IHS Markit Ltd. (Nasdaq: INFO), a global leader in critical
information, analytics and solutions that drive economies and
markets worldwide, today reported results for the third quarter
ended August 31, 2016. The following results include IHS
results for the full three- and nine-month periods and Markit
results from the date of merger (July 12, 2016) to August 31,
2016.
- Revenue of $725 million, up 30 percent
from the prior-year period
- Total organic revenue declined 1
percent when normalized for BPVC timing; reported organic revenue
declined 2 percent, with flat recurring organic revenue growth
- Net loss of $32 million and diluted
earnings per share (EPS) of $(0.09), due primarily to
merger-related costs
- Adjusted EBITDA of $269 million and
Adjusted earnings per diluted share (Adjusted EPS) of $0.45
- Cash flow from operations of $147
million; free cash flow of $100 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.
Third Quarter and Year-to-Date 2016 Financial
Performance
Three months ended August 31,
Change Nine months ended August
31, Change (in thousands, except
percentages and per share data) 2016
2015 $ % 2016
2015 $ % Revenue $ 724.6
$ 557.9 $ 166.7 30 % $ 1,861.0 $ 1,628.6 $ 232.4 14 % Net
income (loss) attributable to IHS Markit $ (31.7 ) $ 59.1 $ (90.8 )
(154 )% $ 63.5 $ 149.6 $ (86.1 ) (58 )% Adjusted EBITDA $ 269.0 $
179.6 $ 89.4 50 % $ 649.6 $ 509.9 $ 139.7 27 % GAAP EPS $
(0.09 ) $ 0.24 $ (0.33 ) (138 )% $ 0.23 $ 0.61 $ (0.38 ) (62 )%
Adjusted EPS $ 0.45 $ 0.41 $ 0.04 10 % $ 1.31 $ 1.16 $ 0.15 13 %
Cash flow from operations $ 146.6 $ 162.4 $ (15.8 ) (10 )% $
475.1 $ 496.6 $ (21.5 ) (4 )% Free cash flow $ 100.0 $ 133.7 $
(33.7 ) (25 )% $ 375.8 $ 398.9 $ (23.1 ) (6 )%
“We are off to a strong start with our integration efforts,
giving us confidence in achieving our synergy targets,” said Jerre
Stead, IHS Markit chairman and chief executive officer. “I am very
proud of the colleagues of IHS Markit who are working so well
together with our focus on delighting our customers
daily.”
“We continue to manage the business well given the challenging
energy end-market and will utilize the financial levers afforded to
us from the merger to deliver upon our financial commitments
through 2017 and beyond,” said Todd Hyatt, IHS Markit chief
financial officer.
Third Quarter and Year-to-Date 2016 Revenue
Performance
Third quarter 2016 revenue increased 30 percent compared to the
third quarter of 2015, and year-to-date 2016 revenue increased 14
percent compared to the same period of 2015. The following table
provides additional revenue information by transaction type.
Three months ended August 31,
Percent change Nine months ended
August 31, Percent change (in
thousands, except percentages) 2016
2015 Total Organic* 2016
2015 Total
Organic* Recurring fixed $ 548.0 $ 449.4 22 % (1 )% $
1,453.2 $ 1,320.3 10 % — % Recurring variable 56.8 — N/A 3 % 56.8 —
N/A 3 % Non-recurring* 119.8 108.5 10 % (12 )% 351.0
308.3 14 % (3 )% Total revenue* $ 724.6 $
557.9 30 % (2 )% $ 1,861.0 $ 1,628.6 14 % — %
The components of revenue growth are described below by segment
and in total.
Change in revenue Third quarter 2016
vs. third quarter 2015 Year-to-date 2016 vs.
year-to-date 2015 (All amounts represent percentage
points) Organic* Acquisitive
Foreign
Currency
Total Organic*
Acquisitive
Foreign
Currency
Total Resources (12 )% 10 % (2 )% (3 )% (9 )%
7 % (1 )% (3 )% Transportation 9 % 9 % (1 )% 17 % 10 % 8 % (1 )% 18
% Consolidated Markets & Solutions* (9 )% — % (2 )% (11 )% (1
)% 3 % (2 )% — % Financial Services** 3 % 5 % (4 )% 4 % 3 % 5 % (4
)% 4 %
Total* (2 )% 35%*** (2
)% 30 % — % 16%***
(2 )% 14 %
* Excluding the effect of the BPVC engineering standard release
in the third quarter of 2015, total non-recurring organic revenue
declined 5 percent and 1 percent for the three and nine months
ended August 31, 2016, respectively; CMS total organic revenue
declined 4 percent and was flat for the three and nine months ended
August 31, 2016, respectively; and total organic revenue declined 1
percent and was flat for the three and nine months ended August 31,
2016, respectively.
** Financial services segment (composed entirely of legacy
Markit business) change in revenue based on 2016 stub period
revenue of $157 million vs. 2015 stub period revenue of $150
million.
*** Total company acquired revenue includes 2016 stub period
revenue of $157 million, less $7 million attributed to components
above.
Third Quarter and Year-to-Date 2016 Operating
Performance
Segment results were as follows (additional segment information
is included below):
- Resources. Third quarter revenue for
Resources decreased $7 million, or 3 percent, to $210 million, and
declined 10 percent organically for the recurring-based business.
Third quarter Adjusted EBITDA for Resources increased $3 million,
or 4 percent, to $94 million.Year-to-date revenue for Resources
decreased $23 million, or 3 percent, to $647 million. Year-to-date
Adjusted EBITDA for Resources increased $9 million, or 3 percent,
to $275 million.
- Transportation. Third quarter revenue
for Transportation increased $34 million, or 17 percent, to $227
million, and included 9 percent organic growth for the
recurring-based business. Third quarter Adjusted EBITDA for
Transportation increased $16 million, or 22 percent, to $89
million.Year-to-date revenue for Transportation increased $98
million, or 18 percent, to $658 million. Year-to-date Adjusted
EBITDA for Transportation increased $49 million, or 24 percent, to
$253 million.
- Consolidated Markets & Solutions
(CMS). Third quarter revenue for CMS decreased $17 million, or 11
percent, to $130 million, and had flat organic growth for the
recurring-based business. Third quarter Adjusted EBITDA for CMS
increased $4 million, or 14 percent, to $33 million.Year-to-date
revenue for CMS was flat compared to the prior year, at $399
million. Year-to-date Adjusted EBITDA for CMS increased $19
million, or 26 percent, to $92 million.
- Financial Services. Third quarter and
year-to-date reported revenue for Financial Services was $157
million, and included 3 percent total organic growth. Third quarter
and year-to-date Adjusted EBITDA for Financial Services was $65
million.
Third quarter net loss of $32 million, or $0.09 per share, was
due to the recognition of $105 million of merger-related costs and
higher levels of stock-based compensation expense. Adjusted EPS in
the quarter was $0.45 and excluded these impacts.
Outlook (forward-looking statement)
For the year ending November 30, 2016, IHS Markit expects:
- Revenue in a range of $2.735 billion to
$2.765 billion;
- Adjusted EBITDA in a range of $975
million to $995 million; and
- Adjusted EPS in a range of $1.72 to
$1.78 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 third quarter 2016 results on September 27, 2016,
at 8:00 a.m. EDT. 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 results, 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
(www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical
information, analytics and expertise to forge 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, except for share and
per-share amounts)
As of August 31, 2016 As of November 30, 2015
(Unaudited) (Audited) Assets Current assets:
Cash and cash equivalents $ 200.7 $ 291.6 Accounts receivable, net
514.7 355.9 Income tax receivable 8.7 4.6 Deferred subscription
costs 53.0 52.8 Assets held for sale — 193.4 Other 152.4
52.2 Total current assets 929.5 950.5 Non-current assets:
Property and equipment, net 391.6 314.4 Intangible assets, net
4,565.2 1,014.7 Goodwill 8,395.1 3,287.5 Deferred income taxes 6.6
6.6 Other 12.0 3.8 Total non-current assets 13,370.5
4,627.0 Total assets $ 14,300.0 $ 5,577.5
Liabilities and
shareholders' equity Current liabilities: Short-term debt $
126.0 $ 36.0 Accounts payable 57.4 59.2 Accrued compensation 134.1
105.5 Accrued royalties 24.0 33.3 Other accrued expenses 275.4
118.4 Income tax payable 32.7 23.3 Deferred revenue 803.4 552.5
Liabilities held for sale — 32.1 Total current liabilities
1,453.0 960.3 Long-term debt 3,140.0 2,071.5 Accrued pension and
postretirement liability 25.8 26.7 Deferred income taxes 1,125.8
259.5 Other liabilities 111.9 58.6 Commitments and contingencies
Redeemable noncontrolling interest 77.7 — Shareholders' equity
8,365.8 2,200.9 Total liabilities and shareholders' equity $
14,300.0 $ 5,577.5
IHS MARKIT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except for per-share
amounts)
(Unaudited)
Three months ended August 31, Nine months ended
August 31, 2016 2015
2016 2015 Revenue $ 724.6
$ 557.9 $ 1,861.0 $ 1,628.6
Operating expenses: Cost of
revenue 205.9 209.2 629.0 624.3 Selling, general and administrative
330.8 200.1 724.3 589.2 Depreciation and amortization 91.7 54.8
216.5 159.5 Restructuring charges 10.6 1.9 23.9 22.0
Acquisition-related costs 104.5 0.1 119.9 0.6 Net periodic pension
and postretirement expense 0.6 0.6 1.2 1.5 Other expense (income),
net (2.8 ) 0.2 (2.0 ) 1.3 Total operating expenses
741.3 466.9 1,712.8 1,398.4
Operating income (loss) (16.7 ) 91.0 148.2 230.2 Interest
income 0.3 0.3 0.9 0.6 Interest expense (36.5 ) (18.2 ) (92.0 )
(52.6 )
Non-operating expense, net
(36.2 ) (17.9 ) (91.1 ) (52.0 ) Income (loss) from continuing
operations before income taxes and equity in earnings of equity
method investee (52.9 ) 73.1 57.1 178.2 Provision for income taxes
23.1 (16.3 ) (0.7 ) (36.7 ) Equity in earnings of equity method
investee (1.2 ) — (1.2 ) — Income (loss) from
continuing operations (31.0 ) 56.8 55.2 141.5 Income (loss) from
discontinued operations, net (1.0 ) 2.3 8.0 8.1
Net income (loss) (32.0 ) 59.1 63.2 149.6 Net loss
attributable to noncontrolling interest 0.3 — 0.3
—
Net income (loss) attributable to IHS Markit
Ltd. $ (31.7 ) $ 59.1 $ 63.5 $ 149.6
Basic earnings per share: Income (loss) from continuing
operations attributable to IHS Markit Ltd. $ (0.09 ) $ 0.23 $ 0.20
$ 0.58 Income (loss) from discontinued operations, net —
0.01 0.03 0.03 Net income (loss) attributable
to IHS Markit Ltd. $ (0.09 ) $ 0.24 $ 0.23 $ 0.61
Weighted average shares used in computing basic earnings per
share 340.1 243.1 273.5 244.1
Diluted earnings per share: Income (loss) from continuing
operations attributable to IHS Markit Ltd. $ (0.09 ) $ 0.23 $ 0.20
$ 0.58 Income (loss) from discontinued operations, net —
0.01 0.03 0.03 Net income (loss) attributable
to IHS Markit Ltd. $ (0.09 ) $ 0.24 $ 0.23 $ 0.61
Weighted average shares used in computing diluted earnings
per share 340.1 244.8 277.5 246.0
IHS MARKIT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions)
(Unaudited)
Nine months ended August 31, 2016
2015 Operating
activities: Net income (loss) attributable to IHS Markit Ltd. $
63.5 $ 149.6 Reconciliation of net income to net cash provided by
operating activities: Depreciation and amortization 216.5 174.8
Stock-based compensation expense 144.9 101.2 Gain on sale of assets
(41.5 ) — Impairment of assets — 1.2 Excess tax benefit from
stock-based compensation (1.8 ) (5.9 ) Net periodic pension and
postretirement expense 1.2 1.5 Undistributed earnings of
affiliates, net 1.4 — Pension and postretirement contributions (2.2
) (3.0 ) Deferred income taxes 6.1 (21.3 ) Change in assets and
liabilities: Accounts receivable, net 65.8 101.3 Other current
assets 39.9 (20.4 ) Accounts payable (40.6 ) 2.0 Accrued expenses
6.9 (32.1 ) Income tax (5.8 ) 45.8 Deferred revenue 10.7 (1.3 )
Other liabilities 10.1 3.2
Net cash provided by
operating activities 475.1 496.6
Investing
activities: Capital expenditures on property and equipment
(99.3 ) (97.7 ) Acquisitions of businesses, net of cash acquired
(1,014.4 ) (369.9 ) Proceeds from sale of assets 190.2 — Change in
other assets 0.3 3.3 Settlements of forward contracts 5.6
0.8
Net cash used in investing activities (917.6 )
(463.5 )
Financing activities: Proceeds from borrowings
3,423.0 465.0 Repayment of borrowings (2,876.8 ) (222.3 ) Payment
of debt issuance costs (22.8 ) — Excess tax benefit from
stock-based compensation 1.8 5.9 Proceeds from the exercise of
employee stock options 69.1 — Repurchases of common stock (264.6 )
(148.6 )
Net cash provided by financing activities 329.7
100.0 Foreign exchange impact on cash balance 20.4
(22.7 ) Net increase (decrease) in cash and cash equivalents
(92.4 ) 110.4 Cash and cash equivalents at the beginning of the
period 293.1 153.2 Cash and cash equivalents at the
end of the period $ 200.7 $ 263.6
IHS MARKIT LTD.
SUPPLEMENTAL REVENUE DISCLOSURE
(In millions)
(Unaudited)
Three months ended August 31, Percent change
Nine months ended August 31, Percent change
2016 2015 Total
Organic 2016 2015 Total
Organic Recurring fixed revenue:
Resources $ 186.1 $ 187.7 (1 )% (10 )% $ 557.5 $ 566.6 (2 )% (8 )%
Transportation 157.2 144.4 9 % 9 % 460.8 421.6 9 % 10 % CMS 113.9
117.3 (3 )% — % 344.1 332.1 4 % 2 % Financial Services 90.8
— N/A 3 % 90.8 — N/A 3 %
Total recurring
fixed revenue $ 548.0 $ 449.4 22 % (1 )% $
1,453.2 $ 1,320.3 10 % — %
Recurring
variable revenue: Financial Services $ 56.8 $ —
N/A 3 % $ 56.8 $ — N/A 3 %
Total recurring
variable revenue $ 56.8 $ — N/A 3 % $ 56.8
$ — N/A 3 %
Non-recurring revenue: Resources $
24.3 $ 30.1 (19 )% (21 )% $ 89.9 $ 103.5 (13 )% (14 )%
Transportation 69.9 49.0 43 % 9 % 196.9 137.7 43 % 12 % CMS* 16.3
29.4 (45 )% (44 )% 54.9 67.1 (18 )% (19 )% Financial Services 9.3
— N/A 10 % 9.3 — N/A 10 %
Total
non-recurring revenue* $ 119.8 $ 108.5 10 % (12
)% $ 351.0 $ 308.3 14 % (3 )%
Total revenue
(segment): Resources $ 210.4 $ 217.8 (3 )% (12 )% $ 647.4 $
670.1 (3 )% (9 )% Transportation 227.1 193.4 17 % 9 % 657.7 559.3
18 % 10 % CMS* 130.2 146.7 (11 )% (9 )% 399.0 399.2 — % (1 )%
Financial Services 156.9 — N/A 3 % 156.9 —
N/A 3 %
Total revenue* $ 724.6 $ 557.9
30 % (2 )% $ 1,861.0 $ 1,628.6 14 % — %
* Excluding the effect of the BPVC engineering standard release
in the third quarter of 2015 results in the following organic
revenue change percentages:
- CMS non-recurring organic revenue
declined 23 percent and 12 percent for the three and nine months
ended August 31, 2016, respectively;
- Total non-recurring organic revenue
declined 5 percent and 1 percent for the three and nine months
ended August 31, 2016, respectively;
- CMS total organic revenue declined 4
percent and was flat for the three and nine months ended August 31,
2016, respectively; and
- Total organic revenue declined 1
percent and was flat for the three and nine months ended August 31,
2016, respectively.
IHS MARKIT LTD.
RECONCILIATION OF CONSOLIDATED NON-GAAP
FINANCIAL MEASURES TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL
MEASURES
(In millions, except for per-share
amounts)
(Unaudited)
Three months ended August 31, Nine months ended
August 31, 2016 2015
2016 2015 Net income (loss)
attributable to IHS Markit Ltd. $ (31.7 ) $ 59.1 $ 63.5 $ 149.6
Interest income (0.3 ) (0.3 ) (0.9 ) (0.6 ) Interest expense 36.5
18.2 92.0 52.6 Provision for income taxes (23.1 ) 16.3 0.7 36.7
Depreciation 30.2 21.0 78.2 61.9 Amortization related to acquired
intangible assets 61.5 33.8 138.3 97.6
EBITDA (1)(6) $ 73.1 $ 148.1 $ 371.8 $ 397.8
Stock-based compensation expense 80.4 31.8 142.6 96.4 Restructuring
charges 10.6 1.9 23.9 22.0 Acquisition-related costs 104.5 0.1
119.9 0.6 Impairment of assets — — — 1.2 Share of joint venture
results not attributable to Adjusted EBITDA (0.3 ) — (0.3 ) —
Adjusted EBITDA attributable to noncontrolling interest (0.3 ) —
(0.3 ) — Income from discontinued operations, net 1.0 (2.3 )
(8.0 ) (8.1 )
Adjusted EBITDA (2)(6) $ 269.0 $
179.6 $ 649.6 $ 509.9
Three months
ended August 31, Nine months ended August 31,
2016 2015 2016 2015 Net income
(loss) attributable to IHS Markit Ltd. $ (31.7 ) $ 59.1 $ 63.5
$ 149.6 Stock-based compensation expense 80.4 31.8 142.6 96.4
Amortization related to acquired intangible assets 61.5 33.8 138.3
97.6 Restructuring charges 10.6 1.9 23.9 22.0 Acquisition-related
costs 104.5 0.1 119.9 0.6 Acquisition financing fees 7.1 — 12.1 —
Impairment of assets — — — 1.2 Income tax effect of above
adjustments (74.6 ) (23.1 ) (129.7 ) (73.9 ) Adjusted earnings
attributable to noncontrolling interest (0.2 ) — (0.2 ) — Income
from discontinued operations, net 1.0 (2.3 ) (8.0 ) (8.1 )
Adjusted net income (3) $ 158.6 $ 101.3
$ 362.4 $ 285.4
Adjusted EPS (4)(6) $
0.45 $ 0.41 $ 1.31 $ 1.16 Weighted
average shares used in computing Adjusted EPS* 349.0 244.8
277.5 246.0 *Third quarter diluted
weighted average shares for Adjusted EPS include 8.9 million
dilutive shares that were antidilutive for GAAP EPS due to the GAAP
net loss.
Three months ended August 31,
Nine months ended August 31, 2016 2015
2016 2015 Net cash provided by operating
activities $ 146.6 $ 162.4 $ 475.1 $ 496.6 Capital expenditures
on property and equipment (46.6 ) (28.7 ) (99.3 ) (97.7 )
Free
cash flow (5)(6) $ 100.0 $ 133.7 $ 375.8
$ 398.9
IHS MARKIT LTD.
SUPPLEMENTAL SEGMENT OPERATING PROFIT
MEASURE DISCLOSURE
(In millions)
(Unaudited)
Three months ended August 31, Nine months ended
August 31, 2016 2015
2016 2015 Adjusted EBITDA by
segment: Resources $ 94.4 $ 91.0 $ 275.4 $ 266.4 Transportation
88.6 72.4 252.6 204.0 CMS 33.3 29.1 91.6 72.8 Financial Services
65.0 — 65.0 — Shared services (12.3 ) (12.9 ) (35.0 ) (33.3 )
Total Adjusted EBITDA $ 269.0 $ 179.6 $ 649.6
$ 509.9
Adjusted EBITDA margin by
segment: Resources 44.9 % 41.8 % 42.5 % 39.8 % Transportation
39.0 % 37.4 % 38.4 % 36.5 % CMS 25.6 % 19.8 % 23.0 % 18.2 %
Financial Services 41.4 % N/A 41.4 % N/A
Total Adjusted EBITDA
margin 37.1 % 32.2 % 34.9 % 31.3 % (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/20160927005660/en/
IHS Markit Ltd.News 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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