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SEC Filings

10-K
IHS MARKIT LTD. filed this Form 10-K on 01/18/2019
Entire Document
 

 
 
 
 
Payment due by period
Contractual Obligations and Commercial Commitments
 
Total
 
Less than 1 year
 
1 - 3 years
 
3 - 5 years
 
More than 5 years
Term loans, notes, and interest
 
$
5,728.1

 
$
572.8

 
$
1,304.2

 
$
1,516.0

 
$
2,335.1

Operating lease obligations
 
495.9

 
74.1

 
125.4

 
95.3

 
201.1

Unconditional purchase obligations
 
153.0

 
67.2

 
84.6

 
0.9

 
0.3

Total
 
$
6,377.0

 
$
714.1

 
$
1,514.2

 
$
1,612.2

 
$
2,536.5


We expect to contribute approximately $2 million to our pension and postretirement benefit plans in 2019.

Over the next one to four years, we expect to pay cash to acquire the remaining 22 percent of aM’s equity interests. The amount of cash to be paid is based on put/call provisions that tie the valuation to underlying adjusted EBITDA performance of aM. Based on our current estimates, we believe that the purchase price for the remaining equity interests will be in a range of $150 million to $175 million.

In addition to the term loans and notes, as of November 30, 2018, we also had $1.1 billion of outstanding borrowings under our $2.0 billion 2018 revolving facility at a current annual interest rate of 3.69 percent. The facility has a five-year term ending in June 2023. We also had approximately $7 million in capital lease obligations as of November 30, 2018.

Recent Accounting Pronouncements

Please refer to “Item 8 - Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 2” in Part II of this Form 10-K for a discussion of recent accounting pronouncements and their anticipated effect on our business.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risk refers to potential losses from adverse changes in market rates and prices. We are exposed to market risk primarily in the form of interest rate, foreign currency exchange rate, and credit risk. We actively monitor these exposures. In order to manage these exposures, we use derivative financial instruments, including interest rate swaps and foreign currency forwards. Our objective is to reduce fluctuations in revenue, earnings, and cash flows resulting from changes in interest rates and foreign currency rates. We do not use derivatives for speculative purposes.

Interest Rate Risk
 
As of November 30, 2018, we had no significant investments other than cash and cash equivalents and therefore we were not exposed to material interest rate risk on investments.

Our 2018 revolving facility, our 2018 term loans, and our 364-day credit agreement are subject to variable interest rates. We use interest rate swaps in order to fix a portion of our variable rate debt as part of our overall interest rate risk management strategy. As of November 30, 2018, we had $2.413 billion of floating-rate debt at a 3.76 percent weighted-average interest rate, of which $400 million was subject to effective floating-to-fixed interest rate swaps. A hypothetical increase in interest rates of 100 basis points applied to our floating rate indebtedness would increase annual interest expense by approximately $20 million ($24 million without giving effect to any of our interest rate swaps).

Foreign Currency Exchange Rate Risk

Our consolidated financial statements are expressed in U.S. dollars, but a portion of our business is conducted in currencies other than U.S. dollars. Changes in the exchange rates for such currencies into U.S. dollars can affect our revenues, earnings, and the carrying values of our assets and liabilities in our consolidated balance sheet, either positively or negatively. Fluctuations in foreign currency rates increased (decreased) our revenues by approximately $24 million, $(27) million, and $(50) million for the years ended November 30, 2018, 2017, and 2016, respectively, and had no material impact on operating income for the same respective periods. The translation effects of changes in exchange rates in our consolidated balance sheet are recorded within the cumulative translation adjustment component of our shareholders’ equity. In 2018, we recorded a cumulative translation loss of $220 million, reflecting changes in exchange rates of various currencies compared to the U.S. dollar.

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