IHS Markit Ltd. (Nasdaq: INFO), a world leader in critical
information, analytics and solutions for the major industries and
markets that drive economies worldwide, today reported results for
the fourth quarter ended November 30, 2016.
- Revenue of $874 million, including
organic revenue growth of 1 percent
- Net income of $89 million and diluted
earnings per share (EPS) of $0.21
- Adjusted EBITDA of $338 million and
Adjusted earnings per diluted share (Adjusted EPS) of $0.48
- Cash flow from operations of $163
million and free cash flow of $115 million
Adjusted EBITDA, Adjusted EPS, and free cash flow are non-GAAP
financial measures used by management to measure operating
performance. These terms are defined elsewhere in this release.
Please see schedules appearing later in this release for
reconciliations of non-GAAP financial measures to the most directly
comparable GAAP measures.
Full-year results include IHS results for the full fiscal year
and Markit results from the date of merger (July 12, 2016).
Fourth Quarter and Full Year 2016 Financial
Performance
Three months ended November 30, Change
Year ended November 30, Change (in
millions, except percentages and per share data) 2016
2015 $ % 2016
2015 $ % Revenue $ 873.8 $ 555.7 $
318.1 57 % $ 2,734.8 $ 2,184.3 $ 550.5 25 % Net income
attributable to IHS Markit $ 89.3 $ 90.5 $ (1.2 )
(1)
%
$ 152.8 $ 240.2 $ (87.4 )
(36)
%
Adjusted EBITDA $ 338.1 $ 186.5 $ 151.6 81 % $ 987.7 $ 696.4 $
291.3 42 % GAAP EPS $ 0.21 $ 0.37 $ (0.16 )
(43)
%
$ 0.48 $ 0.97 $ (0.49 )
(51)
%
Adjusted EPS $ 0.48 $ 0.44 $ 0.04 9 % $ 1.80 $ 1.60 $ 0.20 13 %
Cash flow from operations $ 163.2 $ 116.0 $ 47.2 41 % $
638.3 $ 612.6 $ 25.7 4 % Free cash flow $ 114.9 $ 90.8 $ 24.1 27 %
$ 490.7 $ 489.7 $ 1.0 — %
“2016 was a momentous year for IHS Markit as we merged two
world class organizations in record time,” said Jerre Stead, IHS
Markit chairman and chief executive officer. “Thanks to the
tireless work by our colleagues we hit the ground running in
December, the start of our first fiscal year as a new company.”
“We are in a very solid financial position entering our first
fiscal year as a merged company, with a business model that has
favorable financial characteristics. The financial levers afforded
to us from the merger allow us to invest in our future while
delivering strong returns for our shareholders,” said Todd Hyatt,
IHS Markit chief financial officer.
Fourth Quarter and Full Year 2016 Revenue Performance
Fourth quarter 2016 revenue increased 57 percent compared to the
fourth quarter of 2015, and full year 2016 revenue increased 25
percent compared to the same period of 2015. The following table
provides additional revenue information by transaction type.
Three months ended November 30,
Percent change Year ended November 30, Percent
change (in millions, except percentages) 2016
2015 Total Organic 2016
2015 Total Organic Recurring
fixed $ 621.3 $ 448.2 39 % — % $ 2,074.5 $ 1,768.5 17 % — %
Recurring variable 107.3 —
N/A
11 % 164.1 — N/A 8 % Non-recurring 145.2 107.5 35 %
(1)
%
496.2 415.8 19 %
(3)
%
Total revenue $ 873.8 $ 555.7 57 % 1 % $ 2,734.8
$ 2,184.3 25 % — %
The components of revenue growth are described below by segment
and in total.
Change in revenue Fourth quarter 2016 vs. fourth
quarter 2015 2016 vs. 2015 (All amounts
represent percentage points) Organic
Acquisitive
ForeignCurrency
Total Organic Acquisitive
ForeignCurrency
Total Resources
(9)
%
10 % (2 )%
(1)
%
(9)
%
8 % (1 )%
(3)
%
Transportation 11
%
9 % (1 )% 18
%
10 % 8 % (1 )% 18 % Consolidated Markets & Solutions
(3)
%
— % (3 )%
(6)
%
(2)
%
2 % (2 )%
(2)
%
Financial Services* 4
%
1 % (4 )% 1
%
4 % 2 % (4 )% 2 %
Total 1
%
59
%**
(3 )% 57
%
— %
27
%**
(2 )% 25 % * Financial Services segment
(composed entirely of legacy Markit business) change in revenue
based on 2016 fourth quarter revenue of $292 million vs. 2015
fourth quarter revenue of $290 million and YTD 2016 stub period
revenue of $449 million vs. YTD 2015 stub period revenue of $440
million. ** Total company acquired revenue includes Financial
Services segment 2016 Q4 and 2016 stub period revenue of $292
million and $449 million, respectively, less $2 million and $9
million, respectively, attributed to components above.
Fourth Quarter and Full Year 2016 Operating
Performance
Segment results were as follows (additional segment information
is included on pages 9 and 11):
- Resources. Fourth quarter revenue for
Resources decreased $1 million, or 1 percent, to $214 million, and
declined 10 percent organically for the recurring-based business.
Fourth quarter Adjusted EBITDA for Resources increased $2 million,
or 2 percent, to $92 million.Year-to-date revenue for Resources
decreased $24 million, or 3 percent, to $861 million. Year-to-date
Adjusted EBITDA for Resources increased $11 million, or 3 percent,
to $368 million.
- Transportation. Fourth quarter revenue
for Transportation increased $36 million, or 18 percent, to $235
million, and included 9 percent organic growth for the
recurring-based business. Fourth quarter Adjusted EBITDA for
Transportation increased $22 million, or 28 percent, to $101
million.Year-to-date revenue for Transportation increased $134
million, or 18 percent, to $893 million. Year-to-date Adjusted
EBITDA for Transportation increased $71 million, or 25 percent, to
$353 million.
- Consolidated Markets & Solutions
(CMS). Fourth quarter revenue for CMS decreased $9 million, or 6
percent, to $133 million, and had 1 percent organic growth for the
recurring-based business. Fourth quarter Adjusted EBITDA for CMS
increased $2 million, or 6 percent, to $36 million.Year-to-date
revenue for CMS decreased $9 million, or 2 percent, to $532
million. Year-to-date Adjusted EBITDA for CMS increased $21
million, or 19 percent, to $128 million.
- Financial Services. Fourth quarter
revenue for Financial Services was $292 million, and included 4
percent total organic growth. Fourth quarter Adjusted EBITDA for
Financial Services was $125 million.
Fourth quarter results were adversely affected by the
recognition of $41 million of merger-related costs as well as
higher levels of stock-based compensation expense. Adjusted EPS in
the quarter excludes these impacts.
Outlook (forward-looking statement)
For the year ending November 30, 2017, IHS Markit expects:
- Revenue in a range of $3.490 billion to
$3.560 billion, including total organic growth of 2 percent to 4
percent;
- Adjusted EBITDA in a range of $1.375
billion to $1.400 billion; and
- Adjusted EPS in a range of $2.02 to
$2.08 per diluted share.
The above outlook assumes no further currency movements,
acquisitions, divestitures, pension mark-to-market adjustments or
unanticipated events. See discussion of non-GAAP financial measures
at the end of this release.
As previously announced, IHS Markit will hold a conference call
to discuss fourth quarter 2016 results on January 17, 2017, at
8:00 a.m. EST. The conference call will be simultaneously webcast
on the Investor Relations section of the company’s website:
investor.ihsmarkit.com.
Use of Non-GAAP Financial Measures
Non-GAAP results are presented only as a supplement to our
financial statements based on U.S. generally accepted accounting
principles (GAAP). Non-GAAP financial information is provided to
enhance the reader’s understanding of our financial performance,
but none of these non-GAAP financial measures are recognized terms
under GAAP and non-GAAP measures should not be considered in
isolation or as a substitute for financial measures calculated in
accordance with GAAP. Reconciliations of the most directly
comparable GAAP measures to non-GAAP measures, such as EBITDA,
Adjusted EBITDA, Adjusted net income, Adjusted EPS, and free cash
flow are provided within the schedules attached to this
release.
We use non-GAAP measures in our operational and financial
decision-making, believing that it is useful to exclude certain
items in order to focus on what we deem to be a more reliable
indicator of ongoing operating performance and our ability to
generate cash flow from operations. As a result, internal
management reports used during monthly operating reviews feature
the Adjusted EBITDA, Adjusted net income, Adjusted EPS, and free
cash flow metrics. We also believe that investors may find non-GAAP
financial measures useful for the same reasons, although investors
are cautioned that non-GAAP financial measures are not a substitute
for GAAP disclosures.
Non-GAAP measures are frequently used by securities analysts,
investors, and other interested parties in their evaluation of
companies comparable to IHS Markit, many of which present non-GAAP
measures when reporting their results. These measures can be useful
in evaluating our performance against our peer companies because we
believe the measures provide users with valuable insight into key
components of GAAP financial disclosures. However, non-GAAP
measures have limitations as an analytical tool. Non-GAAP measures
are not necessarily comparable to similarly titled measures used by
other companies. They are not presentations made in accordance with
GAAP, are not measures of financial condition or liquidity, and
should not be considered as an alternative to profit or loss for
the period determined in accordance with GAAP or operating cash
flows determined in accordance with GAAP. As a result, you should
not consider such performance measures in isolation from, or as a
substitute analysis for, results of operations as determined in
accordance with GAAP.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the federal securities laws, including Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In this context,
forward-looking statements often address expected future business
and financial performance and financial condition, and often
contain words such as “anticipate,” “intend,” “plan,” “goal,”
“seek,” “aim,” “strive,” “believe,” “see,” “project,” “predict,”
“estimate,” “expect,” “continue,” “strategy,” “future,” “likely,”
“may,” “might,” “should,” “will,” “would,” “target,” similar
expressions, and variations or negatives of these words. Examples
of forward-looking statements include, among others, statements we
make regarding: guidance and predictions relating to expected
operating results, such as revenue growth and earnings; strategic
actions, including acquisitions and dispositions, anticipated
benefits from strategic actions including the merger between IHS
Inc. and Markit Ltd., and our success in integrating acquired
businesses; anticipated levels of capital expenditures in future
periods; our belief that we have sufficient liquidity to fund our
ongoing business operations; expectations of the effect on our
financial condition of claims, litigation, environmental costs,
contingent liabilities and governmental and regulatory
investigations and proceedings; and our strategy for customer
retention, growth, product development, market position, financial
results, and reserves. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on our current beliefs, expectations, and
assumptions regarding the future of our business, future plans and
strategies, projections, anticipated events and trends, the
economy, and other future conditions. Because forward-looking
statements relate to the future, they are subject to inherent
uncertainties, risks, and changes in circumstances that are
difficult to predict and many of which are outside of our control.
Important factors that could cause our actual results and financial
condition to differ materially from those indicated in the
forward-looking statements include, among others, the following:
economic and financial conditions, including volatility in interest
and exchange rates; our ability to manage system failures, capacity
constraints, and cyber risks; our ability to successfully manage
risks associated with changes in demand for our products and
services, as well as changes in our targeted industries; our
ability to develop new platforms to deliver our products and
services, pricing, and other competitive pressures; legislative,
regulatory, and economic developments, including any new or
proposed U.S. Treasury rule changes; the extent to which we are
successful in gaining new long-term relationships with customers or
retaining existing ones and the level of service failures that
could lead customers to use competitors' services; the anticipated
tax treatment, unforeseen liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, economic performance,
indebtedness, financial condition, losses, future prospects,
business and management strategies for the management, expansion,
and growth of the combined company’s operations; our ability to
integrate the business successfully and to achieve anticipated
synergies, risks, and costs; any potential adverse reactions
(including litigation), disruptions, or changes to business
relationships resulting from the completion of the merger; our
ability to retain and hire key personnel; our ability to satisfy
our debt obligations and our other ongoing business obligations;
the continued availability of capital and financing and rating
agency actions; and the occurrence of any catastrophic events,
including, but not limited to, acts of terrorism or outbreak of war
or hostilities. These risks, as well as other risks, are more fully
discussed in our filings with the U.S. Securities and Exchange
Commission. While the list of factors presented here is considered
representative, no such list should be considered to be a complete
statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the
realization of forward-looking statements. Consequences of material
differences in results as compared with those anticipated in the
forward-looking statements could include, among other things,
business disruption, operational problems, financial loss, legal
liability to third parties, and similar risks, any of which could
have a material adverse effect on our consolidated financial
condition, results of operations, credit rating, or liquidity.
Therefore, you should not rely on any of these forward-looking
statements. Any forward-looking statement made by us in this
communication is based only on information currently available to
us and speaks only as of the date of this report. We do not assume
any obligation to publicly provide revisions or updates to any
forward-looking statements, whether as a result of new information,
future developments or otherwise, should circumstances change,
except as otherwise required by securities and other applicable
laws.
About IHS Markit
IHS Markit (Nasdaq: INFO) is a world leader in critical
information, analytics and solutions for the major industries and
markets that drive economies worldwide. The company delivers
next-generation information, analytics and solutions to customers
in business, finance and government, improving their operational
efficiency and providing deep insights that lead to well-informed,
confident decisions. IHS Markit has more than 50,000 key
business and government customers, including 85 percent of the
Fortune Global 500 and the world’s leading financial institutions.
Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. All
other company and product names may be trademarks of their
respective owners. © 2016 IHS Markit Ltd. All rights reserved.
IHS MARKIT LTD.CONDENSED
CONSOLIDATED BALANCE SHEETS(In millions)
As of November 30, 2016 As of November 30,
2015 (Unaudited) (Audited) Assets Current
assets: Cash and cash equivalents $ 138.9 $ 291.6 Accounts
receivable, net 565.8 355.9 Income tax receivable 26.0 4.6 Deferred
subscription costs 55.6 52.8 Assets held for sale — 193.4 Other
147.2 52.2 Total current assets 933.5 950.5
Non-current assets: Property and equipment, net 416.2 314.4
Intangible assets, net 4,351.8 1,014.7 Goodwill 8,214.6 3,287.5
Deferred income taxes 14.8 6.6 Other 10.5 3.8 Total
non-current assets 13,007.9 4,627.0 Total assets $ 13,941.4
$ 5,577.5
Liabilities and shareholders' equity
Current liabilities: Short-term debt $ 104.6 $ 36.0 Accounts
payable 58.9 59.2 Accrued compensation 174.0 105.5 Accrued
royalties 35.7 33.3 Other accrued expenses 257.1 118.4 Income tax
payable 11.9 23.3 Deferred revenue 770.2 552.5 Liabilities held for
sale — 32.1 Total current liabilities 1,412.4 960.3
Long-term debt 3,279.3 2,071.5 Accrued pension and postretirement
liability 33.0 26.7 Deferred income taxes 974.5 259.5 Other
liabilities 74.7 58.6 Commitments and contingencies Redeemable
noncontrolling interest 62.5 — Shareholders' equity 8,105.0
2,200.9 Total liabilities and shareholders' equity $ 13,941.4
$ 5,577.5
IHS MARKIT LTD.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In millions, except
for per-share amounts)(Unaudited)
Three months ended November 30, Year ended
November 30, 2016 2015 2016
2015 Revenue $ 873.8 $ 555.7 $ 2,734.8 $ 2,184.3
Operating expenses: Cost of revenue 345.5 194.8 1,037.7
819.2 Selling, general and administrative 246.0 206.3 907.1 795.3
Depreciation and amortization 119.2 55.6 335.7 215.1 Restructuring
charges (1.1 ) 17.3 22.8 39.4 Acquisition-related costs 41.3 0.9
161.2 1.5 Net periodic pension and postretirement expense 8.8 3.0
10.0 4.5 Other expense (income), net 1.9 0.2 (0.1 )
1.5 Total operating expenses 761.6 478.1
2,474.4 1,876.5
Operating income 112.2 77.6
260.4 307.8 Interest income 0.4 0.3 1.3 0.9 Interest expense (27.4
) (18.4 ) (119.4 ) (70.9 ) Non-operating expense, net (27.0 ) (18.1
) (118.1 ) (70.0 ) Income from continuing operations before income
taxes and equity in loss of equity method investee 85.2 59.5 142.3
237.8 Benefit (provision) for income taxes 5.8 (12.1 ) 5.1 (48.9 )
Equity in loss of equity method investee (3.3 ) — (4.5 ) —
Income from continuing operations 87.7 47.4 142.9 188.9
Income from discontinued operations, net 1.2 43.1 9.2
51.3
Net income 88.9 90.5 152.1 240.2 Net loss
attributable to noncontrolling interest 0.4 — 0.7
—
Net income attributable to IHS Markit Ltd. $
89.3 $ 90.5 $ 152.8 $ 240.2
Basic earnings per share: Income from continuing operations
attributable to IHS Markit Ltd. $ 0.21 $ 0.20 $ 0.46 $ 0.78 Income
from discontinued operations, net — 0.18 0.03
0.21 Net income attributable to IHS Markit Ltd. $ 0.21
$ 0.37 $ 0.49 $ 0.99 Weighted average
shares used in computing basic earnings per share 416.6
241.6 309.2 243.4 Diluted earnings per
share: Income from continuing operations attributable to IHS Markit
Ltd. $ 0.20 $ 0.19 $ 0.45 $ 0.77 Income from discontinued
operations, net — 0.18 0.03 0.21 Net
income attributable to IHS Markit Ltd. $ 0.21 $ 0.37
$ 0.48 $ 0.97 Weighted average shares used in
computing diluted earnings per share 432.9 244.5
316.3 246.4
IHS MARKIT LTD.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
millions)(Unaudited)
Year ended November 30, 2016
2015 Operating activities: Net income attributable to
IHS Markit Ltd. $ 152.8 $ 240.2 Reconciliation of net income to net
cash provided by operating activities: Depreciation and
amortization 335.7 235.5 Stock-based compensation expense 206.2
135.4 Gain on sale of business (41.5 ) — Impairment of assets — 4.6
Excess tax benefit from stock-based compensation (5.6 ) (5.5 ) Net
periodic pension and postretirement expense 10.0 4.5 Undistributed
earnings of affiliates, net 2.2 — Pension and postretirement
contributions (5.7 ) (5.9 ) Deferred income taxes 6.7 (34.9 )
Change in assets and liabilities: Accounts receivable, net (8.5 )
56.1 Other current assets 12.3 (15.6 ) Accounts payable (12.5 )
(4.1 ) Accrued expenses 35.6 (0.1 ) Income tax (44.7 ) 32.1
Deferred revenue (14.6 ) (34.2 ) Other liabilities 9.9 4.5
Net cash provided by operating activities 638.3
612.6
Investing activities: Capital
expenditures on property and equipment (147.6 ) (122.9 )
Acquisitions of businesses, net of cash acquired (1,014.4 ) (369.9
) Proceeds from sale of business 190.9 — Change in other assets
(4.5 ) (3.8 ) Settlements of forward contracts (7.2 ) 0.6
Net cash used in investing activities (982.8 ) (496.0 )
Financing activities: Proceeds from borrowings 4,018.0 550.0
Repayment of borrowings (3,364.8 ) (261.2 ) Payment of debt
issuance costs (22.8 ) — Excess tax benefit from stock-based
compensation 5.6 5.5 Proceeds from the exercise of employee stock
options 147.3 — Repurchases of common stock (605.8 ) (248.9 )
Net cash provided by financing activities 177.5 45.4
Foreign exchange impact on cash balance 12.8 (22.1 )
Net increase (decrease) in cash and cash equivalents (154.2 ) 139.9
Cash and cash equivalents at the beginning of the period 293.1
153.2 Cash and cash equivalents at the end of the
period $ 138.9 $ 293.1 Less: Cash and cash equivalents associated
with discontinued operations at the end of the period — (1.5
) Cash and cash equivalents from continuing operations at the end
of the period $ 138.9 $ 291.6
IHS MARKIT LTD.SUPPLEMENTAL
REVENUE DISCLOSURE(In millions)(Unaudited)
Three months ended November 30,
Percent change Year ended November 30, Percent
change 2016 2015 Total
Organic 2016 2015 Total
Organic Recurring fixed revenue: Resources $ 182.1 $
182.9 — %
(10)
%
$ 739.5 $ 749.4
(1)
%
(9)
%
Transportation 160.6 147.6 9 % 9 % 621.4 569.2 9 % 10 % CMS 114.0
117.7
(3)
%
1 % 458.1 449.9 2 % 2 % Financial Services 164.6 —
N/A 2 % 255.5 — N/A 2 %
Total recurring fixed
revenue $ 621.3 $ 448.2 39 % — % $ 2,074.5
$ 1,768.5 17 % — %
Recurring variable revenue:
Financial Services $ 107.3 $ — N/A 11 % $ 164.1
$ — N/A 8 %
Total recurring variable revenue $
107.3 $ — N/A 11 % $ 164.1 $ — N/A 8 %
Non-recurring revenue: Resources $ 31.4 $ 31.7
(1)
%
(3)
%
$ 121.3 $ 135.2
(10)
%
(12)
%
Transportation 74.5 51.5 45 % 14 % 271.4 189.2 43 % 13 % CMS 19.2
24.3
(21)
%
(20)
%
74.1 91.4
(19)
%
(19)
%
Financial Services 20.1 — N/A
(15)
%
29.4 — N/A
(8)
%
Total non-recurring revenue $ 145.2 $ 107.5 35
%
(1)
%
$ 496.2 $ 415.8 19 %
(3)
%
Total revenue (segment): Resources $ 213.5 $ 214.6
(1)
%
(9)
%
$ 860.8 $ 884.6
(3)
%
(9)
%
Transportation 235.1 199.1 18 % 11 % 892.8 758.4 18 % 10 % CMS
133.2 142.0
(6)
%
(3)
%
532.2 541.3
(2)
%
(2)
%
Financial Services 292.0 — N/A 4 % 449.0 —
N/A 4 %
Total revenue $ 873.8 $ 555.7
57 % 1 % $ 2,734.8 $ 2,184.3 25 % — %
IHS MARKIT LTD.RECONCILIATION OF
CONSOLIDATED NON-GAAP FINANCIAL MEASURES TOMOST DIRECTLY
COMPARABLE GAAP FINANCIAL MEASURES(In millions, except for
per-share amounts)(Unaudited)
Three months ended November 30, Year ended
November 30, 2016 2015 2016
2015 Net income attributable to IHS Markit Ltd. $
89.3 $ 90.5 $ 152.8 $ 240.2 Interest income (0.4 ) (0.3 ) (1.3 )
(0.9 ) Interest expense 27.4 18.4 119.4 70.9 Provision for income
taxes (5.8 ) 12.1 (5.1 ) 48.9 Depreciation 36.6 23.1 114.8 85.0
Amortization related to acquired intangible assets 82.6 32.5
220.9 130.1
EBITDA (1)(6) $
229.7 $ 176.3 $ 601.5 $ 574.2 Stock-based compensation expense 61.3
32.6 203.9 128.9 Restructuring charges (1.1 ) 17.3 22.8 39.4
Acquisition-related costs 41.3 0.9 161.2 1.5 Litigation charges
related to class action suit 0.1 — 0.1 — Loss on debt
extinguishment 0.6 — 0.6 — Impairment of assets — — — 1.2 Gain on
sale of assets (0.7 ) — (0.7 ) — Pension mark-to-market expense 8.4
2.5 8.4 2.5 Share of joint venture results not attributable to
Adjusted EBITDA 0.6 — 0.3 — Adjusted EBITDA attributable to
noncontrolling interest (0.9 ) — (1.2 ) — Income from discontinued
operations, net (1.2 ) (43.1 ) (9.2 ) (51.3 )
Adjusted
EBITDA (2)(6) $ 338.1 $ 186.5 $ 987.7
$ 696.4
Three months ended November
30, Year ended November 30, 2016 2015
2016 2015 Net income attributable to IHS Markit
Ltd. $ 89.3 $ 90.5 $ 152.8 $ 240.2 Stock-based compensation
expense 61.3 32.6 203.9 128.9 Amortization related to acquired
intangible assets 82.6 32.5 220.9 130.1 Restructuring charges (1.1
) 17.3 22.8 39.4 Acquisition-related costs 41.3 0.9 161.2 1.5
Litigation charges related to class action suit 0.1 — 0.1 —
Acquisition financing fees — — 12.1 — Loss on debt extinguishment
0.6 — 0.6 — Impairment of assets — — — 1.2 Gain on sale of assets
(0.7 ) — (0.7 ) — Pension mark-to-market expense 8.4 2.5 8.4 2.5
Income tax effect of above adjustments (72.5 ) (25.3 ) (202.2 )
(99.4 ) Adjusted earnings attributable to noncontrolling interest
(0.5 ) — (0.7 ) — Income from discontinued operations, net (1.2 )
(43.1 ) (9.2 ) (51.3 )
Adjusted net income (3) $
207.6 $ 107.9 $ 570.0 $ 393.1
Adjusted EPS (4)(6) $ 0.48 $ 0.44 $
1.80 $ 1.60 Weighted average shares used in computing
Adjusted EPS 432.9 244.5 316.3 246.4
Three months ended November 30, Year ended
November 30, 2016 2015 2016
2015 Net cash provided by operating activities $
163.2 $ 116.0 $ 638.3 $ 612.6 Capital expenditures on property and
equipment (48.3 ) (25.2 ) (147.6 ) (122.9 )
Free cash flow
(5)(6) $ 114.9 $ 90.8 $ 490.7 $ 489.7
IHS MARKIT LTD.SUPPLEMENTAL
SEGMENT OPERATING PROFIT MEASURE DISCLOSURE(In
millions)(Unaudited)
Three months ended November 30, Year
ended November 30, 2016 2015 2016
2015 Adjusted EBITDA by segment: Resources $
92.4 $ 90.5 $ 367.8 $ 356.8 Transportation 100.7 78.8 353.3 282.7
CMS 35.9 34.0 127.5 106.8 Financial Services 125.4 — 190.4 — Shared
services (16.3 ) (16.8
)
(51.3 ) (49.9 )
Total Adjusted EBITDA $ 338.1 $ 186.5
$ 987.7 $ 696.4
Adjusted EBITDA
margin by segment: Resources 43.3 % 42.2 % 42.7 % 40.3 %
Transportation 42.8 % 39.6 % 39.6 % 37.3 % CMS 27.0 % 23.9 % 24.0 %
19.7 % Financial Services 42.9 % N/A 42.4 % N/A
Total Adjusted
EBITDA margin 38.7 % 33.6 % 36.1 % 31.9 % (1)
EBITDA is defined as net income plus or minus net interest, plus
provision for income taxes, depreciation, and amortization. (2)
Adjusted EBITDA further excludes primarily non-cash items and other
items that we do not consider to be useful in assessing our
operating performance (e.g., stock-based compensation expense,
restructuring charges, acquisition-related costs, exceptional
litigation, net other gains and losses, pension mark-to-market and
settlement expense, the impact of joint ventures and noncontrolling
interests, and discontinued operations). All of the items included
in the reconciliation from net income to Adjusted EBITDA are either
non-cash items or items that we do not consider to be useful in
assessing our operating performance. In the case of the non-cash
items, we believe that investors can better assess our operating
performance if the measures are presented without such items
because, unlike cash expenses, these adjustments do not affect our
ability to generate free cash flow or invest in our business. For
example, by excluding depreciation and amortization from EBITDA,
users can compare operating performance without regard to different
accounting determinations such as useful life. In the case of the
other items, we believe that investors can better assess operating
performance if the measures are presented without these items
because their financial impact does not reflect ongoing operating
performance. (3) Adjusted net income is defined as net income plus
primarily non-cash items and other items that management does not
consider to be useful in assessing our operating performance (e.g.,
stock-based compensation expense, amortization related to acquired
intangible assets, restructuring charges, acquisition-related
costs, acquisition financing fees, net other gains and losses,
pension mark-to-market and settlement expense, the impact of
noncontrolling interests, and discontinued operations, all net of
the related tax effects). (4) Adjusted EPS is defined as Adjusted
net income (as defined above) divided by diluted weighted average
shares. (5) Free cash flow is defined as net cash provided by
operating activities less capital expenditures. (6) EBITDA,
Adjusted EBITDA, Adjusted EPS, and free cash flow are used by many
of our investors, research analysts, investment bankers, and
lenders to assess our operating performance. For example, a measure
similar to Adjusted EBITDA is required by the lenders under our
term loan and revolving credit agreements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170117005500/en/
IHS MarkitNews Media Contact:Dan Wilinsky, +1
303-397-2468dan.wilinsky@ihsmarkit.comorInvestor Relations
Contact:Eric Boyer, +1 303-397-2969eric.boyer@ihsmarkit.com
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