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Q4 2018 IHS Markit Earnings Conference Call - Supplemental Materials - Click here for PDF
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Revenue of
$1.068 billion , including total organic revenue growth of 5 percent -
Net income of
$81 million and diluted earnings per share (EPS) of$0.20 -
Adjusted EBITDA of
$417 million and Adjusted earnings per diluted share (Adjusted EPS) of$0.57 -
Cash flow from operations of
$358 million and free cash flow of$303 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.
Fourth Quarter and Year-to-Date 2018 Financial Performance |
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Three months ended November 30, |
Change | Year ended November 30, | Change | |||||||||||||||||||||||||||||
(in millions, except percentages and per share data) | 2018 | 2017 | $ | % | 2018 | 2017 | $ | % | ||||||||||||||||||||||||
Revenue | $ | 1,067.8 | $ | 944.7 | $ | 123.1 | 13 | % | $ | 4,009.2 | $ | 3,599.7 | $ | 409.5 | 11 | % | ||||||||||||||||
Net income attributable to IHS Markit* | $ | 81.8 | $ | 105.7 | $ | (23.9 | ) | (23 | )% | $ | 542.3 | $ | 416.9 | $ | 125.4 | 30 | % | |||||||||||||||
Adjusted EBITDA | $ | 417.0 | $ | 366.0 | $ | 51.0 | 14 | % | $ | 1,564.9 | $ | 1,389.9 | $ | 175.0 | 13 | % | ||||||||||||||||
GAAP EPS | $ | 0.20 | $ | 0.26 | $ | (0.06 | ) | (23 | )% | $ | 1.33 | $ | 1.00 | $ | 0.33 | 33 | % | |||||||||||||||
Adjusted EPS | $ | 0.57 | $ | 0.52 | $ | 0.05 | 10 | % | $ | 2.29 | $ | 2.07 | $ | 0.22 | 11 | % | ||||||||||||||||
Cash flow from operations | $ | 357.5 | $ | 242.9 | $ | 114.6 | 47 | % | $ | 1,289.5 | $ | 961.5 | $ | 328.0 | 34 | % | ||||||||||||||||
Free cash flow | $ | 303.3 | $ | 174.5 | $ | 128.8 | 74 | % | $ | 1,066.8 | $ | 701.3 | $ | 365.5 | 52 | % | ||||||||||||||||
* Net income attributable to IHS Markit for the year ended November 30, 2018 includes a one-time tax benefit associated with U.S. tax reform estimated at approximately $141 million. |
"We had a very successful 2018 and delivered strong diversified
financial results that were in line with our expectations.
Operationally, our teams are performing at a high level, and we are well
positioned within each of our end markets, which gives us confidence to
achieve our 2019 guidance," said
"We had a solid Q4 to finish a strong year in which we delivered 6
percent organic revenue growth, Adjusted EBITDA margin expansion,
double-digit Adjusted EPS growth, and produced
Fourth Quarter 2018 Revenue Performance
Fourth quarter 2018 revenue increased 13 percent compared to the fourth quarter of 2017. The following table provides additional revenue information by transaction type.
Three months ended November 30, | Percent change | |||||||||||||||
(in millions, except percentages) | 2018 | 2017 | Total | Organic | ||||||||||||
Recurring fixed | $ | 762.4 | $ | 664.4 | 15 | % | 6 | % | ||||||||
Recurring variable | 138.5 | 117.0 | 18 | % | 3 | % | ||||||||||
Non-recurring | 166.9 | 163.3 | 2 | % | 1 | % | ||||||||||
Total revenue | $ | 1,067.8 | $ | 944.7 | 13 | % | 5 | % |
The components of revenue growth are described below by segment and in total.
Change in revenue | ||||||||||||||
Fourth quarter 2018 vs. fourth quarter 2017 | ||||||||||||||
(All amounts represent percentage points) | Organic | Acquisitive |
Foreign
Currency |
Total | ||||||||||
Resources | 4 | % | — | % | (1 | )% | 3 | % | ||||||
Transportation | 10 | % | 2 | % | (1 | )% | 11 | % | ||||||
Consolidated Markets & Solutions | — | % | — | % | (1 | )% | (1 | )% | ||||||
Financial Services | 4 | % | 24 | % | (1 | )% | 27 | % | ||||||
Total | 5 | % | 9 | % | (1 | )% | 13 | % |
Fourth Quarter 2018 Operating Performance
Segment results were as follows (additional segment information is included later in this release):
-
Resources. Fourth quarter revenue for Resources increased
$6 million , or 3 percent, to$223 million , with recurring revenue increasing 4 percent organically. Fourth quarter Adjusted EBITDA for Resources increased$7 million , or 7 percent, to$99 million . -
Transportation. Fourth quarter revenue for Transportation
increased
$30 million , or 11 percent, to$297 million , and included 10 percent organic growth for the recurring-based business. Fourth quarter Adjusted EBITDA for Transportation increased$6 million , or 6 percent, to$117 million . -
Consolidated Markets & Solutions (CMS). Fourth quarter
revenue for CMS decreased
$1 million , or 1 percent, to$139 million , and had 2 percent organic growth for the recurring-based business. Fourth quarter Adjusted EBITDA for CMS increased$3 million , or 8 percent, to$35 million . -
Financial Services. Fourth quarter revenue for Financial
Services increased
$88 million , or 27 percent, to$409 million , and included 4 percent total organic growth. Fourth quarter Adjusted EBITDA for Financial Services increased$32 million , or 21 percent, to$179 million .
Outlook (forward-looking statement)
For the year ending
-
Revenue in a range of
$4.425 billion to $4.500 billion , including total organic growth of 5 percent to 6 percent including Ipreo for the 4 month stub period, and total organic growth of 6 percent to 7 percent including Ipreo for the full 12 months; -
Adjusted EBITDA in a range of
$1.75 billion to $1.78 billion ; and -
Adjusted EPS in a range of
$2.52 to $2.57 per diluted share.
Additionally, for the year ending
-
Depreciation expense to be approximately
$220 million to $225 million ; -
Amortization expense related to acquired intangible assets to be
approximately
$370 million to $380 million ; -
Net interest expense to be approximately
$245 million to $250 million ; -
Stock-based compensation expense to be approximately
$215 million to$225 million ; - A GAAP effective tax rate of approximately 14 percent to 16 percent;
- An adjusted effective tax rate of approximately 18 percent to 20 percent;
- Weighted average diluted shares of approximately 410 million to 415 million;
- Capital expenditures to be approximately 6.0 percent to 6.5 percent of revenue; and
- Free cash flow conversion 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,
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.
Non-GAAP measures are frequently used by securities analysts, investors,
and other interested parties in their evaluation of companies comparable
to
Forward-Looking Statements
This communication contains "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995. These statements,
which express management's current views concerning future business,
events, trends, contingencies, financial performance, or financial
condition, appear at various places in this report and use words like
"aim," "anticipate," "assume," "believe," "continue," "could,"
"estimate," "expect," "forecast," "future," "goal," "intend," "likely,"
"may," "might," "plan," "potential," "predict," "project," "see,"
"seek," "should," "strategy," "strive," "target," "will," and "would"
and similar expressions, and variations or negatives of these words.
Forward-looking statements are neither historical facts nor assurances
of future performance. Instead, they are based only on management's
current beliefs, expectations, and assumptions regarding the future of
our business, future plans and strategies, projections, anticipated
events and trends, the economy, and other future conditions. Because
forward-looking statements relate to the future, they are subject to
inherent uncertainties, risks, and changes in circumstances that are
difficult to predict and many of which are outside of our control. 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
About
IHS MARKIT LTD. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In millions) |
|||||||||
As of November 30, 2018 | As of November 30, 2017 | ||||||||
(Unaudited) | (Audited) | ||||||||
Assets | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 120.0 | $ | 133.8 | |||||
Accounts receivable, net | 792.9 | 693.5 | |||||||
Income tax receivable | 20.8 | 31.9 | |||||||
Deferred subscription costs | 77.3 | 62.8 | |||||||
Other current assets | 88.4 | 93.0 | |||||||
Total current assets | 1,099.4 | 1,015.0 | |||||||
Non-current assets: | |||||||||
Property and equipment, net | 579.6 | 531.3 | |||||||
Intangible assets, net | 4,484.8 | 4,188.3 | |||||||
Goodwill | 9,836.0 | 8,778.5 | |||||||
Deferred income taxes | 14.6 | 7.1 | |||||||
Other | 47.9 | 34.2 | |||||||
Total non-current assets | 14,962.9 | 13,539.4 | |||||||
Total assets | $ | 16,062.3 | $ | 14,554.4 | |||||
Liabilities and equity | |||||||||
Current liabilities: | |||||||||
Short-term debt | $ | 789.9 | $ | 576.0 | |||||
Accounts payable | 63.8 | 53.4 | |||||||
Accrued compensation | 214.1 | 157.4 | |||||||
Other accrued expenses | 357.7 | 323.0 | |||||||
Income tax payable | 8.0 | 5.5 | |||||||
Deferred revenue | 886.8 | 790.8 | |||||||
Total current liabilities | 2,320.3 | 1,906.1 | |||||||
Long-term debt, net | 4,889.2 | 3,617.3 | |||||||
Accrued pension and postretirement liability | 17.4 | 31.8 | |||||||
Deferred income taxes | 699.9 | 869.8 | |||||||
Other liabilities | 109.1 | 105.9 | |||||||
Commitments and contingencies | |||||||||
Redeemable noncontrolling interests | 5.9 | 19.1 | |||||||
Shareholders' equity | 8,020.5 | 8,004.4 | |||||||
Total liabilities and equity | $ | 16,062.3 | $ | 14,554.4 |
IHS MARKIT LTD. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In millions, except for per-share amounts) |
||||||||||||||||||
(Unaudited, except for year ended November 30, 2017) |
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Three months ended November 30, | Year ended November 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Revenue | $ | 1,067.8 | $ | 944.7 | $ | 4,009.2 | $ | 3,599.7 | ||||||||||
Operating expenses: | ||||||||||||||||||
Cost of revenue | 409.1 | 342.1 | 1,495.7 | 1,348.4 | ||||||||||||||
Selling, general and administrative | 315.6 | 285.0 | 1,192.8 | 1,096.0 | ||||||||||||||
Depreciation and amortization | 145.5 | 128.1 | 541.2 | 492.5 | ||||||||||||||
Restructuring charges | 1.3 | 0.8 | 1.7 | — | ||||||||||||||
Acquisition-related costs | 40.3 | 36.1 | 134.8 | 113.0 | ||||||||||||||
Net periodic pension and postretirement expense (income) | 1.0 | 3.0 | (5.6 | ) | 6.9 | |||||||||||||
Other expense (income), net | (4.2 | ) | 10.4 | 1.7 | 18.7 | |||||||||||||
Total operating expenses | 908.6 | 805.5 | 3,362.3 | 3,075.5 | ||||||||||||||
Operating income | 159.2 | 139.2 | 646.9 | 524.2 | ||||||||||||||
Interest income | 0.6 | 0.6 | 3.1 | 2.2 | ||||||||||||||
Interest expense | (67.4 | ) | (43.3 | ) | (225.7 | ) | (154.3 | ) | ||||||||||
Non-operating expense, net | (66.8 | ) | (42.7 | ) | (222.6 | ) | (152.1 | ) | ||||||||||
Income from continuing operations before income taxes |
92.4 | 96.5 | 424.3 | 372.1 | ||||||||||||||
Benefit (provision) for income taxes | (11.3 | ) | 8.6 | 115.4 | 49.9 | |||||||||||||
Equity in loss of equity method investee | (0.3 | ) | — | (0.5 | ) | (5.0 | ) | |||||||||||
Net income | 80.8 | 105.1 | 539.2 | 417.0 | ||||||||||||||
Net loss (income) attributable to noncontrolling interest | 1.0 | 0.6 | 3.1 | (0.1 | ) | |||||||||||||
Net income attributable to IHS Markit Ltd. | $ | 81.8 | $ | 105.7 | $ | 542.3 | $ | 416.9 | ||||||||||
Basic earnings per share attributable to IHS Markit Ltd. | $ | 0.21 | $ | 0.27 | $ | 1.38 | $ | 1.04 | ||||||||||
Weighted average shares used in computing basic earnings per share | 394.5 | 397.6 | 394.4 | 400.3 | ||||||||||||||
Diluted earnings per share attributable to IHS Markit Ltd. | $ | 0.20 | $ | 0.26 | $ | 1.33 | $ | 1.00 | ||||||||||
Weighted average shares used in computing diluted earnings per share | 406.7 | 412.9 | 406.9 | 416.2 |
IHS MARKIT LTD. |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(In millions) |
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Year ended November 30, | ||||||||||
2018 | 2017 | |||||||||
(Unaudited) | (Audited) | |||||||||
Operating activities: | ||||||||||
Net income | $ | 539.2 | $ | 417.0 | ||||||
Reconciliation of net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 541.2 | 492.5 | ||||||||
Stock-based compensation expense | 241.7 | 261.9 | ||||||||
Net periodic pension and postretirement expense (income) | (5.6 | ) | 6.9 | |||||||
Undistributed earnings of affiliates, net | (0.8 | ) | 5.2 | |||||||
Pension and postretirement contributions | (2.6 | ) | (5.7 | ) | ||||||
Deferred income taxes | (211.7 | ) | (100.1 | ) | ||||||
Change in assets and liabilities: | ||||||||||
Accounts receivable, net | (11.8 | ) | (27.5 | ) | ||||||
Other current assets | (2.2 | ) | (34.6 | ) | ||||||
Accounts payable | 10.9 | (20.0 | ) | |||||||
Accrued expenses | 104.1 | (42.8 | ) | |||||||
Income tax | 23.5 | (14.7 | ) | |||||||
Deferred revenue | 26.6 | 4.7 | ||||||||
Other liabilities | 37.0 | 18.7 | ||||||||
Net cash provided by operating activities | 1,289.5 | 961.5 | ||||||||
Investing activities: | ||||||||||
Capital expenditures on property and equipment | (222.7 | ) | (260.2 | ) | ||||||
Acquisitions of businesses, net of cash acquired | (1,876.2 | ) | (401.1 | ) | ||||||
Change in other assets | (6.2 | ) | 0.5 | |||||||
Settlements of forward contracts | (7.0 | ) | 14.5 | |||||||
Net cash used in investing activities | (2,112.1 | ) | (646.3 | ) | ||||||
Financing activities: | ||||||||||
Proceeds from borrowings | 4,617.0 | 3,194.5 | ||||||||
Repayment of borrowings | (3,122.6 | ) | (2,381.2 | ) | ||||||
Payment of debt issuance costs | (30.8 | ) | (14.4 | ) | ||||||
Payments for purchase of noncontrolling interests | (10.1 | ) | (57.0 | ) | ||||||
Proceeds from noncontrolling interests | — | 7.5 | ||||||||
Contingent consideration payments | (43.0 | ) | (2.6 | ) | ||||||
Repurchases of common shares | (672.5 | ) | (1,317.8 | ) | ||||||
Proceeds from the exercise of employee stock options | 230.0 | 331.6 | ||||||||
Payments related to tax withholding for stock-based compensation | (95.0 | ) | (89.9 | ) | ||||||
Net cash provided by (used in) financing activities | 873.0 | (329.3 | ) | |||||||
Foreign exchange impact on cash balance | (64.2 | ) | 9.0 | |||||||
Net decrease in cash and cash equivalents | (13.8 | ) | (5.1 | ) | ||||||
Cash and cash equivalents at the beginning of the period | 133.8 | 138.9 | ||||||||
Cash and cash equivalents at the end of the period | $ | 120.0 | $ | 133.8 |
IHS MARKIT LTD. |
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SUPPLEMENTAL REVENUE DISCLOSURE |
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(In millions) |
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(Unaudited) |
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Three months ended November 30, | Percent change | Year ended November 30, | Percent change | |||||||||||||||||||||||||||
2018 | 2017 | Total | Organic | 2018 | 2017 | Total | Organic | |||||||||||||||||||||||
Recurring revenue: | ||||||||||||||||||||||||||||||
Resources | $ | 187.2 | $ | 180.7 | 4 | % | 4 | % | $ | 738.2 | $ | 711.2 | 4 | % | 4 | % | ||||||||||||||
Transportation | 213.5 | 188.1 | 14 | % | 10 | % | 829.4 | 689.7 | 20 | % | 11 | % | ||||||||||||||||||
CMS | 119.1 | 117.5 | 1 | % | 2 | % | 476.6 | 457.5 | 4 | % | 3 | % | ||||||||||||||||||
Financial Services - fixed | 242.6 | 178.1 | 36 | % | 7 | % | 817.3 | 691.6 | 18 | % | 7 | % | ||||||||||||||||||
Total recurring fixed revenue | $ | 762.4 | $ | 664.4 | 15 | % | 6 | % | $ | 2,861.5 | $ | 2,550.0 | 12 | % | 6 | % | ||||||||||||||
Financial Services - variable | 138.5 | 117.0 | 18 | % | 3 | % | 506.3 | 449.0 | 13 | % | 6 | % | ||||||||||||||||||
Total recurring revenue | $ | 900.9 | $ | 781.4 | 15 | % | 6 | % | $ | 3,367.8 | $ | 2,999.0 | 12 | % | 6 | % | ||||||||||||||
Non-recurring revenue: | ||||||||||||||||||||||||||||||
Resources | $ | 35.5 | $ | 35.7 | (1 | )% | 1 | % | $ | 138.3 | $ | 128.1 | 8 | % | 8 | % | ||||||||||||||
Transportation | 83.8 | 79.2 | 6 | % | 9 | % | 330.8 | 301.9 | 10 | % | 11 | % | ||||||||||||||||||
CMS | 19.9 | 22.5 | (12 | )% | (11 | )% | 76.2 | 78.4 | (3 | )% | (5 | )% | ||||||||||||||||||
Financial Services | 27.7 | 25.9 | 7 | % | (12 | )% | 96.1 | 92.3 | 4 | % | (4 | )% | ||||||||||||||||||
Total non-recurring revenue | $ | 166.9 | $ | 163.3 | 2 | % | 1 | % | $ | 641.4 | $ | 600.7 | 7 | % | 6 | % | ||||||||||||||
Total revenue (segment): | ||||||||||||||||||||||||||||||
Resources | $ | 222.7 | $ | 216.4 | 3 | % | 4 | % | $ | 876.5 | $ | 839.3 | 4 | % | 4 | % | ||||||||||||||
Transportation | 297.3 | 267.3 | 11 | % | 10 | % | 1,160.2 | 991.6 | 17 | % | 11 | % | ||||||||||||||||||
CMS | 139.0 | 140.0 | (1 | )% | — | % | 552.8 | 535.9 | 3 | % | 2 | % | ||||||||||||||||||
Financial Services | 408.8 | 321.0 | 27 | % | 4 | % | 1,419.7 | 1,232.9 | 15 | % | 6 | % | ||||||||||||||||||
Total revenue | $ | 1,067.8 | $ | 944.7 | 13 | % | 5 | % | $ | 4,009.2 | $ | 3,599.7 | 11 | % | 6 | % |
IHS MARKIT LTD. |
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RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASURES TO |
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MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES |
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(In millions, except for per-share amounts) |
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(Unaudited) |
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Three months ended November 30, | Year ended November 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Net income attributable to IHS Markit Ltd. | $ | 81.8 | $ | 105.7 | $ | 542.3 | $ | 416.9 | ||||||||||
Interest income | (0.6 | ) | (0.6 | ) | (3.1 | ) | (2.2 | ) | ||||||||||
Interest expense | 67.4 | 43.3 | 225.7 | 154.3 | ||||||||||||||
Provision (benefit) for income taxes* | 11.3 | (8.6 | ) | (115.4 | ) | (49.9 | ) | |||||||||||
Depreciation | 46.1 | 43.6 | 175.1 | 157.0 | ||||||||||||||
Amortization related to acquired intangible assets | 99.4 | 84.5 | 366.1 | 335.5 | ||||||||||||||
EBITDA (1)(6) | $ | 305.4 | $ | 267.9 | $ | 1,190.7 | $ | 1,011.6 | ||||||||||
Stock-based compensation expense | 69.6 | 58.7 | 241.7 | 261.9 | ||||||||||||||
Restructuring charges | 1.3 | 0.8 | 1.7 | — | ||||||||||||||
Acquisition-related costs | 23.3 | 26.2 | 80.7 | 103.1 | ||||||||||||||
Acquisition-related performance compensation | 17.0 | 9.9 | 54.1 | 9.9 | ||||||||||||||
Loss on debt extinguishment | — | — | 4.7 | — | ||||||||||||||
Pension mark-to-market and settlement (gain) expense | 0.8 | 2.7 | (6.5 | ) | 5.4 | |||||||||||||
Share of joint venture results not attributable to Adjusted EBITDA | 0.3 | — | 0.5 | (1.2 | ) | |||||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (0.7 | ) | (0.2 | ) | (2.7 | ) | (0.8 | ) | ||||||||||
Adjusted EBITDA (2)(6) | $ | 417.0 | $ | 366.0 | $ | 1,564.9 | $ | 1,389.9 | ||||||||||
Three months ended November 30, | Year ended November 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Net income attributable to IHS Markit Ltd. | $ | 81.8 | $ | 105.7 | $ | 542.3 | $ | 416.9 | ||||||||||
Stock-based compensation expense | 69.6 | 58.7 | 241.7 | 261.9 | ||||||||||||||
Amortization related to acquired intangible assets | 99.4 | 84.5 | 366.1 | 335.5 | ||||||||||||||
Restructuring charges | 1.3 | 0.8 | 1.7 | — | ||||||||||||||
Acquisition-related costs | 23.3 | 26.2 | 80.7 | 103.1 | ||||||||||||||
Acquisition-related performance compensation | 17.0 | 9.9 | 54.1 | 9.9 | ||||||||||||||
Acquisition financing fees | — | — | 4.9 | — | ||||||||||||||
Loss on debt extinguishment | — | — | 4.7 | — | ||||||||||||||
Pension mark-to-market and settlement (gain) expense | 0.8 | 2.7 | (6.5 | ) | 5.4 | |||||||||||||
Income tax effect of above adjustments* | (59.6 | ) | (72.2 | ) | (355.2 | ) | (271.3 | ) | ||||||||||
Adjusted earnings attributable to noncontrolling interest | (0.2 | ) | (0.1 | ) | (1.4 | ) | (1.4 | ) | ||||||||||
Adjusted net income (3) | $ | 233.4 | $ | 216.2 | $ | 933.1 | $ | 860.0 | ||||||||||
Adjusted EPS (4)(6) | $ | 0.57 | $ | 0.52 | $ | 2.29 | $ | 2.07 | ||||||||||
Weighted average shares used in computing Adjusted EPS | 406.7 | 412.9 | 406.9 | 416.2 | ||||||||||||||
* Income tax effect for the year ended November 30, 2018 includes a one-time tax benefit associated with U.S. tax reform estimated at approximately $141 million. | ||||||||||||||||||
Three months ended November 30, | Year ended November 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Net cash provided by operating activities | $ | 357.5 | $ | 242.9 | $ | 1,289.5 | $ | 961.5 | ||||||||||
Capital expenditures on property and equipment | (54.2 | ) | (68.4 | ) | (222.7 | ) | (260.2 | ) | ||||||||||
Free cash flow (5)(6) | $ | 303.3 | $ | 174.5 | $ | 1,066.8 | $ | 701.3 |
IHS MARKIT LTD. |
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SUPPLEMENTAL SEGMENT OPERATING PROFIT MEASURE DISCLOSURE |
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(In millions) |
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(Unaudited) |
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Three months ended November 30, | Year ended November 30, | |||||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Adjusted EBITDA by segment: | ||||||||||||||||||
Resources | $ | 98.9 | $ | 92.1 | $ | 369.4 | $ | 360.2 | ||||||||||
Transportation | 116.8 | 110.6 | 479.3 | 408.6 | ||||||||||||||
CMS | 35.4 | 32.8 | 127.4 | 125.2 | ||||||||||||||
Financial Services | 179.4 | 147.7 | 636.9 | 553.7 | ||||||||||||||
Shared services | (13.5 | ) | (17.2 | ) | (48.1 | ) | (57.8 | ) | ||||||||||
Total Adjusted EBITDA | $ | 417.0 | $ | 366.0 | $ | 1,564.9 | $ | 1,389.9 | ||||||||||
Adjusted EBITDA margin by segment: | ||||||||||||||||||
Resources | 44.4 | % | 42.6 | % | 42.1 | % | 42.9 | % | ||||||||||
Transportation | 39.3 | % | 41.4 | % | 41.3 | % | 41.2 | % | ||||||||||
CMS | 25.5 | % | 23.4 | % | 23.0 | % | 23.4 | % | ||||||||||
Financial Services | 43.9 | % | 46.0 | % | 44.9 | % | 44.9 | % | ||||||||||
Total Adjusted EBITDA margin | 39.1 | % | 38.7 | % | 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/20190115005347/en/
Source:
Investor Relations Contact:
Eric Boyer
+1 303 397 2969
eric.boyer@ihsmarkit.com