Market Overview

MSCI Reports Financial Results for Third Quarter and Nine Months 2017

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MSCI Inc. (NYSE:MSCI), a leading provider of indexes and portfolio
construction and risk management tools and services for global
investors, today announced results for the three months ended September
30, 2017 ("third quarter 2017") and nine months ended September 30, 2017
("nine months 2017").

Financial and Operational Highlights for Third Quarter 2017
(Note:
Percentage and other changes refer to third quarter 2016 unless
otherwise noted.)

  • 11.7% increase in operating revenues to $322.1 million.
  • 17.0% increase in Index revenues driven by a 29.8% increase in
    asset-based fees and a 9.5% increase in recurring subscription
    revenues.
  • Record quarter-end AUM of $674.3 billion in ETFs linked to MSCI
    indexes; increase of 42.0% compared to third quarter 2016 AUM. All
    time high of $701.2 billion on October 31, 2017.
  • Diluted and adjusted earnings per share increased 36.8% and 29.9%,
    respectively.
  • Net new recurring subscription sales increased 68.2% to $21.0
    million, driven by stronger Analytics net new sales.
  • Total Aggregate Retention Rate at 94.0% and Index Aggregate
    Retention Rate at 95.5%.
  • 13.8% increase in total Run Rate to $1,305.0 million driven by a
    36.6% increase in asset-based fees Run Rate and an 8.6% increase in
    subscription Run Rate.
      Three Months Ended   Nine Months Ended
Sep. 30,   Sep. 30,   June 30,   YoY % Sep. 30,   Sep. 30,   YoY %
In thousands, except per share data 2017 2016 2017 Change 2017 2016 Change
Operating revenues $ 322,097 $ 288,433 $ 316,089   11.7 % $ 939,393 $ 857,857   9.5 %
Operating income $ 148,663 $ 123,260 $ 145,968 20.6 % $ 425,233 $ 362,092 17.4 %
Operating margin % 46.2 % 42.7 % 46.2 % 45.3 % 42.2 %
 
Net income $ 85,153 $ 65,281 $ 81,266 30.4 % $ 239,370 $ 192,605 24.3 %
 
Diluted EPS $ 0.93 $ 0.68 $ 0.89 36.8 % $ 2.61 $ 1.98 31.8 %
Adjusted EPS $ 1.00 $ 0.77 $ 0.95 29.9 % $ 2.83 $ 2.22 27.5 %
 
Adjusted EBITDA $ 168,602 $ 143,324 $ 166,249 17.6 % $ 485,542 $ 422,500 14.9 %
Adjusted EBITDA margin % 52.3 % 49.7 % 52.6 % 51.7 % 49.3 %

"We are increasingly working closely with some of the largest
participants in the investment industry in ways that provide them with
the means to differentiate themselves and attract assets. This
solutions-based approach is enabled by our focus on research, which is
at the heart of the innovative, world-class products and services we
deliver to our clients every day. It is exactly this focus on our
clients, our integrated model and the strong execution of our strategy
that helped us deliver another strong quarter, with a 12% increase in
revenue, and 37% and 30% increases in diluted EPS and adjusted EPS,
respectively," commented Henry A. Fernandez, Chairman and CEO of MSCI.

"Our research and product development capabilities allow us to create
innovative content that we can integrate across the Company. This cycle
of content enhancement, creation and integration will provide a wide
range of compelling organic opportunities that will drive our continued
growth in the quarters and years ahead," concluded Mr. Fernandez.

Third Quarter and Nine Months 2017 Consolidated
Results

Revenues:
Operating revenues for third quarter 2017 increased $33.7 million, or
11.7%, to $322.1 million, compared to $288.4 million for the three
months ended September 30, 2016 ("third quarter 2016"). The $33.7
million increase in revenues was driven by a $16.9 million, or 7.5%,
increase in recurring subscriptions (driven primarily by a $9.3 million,
or 9.5%, increase in Index recurring subscriptions), and a $16.7
million, or 29.8%, increase in asset-based fees (driven primarily by
higher revenue from ETFs linked to MSCI indexes). Adjusting for the
impact of foreign currency exchange rate fluctuations, operating
revenues would have increased 11.9% for third quarter 2017.

For nine months 2017, operating revenues increased $81.5 million, or
9.5%, to $939.4 million, compared to $857.9 million for the nine months
ended September 30, 2016 ("nine months 2016"). The $81.5 million
increase was driven by a $43.1 million, or 27.9%, increase in
asset-based fees, and a $39.4 million, or 5.8%, increase in recurring
subscriptions, partially offset by a $1.0 million, or 5.2%, decrease in
non-recurring revenues. Adjusting for the impact of foreign currency
exchange rate fluctuations, operating revenues would have increased
10.1% for nine months 2017.

Run Rate: Total
Run Rate at September 30, 2017 grew by $158.2 million, or 13.8%, to
$1,305.0 million, compared to September 30, 2016. The $158.2 million
increase was driven by an $80.6 million, or 8.6%, increase in
subscription Run Rate to $1,015.2 million, and a $77.6 million, or
36.6%, increase in asset-based fees Run Rate to $289.8 million.
Adjusting for the impact of foreign currency exchange rate fluctuations,
subscription Run Rate would have increased 8.3% in third quarter 2017.
Recurring subscriptions and asset-based fees at September 30, 2017
represented 77.8% and 22.2% of total Run Rate, respectively.

Expenses: Total
operating expenses for third quarter 2017 increased $8.3 million, or
5.0%, from third quarter 2016 to $173.4 million, driven by a $6.6
million, or 6.4%, increase in compensation and benefits expenses
(primarily higher wages and salaries and incentive compensation
resulting, in part, from the growth in the number of employees) and a
$1.8 million, or 4.2%, increase in non-compensation expenses (higher
information technology costs and market data, partially offset by lower
professional fees). Adjusted EBITDA expenses for third quarter 2017
increased $8.4 million, or 5.8%, to $153.5 million compared to third
quarter 2016. Adjusting for the impact of foreign currency exchange rate
fluctuations, total operating expenses and adjusted EBITDA expenses for
third quarter 2017 would have increased 4.4% and 5.1%, respectively,
compared to third quarter 2016. Operating margin for third quarter 2017
was 46.2%, compared to 42.7% for third quarter 2016.

For nine months 2017, total operating expenses increased $18.4 million,
or 3.7%, to $514.2 million. Adjusted EBITDA expenses increased $18.5
million, or 4.2%, to $453.9 million compared to nine months 2016.
Adjusting for the impact of foreign currency exchange rate fluctuations,
total operating expenses and adjusted EBITDA expenses for nine months
2017 would have increased 4.6% and 5.2%, respectively, compared to nine
months 2016. Operating margin for nine months 2017 was 45.3%, compared
to 42.2% for nine months 2016.

Headcount: As
of September 30, 2017, there were 3,047 employees, up 8.7% from 2,802 as
of September 30, 2016, and up 2.6% from 2,970 as of June 30, 2017. The
8.7% increase in employees was driven by increased headcount in areas
related to technology, data & content services and research. As of
September 30, 2017, a total of 42% and 58% of employees were located in
developed market and emerging market centers, respectively, compared to
44% in developed market centers and 56% in emerging market centers as of
September 30, 2016.

Amortization and Depreciation Expenses:
Amortization and depreciation expenses decreased by $0.1 million, or
0.6%, for third quarter 2017, compared to third quarter 2016, with a
$1.0 million, or 12.2%, increase in depreciation expense, offset by a
$1.1 million, or 9.7%, decrease in amortization expense. For nine months
2017, amortization and depreciation expenses of $60.3 million were in
line with nine months 2016.

Other Expense (Income), Net:
Other expense (income), net increased $2.1 million, or 8.2%, for
third quarter 2017, compared to third quarter 2016 and increased $12.0
million, or 16.4%, for nine months 2017, compared to the same period of
the prior year. The increase for both periods was primarily driven by
higher interest expense resulting from the August 2016 private offering
of $500.0 million aggregate principal amount of 4.75% senior notes due
2026, partially offset by higher interest income. Nine months 2016
results also included a $3.7 million charge for estimated losses
associated with miscellaneous transactions.

Tax Rate: The
effective tax rate was 29.5% for third quarter 2017, compared to 33.1%
for third quarter 2016 and the effective tax rate for nine months 2017
was 29.6%, compared to 33.3% for nine months 2016. The lower effective
tax rate for both periods was primarily driven by the ongoing efforts to
better align our tax profile with our global operating footprint and the
impact of discrete items. For nine months 2017, the discrete items
included the impact of stock-based compensation excess tax benefits (the
"windfall benefit") resulting from the adoption of new accounting
guidance. The positive impact of the windfall benefit totaled $0.7
million in third quarter 2017 and $4.8 million for nine months 2017.

Net Income: Net
income increased 30.4% to $85.2 million, from $65.3 million in third
quarter 2016. For nine months 2017, net income increased 24.3% to $239.4
million, compared to $192.6 million for nine months 2016.

Adjusted EBITDA:
Adjusted EBITDA was $168.6 million in third quarter 2017, up $25.3
million, or 17.6%, from third quarter 2016. Adjusted EBITDA margin in
third quarter 2017 was 52.3%, compared to 49.7% in third quarter 2016.
For nine months 2017, adjusted EBITDA was $485.5 million, up 14.9% from
nine months 2016, and adjusted EBITDA margin was 51.7% for nine months
2017, compared to 49.3% for nine months 2016.

Cash Balances & Outstanding Debt:
Total cash and cash equivalents as of September 30, 2017 was $799.0
million, of which $425.3 million was held outside of the United States.
MSCI seeks to maintain minimum cash balances in the United States of
approximately $125.0 million to $150.0 million for general operating
purposes. Total outstanding debt as of September 30, 2017 was $2,100.0
million, which excludes deferred financing fees of $22.6 million. Net
debt, defined as total outstanding debt less cash and cash equivalents,
was $1,301.0 million at September 30, 2017. The total debt to operating
income ratio (based on trailing twelve months operating income) was
3.8x. The total debt to adjusted EBITDA ratio (based on trailing twelve
months adjusted EBITDA) was 3.3x.

Cash Flow & Capex:
Net cash provided by operating activities was $101.8 million in third
quarter 2017, compared to $148.5 million in third quarter 2016. Capex
for third quarter 2017 was $11.6 million, compared to $13.7 million in
third quarter 2016. Free cash flow was $90.2 million in third quarter
2017, compared to $134.8 million in third quarter 2016. The decrease in
net cash provided by operating activities and free cash flow compared to
third quarter 2016 was driven by higher payments for income taxes,
including the impact of refunds recorded in third quarter 2016, interest
and operating expenses, partially offset by higher cash collections,
despite higher accounts receivable as a result of the timing of
invoicing and collections.

Net cash provided by operating activities was $261.0 million for nine
months 2017, compared to $303.5 million for nine months 2016. Capex for
nine months 2017 was $28.2 million, compared to $32.1 million for nine
months 2016. Free cash flow was $232.8 million for nine months 2017,
compared to $271.4 million for nine months 2016. The decrease in both
net cash provided by operating activities and free cash flow for nine
months 2017 compared to the same period of the prior year was driven by
higher payments for operating expenses, income taxes, including the
impact of refunds recorded in third quarter 2016, and interest,
partially offset by higher cash collections, despite higher accounts
receivable as a result of the timing of invoicing and collections.

Share Count & Capital Return:
The weighted average diluted shares outstanding in third quarter 2017
declined 3.8% to 91.9 million, compared to 95.5 million in third quarter
2016. The lower share count, driven by buybacks under the share
repurchase program, increased diluted and adjusted earnings per share
each by $0.04 in third quarter 2017, compared to third quarter 2016. In
third quarter 2017, MSCI repurchased 87,429 shares at an average price
of $104.26 per share for a total value of $9.1 million. A total of $0.7
billion remains on the outstanding share repurchase authorization as of
October 27, 2017. Total shares outstanding as of September 30, 2017 was
90.1 million.

On October 31, 2017, the Board of Directors of MSCI declared a cash
dividend of $0.38 per share for fourth quarter 2017. The fourth quarter
2017 dividend is payable on November 30, 2017 to shareholders of record
as of the close of trading on November 17, 2017.

Table 1: Third Quarter 2017 Results by Segment (unaudited)

             
Index Analytics All Other
Adjusted Adjusted Adjusted
Operating Adjusted EBITDA Operating Adjusted EBITDA Operating Adjusted EBITDA
In thousands Revenues EBITDA Margin Revenues EBITDA Margin Revenues EBITDA Margin
Q3'17 $ 184,594 $ 134,299   72.8 % $ 114,972 $ 33,013   28.7 % $ 22,531 $ 1,290   5.7 %
Q3'16 $ 157,751 $ 111,750 70.8 % $ 111,291 $ 31,501 28.3 % $ 19,391 $ 73 0.4 %
Q2'17 $ 177,156 $ 129,476 73.1 % $ 113,367 $ 31,741 28.0 % $ 25,566 $ 5,032 19.7 %
YoY % change 17.0 % 20.2 % 3.3 % 4.8 % 16.2 % n/m
 
YTD 2017 $ 525,185 $ 379,412 72.2 % $ 340,759 $ 94,290 27.7 % $ 73,449 $ 11,840 16.1 %
YTD 2016 $ 454,481 $ 318,317 70.0 % $ 333,947 $ 95,163 28.5 % $ 69,429 $ 9,020 13.0 %
YoY % change   15.6 %   19.2 %       2.0 %   (0.9 %)       5.8 %   31.3 %    
 
n/m: not meaningful.

Index Segment:
Operating revenues for third quarter 2017 increased $26.8 million,
or 17.0%, to $184.6 million, compared to $157.8 million for third
quarter 2016. The $26.8 million increase was driven by a $16.7 million,
or 29.8%, increase in asset-based fees, a $9.3 million, or 9.5%,
increase in recurring subscriptions and a $0.8 million, or 25.5%,
increase in non-recurring revenues.

The $16.7 million increase in asset-based fees was driven by strong
growth across all types of index-linked investment products. A $13.1
million, or 35.4%, increase in revenue from ETFs linked to MSCI indexes
was driven by a 40.0% increase in average AUM, partially offset by the
impact of a change in the product mix. A $2.5 million, or 15.0%,
increase in revenue from non-ETF passive products was driven by higher
AUM and an increased contribution from higher fee products. In addition,
revenues from exchange traded futures and options contracts based on
MSCI indexes grew $1.2 million, or 47.2%, driven by a strong increase in
total trading volumes and a more favorable product mix.

The $9.3 million increase in recurring subscriptions was driven by
strong growth in core products, growth in new products, including factor
indexes, as well as growth in custom index products. There was a
negligible impact from foreign currency exchange rate fluctuations on
Index revenues for third quarter 2017. The adjusted EBITDA margin for
Index was 72.8% for third quarter 2017, compared to 70.8% for third
quarter 2016.

Operating revenues for nine months 2017 increased $70.7 million, or
15.6%, to $525.2 million, compared to $454.5 million for nine months
2016. The $70.7 million increase was driven by a $43.1 million, or
27.9%, increase in asset-based fees, a $26.4 million, or 9.1%, increase
in recurring subscriptions, and a $1.2 million, or 11.1%, increase in
non-recurring revenues. There was a negligible impact from foreign
currency exchange rate fluctuations on Index revenues for nine months
2017. The adjusted EBITDA margin for Index was 72.2% for nine months
2017, compared to 70.0% for nine months 2016.

Index Run Rate at September 30, 2017 grew by $121.2 million, or 19.9%,
to $729.1 million, compared to September 30, 2016. The $121.2 million
increase was driven by a $77.6 million, or 36.6%, increase in
asset-based fees Run Rate, and a $43.6 million, or 11.0%, increase in
recurring subscriptions Run Rate. The 11.0% increase in Index recurring
subscriptions Run Rate was primarily driven by an increase in core
products, strong demand for new products, including factor and ESG
indexes, as well as growth in custom index products. There was a
negligible impact from foreign currency exchange rate fluctuations on
Index recurring subscription Run Rate at September 30, 2017.

Analytics Segment:
Operating revenues for third quarter 2017 increased $3.7 million, or
3.3%, to $115.0 million, compared to $111.3 million for third quarter
2016. The increase was driven by both Equity and Multi-Asset Class
Analytics products. Adjusting for the impact of foreign currency
exchange rate fluctuations, Analytics operating revenues would have
increased 3.7%. The adjusted EBITDA margin for Analytics was 28.7% for
third quarter 2017, compared to 28.3% for third quarter 2016.

Operating revenues for nine months 2017 increased $6.8 million, or 2.0%,
to $340.8 million, compared to $333.9 million for nine months 2016.
Adjusting for the impact of foreign currency exchange rate fluctuations,
Analytics operating revenues for nine months 2017 would have increased
2.9%. The adjusted EBITDA margin for Analytics was 27.7% for nine months
2017, compared to 28.5% for nine months 2016.

Analytics Run Rate at September 30, 2017 grew by $22.4 million, or 5.0%,
to $474.7 million, compared to September 30, 2016, primarily driven by
growth in both Multi-Asset Class and Equity Analytics products.
Adjusting for the impact of foreign currency exchange rate fluctuations,
Analytics Run Rate would have increased 4.7% in third quarter 2017.

All Other Segment:
Operating revenues for third quarter 2017 increased by $3.1 million,
or 16.2%, to $22.5 million, compared to $19.4 million for third quarter
2016. The increase in All Other revenues was driven by a $2.4 million,
or 21.2%, increase in ESG revenues to $13.9 million, and a $0.7 million,
or 9.0% increase in Real Estate revenues. The increase in ESG revenues
was driven by higher ESG Ratings product revenues, which is benefiting
from increased investments. The increase in Real Estate revenues was
primarily driven by an increase in Market Information product revenues.
Adjusting for the impact of foreign currency exchange rate fluctuations,
third quarter 2017 Real Estate revenues would have increased 8.2% and
All Other operating revenues would have increased 15.9%. There was a
negligible impact from foreign currency exchange rate fluctuations on
ESG revenues for third quarter 2017. The adjusted EBITDA margin for All
Other was 5.7% for third quarter 2017, compared to 0.4% for third
quarter 2016.

Operating revenues for nine months 2017 increased $4.0 million, or 5.8%,
to $73.4 million, compared to $69.4 million for nine months 2016. The
increase in All Other revenues was driven by a $7.0 million, or 21.0%,
increase in ESG revenues to $40.1 million, partially offset by a $2.9
million, or 8.1%, decrease in Real Estate revenues to $33.3 million.
Adjusting for the impact of foreign currency exchange rate fluctuations
and the divestiture of the Real Estate occupiers business, nine months
2017 revenues for Real Estate would have decreased 2.1% and All Other
operating revenues would have increased 9.0%. There was a negligible
impact from foreign currency exchange rate fluctuations on ESG revenues
for nine months 2017. The adjusted EBITDA margin for All Other was 16.1%
for nine months 2017, compared to 13.0% for nine months 2016.

All Other Run Rate at September 30, 2017 grew by $14.5 million, or
16.7%, to $101.3 million, compared to September 30, 2016. The $14.5
million increase was primarily driven by a $12.1 million, or 25.9%,
increase in ESG Run Rate to $59.0 million, and a $2.4 million, or 6.0%,
increase in Real Estate Run Rate to $42.3 million. The increase in ESG
Run Rate was primarily driven by growth in ESG Ratings products. The
increase in Real Estate Run Rate was primarily driven by growth in
Market Information products. Adjusting for the impact of foreign
currency exchange rate fluctuations, Real Estate Run Rate would have
increased 2.8%, ESG Run Rate would have increased 23.9% and All Other
Run Rate would have increased 14.2% in third quarter 2017.

Full-Year 2017 Guidance

MSCI's guidance for full-year 2017 is as follows:

  • Total operating expenses are expected to be in the range of $690
    million to $700 million. Adjusted EBITDA expenses are now expected to
    be towards the higher end of the previously announced range of $605
    million to $615 million, primarily reflecting higher severance in the
    fourth quarter associated with certain efficiency initiatives.
  • Interest expense, including the amortization of financing fees, is
    expected to be approximately $116 million, assuming no additional
    financings.
  • Capex is expected to be in the range of $40 million to $50 million.
  • Net cash provided by operating activities and free cash flow is
    expected to be in the range of $360 million to $410 million and $310
    million to $370 million, respectively.
  • The effective tax rate is now expected to be at the lower end of the
    previously announced range of 30.0% to 31.0%.

Conference Call Information

MSCI's senior management will review third quarter 2017 results on
Thursday, November 2, 2017 at 11:00 AM Eastern Time. To listen to the
live event, visit the events and presentations section of MSCI's
Investor Relations homepage, http://ir.msci.com/events.cfm,
or dial 1-877-312-9206 within the United States. International callers
dial 1-408-774-4001. This earnings release and the related investor
presentation used during the conference call will be made available on
MSCI's Investor Relations homepage.

An audio recording of the conference call will be available on our
Investor Relations website, http://ir.msci.com/events.cfm,
beginning approximately two hours after the conclusion of the live
event. Through November 5, 2017, the recording will also be available by
dialing 1-800-585-8367 passcode: 96492216 within the United States or
1-404-537-3406 passcode: 96492216 for international callers. A replay of
the conference call will be archived in the events and presentations
section of MSCI's Investor Relations website for 12 months after the
call.

-Ends-

About MSCI

For more than 45 years, MSCI's research-based indexes and analytics have
helped the world's leading investors build and manage better portfolios.
Clients rely on our offerings for deeper insights into the drivers of
performance and risk in their portfolios, broad asset class coverage and
innovative research.

Our line of products and services includes indexes, analytical models,
data, real estate benchmarks and ESG research.

MSCI serves 99 of the top 100 largest money managers, according to the
most recent P&I ranking.

For more information, visit us at www.msci.com.
MSCI#IR

Forward-Looking Statements

This earnings release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including without limitation, our full-year 2017 guidance. These
forward-looking statements relate to future events or to future
financial performance and involve known and unknown risks, uncertainties
and other factors that may cause our actual results, levels of activity,
performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or
implied by these statements. In some cases, you can identify
forward-looking statements by the use of words such as "may," "could,"
"expect," "intend," "plan," "seek," "anticipate," "believe," "estimate,"
"predict," "potential" or "continue," or the negative of these terms or
other comparable terminology. You should not place undue reliance on
forward-looking statements because they involve known and unknown risks,
uncertainties and other factors that are, in some cases, beyond our
control and that could materially affect our actual results, levels of
activity, performance or achievements.

Other factors that could materially affect actual results, levels of
activity, performance or achievements can be found in MSCI's Annual
Report on Form 10-K for the fiscal year ended December 31, 2016 filed
with the Securities and Exchange Commission ("SEC") on February 24, 2017
and in quarterly reports on Form 10-Q and current reports on Form 8-K
filed or furnished with the SEC (herein, referred to as "Public
Filings"). If any of these risks or uncertainties materialize, or if our
underlying assumptions prove to be incorrect, actual results may vary
significantly from what MSCI projected. Any forward-looking statement in
this earnings release reflects MSCI's current views with respect to
future events and is subject to these and other risks, uncertainties and
assumptions relating to MSCI's operations, results of operations, growth
strategy and liquidity. MSCI assumes no obligation to publicly update or
revise these forward-looking statements for any reason, whether as a
result of new information, future events, or otherwise, except as
required by law.

Website and Social Media Disclosure

MSCI uses its website and corporate Twitter account (@MSCI_Inc) as
channels of distribution of company information. The information we post
through these channels may be deemed material. Accordingly, investors
should monitor these channels, in addition to following our press
releases, SEC filings and public conference calls and webcasts. In
addition, you may automatically receive email alerts and other
information about MSCI when you enroll your email address by visiting
the "Email Alerts Subscription" section of MSCI's Investor Relations
homepage at http://ir.msci.com/alerts.cfm.
The contents of MSCI's website and social media channels are not,
however, incorporated by reference into this earnings release.

Notes Regarding the Use of Operating Metrics

MSCI has presented supplemental key operating metrics as part of this
earnings release, including Run Rate, subscription sales and
cancellations, non-recurring sales and Aggregate Retention Rate.

The Aggregate Retention Rate for a period is calculated by annualizing
the cancellations for which we have received a notice of termination or
for which we believe there is an intention not to renew during the
period, and we believe that such notice or intention evidences the
client's final decision to terminate or not renew the applicable
agreement, even though such notice is not effective until a later date.
This annualized cancellation figure is then divided by the subscription
Run Rate at the beginning of the year to calculate a cancellation rate.
This cancellation rate is then subtracted from 100% to derive the
annualized Aggregate Retention Rate for the period. The Aggregate
Retention Rate is computed on a product-by-product basis. Therefore, if
a client reduces the number of products to which it subscribes or
switches between our products, we treat it as a cancellation. In
addition, we treat any reduction in fees resulting from renegotiated
contracts as a cancellation in the calculation to the extent of the
reduction.

Run Rate estimates at a particular point in time the annualized value of
the recurring revenues under our client license agreements ("Client
Contracts") for the next 12 months, assuming all Client Contracts that
come up for renewal are renewed and assuming then-current currency
exchange rates, subject to the adjustments and exclusions described
elsewhere in our Public Filings. For any Client Contract where fees are
linked to an investment product's assets or trading volume, the Run Rate
calculation reflects, for ETFs, the market value on the last trading day
of the period, for futures and options, the most recent quarterly
volumes, and for other non-ETF products, the most recent client reported
assets. Run Rate does not include fees associated with "one-time" and
other non-recurring transactions. In addition, we add to Run Rate the
annualized fee value of recurring new sales, whether to existing or new
clients, when we execute Client Contracts, even though the license start
date may not be effective until a later date. We remove from Run Rate
the annualized fee value associated with products or services under any
Client Contract with respect to which we have received a notice of
termination or non-renewal during the period and determined that such
notice evidences the client's final decision to terminate or not renew
the applicable products or services, even though such notice is not
effective until a later date.

Organic subscription Run Rate or revenue growth ex FX is defined as the
period over period Run Rate or revenue growth, excluding the impact of
changes in foreign currency and the first year impact of any
acquisitions. It is also adjusted for divestitures. Changes in foreign
currency are calculated by applying the end of period currency exchange
rate from the comparable prior period to current period foreign currency
denominated Run Rate or revenue. This metric also excludes the impact on
the growth in subscription Run Rate or revenue of the acquisitions of
IPD, InvestorForce, and GMI for their respective first year of
operations as part of MSCI, as well as the divestiture of MSCI's Real
Estate occupiers benchmarking business which closed on August 1, 2016.

Notes Regarding the Use of Non-GAAP Financial Measures

MSCI has presented supplemental non-GAAP financial measures as part of
this earnings release. Reconciliations are provided in Tables 9 – 12
below that reconcile each non-GAAP financial measure with the most
comparable GAAP measure. The non-GAAP financial measures presented in
this earnings release should not be considered as alternative measures
for the most directly comparable GAAP financial measures. The non-GAAP
financial measures presented in this earnings release are used by
management to monitor the financial performance of the business, inform
business decision-making and forecast future results.

"Adjusted EBITDA" is defined as net income before provision for income
taxes, other expense (income), net, depreciation and amortization of
property, equipment and leasehold improvements, amortization of
intangible assets and, at times, certain other transactions or
adjustments.

"Adjusted EBITDA expenses" is defined as operating expenses less
depreciation and amortization of property, equipment and leasehold
improvements and amortization of intangible assets.

"Adjusted net income" and "adjusted EPS" are defined as net income and
diluted EPS, respectively, before the after-tax impact of the
amortization of acquired intangible assets and, at times, certain other
transactions or adjustments. For periods prior to first quarter 2017,
the amortization associated with capitalized software development costs
was included as an adjustment to adjusted net income and adjusted EPS as
it was not material.

"Capex" is defined as capital expenditures plus capitalized software
development costs.

"Free cash flow" is defined as net cash provided by operating
activities, less Capex.

We believe adjusted EBITDA and adjusted EBITDA expenses are meaningful
measures of the operating performance of MSCI because they adjust for
significant one-time, unusual or non-recurring items as well as
eliminate the accounting effects of capital spending and acquisitions
that do not directly affect what management considers to be our core
operating performance in the period.

We believe adjusted net income and adjusted EPS are meaningful measures
of the performance of MSCI because they adjust for the after-tax impact
of significant one-time, unusual or non-recurring items as well as
eliminate the accounting effects of acquisitions that do not directly
affect what management considers to be our core performance in the
period.

We believe that free cash flow is useful to investors because it relates
the operating cash flow of MSCI to the capital that is spent to continue
and improve business operations, such as investment in MSCI's existing
products. Further, free cash flow indicates our ability to strengthen
MSCI's balance sheet, repay our debt obligations, pay cash dividends and
repurchase shares of our common stock.

We believe that the non-GAAP financial measures presented in this
earnings release facilitate meaningful period-to-period comparisons and
provide a baseline for the evaluation of future results.

Adjusted EBITDA expenses, adjusted EBITDA, adjusted net income, adjusted
EPS, Capex and free cash flow are not defined in the same manner by all
companies and may not be comparable to similarly-titled non-GAAP
financial measures of other companies.

Notes Regarding Adjusting for the Impact of Foreign Currency Exchange
Rate Fluctuations

Foreign currency exchange rate fluctuations are calculated to be the
difference between the current period results as reported compared to
the current period results recalculated using the foreign currency
exchange rates in effect for the comparable prior period.

Table 2: Condensed Consolidated Statements of Income (unaudited)

     
Three Months Ended Nine Months Ended
Sep. 30,   Sep. 30,   June 30, YoY % Sep. 30,   Sep. 30, YoY %
In thousands, except per share data 2017 2016 2017 Change 2017 2016 Change
Operating revenues $ 322,097 $ 288,433 $ 316,089   11.7 % $ 939,393 $ 857,857   9.5 %
Operating expenses:
Cost of revenues 68,491 62,986 68,595 8.7 % 204,607 188,288 8.7 %
Selling and marketing 44,918 41,514 41,594 8.2 % 129,526 125,057 3.6 %
Research and development 17,983 18,750 18,203 (4.1 %) 55,163 56,244 (1.9 %)
General and administrative 22,103 21,859 21,448 1.1 % 64,555 65,768 (1.8 %)
Amortization of intangible assets 10,614 11,752 11,122 (9.7 %) 32,987 35,535 (7.2 %)
Depreciation and amortization of property,
equipment and leasehold improvements   9,325   8,312   9,159 12.2 %   27,322   24,873 9.8 %
Total operating expenses(1)   173,434   165,173   170,121 5.0 %   514,160   495,765 3.7 %
 
Operating income 148,663 123,260 145,968 20.6 % 425,233 362,092 17.4 %
 
Interest income (1,835 ) (799 ) (1,310 ) 129.7 % (4,077 ) (2,005 ) 103.3 %
Interest expense 29,020 26,790 29,027 8.3 % 87,071 72,612 19.9 %
Other expense (income)   675   (253 )   740 n/m   2,300   2,642 (12.9 %)
Other expense (income), net   27,860   25,738   28,457 8.2 %   85,294   73,249 16.4 %
 
Income before provision for income taxes 120,803 97,522 117,511 23.9 % 339,939 288,843 17.7 %
 
Provision for income taxes   35,650   32,241   36,245 10.6 %   100,569   96,238 4.5 %
Net income $ 85,153 $ 65,281 $ 81,266 30.4 % $ 239,370 $ 192,605 24.3 %
 
                   
Earnings per basic common share $ 0.94 $ 0.69 $ 0.90 36.2 % $ 2.65 $ 1.99 33.2 %
 
                   
Earnings per diluted common share $ 0.93 $ 0.68 $ 0.89 36.8 % $ 2.61 $ 1.98 31.8 %
 
Weighted average shares outstanding used
in computing earnings per share:
 
Basic   90,112   94,823   90,404 (5.0 %)   90,406   96,879 (6.7 %)
Diluted   91,868   95,473   91,708 (3.8 %)   91,731   97,445 (5.9 %)
 
n/m: not meaningful.
(1) Includes stock-based compensation expense of $9.4 million, $8.5
million and $9.5 million for the three months ended Sep. 30, 2017,
Sep. 30, 2016 and June 30, 2017, respectively. Includes stock-based
compensation expense of $28.6 million and $24.0 million for the nine
months ended Sep. 30, 2017 and Sep. 30, 2016, respectively.
 

Table 3: Selected Balance Sheet Items (unaudited)

   
As of
Sep. 30,   Dec. 31,
In thousands 2017 2016
Cash and cash equivalents $799,015 $791,834
Accounts receivable, net of allowances $309,196 $221,504
 
Deferred revenue $374,730 $334,358
Long-term debt(1) $2,077,370 $2,075,201
(1) Consists of gross long-term debt, net of deferred financing
fees. Gross long-term debt at both Sep. 30, 2017 and Dec. 31, 2016
was $2.1 billion.

Table 4: Selected Cash Flow Items (unaudited)

     
Three Months Ended Nine Months Ended
Sep. 30,   Sep. 30,   June 30,   YoY % Sep. 30,   Sep. 30,   YoY %
In thousands 2017 2016 2017 Change 2017 2016 Change
Cash provided by operating activities $ 101,773 $ 148,527 $ 122,217   (31.5 %) $ 261,005 $ 303,510   (14.0 %)
Cash used in investing activities (11,553 ) (13,071 ) (6,264 ) (11.6 %) (27,446 ) (31,496 ) (12.9 %)

Cash (used in) provided by financing activities

(43,251 ) 434,826 (65,398 ) (109.9 %) (233,875 ) (71,758 ) 225.9 %
Effect of exchange rate changes   1,465   (834 )   3,054 (275.7 %)   7,497   (3,900 ) (292.2 %)
Net increase (decrease) in cash and cash equivalents $ 48,434 $ 569,448 $ 53,609 (91.5 %) $ 7,181 $ 196,356 (96.3 %)
(1) Excess tax benefits related to share-based compensation are now
included in operating cash flows rather than financing cash flows in
accordance with the adoption of recent accounting guidance. This
change has been applied retrospectively and resulted in increases of
$1.6 million and $6.5 million in net cash provided by operating
activities with a matching decrease in net cash used in financing
activities in the same period for third quarter 2016 and nine months
2016, respectively.

Table 5: Operating Results by Segment and Revenue Type
(unaudited)

     
Index Three Months Ended Nine Months Ended
Sep. 30,   Sep. 30,   June 30,   YoY % Sep. 30,   Sep. 30,   YoY %
In thousands 2017 2016 2017 Change 2017 2016 Change
Operating revenues:    
Recurring subscriptions $ 107,963 $ 98,625 $ 105,645 9.5 % $ 315,786 $ 289,409 9.1 %
Asset-based fees 72,861 56,122 67,230 29.8 % 197,599 154,455 27.9 %
Non-recurring   3,770   3,004   4,281 25.5 %   11,800   10,617 11.1 %
Total operating revenues 184,594 157,751 177,156 17.0 % 525,185 454,481 15.6 %
Adjusted EBITDA expenses   50,295   46,001   47,680 9.3 %   145,773   136,164 7.1 %
Adjusted EBITDA $ 134,299 $ 111,750 $ 129,476 20.2 % $ 379,412 $ 318,317 19.2 %
Adjusted EBITDA margin % 72.8 % 70.8 % 73.1 % 72.2 % 70.0 %
 
Analytics Three Months Ended Nine Months Ended
Sep. 30, Sep. 30, June 30, YoY % Sep. 30, Sep. 30, YoY %
In thousands 2017 2016 2017 Change 2017 2016 Change
Operating revenues:
Recurring subscriptions $ 113,574 $ 109,554 $ 112,061 3.7 % $ 336,904 $ 328,636 2.5 %
Non-recurring   1,398   1,737   1,306 (19.5 %)   3,855   5,311 (27.4 %)
Total operating revenues 114,972 111,291 113,367 3.3 % 340,759 333,947 2.0 %
Adjusted EBITDA expenses   81,959   79,790   81,626 2.7 %   246,469   238,784 3.2 %
Adjusted EBITDA $ 33,013 $ 31,501 $ 31,741 4.8 % $ 94,290 $ 95,163 (0.9 %)
Adjusted EBITDA margin % 28.7 % 28.3 % 28.0 % 27.7 % 28.5 %
 
All Other Three Months Ended Nine Months Ended
Sep. 30, Sep. 30, June 30, YoY % Sep. 30, Sep. 30, YoY %
In thousands 2017 2016 2017 Change 2017 2016 Change
Operating revenues:
Recurring subscriptions $ 21,865 $ 18,329 $ 24,739 19.3 % $ 71,256 $ 66,533 7.1 %
Non-recurring   666   1,062   827 (37.3 %)   2,193   2,896 (24.3 %)
Total operating revenues 22,531 19,391 25,566 16.2 % 73,449 69,429 5.8 %
Adjusted EBITDA expenses   21,241   19,318   20,534 10.0 %   61,609   60,409 2.0 %
Adjusted EBITDA $ 1,290 $ 73 $ 5,032 n/m $ 11,840 $ 9,020 31.3 %
Adjusted EBITDA margin % 5.7 % 0.4 % 19.7 % 16.1 % 13.0 %
 
Consolidated Three Months Ended Nine Months Ended
Sep. 30, Sep. 30, June 30, YoY % Sep. 30, Sep. 30, YoY %
In thousands 2017 2016 2017 Change 2017 2016 Change
Operating revenues:
Recurring subscriptions $ 243,402 $ 226,508 $ 242,445 7.5 % $ 723,946 $ 684,578 5.8 %
Asset-based fees 72,861 56,122 67,230 29.8 % 197,599 154,455 27.9 %
Non-recurring   5,834   5,803   6,414 0.5 %   17,848   18,824 (5.2 %)
Operating revenues total 322,097 288,433 316,089 11.7 % 939,393 857,857 9.5 %
Adjusted EBITDA expenses   153,495   145,109   149,840 5.8 %   453,851   435,357 4.2 %
Adjusted EBITDA $ 168,602 $ 143,324 $ 166,249 17.6 % $ 485,542 $ 422,500 14.9 %
Adjusted EBITDA margin % 52.3 % 49.7 % 52.6 % 51.7 % 49.3 %
Operating margin % 46.2 % 42.7 % 46.2 % 45.3 % 42.2 %
 
n/m: not meaningful.

Table 6: Sales and Aggregate Retention Rate by Segment
(unaudited)

 
    Three Months Ended   Nine Months Ended
Sep. 30,   June 30,   Mar. 31,   Dec. 31,   Sep. 30, Sep. 30,   Sep. 30,
In thousands 2017 2017 2017 2016 2016 2017 2016
Index
New recurring subscription sales $ 15,499 $ 13,636 $ 14,193 $ 17,220 $ 11,758 $ 43,328 $ 38,059
Subscription cancellations   (4,605 )   (3,045 )   (3,165 )   (6,071 )   (3,840 )   (10,815 )   (11,346 )
Net new recurring subscription sales $ 10,894 $ 10,591 $ 11,028 $ 11,149 $ 7,918 $ 32,513 $ 26,713
Non-recurring sales $ 3,704 $ 4,555 $ 4,374 $ 3,461 $ 5,468 $ 12,633 $ 14,389
Total gross sales(1) $ 19,203 $ 18,191 $ 18,567 $ 20,681 $ 17,226 $ 55,961 $ 52,448
Total Index net sales $ 14,598 $ 15,146 $ 15,402 $ 14,610 $ 13,386 $ 45,146 $ 41,102
 
Index Aggregate Retention Rate(2) 95.5 % 97.0 % 96.9 % 93.4 % 95.8 % 96.5 % 95.9 %
 
Analytics
New recurring subscription sales $ 15,036 $ 12,050 $ 11,874 $ 18,617 $ 13,131 $ 38,960 $ 36,638
Subscription cancellations   (7,444 )   (6,940 )   (7,611 )   (13,749 )   (10,530 )   (21,995 )   (25,456 )
Net new recurring subscription sales $ 7,592 $ 5,110 $ 4,263 $ 4,868 $ 2,601 $ 16,965 $ 11,182
Non-recurring sales $ 2,792 $ 1,609 $ 2,163 $ 3,215 $ 2,330 $ 6,564 $ 5,615
Total gross sales(1) $ 17,828 $ 13,659 $ 14,037 $ 21,832 $ 15,461 $ 45,524 $ 42,253
Total Analytics net sales $ 10,384 $ 6,719 $ 6,426 $ 8,083 $ 4,931 $ 23,529 $ 16,797
 
Analytics Aggregate Retention Rate(2) 93.4 % 93.9 % 93.3 % 87.4 % 90.4 % 93.5 % 92.2 %
 
All Other
New recurring subscription sales $ 4,576 $ 5,456 $ 4,121 $ 6,364 $ 3,877 $ 14,153 $ 13,614
Subscription cancellations   (2,050 )   (2,030 )   (1,683 )   (2,526 )   (1,903 )   (5,763 )   (5,762 )
Net new recurring subscription sales $ 2,526 $ 3,426 $ 2,438 $ 3,838 $ 1,974 $ 8,390 $ 7,852
Non-recurring sales $ 829 $ 958 $ 609 $ 1,139 $ 774 $ 2,396 $ 3,108
Total gross sales(1) $ 5,405 $ 6,414 $ 4,730 $ 7,503 $ 4,651 $ 16,549 $ 16,722
Total All Other net sales $ 3,355 $ 4,384 $ 3,047 $ 4,977 $ 2,748 $ 10,786 $ 10,960
 
All Other Aggregate Retention Rate(2) 90.7 % 90.8 % 92.4 % 87.8 % 90.8 % 91.3 % 90.7 %
 
Consolidated
New recurring subscription sales $ 35,111 $ 31,142 $ 30,188 $ 42,201 $ 28,766 $ 96,441 $ 88,311
Subscription cancellations   (14,099 )   (12,015 )   (12,459 )   (22,346 )   (16,273 )   (38,573 )   (42,564 )
Net new recurring subscription sales $ 21,012 $ 19,127 $ 17,729 $ 19,855 $ 12,493 $ 57,868 $ 45,747
Non-recurring sales $ 7,325 $ 7,122 $ 7,146 $ 7,815 $ 8,572 $ 21,593 $ 23,112
Total gross sales(1) $ 42,436 $ 38,264 $ 37,334 $ 50,016 $ 37,338 $ 118,034 $ 111,423
Total net sales $ 28,337 $ 26,249 $ 24,875 $ 27,670 $ 21,065 $ 79,461 $ 68,859
 
Total Aggregate Retention Rate(2) 94.0 % 94.9 % 94.7 % 89.9 % 92.7 % 94.6 % 93.6 %
(1) Total gross sales equal new recurring subscription sales plus
non-recurring sales.
(2) See "Notes Regarding the Use of Operating Metrics" for details
regarding the definition of Aggregate Retention Rate.

Table 7: AUM in ETFs Linked to MSCI Indexes (unaudited)(1)

 
    Three Months Ended     Nine Months Ended
Sep. 30,     June 30,     Mar. 31,     Dec. 31,   Sep. 30, Sep. 30,     Sep. 30,
In billions 2017 2017 2017 2016 2016 2017 2016
Beginning Period AUM in ETFs linked to
MSCI indexes $ 624.3 $ 555.7 $ 481.4 $ 474.9 $ 439.7 $ 481.4 $ 433.4
Market Appreciation/(Depreciation) 32.2 23.6 35.8 (8.7 ) 23.7 91.6 19.5
Cash Inflows 17.8 45.0 38.5 15.2 11.5 101.3 22.0
Period-End AUM in ETFs linked to                            
MSCI indexes $ 674.3 $ 624.3 $ 555.7 $ 481.4 $ 474.9 $ 674.3 $ 474.9
 
Period Average AUM in ETFs linked to
MSCI indexes $ 654.4 $ 595.0 $ 524.1 $ 471.1 $ 467.3 $ 591.1 $ 438.1
 
Avg. Basis Point Fee(2) 3.05 3.07 3.08 3.10 3.11 3.05 3.11
Source: Bloomberg and MSCI
(1) ETF assets under management calculation methodology is ETF net
asset value multiplied by shares outstanding.
(2) Based on period-end Run Rate for ETFs linked to MSCI Indexes
using period-end AUM.
AUM: Assets under management.

Table 8: Run Rate by Segment and Type (unaudited)(1)

         
As of
Sep. 30,     Sep. 30,     June 30, YoY %
In thousands 2017 2016 2017 Change
Index
Recurring subscriptions $ 439,251 $ 395,601 $ 428,367 11.0 %
Asset-based fees   289,812   212,224   269,595 36.6 %
Index Run Rate   729,063   607,825   697,962 19.9 %
 
Analytics Run Rate   474,721   452,323   465,339 5.0 %
 
All Other Run Rate   101,253   86,738   97,057 16.7 %
 
Total Run Rate $ 1,305,037 $ 1,146,886 $ 1,260,358 13.8 %
 
Total recurring subscriptions $ 1,015,225 $ 934,662 $ 990,763 8.6 %
Total asset-based fees   289,812   212,224   269,595 36.6 %
Total Run Rate $ 1,305,037 $ 1,146,886 $ 1,260,358 13.8 %
(1) See "Notes Regarding the Use of Operating Metrics" for details
regarding the definition of Run Rate.

Table 9: Reconciliation of Adjusted EBITDA to Net Income
(unaudited)

       
Three Months Ended Nine Months Ended
Sep. 30,     Sep. 30,     June 30, Sep. 30,     Sep. 30,
In thousands 2017 2016 2017 2017 2016
Index adjusted EBITDA $ 134,299 $ 111,750 $ 129,476 $ 379,412 $ 318,317
Analytics adjusted EBITDA 33,013 31,501 31,741 94,290 95,163
All Other adjusted EBITDA   1,290   73   5,032   11,840   9,020
Consolidated adjusted EBITDA   168,602   143,324   166,249   485,542   422,500
Amortization of intangible assets 10,614 11,752 11,122 32,987 35,535
Depreciation and amortization of property,
equipment and leasehold improvements   9,325   8,312   9,159   27,322   24,873
Operating income 148,663 123,260 145,968 425,233 362,092
Other expense (income), net 27,860 25,738 28,457 85,294 73,249
Provision for income taxes   35,650   32,241   36,245   100,569   96,238
Net income $ 85,153 $ 65,281 $ 81,266 $ 239,370 $ 192,605

Table 10: Reconciliation of Adjusted Net Income and Adjusted
EPS to Net Income and EPS (unaudited)

     
Three Months Ended Nine Months Ended
Sep. 30,   Sep. 30,   June 30, Sep. 30,   Sep. 30,
In thousands, except per share data 2017 2016 2017 2017 2016
Net income $ 85,153 $ 65,281 $ 81,266 $ 239,370 $ 192,605
Plus: Amortization of acquired intangible assets 9,270 11,752 10,119 29,919 35,535
Less: Gain on sale of investment (771 ) (771 )
Less: Income tax effect   (2,732 )   (3,873 )   (3,146 )   (8,850 )   (11,840 )
Adjusted net income $ 91,691 $ 73,160 $ 87,468 $ 259,668 $ 216,300
 
Diluted EPS $ 0.93 $ 0.68 $ 0.89 $ 2.61 $ 1.98
Plus: Amortization of acquired intangible assets 0.10 0.12 0.11 0.33 0.36
Less: Gain on sale of investment (0.01 ) (0.01 )
Less: Income tax effect   (0.03 )   (0.03 )   (0.04 )   (0.10 )   (0.12 )
Adjusted EPS $ 1.00 $ 0.77 $ 0.95 $ 2.83 $ 2.22

Table 11: Reconciliation of Adjusted EBITDA Expenses to
Operating Expenses (unaudited)

           
Three Months Ended Nine Months Ended Full-Year
Sep. 30,     Sep. 30,     June 30, Sep. 30,     Sep. 30, 2017
In thousands 2017 2016 2017 2017 2016 Outlook(1)
Index adjusted EBITDA expenses $ 50,295 $ 46,001 $ 47,680 $ 145,773 $ 136,164
Analytics adjusted EBITDA expenses 81,959 79,790 81,626 246,469 238,784
All Other adjusted EBITDA expenses   21,241   19,318   20,534   61,609   60,409  
Consolidated adjusted EBITDA expenses   153,495   145,109   149,840   453,851   435,357 $605,000 - $615,000
Amortization of intangible assets 10,614 11,752 11,122 32,987 35,535
Depreciation and amortization of property, 80,000
equipment and leasehold improvements   9,325   8,312   9,159   27,322   24,873  
Total operating expenses $ 173,434 $ 165,173 $ 170,121 $ 514,160 $ 495,765 $690,000 - $700,000
(1) We have not provided a line-item reconciliation for adjusted
EBITDA expenses to total operating expenses for this future period
because we do not provide guidance on the individual reconciling
items between total operating expenses and adjusted EBITDA expenses.

Table 12: Reconciliation of Free Cash Flow to Net Cash Provided
by Operating Activities (unaudited)

       
Three Months Ended Nine Months Ended Full-Year
Sep. 30,   Sep. 30,   June 30, Sep. 30,   Sep. 30, 2017
In thousands 2017 2016 2017 2017 2016 Outlook(1)
Net cash provided by operating activities $ 101,774 $ 148,527 $ 122,217 $ 261,005 $ 303,510 $360,000 - $410,000
Capital expenditures (6,390 ) (10,867 ) (3,729 ) (17,440 ) (24,144 )
Capitalized software development costs   (5,164 )   (2,861 )   (3,306 )   (10,777 )   (7,949 )  
Capex   (11,554 )   (13,728 )   (7,035 )   (28,217 )   (32,093 ) (50,000 - 40,000)
Free cash flow $ 90,220 $ 134,799 $ 115,182 $ 232,788 $ 271,417 $310,000 - $370,000
(1) We have not provided a line-item reconciliation for free cash
flow to net cash from operating activities for this future period
because we do not provide guidance on the individual reconciling
items between net cash from operating activities and free cash flow.

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