MSCI INC (MXB) filed Quarterly Report for the period ended 2009-08-31.
MSCI Inc. is a leading provider of investment decision support tools to investment institutions worldwide. MSCI Inc. products include indices and portfolio analytics for use in managing equity fixed income and multi-asset class portfolios. Msci Inc has a market cap of $2.77 billion; its shares were traded at around $27.14 with a P/E ratio of 38.3 and P/S ratio of 6.4.
Highlight of Business Operations:
Total operating revenues for the three months ended August 31, 2009 decreased $1.5 million, or 1.4%, to $108.9 million compared to $110.4 million for the three months ended August 31, 2008. The decrease was comprised of a $3.4 million decrease in subscription revenues offset, in part, by a $1.8 million increase in equity index asset based fees. Subscription revenues consist of our revenues related to equity index subscriptions, equity portfolio analytics, multi-asset class portfolio analytics and other products. Our revenues are impacted by changes in exchange rates primarily as they relate to the U.S. dollar. Using exchange rates for the same period of the prior year, our revenues for the three months ended August 31, 2009 would have been higher by $0.3 million had the U.S. dollar not strengthened relative to the prior year.
In the three month period ended August 31, 2009, we recorded a $3.3 million reduction to revenue as a result of the cumulative impact of adjustments made in respect of revenues reported through the quarter ended May 31, 2009. For the purpose of the discussion related to the results of operations for the three month period ended August 31, 2009, “revenue adjustments” refers to this $3.3 million adjustment. The revenue adjustments were made to correct the over-amortization and under-amortization, as applicable, of deferred revenue into revenue as a result of having used current foreign exchange rates rather than historical foreign exchange rates as required by GAAP when the originating currency differed from the functional currency. The impact of the revenue adjustments would not have had a material impact on the financial results of any stand-alone reporting period and therefore do not affect the comparability of prior reporting periods.
Revenues related to equity indices increased 9.0% to $67.5 million for the three months ended August 31, 2009 compared to the same period in 2008. Revenues from the equity index subscriptions sub-category were up 8.5% to $47.4 million during the current period with strength across all regions. This growth was led by increases in our emerging market, small cap, and developed market index modules as well as increases in our derivative product license fees and user fees, which more than offset a decline in fees for historical index data. Also included in the increase was a $0.5 million positive impact from the revenue adjustments discussed above.
Revenues attributable to the equity index asset based fees sub-category increased $1.8 million to $20.1 million for the three months ended August 31, 2009 compared to $18.3 million in the same period in 2008. The results reflect increases in the ETF and AUM asset based fees within the equity index asset based fees sub-category. There was also a $0.2 million increase as a result of the revenue adjustments discussed above. The average value of assets in ETFs linked to MSCI equity indices increased 1.1% to $180.3 billion for the three months ended August 31, 2009 compared to $178.3 billion for the three months ended August 31, 2008. As of August 31, 2009, the value of assets in ETFs linked to MSCI equity indices was $199.2 billion, representing an increase of $32.9 billion, or 19.8%, from $166.3 billion as of August 31, 2008. We estimate that the $32.9 billion year-over-year increase in value of assets in ETFs linked to MSCI equity indices was attributable to $47.4 billion of net cash inflows offset, in part, by $14.5 billion of net asset depreciation.
The three MSCI indices with the largest amount of ETF assets linked to them as of August 31, 2009 were the MSCI Emerging Markets, EAFE and U.S. Broad Market Indices with $47.8 billion, $37.0 billion and $11.9 billion in assets, respectively.
MXB is in the portfolios of Ron Baron of Baron Funds, Lee Ainslie of Maverick Capital.
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