Business Context and Reporting Period
This Form 8-K was filed by MSCI Inc. on August 10, 2015, to disclose information regarding a proposed private offering of $500 million in senior notes due 2025. The filing also discloses recent share repurchase activity and provides a reconciliation of non-GAAP financial measures (Adjusted EBITDA and Cash EBITDA) for historical periods ending December 31, 2014, and the twelve months ended June 30, 2015.
Key Financial Metrics
The filing provides a reconciliation of Net Income to Adjusted EBITDA and Cash EBITDA. Specific GAAP revenue figures are not explicitly listed in this text, though Net Income and Operating Income are provided.
| Period | Net Income (in thousands) | Operating Income (in thousands) | Adjusted EBITDA (in thousands) | Cash EBITDA (in thousands) |
|---|---|---|---|---|
| Year Ended Dec 31, 2014 | $284,113 | $337,166 | $408,754 | N/A |
| Six Months Ended June 30, 2015 | $99,844 | $187,253 | $225,922 | N/A |
| Twelve Months Ended June 30, 2015 | $195,898 | $356,383 | $432,179 | $459,991 |
Share Repurchases: Between July 1, 2015, and August 7, 2015, the Company paid $93.8 million for shares of its common stock under its repurchase program.
Material Changes
- Debt Issuance: The Company is proposing to issue $500 million in aggregate principal amount of senior notes due 2025 in a private offering exempt from registration under the Securities Act of 1933.
- Capital Return: Significant capital was returned to shareholders via $93.8 million in share repurchases in the first half of August 2015.
- Financial Performance: Adjusted EBITDA for the twelve months ended June 30, 2015 ($432.2 million) increased compared to the full year ended December 31, 2014 ($408.8 million).
Guidance, Outlook, and Risks
Offering Conditions: The proposed $500 million note offering is subject to market and other conditions. The notes are being offered only to qualified institutional buyers under Rule 144A and to non-U.S. investors under Regulation S.
Non-GAAP Measures: Management utilizes Adjusted EBITDA and Cash EBITDA to supplement GAAP data. The filing notes that these measures have limitations, are not substitutes for GAAP measures, and may not be comparable to similarly titled measures of other companies.
Discontinued Operations: The reconciliation table highlights income from discontinued operations, which was $85.2 million for the year ended 2014 and $(4.7) million for the twelve months ended June 30, 2015.
Investor Verification Checklist
- Verify the final terms and pricing of the proposed $500 million senior notes due 2025.
- Confirm the total number of shares repurchased for the $93.8 million spent in early August 2015.
- Review the full GAAP financial statements to understand the composition of "Other expense (income), net" and "Income from discontinued operations."
- Assess the impact of the new debt issuance on the Company's leverage ratios and liquidity position.