For a discussion of additional risks and uncertainties that may affect the future results of the company, please see the description of risk factors and forward-looking statements in our Form 10-K for our fiscal year ending November 30, 2010 and on our Form 10-Q for the third quarter of 2011.Today’s earnings call may also include discussion of certain non-GAAP financial measures including adjusted EBITDA and adjusted EPS. Adjusted EBITDA and adjusted EPS exclude the following. Third-party transaction expenses resulting from the acquisition of risk metrics, restructuring costs related to the acquisition of risk metrics and non-recurring stock-based expense. Adjusted EPS also excludes the amortization of intangibles resulting from acquisitions and debt repayment and refinancing expenses. Please refer to today’s earnings release for the required reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures and other related disclosures. We will be referring to run rates frequently in our discussion this morning. so let me remind you that our run rate is an approximation at a given point in time of the forward-looking fees for subscriptions and product licenses that we will record over the next 12 months assuming no cancellations, new sales, changes in the assets and ETFs license to our indices or changes in foreign currency rates. Please refer to table 10 in our press release for a detailed explanation. Henry Fernandez will begin the discussion this morning with an overview of the fourth quarter and then David Obstler will provide some details on our financial results. In the case of financial accounting metrics, the discussion of the fiscal year numbers will focus on pro forma results, which assume the acquisition of risk metrics occurred at the beginning of MSCI’s 2010 fiscal year. Pro forma, fiscal year 2010 includes MSCI’s results for the fiscal year ended November 30, 2010 and risk metrics fourth quarter ended December 31, 2009 and first quarter ended March 31, 2010.
As a reminder, MSCI’s acquisition of risk metrics took place on June 1, 2010, the first day of MSCI’s 2010 fiscal third quarter. All operating metrics as distinct from financial accounting metrics have been restated to reflect MSCI’s results on a combined basis during the comparable period in 2010. That means all quarterly operating metrics reflect the calendar quarter or 12 months indicated rather than the prior fiscal period. I’ll now turn the call over to Mr. Henry Fernandez. Henry?Henry A. Fernandez Good morning and thank you all for joining us. Earlier this morning we reported 2011 revenue of $901 million and adjusted EBITDA of $419 million, up 10% and 17% respectively from pro forma 2010. MSCI full year adjusted EBITDA margin rose to 46.5% from 43.7% in pro forma 2010. MSCI’s 2011 adjusted EPS rose 36% year-over-year to $1.85. For the fourth quarter MSCI reported revenues of $226 million, up 6% versus fourth quarter 2010. Adjusted EBITDA of $104 million, up 5% year-over-year and adjusted EPS of $0.45 up 25%. Our adjusted EBITDA margin was 45.8%, down from 46.4% in the fourth quarter of 2010. Our fourth quarter run rate rose 7% year-over-year to $882 million. The increase in the run rate was primarily driven by continued growth in the subscription run rate, offsetting part by slower growth in asset-based fees including the fees from Exchange Traded Funds. From an operating perspective, MSCI continue to perform well despite an uncertain and difficult operating environment globally. We saw healthy growth in subscription sales and our cancellations continue to decline on a year-over-year basis. Total sales for the quarter were $43 million, down from $46 million in the fourth quarter of 2010. New recurring subscription sales rose 5% to $35 million. By client type, our recurring subscription sales to our asset owner client and to our corporate client were strong and we saw very good sales to alternative investment managers including hedge funds and funds of funds. Sales to asset management clients and to banks remained steady during the quarter. Read the rest of this transcript for free on seekingalpha.com