MSCI. J.P. Morgan Global High Yield & Leveraged Finance Conference Kathleen Winters, CFO. February 28, 2017

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Transcription:

MSCI J.P. Morgan Global High Yield & Leveraged Finance Conference Kathleen Winters, CFO February 28, 2017 2017 MSCI Inc. All rights reserved. Please refer to the disclaimer at the end of this document.

FORWARD - LOOKING STATEMENTS Forward-Looking Statements Safe Harbor Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, our full-year 2017 guidance and our long-term targets. These forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these statements. In some cases, you can identify forward-looking statements by the use of words such as may, could, expect, intend, plan, seek, anticipate, believe, estimate, predict, potential, or continue, or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect our actual results, levels of activity, performance or achievements. Other factors that could materially affect our actual results, levels of activity, performance or achievements can be found in MSCI s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the Securities and Exchange Commission ( SEC ) on February 24, 2017, and in quarterly reports on Form 10-Q and current reports on Form 8-K filed with the SEC. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what MSCI projected. Any forward-looking statement in this presentation reflects MSCI s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to MSCI s operations, results of operations, growth strategy and liquidity. MSCI assumes no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise, except as required by law. 2

OTHER INFORMATION Percentage changes and totals in this presentation may not sum due to rounding. Percentage changes refer to the comparable period in 2015 and exclude discontinued operations, unless otherwise noted. FY 2015 and FY 2016 refer to twelve months ended December 31, 2015, and twelve months ended December 31, 2016, respectively. Gross sales include both recurring subscription and non-recurring sales. Subscription revenues include the total of recurring subscription and non-recurring revenues. Foreign currency exchange rate fluctuations are calculated to be the difference between the current period results as reported compared to the current period results recalculated using the foreign currency exchange rates in effect for the comparable prior period. We do not provide the impact of foreign currency fluctuations on our asset-based fees tied to average AUM, of which approximately two-thirds are invested in securities denominated in currencies other than the U.S. dollar, and accordingly, the impact of any such is excluded from the disclosed foreign currency adjusted variances. As a result of the sales of Institutional Shareholder Services Inc. and the Center for Financial Research and Analysis, in Q1 14 MSCI began reporting its former Governance business as discontinued operations in its financial statements. Financial and operating metrics for prior periods have been updated to exclude the Governance business. On August 1, 2016, MSCI closed the sale of its Real Estate Occupiers benchmarking business. Unless indicated otherwise, reported financial results and operating metrics have not been updated to exclude the results of this business. 3

TODAY S PRESENTER Kathleen Winters Chief Financial Officer since May 2016 Formerly at Honeywell International in a succession of senior finance positions, most recently served as Vice President and Chief Financial Officer for the company s Performance Materials and Technologies division Holds a Bachelor of Science degree in Accounting from Boston College 4

MSCI INVESTMENT HIGHLIGHTS A leading provider of mission critical investment decision support tools to the world s leading institutional investors Favorable, macro-growth trends in key product areas Global investing, growth in passive investing (ETFs), use of factors, increasing need for performance attribution / risk reporting, integration of ESG into the mainstream of the investment process Compelling business model Strong track record of delivering revenue growth 98% of revenue is recurring / revenue retention at 93% (FY 2016) High margin / low capital requirements Strong cash generation Strong competitive position $10 trillion in assets (1) benchmarked to MSCI indexes globally A leader in cross-border index licensing, ex-home country bias #1 in number of equity ETFs linked to equity indexes (910 as of Q4 16) World-class research enhanced content and proprietary IP Strong balance sheet and liquidity Management strength Focus on consistent, quality growth / strong accountability Solid stewardship of capital / focus on shareholder value creation (1) As of December 31, 2015, as reported on March 31, 2016 by evestment, Morningstar and Bloomberg. 5

STRONG TRACK RECORD OF REVENUE GROWTH (US$ in millions) $1,400 MSCI Revenues 1 Have Grown at a CAGR of 14% Since 2005 $1,200 $1,000 $800 $781 $827 $913 $997 $1,151 $1,075 $600 $400 $278 $311 $370 $431 $443 $604 $200 $0 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 1 Operating revenues from continuing operations. 6

MSCI FINANCIAL MODEL REVENUE GROWTH Recurring, Visible Revenue Model Strong Historical Retention Rates 98% recurring revenues and 82% subscription revenues FY 2016 90%+ annually since 2011 and 93% FY 2016 OPERATIONAL EFFICIENCY Scalable Cost Structure Aligning Tax Structure With Operating Footprint FY 2016 Adjusted EBITDA margin of 49.5% FY 2016 Effective Tax Rate of 32.4% CAPITAL OPTIMIZATION High Cash Generation Low Capital Expenditures Free Cash Flow of $392m for FY 2016 Capex of $43m for FY 2016 LTM: Last 12 months. Long-Term Shareholder Value Creation 7

A TRULY GLOBAL PRESENCE AMERICAS 13 Offices 1,025 People ASIA 10 Offices 1,200 People Global Footprint 33 Offices 2,862 Employees EMEA 10 Offices 637 People % of Total Employees Q4'13 Q4'14 Q4'15 Q4'16 Developed Market Centers 54% 49% 47% 44% Emerging Market Centers 46% 51% 53% 56% Note: Headcount and number of offices as of December 31, 2016. 8

WE ARE AT THE CENTER OF THE INVESTMENT PROCESS Relationships With 97 of the Top 100 Global Asset Managers* Asset Owners MSCI Managers Traders ~ 6,800 Clients Across 88 countries *Source: Most recent P&I ranking. 9

MSCI POWER OF THE INTEGRATED FRANCHISE Client Investment Opportunities and Challenges Research and Product Development Models / Methodologies CONTENT Algorithms Derived Data Workflow Applications / Services APPLICATIONS Investment Decision Support Tools For Clients Long - Term Value Creation For Shareholders 10

BROAD ASSET COVERAGE / STRONG RECURRING REVENUES FY 2016 Revenues by Segment Analytics 39% $1,163m Run Rate by Asset Class in FY 16 Multi-Asset Class 22% Index 53% All Other 8% Equity 68% Hedge Funds 6% Real Estate 4% FY 2016 Revenues by Type One Time 2% Recurring Subscription 80% ETF 12% non-etf 5% Futures & Options 1% Asset-Based Fees 18% 11

FY 2016 FINANCIAL SUMMARY (US$ in millions, except for EPS) Operating Revenue Operating Expenses Operating Income Earnings Per Share Cash Generation +7.0% +7.5% ex FX 1 Operating Expenses (1.3%) +0.8% ex FX Adj. EBITDA Adj. EPS Cash from Operations +18.2% +16.6% ex FX 1 +30.6% +42.1% 49.5% $671.1 $662.6 44.8% $569.5 $3.03 $434.7 $481.7 $2.32 42.4% $306.0 $1,075.0 $1,150.7 $593.3 Adj. EBITDA Expenses (2.0%) +0.2% ex FX $581.2 37.6% $403.9 Operating Income +20.8% +18.6% ex FX 1 $488.1 $2.03 Diluted EPS +33.0% $2.70 $256.8 Free Cash Flow +52.7% $392.1 FY'15 FY'16 FY'15 FY'16 FY'15 FY'16 FY'15 FY'16 FY'15 FY'16 = Depreciation and Amortization = Depreciation and Amortization = Diluted EPS, less earnings per diluted share from discontinued Adj. EBITDA Margin operations, plus the after-tax impact Operating Margin of intangible amortization, less gain on sale = Capex Strong Financial Performance Across All Metrics 1 MSCI does not provide the impact of foreign currency fluctuations on our asset-based fees tied to average AUM, of which approximately two-thirds are invested in securities denominated in currencies other than the U.S. dollar, and accordingly, the impact of any such fluctuation is excluded from the disclosed foreign currency adjusted variances. 12

INDEX PRODUCTS Products & Services Data & Content Research & Services How MSCI Generates Value Managers Asset Owners MSCI Traders Asset Owners and their Advisors Use our indexes in asset allocation as performance benchmarks for mandates and as the basis for indexed strategies Managers Active Managers use our indexes as benchmarks Indexed Managers and ETF providers use our indexes for indexed strategies Traders Use our data to support Managers in index trades and to support trading of financial 13 products

INDEX PRODUCTS HIGHLIGHTS (US$ in millions) Key Trends / Highlights Demand for MSCI index families, enhancements & data products continues to be driven by global investing trends and MSCI s seamless / global index framework Investments in ABF products driving growth in AUM in MSCI-linked equity ETFs Continuing to build momentum in Factors Futures & options total trading volume growing double-digits ABF Revenue Run Rate by Client Type % of segment Run Rate of $624m at end of Q4 16 Asset Management 77% Banking & Trading 13% Wealth Management 2% Asset Owners 3% Alternative Invt Mgmt 2% Others 3% Subscription Run Rate By Region $177.1 $4.8 $44.1 +11.8% +47.8% +11.4% $198.0 +6.2% $210.2 $7.1 +34.8% $9.6 $49.2 +19.2% $58.6 $368.9 $73.6 $135.0 +10.3% +11.5% +11.0% $406.7 $82.1 $150.0 $128.2 $141.7 $142.0 +10.6% +0.2% $160.2 +9.0% $174.6 FY 2014 FY 2015 FY 2016 ETF non-etf Futures & Options Q4'15 Q4'16 Americas EMEAI Asia Pacific 14

INDEX SUBSCRIPTION THE POWER OF COMPOUNDING Waves of Innovation Globalization: Investors expanding their strategies from a domestic bias to a global view, including small cap Strategy Capture new clients: Investing in coverage of new client segments Factor investing: Investors incorporating factors into their active and indexed investment approach ESG investing: Early adoption stage of investors integrating ESG into their portfolio management Product Contribution to $407m Run Rate MSCI Index Subscription Run Rate Growth FY 11-FY 16 10% CAGR Upsell existing clients: Educating investors on benefits of full global opportunity set; developing new data products New Use Cases: Establishing market leadership in Factor and ESG indexes Global Demand Key Growth Drivers Factor, ESG & Thematic 15% Investors seeking indexes that reflect new strategies Developed Market Emerging Market Custom & Specialized 8% 10% 12% Investors focused on pursuing opportunities in international and developed stocks Investors broadening exposure to international, emerging and global stocks Expanding use cases for Indexes Innovation Drives MSCI Index Growth 15

ETFS LINKED TO MSCI INDEXES DIFFERENTIATED LICENSING (US$ in billions) Growth in ETF AUM Linked to MSCI Indexes 12/31/15 AUM % of Total $335.6 77% Flagship Index Families 1 $6 $4 Net Growth +$10 12/31/16 AUM % of Total $345.2 72% $35.5 8% New Index Families 2 $23 $2 +$25 $61.1 13% $62.3 15% U.S. Segment Index Families 3 $8 Net Cash Flows $5 Market Movement +$13 $75.1 15% 09/30/16 AUM % of Total $344.6 73% Flagship Index Families 1 ($6.8) $7.4 Net Growth +$1 12/31/16 AUM % of Total $345.2 72% $56.7 12% New Index Families 2 ($1) $6 +$5 $61.1 13% $73.6 15% U.S. Segment Index Families 3 ($1) $2 +$1 $75.1 15% Net Cash Flows Market Movement Well Positioned Product Portfolio to Capture Growth From Innovation 1 Flagship Index Families, e.g., ACWI, EM, EAFE, Japan etc. 2 New Index Families, e.g., Developed Market IMI (all market caps), US Minimum Volatility etc. 3 U.S. Segment Index Families, e.g., US REIT, US Sectors etc. 16

ANALYTICS PRODUCTS How MSCI Generates Value Data & Analytical Content Applications Consultants Asset Owners MSCI Asset Owners and Their Consultants Portfolio Construction Portfolio Performance & Risk Managers Portfolio Management Risk Management Performance Attribution Product Creation Managers Regulators Traders Traders Order Execution Risk Management 17

ANALYTICS PRODUCTS HIGHLIGHTS (US$ in millions) Key Trends / Highlights Favorable industry trends are solid foundation for driving higher revenue growth and improved financial performance. For example, investing is become more complex not less complex. Very few firms trade in a single asset class Development of fixed income analytics capability to complement leadership in equity analytics Increasing focus on managed services to help our clients become more operationally efficient Development of new Analytics platform Hedge funds are increasing their usage of factors, driving demand for our products Subscription Run Rate (1) Wealth Management 5% Run Rate by Client Type % of segment Run Rate of $452m at end of Q4 16 Banking & Trading 18% Asset Management 40% Asset Owners 12% Alternative Invt Mgmt 16% Run Rate By Region Investment Consultants 5% Others 2% Energy & Commodity 2% +3.4% $436.7 $451.5 $405.1 $417.7 $436.7 $451.5 $59.9 +8.1% $64.8 $130.3 (0.3%) $130.0 $246.5 $256.8 +4.2% FY 2013 FY 2014 FY 2015 FY'16 Q4'15 Q4'16 Americas EMEAI Asia Pacific (1) Includes the Run Rate of Insignis from the October 16, 2015 acquisition date and the Run Rate of InvestorForce from the January 29, 2013 acquisition date. 18

ANALYTICS GROSS SALES AND CANCELS (US$ in millions) Aggregate Retention Rate 91.8% 93.0% 91.0% Run Rate $417.7 $436.7 $451.5 $60.4 $60.1 $64.1 $33.2 $29.4 $39.2 FY 2014 FY 2015 FY 2016 Gross Sales Cancels Higher Level of Sales Driven By Banking Segment Elevated Cancels Due to Market Conditions For Select Client Segments 19

ALL OTHER PRODUCTS HIGHLIGHTS (US$ in millions) Key Trends / Highlights ESG ESG integration into mainstream of investment process as asset owners across the globe are raising the importance of selecting and managing asset managers based on ESG criteria Asset managers responding with new product launches, with 47 of 104 ESGthemed ETFs linked to MSCI indexes Low carbon investing is one of the fastest growing areas within ESG, resulting in the largest asset owners making significant allocations Real Estate Continue to transform Real Estate product offering with integrated web-based analytical tools and Analytics portal Refine focus on core markets, core client segments, core products and leverage broader MSCI infrastructure to drive efficiencies Subscription Run Rate (1) Run Rate by Client Type % of segment Run Rate of $88m at end of Q4 16 Asset Management 59% Asset Owners 13% Others 18% Run Rate By Region Banking & Trading 5% Wealth Management 2% Investment Consultants 1% Alternative Invt Mgmt 2% $79.2 $82.7 $88.1 $82.7 $3.9 +6.5% +14.8% (ex FX ex Occupiers) +28.3% $88.1 $5.0 $66.4 $47.9 (1.3%) +12.7% (ex FX ex Occupiers) $47.3 $30.9 +16.0% $35.8 FY 2013 FY 2014 FY 2015 FY 2016 Q4'15 Q4'16 Americas EMEAI Asia Pacific (1) Includes the Run Rate of GMI Ratings from the August 11, 2014 acquisition date and Occupiers Run Rate through July 31, 2016. 20

STRONG TRACK RECORD OF RETURNING CAPITAL (US$ in millions, except period-end shares) $857 120 118 112 $759 $88 101 $97 91 $420 $20 $671 $759 $400 $100 $100 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Value of Shares Repurchased Dividends Period-End Shares Outstanding (in millions) Total capital returned since 2012: $2.3B Total shares repurchased since 2012: ~35m In fourth quarter 2016 and through February 17, 2017, a total of 4.4m shares were repurchased at an average price of $80.37 per share for a total value of $353.1m $0.8B remains on outstanding share repurchase authorization as of 02/17/17 Substantial Capital Returned 21

CORPORATE FINANCIAL POLICIES Target Leverage Optimize long-term leverage in order to enhance cost of capital while maintaining operational flexibility Target Liquidity M&A Strategy Maintain $125 $150 million of cash in the U.S. and $75 $100 million internationally for operational purposes Target minimum liquidity will increase with the growth of the business International cash may increase due to tax planning Opportunistically pursue bolt-on transactions that fit with our strategy and meet our financial criteria Recent example acquisitions: Insignis ($7 million, closed October 2015): strengthened MSCI s position in collecting, aggregating and managing complex data for performance and risk reporting, improving the entire data value chain for clients GMI Ratings ($15 million, closed August 2014): enhanced MSCI's position as a leader in ESG (environmental, social and governance) research and ratings Example Divestitures: ISS ($363 million, closed April 2014): focus on core business of performance and risk systems CFRA (amount not disclosed, closed March 2013): forensic accounting research not core to our offering of performance and risk tools Real Estate Occupiers (amount not disclosed, closed August 2016): focus on corporates versus core investing clients Capital Distribution $2.3 billion returned to shareholders to date Board of Directors approved quarterly dividend increase in Q3 16 from $0.22 to $0.28 per share Plan to maintain dividend payout between 30% - 40% of adj. EPS $0.8 billion remains on outstanding repurchase authorization as of 2/17/17 22

BALANCE SHEET AND LIQUIDITY (US$ in millions) As of December 31, 2016 Cash & Cash Equivalents $791.8 Cash & Cash Equivalents in the US 1 $583.6 Cash & Cash Equivalents held outside of the US $208.2 Total Debt 2 $2,100.0 5.25% $800m senior unsecured notes due 11/2024 $800.0 5.75% $800m senior unsecured notes due 8/2025 $800.0 4.75% $500m senior unsecured notes due 8/2026 $500.0 $220m unsecured revolving credit facility terminating 8/2021 $0.0 Net Debt $1,308.2 Total Debt / Adj. EBITDA 3.7x Net Debt / Adj. EBITDA 2.3x Credit Ratings *(S&P / Moody's) BB+ / Ba2 *Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. Target gross leverage remains 3.0x 3.5x and we expect to return to within the stated range in the coming quarters Commitment to deploy capital quickly in the most efficient method to achieve the highest return for shareholders Strong Balance Sheet 1 Includes approximately $125m - $150m in minimum cash balances, which MSCI seeks to maintain for general operating purposes. 2 Excludes deferred financing fees of $24.8m as of December 31, 2016. 23

FY 2017 GUIDANCE (US$ in millions) Metric FY 2016 Actual FY 2017 Guidance Operating expenses $663 $690 - $705 Adjusted EBITDA expenses $581 $605 - $620 Interest expense $102 $116 Net cash provided by operating activities $435 $360 - $410 Capex ($43) ($50 - $40) Free cash flow $392 $310 - $370 Effective tax rate expected to be in the range of 31.5% to 32.5% Dividend pay-out in the range of 30% - 40% of Adjusted EPS Continuing to Execute Consistent Strategy 24

APPENDIX Supplemental Disclosures & Reconciliation of Non-GAAP Measures to GAAP Measures 25

Q1 13 Q4 16 YOY RUN RATE GROWTH TREND YoY Run Rate Growth as Reported 34% 28% 25% 21% 21% 14% 18% 15% 12% 14% 13% 10% 11% 10% 10% 10% 10% 6% 9% 7% 8% 8% 8% 8% 8% 9% 12% 6% 8% 8% 7% 8% 2% 7% 8% 8% 8% 7% 6% 6% 6% 7% 5% 5% 7% 7% (2%) (3%) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Subscription Total Asset-Based Fees MSCI Total YoY Subscription Run Rate Growth as Reported vs. Organic Growth (excluding FX Impact and Acquisitions/Divestitures) 10% 11% 12% 7% 8% 8% 8% 8% 8% 8% 8% 8% 9% 8% 7% 7% 4% 4% 5% 6% 7% 7% 8% 7% 6% 6% 6% 7% 8% 7% 7% 7% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Subscription Run Rate Growth as Reported Organic Subscription Run Rate Growth ex FX 26

Q1 13 Q4 16 YOY SEGMENT RUN RATE GROWTH TREND 1% (0.4%) 2% 0.2% 4% 5% 4% 4% 2% 3% 4% 4% 3% 3% Index 34% 28% 25% 21% 21% 9% 18% 8% 14% 11% 15% 10% 10% 13% 10% 8% 9% 10% 11% 10% 10% 10% 10% 2% 10% 10% 10% 8% (2%) 6% 5% (3%) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Subscription Run Rate Growth as Reported ABF Run Rate Growth as Reported Analytics 4% 6% 6% 6% All Other 5% 2% 2% 3% 6% 5% 7% 6% 5% 6% 5% 5% Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 13% Subscription Run Rate Growth as Reported 18% 21% 24% 19% 12% 13% 13% 15% 15% 14% 14% 12% 13% Organic Subscription Run Rate Growth ex FX 11% 10% 4% 4% 12% 10% 11% 11% 5% 4% 3% 5% 7% Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Subscription Run Rate Growth as Reported Organic Subscription Run Rate Growth ex FX 15% 27

FY 2016 STRONG EXECUTION 1 REVENUE GROWTH Operating Revenues +7.0% Lower Operating Expenses / Adj. EBITDA Expenses (1.3%) / (2.0%) OPERATIONAL EFFICIENCY Growth in Operating Income / Adj. EBITDA +20.8% / +18.2% Operating Margin / Adj. EBITDA Margin Improvement 480bps / 470bps Lower Full-Year Effective Tax Rate (180bps) CAPITAL OPTIMIZATION Lower Diluted Share Count (12.2%) Increased Leverage 2 +0.4x Growth in Diluted EPS / Adj. EPS +33.0% / +30.6% Long - Term Shareholder Value Creation 1 Percentage and other changes refer to full year 2015 unless otherwise noted. 28 2 Leverage = Total Debt / Trailing Twelve Months Adjusted EBITDA.

FY 2016 VS. FY 2015 ADJUSTED EPS BRIDGE Business Growth + Investment Tax Capital Optimization FX / Others Adj. EPS Growth $2.32 +$0.71, 30.6% $3.03 $0.07 $0.41 ($0.03) $0.07 $0.37 ($0.20) $0.02 $2.32 +$0.48 ($0.03) +$0.07 +$0.17 +$0.02 $3.03 FY'15 Adj. EPS Higher Revenues (Investment) / Efficiency Lower Tax Rate Subscription Revenue Lower Share Count ABF Revenue Higher Net Interest Expense FX / Others Pulling All Levers to Deliver Adjusted EPS Growth FY'16 Adj. EPS 29

FY 2016 STRONG FREE CASH FLOW (FCF) GENERATION (US$ in millions) $257 $392 ($20) Cash Collections expected in FY 2017, received in Q4 16 Mid-Point of FY 2017 FCF Guidance ($40) ~$332 ~$340 $20 Non- Recurring Tax Items Cash Collections expected in FY 2017, received in Q4 16 ~$360 FY 2015 FCF Actual FY 2016 FCF Actual Normalized FY 2016 FCF FY 2017 FCF 1 Guidance Normalized FY 2017 FCF 1 Guidance FY 2016 Benefit From Accelerated Cash Collections / Discrete Cash Tax Related Benefits 1 Includes $16m of additional after-tax cash interest expense not incurred prior to FY 2017. 30

Q4 16 FINANCIAL SUMMARY (US$ in millions, except for EPS) Operating Revenue Operating Expenses Operating Income Earnings Per Share Cash Generation +7.3% +8.3% ex FX 1 Operating Expenses +0.9% +3.5% ex FX Adj. EBITDA Adj. EPS Cash from Operations +15.8% +14.9% ex FX 1 +22.7% +69.3% $165.4 $166.8 46.5% 50.2% $147.0 $0.81 $137.7 $0.66 $126.9 43.0% $81.3 $272.9 $292.8 $146.0 Adj. EBITDA Expenses (0.1%) +2.7% ex FX $145.9 39.4% $126.0 $107.5 Operating Income +17.2% +15.8% ex FX 1 $0.57 Diluted EPS +28.1% $0.73 $62.8 $127.2 Free Cash Flow +102.6% Q4'15 Q4'16 Q4'15 Q4'16 Q4'15 Q4'16 Q4'15 Q4'16 = Depreciation and Amortization = Depreciation and Amortization = Diluted EPS, less earnings per diluted share from discontinued Adj. EBITDA Margin operations, plus the after-tax impact Operating Margin of intangible amortization = Capex Q4'15 Strong Financial Performance Across All Metrics 1 MSCI does not provide the impact of foreign currency fluctuations on our asset-based fees tied to average AUM, of which approximately two-thirds are invested in securities denominated in currencies other than the U.S. dollar, and accordingly, the impact of any such fluctuation is excluded from the disclosed foreign currency adjusted variances. Q4'16 31

Q4 16 RECORD SALES (US$ in millions) $50.0 Recurring Subscription Sales 5-Year Quarterly Average $28.8 $28.5 $4.4 $24.1 $35.2 $37.0 $4.1 $5.1 $31.1 $31.9 $41.3 $6.9 $34.4 $7.8 $42.2 Q4'12 Q4'13 Q4'14 Q4'15 Q4'16 Recurring Subscription Sales Non-Recurring Sales Gross Sales Record Sales Offset Higher Cancels in Select Client Segments 32

Q4 16 VS. Q4 15 ADJUSTED EPS BRIDGE Business Growth + Investment Capital Optimization FX Adj. EPS Growth +$0.15, 22.7% $0.66 $0.81 $0.04 ($0.04) $0.08 ($0.05) $0.01 $0.04 Tax Benefit $0.11 Tax Benefit $0.04 $0.62 +$0.15 ($0.04) +$0.03 +$0.01 $0.77 Q4'15 Adj. EPS Higher Revenues (Investment) / Efficiency Lower Share Count Higher Net Interest Expense FX Q4'16 Adj. EPS Subscription Revenue ABF Revenue Pulling All Levers to Deliver Adjusted EPS Growth 33

INDEX SEGMENT (US$ in millions) Operating Revenue Adj. EBITDA & Adj. EBITDA Margin (%) $143.7 +10.7% $159.1 +14.3% $50.2 +11.1% $55.8 71.1% 68.9% $113.2 $93.5 +10.5% $103.3 $99.0 Q4'15 Subscription ABF Q4'16 Strong growth across all revenue types recurring, asset-based fees (ABF) and non-recurring Higher recurring subscription revenues driven by benchmark and data product growth; strength in small cap ABF revenue growth driven by non-etf passive funds, as well as ETF and exchange traded futures and options related revenues Q4'15 Adj. EBITDA Q4'16 Adj. EBITDA Margin Double-digit growth in adjusted EBITDA and higher adjusted EBITDA margin Margin expansion while continuing to invest in new products and enhance existing products Strong Top-Line and Adjusted EBITDA Growth 34

INDEX SEGMENT ASSET-BASED FEE DETAIL (US$ in millions, except AUM in billions and Average BPS fee) Quarterly Asset-Based Fee Revenue Trend $56.1 $50.2 $55.8 $48.7 $49.6 $2.5 $2.6 $2.2 $2.3 $2.2 $16.7 $16.1 $12.8 $13.0 $12.8 Period Ending Quarterly AUM & Market Movement of MSCI-Linked ETFs Market Appreciation: $10.8B Cash Inflows: $37.2B $6.6 $3.9 $11.5 ($1.7) ($2.5 ) $23.6 $15.2 ($8.7) $35.2 $33.3 $34.6 $36.9 $37.1 $433.4 $438.3 $439.7 $474.9 $481.4 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 ETF Non-ETF Futures & Options Quarter-End AUM by Market Exposure 1 of MSCI-Linked ETFs $433.4 $438.3 $439.7 $474.9 $481.4 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Cash Inflows Market Appreciation / (Depreciation) Quarterly Avg. AUM and Avg. BPS 2 of MSCI-Linked ETFs $467.3 $471.1 $85.9 $97.1 $94.2 $104.4 $108.3 $110.4 $104.6 $107.7 $132.0 $124.1 $423.3 3.32 $407.9 3.24 $438.8 3.12 3.11 3.10 $250.5 $239.5 $227.6 $234.6 $246.8 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 DM ex US EM US Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Average AUM Average BPS Fee 1 Note: US = ETFs linked to MSCI indexes the majority of whose weight is comprised of securities in MSCI Developed Market (DM) countries, primarily or exclusively in the US. DM ex US = ETFs linked to MSCI indexes the majority of whose weight is comprised of securities in MSCI DM countries other than the US. EM = ETFs linked to MSCI indexes the majority of whose weight is comprised of securities that are not in MSCI DM countries. Prior periods have been reclassified to conform to the current period classification. 2 Average BPS fee based on Run Rate and period end AUM. 35

ANALYTICS SEGMENT (US$ in millions) Operating Revenue Adj. EBITDA & Adj. EBITDA Margin (%) +3.4% +5.6% ex FX +7.9% +9.3% ex FX 27.9% 29.1% $110.7 $114.4 $30.9 $33.3 Q4'15 Q4'16 Higher RiskManager revenues and strong contribution from equity models and BarraOne due to increasing use of factors to explain performance Solid performance despite challenging market conditions for select client segments Q4'15 Adj. EBITDA Q4'16 Adj. EBITDA Margin Focus on profitability has delivered strong growth in operating leverage Reinvestment of cost savings into new growth opportunities Investing to drive future growth: fixed income, services and launch of the first client-facing version of new Analytics platform Expanding Margin While Investing To Drive Top-Line Growth 36

ALL OTHER SEGMENT (US$ in millions) Operating Revenue Adj. EBITDA & Adj. EBITDA Margin (%) $18.5 +4.4% +15.2% ex FX ex Occupiers $19.3 2.3% $0.5 +19.5% $9.9 (negligible FX) $11.8 ($3.0) (12.9%) $8.6 +9.8% ex FX $7.5 ex Occupiers Q4'15 Q4'16 Real Estate ESG (16.1%) Q4'15 Adj. EBITDA Q4'16 Adj. EBITDA Margin Strong growth in ESG driven by record quarterly sales 33% growth in ESG ratings Run Rate ESG integration driving new client sales Real Estate impacted by FX revenues up 10% on organic basis, excluding FX impact Real Estate market information product Run Rate up by 12% Improved profitability driven by continued strong growth in ESG top-line and improved efficiency in Real Estate Investment in ESG continues Continued restructuring of Real Estate product area to achieve profitability Strong Demand for ESG; Continued Restructuring of Real Estate 37

RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME Dec. 31, Dec. 31, Sep. 30, Dec. 31, Dec. 31, In thousands 2016 2015 2016 2016 2015 Index adjusted EBITDA $ 113,161 $ 98,990 $ 111,750 $ 431,478 $ 392,987 Analytics adjusted EBITDA 33,344 30,908 31,501 128,507 95,468 All Other adjusted EBITDA 452 (2,984) 73 9,472 (6,758) Consolidated adjusted EBITDA 146,957 126,914 143,324 569,457 481,697 Amortization of intangible assets 11,498 11,803 11,752 47,033 46,910 Depreciation and amortization of property, equipment and leasehold improvements 9,447 7,568 8,312 34,320 30,889 Operating income 126,012 107,543 123,260 488,104 403,898 Other expense (income), net 28,917 22,107 25,738 102,166 54,344 Provision for income taxes 28,845 25,437 32,241 125,083 119,516 Income from continuing operations 68,250 59,999 65,281 260,855 230,038 Income (loss) from discontinued operations, Three Months Ended Year Ended net of income taxes (593) (6,390) Net income $ 68,250 $ 59,406 $ 65,281 $ 260,855 $ 223,648 38

RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED EPS TO NET INCOME AND EPS Dec. 31, Dec. 31, Sep. 30, Dec. 31, Dec. 31, In thousands, except per share data 2016 2015 2016 2016 2015 Net income $ 68,250 $ 59,406 $ 65,281 $ 260,855 $ 223,648 Less: Income (loss) from discontinued operations, Three Months Ended Year Ended net of income taxes (593) (6,390) Income from continuing operations 68,250 59,999 65,281 260,855 230,038 Plus: Amortization of intangible assets 11,498 11,803 11,752 47,033 46,910 Less: Gain on sale of investment (6,300) Less: Income tax effect (3,403) (3,534) (3,873) (15,243) (16,039) Adjusted net income $ 76,345 $ 68,268 $ 73,160 $ 292,645 $ 254,609 Diluted EPS $ 0.73 $ 0.57 $ 0.68 $ 2.70 $ 2.03 Less: Earnings per diluted common share from discontinued operations (0.01) (0.06) Earnings per diluted common share from continuing operations $ 0.73 $ 0.58 $ 0.68 $ 2.70 $ 2.09 Plus: Amortization of intangible assets 0.12 0.11 0.12 0.49 0.43 Less: Gain on sale of investment (0.06) Less: Income tax effect (0.04) (0.03) (0.03) (0.16) (0.14) Adjusted EPS $ 0.81 $ 0.66 $ 0.77 $ 3.03 $ 2.32 39

RECONCILIATION OF ADJUSTED EBITDA EXPENSES TO OPERATING EXPENSES Three Months Ended Year Ended Full-Year Dec. 31, Dec. 31, Sep. 30, Dec. 31, Dec. 31, 2017 In thousands 2016 2015 2016 2016 2015 Outlook Index adjusted EBITDA expenses $ 45,909 $ 44,712 $ 46,001 $ 182,073 $ 165,977 Analytics adjusted EBITDA expenses 81,062 79,760 79,790 319,846 337,956 All Other adjusted EBITDA expenses 18,884 21,507 19,318 79,293 89,383 Consolidated adjusted EBITDA expenses 145,855 145,979 145,109 581,212 593,316 $605,000 - $620,000 Amortization of intangible assets 11,498 11,803 11,752 47,033 46,910 Depreciation and amortization of property, 85,000 equipment and leasehold improvements 9,447 7,568 8,312 34,320 30,889 Total operating expenses $ 166,800 $ 165,350 $ 165,173 $ 662,565 $ 671,115 $690,000 - $705,000 40

RECONCILIATION OF FREE CASH FLOW TO NET CASH PROVIDED BY OPERATING ACTIVITIES Three Months Ended Year Ended Full-Year Dec. 31, Dec. 31, Sep. 30, Dec. 31, Dec. 31, 2017 In thousands 2016 2015 2016 2016 2015 Outlook Net cash provided by operating activities $ 137,708 $ 81,322 $ 146,923 $ 434,738 $ 305,994 $360,000 - $410,000 Capital expenditures (8,140) (16,127) (10,867) (32,284) (40,652) Capitalized software development costs (2,395) (2,438) (2,861) (10,344) (8,500) Capex (10,535) (18,565) (13,728) (42,628) (49,152) (50,000-40,000) Free cash flow $ 127,173 $ 62,757 $ 133,195 $ 392,110 $ 256,842 $310,000 - $370,000 41

USE OF NON-GAAP FINANCIAL MEASURES AND OPERATING METRICS MSCI has presented supplemental non-gaap financial measures as part of this presentation. The non-gaap financial measures presented in this presentation should not be considered as alternative measures for the most directly comparable GAAP financial measures. The non-gaap financial measures presented in this presentation are used by management to monitor the financial performance of the business, inform business decision-making and forecast future results. A reconciliation that reconciles each non-gaap financial measure with the most comparable GAAP measure is available in the appendix. Adjusted EBITDA is defined as net income before income (loss) from discontinued operations, net of income taxes, plus 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. Adjusted EBITDA expenses is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets. Adjusted net income and adjusted EPS are defined as net income and diluted EPS, respectively, before income from discontinued operations, net of income taxes and the after-tax impact of the amortization of intangible assets and, at times, certain other transactions or adjustments. Capex is defined as capital expenditures plus capitalized software development costs. Free cash flow is defined as net cash provided by operating activities, less Capex. We believe adjusted EBITDA and adjusted EBITDA expenses are meaningful measures of the operating performance of MSCI because they adjust for significant one-time, unusual or nonrecurring items as well as eliminate the accounting effects of capital spending and acquisitions that do not directly affect what management considers to be our core operating performance in the period. We believe that free cash flow is useful to investors because it relates the operating cash flow of MSCI to the capital that is spent to continue and improve business operations, such as investment in MSCI s existing products. Further, free cash flow indicates our ability to strengthen MSCI s balance sheet, repay our debt obligations, pay cash dividends and repurchase shares of our common stock. From time to time, we may present normalized cash flows that takes into account the timing of cash collections and other payments, if material or helpful. We believe that the non-gaap financial measures presented in this presentation facilitate meaningful period-to-period comparisons and provide a baseline for the evaluation of future results. Adjusted EBITDA expenses, adjusted EBITDA, adjusted net income, adjusted EPS and free cash flow are not defined in the same manner by all companies and may not be comparable to similarly-titled non-gaap financial measures of other companies. The Run Rate at a particular point in time primarily represents the forward-looking revenues for the next 12 months from then-current subscriptions and investment product licenses we provide to our clients under renewable contracts or agreements assuming all contracts or agreements that come up for renewal are renewed and assuming then-current currency exchange rates. For any license where fees are linked to an investment product s assets or trading volume, the Run Rate calculation reflects, for ETFs, the market value on the last trading day of the period, for futures and options, the most recent quarterly volumes and for non-etf funds, the most recent client reported assets under such license or subscription. The Run Rate does not include fees associated with one-time and other non-recurring transactions. In addition, we remove from the Run Rate the fees associated with any subscription or investment product license agreement with respect to which we have received a notice of termination or non-renewal during the period and determined that such notice evidences the client s final decision to terminate or not renew the applicable subscription or agreement, even though such notice is not effective until a later date. Organic subscription Run Rate growth ex FX is defined as the period over period Run Rate growth, excluding the impact of changes in foreign currency and the first year impact of any acquisitions, it is also adjusted for divestitures. Changes in foreign currency are calculated by applying the end of period currency exchange rate from the comparable prior period to current period foreign currency denominated Run Rate. This metric also excludes the impact on the growth in subscription Run Rate of the acquisitions of IPD, InvestorForce, and GMI for their respective first year of operations as part of MSCI, as well as the divestiture of MSCI s Real Estate Occupiers benchmarking business which closed on August 1, 2016. The Aggregate Retention Rate for a period is calculated by annualizing the cancellations for which we have received a notice of termination or for which we believe there is an intention to not renew during the period, and we believe that such notice or intention evidences the client s final decision to terminate or not renew the applicable agreement, even though such notice is not effective until a later date. This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Aggregate Retention Rate for the period. The Aggregate Retention Rate is computed on a product-by-product basis. Therefore, if a client reduces the number of products to which it subscribes or switches between our products, we treat it as a cancellation. In addition, we treat any reduction in fees resulting from renegotiated contracts as a cancellation in the calculation to the extent of the reduction. 42