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What changed in MSCI Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of MSCI Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+405 added−382 removedSource: 10-K (2024-02-09) vs 10-K (2023-02-10)

Top changes in MSCI Inc.'s 2023 10-K

405 paragraphs added · 382 removed · 311 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

190 edited+64 added−51 removed233 unchanged
Biggest changeAs a result, the investment process is transforming, which is reflected in several trends we have observed, including: • Changing client operating models and business strategies, driven in part by fee compression, changing demographics, the regulatory environment and shifting economic outlooks; 1 For this purpose, affiliated companies under a common parent entity are aggregated and counted as a single client. 2 Table of Contents • Increasing use of global, multi-asset-class and other complex investment strategies, including strategies incorporating private asset investments and factor objectives, as investors seek specific and unique outcomes; • The need for high-quality data, insightful models and timely research during times of extreme volatility and high uncertainty; • Accelerating integration of ESG and climate considerations into investment processes, reporting and products, as sustainable investing becomes more prominent and investors increasingly focus on companies with strong sustainability practices as an indicator of long-term resilience; • Continuing growth of indexed investing through indexed investment products such as ETFs, mutual/UCITS funds and annuities, as well as indexed derivatives such as futures, options, structured products and over-the-counter swaps, and other vehicles that seek to track an index, as investors increasingly seek lower-cost investment strategies or seek to incorporate increasingly complex investment strategies across geographies, sectors, factors, trends and other considerations; • Increasing allocation of capital to real estate and other private assets and desire for greater transparency into the performance of private assets, with an increased focus on climate and income risk; • Increasing demand for data and tools that clients can integrate to support customized portfolio construction and highly specialized preferences and objectives; and • Growing use of advanced technologies to enhance investment analytics, evaluate data, streamline operations, create efficiencies and gain competitive advantages.
Biggest changeAs a result, the investment process is transforming, which is reflected in several trends we have observed, including: • Changing client operating models and business strategies, driven in part by fee compression, changing demographics, the regulatory environment and shifting economic outlooks; • Use of global, multi-asset-class and other complex investment strategies, including strategies incorporating private asset investments and factor objectives, as investors seek specific and unique outcomes; • The need for high-quality data, insightful models and timely research during times of volatility and high uncertainty; • Integration of ESG and climate considerations into investment processes, reporting and products, as investors focus on companies with strong sustainability practices as an indicator of long-term resilience; • Growth of indexed investing through indexed investment products such as ETFs, mutual/UCITS funds and annuities, as well as indexed derivatives such as futures, options, structured products and over-the-counter swaps, and other vehicles that seek to track an index, as investors seek lower-cost investment strategies or seek to incorporate complex investment strategies across geographies, sectors, factors, trends and other considerations; • Allocation of capital to private assets and desire for greater transparency into the performance of private assets; • Interest in high-quality data and greater disclosure, leading to increased demand for streamlined reporting solutions; • Demand for data and tools that clients can integrate to support customized portfolio construction and highly specialized preferences and objectives; and • Use of advanced technologies to enhance investment analytics, collect and evaluate data, improve client experiences, streamline operations, create efficiencies and gain competitive advantages.
Mr. Fernandez also serves on boards of directors/trustees at Royalty Pharma plc, Stanford University, King Abdullah University of Science and Technology and its affiliate, KIMC, the Hoover Institution, Memorial Sloan-Kettering Cancer Center, the Foreign Policy Association, and Catholic Charities of the Archdiocese of New York. Mr.
Fernandez also serves on boards of directors/trustees at Royalty Pharma plc, Stanford University, King Abdullah University of Science and Technology and its affiliate, KIMC, the Hoover Institution, Memorial Sloan-Kettering Cancer Center, the Foreign Policy Association, and Catholic Charities of the Archdiocese of New York. Mr.
Gutowski has served as the Company’s General Counsel since January 2020. Mr. Gutowski previously served as the Company’s Deputy General Counsel and the Head of Compliance from 2010 to 2019 and the Head of Internal Audit from 2012 to 2019. He joined MSCI in 2002.
Gutowski Mr. Gutowski has served as the Company’s General Counsel since January 2020. Mr. Gutowski previously served as the Company’s Deputy General Counsel and the Head of Compliance from 2010 to 2019 and the Head of Internal Audit from 2012 to 2019. He joined MSCI in 2002.
Errors or defects can exist at any point in a product’s lifecycle, but are frequently found after introduction of new products or services or enhancements to existing products. We continually introduce new methodologies and products, and new versions of and updates to our existing products or services.
Errors or defects can exist at any point in a product’s lifecycle, but are frequently found after introduction of new products or services or enhancements to existing products or services. We continually introduce new methodologies and products, and new versions of, and updates to, our existing products or services.
We strongly differentiate cash bonus payouts based on actual results against goals and for managers, how effectively they demonstrate behaviors consistent with our values and culture. Senior employees and select other employees are eligible to participate in the MSCI Long-Term Incentive Program with awards of MSCI common stock that vest over a multi-year period.
We differentiate cash bonus payouts based on actual results against goals and for managers, how effectively they demonstrate behaviors consistent with our values and culture. Senior employees and select other employees are eligible to participate in the MSCI Long-Term Incentive Program with awards of MSCI common stock that vest over a multi-year period.
Any failure to ensure and protect the confidentiality of data could have a material adverse effect on our business, financial condition or results of operations. Many of our products, as well as our internal systems and processes, involve the collection, retrieval, processing, storage and transmission, through a variety of channels, of proprietary, third party and client confidential information.
Any failure to ensure and protect the confidentiality of data could have a material adverse effect on our business, financial condition or results of operations. Many of our products, as well as our internal systems and processes, involve the collection, retrieval, storage, transmission and other processing, through a variety of channels, of proprietary, third-party and client confidential information.
We rely on a complex system of internal processes and IT controls along with policies, procedures and training to protect this information, including sensitive client data such as material non-public information and client portfolio data that may be provided to us or hosted on our systems, against unauthorized access or disclosure.
We rely on a complex system of internal processes and IT controls along with policies, procedures and training to protect this information, including sensitive client data such as material non-public information and client portfolio data that may be provided to us or hosted on our systems and networks, against unauthorized access or disclosure.
Except with respect to certain products provided by MSCI ESG Research LLC and certain of its designated foreign affiliates, we believe that our products and services do not constitute or provide investment advice as contemplated by the Advisers Act. See Part I, Item 1. “Business—Government Regulation” above.
Except with respect to certain products provided by MSCI ESG Research LLC and certain of its designated foreign affiliates, we believe our products and services do not constitute or provide investment advice as contemplated by the Advisers Act. See Part I, Item 1. “Business—Government Regulation” above.
An element of our growth strategy is growth through acquisitions, strategic partnerships and investments. Despite our best efforts to continue pursuing such transactions, there can be no assurance that we will be able to identify and execute transactions with suitable strategic partners, investment opportunities or attractive acquisition candidates at acceptable terms.
An element of our growth strategy is growth through acquisitions, strategic partnerships and investments. Despite our efforts to continue pursuing such transactions, there can be no assurance that we will be able to identify and execute transactions with suitable strategic partners, investment opportunities or attractive acquisition candidates at acceptable terms.
The heightened attention and scrutiny on benchmarks and index providers by regulators, policymakers and the media in the EU, the U.S. and other jurisdictions around the world could result in negative publicity or comments about the role or influence of our company or the index industry generally, which could harm our reputation and credibility.
The heightened attention and scrutiny on benchmarks and index providers by regulators, policymakers and the media in the EU, the U.S. and other jurisdictions around the world could also result in negative publicity or comments about the role or influence of our company or the index industry generally, which could harm our reputation and credibility.
We provide data, ratings, research and tools to help investors navigate increasing regulation, meet new client demands and better integrate ESG and climate elements into their investment processes. In recent years, ESG and climate related issues have become key business priorities across industries.
We provide data, ratings, research and tools to help investors navigate increasing regulation, meet new client demands and better integrate ESG and climate elements into their investment processes. In recent years, sustainability related issues have become key business priorities across industries.
In the U.S., the SEC has recently sought public comment on the role of certain third-party information providers to the asset management industry, including index providers and model providers, and whether, under particular facts and circumstances, information providers are acting as investment advisers under the Advisers Act.
In the U.S., the SEC has sought public comment on the role of certain third-party information providers to the asset management industry, including index providers and model providers, and whether, under particular facts and circumstances, information providers are acting as investment advisers under the Advisers Act.
We depend heavily on the capacity, reliability and security of our information technology systems and platforms and their components, including our data centers, cloud providers and other vendors and service providers, production and delivery systems as well the Internet, to create and deliver our products and service our clients.
We depend heavily on the capacity, reliability and security of our information technology systems, networks and platforms and their components, including our data centers, cloud providers and other vendors and service providers, production and delivery systems as well as the Internet, to create and deliver our products and service our clients.
This proposed rule would impose on investment advisers due diligence, monitoring and record-keeping requirements of their service providers, and index providers, among others, are identified as service providers that could fall within the scope of the proposed requirements. This proposed rule could therefore impose additional requirements on our business.
This proposed rule would impose on investment advisers due diligence, monitoring and record-keeping requirements of their service providers, and index providers, among others, are identified as service providers that could fall within the scope of the proposed requirements. This proposed rule could therefore impose additional requirements on our business. • Brexit .
Our inability to maintain consistent internal policies and procedures across our offices and remain in compliance with local laws in a particular market could have a significant and negative effect not only on our businesses in that market but also on our reputation generally.
Our inability to maintain consistent internal policies and procedures across our offices and remain in compliance with local laws in a particular market could have a significant and negative effect not only on our businesses in that market but also on our reputation.
Despite our best efforts, we cannot be certain that the steps we have taken to protect our intellectual property rights, and the rights of those from whom we license or acquire intellectual property, are adequate to prevent unauthorized use, misappropriation, distribution or theft of our intellectual property.
Despite our efforts, we cannot be certain that the steps we have taken to protect our intellectual property rights, and the rights of those from whom we license or acquire intellectual property, are adequate to prevent unauthorized use, misappropriation, distribution or theft of our intellectual property.
We aim to anticipate the needs of the investment industry with our client-centric focus and our deep understanding of our clients’ workflows, challenges and goals. We are focused on product innovation and data collection to address the evolving needs of an increasingly complex industry.
We aim to anticipate the needs of the investment industry with our client-centric focus and our deep understanding of our clients’ needs, challenges and goals. We are focused on product innovation and data collection to address the evolving needs of an increasingly complex industry.
We regularly evaluate and selectively pursue strategic relationships with, and acquisitions of, providers of unique and differentiated content, products and technologies that we believe have the potential to complement, enhance or expand our offerings and client base.
We regularly evaluate and selectively pursue strategic relationships with, and acquisitions of, providers of unique and differentiated data, content, products and technologies that we believe have the potential to complement, enhance or expand our offerings and client base.
Climate Lab Enterprise is able to aggregate climate data across multiple portfolios and asset classes, providing clients the ability to understand alignment with their climate goals from the enterprise level down through portfolios to individual positions and issuers. • Risk Insights .
Climate Lab Enterprise is able to aggregate climate data across multiple portfolios and asset classes, providing clients the ability to understand alignment with their climate goals from the enterprise level down through portfolios to individual positions and issuers. • Insights .
Through innovation, we aim to enhance the effectiveness and ease of use of our products as we further demonstrate the value of our content, applications and services. • Execute strategic relationships and acquisitions with complementary content and technology companies.
Through innovation, we aim to enhance the effectiveness and ease of use of our products as we further demonstrate the value of our content, applications and services. • Execute strategic relationships and acquisitions with complementary data, content and technology companies.
ESG and Climate The ESG and Climate segment 3 offers products and services that help institutional investors understand how ESG and climate considerations can impact the long-term risk and return of their portfolio and individual security-level investments.
ESG and Climate The ESG and Climate segment 3 offers products and services that help institutional investors understand how sustainability considerations can impact the long-term risk and return of their portfolio and individual security-level investments.
The SEC has also recently proposed a rule that would prohibit SEC-registered investment advisers from outsourcing certain services or functions to service providers that do not meet minimum requirements.
The SEC has also proposed a rule that would prohibit SEC-registered investment advisers from outsourcing certain services or functions to service providers that do not meet minimum requirements.
Use of our products or services as part of the investment process creates the risk that our clients, the parties whose assets are managed by our clients, investors in investment products linked to our indexes, the companies that we rate or assess in our ESG solutions or the shareholders of those companies, may pursue claims against us based on even a small error in our data, calculations, methodologies or analysis or a malfunction or failure in our systems, products or services.
Use of our products or services as part of the investment process creates the risk that our clients, the parties whose assets are managed by our clients, investors in investment products linked to our indexes, the companies that we rate or assess in our ESG solutions or the shareholders of those companies, may pursue claims against us based on even a small error in our or third-party data, calculations, methodologies or analysis or a malfunction or failure in our systems, products or services.
Index Clients use our indexes in many areas of the investment process, including for developing indexed financial products ( e.g. , ETFs, mutual funds, annuities, futures, options, structured products, over-the-counter derivatives), performance benchmarking, portfolio construction and rebalancing, and asset allocation. We currently calculate more than 278,000 2 end-of-day indexes daily and more than 16,000 indexes in real time.
Index Clients use our indexes in many areas of the investment process, including for developing indexed financial products ( e.g. , ETFs, mutual funds, annuities, futures, options, structured products, over-the-counter derivatives), performance benchmarking, portfolio construction and rebalancing, and asset allocation. We currently calculate more than 290,000 2 end-of-day indexes daily and more than 16,000 indexes in real time.
We implement changes and upgrades to technology regularly and maintain processes to minimize risk on an ongoing basis, and we seek to improve employee awareness of cyber and information security issues through training. • Modernizing our workplace to better support a remote and hybrid workforce that can collaborate and productively work from anywhere. • Migrating products, data and services onto a cloud platform to accelerate the delivery of new capabilities that will help investors more swiftly and efficiently manage data and understand the drivers of risk and performance, drive automation across our corporate processes and minimize data center risks.
We implement changes and upgrades to technology regularly and maintain processes designed to minimize risk on an ongoing basis, and we seek to improve employee awareness of cyber and information security issues through training. • Modernizing our workplace to better support a remote and hybrid workforce that can collaborate and productively work from anywhere. • Migrating products, data and services onto cloud platforms to accelerate the delivery of new capabilities that will help investors more swiftly and efficiently manage data and understand the drivers of risk and performance, drive automation across our corporate processes and minimize data center risks.
We may be exposed to more targeted and more sophisticated cyber and other security attacks aimed at accessing certain information on our systems because of our role or prominence in the global marketplace, including client portfolio data, the composition of our indexes and MSCI ESG Research ratings of corporate issuers.
We may be exposed to more targeted and more sophisticated cyber-attacks and other security incidents aimed at accessing certain information on our systems and networks because of our role or prominence in the global marketplace, including client portfolio data, the composition of our indexes and MSCI ESG Research ratings of corporate issuers.
In addition to enhancing our position as a leading provider of tools and solutions for equity investors globally, our strategic priorities also include enhancing our content relating to other asset classes and strategies, including ESG and climate, thematics, factors, fixed income, liquidity and private assets, all of which we believe represent significant growth opportunities. • Lead the enablement of ESG and climate investment integration by delivering the data, information and applications necessary to identify, assess and incorporate material ESG and climate risks and opportunities.
In addition to enhancing our position as a leading provider of tools and solutions for equity investors globally, our strategic priorities also include enhancing our content relating to other asset classes 3 Table of Contents and strategies, including ESG and climate, thematics, factors, fixed income, liquidity and private assets, all of which we believe represent significant growth opportunities. • Lead the enablement of ESG and climate investment integration by delivering the data, information and applications necessary to identify, assess and incorporate material ESG and climate risks and opportunities.
Prior to that, he served as the Senior Vice President and Director of Human Resources of ITT Corporation from 2002 to 2010 and Senior Vice President of Administration and Employee Resources at General Instruments Corp. from 1997 to 2000. Mr. Crum holds a Bachelor of Business Administration with a concentration in industrial relations from Southern Methodist University.
Prior to that, he served as the Senior Vice President and Director of Human Resources of ITT Corporation from 2002 to 2010 and Senior Vice President of Administration and Employee Resources at General Instrument Corp. from 1997 to 2000. Mr. Crum holds a Bachelor of Business Administration with a concentration in industrial relations from Southern Methodist University.
If our internal processes, confidentiality policies, conflict of interest policies or information barrier procedures fail or are insufficient, including as a result of human error or manual processes, system error, other inadvertent release or other failure, or if an employee purposely circumvents or violates our internal controls, policies or procedures, then unauthorized access to, or disclosure or misappropriation of, data, including material non-public or other confidential information (e.g., certain index composition data or ESG rating data), our brand and reputation may suffer and we may become subject to litigation, regulatory actions, sanctions or other penalties, leading to a loss of client confidence, which could have a material adverse effect on our business, financial condition or results of operations.
If our internal processes, confidentiality policies, conflict of interest policies or information barrier procedures fail or are insufficient, including as a result of human error or manual processes, system error, other inadvertent release or other failure, or if an 19 Table of Contents employee purposely circumvents or violates our internal controls, policies or procedures, then unauthorized access to, or disclosure or misappropriation of data, including material non-public information or other confidential information (e.g., certain index composition data, methodologies or ESG rating data), our brand and reputation may suffer and we may become subject to litigation, regulatory actions, sanctions or other penalties, leading to a loss of client confidence, which could have a material adverse effect on our business, financial condition or results of operations.
We may experience pressures to reduce our fees on account of financial and budgetary pressures affecting our clients, including those resulting from weak or volatile economic or market conditions, including uncertainty regarding a global recession or significant financial-market event or crisis, the duration and long-term economic and societal consequences of the COVID-19 pandemic, the Russia-Ukraine conflict and the inflationary environment, which may lead certain clients to reduce their overall spending on our products or services, including by seeking similar products or services at a lower cost than what we are able to provide, by consolidating their spending with fewer providers, by consolidating with other clients or by self-sourcing certain of their information and analytical needs.
We may experience pressures to reduce our fees on account of financial and budgetary pressures affecting our clients, including those resulting from weak or volatile economic or market conditions, including uncertainty regarding a global recession or significant financial-market event or crisis, the duration and long-term economic and societal consequences of the COVID-19 pandemic, the Russia-Ukraine conflict, the Israel-Hamas conflict or other geopolitical conflicts and the inflationary environment, which may lead certain clients to reduce their overall spending on our products or services, including by seeking similar products or services at a lower cost than what we are able to provide, by consolidating their spending with fewer providers, by consolidating with other clients or by self-sourcing certain of their information and analytical needs.
We are focused on being an influential thought leader on these climate-related considerations for the investment industry. • Enhance distribution and content-enabling technology. We are deploying and developing advanced technology to drive integration and efficiencies, accelerate the pace of innovation and enhance distribution and the client experience.
We are focused on being an influential thought leader on these considerations for the investment industry. • Enhance distribution and content-enabling technology. We are deploying and developing advanced technology to drive integration and efficiencies, accelerate the pace of innovation and enhance distribution and the client experience.
The depth of knowledge of our client coverage teams, including dedicated account managers, ensures that we are engaging with our clients in a holistic and integrated manner. In particular, we are leveraging our existing offerings to serve new and developing client use cases.
The depth of knowledge of our client coverage team, including dedicated account managers, ensures that we are engaging with our clients in a holistic and integrated manner. In particular, we are leveraging our existing offerings to serve new and developing client use cases.
The contents of our website, including our Investor Relations homepage and Corporate Responsibility homepage, and our social media channels are not, however, a part of or incorporated by reference in this Annual Report on Form 10-K. Item 1A .
The contents of our website, including our Investor Relations homepage and Corporate Responsibility homepage, and our social media channels are not, however, a part of or incorporated by reference in this Annual Report on Form 10-K. 14 Table of Contents Item 1A .
In some cases, our ESG and Climate offerings, such as our country and company ESG ratings or our Net-Zero Tracker, may insert MSCI into a public spotlight or a public debate regarding the environment, climate change, social concerns or corporate responsibility.
In some cases, our ESG and Climate offerings, such as our country and company ESG ratings or our Net-Zero Tracker, may insert MSCI into a public spotlight or a public debate regarding the environment, climate change, social concerns, governance practices or corporate responsibility.
A refusal or failure by a key vendor to distribute our products; any loss of key outside suppliers of data, applications or services; a reduction in the accuracy or quality of such data, applications or services; or any failure by us to comply with our suppliers’ or distributors’ licensing requirements could impair our ability to provide our clients with our products and services, which could have a material adverse effect on our business, financial condition or results of operations.
A refusal or failure by a key vendor to distribute our products; any loss of key outside suppliers of data, applications or services; a reduction in the accuracy or quality of such data, applications or services; or any failure by us to comply with our suppliers’ or distributors’ licensing requirements could impair our ability to provide our clients 15 Table of Contents with our products and services, which could have a material adverse effect on our business, financial condition or results of operations.
If our products contain undetected errors or fail to perform properly due to defects, malfunctions or similar problems, we may, among other things, become subject to increased costs or liability based on the use of our products or services to support our 15 Table of Contents clients’ investment processes, which could have a material adverse effect on our business, financial condition or results of operations.
If our products contain undetected errors or fail to perform properly due to defects, malfunctions or similar problems, we may, among other things, become subject to increased costs or liability based on the use of our products or services to support our clients’ investment processes, which could have a material adverse effect on our business, financial condition or results of operations.
In addition, our position as a leading source of ESG research, ratings, data and assessments may at times become contentious, politicized or controversial and lead to disputes with companies or investors or other interested stakeholders and create negative media or regulatory attention. 16 Table of Contents In addition, there has been increased regulatory and political focus on ESG-related practices of asset managers.
In addition, our position as a leading source of ESG research, ratings, data and assessments may at times become contentious, politicized or controversial and lead to disputes with companies or investors or other interested stakeholders and create negative media or regulatory attention. In addition, there has been increased regulatory and political focus on ESG-related practices of asset managers.
The value of an investment product’s assets may increase or decrease in response to changes in market performance and cash inflows and outflows, which could impact our revenues. Additionally, an increasing portion of our revenues comes from products and services that relate to certain investment trends, such as ESG and climate, factor, thematic, private asset and MAC investing.
The value of an investment product’s assets may increase or decrease in response to changes in market performance and cash inflows and outflows, which could impact our revenues. 21 Table of Contents Additionally, an increasing portion of our revenues comes from products and services that relate to certain investment trends, such as ESG and climate, factor, thematic, private asset and MAC investing.
Strategy We provide critical tools and solutions that enable investors to manage the transformations taking place in the investment industry, better understand performance and risk, and build portfolios more effectively and efficiently to achieve their investment objectives.
Strategy We provide critical tools and solutions that enable investors to manage the transformations taking place in the investment industry, better understand the drivers of performance and risk, and build portfolios more effectively and efficiently to achieve their investment objectives.
Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K or any other report filed with the SEC. MSCI ESG Research LLC is a registered investment adviser and must comply with the requirements of the Investment Advisers Act of 1940 (the “Advisers Act”) and related SEC regulations.
Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K or any other report filed with the SEC. 12 Table of Contents MSCI ESG Research LLC is a registered investment adviser and must comply with the requirements of the Investment Advisers Act of 1940 (the “Advisers Act”) and related SEC regulations.
Technology Risks Any failures, disruptions, instability or vulnerabilities in our information technology architecture, platforms, vendors and service providers, production and delivery systems, software, code, internal network, the Internet or other systems or applications may disrupt our operations, cause our products to be unavailable or fail and impose delays or additional costs in deploying our products, or impose conditions or restrictions on our ability to commercialize our products or keep them confidential and result in reputational and other harm and have a material adverse effect on our business, financial condition or results of operations.
Technology Risks Any failures, disruptions, instability or vulnerabilities in our information technology architecture, platforms, vendors and service providers, production and delivery systems, software, code, networks, the Internet or other systems or applications may disrupt our operations, cause our products or services to be unavailable or fail and impose delays or additional costs in deploying our products or services, or impose conditions or restrictions on our ability to commercialize our products or services or keep them confidential and result in reputational and other harm and have a material adverse effect on our business, financial condition or results of operations.
Corporate Responsibility As a leader in providing ESG and climate solutions to investors, we also aim to demonstrate leading corporate responsibility practices and policies that are meaningful to our various stakeholders, including our clients, employees, shareholders and local communities.
Corporate Responsibility As a leader in providing ESG and climate solutions to investors, we also aim to demonstrate leading corporate responsibility practices and policies that are meaningful to our various stakeholders, including our clients, employees and shareholders.
In addition, MSCI ESG indexes and our Climate Lab Enterprise analytics product are constructed using data from our ESG and Climate operating segment. Through our relationships with the world’s largest investment institutions, we monitor investment trends and their drivers globally and support instrument valuation, risk modeling, portfolio construction, portfolio attribution, asset allocation and VaR simulation.
In addition, our MSCI ESG indexes and our Climate Lab Enterprise analytics product are constructed using data from our ESG and Climate operating segment. Through our relationships with the world’s largest investment institutions, we monitor investment trends and their drivers globally and support instrument valuation, risk modeling, portfolio construction, portfolio attribution, asset allocation and value-at-risk simulation.
Disruptions, failures or slowdowns that could occur with respect to our operations, including to our information technology systems and platforms, our electronic delivery systems or the Internet, could damage our brand and reputation, result in litigation and negatively affect our ability to distribute our products effectively and to service our clients, including delivering managed services or delivering real-time index data.
Disruptions, failures or slowdowns that could occur with respect to our operations, including to our information technology systems, networks and platforms, our electronic delivery systems or the Internet, could reduce confidence in our products and services, damage our brand and reputation, result in litigation and negatively affect our ability to distribute our products effectively and to service our clients, including delivering managed services or delivering real-time index data.
A portion of our revenues comes from clients who use our indexes as the basis for indexed investment products. These fees are primarily based on a client’s assets under management or trading volumes, and if the level of assets under management or trading 20 Table of Contents volumes declines, we expect our fee-based revenue to show a corresponding decline.
A portion of our revenues comes from clients who use our indexes as the basis for indexed investment products. These fees are primarily based on a client’s assets under management or trading volumes, and if the level of assets under management or trading volumes declines, we expect our fee-based revenue to show a corresponding decline.
As of December 31, 2022, we calculated indexes that covered more than 80 developed, emerging, frontier and standalone equity markets, as well as various regional indexes built from the component indexes. • ESG and Climate Indexes.
As of December 31, 2023, we calculated indexes that covered more than 80 developed, emerging, frontier and standalone equity markets, as well as various regional indexes built from the component indexes. • ESG and Climate Indexes.
Custom Indexes are calculated by applying additional criteria supplied by a client – such as stock exclusion lists, currency hedging rules, tax rates or special weighting – to an MSCI index.
Client-Designed Indexes are calculated by applying additional criteria supplied by a client – such as stock exclusion lists, currency hedging rules, tax rates or special weighting – to an MSCI index.
Our employees also depend on these systems, platforms and providers for internal use.
Our employees also depend on these systems, networks, platforms and providers for internal use.
Our open-architecture, web-based Investment Solutions as a Service (“ISaaS”) offerings now include MSCI ONE, an integrated platform that provides access to investment content across a number of our products and solutions. These offerings help us deliver MSCI content and solutions to our clients at scale. • Expand solutions that empower client customization .
Our open-architecture Investment Solutions as a Service (“ISaaS”) offerings include MSCI ONE, an integrated platform that provides access to investment content across a number of our products and solutions. These offerings help us deliver MSCI content and solutions to our clients at scale. • Expand solutions that empower client customization .
Prior to joining MSCI in 2012, Mr. Wiechmann was an investment banker at Morgan Stanley where he executed M&A and capital markets transactions for financial technology and specialty finance companies, including advising MSCI on its IPO and various acquisitions. Mr. Wiechmann holds Bachelor of Arts degrees in Physics and Economics from Hamilton College. Robert J. Gutowski Mr.
Prior to joining MSCI in 2012, Mr. Wiechmann was an investment banker at Morgan Stanley where he executed M&A and capital markets transactions for financial technology and specialty finance companies, including advising MSCI on its IPO and various acquisitions. Mr. Wiechmann holds Bachelor of Arts degrees in Physics and Economics from Hamilton College. 13 Table of Contents Robert J.
The goal of the Long-Term Incentive Program is to: (i) align the interests of eligible employees with those of our shareholders, (ii) enhance our “owner-operator” philosophy, (iii) recognize and reward potential long-term contributions, and (iv) retain key leaders and top performers.
The goal of the Long-Term Incentive Program is to: (i) align the interests of eligible employees with those of our shareholders, (ii) enhance our “owner-operator” culture, (iii) recognize and reward potential long-term strategic contributions, and (iv) retain key leaders and top performers.
Real or perceived factors that may have already affected credibility, or which could potentially have an impact in this regard, include: the appearance of a conflict of interest; the editorial independence of our index composition and ESG rating and assessment processes and decisions; the influence, attempted influence or appearance of influence of third parties, including governments, politicians and large investors or asset owners, on our editorial decisions; the performance of companies relative to their ESG ratings, index inclusion, risk characteristics or other MSCI content or analytics; the timing and nature of changes to our indexes or ESG ratings and assessments; disagreement with our methodologies or models, including for calculating indexes, value-at-risk and other risk measures, ESG ratings and assessments, data, information and analysis; the accuracy and completeness of our data; views expressed by the media, politicians, other government officials or representatives, regulators or other third parties regarding our company or our industry or our role in the investment process, including allegations or suggestions that we encourage investment in certain companies, countries or regions or in support of certain causes or trends; and the impact of political tensions relating to countries, industries, companies or issues relevant to our products and services, such as the inclusion of certain Chinese companies in our indexes or the focus on sustainable or ESG investing and climate considerations in our products.
Real or perceived factors that may have already affected credibility, or which could potentially have an impact in this regard, include: the appearance of a conflict of interest; the adequacy, completeness and editorial independence of our index composition and ESG rating and assessment processes and decisions; the influence, attempted influence or appearance of influence of third parties, including governments, politicians and large investors or asset owners, on our editorial decisions; the performance of companies relative to their ESG ratings, index inclusion, risk characteristics or other MSCI content or analytics; the timing and nature of changes to our indexes or ESG ratings and related assessments; disagreement with our methodologies or models, including for calculating indexes, value-at-risk and other risk measures, ESG ratings and assessments, data, information and analysis; the accuracy and completeness of our or third-party data, including data voluntarily disclosed by the investment community, corporate issuers and others that is utilized in our products; views expressed by the media, politicians, other government officials or representatives, regulators or other third parties regarding our company or our industry or our role in the investment process, including allegations or suggestions that we encourage investment in certain companies, countries or regions or in support of certain causes or trends; and the impact of political tensions relating to countries, industries, companies or issues relevant to our products and services, such as the inclusion of certain Chinese companies in our indexes or the focus on sustainable or ESG investing and climate considerations in our products.
Clients that license our indexes to serve as the basis for listed futures and options contracts might also discontinue such 17 Table of Contents contracts. Additionally, we have a differentiated licensing strategy for our indexes and from time to time experience faster growth from lower fee products, resulting in a lower average asset-based fee percentage from indexed investment products.
Clients that license our indexes to serve as the basis for listed futures and options contracts might also discontinue such contracts. Additionally, we have a differentiated licensing strategy for our indexes and from time to time experience faster growth from lower fee products, resulting in a lower average asset-based fee percentage from indexed investment products.
As a result, any repurchase program may not ultimately result in enhanced value to our shareholders and may not prove to be the best use of our cash resources. Item 1B. Unresolved Staff Comments Nothing required to be disclosed. 29 Table of Contents
As a result, any repurchase program may not ultimately result in enhanced value to our shareholders and may not prove to be the best use of our cash resources. Item 1B. Unresolved Staff Comments Nothing required to be disclosed.
In response to the pandemic, we have taken numerous steps to support our employees, including transitioning to a hybrid work environment for most employees, enhancing our sick leave policies, engaging with external health and ergonomics consultants and increasing the use of technology to allow our employees to remain fully engaged, productive and well.
Recently, we have taken numerous steps to support our employees, including transitioning to a hybrid work environment for most employees, enhancing our sick leave policies, engaging with external health and ergonomics consultants and increasing the use of technology to allow our employees to remain fully engaged, productive and well.
These indexes can target areas of interest under megatrend categories such as the environment, healthcare and lifestyle. Examples of our Thematic Indexes include digital economy, efficient energy, genomic innovation and smart cities. • Custom Indexes.
These indexes can target areas of interest under megatrend categories such as the environment, healthcare and lifestyle. Examples of our Thematic Indexes include digital economy, efficient energy, genomic innovation and smart cities. • Client-Designed Indexes.
Additionally, there has been increased attention on and scrutiny of index and ESG rating and data providers by politicians, regulators, policymakers and the media, which could create negative publicity that could harm our reputation or credibility as well as result in new or additional regulation that could increase our costs and have a negative impact on our business, financial condition or results of operations.
Additionally, there has been increased attention on and scrutiny of index providers and ESG ratings and data providers by politicians, regulators, policymakers and the media, which could create negative publicity that could harm our reputation or credibility 25 Table of Contents as well as result in new or additional regulation that could increase our costs and have a negative impact on our business, financial condition or results of operations.
Changes to regulatory requirements may obviate the need for these products or services or may cause us to invest in enhancing the products or services to help our clients meet the new regulatory requirements. Financial Risks Our revenues, expenses, assets and liabilities are subject to foreign currency exchange rate fluctuation risk.
Changes to regulatory requirements may obviate the need for these products or services or may cause us to invest in enhancing the products or services to help our clients meet the new regulatory requirements. 26 Table of Contents Financial Risks Our revenues, expenses, assets and liabilities are subject to foreign currency exchange rate fluctuation risk.
These risks include, among others, the following key risks: • Our dependence on third parties to supply data, applications and services for our products and services and on certain vendors to distribute our products; • Undetected errors, defects, malfunctions or similar problems in our products leading to increased costs or liability; • Our exposure to potential reputational and credibility concerns; • The impact of the COVID-19 pandemic or other widespread health crises; • The possibility that our clients seek to negotiate lower asset-based fees or cease using our indexes as the basis for indexed investment products; • Cancellations or reductions by any of our largest clients or reduced demand for our products or services; • The impact of failures, disruptions, instability or vulnerabilities in our information technology systems or applications; • Our inability to ensure and protect the confidentiality of data; • Our exposure to security breaches including cyber-attacks or failures of our security plans, systems or procedures; • Unanticipated failures, interruptions or delays in the performance or delivery of our products as a result of the adoption of new technologies; • Security vulnerabilities resulting from our use of open source code; • The impact of changes in economic conditions and the global capital markets, including resulting from geopolitical events, adverse equity market conditions, volatility in the financial markets and evolving investment trends; • The effects on us from competition and financial and budgetary pressures affecting our clients; • Our need to successfully develop new and enhanced products and services in order to remain competitive; • The impact of our global operations and any future expansion on management and our exposure to additional issues from our increased global footprint; • Failure to comply with laws, rules or regulations; changes to current laws, rules or regulations; or the introduction of new laws, rules or regulations relevant to our business; • Our inability to protect our intellectual property rights; 14 Table of Contents • The impact of foreign currency exchange rate fluctuation; • The impact of our indebtedness on our financial flexibility; • The impact of changes in our credit ratings; and • Our exposure to tax liabilities in various jurisdictions.
These risks include, among others, the following key risks: • Our dependence on third parties to supply data, applications and services for our products and services and on certain vendors to distribute our products; • Undetected errors, defects, malfunctions or similar problems in our products leading to increased costs or liability; • Our exposure to potential reputational and credibility concerns; • The possibility that our clients seek to negotiate lower asset-based fees or cease using our indexes as the basis for indexed investment products; • Cancellations or reductions by any of our largest clients or reduced demand for our products or services; • The impact of failures, disruptions, instability or vulnerabilities in our information technology systems, networks or applications; • Our inability to ensure and protect the confidentiality of data; • Our exposure to security incidents including cyber-attacks or failures of our security plans, systems, networks or procedures; • Unanticipated failures, interruptions or delays in the performance or delivery of our products as a result of the adoption of new technologies; • Security vulnerabilities resulting from our use of open source code; • The impact of changes in economic conditions and the global capital markets, including resulting from geopolitical events, adverse equity market conditions, volatility in the financial markets and evolving investment trends; • The effects on us from competition and financial and budgetary pressures affecting our clients; • Our need to successfully develop new and enhanced products and services in order to remain competitive; • The impact of our global operations and any future expansion on management and our exposure to additional issues from our increased global footprint; • Failure to comply with laws, rules or regulations; changes to current laws, rules or regulations; or the introduction of new laws, rules or regulations relevant to our business; • Our inability to protect our intellectual property rights; • Failure to attract, develop or retain qualified personnel; • The impact of foreign currency exchange rate fluctuation; • The impact of our indebtedness on our financial flexibility; • The impact of changes in our credit ratings; and • Our exposure to tax liabilities in various jurisdictions.
Content created in one segment can often be used for the creation of products in another segment. For example, the MAC models created in our Analytics segment offer a view of risk across market and asset classes, including private real estate, by incorporating content generated in the Real Assets operating segment.
Content created in one segment can often be used for the creation of products in another segment. For example, the MAC models created in our Analytics segment offer a view of risk across market and asset classes, including private assets, by incorporating content generated in our private assets offerings.
It is possible that in addition to MSCI ESG Research LLC, other entities in our corporate family may be required to register as an investment adviser under the Advisers Act or comply with similar laws or requirements in states or foreign jurisdictions.
It is possible that in addition to MSCI ESG Research LLC, other entities in our corporate family could become required to register as an investment adviser under the Advisers Act or comply with similar laws or requirements in states or foreign jurisdictions.
Our ability to effectively use the Internet, including 18 Table of Contents our remote work force’s ability to access the Internet, may also be impaired due to infrastructure failures, service outages at third-party Internet providers, malicious attacks exploiting security vulnerabilities or increased government regulation.
Our ability to effectively use the Internet, including our remote work force’s ability to access the Internet, may also be impaired due to infrastructure failures, service outages at third-party Internet providers, malicious attacks exploiting security vulnerabilities or increased government regulation.
Our Risk Insights offering calculates, stores and delivers a broad range of risk measures to help investors identify trends and respond to rapid changes in markets.
Our Insights offering calculates, stores and delivers a broad range of risk, performance, climate and sustainability measures to help investors identify trends and respond to rapid changes in markets.
We compete for key employees not only with other companies in our industry but also with companies in other industries, such as software services, engineering services and financial services companies, and there is a limited pool of employees who have the skills and training needed to do our work.
We compete for key employees not only with other companies in our industry but also with companies in other industries, such as software services, engineering services and financial services companies, and there is a limited pool of employees who have the skills and training needed to do our work, including with expertise in emerging technologies, such as AI.
In addition, we believe that when we change the composition of our indexes, in some cases the changes can have an indirect effect on the prices of constituent securities and on certain indexed investment products as a result of trading activity related to tracking our indexes.
In addition, we believe that when we change the composition of our indexes or if we expect to change the methodologies that govern our indexes, in some cases the changes can have an indirect effect on the prices of constituent securities and on certain indexed investment products as a result of trading activity related to tracking our indexes.
We rely primarily on a combination of trade secrets, patents, copyrights and trademark rights, laws regarding unfair competition and the misappropriation of intellectual property, as well as technical measures and contractual protections, such as non-disclosure obligations, to protect our products and services.
We consider many aspects of our products and services to be proprietary. We rely primarily on a combination of trade secrets, patents, copyrights and trademark rights, laws regarding unfair competition and the misappropriation of intellectual property, as well as technical measures and contractual protections, such as non-disclosure obligations, to protect our products and services.
The Governance and Corporate Responsibility Committee of our Board of Directors provides oversight of our corporate responsibility strategy and activities and receives regular updates and reports from MSCI management, including our Chief Responsibility and Diversity Officer. We are committed to continuing to develop and enhance our climate-focused strategies and to regularly reporting on our efforts.
The Governance and Corporate Responsibility Committee of our Board of Directors (“Board”) provides oversight of our corporate responsibility strategy and activities and receives regular updates and reports from MSCI management, including our Chief Responsibility and Diversity Officer. We are committed to continuing to develop and enhance our sustainability strategy and to regularly reporting on our efforts.
Clients Our clients comprise a wide spectrum of the global investment industry and include the following key client types: • Asset owners (including pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance companies) • Asset managers (including managers of institutional funds and accounts, mutual funds, hedge funds, ETFs, insurance products, private banking products and real estate investment trusts) • Financial intermediaries (including banks, broker-dealers, exchanges, custodians, trust companies, fund administrators and investment consultants) • Wealth managers (including robo-advisors and self-directed brokerages) • Real Estate Professionals (including real estate brokers, agents, developers, lenders and appraisers) • Corporates (including public and private companies and their advisors) As of December 31, 2022 we served over 6,600 clients 1 in more than 95 countries.
Clients Our clients comprise a wide spectrum of the global investment industry and include the following key client types: • Asset owners (including pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance companies) • Asset managers (including managers of institutional funds and accounts, mutual funds, hedge funds, ETFs, insurance products, private banking products and real estate investment trusts) • Financial intermediaries (including banks, broker-dealers, exchanges, custodians, trust companies, fund administrators and investment consultants) • Wealth managers (including large wealth management organizations, robo-advisors and self-directed brokerages) • Real Estate Professionals (including real estate brokers, agents, developers, lenders and appraisers) • Corporates (including public and private companies and their advisors) As of December 31, 2023 we served approximately 7,000 clients 1 in more than 95 countries.
In our existing global operations or any future expansion, including as a result of acquisition, there can be no assurance that we will effectively attract, engage and retain qualified personnel, develop and retain effective leadership in all our locations; operate and expand our physical facilities and information technology, legal and compliance infrastructure; integrate acquired businesses; or otherwise adequately manage our global operations and any future expansion.
In our existing global operations or any future expansion, including as a result of acquisition, there can be no assurance that we will effectively attract, engage and retain qualified personnel, develop and retain effective leadership in all our locations; operate and expand our physical facilities and information technology, legal and compliance infrastructure; develop and maintain appropriate operational and financial systems, procedures and controls; integrate acquired businesses; or otherwise adequately manage our global operations and any future expansion.
We are continually developing a wide range of differentiated content and have amassed an extensive database of historical global market data, proprietary equity index data, ESG and climate data, factor models, private asset benchmark data and risk algorithms, all of which can be critical components of our clients’ investment processes.
We are continually developing a wide range of differentiated content and have amassed an extensive database of historical global market data; proprietary equity index data; ESG and climate data and metrics; factor models; private asset performance, transaction and benchmark data, including fund- and asset-level data; and risk algorithms, all of which can be critical components of our clients’ investment processes.
Similarly, some of our clients who currently license our risk or ESG and climate data to analyze their portfolio risk may develop their own tools to collect data and assess risk or embed ESG and climate considerations into their investment processes, making our products or services unnecessary for them.
Similarly, some of our clients who currently license our risk or ESG and climate data to analyze 18 Table of Contents their portfolio risk may develop their own tools to collect data and assess risk or embed sustainable investing considerations into their investment processes, making our products or services unnecessary for them.
Restrictions or bans could be placed, or penalties could be levied, relating to the collection, management, aggregation, storage, transfer and use of information that is currently legally available, in which case our costs related to handling information could increase materially.
Restrictions or bans could be placed, or penalties could be levied, relating to the collection, management, aggregation, storage, transfer, use and other processing of information that is currently legally available, in which case our costs related to handling information could increase materially. • Investment Advisers Act.
In addition, our RiskMetrics HedgePlatform service allows clients such as funds of funds, pension funds and endowments who invest in hedge funds to measure, evaluate and monitor the risk of their hedge fund investments across multiple hedge fund strategies. For the year ended December 31, 2022, 25.6% of our revenues were attributable to our Analytics segment.
In addition, our RiskMetrics HedgePlatform service allows clients such as funds of funds, pension funds and endowments who invest in hedge funds to measure, evaluate and monitor the risk of their hedge fund investments across multiple hedge fund strategies. For the year ended December 31, 2023, 24.4% of our revenues were attributable to our Analytics segment.
Further, laws, rules, regulations and orders affecting users of our indexes can have an indirect impact on our indexes, including their construction and composition, such as sanctions that prohibit users of our indexes from investing or transacting in securities included in our indexes. • Data Privacy Legislation.
Further, laws, rules, regulations and orders affecting users of our indexes can have an indirect impact on our indexes, including their construction and composition, such as sanctions that prohibit users of our indexes from investing or transacting in securities included in our indexes. • ESG Ratings .
Current areas of focus include: • Improving the client experience by enhancing the way clients access, interact with and use our data, applications and other tools, including by developing and launching our new open-architecture ISaaS services, many of which are available via modern, web-based platforms, such as our new MSCI ONE offering, or integrate with our clients’ existing ecosystems via APIs. • Enhancing data processing by utilizing data science and machine learning in our data collection processes to more efficiently build scale and facilitate faster product enhancements and releases while also maintaining the highest quality standards. • Enhancing information security by further strengthening our technology infrastructure and software security processes.
Current areas of focus include: • Improving the client experience by enhancing the way clients access, interact with and use our data, applications and other tools, including by developing and launching our open-architecture ISaaS services, many of which are available via modern, web-based platforms, such as our MSCI ONE offering, or integrate with our clients’ existing ecosystems via APIs. • Enhancing data processing by utilizing data science and machine learning in our data collection processes to more efficiently build scale and facilitate faster product enhancements and releases while also maintaining high standards.
As such, to the extent that our clients become subject to certain laws, rules or regulations, we may incur higher costs in connection 22 Table of Contents with modifying our products or services.
As such, to the extent that our clients become subject to certain laws, rules or regulations, we may incur higher costs in connection with modifying our products or services.
Our products and services include indexes; portfolio construction and risk management tools; environmental, social and governance (“ESG”) and climate solutions; and real estate market and transaction data and analysis. We are increasingly focused on open and flexible technology, and our content and capabilities can be accessed by our clients through multiple channels and platforms.
Our products and services include indexes; portfolio construction and risk management tools; environmental, social and governance (“ESG”) and climate solutions; and private asset data and analysis. We are increasingly focused on open and flexible technology, and our content and capabilities can be accessed by our clients through multiple channels and platforms.
Managers receive anonymous feedback and are accountable for improving and enhancing the work environment to drive higher engagement. In our December 2022 employee engagement survey, we achieved a 78% response rate, and the percentage of respondents characterized as fully engaged was 74%, the highest since we implemented the engagement survey .
Managers receive anonymous feedback and are accountable for improving and enhancing the work environment to drive higher engagement. In our December 2023 employee engagement survey, we achieved a 82% response rate, and the percentage of respondents characterized as fully engaged was 75%, the highest since we implemented the engagement survey .
RiskMetrics CreditManager is a portfolio credit risk management system used primarily by banks to quantify portfolio credit risk by capturing market exposure, rating changes and default risk. • Climate Lab Enterprise .
RiskMetrics CreditManager is a portfolio credit risk management system used primarily by banks to quantify portfolio credit risk by capturing market exposure, rating changes and default risk. 6 Table of Contents • Climate Lab Enterprise .
Our global operations also expose us to political, economic, legal, operational, reputational, franchise and other risks that are inherent in operating in many countries, including risks of possible capital controls, exchange controls, customs duties, sanctions compliance, tax penalties, levies or assessments, legal uncertainty, broad regulatory discretion and other restrictive governmental actions, as well as the outbreak of hostilities or political and governmental instability in certain of the countries or regions in which we conduct operations.
Our global operations and our ability to deliver our services to our clients also expose us to political, economic, legal, operational, reputational, franchise and other risks that are inherent in operating in many countries, including risks of possible capital controls, exchange controls, customs duties, sanctions compliance, tax penalties, levies or assessments, legal uncertainty, broad regulatory discretion and other restrictive governmental actions, as well as the outbreak of hostilities (including the Russia-Ukraine conflict and the Israel-Hamas conflict) or political and governmental instability in certain of the countries or regions in which we conduct operations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of December 31, 2022, our principal offices consisted of the following leased properties: Location Square Feet Expiration Date New York, New York 125,811 (1) February 28, 2033 Budapest, Hungary 70,833 February 28, 2029 Mumbai, India 63,143 July 31, 2032 Monterrey, Mexico 56,213 October 31, 2028 Manila, Philippines 31,544 February 28, 2027 London, England 30,519 December 25, 2026 Pune, India 24,434 January 19, 2026 Berkeley, California 19,808 February 28, 2030 ________________ (1) As of December 31, 2022, 41,759 square feet of this location have been subleased.
Biggest changeProperties As of December 31, 2023, our principal offices consisted of the following leased properties: Location Square Feet Expiration Date New York, New York 125,811 (1) February 28, 2033 Budapest, Hungary 70,833 (2) February 28, 2029 Mumbai, India 63,143 July 31, 2032 Monterrey, Mexico 56,213 October 31, 2028 London, England 30,519 December 25, 2026 Pune, India 24,434 January 19, 2026 Manila, Philippines 20,904 February 28, 2027 Berkeley, California 19,808 February 28, 2030 Hoboken, New Jersey 19,018 November 30, 2026 Stellenbosch, South Africa 18,611 September 30, 2026 ________________ (1) As of December 31, 2023, 41,759 square feet of this location have been subleased.
As of December 31, 2022, we had more than 30 leased and occupied locations of which the principal offices are listed above. We believe that our properties are in good operating condition and adequately serve our current business operations.
(2) As of December 31, 2023, 17,059 square feet of this location have been subleased. As of December 31, 2023, we had more than 30 leased and occupied locations of which the principal offices are listed above. We believe that our properties are in good operating condition and adequately serve our current business operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 30 Table of Contents PART II
Biggest changeHowever, based on facts currently available, management believes that the disposition of matters that are currently pending or asserted will not, individually or in the aggregate, have a material effect on MSCI’s business, operating results, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 33 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−2 removed5 unchanged
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1, 2022-October 31, 2022 163,117 $ 430.06 163,064 $ 1,304,379,000 November 1, 2022-November 30, 2022 167 $ 502.00 — $ 1,304,379,000 December 1, 2022-December 31, 2022 — $ — — $ 1,304,379,000 Total 163,284 $ 430.14 163,064 $ 1,304,379,000 ________________ (1) Includes (i) shares purchased by the Company on the open market under the stock repurchase program; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; and (iii) shares held in treasury under the MSCI Inc.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2023-October 31, 2023 52 $ 523.17 — $ 845,668,000 November 1, 2023-November 30, 2023 63 $ 526.57 — $ 845,668,000 December 1, 2023-December 31, 2023 — $ — — $ 845,668,000 Total 115 $ 525.03 — $ 845,668,000 ________________ (1) Includes, when applicable, (i) shares purchased by the Company on the open market under the stock repurchase program; (ii) shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying restricted stock units; and (iii) shares held in treasury under the MSCI Inc.
See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to Consolidated Financial Statements included herein for additional information on our stock repurchase program. The following table provides information with respect to purchases made by or on behalf of the Company of its shares of common stock during the quarter ended December 31, 2022.
See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to Consolidated Financial Statements included herein for additional information on our stock repurchase program. The following table provides information with respect to purchases made by or on behalf of the Company of its shares of common stock during the quarter ended December 31, 2023.
(2) See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to the Consolidated Financial Statements included herein for further information regarding our stock repurchase program. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in the year ended December 31, 2022.
(3) See Note 11, “Shareholders’ Equity (Deficit),” of the Notes to the Consolidated Financial Statements included herein for further information regarding our stock repurchase program. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in the year ended December 31, 2023.
Use of Proceeds from Sale of Registered Securities None. 31 Table of Contents FIVE-YEAR STOCK PERFORMANCE GRAPH The following graph compares the cumulative total shareholders’ return on our common stock, the Standard & Poor’s 500 Stock Index, the MSCI USA Financials Index and the NYSE Composite Index since December 31, 2017 assuming an investment of $100 at the closing price on December 31, 2017.
Use of Proceeds from Sale of Registered Securities None. 34 Table of Contents FIVE-YEAR STOCK PERFORMANCE GRAPH The following graph compares the cumulative total shareholders’ return on our common stock, the Standard & Poor’s 500 Stock Index and the MSCI USA Financials Index since December 31, 2018 assuming an investment of $100 at the closing price on December 31, 2018.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Price and Dividends Our common stock is traded on the New York Stock Exchange under the symbol “MSCI.” As of February 3, 2023, there were 109 shareholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Stock Price and Dividends Our common stock is traded on the New York Stock Exchange under the symbol “MSCI.” As of February 2, 2024, there were 101 shareholders of record of our common stock.
Non-Employee Directors Deferral Plan. The value of shares withheld to satisfy tax withholding obligations was determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company.
Non-Employee Directors Deferral Plan. The value of shares withheld to satisfy tax withholding obligations was determined using the fair market value of the Company’s common stock on the date of withholding, using a valuation methodology established by the Company. (2) Excludes 1% excise tax incurred on share repurchases.
Removed
Total Investment Value Years Ended December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 MSCI Inc. $100 $118 $209 $364 $503 $386 S&P 500 $100 $96 $126 $149 $192 $157 MSCI USA Financials Index (1) $100 $86 $115 $113 $153 $134 NYSE Composite Index (1) $100 $91 $114 $122 $148 $134 ________________ (1) To better align with comparable investment opportunities, for the year ended December 31, 2022, MSCI replaced the NYSE Composite Index with the MSCI USA Financials Index.
Added
Total Investment Value Years Ended December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 MSCI Inc. $100 $177 $309 $427 $327 $402 S&P 500 $100 $131 $156 $200 $164 $207 MSCI USA Financials Index $100 $133 $130 $177 $155 $178 Item 6. [Reserved] 35 Table of Contents
Removed
Both indices are presented, in accordance with SEC rules, which require that if a company selects a different index from that used in the immediately preceding fiscal year, the company’s stock performance must be compared against both the newly selected index and previous index in the year of change. MSCI USA Financials Index is an index operated by MSCI.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeTotal net sales represent the total gross sales net of the impact from subscription cancellations. 48 Table of Contents The following table presents our recurring subscription sales, cancellations and non-recurring sales by reportable segment for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) New recurring subscription sales Index $ 109,699 $ 99,686 10.0 % Analytics 75,584 71,656 5.5 % ESG and Climate 78,980 69,964 12.9 % All Other - Private Assets 23,213 14,142 64.1 % New recurring subscription sales total 287,476 255,448 12.5 % Subscription cancellations Index (27,103) (24,399) 11.1 % Analytics (37,171) (34,291) 8.4 % ESG and Climate (5,618) (4,811) 16.8 % All Other - Private Assets (7,569) (6,737) 12.3 % Subscription cancellations total (77,461) (70,238) 10.3 % Net new recurring subscription sales Index 82,596 75,287 9.7 % Analytics 38,413 37,365 2.8 % ESG and Climate 73,362 65,153 12.6 % All Other - Private Assets 15,644 7,405 111.3 % Net new recurring subscription sales total 210,015 185,210 13.4 % Non-recurring sales Index 57,560 54,030 6.5 % Analytics 11,143 12,407 (10.2) % ESG and Climate 4,268 4,135 3.2 % All Other - Private Assets 1,264 1,694 (25.4) % Non-recurring sales total 74,235 72,266 2.7 % Gross sales Index $ 167,259 $ 153,716 8.8 % Analytics 86,727 84,063 3.2 % ESG and Climate 83,248 74,099 12.3 % All Other - Private Assets 24,477 15,836 54.6 % Total gross sales $ 361,711 $ 327,714 10.4 % Net sales Index $ 140,156 $ 129,317 8.4 % Analytics 49,556 49,772 (0.4) % ESG and Climate 77,630 69,288 12.0 % All Other - Private Assets 16,908 9,099 85.8 % Total net sales $ 284,250 $ 257,476 10.4 % 49 Table of Contents Retention Rate Another key metric is our “Retention Rate.” The following table presents our Retention Rate by reportable segment for the periods indicated: Index Analytics ESG and Climate All Other - Private Assets (1) Total 2022 Three Months Ended March 31, 96.6% 94.4% 98.7% 94.1% 95.9% Three Months Ended June 30, 95.9% 94.3% 97.3% 96.0% 95.5% Three Months Ended September 30, 96.9% 95.9% 97.4% 94.8% 96.4% Three Months Ended December 31, 95.0% 90.0% 95.4% 92.6% 93.0% Year Ended December 31, (2) 96.1% 93.6% 97.2% 94.4% 95.2% 2021 Three Months Ended March 31, 96.6% 95.8% 97.0% 95.1% 96.3% Three Months Ended June 30, 95.6% 92.7% 96.4% 93.7% 94.4% Three Months Ended September 30, 96.0% 93.4% 96.1% 91.0% 94.5% Three Months Ended December 31, 96.0% 93.4% 96.6% 88.1% 94.4% Year Ended December 31, (2) 96.1% 93.8% 96.5% 90.5% 94.7% ______________________________ (1) Includes RCA’s Run Rate commencing as of the acquisition date of September 13, 2021.
Biggest changeThe following table presents our recurring subscription sales, cancellations and non-recurring sales by reportable segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) New recurring subscription sales Index $ 116,016 $ 109,699 5.8 % Analytics 79,035 75,584 4.6 % ESG and Climate 55,092 78,980 (30.2 %) All Other - Private Assets 26,175 23,213 12.8 % New recurring subscription sales total 276,318 287,476 (3.9 %) Subscription cancellations Index (32,298) (27,103) 19.2 % Analytics (34,675) (37,171) (6.7 %) ESG and Climate (10,923) (5,618) 94.4 % All Other - Private Assets (15,337) (7,569) 102.6 % Subscription cancellations total (93,233) (77,461) 20.4 % Net new recurring subscription sales Index 83,718 82,596 1.4 % Analytics 44,360 38,413 15.5 % ESG and Climate 44,169 73,362 (39.8 %) All Other - Private Assets 10,838 15,644 (30.7 %) Net new recurring subscription sales total 183,085 210,015 (12.8 %) Non-recurring sales Index 87,775 57,560 52.5 % Analytics 14,379 11,143 29.0 % ESG and Climate 5,625 4,268 31.8 % All Other - Private Assets 2,151 1,264 70.2 % Non-recurring sales total 109,930 74,235 48.1 % Gross sales Index $ 203,791 $ 167,259 21.8 % Analytics 93,414 86,727 7.7 % ESG and Climate 60,717 83,248 (27.1 %) All Other - Private Assets 28,326 24,477 15.7 % Total gross sales $ 386,248 $ 361,711 6.8 % Net sales Index $ 171,493 $ 140,156 22.4 % Analytics 58,739 49,556 18.5 % ESG and Climate 49,794 77,630 (35.9 %) All Other - Private Assets 12,989 16,908 (23.2 %) Total net sales $ 293,015 $ 284,250 3.1 % 51 Table of Contents Retention Rate Another key metric is our “Retention Rate.” The following table presents our Retention Rate by reportable segment for the periods indicated: Index Analytics ESG and Climate (1) All Other - Private Assets (2) Total 2023 Three Months Ended March 31, 96.4% 94.0% 96.1% 92.1% 95.2% Three Months Ended June 30, 95.8% 95.2% 96.9% 92.8% 95.5% Three Months Ended September 30, 96.2% 95.1% 96.0% 91.3% 95.4% Three Months Ended December 31, (3) 95.0% 93.1% 94.7% 88.8% 93.6% Year Ended December 31, (3) 95.8% 94.4% 95.9% 90.4% 94.7% 2022 Three Months Ended March 31, 96.6% 94.4% 98.7% 94.1% 95.9% Three Months Ended June 30, 95.9% 94.3% 97.3% 96.0% 95.5% Three Months Ended September 30, 96.9% 95.9% 97.4% 94.8% 96.4% Three Months Ended December 31, 95.0% 90.0% 95.4% 92.6% 93.0% Year Ended December 31, 96.1% 93.6% 97.2% 94.4% 95.2% ______________________________ (1) Includes Trove’s Run Rate commencing as of the acquisition date of November 1, 2023.
Non-GAAP Financial Measures Adjusted EBITDA “Adjusted EBITDA,” a non-GAAP measure used by management to assess operating performance, is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or adjustments, including, when applicable, impairment related to sublease of leased property and certain non-recurring acquisition-related integration and transaction costs.
Non-GAAP Financial Measures Adjusted EBITDA “Adjusted EBITDA,” a non-GAAP measure used by management to assess operating performance, is defined as net income before (1) provision for income taxes, (2) other expense (income), net, (3) depreciation and amortization of property, equipment and leasehold improvements, (4) amortization of intangible assets and, at times, (5) certain other transactions or adjustments, including, when applicable, impairment related to sublease of leased property and certain acquisition-related integration and transaction costs.
We believe that global cash flows from operations, together with existing cash and cash equivalents and funds available under our existing revolving credit facility and our ability to access bank debt and the capital markets for additional funds, will continue to be sufficient to fund our global operating activities and cash commitments for investing and financing activities, such as material capital expenditures and share repurchases, for at least the 12 months following issuance of this Form 10-K and for the foreseeable future thereafter.
We believe that global cash flows from operations, together with existing cash and cash equivalents and funds available under our existing revolving credit facility and our ability to access bank debt, private debt and the capital markets for additional funds, will continue to be sufficient to fund our global operating activities and cash commitments for investing and financing activities, such as material capital expenditures and share repurchases, for at least the 12 months following issuance of this Form 10-K and for the foreseeable future thereafter.
Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of ESG and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and growing into strategic partnerships with clients and (f) executing strategic relationships and acquisitions with complementary content and technology companies.
Our growth strategy includes: (a) extending leadership in research-enhanced content across asset classes, (b) leading the enablement of ESG and climate investment integration, (c) enhancing distribution and content-enabling technology, (d) expanding solutions that empower client customization, (e) strengthening client relationships and growing into strategic partnerships with clients and (f) executing strategic relationships and acquisitions with complementary data, content and technology companies.
“Adjusted EBITDA expenses,” a non-GAAP measure used by management to assess operating performance, is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets and, at times, certain other transactions or adjustments, including, when applicable, impairment related to sublease of leased property and certain non-recurring acquisition-related integration and transaction costs.
“Adjusted EBITDA expenses,” a non-GAAP measure used by management to assess operating performance, is defined as operating expenses less depreciation and amortization of property, equipment and leasehold improvements and amortization of intangible assets and, at times, certain other transactions or adjustments, including, when applicable, impairment related to sublease of leased property and certain acquisition-related integration and transaction costs.
Accordingly, the Company’s computation of the Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses measures may not be comparable to similarly titled measures computed by other companies. Run Rate Run Rate is a key operating metric and is important because an increase or decrease in our Run Rate ultimately impacts our future operating revenues over time.
Accordingly, the Company’s computation of the Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA expenses measures may not be comparable to similarly titled measures computed by other companies. Operating Metrics Run Rate Run Rate is a key operating metric and is important because an increase or decrease in our Run Rate ultimately impacts our future operating revenues over time.
The significant assumptions used to estimate the fair value of the acquired intangible assets included, forecasted cash flows which were determined based on certain assumptions that included, among others, projected future revenues, and expected market royalty rate, technology obsolescence rates and discount rates.
The significant assumptions used to estimate the fair value of the acquired intangible assets included forecasted cash flows, which were determined based on certain assumptions that included, among others, projected future revenues, and expected market royalty rates, technology obsolescence rates and discount rates.
The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including: • fluctuations in revenues associated with new recurring sales; • modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements; • differences between the recurring license start date and the date the Client Contract is executed due to, for example, contracts with onboarding periods or fee waiver periods; • fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes; • fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes; • fluctuations in the number of hedge funds for which we provide investment information and risk analysis to hedge fund investors; 46 Table of Contents • price changes or discounts; • revenue recognition differences under U.S.
The actual amount of recurring revenues we will realize over the following 12 months will differ from Run Rate for numerous reasons, including: • fluctuations in revenues associated with new recurring sales; • modifications, cancellations and non-renewals of existing Client Contracts, subject to specified notice requirements; • differences between the recurring license start date and the date the Client Contract is executed due to, for example, contracts with onboarding periods or fee waiver periods; • fluctuations in asset-based fees, which may result from changes in certain investment products’ total expense ratios, market movements, including foreign currency exchange rates, or from investment inflows into and outflows from investment products linked to our indexes; • fluctuations in fees based on trading volumes of futures and options contracts linked to our indexes; • fluctuations in the number of hedge funds for which we provide investment information and risk analysis to hedge fund investors; • price changes or discounts; • revenue recognition differences under U.S.
This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion summarizing the significant factors affecting the results of operations and financial condition of MSCI for the year ended December 31, 2021 can be found in Part II, “Item 7.
This discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion summarizing the significant factors affecting the results of operations and financial condition of MSCI for the year ended December 31, 2022 can be found in Part II, “Item 7.
The fees are recognized as we provide the product and service to the client over the license period and are generally billed in advance, prior to the license start date. 33 Table of Contents Asset-based fees represent fees earned that are variable in nature, as they are primarily calculated based on the AUM linked to our indexes.
The fees are recognized as we provide the product and service to the client over the license period and are generally billed in advance, prior to the license start date. 36 Table of Contents Asset-based fees represent fees earned that are variable in nature, as they are primarily calculated based on the AUM linked to our indexes.
In our product lines, Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year. 50 Table of Contents Liquidity and Capital Resources We require capital to fund ongoing operations, internal growth initiatives and acquisitions.
In our product lines, Retention Rate is generally higher during the first three quarters and lower in the fourth quarter, as the fourth quarter is traditionally the largest renewal period in the year. 52 Table of Contents Liquidity and Capital Resources We require capital to fund ongoing operations, internal growth initiatives and acquisitions.
Research and Development R&D expenses consist of costs to develop new or enhance existing products and the costs to develop new or enhanced technologies and service platforms for the delivery of our products and services and primarily include the costs of development, research, product management, project management and the technology support directly associated with these activities.
Research and Development R&D expenses consist of costs to develop new or enhanced products and the costs to develop new or enhanced technologies and service platforms for the delivery of our products and services and primarily include the costs of development, research, product management, project management and the technology support directly associated with these activities.
Based on our qualitative assessment for 2022, we determined that it was not more likely than not that the fair value of the company’s reporting units is less than their respective carrying values and no impairments were recorded.
Based on our qualitative assessment for 2023, we determined that it was not more likely than not that the fair value of the company’s reporting units is less than their respective carrying values and no impairments were recorded.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is a discussion and analysis of the financial condition and results of the operations of MSCI Inc. and its consolidated subsidiaries for the year ended December 31, 2022.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is a discussion and analysis of the financial condition and results of the operations of MSCI Inc. and its consolidated subsidiaries for the year ended December 31, 2023.
Amortization of Intangible Assets Amortization of intangible assets expense relates to definite-lived intangible assets arising from past acquisitions and capitalization of internally developed software projects. Intangibles arising from past acquisitions consist of customer relationships, proprietary data, trademarks and trade names and technology and software. We amortize definite-lived intangible assets over their estimated useful lives.
Amortization of Intangible Assets Amortization of intangible assets expense relates to definite-lived intangible assets arising from past acquisitions and capitalization of internally developed software projects. Intangibles arising from past acquisitions consist of customer relationships, 37 Table of Contents proprietary data, trademarks and trade names and technology and software. We amortize definite-lived intangible assets over their estimated useful lives.
See “— Operating Metrics — Retention Rate ” below for additional information on the calculation of this metric. 35 Table of Contents Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
See “— Operating Metrics — Retention Rate ” below for additional information on the calculation of this metric. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), which was filed with the Securities and Exchange Commission on February 11, 2022. Overview We are a leading provider of critical decision support tools and solutions for the global investment community.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”), which was filed with the Securities and Exchange Commission on February 10, 2023. Overview We are a leading provider of critical decision support tools and solutions for the global investment community.
As of December 31, 2022 and 2021, $344.5 million and $542.2 million, respectively, of the cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions.
As of December 31, 2023 and 2022, $285.2 million and $344.5 million, respectively, of the cash and cash equivalents were held by foreign subsidiaries. Repatriation of some foreign cash may be subject to certain withholding taxes in local jurisdictions and other distribution restrictions.
These estimates are inherently uncertain and unpredictable, and if different estimates were used, the purchase price for the acquisition could be allocated to the acquired assets and assumed liabilities of RCA differently from the allocation that we have made. We amortize our intangible assets over the estimated period of economic benefit.
These estimates are inherently uncertain and unpredictable, and if different estimates were used, the purchase price 39 Table of Contents for the acquisition could be allocated to the acquired assets and assumed liabilities of Burgiss differently from the allocation that we have made. We amortize our intangible assets over the estimated period of economic benefit.
This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Retention Rate for the period. For example, in the fourth quarter of 2022, we recorded cancellations of $28.1 million.
This annualized cancellation figure is then divided by the subscription Run Rate at the beginning of the fiscal year to calculate a cancellation rate. This cancellation rate is then subtracted from 100% to derive the annualized Retention Rate for the period. For example, in the fourth quarter of 2023, we recorded cancellations of $30.6 million.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, operating revenues from recurring subscriptions would have increased 14.6%.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, operating revenues from recurring subscriptions would have increased 11.4%.
The Senior Notes and the Credit Agreement are fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect wholly owned domestic subsidiaries that account for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries (the “subsidiary guarantors”).
As of December 31, 2023, the Senior Notes and the Prior Credit Agreement were fully and unconditionally, and jointly and severally, guaranteed by our direct or indirect wholly owned domestic subsidiaries that account for more than 5% of our and our subsidiaries’ consolidated assets, other than certain excluded subsidiaries (the “subsidiary guarantors”).
Cost of revenues, selling and marketing, R&D and G&A all include both compensation as well as non-compensation related expenses Cost of Revenues Cost of revenues expenses consist of costs related to the production and servicing of our products and services and primarily includes related information technology costs, including data center, cloud service, platform and infrastructure costs; costs to acquire, produce and maintain market data information; costs of research to support and maintain existing products; costs of product management teams; costs of client service and consultant teams to support customer needs; as well as other support costs directly attributable to the cost of revenues including certain human resources, finance and legal costs.
Cost of Revenues Cost of revenues expenses consist of costs related to the production and servicing of our products and services and primarily includes related information technology costs, including data center, cloud service, platform and infrastructure costs; costs to acquire, produce and maintain market data information; costs of research to support and maintain existing products; costs of product management teams; costs of client service and consultant teams to support customer needs; as well as other support costs directly attributable to the cost of revenues including certain human resources, finance and legal costs.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, total operating revenues would have increased 8.9%.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, total operating revenues would have increased 11.4%.
Cash Flows From Financing Activities The year-over-year change was primarily driven by the impact of lower proceeds from borrowings and higher share repurchases, partially offset by lower repayments on debt.
Cash Flows From Financing Activities The year-over-year change was primarily driven by the impact of lower share repurchases, partially offset by lower proceeds from borrowings.
In addition, under the Credit Agreement, we had as of December 31, 2022: (i) an aggregate of $347.8 million in Tranche A Term Loans outstanding under the TLA Facility and (ii) $500 million of undrawn borrowing capacity under the Revolving Credit Facility.
In addition, under the Prior Credit Agreement, we had as of December 31, 2023: (i) an aggregate of $339.1 million in Tranche A Term Loans outstanding under the TLA Facility and (ii) $500 million of undrawn borrowing capacity under the Revolving Credit Facility.
None of the restrictions above are expected to impact our ability to effectively operate the business. 51 Table of Contents The Credit Agreement also requires us and our subsidiaries to achieve financial and operating results sufficient to maintain compliance with the following financial ratios on a consolidated basis through the termination of the Credit Agreement: (1) the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis not to exceed 4.25:1.00 (or 4.50:1.00 for two fiscal quarters following a material acquisition) and (2) the minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis of at least 4.00:1.00.
The Credit Agreement also requires us and our subsidiaries to achieve financial and operating results sufficient to maintain compliance with the following financial ratios on a consolidated basis through the termination of the Credit Agreement: (1) the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis not to exceed 4.25:1.00 (or 4.50:1.00 for four fiscal quarters following a material acquisition) and (2) the minimum Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) measured quarterly on a rolling four-quarter basis of at least 4.00:1.00.
Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 6.8%.
Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics operating revenues would have increased 7.2%.
The indentures governing our Senior Notes (the “Indentures”) among us, each of the subsidiary guarantors, and Computershare, National Association, as trustee and successor to Wells Fargo Bank, National Association, contain covenants that limit our and certain of our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets.
The Indentures among us and Computershare, National Association, as trustee and successor to Wells Fargo Bank, National Association, contain covenants that limit our and our subsidiaries’ ability to, among other things, incur liens, enter into sale/leaseback transactions and consolidate, merge or sell all or substantially all of our assets, and that limit the ability of our subsidiaries to incur certain additional indebtedness.
Our non-guarantor subsidiaries under the Senior Notes and the Credit Agreement consist of: (i) domestic subsidiaries of the Company that account for 5% or less of consolidated assets of the Company and its subsidiaries and (ii) any foreign or domestic subsidiary of the Company that is deemed to be a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended.
As of December 31, 2023, the non-guarantor subsidiaries under the Senior Notes and the Prior Credit Agreement consisted of: (i) domestic subsidiaries of the Company that accounted for 5% or less of consolidated assets of the Company and its subsidiaries and (ii) any foreign or domestic subsidiary of the Company that was deemed to be a controlled foreign corporation within the meaning of Section 957 of the Internal Revenue Code of 1986, as amended.
Subscription Sales Subscription sales is a key operating metric and is important to management because new subscription sales increase our Run Rate and represent future operating revenues that will be recognized over time. See “— Operating Metrics — Sales ” below for additional information.
Subscription Sales Subscription Sales is a key operating metric and is important to management because new Subscription Sales increase our Run Rate and represent future operating revenues that will be recognized over time.
With respect to our acquisition of RCA on September 13, 2021, the valuation of intangible assets, as part of the acquisition method of accounting, was subjective and based, in part, on inputs that were unobservable.
With respect to our acquisition of Burgiss on October 2, 2023, the valuation of intangible assets, as part of the acquisition method of accounting, was subjective and based, in part, on inputs that were unobservable.
We have no indefinite-lived intangible assets. 34 Table of Contents Depreciation and Amortization of Property, Equipment and Leasehold Improvements Depreciation and amortization of property, equipment and leasehold improvements consists of expenses related to depreciating or amortizing the cost of computer and related equipment, leasehold improvements, software and furniture and fixtures over the estimated useful life of the assets.
Depreciation and Amortization of Property, Equipment and Leasehold Improvements Depreciation and amortization of property, equipment and leasehold improvements consists of expenses related to depreciating or amortizing the cost of computer and related equipment, leasehold improvements, software and furniture and fixtures over the estimated useful life of the assets.
The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated: Period Ended 2021 2022 (in billions) March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,209.6 $ 1,336.2 $ 1,336.6 $ 1,451.6 $ 1,389.3 $ 1,189.5 $ 1,081.2 $ 1,222.9 Sequential Change in Value Market Appreciation/(Depreciation) $ 43.2 $ 73.7 $ (30.7) $ 56.5 $ (89.7) $ (207.3) $ (105.7) $ 118.8 Cash Inflows 62.8 52.9 31.1 58.5 27.4 7.5 (2.6) 22.9 Total Change $ 106.0 $ 126.6 $ 0.4 $ 115.0 $ (62.3) $ (199.8) $ (108.3) $ 141.7 The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated: Year-to-Date Average 2021 2022 (in billions) March June September December March June September December AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,169.2 $ 1,230.8 $ 1,274.5 $ 1,309.6 $ 1,392.5 $ 1,338.9 $ 1,295.6 $ 1,267.2 ________________ (1) The historical values of the AUM in ETFs linked to our equity indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to MSCI Equity Indexes” on our Investor Relations homepage at http://ir.msci.com .
The following table presents the value of AUM in ETFs linked to MSCI equity indexes and the sequential change of such assets as of the end of each of the periods indicated: Period Ended 2022 2023 (in billions) March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,389.3 $ 1,189.5 $ 1,081.2 $ 1,222.9 $ 1,305.4 $ 1,372.5 $ 1,322.8 $ 1,468.9 Sequential Change in Value Market Appreciation/(Depreciation) $ (89.7) $ (207.3) $ (105.7) $ 118.8 $ 75.1 $ 48.4 $ (56.1) $ 130.5 Cash Inflows/(Outflows) 27.4 7.5 (2.6) 22.9 7.4 18.7 6.4 15.6 Total Change $ (62.3) $ (199.8) $ (108.3) $ 141.7 $ 82.5 $ 67.1 $ (49.7) $ 146.1 The following table presents the average value of AUM in ETFs linked to MSCI equity indexes for the periods indicated: Year-to-Date Average 2022 2023 (in billions) March June September December March June September December AUM in ETFs linked to MSCI equity indexes (1) (2) $ 1,392.5 $ 1,338.9 $ 1,295.6 $ 1,267.2 $ 1,287.5 $ 1,310.7 $ 1,332.6 $ 1,340.7 ________________ (1) The historical values of the AUM in ETFs linked to our equity indexes as of the last day of the month and the monthly average balance can be found under the link “AUM in ETFs Linked to MSCI Equity Indexes” on our Investor Relations homepage at http://ir.msci.com .
Weighted Average Shares and Common Shares Outstanding The following table shows our weighted average shares and common shares outstanding for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 % Change Weighted average shares outstanding: Basic 80,746 82,508 (2.1 %) Diluted 81,215 83,479 (2.7 %) Common shares outstanding 79,960 82,439 (3.0 %) The decrease in weighted average shares and common shares outstanding primarily reflects the impact of share repurchases made pursuant to the stock repurchase program.
Weighted Average Shares and Common Shares Outstanding The following table shows our weighted average shares and common shares outstanding for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 % Change Weighted average shares outstanding: Basic 79,462 80,746 (1.6 %) Diluted 79,843 81,215 (1.7 %) The following table shows our common shares outstanding for the periods indicated: As of % Change (in thousands) December 31, 2023 December 31, 2022 Common shares outstanding 79,091 79,960 (1.1 %) The decrease in weighted average shares and common shares outstanding primarily reflects the impact of share repurchases made pursuant to the Company’s stock repurchase program.
Adjusting for the impact of foreign currency exchange rate fluctuations, All Other - Private Assets Run Rate would have increased 11.6%. 47 Table of Contents Sales Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues.
This increase reflected growth across all regions. Adjusting for the impact of the acquisition of Burgiss and foreign currency exchange rate fluctuations, All Other - Private Assets Run Rate would have increased 4.9%. Sales Sales represents the annualized value of products and services clients commit to purchase from MSCI and will result in additional operating revenues.
Adjusting for the impact of foreign currency exchange rate fluctuations, Analytics Run Rate would have increased 6.6%. Run Rate from ESG and Climate products increased 33.8% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by strong growth in Ratings, Climate and Screening products.
Run Rate from ESG and Climate products increased 19.6% for the year ended December 31, 2023, primarily driven by strong growth in Ratings, Screening and Climate products. Adjusting for the impact of the acquisition of Trove and foreign currency exchange rate fluctuations, ESG and Climate Run Rate would have increased 16.1%.
These laws can be complicated and are difficult to apply to any business. The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes.
The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes.
General and Administrative G&A expenses decreased 0.7% for the year ended December 31, 2022 compared to the year ended December 31, 2021, reflecting decreased spending in the Analytics reportable segment, partially offset by increases across the All Other - Private Assets, ESG and Climate and Index reportable segments.
General and Administrative G&A expenses increased 4.8% for the year ended December 31, 2023, reflecting increases across the ESG and Climate, Index and Analytics reportable segments, partially offset by decreases in the All Other - Private Assets reportable segment.
Adjusting for the impact of foreign currency exchange rate fluctuations, Index operating segment revenues would have increased 4.5%. Revenues from recurring subscriptions increased 12.2% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by strong growth from both market cap-weighted and factor, ESG and climate Index products.
Adjusting for the impact of foreign currency exchange rate fluctuations, Index operating segment revenues would have increased 11.5%. Revenues from recurring subscriptions increased 11.6% for the year ended December 31, 2023, primarily driven by strong growth from market cap-weighted Index products.
The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Compensation and benefits $ 652,364 $ 614,950 6.1 % Non-compensation expenses 270,622 246,376 9.8 % Amortization of intangible assets 91,079 80,592 13.0 % Depreciation and amortization of property, equipment and leasehold improvements 26,893 28,901 (6.9) % Total operating expenses $ 1,040,958 $ 970,819 7.2 % A significant portion of the incentive compensation component of operating expenses is based on the achievement of a number of financial and operating metrics.
The following table presents operating expenses using compensation and non-compensation categories, rather than using activity categories, for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Compensation and benefits $ 722,789 $ 652,364 10.8 % Non-compensation expenses 286,084 270,622 5.7 % Amortization of intangible assets 114,429 91,079 25.6 % Depreciation and amortization of property, equipment and leasehold improvements 21,009 26,893 (21.9 %) Total operating expenses $ 1,144,311 $ 1,040,958 9.9 % A significant portion of the incentive compensation component of operating expenses is based on the achievement of a number of financial and operating metrics.
Adjusting for the impact of foreign currency exchange rate fluctuations, recurring subscriptions Run Rate would have increased 13.0%. Run Rate from Index recurring subscriptions increased 12.0% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by strong growth from market cap-weighted, factor, ESG and climate, and custom Index products and special packages.
Adjusting for the impact of acquisitions and foreign currency exchange rate fluctuations, recurring subscriptions Run Rate would have increased 9.9%. Run Rate from Index recurring subscriptions increased 10.8% for the year ended December 31, 2023, primarily driven by market cap-weighted products, custom Index products and special packages as well as factor, ESG and climate products.
Operating Expenses Total operating expenses increased 7.2% for the year ended December 31, 2022 compared to the year ended December 31, 2021. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 11.2%.
Operating Expenses Total operating expenses increased 9.9% for the year ended December 31, 2023. Adjusting for the impact of foreign currency exchange rate fluctuations, the increase would have been 9.8%.
Subscription cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate. Net new recurring subscription sales represent the amount of new recurring subscription sales net of subscription cancellations during the period, which reflects the net impact to Run Rate during the period.
Subscription cancellations reflect client activities during the period, such as discontinuing products and services and/or reductions in price, resulting in reductions to Run Rate.
For the year ended December 31, 2022, 36.2% of our cancellations occurred in the fourth quarter.
For the year ended December 31, 2023, 32.8% of our cancellations occurred in the fourth quarter.
Operating revenues from asset-based fees decreased 4.7% for the year ended December 31, 2022 compared to the year ended December 31, 2021, driven by a decline in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by an increase in revenues from exchange traded futures and options contracts linked to MSCI indexes.
Operating revenues from asset-based fees increased 5.6% for the year ended December 31, 2023, mainly driven by growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by a decrease in revenues from exchange traded futures and options contracts linked to MSCI indexes.
Operating revenues from asset-based fees decreased 4.7% for the year ended December 31, 2022 compared to the year ended December 31, 2021, driven by a decline in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by an increase in revenues from exchange traded futures and options contracts linked to MSCI indexes.
Operating revenues from asset-based fees increased 5.6% for the year ended December 31, 2023, primarily driven by growth in revenues from ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by a decrease in revenues from exchange traded futures and options contracts linked to MSCI indexes.
Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate segment Adjusted EBITDA expenses would have increased 28.0%.
Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased 8.3%.
(2) Retention rate for All Other – Private Assets excluding the impact of RCA was 92.7% and 92.4% for the years ended December 31, 2022 and 2021, respectively. Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time.
Retention rate for All Other – Private Assets excluding the impact of the acquisition of Burgiss was 88.6% and 91.2% for the three months and year ended December 31, 2023, respectively. Retention Rate is an important metric because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time.
Run Rate from Index asset-based fees decreased 12.7% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by lower AUM in ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by higher exchange traded futures and options volume.
The increase reflected growth across all regions and client segments. Run Rate from Index asset-based fees increased 14.9% for the year ended December 31, 2023, primarily driven by higher AUM in ETFs linked to MSCI equity indexes and non-ETF indexed funds linked to MSCI indexes, partially offset by lower exchange traded futures and options volume.
Operating revenues from ETFs linked to MSCI equity indexes decreased by 7.7%, primarily driven by a decrease in average basis point fees and average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes decreased by 6.9%, primarily driven by a decrease in average basis point fees, partially offset by an increase in average AUM.
Operating revenues from ETFs linked to MSCI equity indexes increased by 7.3%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 5.0%, primarily driven by an increase in average basis point fees.
Historically, the payment of cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year.
Historically, the payment of cash for compensation and benefits is at its highest level in the first quarter when we pay discretionary employee compensation related to the previous fiscal year. Cash Flows From Investing Activities The year-over-year change was primarily driven by the acquisitions of Burgiss and Trove.
This information is updated mid-month each month. Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K or any other report filed with the SEC. The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented.
This information is updated mid-month each month. Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K or any other report filed with the SEC.
ESG and Climate Segment The following table presents the results for the ESG and Climate segment for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 223,160 $ 162,609 37.2 % Non-recurring 5,151 3,583 43.8 % Operating revenues total 228,311 166,192 37.4 % Adjusted EBITDA expenses 167,217 136,444 22.6 % Adjusted EBITDA $ 61,094 $ 29,748 105.4 % Adjusted EBITDA margin % 26.8 % 17.9 % ESG and Climate operating revenues increased 37.4% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products.
ESG and Climate Segment The following table presents the results for the ESG and Climate segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 282,351 $ 223,160 26.5 % Non-recurring 5,217 5,151 1.3 % Operating revenues total 287,568 228,311 26.0 % Adjusted EBITDA expenses 195,890 167,217 17.1 % Adjusted EBITDA $ 91,678 $ 61,094 50.1 % Adjusted EBITDA margin % 31.9 % 26.8 % ESG and Climate operating revenues increased 26.0% for the year ended December 31, 2023, primarily driven by strong growth from recurring subscriptions related to Ratings, Climate and Screening products.
As of December 31, 2022, our Consolidated Leverage Ratio was 3.08:1.00 and our Consolidated Interest Coverage Ratio was 8.45:1.00.
As of December 31, 2023, our Consolidated Leverage Ratio was 2.64:1.00 and our Consolidated Interest Coverage Ratio was 8.92:1.00.
Retention Rate Retention Rate is a key operating metric and is important to management because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time.
See “— Operating Metrics — Sales ” below for additional information. 38 Table of Contents Retention Rate Retention Rate is a key operating metric and is important to management because subscription cancellations decrease our Run Rate and ultimately our future operating revenues over time.
Income Taxes The following table shows our income tax provision and effective tax rate for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Provision for income taxes $ 173,268 $ 132,153 31.1 % ETR 16.6 % 15.4 % 7.8 % The effective tax rate of 16.6% for the year ended December 31, 2022 reflects the impact of certain favorable discrete items totaling $29.1 million, in relation to pretax income, primarily related to $28.4 million of excess tax benefits recognized on share-based compensation vested during the period.
The effective tax rate of 16.6% for the year ended December 31, 2022 reflects the impact of certain favorable discrete items totaling $29.1 million, in relation to pretax income, primarily related to $28.4 million of excess tax benefits recognized on share-based compensation vested during the period. 44 Table of Contents Net Income The following table shows our net income for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Net income $ 1,148,592 $ 870,573 31.9 % As a result of the factors described above, net income increased 31.9% for the year ended December 31, 2023.
Cash Flows The following table presents the Company’s cash and cash equivalents as of the dates indicated: As of (in thousands) December 31, 2022 December 31, 2021 Cash and cash equivalents $ 993,564 $ 1,421,449 The following table presents the breakdown of the Company’s cash flows for the periods indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Net cash provided by operating activities $ 1,095,369 $ 936,069 Net cash used in investing activities (79,335) (1,035,713) Net cash provided by (used in) financing activities (1,425,380) 229,505 Effect of exchange rate changes (18,539) (8,933) Net increase (decrease) in cash $ (427,885) $ 120,928 52 Table of Contents Cash and Cash Equivalents We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes.
Cash Flows The following table presents the Company’s cash and cash equivalents, including restricted cash, as of the dates indicated: As of (in thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents (includes restricted cash of $3,878 and $368 at December 31 2023 and December 31 2022 , respectively) $ 461,693 $ 993,564 The following table presents the breakdown of the Company’s cash flows for the periods indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Net cash provided by operating activities $ 1,236,029 $ 1,095,369 Net cash used in investing activities (819,378) (79,335) Net cash provided by (used in) financing activities (953,931) (1,425,380) Effect of exchange rate changes 5,409 (18,539) Net increase (decrease) in cash, cash equivalents and restricted cash $ (531,871) $ (427,885) Cash and Cash Equivalents We typically seek to maintain minimum cash balances globally of approximately $225.0 million to $275.0 million for general operating purposes.
Operating revenues from recurring subscriptions increased 16.4% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by strong growth in Index products, which increased $79.1 million, or 12.2%, strong growth in ESG and Climate products, which increased $60.6 million, or 37.2%, strong growth in All Other - Private Assets products, which increased $60.0 million, or 75.4%, and growth in Analytics products, which increased $33.8 million, or 6.3%.
Operating revenues from recurring subscriptions increased 12.8% for the year ended December 31, 2023, primarily driven by strong growth in Index products, which increased $84.9 million, or 11.6%, strong growth in ESG and Climate products, which increased $59.2 million, or 26.5%, growth in Analytics products, which increased $36.3 million, or 6.4%, and strong growth in All Other - Private Assets products, which increased $31.4 million, or 22.5%.
Depreciation and Amortization of Property, Equipment and Leasehold Improvements Depreciation and amortization of property, equipment and leasehold improvements decreased 6.9% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by lower amortization on software and the lack of impairment charges on leasehold improvements.
Depreciation and Amortization of Property, Equipment and Leasehold Improvements Depreciation and amortization of property, equipment and leasehold improvements decreased 21.9% for the year ended December 31, 2023, primarily driven by lower depreciation on computers and related equipment.
We had 4,759 employees as of December 31, 2022 compared to 4,303 employees as of December 31, 2021, reflecting a 10.6% growth in the number of employees. Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefits costs.
Continued growth of our emerging market centers around the world is an important factor in our ability to manage and control the growth of our compensation and benefits costs. As of December 31, 2023, 66.5% of our employees were located in emerging market centers compared to 65.0% as of December 31, 2022.
The obligations related to our uncertain tax positions, which are not considered material, have been excluded from the table above because of the uncertainty surrounding the timing and final amounts of any settlement. Recent Accounting Standards Updates See Note 2, “Recent Accounting Standards Updates,” of the Notes to the Consolidated Financial Statements included herein for further information.
The obligations related to our uncertain tax positions, which are not considered material, have been excluded from the table above because of the uncertainty surrounding the timing and final amounts of any settlement.
We operate in four reportable segments as follows: Index, Analytics, ESG and Climate, and All Other – Private Assets. The operating segments of Real Assets and The Burgiss Group, LLC (“Burgiss”) do not individually meet the segment reporting thresholds and have been combined and presented as part of the All Other – Private Assets reportable segment.
The operating segments of Real Assets and Private Capital Solutions do not individually meet the segment reporting thresholds and have been combined and presented as part of the All Other – Private Assets reportable segment.
Operating revenues from ETFs linked to MSCI equity indexes decreased by 7.7%, primarily driven by a decrease in average basis point fees and average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes decreased by 6.9%, primarily 37 Table of Contents driven by a decrease in average basis point fees, partially offset by an increase in average AUM.
Operating revenues from ETFs linked to MSCI equity indexes increased by 7.3%, primarily driven by an increase in average AUM. Operating revenues from non-ETF indexed funds linked to MSCI indexes increased by 5.0%, primarily driven by an increase in average basis point fees.
The change was driven by increases in non-compensation costs, primarily relating to higher information technology costs and professional fees, as well as 39 Table of Contents increases in compensation and benefit costs, reflecting higher wages and salaries and higher severance costs, partially offset by lower incentive compensation costs.
The change was primarily driven by increases in compensation and benefits costs, relating to higher wages and salaries and incentive compensation costs, partially offset by lower benefits costs, as well as increases in non-compensation costs, primarily reflecting increased marketing costs and travel and entertainment expenses.
Adjusting for the impact of foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 47.5%. ESG and Climate segment Adjusted EBITDA expenses increased 22.6% for the year ended December 31, 2022 compared to the year ended December 31, 2021, reflecting higher compensation and non-compensation expenses to support growth across all expense categories.
Adjusting for the impact of the acquisition of Trove and foreign currency exchange rate fluctuations, ESG and Climate operating revenues would have increased 24.8%. ESG and Climate segment Adjusted EBITDA expenses increased 17.1% for the year ended December 31, 2023, primarily driven by higher compensation and non-compensation expenses across all expense activity categories.
The year-over-year change was primarily driven by higher cash collections from customers, partially offset by higher payments for cash expenses, mainly reflecting higher cash compensation and benefits costs, information technology costs, professional fees, market data costs and travel & entertainment costs.
The year-over-year change was primarily driven by higher cash collections from customers, partially offset by higher income tax payments and cash expenses, mainly reflecting higher cash compensation. 54 Table of Contents Our primary uses of cash from operating activities are for the payment of cash compensation and benefits costs, income taxes, interest expense, information technology costs, professional fees, market data costs and office rent.
(2) The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.
The AUM in ETFs also includes AUM in Exchange Traded Notes, the value of which is less than 1.0% of the AUM amounts presented. 41 Table of Contents (2) The value of AUM in ETFs linked to MSCI equity indexes is calculated by multiplying the equity ETF net asset value by the number of shares outstanding.
Adjusting for the impact of foreign currency exchange rate fluctuations, Index segment Adjusted EBITDA expenses would have increased 9.9%. 44 Table of Contents Analytics Segment The following table presents the results for the Analytics segment for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 567,004 $ 533,178 6.3 % Non-recurring 9,103 11,121 (18.1) % Operating revenues total 576,107 544,299 5.8 % Adjusted EBITDA expenses 328,212 345,500 (5.0) % Adjusted EBITDA $ 247,895 $ 198,799 24.7 % Adjusted EBITDA margin % 43.0 % 36.5 % Analytics operating revenues increased 5.8% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by growth from recurring subscriptions related to both Multi-Asset Class and Equity Analytics products.
Analytics Segment The following table presents the results for the Analytics segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 603,291 $ 567,004 6.4 % Non-recurring 12,665 9,103 39.1 % Operating revenues total 615,956 576,107 6.9 % Adjusted EBITDA expenses 341,081 328,212 3.9 % Adjusted EBITDA $ 274,875 $ 247,895 10.9 % Adjusted EBITDA margin % 44.6 % 43.0 % 47 Table of Contents Analytics operating revenues increased 6.9% for the year ended December 31, 2023, primarily driven by growth from recurring subscriptions related to both Equity Analytics and Multi-Asset Class products.
The following table presents operating expenses by activity category for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Operating expenses: Cost of revenues $ 404,341 $ 358,684 12.7 % Selling and marketing 264,583 243,185 8.8 % Research and development 107,205 111,564 (3.9) % General and administrative 146,857 147,893 (0.7) % Amortization of intangible assets 91,079 80,592 13.0 % Depreciation and amortization of property, equipment and leasehold improvements 26,893 28,901 (6.9) % Total operating expenses $ 1,040,958 $ 970,819 7.2 % Cost of Revenues Cost of revenues increased 12.7% for the year ended December 31, 2022 compared to the year ended December 31, 2021, reflecting increases across the All Other - Private Assets, ESG and Climate and Index reportable segments.
The following table presents operating expenses by activity category for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating expenses: Cost of revenues $ 446,581 $ 404,341 10.4 % Selling and marketing 276,204 264,583 4.4 % Research and development 132,121 107,205 23.2 % General and administrative 153,967 146,857 4.8 % Amortization of intangible assets 114,429 91,079 25.6 % Depreciation and amortization of property, equipment and leasehold improvements 21,009 26,893 (21.9 %) Total operating expenses $ 1,144,311 $ 1,040,958 9.9 % 42 Table of Contents Cost of Revenues Cost of revenues increased 10.4% for the year ended December 31, 2023, reflecting increases across all reportable segments.
Our non-guarantor subsidiaries accounted for approximately $1,363.1 million, or 60.6%, of our total revenue for the trailing 12 months ended December 31, 2022, approximately $537.4 million, or 44.5%, of our consolidated operating income for the trailing 12 months ended December 31, 2022, and approximately $1,043.0 million, or 20.9%, of our consolidated total assets (excluding intercompany assets) and $863.5 million, or 14.4%, of our consolidated total liabilities, in each case as of December 31, 2022.
The non-guarantor subsidiaries accounted for approximately $1,544.8 million, or 61.1%, of our total revenue for the trailing 12 months ended December 31, 2023, approximately $745.3 million, or 53.8%, of our consolidated operating income for the trailing 12 months ended December 31, 2023, and approximately $1,149.8 million, or 20.8%, of our consolidated total assets (excluding intercompany assets) and $1,055.2 million, or 16.9%, of our 53 Table of Contents consolidated total liabilities, in each case as of December 31, 2023.
All Other – Private Assets Segment The following table presents the results for the All Other – Private Assets segment for the years indicated: 45 Table of Contents Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 139,649 $ 79,624 75.4 % Non-recurring 1,322 1,665 (20.6) % Operating revenues total 140,971 81,289 73.4 % Adjusted EBITDA expenses 105,696 64,358 64.2 % Adjusted EBITDA $ 35,275 $ 16,931 108.3 % Adjusted EBITDA margin % 25.0 % 20.8 % All Other – Private Assets operating revenues increased 73.4% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by revenues attributable to the acquisition of RCA as well as growth from recurring subscriptions related to Global Intel, Enterprise Analytics and Climate Value-at-Risk products, partially offset by unfavorable foreign currency exchange rate fluctuations.
All Other – Private Assets Segment The following table presents the results for the All Other – Private Assets segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 171,066 $ 139,649 22.5 % Non-recurring 2,515 1,322 90.2 % Operating revenues total 173,581 140,971 23.1 % Adjusted EBITDA expenses 124,156 105,696 17.5 % Adjusted EBITDA $ 49,425 $ 35,275 40.1 % Adjusted EBITDA margin % 28.5 % 25.0 % All Other – Private Assets operating revenues increased 23.1% for the year ended December 31, 2023, primarily driven by revenues attributable to the acquisition of Burgiss as well as growth from recurring subscriptions related to Index Intel, Climate Insights, Property Intel and Real Capital Analytics (“RCA”), partially offset by unfavorable foreign currency exchange rate fluctuations.
The following table presents the reconciliation of operating expenses to Adjusted EBITDA expenses for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Total operating expenses $ 1,040,958 $ 970,819 7.2 % Amortization of intangible assets 91,079 80,592 13.0 % Depreciation and amortization of property, equipment and leasehold improvements 26,893 28,901 (6.9) % Impairment related to sublease of leased property — 7,702 (100.0) % Acquisition-related integration and transaction costs (1) 4,059 6,870 (40.9) % Consolidated Adjusted EBITDA expenses $ 918,927 $ 846,754 8.5 % Index Adjusted EBITDA expenses 317,802 300,452 5.8 % Analytics Adjusted EBITDA expenses 328,212 345,500 (5.0 %) ESG and Climate Adjusted EBITDA expenses 167,217 136,444 22.6 % All Other - Private Assets Adjusted EBITDA expenses 105,696 64,358 64.2 % Consolidated Adjusted EBITDA expenses $ 918,927 $ 846,754 8.5 % ________________ (1) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction. 43 Table of Contents Segment Results The results for each of our four reportable segments for the years ended December 31, 2022, and 2021 are presented below: Index Segment The following table presents the results for the Index segment for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 729,710 $ 650,629 12.2 % Asset-based fees 528,127 553,991 (4.7) % Non-recurring 45,372 47,144 (3.8) % Operating revenues total 1,303,209 1,251,764 4.1 % Adjusted EBITDA expenses 317,802 300,452 5.8 % Adjusted EBITDA $ 985,407 $ 951,312 3.6 % Adjusted EBITDA margin % 75.6 % 76.0 % Index operating revenues increased 4.1% for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily driven by growth from recurring subscriptions, partially offset by a decline in asset-based fees and non-recurring revenues.
The following table presents the reconciliation of operating expenses to Adjusted EBITDA expenses for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Total operating expenses $ 1,144,311 $ 1,040,958 9.9 % Amortization of intangible assets 114,429 91,079 25.6 % Depreciation and amortization of property, equipment and leasehold improvements 21,009 26,893 (21.9 %) Impairment related to sublease of leased property 477 — — % Acquisition-related integration and transaction costs (1) 2,427 4,059 (40.2 %) Consolidated Adjusted EBITDA expenses $ 1,005,969 $ 918,927 9.5 % Index Adjusted EBITDA expenses 344,842 317,802 8.5 % Analytics Adjusted EBITDA expenses 341,081 328,212 3.9 % ESG and Climate Adjusted EBITDA expenses 195,890 167,217 17.1 % All Other - Private Assets Adjusted EBITDA expenses 124,156 105,696 17.5 % Consolidated Adjusted EBITDA expenses $ 1,005,969 $ 918,927 9.5 % ________________ (1) Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition. 46 Table of Contents Segment Results The results for each of our four reportable segments for the years ended December 31, 2023, and 2022 are presented below: Index Segment The following table presents the results for the Index segment for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Recurring subscriptions $ 814,582 $ 729,710 11.6 % Asset-based fees 557,502 528,127 5.6 % Non-recurring 79,731 45,372 75.7 % Operating revenues total 1,451,815 1,303,209 11.4 % Adjusted EBITDA expenses 344,842 317,802 8.5 % Adjusted EBITDA $ 1,106,973 $ 985,407 12.3 % Adjusted EBITDA margin % 76.2 % 75.6 % Index operating revenues increased 11.4% for the year ended December 31, 2023, driven by strong growth from both recurring subscriptions and non-recurring revenues, as well as growth from asset-based fees.
Costs are assigned to these activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved.
Costs are assigned to these activity categories based on the nature of the expense or, when not directly attributable, an estimated allocation based on the type of effort involved. Cost of revenues, selling and marketing, R&D and G&A all include both compensation as well as non-compensation related expenses.
Adjusted EBITDA The following table presents non-GAAP Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Operating revenues: $ 2,248,598 $ 2,043,544 10.0 % Adjusted EBITDA expenses 918,927 846,754 8.5 % Adjusted EBITDA $ 1,329,671 $ 1,196,790 11.1 % Operating margin % 53.7 % 52.5 % Adjusted EBITDA margin % 59.1 % 58.6 % The increase in Adjusted EBITDA and Adjusted EBITDA margin reflects a higher rate of growth in operating revenues as compared to the rate of growth of Adjusted EBITDA expenses, driven by the factors previously described. 42 Table of Contents Reconciliation of Net Income to Adjusted EBITDA and Operating Expenses to Adjusted EBITDA Expenses The following table presents the reconciliation of net income to Adjusted EBITDA for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Net income $ 870,573 $ 725,983 19.9 % Provision for income taxes 173,268 132,153 31.1 % Other expense (income), net 163,799 214,589 (23.7) % Operating income 1,207,640 1,072,725 12.6 % Amortization of intangible assets 91,079 80,592 13.0 % Depreciation and amortization of property, equipment and leasehold improvements 26,893 28,901 (6.9 %) Impairment related to sublease of leased property — 7,702 (100.0 %) Acquisition-related integration and transaction costs (1) 4,059 6,870 (40.9 %) Consolidated Adjusted EBITDA $ 1,329,671 $ 1,196,790 11.1 % Index Adjusted EBITDA 985,407 951,312 3.6 % Analytics Adjusted EBITDA 247,895 198,799 24.7 % ESG and Climate Adjusted EBITDA 61,094 29,748 105.4 % All Other - Private Assets Adjusted EBITDA 35,275 16,931 108.3 % Consolidated Adjusted EBITDA $ 1,329,671 $ 1,196,790 11.1 % ________________ (1) Incremental and non-recurring costs attributable to acquisitions directly related to the execution of the transaction and integration of the acquired business that have occurred no later than 12 months after the close of the transaction.
Adjusted EBITDA The following table presents non-GAAP Adjusted EBITDA, Adjusted EBITDA expenses and Adjusted EBITDA margin for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: $ 2,528,920 $ 2,248,598 12.5 % Adjusted EBITDA expenses 1,005,969 918,927 9.5 % Adjusted EBITDA $ 1,522,951 $ 1,329,671 14.5 % Operating margin % 54.8 % 53.7 % Adjusted EBITDA margin % 60.2 % 59.1 % The increase in Adjusted EBITDA and Adjusted EBITDA margin reflects a higher rate of growth in operating revenues as compared to the rate of growth of Adjusted EBITDA expenses, driven by the factors previously described. 45 Table of Contents Reconciliation of Net Income to Adjusted EBITDA and Operating Expenses to Adjusted EBITDA Expenses The following table presents the reconciliation of net income to Adjusted EBITDA for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Net income $ 1,148,592 $ 870,573 31.9 % Provision for income taxes 220,469 173,268 27.2 % Other expense (income), net 15,548 163,799 (90.5 %) Operating income 1,384,609 1,207,640 14.7 % Amortization of intangible assets 114,429 91,079 25.6 % Depreciation and amortization of property, equipment and leasehold improvements 21,009 26,893 (21.9 %) Impairment related to sublease of leased property 477 — — % Acquisition-related integration and transaction costs (1) 2,427 4,059 (40.2 %) Consolidated Adjusted EBITDA $ 1,522,951 $ 1,329,671 14.5 % Index Adjusted EBITDA 1,106,973 985,407 12.3 % Analytics Adjusted EBITDA 274,875 247,895 10.9 % ESG and Climate Adjusted EBITDA 91,678 61,094 50.1 % All Other - Private Assets Adjusted EBITDA 49,425 35,275 40.1 % Consolidated Adjusted EBITDA $ 1,522,951 $ 1,329,671 14.5 % ________________ (1) Represents transaction expenses and other costs directly related to the acquisition and integration of acquired businesses, including professional fees, severance expenses, regulatory filing fees and other costs, in each case that are incurred no later than 12 months after the close of the relevant acquisition.
The change was primarily driven by higher compensation and benefits costs, primarily relating to higher wages and salaries, benefits and severance costs, partially offset by lower incentive compensation. The change was also driven by higher non-compensation costs, primarily related to higher costs associated with conferences and events and travel.
The change was primarily driven by increases in compensation and benefits costs, primarily relating to higher incentive compensation costs and wages and salaries partially offset by lower severance costs. The change was also driven by increases in transaction related expenses due to the acquisition of Burgiss and Trove, partially offset by decreases in professional fees.
For the year ended December 31, 2022, the average value of AUM in ETFs linked to MSCI equity indexes was down $42.4 billion, or 3.2%, compared to the year ended December 31, 2021. 38 Table of Contents The following table presents operating revenues by reportable segment and revenue type for the years indicated: Years Ended (in thousands) December 31, 2022 December 31, 2021 Increase/(Decrease) Operating revenues: Index Recurring subscriptions $ 729,710 $ 650,629 12.2 % Asset-based fees 528,127 553,991 (4.7) % Non-recurring 45,372 47,144 (3.8) % Index total 1,303,209 1,251,764 4.1 % Analytics Recurring subscriptions 567,004 533,178 6.3 % Non-recurring 9,103 11,121 (18.1) % Analytics total 576,107 544,299 5.8 % ESG and Climate Recurring subscriptions 223,160 162,609 37.2 % Non-recurring 5,151 3,583 43.8 % ESG and Climate total 228,311 166,192 37.4 % All Other - Private Assets Recurring subscriptions 139,649 79,624 75.4 % Non-recurring 1,322 1,665 (20.6) % All Other - Private Assets total 140,971 81,289 73.4 % Total operating revenues $ 2,248,598 $ 2,043,544 10.0 % Refer to the section titled “Segment Results” that follows for further discussion of segment revenues.
The following table presents operating revenues by reportable segment and revenue type for the years indicated: Years Ended (in thousands) December 31, 2023 December 31, 2022 Increase/(Decrease) Operating revenues: Index Recurring subscriptions $ 814,582 $ 729,710 11.6 % Asset-based fees 557,502 528,127 5.6 % Non-recurring 79,731 45,372 75.7 % Index total 1,451,815 1,303,209 11.4 % Analytics Recurring subscriptions 603,291 567,004 6.4 % Non-recurring 12,665 9,103 39.1 % Analytics total 615,956 576,107 6.9 % ESG and Climate Recurring subscriptions 282,351 223,160 26.5 % Non-recurring 5,217 5,151 1.3 % ESG and Climate total 287,568 228,311 26.0 % All Other - Private Assets Recurring subscriptions 171,066 139,649 22.5 % Non-recurring 2,515 1,322 90.2 % All Other - Private Assets total 173,581 140,971 23.1 % Total operating revenues $ 2,528,920 $ 2,248,598 12.5 % Refer to the section titled “Segment Results” that follows for further discussion of segment revenues.
The increase was primarily driven by increased salaries and benefits costs, as a result of increased headcount, as well as increased information technology costs and professional fees. The increase was partially offset by increased capitalization of expenses related to internally developed software projects.
The change was primarily driven by increases in compensation and benefits costs, primarily relating to higher wages and salaries and incentive compensation costs, partially offset by increased capitalization of costs related to internally developed software projects. The change was also driven by increases in non-compensation costs, primarily relating to higher information technology costs.
If the estimated period of economic benefit is changed, the prospective amortization of the intangible asset could materially change. 36 Table of Contents Income Taxes We are subject to income taxes in the U.S. and other foreign jurisdictions. Our tax provision is an estimate based on our understanding of laws in federal, state and foreign tax jurisdictions.
Income Taxes We are subject to income taxes in the U.S. and other foreign jurisdictions. Our tax provision is an estimate based on our understanding of laws in federal, state and foreign tax jurisdictions. These laws can be complicated and are difficult to apply to any business.
Index segment Adjusted EBITDA expenses increased 5.8% for the year ended December 31, 2022 compared to the year ended December 31, 2021, driven by higher non-compensation expenses across the cost of revenues, R&D and selling and marketing expense categories, primarily relating to higher information technology costs.
Analytics segment Adjusted EBITDA expenses increased 3.9% for the year ended December 31, 2023, primarily driven by higher compensation expenses across the cost of revenues, selling and marketing and G&A expense activity categories, partially offset by lower compensation expenses in the R&D expense activity category.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOf the 15.9% of non-U.S. dollar exposure for the year ended December 31, 2022, 41.4% was in Euros, 30.4% was in British pounds sterling and 18.8% was in Japanese yen. Of the 15.1% of non-U.S. dollar exposure for the year ended December 31, 2021, 41.6% was in Euros, 26.5% was in British pounds sterling and 23.8% was in Japanese yen.
Biggest changeOf the 16.7% of non-U.S. dollar exposure for the year ended December 31, 2023, 41.9% was in Euros, 32.5% was in British pounds sterling and 17.7% was in Japanese yen. Of the 15.9% of non-U.S. dollar exposure for the year ended December 31, 2022, 41.4% was in Euros, 30.4% was in British pounds sterling and 18.8% was in Japanese yen.
We are exposed to additional foreign currency risk in certain of our operating costs. Approximately 42.1% and 41.1% of our operating expenses for the years ended December 31, 2022 and 2021, respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Euros, Hungarian forints, Mexican pesos and Swiss francs.
We are exposed to additional foreign currency risk in certain of our operating costs. Approximately 42.4% and 42.1% of our operating expenses for the years ended December 31, 2023 and 2022, respectively, were denominated in foreign currencies, the significant majority of which were denominated in British pounds sterling, Indian rupees, Euros, Hungarian forints, Mexican pesos and Swiss francs.
Revenues from asset-based fees represented 23.5% and 27.1% of operating revenues for the years ended December 31, 2022 and 2021, respectively. While a substantial portion of our asset-based fees are invoiced in U.S. dollars, the fees are based on the assets in investment products, of which approximately three-fifths are invested in securities denominated in currencies other than the U.S. dollar.
Revenues from asset-based fees represented 22.0% and 23.5% of operating revenues for the years ended December 31, 2023 and 2022, respectively. While a substantial portion of our asset-based fees are invoiced in U.S. dollars, the fees are based on the assets in investment products, of which approximately three-fifths are invested in securities denominated in currencies other than the U.S. dollar.
For the years ended December 31, 2022 and 2021, 15.9% and 15.1%, respectively, of our revenues were subject to foreign currency exchange rate risk and primarily included clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities.
For the years ended December 31, 2023 and 2022, 16.7% and 15.9%, respectively, of our revenues were subject to foreign currency exchange rate risk and primarily included clients billed in foreign currency as well as U.S. dollar exposures on non-U.S. dollar foreign operating entities.
We recognized total foreign currency exchange gains of $0.5 million for the year ended December 31, 2022 and foreign currency exchange losses of $1.9 million for the year ended December 31, 2021. 54 Table of Contents
We recognized total foreign currency exchange losses of $4.5 million for the year ended December 31, 2023 and foreign currency exchange gains of $0.5 million for the year ended December 31, 2022. 56 Table of Contents

Other MSCI 10-K year-over-year comparisons