NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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1.
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Basis of Presentation and Significant Accounting Policies
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The accompanying unaudited condensed consolidated financial statements of IHS Markit have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended November 30, 2018. In our opinion, these condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented, and such adjustments are of a normal, recurring nature.
Our business has seasonal aspects. Our first quarter generally has our lowest quarterly levels of revenue and profit. We also experience event-driven seasonality in our business; for instance, CERAWeek, an annual energy conference, is typically held in the second quarter of each year. Another example is the biennial release of the Boiler Pressure Vessel Code (“BPVC”) engineering standard, which generates revenue for us predominantly in the third quarter of every other year. The most recent BPVC release was in the third quarter of 2019.
Revenue Recognition
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, which establishes a comprehensive new revenue recognition model designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In March, April, and May 2016, the FASB issued ASU 2016-08, ASU 2016-10, and ASU 2016-12, respectively, which provide further revenue recognition guidance related to principal versus agent considerations, performance obligations and licensing, and narrow-scope improvements and practical expedients. These standards have all been codified in the FASB’s Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.”
On December 1, 2018, we adopted ASC Topic 606 using the modified retrospective transition method applied to our customer revenue contracts as of the adoption date. Revenue results for periods beginning after December 1, 2018 are presented in accordance with ASC Topic 606, while prior year amounts continue to be reported in accordance with ASC Topic 605, “Revenue Recognition.”
The following table shows the cumulative effect of the changes made to the December 1, 2018 consolidated balance sheet for the adoption of ASC Topic 606 related to contracts that were in effect at the time of adoption (in millions):
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November 30, 2018
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Adjustments due to adoption of ASC Topic 606
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December 1, 2018
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Accounts receivable, net
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$
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792.9
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$
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29.8
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$
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822.7
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Other current assets
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88.4
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4.2
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92.6
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Other non-current assets
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47.9
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9.5
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57.4
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Deferred revenue
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886.8
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(28.8
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)
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858.0
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Deferred income taxes
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699.9
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16.3
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716.2
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Retained earnings
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2,743.1
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56.0
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2,799.1
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The net cumulative effect adjustment to retained earnings was primarily related to (1) the change in accounting for the license rights associated with certain term-based software license arrangements, which were historically recognized over the term of the contract, but are now recognized at contract inception based on estimated stand-alone selling price, and (2) the change in accounting for commission costs incurred to obtain a portion of our contracts, which costs were historically expensed as incurred, but are now deferred at contract inception and recognized over the expected customer life.
For the three and nine months ended August 31, 2019, the adoption of ASC Topic 606 did not result in a material difference between what we reported under ASC Topic 606 and what we would have reported under ASC Topic 605.
We disaggregate our revenue by segment (as described in Note 12) and by transaction type according to the following categories:
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Recurring fixed revenue represents revenue generated from contracts specifying a relatively fixed fee for services delivered over the life of the contract. The fixed fee is typically paid annually or more periodically in advance. These contracts typically consist of subscriptions to our various information offerings and software maintenance, which provide continuous access to our platforms and associated data over the contract term. The revenue is usually recognized ratably over the contract term or for term-based software license arrangements, annually on renewal. The initial term of these contracts is typically annual (with some longer-term arrangements) and non-cancellable for the term of the subscription and may contain provisions for minimum monthly payments.
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•
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Recurring variable revenue represents revenue from contracts that specify a fee for services, which is typically not fixed. The variable fee is usually paid monthly in arrears. Recurring variable revenue is based on, among other factors, the number of trades processed, assets under management, or the number of positions we value, and revenue is recognized based on the specific factor used (e.g., for usage-based contracts, we recognize revenue in line with usage in the period). Many of these contracts do not have a maturity date, while the remainder have an initial term ranging from one to five years. Recurring variable revenue was derived entirely from the Financial Services segment for all periods presented.
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Non-recurring revenue represents consulting (e.g., research and analysis, modeling, and forecasting), services, single-document product sales, perpetual license sales and associated services, conferences and events, and advertising. Revenue for services and other non-recurring revenue is recognized upon completion of the associated performance obligation.
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The following table presents our revenue by transaction type (in millions):
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Three months ended August 31,
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Nine months ended August 31,
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2019
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2018
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2019
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2018
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Recurring fixed revenue
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$
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799.9
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$
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717.7
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$
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2,352.3
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$
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2,099.1
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Recurring variable revenue
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144.4
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124.8
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425.4
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367.8
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Non-recurring revenue
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168.0
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158.5
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516.5
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474.5
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Total revenue
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$
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1,112.3
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$
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1,001.0
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$
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3,294.2
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$
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2,941.4
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Our customer contracts may include multiple performance obligations; for example, we typically sell software licenses with maintenance and other associated services. For these transactions, we recognize revenue based on the relative fair value to the customer of each performance obligation as each performance obligation is completed.
We record a receivable when a customer is billed or when revenue is recognized prior to billing a customer. Contract assets include unbilled amounts for multi-year customer contracts where payment is not yet due and where services have been provided up-front but have not yet been billed. Contract assets were approximately $40.7 million as of August 31, 2019 and $29.8 million as of December 1, 2018, and are recorded in accounts receivable, net, in the consolidated balance sheets.
Contract liabilities primarily include our obligations to transfer goods or services for which we have received consideration (or an amount of consideration is due) from the customer. As of August 31, 2019 and December 1, 2018, we had contract liabilities of $896.5 million and $858.0 million, respectively, which are recorded as deferred revenue in the consolidated balance sheets. The increase in contract liabilities from December 1, 2018 to August 31, 2019 was primarily due to billings of $2,605.3 million that were paid in advance or due from customers, partially offset by $2,557.6 million of revenue recognized for the nine months ended August 31, 2019 and a $9.2 million net reduction in contract liabilities associated with the Agribusiness acquisition and the Technology, Media, & Telecom (“TMT”) market intelligence assets divestiture, as described in Note 2.
We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to exceed one year. Certain sales commission programs are designed to promote the sale of products and services to new customers, and we therefore defer the incremental costs related to these programs over the expected customer life related to those products underlying the contracts. We record these expenses as selling, general and administrative expense within the consolidated statements of operations.
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, which requires that lease assets and lease liabilities be recognized on the balance sheet, and that key information about leasing arrangements be disclosed. In July 2018, the FASB issued ASU 2018-11, which provides targeted improvements to ASU 2016-02 by providing an additional optional transition method and a lessor practical expedient for lease and nonlease components. The standard will be effective for us in the first quarter of our fiscal year 2020, although early adoption is permitted. We have determined that we will adopt this standard using the modified retrospective approach and will use the transition relief package of practical expedients. We will not adopt the hindsight practical expedient in determining a lease term and impairment of the right-of-use assets at the adoption date. We are currently developing an inventory of leasing arrangements that will be subject to the new standard and are developing assumptions and processes to use at the transition date and on an ongoing basis. We are still evaluating the impact of this standard on our consolidated financial statements, but believe that the most significant impact of adoption will be the recognition of right-of-use assets and lease liabilities associated with our operating leases.
In June 2016, the FASB issued ASU No. 2016-13, which replaces the existing incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The standard will be effective for us in the first quarter of our fiscal year 2021. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, which removes Step 2 from the goodwill impairment test. The standard will be effective for us in the first quarter of our fiscal 2021, although early adoption is permitted. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, which addresses the accounting for implementation costs associated with a hosted service. The standard provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. The standard will be effective for us in the first quarter of our fiscal 2021, although early adoption is permitted. The amendments will be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements.
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2.
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Business Combinations and Divestitures
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On June 30, 2019, we acquired the Agribusiness Intelligence group from Informa plc for approximately $128 million. The acquisition of the Agribusiness Intelligence group helps strengthen our Resources core end-market by building on our existing data, pricing, insights, forecasting, and news services within our chemical and downstream product offerings, and expands our capability into fertilizers and chemical crop protection while expanding our capabilities in biofuels.
The purchase price allocation for this acquisition is preliminary and may change upon completion of the determination of fair value of assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocation, net of acquired cash, for this acquisition (in millions):
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Total
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Assets:
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Current assets
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$
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10.2
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Property and equipment
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0.6
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Intangible assets
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55.4
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Goodwill
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86.0
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Total assets
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152.2
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Liabilities:
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Current liabilities
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2.2
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Deferred revenue
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12.2
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Deferred taxes
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9.4
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Total liabilities
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23.8
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Purchase price
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$
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128.4
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On August 1, 2019, we sold the majority of our TMT market intelligence assets to Informa plc for approximately $150 million. The TMT assets were previously included in our CMS segment. We recognized a gain of approximately $112 million on the sale, which is recorded in other (income) expense, net. The transaction resulted in the divestiture of the following assets and liabilities (in millions):
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Current assets
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$
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10.3
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Property and equipment
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$
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0.9
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Intangible assets
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$
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14.1
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Goodwill
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$
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33.4
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Current liabilities
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$
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(0.8
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Deferred revenue
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$
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(21.5
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)
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In September 2019, we entered into a definitive agreement to sell our Aerospace & Defense business line to Montagu Private Equity for approximately $470 million. Completion of the transaction is subject to customary closing conditions and regulatory filings and approvals.
The following table presents details of our intangible assets, other than goodwill, as of August 31, 2019 and November 30, 2018 (in millions):
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As of August 31, 2019
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As of November 30, 2018
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Gross
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Accumulated
Amortization
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Net
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Gross
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Accumulated
Amortization
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Net
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Intangible assets subject to amortization:
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Information databases
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$
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623.8
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$
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(330.8
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)
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$
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293.0
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$
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671.0
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$
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(329.6
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$
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341.4
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Customer relationships
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3,427.9
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(592.9
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)
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2,835.0
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3,458.8
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(473.3
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2,985.5
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Developed technology
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923.4
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(185.6
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737.8
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928.8
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(133.1
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795.7
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Developed computer software
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85.0
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(69.7
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15.3
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85.0
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(63.0
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22.0
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Trademarks
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494.5
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(194.0
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300.5
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493.8
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(153.6
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340.2
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Other
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1.1
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(1.1
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—
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1.1
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(1.1
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—
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Total intangible assets
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$
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5,555.7
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$
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(1,374.1
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$
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4,181.6
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$
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5,638.5
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$
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(1,153.7
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$
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4,484.8
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Intangible assets amortization expense was $93.2 million and $283.5 million for the three and nine months ended August 31, 2019, respectively, compared to $89.1 million and $266.7 million for the three and nine months ended August 31, 2018, respectively. The following table presents the estimated future amortization expense related to intangible assets held as of August 31, 2019 (in millions):
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Year
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Amount
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Remainder of 2019
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$
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92.8
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2020
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$
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368.6
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2021
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$
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363.8
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2022
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$
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345.3
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2023
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$
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334.2
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Thereafter
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$
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2,676.9
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Goodwill, gross intangible assets, and net intangible assets are all subject to foreign currency translation effects. The change in net intangible assets from November 30, 2018 to August 31, 2019 was due to current year amortization, the addition of the Agribusiness intangible assets, and the sale of the TMT market intelligence intangible assets.
The following table summarizes total indebtedness, including unamortized premiums, as of August 31, 2019 and November 30, 2018 (in millions):
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August 31, 2019
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November 30, 2018
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2018 revolving facility
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$
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413.0
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$
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1,108.0
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2018 term loan:
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Tranche A-1
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—
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574.0
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Tranche A-2
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—
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481.3
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364-day credit agreement
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—
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250.0
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5.00% senior notes due 2022
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750.0
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750.0
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4.125% senior notes due 2023
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498.9
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498.6
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3.625% senior notes due 2024
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398.9
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—
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4.75% senior notes due 2025
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812.3
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813.8
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4.00% senior notes due 2026
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500.0
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500.0
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4.75% senior notes due 2028
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747.5
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747.3
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4.25% senior notes due 2029
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974.8
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—
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Debt issuance costs
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(50.0
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)
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(51.2
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Capital leases
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7.0
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7.3
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Total debt
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$
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5,052.4
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$
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5,679.1
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Current portion
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(1.2
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(789.9
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)
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Total long-term debt
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$
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5,051.2
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$
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4,889.2
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2018 revolving facility. On June 25, 2018, we entered into a $2.0 billion senior unsecured revolving credit agreement (“2018 revolving facility”). Borrowings under the 2018 revolving facility mature in June 2023. The interest rates for borrowings under the 2018 revolving facility are the applicable LIBOR plus a spread of 1.00 percent to 1.75 percent, depending upon our credit rating. A commitment fee on any unused balance is payable periodically and ranges from 0.125 percent to 0.30 percent based upon our credit rating. The obligations under the 2018 revolving facility are not guaranteed by any of our subsidiaries. We had approximately $1.2 million of outstanding letters of credit under the 2018 revolving facility as of August 31, 2019, which reduced the available borrowing under the facility by an equivalent amount.
Subject to certain conditions, the 2018 revolving facility may be expanded by up to an aggregate of $1.0 billion in additional commitments. The 2018 revolving facility has certain financial and other covenants, including a maximum Leverage Ratio and a minimum Interest Coverage Ratio, which is defined as the ratio of Consolidated EBITDA to Consolidated Interest Expense, as such terms are defined in the agreement.
2018 term loan. Coincident with entering into the 2018 revolving facility, we entered into a senior unsecured amortizing term loan agreement (“2018 term loan”). The 2018 term loan had a final maturity date of July 2021, but we repaid both tranches of the 2018 term loan in April 2019 using proceeds from our April 2019 debt offering and borrowings under the 2018 revolving facility. The obligations under the 2018 term loan were not guaranteed by any of our subsidiaries. The interest rates for borrowings under the 2018 term loan were the same as those under the 2018 revolving facility.
364-Day Credit Agreement. In June 2018, we entered into a 364-day credit agreement (the “364-Day Credit Agreement”) for a term loan credit facility in an aggregate principal amount of $1.855 billion, which became available to be borrowed upon the satisfaction of certain conditions precedent, including the concurrent completion of our acquisition of Ipreo. On August 2, 2018, concurrent with the completion of our acquisition of Ipreo, we borrowed $250.0 million under the 364-Day Credit Agreement. The unutilized balance of the commitment terminated upon completion of the acquisition. The interest rates for borrowings under the 364-Day Credit Agreement were the applicable LIBOR plus a spread of 1.00 percent to 1.75 percent, depending upon our credit rating. The spread over LIBOR was subject to a 0.25 percent step-up on the 180th day following the closing date of the agreement and a 0.50 percent step-up on the 270th day following the closing date. The obligations under the 364-Day Credit Agreement were not guaranteed by any of our subsidiaries. The 364-Day Credit Agreement had certain financial and other covenants that were consistent with the covenants contained in the 2018 revolving facility and the 2018 term loan, including a maximum Leverage Ratio and a minimum Interest Coverage Ratio, which was defined as the ratio of Consolidated EBITDA to Consolidated Interest Expense, as such terms were defined in the 364-Day Credit Agreement. On January 7, 2019, we repaid the 364-Day Credit Agreement using cash on hand and borrowings under the revolving credit facility.
As of August 31, 2019, we had approximately $413 million of outstanding borrowings under the 2018 revolving facility at a current weighted average annual interest rate of 4.28 percent, including the effect of the interest rate swaps described in Note 5.
2019 364-Day Credit Agreement. In September 2019, we entered into a 364-day credit agreement (the “2019 364-Day Credit Agreement”) for a term loan credit facility in an aggregate principal amount of $250.0 million. The interest rate for borrowing under the 2019 364-Day Credit Agreement is the applicable LIBOR plus a spread of 0.75 percent. The obligations under the 2019 364-Day Credit Agreement are not guaranteed by any of our subsidiaries. The 2019 364-Day Credit Agreement has certain financial and other covenants that are consistent with the covenants contained in the 2018 revolving facility, including a maximum Leverage Ratio and a minimum Interest Coverage Ratio, which is defined as the ratio of Consolidated EBITDA to Consolidated Interest Expense, as such terms were defined in the 2019 364-Day Credit Agreement.
5.00% senior notes due 2022 (“5% Notes due 2022”). In October 2014, IHS Inc. issued $750 million aggregate principal amount of senior unsecured notes due 2022 in an offering not subject to the registration requirements of the Securities Act of 1933, as amended (the Securities Act). In August 2015, we completed a registered exchange offer for the 5% Notes due 2022. In July 2016, in connection with the merger between IHS and Markit, we completed an exchange offer for $742.8 million of the outstanding 5% Notes due 2022 for an equal principal amount of new 5% senior unsecured notes issued by IHS Markit with the same maturity. Approximately $7.2 million of the 5% Notes due 2022 did not participate in the exchange offer. The new 5% Notes due 2022 are not, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction. The new 5% Notes due 2022 have been admitted to the official list of The International Stock Exchange in the Channel Islands.
The 5% Notes due 2022 bear interest at a fixed rate of 5.00 percent and mature on November 1, 2022. Interest on the 5% Notes due 2022 is due semiannually on May 1 and November 1 of each year. We may redeem the 5% Notes due 2022 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the Applicable Premium, as defined in the indenture governing the 5% Notes due 2022. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a Change of Control Triggering Event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. In connection with the entry into the 2018 revolving facility and 2018 term loan, each guarantor of the 5% Notes due 2022 was released from its guarantees pursuant to the terms of the indenture under which such notes were issued. The fair value of the 5% Notes due 2022 as of August 31, 2019 was approximately $800.4 million.
4.125% senior notes due 2023 (“4.125% Notes due 2023”). In July 2018, we issued $500 million aggregate principal amount of senior unsecured notes due 2023 in a registered offering under the Securities Act. The 4.125% Notes due 2023 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 4.125% Notes due
2023 bear interest at a fixed rate of 4.125 percent and mature on August 1, 2023. Interest on the 4.125% Notes due 2023 is due semiannually on February 1 and August 1 of each year. The notes were issued at a discount which represented a price to the public of 99.707 percent of the principal amount. We may redeem the 4.125% Notes due 2023 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the applicable premium, as defined in the indenture governing the 4.125% Notes due 2023. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. The fair value of the 4.125% Notes due 2023 as of August 31, 2019 was approximately $528.3 million.
3.625% senior notes due 2024 (“3.625% Notes due 2024”). In April 2019, we issued $400 million aggregate principal amount of senior unsecured notes due 2024 in a registered offering under the Securities Act. The 3.625% Notes due 2024 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 3.625% Notes due 2024 bear interest at a fixed rate of 3.625 percent and mature on May 1, 2024. Interest on the 3.625% Notes due 2024 is due semiannually on May 1 and November 1 of each year. The notes were issued at a discount which represented a price to the public of 99.686 percent of the principal amount. We may redeem the 3.625% Notes due 2024 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the applicable premium, as defined in the indenture governing the 3.625% Notes due 2024. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. The fair value of the 3.625% Notes due 2024 as of August 31, 2019 was approximately $417.4 million.
4.75% senior notes due 2025 (“4.75% Notes due 2025”). In February 2017, we issued $500 million aggregate principal amount of senior unsecured notes due 2025 in an offering not subject to the registration requirements of the Securities Act. In July 2017, we issued an additional $300 million aggregate principal amount of the 4.75% Notes due 2025 at a $16.5 million premium, resulting in an effective interest rate of 3.88 percent. The 4.75% Notes due 2025 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 4.75% Notes due 2025 bear interest at a fixed rate of 4.75 percent and mature on February 15, 2025. Interest on the 4.75% Notes due 2025 is due semiannually on February 15 and August 15 of each year. We may redeem the 4.75% Notes due 2025 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the Applicable Premium, as defined in the indenture governing the 4.75% Notes due 2025. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a Change of Control Triggering Event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. In connection with the entry into the 2018 revolving facility and 2018 term loan, each guarantor of the 4.75% Notes due 2025 was released from its guarantees pursuant to the terms of the indenture under which such notes were issued. The fair value of the 4.75% Notes due 2025 as of August 31, 2019 was approximately $873.6 million.
4.00% senior notes due 2026 (“4% Notes due 2026”). In December 2017, we issued $500 million aggregate principal amount of senior unsecured notes due 2026 in an offering not subject to the registration requirements of the Securities Act. The 4% Notes due 2026 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 4% Notes due 2026 bear interest at a fixed rate of 4.00 percent and mature on March 1, 2026. Interest on the 4% Notes due 2026 is due semiannually on March 1 and September 1 of each year. We may redeem the 4% Notes due 2026 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the applicable premium, as defined in the indenture governing the 4% Notes due 2026. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. In connection with the entry into the 2018 revolving facility and 2018 term loan, each guarantor of the 4% Notes
due 2026 was released from its guarantees pursuant to the terms of the indenture under which such notes were issued. The fair value of the 4% Notes due 2026 as of August 31, 2019 was approximately $534.1 million.
4.75% senior notes due 2028 (“4.75% Notes due 2028”). In July 2018, we issued $750 million aggregate principal amount of senior unsecured notes due 2028 in a registered offering under the Securities Act. The 4.75% Notes due 2028 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 4.75% Notes due 2028 bear interest at a fixed rate of 4.75 percent and mature on August 1, 2028. Interest on the 4.75% Notes due 2028 is due semiannually on February 1 and August 1 of each year. The 4.75% Notes due 2028 were issued at a discount, which represented a price to the public of 99.628% of the principal amount. We may redeem the 4.75% Notes due 2028 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the applicable premium, as defined in the indenture governing the 4.75% Notes due 2028. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. The fair value of the 4.75% Notes due 2028 as of August 31, 2019 was approximately $850.2 million.
4.25% senior notes due 2029 (“4.25% Notes due 2029”). In April 2019, we issued $600 million aggregate principal amount of senior unsecured notes due 2029 in a registered offering under the Securities Act. The notes were issued at a discount, which represented a price to the public of 99.422 percent of the principal amount. In August 2019, we issued an additional $350 million aggregate principal amount of the 4.25% Notes due 2029 at a $28.1 million premium, resulting in an effective interest rate of 3.25 percent. The 4.25% Notes due 2029 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 4.25% Notes due 2029 bear interest at a fixed rate of 4.25 percent and mature on May 1, 2029. Interest on the 4.25% Notes due 2029 is due semiannually on May 1 and November 1 of each year. We may redeem the 4.25% Notes due 2029 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the applicable premium, as defined in the indenture governing the 4.25% Notes due 2029. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. The fair value of the 4.25% Notes due 2029 as of August 31, 2019 was approximately $1,034.5 million.
As of August 31, 2019, we were in compliance with all of our debt covenants. We have classified short-term debt based on scheduled loan payments and intended repayments on our revolving facility based on expected cash availability over the next 12 months.
The carrying values of our variable rate debt instruments approximate their fair value because of the variable interest rates associated with those instruments. The fair values of the senior notes were measured using observable inputs in markets that are not active; consequently, we have classified those notes within Level 2 of the fair value hierarchy.
Our business is exposed to various market risks, including interest rate and foreign currency risks. We utilize derivative instruments to help us manage these risks. We do not hold or issue derivatives for speculative purposes.
Interest Rate Swaps
To mitigate interest rate exposure on our outstanding revolving facility debt, we utilize interest rate derivative contracts that effectively swap $400 million of floating rate debt at a 2.86 percent weighted-average fixed interest rate, plus the applicable spread on our floating rate debt. We entered into these swap contracts in November 2013 and January 2014, and the contracts expire between May and November 2020.
Because the terms of these swaps and the variable rate debt (as amended or extended over time) effectively coincide, we do not expect any ineffectiveness. We have designated and accounted for these instruments as cash flow hedges, with changes in fair value being deferred in AOCI in our consolidated balance sheets.
Foreign Currency Forwards
To mitigate foreign currency exposure, we utilize short-term foreign currency forward contracts that manage market risks associated with fluctuations in balances that are denominated in currencies other than the local functional currency. We account for these forward contracts at fair value and recognize the associated realized and unrealized gains and losses in other (income) expense, net, since we have not designated these contracts as hedges for accounting purposes. The notional amount of these outstanding foreign currency forward contracts was $623.0 million and $500.1 million as of August 31, 2019 and November 30, 2018, respectively.
Fair Value of Derivatives
Since our derivative instruments are not listed on an exchange, we have evaluated fair value by reference to similar transactions in active markets; consequently, we have classified all of our derivative instruments within Level 2 of the fair value measurement hierarchy. As of August 31, 2019 and November 30, 2018, we had assets of zero and $0.2 million, respectively, which were classified within other current assets, and we had liabilities of $6.8 million and $1.6 million, respectively, which were classified within other accrued expenses and other liabilities.
|
|
|
|
6.
|
Acquisition-related Costs
|
During the nine months ended August 31, 2019, we incurred approximately $67.6 million in costs associated with acquisitions and divestitures, of which $46.0 million was performance compensation expense related to the automotiveMastermind (“aM”) acquisition described below, and the remainder was associated with employee severance charges and retention costs, contract termination costs for facility consolidations, and legal and professional fees. Approximately $3.5 million of the total charge was allocated to shared services, with $47.0 million of the charge recorded in the Transportation segment, $12.8 million in the Financial Services segment, and the remainder in the Resources and CMS segments.
In September 2017, we acquired aM, a leading provider of predictive analytics and marketing automation software for the automotive industry. We purchased approximately 78 percent of aM at that time. In exchange for the remaining 22 percent of aM, we issued equity interests in aM’s immediate parent holding company to aM’s founders and certain employees. We will pay cash to acquire these interests over the next five years based on put/call provisions that tie the valuation to underlying adjusted EBITDA performance of aM. Since the purchase of the remaining 22 percent of the business requires continued service of the founders and employees, we are accounting for the arrangement as compensation expense that will be remeasured based on changes in the fair value of the equity interests; we have classified this expense as acquisition-related costs within the consolidated statements of operations and we have classified the associated accrued liability as other accrued expenses and other liabilities within the consolidated balance sheets. We currently estimate a compensation expense range of approximately $150 million to $175 million, which is being recognized over a weighted-average recognition period of approximately 3.5 years.
The following table provides a reconciliation of the acquisition-related costs accrued liability, recorded in other accrued expenses and other liabilities, as of August 31, 2019 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
Severance and
Other
Termination
Benefits
|
|
Contract
Termination
Costs
|
|
Other
|
|
Total
|
|
Balance at November 30, 2018
|
$
|
2.5
|
|
|
$
|
16.8
|
|
|
$
|
68.7
|
|
|
$
|
88.0
|
|
|
Add: Costs incurred
|
3.8
|
|
|
—
|
|
|
66.0
|
|
|
69.8
|
|
|
Revision to prior estimates
|
—
|
|
|
(0.2
|
)
|
|
(2.0
|
)
|
|
(2.2
|
)
|
|
Less: Amount paid
|
(6.3
|
)
|
|
(8.9
|
)
|
|
(13.8
|
)
|
|
(29.0
|
)
|
|
Balance at August 31, 2019
|
$
|
—
|
|
|
$
|
7.7
|
|
|
$
|
118.9
|
|
|
$
|
126.6
|
|
As of August 31, 2019, the $126.6 million remaining liability was primarily in the Transportation segment, with the remainder primarily in the Financial Services and Resources segments. Approximately $110.1 million of the remaining liability is associated with the aM acquisition-related performance compensation liability. We expect that the significant majority of the remaining liability will be paid within the next 12 months.
|
|
|
|
7.
|
Stock-based Compensation
|
Stock-based compensation expense for the three and nine months ended August 31, 2019 and August 31, 2018 was as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended August 31,
|
|
Nine months ended August 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Cost of revenue
|
$
|
15.6
|
|
|
$
|
15.2
|
|
|
$
|
48.5
|
|
|
$
|
49.9
|
|
|
Selling, general and administrative
|
38.4
|
|
|
37.3
|
|
|
118.8
|
|
|
122.2
|
|
|
Total stock-based compensation expense
|
$
|
54.0
|
|
|
$
|
52.5
|
|
|
$
|
167.3
|
|
|
$
|
172.1
|
|
No stock-based compensation cost was capitalized during the three and nine months ended August 31, 2019 and August 31, 2018.
As of August 31, 2019, there was $233.9 million of unrecognized stock-based compensation cost, adjusted for estimated forfeitures, related to unvested stock-based awards that will be recognized over a weighted-average period of approximately 1.7 years. Total unrecognized stock-based compensation cost will be adjusted for future changes in estimated forfeitures and expected performance achievement.
Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs). The following table summarizes RSU/RSA activity, including awards with performance and market conditions, during the nine months ended August 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted-
Average Grant
Date Fair Value
|
|
|
(in millions)
|
|
|
|
Balance at November 30, 2018
|
8.8
|
|
|
$
|
41.77
|
|
|
Granted
|
3.1
|
|
|
$
|
52.98
|
|
|
Vested
|
(3.5
|
)
|
|
$
|
38.44
|
|
|
Forfeited
|
(0.4
|
)
|
|
$
|
47.50
|
|
|
Balance at August 31, 2019
|
8.0
|
|
|
$
|
47.36
|
|
The total fair value of RSUs and RSAs that vested during the nine months ended August 31, 2019 was $183.0 million.
Stock Options. The following table summarizes stock option award activity during the nine months ended August 31, 2019, as well as stock options that are vested and expected to vest and stock options exercisable as of August 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value
|
|
|
(in millions)
|
|
|
|
(in years)
|
|
(in millions)
|
|
Balance at November 30, 2018
|
15.7
|
|
|
$
|
26.61
|
|
|
|
|
|
|
Exercised
|
(5.2
|
)
|
|
$
|
26.31
|
|
|
|
|
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
Balance at August 31, 2019
|
10.5
|
|
|
$
|
26.76
|
|
|
1.1
|
|
408.6
|
|
|
Vested and expected to vest at August 31, 2019
|
10.5
|
|
|
$
|
26.76
|
|
|
1.1
|
|
408.4
|
|
|
Exercisable at August 31, 2019
|
10.0
|
|
|
$
|
26.67
|
|
|
1.0
|
|
390.3
|
|
The aggregate intrinsic value amounts in the table above represent the difference between the closing price of our common shares on August 31, 2019 and the exercise price, multiplied by the number of in-the-money stock options as of that date. This represents the value that would have been received by stock option holders if they had all exercised their stock options on August 31, 2019. In future periods, this amount will change depending on fluctuations in our share price. The total intrinsic value of stock options exercised during the nine months ended August 31, 2019 was approximately $173.1 million.
Our effective tax rate is estimated based upon the effective tax rate expected to be applicable for the full year.
On June 14, 2019, the U.S. Treasury Department and the U.S. Internal Revenue Service released final temporary regulations related to the Tax Cuts and Jobs Act (“temporary tax regulations”) related to the foreign dividends received deduction and global intangible low-taxed income. The temporary tax regulations contained language that modified certain provisions of the Tax Cuts and Jobs Act and previously issued guidance. The temporary tax regulations are effective retroactively to our 2018 tax year and purport to cause certain intercompany transactions we engaged in during 2018 to produce taxable income as “subpart F income” for our U.S. subsidiary. We have recorded the impacts of the temporary tax regulations in our results for the three and nine months ended August 31, 2019. This resulted in an additional one-time net tax expense of approximately $200 million. In the fourth quarter of 2019, we made filings which we expect will reduce a portion of this expense.
Our effective tax rate for the three and nine months ended August 31, 2019 was 86 percent and 47 percent, respectively, compared to 7 percent and negative 38 percent, respectively, for the three and nine months ended August 31, 2018. The high 2019 tax rates are primarily due to the additional one-time tax expense associated with U.S. tax reform described above, partially offset by excess tax benefits on stock-based compensation of approximately $20 million and $38 million, respectively. The low or negative 2018 tax rates were primarily due to tax benefits associated with U.S. tax reform of approximately $136 million in the first quarter of 2018, and excess tax benefits on stock-based compensation of approximately $9 million and $40 million, respectively, for the three and nine months ended August 31, 2018.
|
|
|
|
9.
|
Commitments and Contingencies
|
From time to time, in the ordinary course of our business, we are involved in various legal, regulatory or administrative proceedings, lawsuits, government investigations, and other claims, including employment, commercial, intellectual property, and environmental, safety, and health matters. In addition, we may receive routine requests for information from governmental agencies in connection with their regulatory or investigatory authority or from private third parties pursuant to valid court orders or subpoenas. We review such proceedings, lawsuits, investigations, claims, and requests for information and take appropriate action as necessary. At the present time, we can give no assurance as to the outcome of any such pending proceedings, lawsuits, investigations, claims, or requests for information and we are unable to determine the ultimate resolution of or provide a reasonable estimate of the range of possible loss attributable to these matters or the effect they may have on us. However, we do not expect the outcome of such proceedings, lawsuits, claims, or requests for information to have a material adverse effect on our results of operations or financial condition. We have defended and will continue to vigorously defend ourselves in all matters.
|
|
|
|
10.
|
Common Shares and Earnings per Share
|
Weighted-average shares outstanding for the three and nine months ended August 31, 2019 and August 31, 2018 were calculated as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended August 31,
|
|
Nine months ended August 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
Shares used in basic EPS calculation
|
401.2
|
|
|
393.0
|
|
|
399.9
|
|
|
394.2
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
RSUs/RSAs
|
2.9
|
|
|
3.1
|
|
|
2.5
|
|
|
3.3
|
|
|
Stock options
|
6.8
|
|
|
9.0
|
|
|
7.0
|
|
|
9.3
|
|
|
Shares used in diluted EPS calculation
|
410.9
|
|
|
405.1
|
|
|
409.4
|
|
|
406.8
|
|
Share Repurchase Programs
Our Board of Directors has authorized a share repurchase program of up to $3.25 billion of IHS Markit common shares through November 30, 2019, to be funded using our existing cash, cash equivalents, marketable securities and future cash flows, or through the incurrence of short- or long-term indebtedness, at management’s discretion. This repurchase program does not obligate us to repurchase any set dollar amount or number of shares and may be modified, suspended, or terminated at any time without prior notice. Under this program, we are authorized to repurchase our common shares on the open market from time to time, in privately negotiated transactions, or through accelerated share repurchase (“ASR”) agreements, subject to availability of common shares, price, market conditions, alternative uses of capital, and applicable regulatory requirements, at management’s discretion. As of August 31, 2019, we had $806.9 million remaining available to repurchase under the program.
In August 2016, our Board of Directors separately and additionally authorized, subject to applicable regulatory requirements, the repurchase of our common shares surrendered by employees in an amount equal to the exercise price, if applicable, and statutory tax liability associated with the vesting of their equity awards, for which we pay the statutory tax on behalf of the employee and forgo receipt of the exercise price of the award from the employee, if applicable.
In July 2019, we entered into and funded a $200 million ASR agreement with a scheduled termination date in August 2019. Upon funding of the ASR, we received an initial delivery of 2.478 million shares. At the completion of the ASR in August 2019, we received an additional 0.637 million shares.
In September 2019, we funded a $300 million ASR agreement with a scheduled termination date in the fourth quarter of 2019. Upon funding of the ASR, we received an initial delivery of 3.658 million shares. The total number of shares ultimately to be repurchased under this ASR will generally be based on the daily volume-weighted average price of the shares during the calculation period for the ASR, less an agreed discount. At final settlement, we may be entitled to receive additional shares, or, under certain limited circumstances, be required to deliver shares to the relevant ASR counterparty.
Employee Benefit Trust (EBT) Shares
We have approximately 25.2 million outstanding common shares that are held by the Markit Group Holdings Limited Employee Benefit Trust. The trust is under our control using the variable interest entity model criteria; consequently, we have consolidated and classified the trust shares as treasury shares within our consolidated balance sheets.
|
|
|
|
11.
|
Accumulated Other Comprehensive Income (Loss)
|
The following table summarizes the changes in AOCI by component (net of tax) for the three and nine months ended August 31, 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
Net pension and OPEB liability
|
|
Unrealized losses on hedging activities
|
|
Total
|
|
Balance at November 30, 2017
|
|
$
|
(68.1
|
)
|
|
$
|
(13.0
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(85.0
|
)
|
|
Other comprehensive income before reclassifications
|
|
56.4
|
|
|
—
|
|
|
3.6
|
|
|
60.0
|
|
|
Reclassifications from AOCI to income
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
|
Reclassifications from AOCI to retained earnings
|
|
—
|
|
|
(1.7
|
)
|
|
(4.2
|
)
|
|
(5.9
|
)
|
|
Balance at February 28, 2018
|
|
$
|
(11.7
|
)
|
|
$
|
(14.7
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(29.7
|
)
|
|
Other comprehensive (loss) income before reclassifications
|
|
(114.9
|
)
|
|
—
|
|
|
0.2
|
|
|
(114.7
|
)
|
|
Reclassifications from AOCI to income
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.8
|
|
|
Balance at May 31, 2018
|
|
$
|
(126.6
|
)
|
|
$
|
(14.7
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(143.6
|
)
|
|
Other comprehensive (loss) income before reclassifications
|
|
(78.5
|
)
|
|
0.6
|
|
|
0.5
|
|
|
(77.4
|
)
|
|
Reclassifications from AOCI to income
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
Balance at August 31, 2018
|
|
$
|
(205.1
|
)
|
|
$
|
(14.1
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
(220.6
|
)
|
The following table summarizes the changes in AOCI by component (net of tax) for the three and nine months ended August 31, 2019 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation
|
|
Net pension and OPEB liability
|
|
Unrealized losses on hedging activities
|
|
Total
|
|
Balance at November 30, 2018
|
|
$
|
(288.5
|
)
|
|
$
|
(9.9
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(298.9
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
|
135.7
|
|
|
—
|
|
|
(1.7
|
)
|
|
134.0
|
|
|
Reclassifications from AOCI to income
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
Balance at February 28, 2019
|
|
$
|
(152.8
|
)
|
|
$
|
(9.9
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(164.7
|
)
|
|
Other comprehensive loss
|
|
(175.7
|
)
|
|
—
|
|
|
(1.9
|
)
|
|
(177.6
|
)
|
|
Balance at May 31, 2019
|
|
$
|
(328.5
|
)
|
|
$
|
(9.9
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
(342.3
|
)
|
|
Other comprehensive loss
|
|
(115.6
|
)
|
|
—
|
|
|
(1.0
|
)
|
|
(116.6
|
)
|
|
Reclassifications from AOCI to income
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
Balance at August 31, 2019
|
|
$
|
(444.1
|
)
|
|
$
|
(9.9
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
(458.6
|
)
|
We prepare our financial reports and analyze our business results within our four operating segments: Resources, Transportation, CMS, and Financial Services. We evaluate revenue performance at the segment level and by transaction type. No single customer accounted for 10 percent or more of our total revenue for the three and nine months ended August 31, 2019 and August 31, 2018. There are no material inter-segment revenues for any period presented. Our shared services function includes corporate transactions that are not allocated to the reportable segments, including net periodic pension and postretirement expense, as well as certain corporate functions such as investor relations, procurement, corporate development, and portions of finance, legal, and marketing.
We evaluate segment operating performance at the Adjusted EBITDA level for each of our four segments. We define Adjusted EBITDA as net income before net interest, provision for income taxes, depreciation and amortization, stock-based compensation expense, restructuring charges, acquisition-related costs and performance compensation, 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. Information about the operations of our four segments is set forth below (in millions).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended August 31,
|
|
Nine months ended August 31,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Revenue
|
|
|
|
|
|
|
|
|
Resources
|
$
|
230.0
|
|
|
$
|
211.5
|
|
|
$
|
696.2
|
|
|
$
|
653.8
|
|
|
Transportation
|
314.9
|
|
|
297.0
|
|
|
921.6
|
|
|
862.9
|
|
|
CMS
|
138.6
|
|
|
137.3
|
|
|
405.5
|
|
|
413.8
|
|
|
Financial Services
|
428.8
|
|
|
355.2
|
|
|
1,270.9
|
|
|
1,010.9
|
|
|
Total revenue
|
$
|
1,112.3
|
|
|
$
|
1,001.0
|
|
|
$
|
3,294.2
|
|
|
$
|
2,941.4
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Resources
|
$
|
100.8
|
|
|
$
|
85.1
|
|
|
$
|
303.2
|
|
|
$
|
270.5
|
|
|
Transportation
|
134.2
|
|
|
128.1
|
|
|
385.1
|
|
|
362.5
|
|
|
CMS
|
31.1
|
|
|
30.3
|
|
|
89.8
|
|
|
92.0
|
|
|
Financial Services
|
199.1
|
|
|
156.3
|
|
|
587.9
|
|
|
457.5
|
|
|
Shared services
|
(12.3
|
)
|
|
(9.3
|
)
|
|
(40.0
|
)
|
|
(34.6
|
)
|
|
Total Adjusted EBITDA
|
$
|
452.9
|
|
|
$
|
390.5
|
|
|
$
|
1,326.0
|
|
|
$
|
1,147.9
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation to the consolidated statements of operations:
|
|
|
|
|
|
|
|
|
Interest income
|
0.6
|
|
|
0.9
|
|
|
1.6
|
|
|
2.5
|
|
|
Interest expense
|
(63.2
|
)
|
|
(56.7
|
)
|
|
(195.9
|
)
|
|
(158.3
|
)
|
|
(Provision) benefit for income taxes
|
(240.6
|
)
|
|
(7.9
|
)
|
|
(263.9
|
)
|
|
126.7
|
|
|
Depreciation
|
(51.5
|
)
|
|
(45.0
|
)
|
|
(147.5
|
)
|
|
(129.0
|
)
|
|
Amortization related to acquired intangible assets
|
(93.2
|
)
|
|
(89.1
|
)
|
|
(283.5
|
)
|
|
(266.7
|
)
|
|
Stock-based compensation expense
|
(54.0
|
)
|
|
(52.5
|
)
|
|
(167.3
|
)
|
|
(172.1
|
)
|
|
Restructuring charges
|
(1.1
|
)
|
|
(0.4
|
)
|
|
(11.0
|
)
|
|
(0.4
|
)
|
|
Acquisition-related costs
|
(8.1
|
)
|
|
(30.2
|
)
|
|
(21.6
|
)
|
|
(57.4
|
)
|
|
Acquisition-related performance compensation
|
(15.3
|
)
|
|
(11.5
|
)
|
|
(46.0
|
)
|
|
(37.1
|
)
|
|
Loss on debt extinguishment
|
—
|
|
|
(1.7
|
)
|
|
(6.0
|
)
|
|
(4.7
|
)
|
|
Gain on sale of assets
|
113.0
|
|
|
—
|
|
|
113.0
|
|
|
—
|
|
|
Pension mark-to-market and settlement gain (expense)
|
—
|
|
|
7.3
|
|
|
—
|
|
|
7.3
|
|
|
Share of joint venture results not attributable to Adjusted EBITDA
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
Adjusted EBITDA attributable to noncontrolling interest
|
0.8
|
|
|
1.0
|
|
|
2.2
|
|
|
2.0
|
|
|
Net income attributable to IHS Markit Ltd.
|
$
|
40.1
|
|
|
$
|
104.5
|
|
|
$
|
299.6
|
|
|
$
|
460.5
|
|