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Msci Annual Report, Year Ended Nov 30, 2009

Filing Date
Filed January 29, 2010
Period End
November 30, 2009
Security
MSCI
In the record · 2016–202610-K1110-Q338-K133

MSCI filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 133 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Nov ’19Nov ’19
  3. Leadership change8-K · Jan ’22Jan ’22
  4. Leadership change8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed January 29, 2010. Cited figures are marked; the original filing is the authoritative source.

MSCI Inc. (formerly Morgan Stanley Capital International Inc.) reported fiscal year 2009 (ended November 30, 2009) operating revenues of $442.9 milliona, up 2.8% from $431.0 million in fiscal 2008, and operating income of $151.0 million, up 11.2%.

Net income rose to $81.8 millionb from $68.3 million, and diluted EPS was $0.80 versus $0.67. Operating margin improved to 34.1% from 31.5%. Growth was led by equity index subscriptions (up 10.9% to $188.3 million) and a recovery in equity index asset-based fees tied to ETFs, where assets linked to MSCI equity indices rose 96.8% to $234.2 billion at year-end.

Revenue from equity portfolio analytics fell 6.9%c, reflecting lower new subscriptions and retention rates. Retention remained under pressure from the financial crisis. The Aggregate Retention Rate was 85.2% for fiscal 2009 versus 89.9% in fiscal 2008, and the Core Retention Rate was 86.4% versus 92.1%.

Net new recurring subscription sales were only $4.1 milliond, compared with $45.1 million the prior year. Morgan Stanley fully exited its ownership on May 22, 2009, and MSCI became a stand-alone public company. Barclays PLC was the largest client at 9.9% of operating revenues.

The balance sheet shows cash and cash equivalents of $176.0 million, short-term investments of $295.3 million, and $380.5 million outstanding under a $500.0 million credit facility. Management reported internal control over financial reporting as effective, and the company stated it does not intend to pay dividends in the foreseeable future.

02—Key points

Key Highlights

  1. Operating revenues rose 2.8% to $442.9 million, and operating income rose 11.2% to $151.0 million.
  2. Net income was $81.8 million, or $0.80 per diluted share, versus $0.67 in fiscal 2008.
  3. Equity index asset-based fees recovered with ETF assets linked to MSCI equity indices reaching $234.2 billion, up 96.8% year over year.
  4. Aggregate Retention Rate fell to 85.2% from 89.9%, and Core Retention Rate fell to 86.4% from 92.1%.
  5. Net new recurring subscription sales were $4.1 million, down from $45.1 million in fiscal 2008.
  6. Morgan Stanley disposed of its remaining equity interest on May 22, 2009, completing the separation.
  7. The company ended the year with $176.0 million in cash, $295.3 million in short-term investments, and $380.5 million of Credit Facility debt.

03—One dollar

04—Financials

Financial Highlights

Figures from 10-KFY2009filed January 29, 2010
Revenue$442.95MNet Income$81.80M18.5% Net MarginEPS (Diluted)$0.80Cash & Equivalents$226.57MFree Cash Flow$117.53M

Financial Statements

FY2009 against FY2008

Line itemFY2009FY2008Change
Revenue$442.95M$430.96M+2.8%
SG&A Expenses$135.78M$138.31M−1.8%
Operating Income$150.99M$135.79M+11.2%
Interest Expense$19.68M$26.93M−26.9%
Net Income$81.80M$68.27M+19.8%
EPS (Basic)$0.80$0.66+21.2%
EPS (Diluted)$0.80$0.66+21.2%
Shares Outstanding (Basic)100.61M100.04M+0.6%
Shares Outstanding (Diluted)100.86M100.28M+0.6%

05—Questions

Frequently Asked Questions

  1. How did MSCI perform financially in fiscal 2009?

    Operating revenues grew 2.8% to $442.9 million, operating income rose 11.2% to $151.0 million, and operating margin improved to 34.1% from 31.5%. Net income increased 19.8% to $81.8 million.

  2. What drove growth in ETF-related revenue?

    Equity index asset-based fees rose 2.3% to $71.3 million, helped by growth in listed ETFs linked to MSCI indices from 167 to 268. Assets in those ETFs reached $234.2 billion at November 30, 2009, up 96.8%, of which $66.7 billion came from net asset appreciation and $48.5 billion from net inflows.

  3. Why did client retention decline?

    The filing attributes lower retention to the closure or merger of a number of clients and the shutdown of quantitative funds and teams during the year. Aggregate Retention Rate was 85.2% versus 89.9% in fiscal 2008.

  4. What are the main concentration and debt risks?

    Barclays PLC accounted for 9.9% of operating revenues, and the ten largest clients accounted for 27.3%. The company had $380.5 million outstanding under its secured Credit Facility, with leverage and interest coverage covenants that tighten after November 30, 2009.

06—Continue

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