MSCI Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

  MSCI Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

Business Wire

NEW YORK -- February 7, 2013

MSCI Inc. (NYSE: MSCI), a leading global provider of investment decision
support tools, including indices, portfolio risk and performance analytics and
corporate governance services, today announced results for the fourth quarter
and full year ended December 31, 2012.

(Note: Percentage changes are referenced to the comparable period in 2011,
unless otherwise noted.)

  *Operating revenues increased 9.3% to $247.1 million in fourth quarter 2012
    and 5.5% to $950.1 million for the full year 2012.
  *Net income increased 22.4% to $54.5 million in fourth quarter 2012 and net
    income grew 6.2% to $184.2 million for full year 2012.
  *Adjusted EBITDA (defined below) grew by 12.5% to $116.6 million in fourth
    quarter 2012. For full year 2012, Adjusted EBITDA grew by 3.8% to $434.5
    million. Fourth quarter 2012 Adjusted EBITDA margin increased to 47.2%
    from 45.8% and full year 2012 Adjusted EBITDA margin fell to 45.7% from
    46.5%.
  *Diluted EPS for fourth quarter 2012 rose 22.2% to $0.44 and full year 2012
    Diluted EPS increased 5.0% to $1.48.
  *Fourth quarter 2012 Adjusted EPS (defined below) rose 15.6% to $0.52. Full
    year 2012 Adjusted EPS rose 4.9% to $1.94.
  *MSCI entered into a $100 million accelerated share repurchase agreement in
    December 2012 and its Board of Directors authorized an additional $200
    million repurchase program.
  *MSCI’s run rate grew by 9.7% to $967.4 million in fourth quarter 2012,
    driven by organic subscription growth of 5.1%, organic asset-based fee
    growth of 6.2% and the acquisition of IPD.

“We are proud of what MSCI achieved in 2012,” Henry A. Fernandez, Chairman and
CEO, said. “Despite the challenging environment, MSCI reported total run rate
growth of 9.7%. MSCI’s growth underscores the importance of being able to
offer our clients a diverse portfolio of investment decision support tools.
While our sales to active portfolio managers slowed, our run rate from passive
investment products grew by 6.2%, even after factoring in the loss of the
Vanguard ETFs. We also benefited from renewed growth in our governance
segment. Since acquiring this business as part of the purchase of RiskMetrics
in 2010, we have focused on broadening its product offering and it is
gratifying to see these efforts begin to pay off.

“Strong cash flows enabled MSCI to pursue a balanced approach to capital
deployment,” added Mr. Fernandez. “During 2012 we continued to fund our
organic investments, acquired IPD for $125 million to strengthen our
multi-asset class product offering and repaid more than $200 million of debt.
We spent another $100 million to repurchase MSCI shares and have the
authorization to repurchase an additional $200 million.

“We enter 2013 with an enhanced platform of products that are better
positioned than ever to compete in a market in which clients, financial
markets and technology are constantly evolving. Our strong cash flows enable
us to continue to invest in our business, repay our scheduled debt
obligations, and return capital to shareholders,” concluded Mr. Fernandez.

                                                                           
Table 1: MSCI Inc. Selected Financial Information (unaudited)
                                                                                            
                       Three Months Ended          Change       Year Ended                  Change
                                                   from                                     From
Dollars in             December      December      December     December      December      December
thousands,             31,           31,           31,          31,           31,           31,
except per       2012          2011          2011         2012          2011          2011
share data
Operating              $ 247,080     $ 226,134     9.3%         $ 950,141     $ 900,941     5.5%
revenues
Operating                151,773       144,501     5.0%           603,205       578,943     4.2%
expenses
Net income               54,452        44,486      22.4%          184,238       173,454     6.2%
% Margin                 22.0%         19.7%                      19.4%         19.3%
Diluted                $ 0.44        $ 0.36        22.2%        $ 1.48        $ 1.41        5.0%
EPS
                                                                                            
Adjusted               $ 0.52        $ 0.45        15.6%        $ 1.94        $ 1.85        4.9%
EPS^1
Adjusted               $ 116,567     $ 103,648     12.5%        $ 434,460     $ 418,740     3.8%
EBITDA^2
% Margin                 47.2%         45.8%                      45.7%         46.5%
                                                                                            

^1 Per share net income before after-tax impact of amortization of
intangibles, non-recurring stock-based compensation, restructuring costs, debt
repayment and refinancing expenses and the lease exit charge. See Table 14
titled "Reconciliation of Adjusted Net Income and Adjusted EPS to Net Income
and EPS (unaudited)" and information about the use of non-GAAP financial
information provided under "Notes Regarding the Use of Non-GAAP Financial
Measures.”

^2 Net ^ Income before income taxes, other net expense and income,
depreciation, amortization, non-recurring stock-based compensation,
restructuring costs, and the lease exit charge. See Table 13 titled
"Reconciliation of Adjusted EBITDA to Net Income (unaudited)" and information
about the use of non-GAAP financial information provided under "Notes
Regarding the Use of Non-GAAP Financial Measures.”

Summary of Results for Fourth Quarter 2012 compared to Fourth Quarter 2011

Operating Revenues – See Table 4

Total operating revenues for the three months ended December 31, 2012 (“fourth
quarter 2012”) increased $20.9 million, or 9.3%, to $247.1 million compared to
$226.1 million for the three months ended December 30, 2011 (“fourth quarter
2011”). On an organic basis, which excludes the impact of the revenues of IPD
Group Limited (“IPD”), acquired on November 30, 2012, revenues grew by $17.3
million, or 7.7%.

Total fourth quarter 2012 subscription revenues rose $12.2 million, or 6.4%,
to $202.0 million while asset-based fees increased $7.1 million, or 22.8%, to
$38.1 million. Non-recurring revenues rose $1.6 million to $6.9 million. The
increase in non-recurring revenues was driven by the acquisition of IPD and by
an increase in non-recurring governance revenues.

Performance and Risk segment revenues rose $18.4 million, or 9.3%, to $215.9
million, primarily driven by growth in index and environmental, social and
governance (“ESG”) products, and risk management analytics offset, in part, by
declines in portfolio management analytics and energy and commodity analytics
revenues.

  *Index and ESG products: Index and ESG products revenues increased $16.7
    million, or 16.6%, to $117.4 million. Organic revenue growth was $13.1
    million, or 13.0%. Subscription revenues grew by $9.6 million, or 13.8%,
    to $79.3 million, driven by growth in revenues of index benchmark products
    and, to a lesser extent, the acquisition of IPD.

    Revenues attributable to equity index asset-based fees rose $7.1 million,
    or 22.8%, to $38.1 million, largely as a result of higher assets under
    management and higher fees from other passive funds. The average assets
    under management (“AUM”) in ETFs linked to MSCI indices increased 23.5% to
    $376.6 billion from $305.0 billion in fourth quarter 2011. The average AUM
    of ETFs for which Vanguard has announced its intention to switch the
    underlying indices was $133.0 billion in fourth quarter 2012.

  *Risk management analytics: Revenues related to risk management analytics
    products increased $4.6 million, or 7.4%, to $66.7 million. The increase
    in risk management analytics revenues was driven by higher revenues from
    our BarraOne and HedgePlatform products.
  *Portfolio management analytics: Revenues related to portfolio management
    analytics products declined $1.5 million, or 5.1%, to $28.6 million as a
    result of weak sales of equity analytics products and the continued
    migration of fixed income analytics systems to BarraOne.
  *Energy and commodity analytics: Revenues from energy and commodity
    analytics products were $3.3 million, down $1.4 million, or 29.6%, from
    fourth quarter 2011. At the beginning of 2012, we corrected an error
    inour revenue recognition policy for our energy and commodity analytics
    products. The correction resulted in a smaller proportion of annual
    revenue being recognized in fourth quarter 2012 than in fourth quarter
    2011.

Governance segment revenues rose $2.6 million, or 9.0%, to $31.1 million in
fourth quarter 2012, driven by higher revenues from advisory compensation data
and analytics and higher revenues from our securities class action services.
Non-recurring governance revenues grew by $0.6 million to $2.5 million.

Operating Expenses – See Table 6

Total operating expenses rose $7.3 million, or 5.0%, to $151.8 million,
primarily driven by higher compensation costs offset, in part, by lower
non-compensation expenses.

  *Compensation costs: Total compensation costs rose $7.9 million, or 9.2%,
    to $93.8 million in fourth quarter 2012. Excluding non-recurring
    stock-based compensation expense, total compensation costs rose $8.7
    million, or 10.2%, to $93.5 million. Compensation costs were impacted by
    an increase in overall compensation and benefits expense and by the
    addition of IPD.
  *Non-compensation costs excluding the lease exit charge, depreciation and
    amortization, and restructuring costs declined $0.6 million, or 1.7%, to
    $37.1 million in fourth quarter 2012. The biggest drivers of the decline
    were lower information technology and recruiting expenses, which more than
    offset the addition of IPD’s operating costs and the impact of higher
    professional fees and occupancy costs.
  *Lease exit charge: Fourth quarter 2012 included a $0.5 million charge
    associated with the exit of a lease resulting from the consolidation of
    our New York offices.
  *Depreciation and amortization: Amortization of intangibles expense totaled
    $15.4 million compared to $16.3 million in fourth quarter 2011, a decline
    of 5.2%. Depreciation and amortization of property, plant and equipment
    rose $0.5 million, or 11.4%, to $5.0 million.

Other Expense (Income), Net

Other expense (income), net for fourth quarter 2012 was $7.0 million, a
decline of $4.5 million from fourth quarter 2011. Interest expense fell by
$6.1 million to $7.2 million as a result of lower levels of indebtedness and
lower interest rates following our second quarter 2012 refinancing.

Provision for Income Taxes

Income tax expense was $33.9 million in fourth quarter 2012, an increase of
$8.2 million, or 32.1%, from fourth quarter 2011. Contributing to the increase
in income tax expense was a $1.7 million charge relating to the finalization
of amounts owed to Morgan Stanley regarding tax periods 2002 through 2006,
which were prior to MSCI’s initial public offering. The effective tax rate in
fourth quarter 2012 was 38.3%, up from 36.6% in fourth quarter 2011.

Net Income and Earnings per Share – See Table 14

Net income rose $10.0 million, or 22.4%, to $54.5 million for fourth quarter
2012. The net income margin increased to 22.0% from 19.7% as a result of the
higher operating profit margin and lower interest costs offset, in part, by
the higher tax rate. Diluted EPS rose by $0.08, or 22.2%, to $0.44.

Adjusted net income, which excludes the after-tax impact of the lease exit
charge, amortization of intangibles, non-recurring stock-based compensation
expense and restructuring costs, rose $8.6 million, or 15.5%, to $64.2
million. Adjusted EPS, which excludes the after-tax, per share impact of the
lease exit charge, amortization of intangibles, non-recurring stock-based
compensation expense and restructuring costs totaling $0.08, rose $0.07, or
15.6%, to $0.52.

See Table 14 titled “Reconciliation of Adjusted Net Income and Adjusted EPS to
Net Income and EPS” and “Notes Regarding the Use of Non-GAAP Financial
Measures” below.

Adjusted EBITDA – See Table 13

Adjusted EBITDA, which excludes income taxes, other net expense and income,
depreciation, amortization, non-recurring stock-based compensation,
restructuring costs and the lease exit charge, was $116.6 million, up $12.9
million, or 12.5%, from fourth quarter 2011. The Adjusted EBITDA margin
increased to 47.2% from 45.8%.

By segment, Adjusted EBITDA for the Performance and Risk segment increased
$10.5 million, or 10.9%, to $107.5 million in fourth quarter 2012. The
Adjusted EBITDA margin for this segment increased to 49.8% from 49.1%.
Adjusted EBITDA for the Governance segment increased $2.4 million, or 35.6%,
to $9.1 million and the Adjusted EBITDA margin for this segment rose to 29.1%
from 23.4%.

See Table 13 titled “Reconciliation of Adjusted EBITDA to Net Income” and
“Notes Regarding the Use of Non-GAAP Financial Measures” below.

Summary of Results for Full Year Ended December 31, 2012 compared to Full Year
Ended December 31, 2011

Operating Revenues – See Table 5

Total operating revenues for the full year ended December 31, 2012 (“full year
2012”) increased $49.2 million, or 5.5%, to $950.1 million compared to $900.9
million for the full year ended December 31, 2011 (“full year 2011”). Total
subscription revenues rose $51.9 million, or 7.1%, to $784.3 million, and
asset-based fees increased $4.9 million, or 3.6%, to $140.9 million. Total
non-recurring revenues fell $7.6 million, or 23.3%, to $24.9 million.

Index and ESG products, risk management analytics and governance revenues grew
9.1%, 6.9% and 3.0%, respectively, in full year 2012. Partially offsetting
these increases, Portfolio management analytics revenues declined 2.3% and
energy and other commodity analytics revenues fell 36.4%, primarily as a
result of a $5.2 million non-cash cumulative revenue reduction in first
quarter 2012 to correct an error. By segment, Performance and Risk revenues
rose $45.6 million, or 5.8%, to $827.0 million for full year 2012. Governance
revenues rose $3.6 million, or 3.0%, to $123.2 million.

Operating Expenses – See Table 7

Total operating expenses increased $24.3 million, or 4.2%, to $603.2 million
in full year 2012 compared to full year 2011, primarily driven by higher
compensation costs and the lease exit charge, partially offset by lower
restructuring expenses and amortization of intangibles. Excluding
non-recurring stock-based compensation, compensation expenses rose $33.3
million, or 9.8%. The increase in compensation costs was primarily driven by
an increase in average headcount and higher severance expenses.

Non-compensation expenses  costs excluding the lease exit charge, depreciation
and amortization, and restructuring costs were essentially flat, up $0.2
million to $144.3 million as lower professional fees and other expenses
largely offset an increase in occupancy costs. Restructuring costs declined by
$3.6 million. Depreciation and amortization expenses, including the
amortization of intangibles, declined by $3.2 million, or 3.8%.

Other Expense (Income), Net

Other expense (income), net for full year 2012 was $57.5 million, a decline of
$1.1 million from full year 2011. Other expense (income), net includes debt
repayment and refinancing expenses of $20.6 million in full year 2012 and $6.4
million in full year 2011. Excluding the change in debt repayment and
refinancing expenses, other expense declined by $15.3 million in full year
2012 as a result of lower levels of indebtedness and lower interest rates.

Provision for Income Taxes

The provision for income tax expense was $105.2 million in full year 2012, up
$15.2 million, or 16.9%, from full year 2011. Contributing to the increase in
income tax expense was a $1.7 million charge relating to the finalization of
amounts owed to Morgan Stanley. The effective tax rate was 36.3% for full year
2012, up from 34.2% for full year 2011. Full year 2011 income tax expense
benefited from $4.2 million of certain non-recurring benefits relating to
prior tax periods.

Net Income and Earnings per Share – See Table 14

Net income rose $10.8 million, or 6.2%, to $184.2 million in full year 2012.
The net income margin increased slightly to 19.4% from 19.3%. Diluted EPS
increased $0.07, or 5.0%, to $1.48.

Adjusted net income, which excludes the after-tax impact of the lease exit
charge, amortization of intangibles, non-recurring stock-based compensation
expense, and restructuring costs, rose $13.9 million, or 6.1%, to $241.2
million. Adjusted EPS rose 4.9% to $1.94 in full year 2012.

See Table 14 titled “Reconciliation of Adjusted Net Income and Adjusted EPS to
Net Income and EPS” and “Notes Regarding the Use of Non-GAAP Financial
Measures” below.

Adjusted EBITDA – See Table 13

Adjusted EBITDA, which excludes income taxes, other net expense and income,
depreciation, amortization, non-recurring stock-based compensation, the lease
exit charge and restructuring costs, was $434.5 million, up $15.7 million, or
3.8%, from full year 2011. Adjusted EBITDA margin decreased to 45.7% from
46.5%.

Adjusted EBITDA for the Performance and Risk segment increased $17.2 million,
or 4.4%, to $404.6 million from full year 2011. The Adjusted EBITDA margin for
the Performance and Risk segment declined to 48.9% from 49.6% in full year
2011. Adjusted EBITDA for the Governance segment declined $1.5 million, or
4.7%, to $29.8 million in full year 2012. The Adjusted EBITDA margin for the
Governance segment was 24.2%, down from 26.2% in full year 2011.

See Table 13 titled “Reconciliation of Adjusted EBITDA to Net Income” and
“Notes Regarding the Use of Non-GAAP Financial Measures” below.

Key Operating Metrics – See Tables 10, 11, 12

Total run rate grew by $85.4 million, or 9.7%, to $967.4 million as of
December 31, 2012 versus December 31, 2011. On an organic basis, run rate grew
by 5.2%.

Performance and Risk segment run rate grew by $76.4 million, or 9.9%, to
$850.2 million as of December 31, 2012. On an organic basis, Performance and
Risk run rate grew by $36.9 million, or 4.8%.

  *Index and ESG products: Index and ESG subscription run rate grew by $68.2
    million, or 25.3%, to $338.0 million. On an organic basis, run rate grew
    by $28.7 million, or 10.6%, driven by growth in equity index benchmark
    products and ESG products.

    Run rate attributable to asset-based fees grew by $7.4 million, or 6.2%,
    to $127.1 million. The growth was driven by higher overall levels of AUM
    in ETFs linked to MSCI indices, partially offset by the decision by
    Vanguard to switch the indices for 22 of its ETFs (“Vanguard ETFs”).
    Excluding the impact of the Vanguard ETFs in fourth quarter 2011,
    asset-based fee run rate grew by $25.4 million, or 25.0%.

    At the end of fourth quarter 2012, AUM in ETFs linked to MSCI indices were
    $402.3 billion, up $100.7 billion, or 33.4%, from the end of fourth
    quarter 2011 and up $38.6 billion, or 10.6%, from the end of third quarter
    2012. Excluding the Vanguard ETFs, AUM in MSCI-linked ETFs was $263.8
    billion, up $61.7 billion, or 30.5%, from the end of fourth quarter 2011
    and up $31.3 billion, or 13.5%, from the end of third quarter 2012.

    ETFs linked to MSCI indices attracted net inflows of $25.9 billion in
    fourth quarter 2012, including $3.9 billion in the Vanguard ETFs and $22.0
    billion in other ETFs linked to MSCI indices. For full year 2012, total
    inflows to MSCI-linked ETFs were $56.6 billion, of which $23.5 billion
    were into the Vanguard ETFs and $33.1 billion into all other ETFs.

  *Risk management analytics: Run rate related to risk management analytics
    products increased $11.1 million, or 4.4%, to $262.1 million. MSCI
    continued to benefit from strong growth in run rate associated with its
    HedgePlatform hedge fund transparency products and from its BarraOne risk
    management and reporting system.
  *Portfolio management analytics: Run rate related to portfolio management
    analytics products declined $8.5 million, or 7.2%, to $109.8 million. Run
    rate was negatively impacted by $3.0 million of product swaps (mostly to
    BarraOne), and by changes in foreign currency rates, which lowered run
    rate by $1.9 million. The impact of swaps and the foreign currency charges
    reduced fourth quarter 2012 run rate by $3.4 million relative to third
    quarter 2012.
  *Energy and commodity analytics: Run rate associated from energy and
    commodity analytics products declined to $13.1 million, down $1.8 million,
    or 12.1%, from fourth quarter 2011.

Governance run rate grew by $9.0 million, or 8.3%, to $117.3 million as of
December 31, 2012, reflecting strong growth in the sales of our compensation
data and analytics products, as well as gains in our institutional proxy
research and voting products.

Acquisition of IPD

On November 30, 2012, MSCI completed the acquisition of IPD Group Limited for
$125 million. IPD is a global real estate information business operating in 32
countries that provides institutional investors, fund managers, occupiers,
lenders, advisors and researchers with objective benchmarks and market
indices. Its detailed databases cover some $1.4 trillion of property
investments. The acquisition of IPD added $3.6 million to fourth quarter 2012
revenues and $39.5 million to fourth quarter 2012 run rate.

Share Repurchase Authorization

On December 14, 2012, MSCI announced that it had entered into an Accelerated
Share Repurchase (“ASR”) agreement with Morgan Stanley & Co., LLC (“Morgan
Stanley”), which began immediately. Under the ASR agreement, MSCI paid Morgan
Stanley $100 million in cash and received approximately 2.2 million shares of
its common stock at the inception of the ASR agreement and may receive from
Morgan Stanley additional shares at or prior to maturity of the ASR agreement.
The total number of shares to be repurchased will be based primarily on the
arithmetic average of the volume-weighted average prices of MSCI common stock
on each trading day during the repurchase period. This average price will be
capped such that only under limited circumstances, the company may be required
to deliver shares or, at its election, pay cash to Morgan Stanley at
settlement. MSCI anticipates that all repurchases under the ASR agreement will
be completed no later than July 2013, although Morgan Stanley has the right to
accelerate settlement of the ASR agreement under certain circumstances.
Because of the timing of the ASR agreement, the reduced share count had only a
marginal effect on MSCI’s average shares outstanding figure in both fourth
quarter and full year 2012.

In addition, MSCI also announced that its Board of Directors authorized the
repurchase of up to an additional $200 million of MSCI’s shares of common
stock, which will be available for utilization from time to time through 2014
at MSCI’s discretion.

Acquisition of Investor Force Holdings, Inc.

On January 29, 2013, MSCI completed the previously announced acquisition of
Investor Force Holdings, Inc. (“InvestorForce”) for a purchase price of
approximately $23.5 million, funded through existing cash. InvestorForce is a
leading provider of performance reporting solutions to the institutional
investment community in the United States, providing investment consultants
with an integrated solution for daily monitoring, analysis and reporting on
institutional assets. The acquisition is not expected to have a material
impact on MSCI’s results of operations in fiscal year 2013.

Conference Call Information

Investors will have the opportunity to listen to MSCI Inc.'s senior management
review fourth quarter and full year 2012 results on Thursday, February 7, 2013
at 11:00 am Eastern Time. To listen to the live event, visit the investor
relations section of MSCI's website, http://ir.msci.com/events.cfm, or dial
1-877-312-9206 within the United States. International callers dial
1-408-774-4001.

An audio recording of the conference call will be available on our website
approximately two hours after the conclusion of the live event and will be
accessible through February 9, 2013. To listen to the recording, visit
http://ir.msci.com/events.cfm, or dial 1-855-859-2056 (passcode: 90364207)
within the United States. International callers dial 1-404-537-3406 (passcode:
90364207).

About MSCI Inc.

MSCI Inc. is a leading provider of investment decision support tools to
investors globally, including asset managers, banks, hedge funds and pension
funds. MSCI products and services include indices, portfolio risk and
performance analytics, and governance tools.

The company’s flagship product offerings are: the MSCI indices with
approximately USD 7 trillion estimated to be benchmarked to them on a
worldwide basis^1; Barra multi-asset class factor models, portfolio risk and
performance analytics; RiskMetrics multi-asset class market and credit risk
analytics; ISS governance research and outsourced proxy voting and reporting
services; and FEA valuation models and risk management software for the energy
and commodities markets. MSCI is headquartered in New York, with research and
commercial offices around the world. MSCI#IR

^1As of March 31, 2012, as published by eVestment, Lipper and Bloomberg in
September, 2012.

For further information on MSCI Inc. or our products please visit
www.msci.com.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These 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 forward-looking 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 actual results, levels of activity,
performance, or achievements.

Other factors that could materially affect 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, 2011 filed with the Securities and
Exchange Commission (SEC) on February 29, 2012, 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 we projected.
Any forward-looking statement in this release reflects our current views with
respect to future events and is subject to these and other risks,
uncertainties and assumptions relating to our operations, results of
operations, growth strategy and liquidity. We assume 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.

Notes Regarding the Use of Non-GAAP Financial Measures

MSCI has presented supplemental non-GAAP financial measures as part of this
earnings release. A reconciliation is provided that reconciles each non-GAAP
financial measure with the most comparable GAAP measure. The presentation of
non-GAAP financial measures should not be considered as alternative measures
for the most directly comparable GAAP financial measures. These measures are
used by management to monitor the financial performance of the business,
inform business decision making and forecast future results.

Adjusted EBITDA is defined as net income before provision for income taxes,
other net expense and income, depreciation and amortization, non-recurring
stock-based compensation expense, the lease exit charge and restructuring
costs.

Adjusted net income and Adjusted EPS are defined as net income and EPS,
respectively, before provision for non-recurring stock-based compensation
expenses, amortization of intangible assets, lease exit charge, restructuring
costs and the accelerated amortization or write off of deferred financing and
debt discount costs as a result of debt repayment (debt repayment and
refinancing expenses), as well as for any related tax effects.

We believe that adjustments related to the lease exit charge, restructuring
costs and debt repayment and refinancing expenses are useful to management and
investors because it allows for an evaluation of MSCI’s underlying operating
performance. Additionally, we believe that adjusting for non-recurring
stock-based compensation expenses, debt repayment and refinancing expenses and
depreciation and amortization may help investors compare our performance to
that of other companies in our industry as we do not believe that other
companies in our industry have as significant a portion of their operating
expenses represented by these items. We believe that the non-GAAP financial
measures presented in this earnings release facilitate meaningful
period-to-period comparisons and provide a baseline for the evaluation of
future results.

Adjusted EBITDA, Adjusted net income and Adjusted EPS are not defined in the
same manner by all companies and may not be comparable to other similarly
titled measures of other companies.

                                                                   
Table 2: MSCI Inc. Consolidated Statement of Income (unaudited)
                                                                         
                 Three Months Ended                        Year Ended
Dollars in       December      December      September     December      December
thousands,       31,           31,           30,           31,           31,
except per      2012          2011          2012          2012          2011
share data
                                                                         
Operating        $ 247,080     $ 226,134     $ 235,444     $ 950,141     $ 900,941
revenues
                                                                         
Operating
expenses
Cost of            74,191        69,121        68,350        288,075       277,147
services
Selling,
general and        57,172        54,509        62,973        233,183       212,972
administrative
Restructuring      -             125           -             (51     )     3,594
costs
Amortization
of intangible      15,421        16,268        15,959        63,298        65,805
assets
Depreciation
and
amortization
of property,
equipment and
leasehold         4,989       4,478       4,633       18,700      19,425  
improvements
Total
operating        $ 151,773    $ 144,501    $ 151,915    $ 603,205    $ 578,943 
expenses
                                                                         
Operating        $ 95,307      $ 81,633      $ 83,529      $ 346,936     $ 321,998
income
Operating          38.6    %     36.1    %     35.5    %     36.5    %     35.7    %
margin
                                                                         
Interest           (242    )     (335    )     (252    )     (954    )     (848    )
income
Interest           7,178         13,267        7,314         56,428        55,819
expense
Other expense     56          (1,427  )    873         2,053       3,614   
(income)
Other expenses   $ 6,992      $ 11,505     $ 7,935      $ 57,527     $ 58,585  
(income), net
                                                                         
Income before      88,315        70,128        75,594        289,409       263,413
taxes
                                                                         
Provision for     33,863      25,642      27,320      105,171     89,959  
income taxes
Net income       $ 54,452     $ 44,486     $ 48,274     $ 184,238    $ 173,454 
Net income         22.0    %     19.7    %     20.5    %     19.4    %     19.3    %
margin
                                                                         
Earnings per
basic common     $ 0.44       $ 0.37       $ 0.39       $ 1.50       $ 1.43    
share
Earnings per
diluted common   $ 0.44       $ 0.36       $ 0.39       $ 1.48       $ 1.41    
share
                                                                         
Weighted
average shares
outstanding
used
in computing
earnings per
share
                                                                         
Basic             122,082     121,146     122,261     122,023     120,717 
Diluted           122,995     122,536     123,450     123,204     122,276 
                                                                         

                                                    
Table 3: MSCI Inc. Selected Balance Sheet Items (Unaudited)
                                                                   
                               As of
                               December          September         December
                               31,               30,               31,
Dollars in             2012           2012           2011
thousands
                                                                   
Cash and cash                  $  183,309        $  340,458        $ 252,211
equivalents
Short-term                        70,898            93,885           140,490
investments
Trade
receivables,                      153,557           124,309          180,566
net of
allowances
                                                                   
Deferred                       $  308,022        $  323,503        $ 289,217
revenue
Current
maturities of                     43,093            43,082           10,339
long-term debt
Long-term
debt, net of                      811,623           822,401          1,066,548
current
maturities
                                                                     

                                                               
Table 4: Quarterly Operating Revenues by Product Category and Revenue Type
(Unaudited)
                                                                     
                 Three Months Ended                     % Change from
                 December     December    September     December     September
                 31,          31,         30,           31,          30,
Dollars in      2012         2011        2012          2011         2012
thousands
Index and ESG
products
Subscriptions    $  79,268    $ 69,677    $ 73,894        13.8  %    7.3    %
Asset-based        38,138     31,057     34,042       22.8  %    12.0   %
fees
Index and ESG       117,406     100,734     107,936       16.6  %    8.8    %
products total
Risk
management          66,654      62,037      64,998        7.4   %    2.5    %
analytics
Portfolio
management          28,606      30,149      29,138        (5.1  %)   (1.8   %)
analytics
Energy and
commodity          3,270      4,647      3,317        (29.6 %)   (1.4   %)
analytics
                                                                     
Total
Performance      $  215,936   $ 197,567   $ 205,389       9.3   %    5.1    %
and Risk
revenues
                                                                     
Total
Governance         31,144     28,567     30,055       9.0   %    3.6    %
revenues
                                                                     
Total
operating        $  247,080   $ 226,134   $ 235,444      9.3   %    4.9    %
revenues
                                                                     
Recurring        $  202,001   $ 189,763   $ 197,591       6.4   %    2.2    %
subscriptions
Asset-based         38,138      31,057      34,042        22.8  %    12.0   %
fees
Non-recurring      6,941      5,314      3,811        30.6  %    82.1   %
revenue
Total
operating        $  247,080   $ 226,134   $ 235,444      9.3   %    4.9    %
revenues
                                                                     
                                                                     
                                                                     
Table 5: Full Year Operating Revenues by Product Category and Revenue Type
(Unaudited)
                                                                     
                                          Year Ended                 % Change
                                                                     from
                                          December      December     December
                                          31,           31,          31,
Dollars in                           2012          2011         2011
thousands
Index and ESG
products
Subscriptions                             $ 300,630     $ 264,390    13.7   %
Asset-based                                140,883     140,243    0.5    %
fees
Index and ESG                               441,513       404,633    9.1    %
products total
Risk
management                                  260,276       243,570    6.9    %
analytics
Portfolio
management                                  116,133       118,889    (2.3   %)
analytics
Energy and
commodity
analytics
Recurring
Energy and                                  14,271        14,263     0.1    %
commodity
analytics
Correction^1                               (5,203  )    -          n/m
Net energy and
commodity                                  9,068       14,263     (36.4  %)
analytics
                                                                     
Total
Performance                               $ 826,990     $ 781,355    5.8    %
and Risk
revenues
                                                                     
Total
Governance                                 123,151     119,586    3.0    %
revenues
                                                                     
Total
operating                                 $ 950,141    $ 900,941    5.5    %
revenues
                                                                     
Recurring                                 $ 784,331     $ 732,473    7.1    %
subscriptions
Asset-based                                 140,883       135,981    3.6    %
fees
Non-recurring                              24,927      32,487     (23.3  %)
revenue
Total
operating                                 $ 950,141    $ 900,941    5.5    %
revenues
                                                                     

^1 In first quarter 2012, MSCI recorded a non-cash $5.2 million cumulative
revenue reduction to correct an error related to energy and commodity
analytics revenues previously reported prior to January 1, 2012. MSCI’s
previous policy had resulted in the immediate recognition of a substantial
portion of the revenue related to a majority of its contracts rather than
amortizing that revenue over the life of that contract, which is now the
method of recognition.

                                                              
Table 6: Quarterly Operating Expense Detail (Unaudited)
                                                                     
                      Three Months Ended                  % Change from
                      December    December    September   December   September
                      31,         31,         30,         31,        30,
In thousands          2012        2011        2012        2011       2012
Cost of services
Compensation          $ 55,982    $ 50,132    $ 50,111    11.7  %    11.7   %
Non-recurring
stock based            255        443        267       (42.4 %)   (4.5   %)
compensation
Total                 $ 56,237    $ 50,575    $ 50,378    11.2  %    11.6   %
compensation
Non-compensation        17,735      18,546      16,448    (4.4  %)   7.8    %
Lease exit             219        -          1,524     n/m        (85.6  %)
charge^1
Total                  17,954     18,546     17,972    (3.2  %)   (0.1   %)
non-compensation
Total cost of         $ 74,191    $ 69,121    $ 68,350    7.3   %    8.5    %
services
                                                                     
Selling, general
and
administrative
Compensation          $ 37,475    $ 34,672    $ 42,296    8.1   %    (11.4  %)
Non-recurring
stock based            126        701        359       (82.0 %)   (64.9  %)
compensation
Total                 $ 37,601    $ 35,373    $ 42,655    6.3   %    (11.8  %)
compensation
Non-compensation        19,321      19,136      18,515    1.0   %    4.4    %
Lease exit             250        -          1,803     n/m        (86.1  %)
charge^1
Total                  19,571     19,136     20,318    2.3   %    (3.7   %)
non-compensation
Total selling,
general and           $ 57,172    $ 54,509    $ 62,973    4.9   %    (9.2   %)
administrative
                                                                     
Restructuring           -           125         -         n/m        n/m
costs
Amortization of         15,421      16,268      15,959    (5.2  %)   (3.4   %)
intangible assets
Depreciation and
amortization of
property,
equipment and
leasehold              4,989      4,478      4,633     11.4  %    7.7    %
improvements
Total operating       $ 151,773   $ 144,501   $ 151,915   5.0   %    (0.1   %)
expenses
                                                                     
                                                                
Compensation          $ 93,457    $ 84,804    $ 92,407    10.2  %    1.1    %
Non-recurring
stock-based             381         1,144       626       (66.7 %)   (39.1  %)
compensation
Non-compensation        37,056      37,682      34,963    (1.7  %)   6.0    %
expenses
Lease exit              469         -           3,327     n/m        (85.9  %)
charge^1
Restructuring           -           125         -         n/m        n/m
costs
Amortization of         15,421      16,268      15,959    (5.2  %)   (3.4   %)
intangible assets
Depreciation and
amortization of
property,
equipment and
leasehold              4,989      4,478      4,633     11.4  %    7.7    %
improvements
Total operation       $ 151,773   $ 144,501   $ 151,915   5.0   %    (0.1   %)
expenses
                                                                     

^1The third quarter and fourth quarter 2012 included charges of $3.3 million
charge and $0.5 million, respectively, associated with an occupancy lease exit
resulting from the consolidation of our New York offices.

                                                        
Table 7: Full Year Operating Expense Detail (Unaudited)
                                                                   
                             Year Ended                            % Change
                                                                   from
                             December 31,       December 31,       December
                                                                   31,
In thousands               2012               2011               2011
Cost of services
Compensation                 $  215,134         $   199,447        7.9     %
Non-recurring stock            884               3,150          (71.9   %)
based compensation
Total compensation           $  216,018         $   202,597        6.6     %
Non-compensation                70,314              74,550         (5.7    %)
Lease exit charge^1            1,743             -              n/m
Total                          72,057            74,550         (3.3    %)
non-compensation
Total cost of                $  288,075         $   277,147        3.9     %
services
                                                                   
Selling, general and
administrative
Compensation                 $  156,288         $   138,722        12.7    %
Non-recurring stock            897               4,768          (81.2   %)
based compensation
Total compensation           $  157,185         $   143,490        9.5     %
Non-compensation                73,945              69,482         6.4     %
Lease exit charge^1            2,053             -              n/m
Total                          75,998            69,482         9.4     %
non-compensation
Total selling,
general and                  $  233,183         $   212,972        9.5     %
administrative
                                                                   
Restructuring costs             (51     )           3,594          (101.4  %)
Amortization of                 63,298              65,805         (3.8    %)
intangible assets
Depreciation and
amortization of
property,
equipment and
leasehold                      18,700            19,425         (3.7    %)
improvements
Total operating              $  603,205        $   578,943        4.2     %
expenses
                                                                   
                                                              
Compensation                 $  371,422         $   338,169        9.8     %
Non-recurring
stock-based                     1,781               7,918          (77.5   %)
compensation
Non-compensation                144,259             144,032        0.2     %
expenses
Lease exit charge^1             3,796               -              n/m
Restructuring costs             (51     )           3,594          (101.4  %)
Amortization of                 63,298              65,805         (3.8    %)
intangible assets
Depreciation and
amortization of
property,
equipment and
leasehold                      18,700            19,425         (3.7    %)
improvements
Total operation              $  603,205        $   578,943        4.2     %
expenses
                                                                   

^1Full year 2012 included charges of $3.8 million associated with an occupancy
lease exit resulting from the consolidation of our New York offices.


Table 8: Summary Quarterly Segment Information (Unaudited)
                                                                    
                                                                                 
                            Three Months Ended                        % Change from
                            December      December      September     December   September
                            31,           31,           30,           31,        30,
Dollars in            2012          2011          2012          2011       2012
thousands
                                                                                 
Revenues:
Performance                 $ 215,936     $ 197,567     $ 205,389     9.3   %    5.1    %
and Risk
Governance                   31,144      28,567      30,055     9.0   %    3.6    %
Total
Operating                   $ 247,080     $ 226,134     $ 235,444     9.3   %    4.9    %
revenues
                                                                                 
Operating
Income:
Performance                   90,620        79,046        80,472      14.6  %    12.6   %
and Risk
Margin                        42.0    %     40.0    %     39.2    %
Governance                    4,687         2,587         3,057       81.2  %    53.3   %
Margin                        15.0    %     9.1     %     10.2    %
Total
Operating                   $ 95,307      $ 81,633      $ 83,529      16.8  %    14.1   %
Income
Margin                        38.6    %     36.1    %     35.5    %
                                                                                 
Adjusted
EBITDA:
Performance                   107,502       96,964        100,362     10.9  %    7.1    %
and Risk
Margin                        49.8    %     49.1    %     48.9    %
Governance                    9,065         6,684         7,712       35.6  %    17.5   %
Margin                        29.1    %     23.4    %     25.7    %
Total
Adjusted                    $ 116,567     $ 103,648     $ 108,074     12.5  %    7.9    %
EBITDA
Margin                        47.2    %     45.8    %     45.9    %
                                                                                 
                                                                                 
Table 9: Summary Full Year Segment Information (unaudited)
                                                                                 
                                          Year Ended                  % Change
                                                                      from
                                          December      December      December
                                          31,           31,           31,
Dollars in                          2012          2011          2011
thousands
                                                                                 
Revenues:
Performance                               $ 826,990     $ 781,355     5.8   %
and Risk
Governance                                 123,151     119,586    3.0   %
Total
Operating                                 $ 950,141     $ 900,941     5.5   %
revenues
                                                                                 
Operating
Income:
Performance                                 334,547       310,504     7.7   %
and Risk
Margin                                      40.5    %     39.7    %
Governance                                  12,389        11,494      7.8   %
Margin                                      10.1    %     9.6     %
Total
Operating                                 $ 346,936     $ 321,998     7.7   %
Income
Margin                                      36.5    %     35.7    %
                                                                                 
Adjusted
EBITDA:
Performance                                 404,644       387,459     4.4   %
and Risk
Margin                                      48.9    %     49.6    %
Governance                                  29,816        31,281      (4.7  %)
Margin                                      24.2    %     26.2    %
Total
Adjusted                                  $ 434,460     $ 418,740     3.8   %
EBITDA
Margin                                      45.7    %     46.5    %
                                                                                 

                                                                             
Table 10: Key Operating Metrics^1 (unaudited)
                                                                                            
                                                                                            
                         As of                                                 % Change from
Dollars in               December          December          September         December     September
thousands,
except                2012              2011              2012              2011         2012
employee count
                                                                                            
Run Rates^1
Index and ESG
products
Subscription^2           $  338,006       $  269,780       $  292,787       25.3  %      15.4   %
Asset-based                127,072        119,706        114,576      6.2   %      10.9   %
fees^3
Index and ESG                465,078           389,486           407,363       19.4  %      14.2   %
products total
Risk
management                   262,108           250,967           261,776       4.4   %      0.1    %
analytics
Portfolio
management                   109,836           118,354           115,958       (7.2  %)     (5.3   %)
analytics
Energy and
commodity                  13,128         14,928         14,040       (12.1 %)     (6.5   %)
analytics
Total
Performance                  850,150           773,735           799,137       9.9   %      6.4    %
and Risk
                                                                                            
Governance                 117,261        108,251        115,840      8.3   %      1.2    %
Total Run Rate           $  967,411      $  881,986      $  914,977      9.7   %      5.7    %
                                                                                            
Subscription             $   840,339       $   762,280       $   800,401       10.2  %      5.0    %
total^2
Asset-based                127,072        119,706        114,576      6.2   %      10.9   %
fees total^3
Total Run Rate           $  967,411      $  881,986      $  914,977      9.7   %      5.7    %
                                                                                            
New Recurring
Subscription             $   29,742        $   35,444        $   27,164        (16.1 %)     9.5    %
Sales
Subscription               (28,725 )       (27,245 )       (19,134 )     5.4   %      50.1   %
Cancellations
Net New
Recurring                $   1,017         $   8,199         $   8,030         (87.6 %)     (87.3  %)
Subscription
Sales
Non-recurring            $   7,443         $   7,460         $   3,878         (0.2  %)     91.9   %
sales
                                                                                            
Employees                    2,759             2,429             2,416         13.6  %      14.2   %
% Employees by
location
Developed                    59      %         61      %         56      %
Market Centers
Emerging                     41      %         39      %         44      %
Market Centers
                                                                                            

^1 The run rate at a particular point in time represents the forward-looking
revenues for the next twelve months from all subscriptions and investment
product licenses we currently provide to our clients under renewable contracts
assuming all contracts that come up for renewal are renewed and assuming
then-current exchange rates. For any subscription or license whose fees are
linked to an investment product’s assets or trading volume, the run rate
calculation reflects an annualization of the most recent periodic revenue
earned under such license or subscription. The run rate does not include
revenues associated with “one-time” and other non-recurring transactions. In
addition, we remove from the run rate the revenues 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 we
have determined that such notice evidences the client's final decision to
terminate or not renew the applicable subscription or agreement, even though
the notice is not effective until a later date (see footnote 2 for discussion
of IPD Group Limited).
^2 Includes $39.5 million at December 31, 2012 related to the previously
disclosed acquisition of IPD Group Limited, which was completed on November
30, 2012. The run rate for IPD Group Limited was approximated using the
trailing twelve months of revenue primarily adjusted for estimates for
non-recurring sales, new sales, and cancellations.
^3 The asset-based fee run rate as of December 2012 and September 2012
excludes all run rate associated with 22 Vanguard ETFs due to be switched from
MSCI indices starting in January 2013.

                                                                                                                                                
Table 11: ETF Assets Linked to MSCI Indices^1 (unaudited)
                                                                                                                                                      Year
                              Three Months Ended 2011                                       Three Months Ended 2012                                   Ended December
Dollars in billions           March       June          September     December        March       June          September   December      2011          2012
                                                                                                                                                                      
Beginning Period AUM in
ETFs linked
to MSCI Indices               $  333.3     $  350.1       $  360.5       $  290.1       $  301.6     $  354.7       $  327.4     $  363.7     $  333.3       $  301.6
Cash Inflow/ Outflow              6.7           14.2            (0.0  )         1.0             15.2          0.3             15.2          25.9          21.9            56.6
Appreciation/Depreciation       10.1      (3.8  )     (70.4 )     10.5          37.9      (27.6 )     21.1      12.7        (53.6 )     44.1
Period End AUM in ETFs
linked to
MSCI Indices                  $   350.1     $   360.5       $   290.1       $   301.6       $   354.7     $   327.4       $   363.7     $   402.3     $   301.6       $   402.3
                                                                                                                                                                      
Period Average AUM in
ETFs linked to
MSCI Indices ^2               $   337.6     $   356.8       $   329.1       $   305.0       $   341.0     $   331.6       $   344.7     $   376.6     $   333.5       $   349.1
                                                                                                                                                                          

^1 ETF assets under management calculation methodology is ETF net asset value
multiplied by shares outstanding. Source: Bloomberg and MSCI
^2 September 2012 and December 2012 period end assets under management include
22 Vanguard ETFs which have been switched or will be switched in 2013.

                                                                                                                                   
Table 12: Supplemental Operating Metrics (unaudited)
                                                                                                                                              
                                                                                                                                              
Recurring Subscription Sales & Subscription Cancellations
                Three Months Ended 2011                                 Three Months Ended 2012                                 Year Ended December
Dollars in      March        June         September    December      March        June         September    December      2011         2012
thousands
New Recurring
Subscription    $ 34,612      $ 30,298      $ 31,661      $ 35,444      $ 33,506      $ 28,453      $ 27,164      $ 29,742      $ 132,015     $ 118,865
Sales
Subscription     (14,402 )   (14,965 )   (15,364 )   (27,245 )    (13,498 )   (17,229 )   (19,134 )   (28,725 )    (71,976 )   (78,586 )
Cancellations
Net New
Recurring       $ 20,210    $ 15,333    $ 16,297    $ 8,199      $ 20,008    $ 11,224    $ 8,030     $ 1,017      $ 60,039    $ 40,279  
Subscription
Sales
                                                                                                                                              
Non-recurring    13,647     8,415      6,560      7,460       9,338      5,099      3,878      7,443       36,082     25,758  
sales
Total Sales     $ 48,259    $ 38,713    $ 38,221    $ 42,904     $ 42,844    $ 33,552    $ 31,042    $ 37,185     $ 168,097   $ 144,623 
                                                                                                                                              
                                                                                                                                              
                                                                                                                                              
Aggregate & Core Retention Rates
                Three Months Ended 2011                                 Three Months Ended 2012                                 Year Ended December
               March        June         September    December      March        June         September    December      2011         2012
Aggregate
Retention
Rate ^ 1
Index and ESG     95.0    %     92.8    %     95.2    %     89.3    %     94.5    %     94.9    %     94.0    %     90.4    %     93.1    %     93.4    %
products
Risk
management        94.2    %     92.2    %     92.1    %     80.8    %     93.9    %     90.0    %     88.5    %     84.4    %     89.5    %     89.0    %
analytics
Portfolio
management        88.6    %     91.4    %     86.6    %     87.2    %     91.9    %     84.2    %     84.9    %     78.0    %     88.4    %     84.7    %
analytics
Energy &
commodity         76.9    %     88.8    %     89.3    %     75.0    %     90.2    %     85.5    %     76.6    %     60.4    %     82.5    %     78.1    %
analytics
                                                                                                                                              
Total
Performance       93.0    %     92.2    %     92.2    %     85.2    %     93.7    %     90.9    %     89.8    %     85.2    %     90.5    %     89.8    %
and Risk
                                                                                                                                              
Total             85.0    %     90.4    %     86.2    %     80.6    %     88.7    %     92.1    %     91.1    %     83.6    %     85.6    %     88.9    %
Governance
                                                                                                                              
Total
Aggregate        91.8    %   91.9    %   91.3    %   84.5    %    93.0    %   91.0    %   90.0    %   84.9    %    89.8    %   89.7    %
Retention
Rate
                                                                                                                                              
Core
Retention
Rate ^1
Index and ESG     95.2    %     92.8    %     95.2    %     89.3    %     94.6    %     95.0    %     94.0    %     90.5    %     93.1    %     93.5    %
products
Risk
management        94.2    %     92.7    %     92.1    %     81.0    %     94.0    %     92.0    %     89.3    %     84.4    %     90.0    %     89.8    %
analytics
Portfolio
management        89.9    %     93.2    %     88.3    %     88.3    %     92.2    %     87.0    %     86.5    %     83.6    %     89.9    %     87.3    %
analytics
Energy &
commodity         76.9    %     88.8    %     91.3    %     75.0    %     90.7    %     85.5    %     77.1    %     60.4    %     83.0    %     78.4    %
analytics
                                                                                                                                              
Total
Performance       93.4    %     92.7    %     92.6    %     85.5    %     93.8    %     92.2    %     90.5    %     86.2    %     91.0    %     90.6    %
and Risk
                                                                                                                                              
Total             85.0    %     90.4    %     86.3    %     80.6    %     88.7    %     92.2    %     91.2    %     83.8    %     85.6    %     89.0    %
Governance
                                                                                                                              
Total Core
Retention        92.1    %   92.4    %   91.6    %   84.8    %    93.1    %   92.2    %   90.6    %   85.9    %    90.2    %   90.4    %
Rate
                                                                                                                                                        

^1The quarterly Aggregate Retention Rates are calculated by annualizing the
cancellations for which we have received a notice of termination or
non-renewal during the quarter and we have 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. 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 Retention Rate for the quarter. 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. For the calculation of the Core Retention Rate
the same methodology is used except the amount of cancellations in the quarter
is reduced by the amount of product swaps.

                                                                                      
Table 13: Reconciliation of Adjusted EBITDA to Net Income (unaudited)
                                                                                                
                            Three Months Ended December 31, 2012     Three Months Ended December 31, 2011
                           Performance                            Performance               
In thousands                and Risk     Governance  Total         and Risk     Governance  Total
Net Income                                             $ 54,452                                 $ 44,486
Plus:       Provision for                                33,863                                   25,642
            income taxes
Plus:       Other expense                           6,992                              11,505
            (income), net
Operating income            $ 90,620    $ 4,687    $ 95,307     $  79,046    $ 2,587    $ 81,633
            Non-recurring
Plus:       stock-based       342           39           381            1,015        129          1,144
            compensation
            Depreciation
Plus:       and
            amortization
            of property,
            equipment and
            leasehold         4,028         961          4,989          3,595        883          4,478
            improvements
            Amortization
Plus:       of intangible     12,101        3,320        15,421         12,927       3,341        16,268
            assets
Plus:       Lease exit        411           58           469            -            -            -
            charge
Plus:       Restructuring    -          -         -            381        (256   )   125
            costs
Adjusted EBITDA             $ 107,502   $ 9,065    $ 116,567    $  96,964    $ 6,684    $ 103,648
                                                                                                
                                                                                                
                            Year Ended December 31, 2012             Year Ended December 31, 2011
                            Performance                              Performance
In thousands                and Risk     Governance  Total         and Risk     Governance  Total
Net Income                                             $ 184,238                                $ 173,454
Plus:       Provision for                                105,171                                  89,959
            income taxes
Plus:       Other expense                           57,527                             58,585
            (income), net
Operating income            $ 334,547   $ 12,389   $ 346,936    $  310,504   $ 11,494   $ 321,998
            Non-recurring
Plus:       stock-based       1,611         170          1,781          7,446        472          7,918
            compensation
            Depreciation
Plus:       and
            amortization
            of property,
            equipment and
            leasehold         15,165        3,535        18,700         15,144       4,281        19,425
            improvements
            Amortization
Plus:       of intangible     50,017        13,281       63,298         52,414       13,391       65,805
            assets
Plus:       Lease exit        3,336         460          3,796          -            -            -
            charge
Plus:       Restructuring    (32     )   (19    )   (51     )     1,951      1,643     3,594
            costs
Adjusted EBITDA             $ 404,644   $ 29,816   $ 434,460    $  387,459   $ 31,281   $ 418,740
                                                                                                  

                                                                        
Table 14: Reconciliation of Adjusted Net Income and Adjusted EPS to Net Income and EPS
(unaudited)
                                                                                 
                            Three Months Ended                     Years Ended
                            December     December     September    December      December
                            31,          31,          30,          31,           31,
In thousands                2012         2011         2012         2012          2011
Net Income                  $ 54,452     $ 44,486     $ 48,274     $ 184,238     $ 173,454
            Non-recurring
Plus:       stock-based       381          1,144        626          1,781         7,918
            compensation
            Amortization
Plus:       of intangible     15,421       16,268       15,959       63,298        65,805
            assets
            Debt
Plus:       repayment and     -            -            -            20,639        6,404
            refinancing
            expenses
Plus:       Lease exit        469          -            3,327        3,796         -
            charge
Plus:       Restructuring     -            126          -            (51     )     3,594
            costs
Less:       Income tax        (6,556 )     (6,463 )     (7,280 )     (32,510 )     (29,913 )
            effect
                                                                             
Adjusted net income         $ 64,167    $ 55,561    $ 60,906    $ 241,191    $ 227,262 
                                                                                 
Diluted EPS                 $ 0.44       $ 0.36       $ 0.39       $ 1.48        $ 1.41
            Non-recurring
Plus:       stock-based     $ -          $ 0.01       $ 0.01       $ 0.01        $ 0.06
            compensation
            Amortization
Plus:       of intangible   $ 0.12       $ 0.13       $ 0.13       $ 0.51        $ 0.54
            assets
            Debt
Plus:       repayment and   $ -          $ -          $ -          $ 0.17        $ 0.05
            refinancing
            expenses
Plus:       Lease exit      $ -          $ -          $ 0.03       $ 0.03        $ -
            charge
Plus:       Restructuring   $ -          $ -          $ -          $ (0.00   )   $ 0.03
            costs
Less:       Income tax      $ (0.04  )   $ (0.05  )   $ (0.07  )   $ (0.26   )   $ (0.24   )
            effect
Adjusted EPS                $ 0.52      $ 0.45      $ 0.49      $ 1.94       $ 1.85    
                                                                                 

Contact:

MSCI Inc.:
MSCI, New York
W. Edings Thibault, + 1-212-804-5273
or
For media inquiries:
MSCI, London
Jo Morgan, + 44-20-7618-2224
or
MSCI, New York
Kristin Meza, + 1-212-804-5330
or
MHP Communications, London
Sally Todd | Christian Pickel, + 44-20-3128-8515
 
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