Q3 2018 IHS Markit Earnings Conference Call - Supplemental Materials - Click here for PDF LONDON--(BUSINESS WIRE)--Sep. 25, 2018--
IHS Markit (Nasdaq: INFO), a world leader in critical information,
analytics and solutions, today reported results for the third quarter
ended August 31, 2018.
-
Revenue of $1.001 billion, including total revenue growth of 11
percent, total organic revenue growth of 6 percent, and normalized
total organic revenue growth of 7 percent
-
Net income of $104 million and diluted earnings per share (EPS) of
$0.26
-
Adjusted EBITDA of $391 million and Adjusted earnings per diluted
share (Adjusted EPS) of $0.58
-
Cash flow from operations of $346 million and free cash flow of $293
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 2018 Financial Performance
|
|
|
Three months ended August 31,
|
|
|
Change
|
|
|
Nine months ended August 31,
|
|
|
Change
|
(in millions, except percentages and per share data)
|
|
|
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
|
|
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
Revenue
|
|
|
$
|
1,001.0
|
|
|
|
$
|
904.7
|
|
|
|
$
|
96.3
|
|
|
|
11
|
%
|
|
|
$
|
2,941.4
|
|
|
|
$
|
2,655.0
|
|
|
|
$
|
286.4
|
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to IHS Markit*
|
|
|
$
|
104.5
|
|
|
|
$
|
145.9
|
|
|
|
$
|
(41.4
|
)
|
|
|
(28
|
)%
|
|
|
$
|
460.5
|
|
|
|
$
|
311.2
|
|
|
|
$
|
149.3
|
|
|
|
48
|
%
|
Adjusted EBITDA
|
|
|
$
|
390.5
|
|
|
|
$
|
350.8
|
|
|
|
$
|
39.7
|
|
|
|
11
|
%
|
|
|
$
|
1,147.9
|
|
|
|
$
|
1,023.9
|
|
|
|
$
|
124.0
|
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP EPS
|
|
|
$
|
0.26
|
|
|
|
$
|
0.35
|
|
|
|
$
|
(0.09
|
)
|
|
|
(26
|
)%
|
|
|
$
|
1.13
|
|
|
|
$
|
0.75
|
|
|
|
$
|
0.38
|
|
|
|
51
|
%
|
Adjusted EPS
|
|
|
$
|
0.58
|
|
|
|
$
|
0.57
|
|
|
|
$
|
0.01
|
|
|
|
2
|
%
|
|
|
$
|
1.72
|
|
|
|
$
|
1.54
|
|
|
|
$
|
0.18
|
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operations
|
|
|
$
|
346.4
|
|
|
|
$
|
267.3
|
|
|
|
$
|
79.1
|
|
|
|
30
|
%
|
|
|
$
|
932.0
|
|
|
|
$
|
718.6
|
|
|
|
$
|
213.4
|
|
|
|
30
|
%
|
Free cash flow
|
|
|
$
|
292.6
|
|
|
|
$
|
206.0
|
|
|
|
$
|
86.6
|
|
|
|
42
|
%
|
|
|
$
|
763.5
|
|
|
|
$
|
526.8
|
|
|
|
$
|
236.7
|
|
|
|
45
|
%
|
* Net income attributable to IHS Markit for the nine months ended
August 31, 2018 includes a one-time tax benefit associated with U.S. tax
reform estimated at approximately $136 million.
"Continued focus on operational execution led to strong financial
results in the quarter. I am particularly pleased with the continued
sense of urgency and high level of commercial engagement across the
firm," said Lance Uggla, chairman and chief executive officer at IHS
Markit.
"We continue to deliver broad-based revenue and profit growth and solid
free cash flow conversion," said Todd Hyatt, chief financial officer at
IHS Markit.
Third Quarter 2018 Revenue Performance
Third quarter 2018 revenue increased 11 percent compared to the third
quarter of 2017. The following table provides additional revenue
information by transaction type.
|
|
|
Three months ended August 31,
|
|
|
Percent change
|
(in millions, except percentages)
|
|
|
2018
|
|
|
2017
|
|
|
Total
|
|
|
Organic
|
Recurring fixed
|
|
|
$
|
717.7
|
|
|
|
$
|
637.9
|
|
|
|
13
|
%
|
|
|
7
|
%
|
Recurring variable
|
|
|
124.8
|
|
|
|
109.6
|
|
|
|
14
|
%
|
|
|
8
|
%
|
Non-recurring*
|
|
|
158.5
|
|
|
|
157.2
|
|
|
|
1
|
%
|
|
|
1
|
%
|
Total revenue*
|
|
|
$
|
1,001.0
|
|
|
|
$
|
904.7
|
|
|
|
11
|
%
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The components of revenue growth are described below by segment and in
total.
|
|
|
Change in revenue
|
|
|
|
Third quarter 2018 vs. Third quarter 2017
|
(All amounts represent percentage points)
|
|
|
Organic
|
|
|
Acquisitive
|
|
|
Foreign Currency
|
|
|
Total
|
Resources
|
|
|
5
|
%
|
|
|
—
|
%
|
|
|
—
|
%
|
|
|
5
|
%
|
Transportation
|
|
|
9
|
%
|
|
|
7
|
%
|
|
|
—
|
%
|
|
|
16
|
%
|
Consolidated Markets & Solutions*
|
|
|
(2
|
)%
|
|
|
1
|
%
|
|
|
—
|
%
|
|
|
(1
|
)%
|
Financial Services
|
|
|
8
|
%
|
|
|
8
|
%
|
|
|
—
|
%
|
|
|
16
|
%
|
Total*
|
|
|
6
|
%
|
|
|
5
|
%
|
|
|
—
|
%
|
|
|
11
|
%
|
* Excluding the effect of the BPVC engineering standard release in
the third quarter of 2017, total non-recurring organic revenue increased
13 percent, CMS total organic revenue increased 4 percent, and total
organic revenue increased 7 percent for the three months ended August
31, 2018 compared to the three months ended August 31, 2017.
Third Quarter 2018 Operating Performance
Segment results were as follows (additional segment information is
included later in this release):
-
Resources. Third quarter revenue for Resources increased $9
million, or 5 percent, to $212 million, with recurring revenue
increasing 4 percent organically. Third quarter Adjusted EBITDA for
Resources decreased $3 million, or 4 percent, to $85 million.
-
Transportation. Third quarter revenue for Transportation
increased $40 million, or 16 percent, to $297 million, and included 10
percent organic growth for the recurring-based business. Third quarter
Adjusted EBITDA for Transportation increased $18 million, or 16
percent, to $128 million.
-
Consolidated Markets & Solutions (CMS). Third quarter
revenue for CMS decreased $2 million, or 1 percent, to $137 million,
and had 3 percent organic growth for the recurring-based business.
Third quarter Adjusted EBITDA for CMS decreased $2 million, or 5
percent, to $30 million.
-
Financial Services. Third quarter revenue for Financial
Services increased $49 million, or 16 percent, to $355 million, and
included 8 percent total organic growth. Third quarter Adjusted EBITDA
for Financial Services increased $18 million, or 13 percent, to $156
million.
Outlook (forward-looking statement)
For the year ending November 30, 2018, IHS Markit now expects:
-
Revenue in a range of $4.000 billion to $4.020 billion, including
total organic growth of 6 percent;
-
Adjusted EBITDA in a range of $1.550 billion to $1.560 billion; and
-
Adjusted EPS in a range of $2.25 to $2.27 per diluted share.
Additionally, for the year ending November 30, 2018, IHS Markit expects:
-
Depreciation expense to be approximately $180 million to $190 million;
-
Amortization expense related to acquired intangible assets to be
approximately $360 million to $370 million;
-
Net interest expense to be approximately $215 million to $220 million;
-
Stock-based compensation expense to be approximately $225 million to
$235 million;
-
An adjusted effective tax rate of approximately 18 percent to 20
percent;
-
Weighted average diluted shares of approximately 405 million to 410
million;
-
Capital expenditures to be approximately 6 percent to 7 percent of
revenue; and
-
Free cash flow as a percentage of Adjusted EBITDA in the mid-60's.
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 2018 results on September 25, 2018, 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.
A replay of the earnings webcast will be available approximately two
hours after the conclusion of the live event. The webcast recording will
be available for one year on the Investor Relations section of the
company's website.
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. This communication also includes
certain forward-looking non-GAAP financial measures. IHS Markit is
unable to present a reconciliation of this forward-looking non-GAAP
financial information because management cannot reliably predict all of
the necessary components of such measures. Accordingly, investors are
cautioned not to place undue reliance on this information.
Non-GAAP measures are frequently used by securities analysts, investors,
and other interested parties in their evaluation of companies comparable
to IHS Markit, many of which present non-GAAP measures when reporting
their results. These measures can be useful in evaluating our
performance against our peer companies because we believe the measures
provide users with valuable insight into key components of GAAP
financial disclosures. However, non-GAAP measures have limitations as an
analytical tool. Non-GAAP measures are not necessarily comparable to
similarly titled measures used by other companies. They are not
presentations made in accordance with GAAP, are not measures of
financial condition or liquidity, and should not be considered as an
alternative to profit or loss for the period determined in accordance
with GAAP or operating cash flows determined in accordance with GAAP. As
a result, you should not consider such performance measures in isolation
from, or as a substitute analysis for, results of operations as
determined in accordance with GAAP.
Forward-Looking Statements
This communication contains "forward-looking statements" within the
meaning of the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. 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," "could," "target," similar expressions, and variations
or negatives of these words and the use of future tense. Forward-looking
statements are neither historical facts nor assurances of future
performance. Instead, they are based only on our current beliefs,
expectations, estimates 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. A
detailed discussion of some of the risks and uncertainties that could
cause our actual results and financial condition to differ materially
from the forward-looking statements is described under the caption "Risk
Factors" in our most recent annual report on Form 10-K, along with our
other filings with the U.S. Securities and Exchange Commission. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this communication. 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 communication. 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. Please consult our public filings at www.sec.gov
or www.ihsmarkit.com.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information,
analytics and solutions for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 business and government customers, including 80 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 and/or its
affiliates. All other company and product names may be trademarks of
their respective owners © 2018 IHS Markit Ltd. All rights reserved.
|
IHS MARKIT LTD.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In millions)
|
|
|
|
|
|
|
As of August 31, 2018
|
|
|
As of November 30, 2017
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
154.4
|
|
|
|
$
|
133.8
|
Accounts receivable, net
|
|
|
|
|
760.6
|
|
|
|
693.5
|
Income tax receivable
|
|
|
|
|
18.2
|
|
|
|
31.9
|
Deferred subscription costs
|
|
|
|
|
71.2
|
|
|
|
62.8
|
Other current assets
|
|
|
|
|
109.7
|
|
|
|
93.0
|
Total current assets
|
|
|
|
|
1,114.1
|
|
|
|
1,015.0
|
Non-current assets:
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
591.9
|
|
|
|
531.3
|
Intangible assets, net
|
|
|
|
|
4,434.8
|
|
|
|
4,188.3
|
Goodwill
|
|
|
|
|
10,003.4
|
|
|
|
8,778.5
|
Deferred income taxes
|
|
|
|
|
11.1
|
|
|
|
7.1
|
Other
|
|
|
|
|
51.0
|
|
|
|
34.2
|
Total non-current assets
|
|
|
|
|
15,092.2
|
|
|
|
13,539.4
|
Total assets
|
|
|
|
|
$
|
16,206.3
|
|
|
|
$
|
14,554.4
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
|
|
$
|
1,166.3
|
|
|
|
$
|
576.0
|
Accounts payable
|
|
|
|
|
39.6
|
|
|
|
53.4
|
Accrued compensation
|
|
|
|
|
155.3
|
|
|
|
157.4
|
Other accrued expenses
|
|
|
|
|
294.7
|
|
|
|
323.0
|
Income tax payable
|
|
|
|
|
10.5
|
|
|
|
5.5
|
Deferred revenue
|
|
|
|
|
897.0
|
|
|
|
790.8
|
Total current liabilities
|
|
|
|
|
2,563.4
|
|
|
|
1,906.1
|
Long-term debt, net
|
|
|
|
|
4,893.8
|
|
|
|
3,617.3
|
Accrued pension and postretirement liability
|
|
|
|
|
22.2
|
|
|
|
31.8
|
Deferred income taxes
|
|
|
|
|
666.0
|
|
|
|
869.8
|
Other liabilities
|
|
|
|
|
162.4
|
|
|
|
105.9
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests
|
|
|
|
|
6.9
|
|
|
|
19.1
|
Shareholders' equity
|
|
|
|
|
7,891.6
|
|
|
|
8,004.4
|
Total liabilities and equity
|
|
|
|
|
$
|
16,206.3
|
|
|
|
$
|
14,554.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Revenue
|
|
|
$
|
1,001.0
|
|
|
|
$
|
904.7
|
|
|
|
$
|
2,941.4
|
|
|
|
$
|
2,655.0
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
375.3
|
|
|
|
341.6
|
|
|
|
1,086.6
|
|
|
|
1,006.3
|
|
Selling, general and administrative
|
|
|
287.7
|
|
|
|
268.8
|
|
|
|
877.2
|
|
|
|
811.0
|
|
Depreciation and amortization
|
|
|
134.1
|
|
|
|
120.8
|
|
|
|
395.7
|
|
|
|
364.4
|
|
Restructuring charges
|
|
|
0.4
|
|
|
|
(0.1
|
)
|
|
|
0.4
|
|
|
|
(0.8
|
)
|
Acquisition-related costs
|
|
|
41.7
|
|
|
|
14.9
|
|
|
|
94.5
|
|
|
|
76.9
|
|
Net periodic pension and postretirement expense (income)
|
|
|
(7.1
|
)
|
|
|
3.1
|
|
|
|
(6.6
|
)
|
|
|
3.9
|
|
Other expense, net
|
|
|
1.5
|
|
|
|
3.1
|
|
|
|
5.9
|
|
|
|
8.3
|
|
Total operating expenses
|
|
|
833.6
|
|
|
|
752.2
|
|
|
|
2,453.7
|
|
|
|
2,270.0
|
|
Operating income
|
|
|
167.4
|
|
|
|
152.5
|
|
|
|
487.7
|
|
|
|
385.0
|
|
Interest income
|
|
|
0.9
|
|
|
|
0.5
|
|
|
|
2.5
|
|
|
|
1.6
|
|
Interest expense
|
|
|
(56.7
|
)
|
|
|
(41.5
|
)
|
|
|
(158.3
|
)
|
|
|
(111.0
|
)
|
Non-operating expense, net
|
|
|
(55.8
|
)
|
|
|
(41.0
|
)
|
|
|
(155.8
|
)
|
|
|
(109.4
|
)
|
Income from continuing operations before income taxes and equity in
loss of equity method investee
|
|
|
111.6
|
|
|
|
111.5
|
|
|
|
331.9
|
|
|
|
275.6
|
|
Benefit (provision) for income taxes
|
|
|
(7.9
|
)
|
|
|
36.7
|
|
|
|
126.7
|
|
|
|
41.3
|
|
Equity in loss of equity method investee
|
|
|
(0.2
|
)
|
|
|
(1.1
|
)
|
|
|
(0.2
|
)
|
|
|
(5.0
|
)
|
Net income
|
|
|
103.5
|
|
|
|
147.1
|
|
|
|
458.4
|
|
|
|
311.9
|
|
Net loss (income) attributable to noncontrolling interest
|
|
|
1.0
|
|
|
|
(1.2
|
)
|
|
|
2.1
|
|
|
|
(0.7
|
)
|
Net income attributable to IHS Markit Ltd.
|
|
|
$
|
104.5
|
|
|
|
$
|
145.9
|
|
|
|
$
|
460.5
|
|
|
|
$
|
311.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share attributable to IHS Markit Ltd.
|
|
|
$
|
0.26
|
|
|
|
$
|
0.37
|
|
|
|
$
|
1.17
|
|
|
|
$
|
0.78
|
|
Weighted average shares used in computing basic earnings per share
|
|
|
393.0
|
|
|
|
397.6
|
|
|
|
394.2
|
|
|
|
401.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to IHS Markit Ltd.
|
|
|
$
|
0.26
|
|
|
|
$
|
0.35
|
|
|
|
$
|
1.13
|
|
|
|
$
|
0.75
|
|
Weighted average shares used in computing diluted earnings per share
|
|
|
405.1
|
|
|
|
414.2
|
|
|
|
406.8
|
|
|
|
417.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IHS MARKIT LTD.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
Nine months ended August 31,
|
|
|
|
|
|
2018
|
|
|
2017
|
Operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
458.4
|
|
|
|
$
|
311.9
|
|
Reconciliation of net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
395.7
|
|
|
|
364.4
|
|
Stock-based compensation expense
|
|
|
|
|
172.1
|
|
|
|
203.2
|
|
Net periodic pension and postretirement expense (income)
|
|
|
|
|
(6.6
|
)
|
|
|
3.9
|
|
Undistributed earnings of affiliates, net
|
|
|
|
|
—
|
|
|
|
(4.1
|
)
|
Pension and postretirement contributions
|
|
|
|
|
(2.2
|
)
|
|
|
(2.0
|
)
|
Deferred income taxes
|
|
|
|
|
(203.2
|
)
|
|
|
(98.5
|
)
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
|
27.9
|
|
|
|
11.7
|
|
Other current assets
|
|
|
|
|
(14.1
|
)
|
|
|
(42.4
|
)
|
Accounts payable
|
|
|
|
|
(13.3
|
)
|
|
|
(17.5
|
)
|
Accrued expenses
|
|
|
|
|
(10.4
|
)
|
|
|
(68.6
|
)
|
Income tax
|
|
|
|
|
34.0
|
|
|
|
16.9
|
|
Deferred revenue
|
|
|
|
|
33.4
|
|
|
|
34.6
|
|
Other liabilities
|
|
|
|
|
60.3
|
|
|
|
5.1
|
|
Net cash provided by operating activities
|
|
|
|
|
932.0
|
|
|
|
718.6
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures on property and equipment
|
|
|
|
|
(168.5
|
)
|
|
|
(191.8
|
)
|
Acquisitions of businesses, net of cash acquired
|
|
|
|
|
(1,881.4
|
)
|
|
|
—
|
|
Change in other assets
|
|
|
|
|
(7.4
|
)
|
|
|
(2.9
|
)
|
Settlements of forward contracts
|
|
|
|
|
(6.9
|
)
|
|
|
6.6
|
|
Net cash used in investing activities
|
|
|
|
|
(2,064.2
|
)
|
|
|
(188.1
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from borrowings
|
|
|
|
|
4,599.9
|
|
|
|
2,464.5
|
|
Repayment of borrowings
|
|
|
|
|
(2,721.6
|
)
|
|
|
(1,856.1
|
)
|
Payment of debt issuance costs
|
|
|
|
|
(30.9
|
)
|
|
|
(14.4
|
)
|
Payments for purchase of noncontrolling interests
|
|
|
|
|
(7.7
|
)
|
|
|
—
|
|
Proceeds from noncontrolling interests
|
|
|
|
|
—
|
|
|
|
7.5
|
|
Contingent consideration payments
|
|
|
|
|
(43.0
|
)
|
|
|
—
|
|
Repurchases of common shares
|
|
|
|
|
(672.5
|
)
|
|
|
(1,317.8
|
)
|
Proceeds from the exercise of employee stock options
|
|
|
|
|
162.4
|
|
|
|
297.2
|
|
Payments related to tax withholding for stock-based compensation
|
|
|
|
|
(85.6
|
)
|
|
|
(82.2
|
)
|
Net cash provided by (used in) financing activities
|
|
|
|
|
1,201.0
|
|
|
|
(501.3
|
)
|
Foreign exchange impact on cash balance
|
|
|
|
|
(48.2
|
)
|
|
|
(14.3
|
)
|
Net increase in cash and cash equivalents
|
|
|
|
|
20.6
|
|
|
|
14.9
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
|
|
133.8
|
|
|
|
138.9
|
|
Cash and cash equivalents at the end of the period
|
|
|
|
|
$
|
154.4
|
|
|
|
$
|
153.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IHS MARKIT LTD.
|
SUPPLEMENTAL REVENUE DISCLOSURE
|
(In millions)
|
(Unaudited)
|
|
|
|
|
Three months ended August 31,
|
|
|
Percent change
|
|
|
Nine months ended August 31,
|
|
|
Percent change
|
|
|
|
2018
|
|
|
2017
|
|
|
Total
|
|
|
Organic
|
|
|
2018
|
|
|
2017
|
|
|
Total
|
|
|
Organic
|
Recurring revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resources
|
|
|
$
|
184.3
|
|
|
|
$
|
176.9
|
|
|
|
4
|
%
|
|
|
4
|
%
|
|
|
$
|
551.0
|
|
|
|
$
|
530.5
|
|
|
|
4
|
%
|
|
|
3
|
%
|
Transportation
|
|
|
210.7
|
|
|
|
173.7
|
|
|
|
21
|
%
|
|
|
10
|
%
|
|
|
615.9
|
|
|
|
501.6
|
|
|
|
23
|
%
|
|
|
11
|
%
|
CMS
|
|
|
118.8
|
|
|
|
114.7
|
|
|
|
4
|
%
|
|
|
3
|
%
|
|
|
357.5
|
|
|
|
340.0
|
|
|
|
5
|
%
|
|
|
3
|
%
|
Financial Services - fixed
|
|
|
203.9
|
|
|
|
172.6
|
|
|
|
18
|
%
|
|
|
8
|
%
|
|
|
574.7
|
|
|
|
513.5
|
|
|
|
12
|
%
|
|
|
7
|
%
|
Total recurring fixed revenue
|
|
|
$
|
717.7
|
|
|
|
$
|
637.9
|
|
|
|
13
|
%
|
|
|
7
|
%
|
|
|
$
|
2,099.1
|
|
|
|
$
|
1,885.6
|
|
|
|
11
|
%
|
|
|
6
|
%
|
Financial Services - variable
|
|
|
124.8
|
|
|
|
109.6
|
|
|
|
14
|
%
|
|
|
8
|
%
|
|
|
367.8
|
|
|
|
332.0
|
|
|
|
11
|
%
|
|
|
7
|
%
|
Total recurring revenue
|
|
|
$
|
842.5
|
|
|
|
$
|
747.5
|
|
|
|
13
|
%
|
|
|
7
|
%
|
|
|
$
|
2,466.9
|
|
|
|
$
|
2,217.6
|
|
|
|
11
|
%
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resources
|
|
|
$
|
27.2
|
|
|
|
$
|
25.3
|
|
|
|
8
|
%
|
|
|
8
|
%
|
|
|
$
|
102.8
|
|
|
|
$
|
92.4
|
|
|
|
11
|
%
|
|
|
11
|
%
|
Transportation
|
|
|
86.3
|
|
|
|
83.4
|
|
|
|
3
|
%
|
|
|
6
|
%
|
|
|
247.0
|
|
|
|
222.7
|
|
|
|
11
|
%
|
|
|
11
|
%
|
CMS*
|
|
|
18.5
|
|
|
|
24.1
|
|
|
|
(23
|
)%
|
|
|
(25
|
)%
|
|
|
56.3
|
|
|
|
55.9
|
|
|
|
1
|
%
|
|
|
(2
|
)%
|
Financial Services
|
|
|
26.5
|
|
|
|
24.4
|
|
|
|
9
|
%
|
|
|
4
|
%
|
|
|
68.4
|
|
|
|
66.4
|
|
|
|
3
|
%
|
|
|
—
|
%
|
Total non-recurring revenue*
|
|
|
$
|
158.5
|
|
|
|
$
|
157.2
|
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
$
|
474.5
|
|
|
|
$
|
437.4
|
|
|
|
8
|
%
|
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue (segment):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resources
|
|
|
$
|
211.5
|
|
|
|
$
|
202.2
|
|
|
|
5
|
%
|
|
|
5
|
%
|
|
|
$
|
653.8
|
|
|
|
$
|
622.9
|
|
|
|
5
|
%
|
|
|
4
|
%
|
Transportation
|
|
|
297.0
|
|
|
|
257.1
|
|
|
|
16
|
%
|
|
|
9
|
%
|
|
|
862.9
|
|
|
|
724.3
|
|
|
|
19
|
%
|
|
|
11
|
%
|
CMS*
|
|
|
137.3
|
|
|
|
138.8
|
|
|
|
(1
|
)%
|
|
|
(2
|
)%
|
|
|
413.8
|
|
|
|
395.9
|
|
|
|
5
|
%
|
|
|
2
|
%
|
Financial Services
|
|
|
355.2
|
|
|
|
306.6
|
|
|
|
16
|
%
|
|
|
8
|
%
|
|
|
1,010.9
|
|
|
|
911.9
|
|
|
|
11
|
%
|
|
|
7
|
%
|
Total revenue*
|
|
|
$
|
1,001.0
|
|
|
|
$
|
904.7
|
|
|
|
11
|
%
|
|
|
6
|
%
|
|
|
$
|
2,941.4
|
|
|
|
$
|
2,655.0
|
|
|
|
11
|
%
|
|
|
7
|
%
|
* Excluding the effect of the BPVC engineering standard release in
the third quarter of 2017 results in the following organic revenue
change percentages:
-
CMS non-recurring organic revenue increased 13 percent and 8
percent for the three and nine months ended August 31, 2018,
respectively;
-
Total non-recurring organic revenue increased 6 percent and 8
percent for the three and nine months ended August 31, 2018,
respectively;
-
CMS total organic revenue increased 4 percent for both the three
and nine months ended August 31, 2018; and
-
Total organic revenue increased 7 percent for both the three and
nine months ended August 31, 2018.
|
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,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Net income attributable to IHS Markit Ltd.
|
|
|
$
|
104.5
|
|
|
|
$
|
145.9
|
|
|
|
$
|
460.5
|
|
|
|
$
|
311.2
|
|
Interest income
|
|
|
(0.9
|
)
|
|
|
(0.5
|
)
|
|
|
(2.5
|
)
|
|
|
(1.6
|
)
|
Interest expense
|
|
|
56.7
|
|
|
|
41.5
|
|
|
|
158.3
|
|
|
|
111.0
|
|
Provision (benefit) for income taxes
|
|
|
7.9
|
|
|
|
(36.7
|
)
|
|
|
(126.7
|
)
|
|
|
(41.3
|
)
|
Depreciation
|
|
|
45.0
|
|
|
|
38.2
|
|
|
|
129.0
|
|
|
|
113.4
|
|
Amortization related to acquired intangible assets
|
|
|
89.1
|
|
|
|
82.6
|
|
|
|
266.7
|
|
|
|
251.0
|
|
EBITDA (1)(6)
|
|
|
$
|
302.3
|
|
|
|
$
|
271.0
|
|
|
|
$
|
885.3
|
|
|
|
$
|
743.7
|
|
Stock-based compensation expense
|
|
|
52.5
|
|
|
|
63.4
|
|
|
|
172.1
|
|
|
|
203.2
|
|
Restructuring charges
|
|
|
0.4
|
|
|
|
(0.1
|
)
|
|
|
0.4
|
|
|
|
(0.8
|
)
|
Acquisition-related costs
|
|
|
30.2
|
|
|
|
14.9
|
|
|
|
57.4
|
|
|
|
76.9
|
|
Acquisition-related performance compensation
|
|
|
11.5
|
|
|
|
—
|
|
|
|
37.1
|
|
|
|
—
|
|
Loss on debt extinguishment
|
|
|
1.7
|
|
|
|
—
|
|
|
|
4.7
|
|
|
|
—
|
|
Pension mark-to-market and settlement (gain) expense
|
|
|
(7.3
|
)
|
|
|
2.7
|
|
|
|
(7.3
|
)
|
|
|
2.7
|
|
Share of joint venture results not attributable to Adjusted EBITDA
|
|
|
0.2
|
|
|
|
(0.4
|
)
|
|
|
0.2
|
|
|
|
(1.2
|
)
|
Adjusted EBITDA attributable to noncontrolling interest
|
|
|
(1.0
|
)
|
|
|
(0.7
|
)
|
|
|
(2.0
|
)
|
|
|
(0.6
|
)
|
Adjusted EBITDA (2)(6)
|
|
|
$
|
390.5
|
|
|
|
$
|
350.8
|
|
|
|
$
|
1,147.9
|
|
|
|
$
|
1,023.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended August 31,
|
|
|
Nine months ended August 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Net income attributable to IHS Markit Ltd.
|
|
|
$
|
104.5
|
|
|
|
$
|
145.9
|
|
|
|
$
|
460.5
|
|
|
|
$
|
311.2
|
|
Stock-based compensation expense
|
|
|
52.5
|
|
|
|
63.4
|
|
|
|
172.1
|
|
|
|
203.2
|
|
Amortization related to acquired intangible assets
|
|
|
89.1
|
|
|
|
82.6
|
|
|
|
266.7
|
|
|
|
251.0
|
|
Restructuring charges
|
|
|
0.4
|
|
|
|
(0.1
|
)
|
|
|
0.4
|
|
|
|
(0.8
|
)
|
Acquisition-related costs
|
|
|
30.2
|
|
|
|
14.9
|
|
|
|
57.4
|
|
|
|
76.9
|
|
Acquisition-related performance compensation
|
|
|
11.5
|
|
|
|
—
|
|
|
|
37.1
|
|
|
|
—
|
|
Acquisition financing fees
|
|
|
0.3
|
|
|
|
—
|
|
|
|
4.9
|
|
|
|
—
|
|
Loss on debt extinguishment
|
|
|
1.7
|
|
|
|
—
|
|
|
|
4.7
|
|
|
|
—
|
|
Pension mark-to-market and settlement (gain) expense
|
|
|
(7.3
|
)
|
|
|
2.7
|
|
|
|
(7.3
|
)
|
|
|
2.7
|
|
Income tax effect of above adjustments*
|
|
|
(48.4
|
)
|
|
|
(72.1
|
)
|
|
|
(295.6
|
)
|
|
|
(199.1
|
)
|
Adjusted earnings attributable to noncontrolling interest
|
|
|
(0.4
|
)
|
|
|
(0.4
|
)
|
|
|
(1.2
|
)
|
|
|
(1.3
|
)
|
Adjusted net income (3)
|
|
|
$
|
234.1
|
|
|
|
$
|
236.9
|
|
|
|
$
|
699.7
|
|
|
|
$
|
643.8
|
|
Adjusted EPS (4)(6)
|
|
|
$
|
0.58
|
|
|
|
$
|
0.57
|
|
|
|
$
|
1.72
|
|
|
|
$
|
1.54
|
|
Weighted average shares used in computing Adjusted EPS
|
|
|
405.1
|
|
|
|
414.2
|
|
|
|
406.8
|
|
|
|
417.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Income tax effect for the nine months ended August 31, 2018
includes a one-time tax benefit associated with U.S. tax reform
estimated at approximately $136 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended August 31,
|
|
|
Nine months ended August 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Net cash provided by operating activities
|
|
|
$
|
346.4
|
|
|
|
$
|
267.3
|
|
|
|
$
|
932.0
|
|
|
|
$
|
718.6
|
|
Capital expenditures on property and equipment
|
|
|
(53.8
|
)
|
|
|
(61.3
|
)
|
|
|
(168.5
|
)
|
|
|
(191.8
|
)
|
Free cash flow (5)(6)
|
|
|
$
|
292.6
|
|
|
|
$
|
206.0
|
|
|
|
$
|
763.5
|
|
|
|
$
|
526.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IHS MARKIT LTD.
|
SUPPLEMENTAL SEGMENT OPERATING PROFIT MEASURE DISCLOSURE
|
(In millions)
|
(Unaudited)
|
|
|
|
|
Three months ended August 31,
|
|
|
Nine months ended August 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
Adjusted EBITDA by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Resources
|
|
|
$
|
85.1
|
|
|
|
$
|
88.5
|
|
|
|
$
|
270.5
|
|
|
|
$
|
268.2
|
|
Transportation
|
|
|
128.1
|
|
|
|
110.0
|
|
|
|
362.5
|
|
|
|
298.0
|
|
CMS
|
|
|
30.3
|
|
|
|
32.0
|
|
|
|
92.0
|
|
|
|
92.3
|
|
Financial Services
|
|
|
156.3
|
|
|
|
138.0
|
|
|
|
457.5
|
|
|
|
406.0
|
|
Shared services
|
|
|
(9.3
|
)
|
|
|
(17.7
|
)
|
|
|
(34.6
|
)
|
|
|
(40.6
|
)
|
Total Adjusted EBITDA
|
|
|
$
|
390.5
|
|
|
|
$
|
350.8
|
|
|
|
$
|
1,147.9
|
|
|
|
$
|
1,023.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin by segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Resources
|
|
|
40.2
|
%
|
|
|
43.8
|
%
|
|
|
41.4
|
%
|
|
|
43.1
|
%
|
Transportation
|
|
|
43.1
|
%
|
|
|
42.8
|
%
|
|
|
42.0
|
%
|
|
|
41.1
|
%
|
CMS
|
|
|
22.1
|
%
|
|
|
23.1
|
%
|
|
|
22.2
|
%
|
|
|
23.3
|
%
|
Financial Services
|
|
|
44.0
|
%
|
|
|
45.0
|
%
|
|
|
45.3
|
%
|
|
|
44.5
|
%
|
Total Adjusted EBITDA margin
|
|
|
39.0
|
%
|
|
|
38.8
|
%
|
|
|
39.0
|
%
|
|
|
38.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and performance
compensation, exceptional litigation, net other gains and losses,
pension mark-to-market and other adjustments, 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 and
performance compensation, acquisition financing fees, net other
gains and losses, pension mark-to-market expense and other
adjustments, and the impact of noncontrolling interests, 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: https://www.businesswire.com/news/home/20180925005403/en/
Source: IHS Markit
IHS Markit News Media Contact: Dan
Wilinsky, +1 303-397-2468 dan.wilinsky@ihsmarkit.com or Investor
Relations Contact: Eric Boyer, +1 303-397-2969 eric.boyer@ihsmarkit.com
|