resulted in a non-taxable, one-time gain on the remeasurement of our equity method investment in Burgiss of $ 143.0 million following the acquisition.

During the year ended December 31, 2023, the Company renamed the Burgiss operating segment to Private Capital Solutions.

Burgiss’ consolidated results were included in the Company’s All Other – Private Assets reportable segment following the acquisition.

Significant Accounting Policies

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The Company makes certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements, as well as the reported amounts of operating revenues and expenses during the periods presented.

Significant estimates and judgments made by management include such examples as assessment of impairment of goodwill and intangible assets and income taxes.

Significant estimates and judgments made by management include such examples as the assessment of the fair value of acquired intangible assets;

the assessment of impairment of goodwill and intangible assets;

and income taxes.

The Company believes that estimates used in the preparation of these consolidated financial statements are reasonable;

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A client can receive a discount for purchasing a bundle of products or services if the sum of the standalone selling price of those promised products or services in the contract exceeds the promised consideration in the contract.

within the sales and usage-based royalty exception under which the price and associated revenue are based upon actual known performance or best estimates of actual performance during the performance period.

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

Revenue is recognized when a client obtains control of promised products or services in an amount that reflects the consideration the entity expects to receive in exchange for those products or services.

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Non-recurring revenues primarily represent fees earned on products and services where we typically do not have renewal clauses within the contract.

Examples of such products and services include one-time license fees, certain derivative financial products, certain implementation services and historical data sets.

Based on the nature of the services provided, non-recurring revenues are generally billed either in advance or after delivery and recognized point in time or over the service period.

Revenues By Segment

Index segment operating revenues consist of fees earned for licenses of index data subscriptions, performance obligations to deliver the data are satisfied over time and, accordingly, revenue is recognized ratably over the term of the agreement pursuant to the contract terms.

Index segment operating revenues consist of fees earned primarily for licenses of index data subscriptions, performance obligations to deliver the data are satisfied over time and, accordingly, revenue is recognized ratably over the term of the agreement pursuant to the contract terms.

With respect to licenses to create indexed investment products, such as ETFs, passively managed funds, or licenses which allow certain exchanges to use MSCI’s indexes as the basis for futures and options contracts, MSCI’s performance obligation allows customers to use the Company’s intellectual property ( e.g.

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For custom ESG research data, the performance obligation is typically satisfied, and revenue is recognized, at the point in time when the data is updated and available to the client.

All Other – Private Assets segment operating revenues are recognized as MSCI's performance obligations to provide publications, analysis, insights and data to clients are satisfied.

All Other – Private Assets segment operating revenues are recognized as MSCI's performance obligations to provide analysis, insights and data to clients are satisfied.

The majority of these performance obligations are satisfied over the term of the license period, with operating revenues recognized ratably.

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The Company applies the provisions of ASC Subtopic 350-40, “ Internal Use Software ,” and accounts for the cost of computer software developed for internal use by capitalizing qualifying costs, which are substantially incurred during the application development stage.

The amounts capitalized are included in Intangible Assets on the Consolidated Statement of Financial Condition and include external direct costs of services used in developing internal-use software and payroll and payroll-related costs of employees directly associated with the development activities.

The amounts capitalized primarily relate to internally developed software used to provide services to customers and are included in Intangible Assets on the Consolidated Statement of Financial Condition and include external direct costs of services used in developing internal-use software and payroll and payroll-related costs of employees directly associated with the development activities.

Additionally, costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements provide additional functionality to the software.

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Balance as of December 31, 2020

Addition (reduction) to credit loss expense 1,712

Addition to credit loss expense

Write-offs, net of recoveries ( 456 )

Balance as of December 31, 2021

Addition (reduction) to credit loss expense 1,210

Adjustments and write-offs, net of recoveries ( 456 )

Addition to credit loss expense

Write-offs, net of recoveries

Balance as of December 31, 2022

Addition (reduction) to credit loss expense 910

Adjustments and write-offs, net of recoveries ( 595 )

Addition to credit loss expense

Write-offs, net of recoveries

Balance as of December 31, 2023

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If the estimated fair value is below carrying value, an impairment charge will be recorded up to, but not more than, the total amount of goodwill allocated to the reporting unit.

The Company completed its annual goodwill impairment test as of July 1, 2022 on its Index, Analytics, ESG and Climate, and Real Assets reporting units, which are also the Company’s operating segments, and no impairments were noted.

The Company completed its annual goodwill impairment test as of July 1, 2023 on its Index, Analytics, ESG and Climate, and Real Assets reporting units, which were also the Company’s operating segments as of July 1, 2023, and no impairments were noted.

The Company performed a qualitative test for impairment and determined that it was not more likely than not that the fair value of its reporting units is less than their respective carrying values.

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The Company amortizes definite-lived intangible assets over their estimated useful lives.

Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable.

The Company also reviews the useful lives on a quarterly basis to determine if the period of economic benefit has changed.

Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be

The Company also reviews the useful lives on a periodic basis to determine if the period of economic benefit has changed.

If the carrying value of an intangible asset exceeds its fair value, an impairment charge would be recognized in an amount equal to the amount by which the carrying value of the intangible asset exceeds its fair value.

There were no events or changes in circumstances that would indicate that the carrying value of the definite-lived intangible assets may not be recoverable during the years ended December 31, 2023 and 2022.

The Company had no indefinite-lived intangible assets during the years ended December 31, 2022 and 2021.

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

Foreign Currency Translation

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No single customer accounted for 10.0% or more of operating revenues within the Analytics, ESG and Climate and All Other – Private Assets segments for the years ended December 31, 2023, 2022 and 2021.

RECENT ACCOUNTING STANDARDS UPDATES

There are no pending accounting standards updates that are currently expected to have a material impact on the Company's consolidated financial statements.

Cash and Cash Equivalents

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

Restricted Cash

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

RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued Accounting Standards Update No.

2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” or ASU 2023-07.

The amendments in ASU 2023-07 aim to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent interim periods, with early adoption permitted.

The Company is currently evaluating the impact of this update on its consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” or ASU 2023-09.

The amendments in ASU 2023-09 aim to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 is effective for the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, with early adoption permitted.

The Company is currently evaluating the impact of this update on its consolidated financial statements.

REVENUE RECOGNITION

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Total $ 1,251,764 $ 544,299 $ 166,192 $ 81,289 $ 2,043,544

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

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

(in thousands) Accounts receivable, net of allowances Deferred revenue

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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:

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:

(in thousands) December 31,

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Diluted $ 14.39 $ 10.72 $ 8.70

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

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.

On October 2, 2023, the Company acquired the remaining 66.4 % interest in Burgiss for $ 696.8 million in cash (the “step acquisition”).

The acquisition of Burgiss will provide the Company with comprehensive data and deep expertise in private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk, and conduct robust analytics.

The step acquisition has been accounted for as a business combination using the acquisition method of accounting and its results are reported within the Private Capital Solutions operating segment within the All Other – Private Assets reportable segment.

With the step acquisition, we renamed the Burgiss operating segment to Private Capital Solutions.

The Company’s existing 33.6 % interest had a fair value at acquisition date of $ 353.2 million which resulted in a non-taxable gain of $ 143.0 million.

Prior to the step acquisition, Burgiss was accounted for as an equity-method investment.

Therefore, MSCI did not recognize the proportionate share of Burgiss’ operating revenues, rather, the Company’s proportionate share of the income or loss of Burgiss was reported as a component of other (expense) income, net.

A portion of Burgiss’s client agreements do not have automatic renewal clauses at the end of the subscription period.

Due to the historically high retention rate and expectation that a substantial portion of the client agreements will be renewed and the nature of the subscription service, the associated revenue is recorded as recurring subscription revenue.

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

(in thousands) Estimated

Useful Life Fair Value

Cash and cash equivalents

Accounts receivable 25,795

Prepaid Income Taxes

Other current assets 4,153

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Long-term operating lease liabilities ( 2,525 )

Deferred tax liabilities ( 83,737 )

Other non-current liabilities ( 223 )

Intangible assets:

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Acquired technology and software 3 years 19,000

Trademarks 2 years 890

Trademarks 1 year 900

Goodwill 618,415

Purchase price, net of cash acquired $ 948,959

Net assets acquired

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 no t deductible for income tax purposes.

The weighted average amortization period for the acquired intangible assets approximates the estimated useful life.

Revenue of RCA recognized within the consolidated financial statements was $ 79.7 million and $ 22.1 million for the years ended December 31, 2022 and 2021, respectively .

COMMITMENTS AND CONTINGENCIES

Goodwill attributable to the acquisition is deductible for federal income tax purposes to the extent of consideration paid.

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

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

Trove is a part of the ESG and Climate operating segment.

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

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__________________________

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

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

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Total debt $ 4,539,063

_________________________

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

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

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(1) The first payment occurred on July 11 , 2022.

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

The fair market value of the Company’s debt obligations represent Level 2 valuations.

The Company utilizes the market approach and obtains security pricing from a vendor who uses broker quotes and third-party pricing services to determine fair values.

The Company utilized the market approach and obtained security pricing from a vendor who used broker quotes and third-party pricing services to determine fair values.

Senior Notes.

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In addition, the Company may redeem all or part of the 2029 Senior Notes, together with accrued and unpaid interest, on or after November 15, 2024, at redemption prices set forth in the indenture governing the 2029 Senior Notes.

At any time prior to November 15, 2022, the Company may use the proceeds of certain equity offerings to redeem up to 35 % of the aggregate principal amount of the 2029 Senior Notes, including any permitted additional notes, at a redemption price equal to 104.000 % of the principal amount plus accrued and unpaid interest, if any, to the redemption date.

The $ 900.0 million aggregate principal amount of 3.625 % senior unsecured notes due 2030 (the “2030 Senior Notes”) are scheduled to mature on September 1, 2030 .

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In addition, the Company may redeem all or part of the 2030 Senior Notes, together with accrued and unpaid interest, on or after March 1, 2025, at redemption prices set forth in the indenture governing the 2030 Senior Notes.

At any time prior to March 1, 2023, the Company may use the proceeds of certain equity offerings to redeem up to 35 % of the aggregate principal amount of the 2030 Senior Notes, including any permitted additional notes, at a redemption price equal to 103.625 % of the principal amount plus accrued and unpaid interest, if any, to the redemption date.

The $ 1,000.0 million aggregate principal amount of 3.875 % senior unsecured notes due 2031 (the “2031A Senior Notes”) are scheduled to mature on February 15, 2031 .

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In addition, the Company may redeem all or part of the 2031A Senior Notes, together with accrued and unpaid interest, on or after June 1, 2025, at redemption prices set forth in the indenture governing the 2031A Senior Notes.

At any time prior to June 1, 2023, the Company may use the proceeds of certain equity offerings to redeem up to 35 % of the aggregate principal amount of the 2031A Senior Notes, including any permitted additional notes, at a redemption price equal to 103.875 % of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The $ 600.0 million aggregate principal amount of 3.625 % Senior Unsecured Notes due 2031 (the “2031B Senior Notes”) are scheduled to mature on November 1, 2031 .

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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 an aggregate of $ 500.0 million of revolving loan commitments, which may be drawn until February 16, 2027, and the TLA Facility.

At December 31, 2022, the revolving loan commitments were undrawn.

As noted above, at December 31, 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).

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.

On June 9, 2022, the Company, the guarantors party thereto and the lenders and agents party thereto, entered into an Amended and Restated Credit Agreement (the “Prior Credit Agreement”).

On January 26, 2024, the Company entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement”) amending and restating in its entirety the Prior Credit Agreement.

The Credit Agreement makes available an aggregate of $ 1,250.0 million of revolving loan commitments under the Revolving Credit Facility, which may be drawn until January 26, 2029.

The Revolving Credit Facility under the Credit Agreement was drawn at closing in an amount sufficient to prepay all term loans outstanding under the TLA Facility under the Prior Credit Agreement.

The obligations under the Credit Agreement are general unsecured obligations of the Company.

Interest on the revolving loans under the Credit Agreement accrues, at a variable rate, based on the secured overnight funding rate (“SOFR”) or the alternate base rate (“Base Rate”), plus, in each case, an applicable margin to be determined based on the credit ratings of the Company’s senior, unsecured long-term debt and will be due on each Interest Payment Date (as defined in the Credit Agreement).

So long as the credit rating for the Company’s senior, unsecured long-term debt is set at BBB-/BBB- by each of S&P and Fitch, respectively, the applicable margin is 0.50 % for Base Rate loans, and 1.50 % for SOFR loans.

The Prior Credit Agreement made available to the Company on December 31, 2023 an aggregate of $ 500.0 million of revolving loan commitments, which could be drawn until February 16, 2027, and the TLA Facility.

As of December 31, 2023, the revolving loan commitments were undrawn.

As noted above, as of December 31, 2023, the commitments under the TLA Facility were drawn in full.

The obligations under the Prior Credit Agreement were general unsecured obligations of the Company and the guarantors party thereto.

Interest on the Tranche A Term Loans under the TLA Facility accrued, at a variable rate, based on SOFR or the Base Rate, plus, in each case, an applicable margin and was due on each Interest Payment Date.

The applicable margin was calculated by reference to the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and ranged between 1.50 % to 2.00 % for SOFR loans, and 0.50 % to 1.00 % for Base Rate loans.

At December 31, 2023, the interest rate on the TLA Facility was 7.46 %.

In connection with the closings of the Senior Notes offerings, entry into the Prior Revolving Credit Agreement and the subsequent amendments thereto 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.

In connection with the closings of the Senior Notes offerings, entry into the Prior Revolving Credit Agreement and the subsequent amendments thereto, including entry into the Credit Agreement, the Company paid certain financing fees which, together with the existing fees related to prior credit facilities, are being amortized over their related lives.

At December 31, 2023, $ 33.0 million of the deferred financing fees and premium remain unamortized, $ 0.6 million of which is included in “Prepaid and other assets,” $ 1.1 million of which is included in “Other non-current assets” and $ 31.3 million of which is included in “Long-term debt” on the Consolidated Statement of Financial Condition.

The Company recognized $ 29.7 million, $ 30.6 million and $ 32.8 million of operating lease expenses for the years ended December 31, 2022, 2021 and 2020, respectively.

The amounts associated with variable lease costs, short-term lease costs and sublease income were not material for any of the years ended December 31, 2022, 2021 and 2020.

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

Twelve Months Ended

(in thousands) 2023 2022 2021

Operating lease expenses $ 29,240 $ 29,724 $ 30,615

Variable lease costs 3,876 3,286 3,017

Short-term lease costs 745 477 343

Sublease income $ ( 5,127 ) $ ( 4,630 ) $ ( 3,303 )

Total lease costs $ 28,734 $ 28,857 $ 30,672

The Company’s leases have remaining lease terms of up to approximately 9 years.

1 unchanged sentence

Some of the leases also provide for early termination, the exercise of which would shorten the term of those leases by up to 5 years.

The Company recorded pre-tax impairment charges for the year ended December 31, 2021 of $ 8.4 million associated with right of use assets.

The Company recorded pre-tax impairment charges associated with right of use assets of $ 8.4 million for the year ended December 31, 2021.

The impairment charges are included in General and administrative expenses within the consolidated statements of income.

44 unchanged sentences

Acquisitions⁽ 2 ⁾

— — 34,912 618,415 653,327

Foreign exchange translation adjustment 1,813 — 1,765 1,117 4,695

3 unchanged sentences

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

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

Intangible Assets, Net

15 unchanged sentences

458,717 220,778

Internally developed capitalized software 3 to 5 years

237,760 165,928

Acquired technology and software 3 to 9 years

2 unchanged sentences

209,090 208,190

Internally developed capitalized software 3 to 5 years

165,928 106,181

Subtotal 1,846,187 1,336,616

4 unchanged sentences

Proprietary data ( 62,590 ) ( 41,783 )

Internally developed capitalized software ( 118,387 ) ( 77,259 )

Acquired technology and software ( 189,174 ) ( 179,833 )

Trademarks ( 171,715 ) ( 162,044 )

Internally developed capitalized software ( 77,259 ) ( 49,394 )

Subtotal ( 882,788 ) ( 769,356 )

4 unchanged sentences

Proprietary data 396,127 178,995

Internally developed capitalized software 119,373 88,670

Acquired technology and software 39,046 29,387

Trademarks 37,375 46,146

Internally developed capitalized software 88,670 56,787

Subtotal 963,399 567,260

25 unchanged sentences

Total $ 38,739 $ 36,504 $ 31,525

The Company uses a measurement date of December 31 st to calculate obligations under its pension and postretirement plans.

The Company uses a measurement date of December 31 to calculate obligations under its pension and postretirement plans.

As of December 31, 2023 and 2022, the Company carried a net liability of $ 31.9 million and $ 20.1 million, respectively, in “Other non-current liabilities” on the Consolidated Statement of Financial Condition related to its future pension obligations.

25 unchanged sentences

Repurchased Dollar

Repurchased (1)

December 31, 2023

4 unchanged sentences

$ 412.25 339 $ 139,580

_____________________________

(1) As of January 1, 2023, the Company’s share repurchases in excess of issuances are subject to a 1 % excise tax enacted by the Inflation Reduction Act.

The values in this column exclude the 1 % excise tax incurred on share repurchases.

Any excise tax incurred is recognized as part of the cost of the shares acquired in the Consolidated Statements of Shareholders’ Equity (Deficit).

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

21 unchanged sentences

Dividend payable/paid 268 ( 156 ) 112

Common stock issued and exercise of stock options 406,960 — 406,960

Common stock issued

331,427 — 331,427

Shares withheld for tax withholding — ( 133,431 ) ( 133,431 )

38 unchanged sentences

As of December 31, 2023, $ 91.7 million of compensation cost related to MSCI unvested share-based awards granted to the Company’s employees and to directors who are not employees of the Company had not yet been recognized.

The unrecognized compensation cost relating to unvested stock-based awards expected to vest will be recognized primarily over the next one to four years .

The unrecognized compensation cost relating to unvested stock-based awards expected to vest will be recognized primarily over the next one to three years .

In connection with awards under its equity-based compensation and benefit plans, the Company is authorized to issue shares of common stock.

52 unchanged sentences

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

There were no stock option awards issued or outstanding for the years ended December 31, 2021 and 2020.

There were no stock option awards issued or outstanding for the year ended December 31, 2021.

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

20 unchanged sentences

Domestic tax credits and incentives ( 0.53 %) ( 0.46 %) ( 0.59 %)

Impact of Burgiss Transaction

( 1.58 %) — % — %

Valuation allowance — % — % — %

2 unchanged sentences

Effective income tax rate 16.10 % 16.60 % 15.40 %

______________________________

(1) The year ended December 31, 2020 includes ( 3.00 )% released during the year related to the favorable impact on prior years from final regulations clarifying certain provisions of the Tax Cuts and Jobs Act (“Tax Reform”).

Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse.

Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse.

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023 and 2022, were as follows:

1 unchanged sentence

Deferred tax assets:

Capitalized expenses $ 41,176 $ 94,265

Unearned revenue $ 65,370 $ 54,263

Capitalized expenses 52,098 41,176

Lease liabilities 33,321 35,425

Employee compensation and benefit plans 28,781 24,318

Loss carryforwards 13,128 18,173

Intangible assets

Interest expense carryforwards 10,093 11,283

Pension — 2,229

Other 6,520 18

Loss carryforwards 7,752 13,128

Subtotal 215,521 179,611

3 unchanged sentences

Intangible assets $ ( 130,231 ) $ ( 132,705 )

Right of use assets ( 28,213 ) ( 32,106 )

Property, equipment and leasehold improvements, net ( 35,203 ) ( 15,169 )

Right of use assets ( 26,016 ) ( 28,213 )

Unremitted foreign earnings ( 2,203 ) ( 2,162 )

4 unchanged sentences

The tax value of the U.S.

portion of the interest carryforward was zero as of December 31, 2022 and December 31, 2021.

portion of the interest carryforward was zero as of December 31, 2023 and 2022.

The tax value of the non-U.S.

portion of the interest carryforward was $ 11.3 million and $ 11.2 million as of December 31, 2022 and December 31, 2021, respectively.

portion of the interest carryforward was $ 10.1 million and $ 11.3 million as of December 31, 2023 and 2022, respectively.

This carryforward is subject to an annual limitation on utilization over an indefinite life.

Net operating loss carryforwards in the U.S.

were $ 48.7 million with a tax value of $ 10.9 million and $ 69.7 million with a tax value of $ 17.9 million as of December 31, 2022 and December 31, 2021, respectively.

were $ 32.2 million with a tax value of $ 7.6 million and $ 48.7 million with a tax value of $ 10.9 million as of December 31, 2023 and 2022, respectively.

These carryforwards are subject to annual limitations and will begin to expire in 2026.

The tax value of the non-U.S.

portion of the net operating loss was $ 2.2 million and $ 0.3 million as of December 31, 2022 and December 31, 2021 respectively.

portion of the net operating loss was $ 0.1 million and $ 2.2 million as of December 31, 2023 and 2022 respectively.

These carryforwards are subject to annual limitations and will begin to expire in 2025.

31 unchanged sentences

The Company recognizes the accrual of interest and penalties related to unrecognized tax benefits in the “Provision for income taxes” in the Consolidated Statement of Income.

For the year ended December 31, 2022, the Company recognized $( 0.5 ) million and for the years ended December 31, 2021 and 2020, the Company recognized zero interest in the Consolidated Statement of Income with respect to unrecognized tax benefits.

The Company recognized $ 2.1 million, $( 0.5 ) million and zero interest in the Consolidated Statement of Income with respect to unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021, respectively.

Penalties of $ 1.3 million, $( 0.3 ) million and $ 0.3 million were recognized in the Consolidated Statement of Income and the Consolidated Statement of Financial Position for the years ended December 31, 2023, 2022 and 2021, respectively.

The amount of accrued interest, which includes interest related to uncertain tax positions and accrued income tax expense, recorded on the Consolidated Statement of Financial Condition as of December 31, 2022 was $ 0.4 million and for the years ended December 31, 2021 and 2020 was $ 0.9 million.

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

The amount of accrued interest, which includes interest related to uncertain tax positions and accrued income tax expense, recorded on the Consolidated Statement of Financial Condition was $ 2.5 million, $ 0.4 million and $ 0.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company is under examination by tax authorities in certain jurisdictions, including foreign jurisdictions, such as Switzerland, India and states in the U.S.

in which the Company has significant operations, such as New York and California.

The tax years currently under examination vary by jurisdiction but include years ranging from 2008 onwards.

The Inflation Reduction Act of 2022 (“IRA”), enacted on August 16, 2022, is not currently anticipated to have a material impact on the Company’s provision for income taxes.

SEGMENT INFORMATION

10 unchanged sentences

Due to the integrated structure of MSCI’s business, certain costs incurred by one segment may benefit other segments.

A segment may use the content and data produced by another segment without incurring an arm’s-length intersegment charge.

A segment may use the content and data produced by another segment without incurring an intersegment charge.

The CODM does not review any information regarding total assets on an operating segment basis.

2 unchanged sentences

The Company has five operating segments:

Index, Analytics, ESG and Climate, Real Assets and Burgiss, which are presented as the following four reportable 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, 2022, the Company renamed the Real Estate operating segment to Real Assets.

Effective January 1, 2021, the Company began presenting four reportable segments with the ESG and Climate operating segment being presented as a separate reportable segment.

Prior period amounts have been recast to reflect the current presentation.

The operating segments of Real Assets and Burgiss do not individually meet the segment reporting thresholds and have been combined and presented as part of All Other – Private Assets reportable segment.

The Company’s ownership interest in Burgiss is classified as an equity-method investment.

Therefore, the All Other – Private Assets segment does not include the Company’s proportionate share of operating revenues and Adjusted EBITDA related to Burgiss.

The Company’s proportionate share of the income or loss from its equity-method investment in Burgiss is not a component of Adjusted EBITDA as it is reported as a component of other (expense) income, net.

During the year ended December 31, 2023, the Company renamed the Burgiss operating segment to Private Capital Solutions.

The operating segments of Real Assets and Private Capital Solutions do not individually meet the segment reporting thresholds and have been combined and presented as part of All Other – Private Assets reportable segment.

Prior to the step acquisition of Burgiss on October 2, 2023, the Company’s ownership interest in Burgiss was classified as an equity-method investment.

Therefore, the All Other – Private Assets segment did not include the Company’s proportionate share of operating revenues and Adjusted EBITDA related to Burgiss.

The Company’s proportionate share of the income or loss from its equity-method investment in Burgiss was not a component of Adjusted EBITDA as it was reported as a component of other (expense) income, net.

Following the acquisition, the consolidated results of Burgiss were included in the Company’s Private Capital Solutions operating segment.

The Index operating segment offers equity and fixed income indexes.

8 unchanged sentences

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 change in reportable segments referred to above did not result in any changes to MSCI’s CODM or the basis for segment profitability.

The CODM continues to measure and evaluate reportable segments based on segment operating revenues as well as Adjusted EBITDA and other measures.

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

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

25 unchanged sentences

______________________________

(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.

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

Operating revenues by geography are primarily based on the shipping address of the ultimate customer utilizing the product.

31 unchanged sentences

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

On January 26, 2024, the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., in its capacity as administrative agent, entered into the Credit Agreement, amending and restating in its entirety the Prior Credit Agreement.

The Credit Agreement makes available to the Company an aggregate of $ 1,250.0 million of revolving loan commitments, which may be drawn until January 26, 2029.

The revolving loans under the Credit Agreement were drawn at closing in an amount sufficient to prepay all term loans outstanding under the TLA Facility of the Prior Credit Agreement.

The obligations under the Credit Agreement are general unsecured obligations of the Company.

Upon the termination of the Prior Credit Agreement on January 26, 2024, the subsidiary guarantors were released from their guarantees under the Prior Credit Agreement and the Indentures.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data