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SEC Filings

10-Q
IHS MARKIT LTD. filed this Form 10-Q on 06/26/2018
Entire Document
 

 
Three months ended May 31,
 
Six months ended May 31,
 
2018
 
2017
 
2018
 
2017
Cost of revenue
$
16.7

 
$
21.8

 
$
34.7

 
$
37.7

Selling, general and administrative
41.0

 
42.8

 
84.9

 
102.1

Total stock-based compensation expense
$
57.7

 
$
64.6

 
$
119.6

 
$
139.8

No stock-based compensation cost was capitalized during the three and six months ended May 31, 2018 and May 31, 2017.
As of May 31, 2018, there was $270.9 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 1.8 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 six months ended May 31, 2018:
 
Shares
 
Weighted-
Average Grant
Date Fair Value
 
(in millions)
 
 
Balance at November 30, 2017
10.7

 
$
35.64

Granted
3.1

 
$
47.59

Vested
(4.6
)
 
$
33.90

Forfeited
(0.4
)
 
$
41.03

Balance at May 31, 2018
8.8

 
$
40.55

The total fair value of RSUs and RSAs that vested during the six months ended May 31, 2018 was $218.2 million.
Stock Options. The following table summarizes stock option award activity during the six months ended May 31, 2018, as well as stock options that are vested and expected to vest and stock options exercisable as of May 31, 2018:
 
Shares
 
Weighted-Average Exercise Price
 
Weighted-Average Remaining Contractual Term
 
Aggregate Intrinsic Value
 
(in millions)
 
 
 
(in years)
 
(in millions)
Balance at November 30, 2017
25.3

 
$
25.69

 
 
 
 
Exercised
(4.9
)
 
$
22.76

 
 
 
 
Forfeited

 
$

 
 
 
 
Balance at May 31, 2018
20.4

 
$
26.39

 
2.1
 
465.9

Vested and expected to vest at May 31, 2018
20.2

 
$
26.39

 
2.1
 
461.3

Exercisable at May 31, 2018
8.9

 
$
25.79

 
1.7
 
208.2

 
The aggregate intrinsic value amounts in the table above represent the difference between the closing price of our common shares on May 31, 2018 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 May 31, 2018. In future periods, this amount will change depending on fluctuations in our share price. The total intrinsic value of stock options exercised during the six months ended May 31, 2018 was approximately $124.7 million.

8.
Income Taxes

Our effective tax rate is estimated based upon the effective tax rate expected to be applicable for the full year.
Our effective tax rate for the three and six months ended May 31, 2018 was 10 percent and negative 61 percent, respectively, compared to negative 1 percent and negative 3 percent for the three and six months ended May 31, 2017. The low or negative 2018 tax rates are primarily due to tax benefits associated with US tax reform of approximately $136 million in the first quarter of 2018, and excess tax benefits on stock-based compensation of approximately $7 million and $31 million for the three and six months ended May 31, 2018, respectively. The negative 2017 tax rates are primarily due to tax benefits associated

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