During the fourth quarter, MSCI repaid $37.8 million of its term loan facility.

Provision for Income Taxes

The provision for income tax expense was $25.6 million for fourth quarter 2011, an increase of $4.8 million, or 23.2%, compared to $20.8 million for the same period in 2010, driven primarily by higher pre-tax income. The effective tax rate was 36.6% for fourth quarter 2011. The effective tax rate for fourth quarter 2010 was 40.7%.

Net Income and Earnings per Share – See Table 15

Net income increased $14.2 million, or 47.0%, to $44.5 million for fourth quarter 2011. The net income margin increased to 19.7% from 14.2% in fourth quarter 2010. Diluted EPS increased 44.0% to $0.36.

Adjusted net income, which excludes $11.1 million of after-tax impact of amortization of intangibles, non-recurring stock-based compensation expense, transaction expenses, restructuring costs and debt repayment and refinancing expenses, rose $11.2 million, or 25.4%, to $55.6 million. Adjusted EPS, which excludes the after-tax, per share impact of amortization of intangibles, non-recurring stock-based compensation expense, transaction expenses, restructuring costs and debt repayment and refinancing expenses totaling $0.09, rose 25.0% to $0.45.

See table 15 titled “Reconciliation of Adjusted Net Income and Adjusted EPS to Net Income and EPS.”

Adjusted EBITDA – See Table 13

Adjusted EBITDA, which excludes, among other things, the impact of non-recurring stock-based compensation and restructuring costs, was $103.6 million, an increase of $4.7 million, or 4.8%, from fourth quarter 2010. Adjusted EBITDA margin declined to 45.8% from 46.4%.

By segment, Adjusted EBITDA for the Performance and Risk segment increased $6.4 million, or 7.1%, to $97.0 million from fourth quarter 2010. Adjusted EBITDA margin for this segment rose slightly to 49.1% from 48.9% in fourth quarter 2010. Adjusted EBITDA for the Governance segment declined by 20.1% to $6.7 million and the Adjusted EBITDA margin fell to 23.4% from 29.6%.

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