v3.22.1
Segment Information
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment Information

12. SEGMENT INFORMATION

The Company has five operating segments: Index, Analytics, ESG and Climate, Real Estate and The Burgiss Group, LLC (“Burgiss”), which are presented as the following four reportable segments: Index, Analytics, ESG and Climate and All Other – Private Assets.

 

The Index operating segment offers equity and fixed income indexes. The indexes are used in many areas of the investment process, including indexed product creation (e.g., Exchange Traded Funds (“ETFs”), mutual funds, annuities, futures, options, structured products and over-the-counter derivatives), performance benchmarking, portfolio construction and rebalancing, and asset allocation.

The Analytics operating segment offers risk management, performance attribution and portfolio management content, applications and services that provide clients with an integrated view of risk and return and tools for analyzing market, credit, liquidity, counterparty and climate risk across all major asset classes, spanning short-, medium- and long-term time horizons. Clients access Analytics tools and content through MSCI’s proprietary applications and application programming interfaces, third-party applications or directly through their own platforms. Additionally, the Analytics operating segment also provides various managed services to help clients operate more efficiently, including consolidation of client portfolio data from various sources, review and reconciliation of input data and results, and customized reporting.

The ESG and Climate operating segment 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. In addition, the ESG and Climate operating segment provides 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.

The Real Estate operating segment offers real estate market and transaction data, benchmarks, return-analytics, climate assessments and market insights for funds, investors, managers and other real estate market participants. In addition, Real Estate performance and risk analytics range from enterprise-wide to property-specific analysis. The Real Estate operating segment also provides business intelligence products to real estate owners, managers, developers and brokers worldwide.

The Burgiss operating segment represents the Company’s equity method investment in Burgiss, a global provider of investment decision support tools for private capital.

 

The Chief Operating Decision Maker (“CODM”) measures and evaluates reportable segments based on segment operating revenues as well as Adjusted EBITDA and other measures. The Company excludes the following items from segment Adjusted EBITDA: provision for income taxes, other expense (income), net, depreciation and amortization of property, equipment and leasehold improvements, amortization of intangible assets and, at times, certain other transactions or adjustments, including certain non-recurring acquisition-related integration and transaction costs, that the CODM does not consider for the purposes of making decisions to allocate resources among segments or to assess segment performance. Although these amounts are excluded from segment Adjusted EBITDA, they are included in reported consolidated net income and are included in the reconciliation that follows.

 

The following table presents operating revenues by reportable segment for the periods indicated:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Operating revenues

 

 

 

 

 

 

 

 

Index

 

$

330,759

 

 

$

292,491

 

Analytics

 

 

139,797

 

 

 

134,017

 

ESG and Climate

 

 

52,029

 

 

 

34,750

 

All Other - Private Assets

 

 

37,360

 

 

 

17,165

 

Total

 

$

559,945

 

 

$

478,423

 

 

 

The following table presents segment profitability and a reconciliation to net income for the periods indicated:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Index Adjusted EBITDA

 

$

245,875

 

 

$

219,879

 

Analytics Adjusted EBITDA

 

 

50,889

 

 

 

45,731

 

ESG and Climate Adjusted EBITDA

 

 

12,092

 

 

 

5,045

 

All Other - Private Assets Adjusted

  EBITDA

 

 

9,688

 

 

 

5,931

 

Total operating segment profitability

 

 

318,544

 

 

 

276,586

 

Amortization of intangible assets

 

 

21,720

 

 

 

15,068

 

Depreciation and amortization of property,

   equipment and leasehold improvements

 

 

6,534

 

 

 

7,143

 

Acquisition-related integration and

  transaction costs (1)

 

 

1,312

 

 

 

—

 

Operating income

 

 

288,978

 

 

 

254,375

 

Other expense (income), net

 

 

40,035

 

 

 

38,347

 

Provision for income taxes

 

 

20,520

 

 

 

19,209

 

Net income

 

$

228,423

 

 

$

196,819

 

 

(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.

 

Operating revenues by geography are based on the shipping address of the ultimate customer utilizing the product. The following table presents operating revenues by geographic area for the periods indicated:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

 

2022

 

 

 

2021

 

 

 

(in thousands)

 

Operating revenues

 

 

 

 

 

 

 

 

Americas:

 

 

 

 

 

 

 

 

United States

 

$

233,356

 

 

$

196,689

 

Other

 

 

22,467

 

 

 

20,173

 

Total Americas

 

 

255,823

 

 

 

216,862

 

 

 

 

 

 

 

 

 

 

Europe, the Middle East and Africa ("EMEA"):

 

 

 

 

 

 

 

 

United Kingdom

 

 

86,986

 

 

 

79,081

 

Other

 

 

131,573

 

 

 

106,194

 

Total EMEA

 

 

218,559

 

 

 

185,275

 

 

 

 

 

 

 

 

 

 

Asia & Australia:

 

 

 

 

 

 

 

 

Japan

 

 

23,190

 

 

 

21,642

 

Other

 

 

62,373

 

 

 

54,644

 

Total Asia & Australia

 

 

85,563

 

 

 

76,286

 

 

 

 

 

 

 

 

 

 

Total

 

$

559,945

 

 

$

478,423

 

 

 

Long-lived assets consist of property, equipment and leasehold improvements, right of use assets and internally developed capitalized software, net of accumulated depreciation and amortization. The following table presents long-lived assets by geographic area on the dates indicated:

 

 

 

As of

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(in thousands)

 

Long-lived assets

 

 

 

 

 

 

 

 

Americas:

 

 

 

 

 

 

 

 

United States

 

$

170,598

 

 

$

167,870

 

Other

 

 

13,299

 

 

 

13,480

 

Total Americas

 

 

183,897

 

 

 

181,350

 

 

 

 

 

 

 

 

 

 

EMEA:

 

 

 

 

 

 

 

 

United Kingdom

 

 

19,981

 

 

 

19,563

 

Other

 

 

29,434

 

 

 

34,240

 

Total EMEA

 

 

49,415

 

 

 

53,803

 

 

 

 

 

 

 

 

 

 

Asia & Australia:

 

 

 

 

 

 

 

 

Japan

 

 

1,038

 

 

 

1,150

 

Other

 

 

29,590

 

 

 

31,873

 

Total Asia & Australia

 

 

30,628

 

 

 

33,023

 

 

 

 

 

 

 

 

 

 

Total

 

$

263,940

 

 

$

268,176