IHS Markit Ltd. - FORM 8-K - EX-99.1 - MEDIA RELEASE

Attached files

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EX-99.2 - SUPPLEMENTAL INFORMATION - IHS Markit Ltd.	q217supplementalverfinal.htm
8-K - 8-K - IHS Markit Ltd.	q2-17earningsrelease.htm

Exhibit 99.1



	News Release

For immediate release



News Media Contact:		Investor Relations Contact:
Dan Wilinsky		Eric Boyer
+1 303 397 2468		+1 303 397 2969
dan.wilinsky@ihsmarkit.com		eric.boyer@ihsmarkit.com

IHS Markit Reports Second Quarter 2017 Results

LONDON (June 27, 2017) - IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today reported results for the second quarter ended May 31, 2017.


•	Revenue of $906 million, including reported organic revenue growth of 5 percent and normalized organic revenue growth of 3 percent


•	Net income of $99 million and diluted earnings per share (EPS) of $0.24


•	Adjusted EBITDA of $353 million and Adjusted earnings per diluted share (Adjusted EPS) of $0.52


•	Cash flow from operations of $201 million and free cash flow of $142 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.

Second Quarter and Year-to-Date 2017 Financial Performance



	Three months ended May 31,				Change					Six months ended May 31,				Change
(in millions, except percentages and per share data)	2017		2016		$			%		2017		2016		$		%
Revenue	$	906.1	$	587.9	$	318.2		54	%	$	1,750.3	$	1,136.4	$	613.9	54	%

Net income attributable to IHS Markit	$	99.3	$	50.0	$	49.3		99	%	$	165.3	$	95.2	$	70.1	74	%
Adjusted EBITDA	$	352.9	$	200.5	$	152.4		76	%	$	673.1	$	380.3	$	292.8	77	%

GAAP EPS	$	0.24	$	0.21	$	0.03		14	%	$	0.39	$	0.39	$	—	—	%
Adjusted EPS	$	0.52	$	0.45	$	0.07		16	%	$	0.97	$	0.84	$	0.13	15	%

Cash flow from operations	$	200.6	$	176.7	$	23.9		14	%	$	451.3	$	328.5	$	122.8	37	%
Free cash flow	$	141.8	$	148.5	$	(6.7	)	(5	)%	$	320.8	$	275.8	$	45.0	16	%

“We were very pleased with all that we accomplished in Q2,” said Jerre Stead, chairman and chief executive officer at IHS Markit. “We reported a very strong quarter, continued to make progress with our integration, and hosted our first Investor Day as IHS Markit, which detailed why we are so excited about our future.”

“We posted another solid quarter in Q2 with improved organic revenue growth and continued margin expansion,” said Todd Hyatt, chief financial officer at IHS Markit. “Financial Services delivered very strong performance, Transportation continued to perform well, and we were encouraged that our Resources annual contract value turned positive in the quarter.”

Second Quarter 2017 Revenue Performance

Second quarter 2017 revenue increased 54 percent compared to the second quarter of 2016. The following table provides additional revenue information by transaction type.



	Three months ended May 31,				Percent change
(in millions, except percentages)	2017		2016		Total		Reported Organic		Normalized Organic*
Recurring fixed	$	630.6	$	462.0	36	%	2	%	2	%
Recurring variable	116.0		—		N/A		14	%	14	%
Non-recurring	159.5		125.9		27	%	12	%	4	%
Total revenue	$	906.1	$	587.9	54	%	5	%	3	%
* Normalized for effect of conference event timing on revenue results. See also supplemental revenue disclosure on page 9 of this release.

The components of revenue growth are described below by segment and in total.



	Change in revenue
	Second quarter 2017 vs. second quarter 2016
(All amounts represent percentage points)	Normalized Organic*		Reported Organic		Acquisitive		Foreign Currency		Total
Resources*	(4	)%	3	%	—	%	(1	)%	1	%
Transportation*	8	%	6	%	—	%	(1	)%	5	%
Consolidated Markets & Solutions	(1	)%	(1	)%	—	%	(2	)%	(4	)%
Financial Services**	8	%	8	%	—	%	(3	)%	5	%
Total	3%		5	%	51%***		(2	)%	54	%
* Normalized for effect of conference event timing on revenue results. See also supplemental revenue disclosure on page 9 of this release.
** Financial Services segment (composed entirely of legacy Markit business) change in revenue based on 2017 second quarter revenue of $309 million vs. 2016 second quarter revenue of $294 million.
*** Total company acquired revenue includes Financial Services segment 2017 Q2 revenue of $309 million, less $15 million attributed to components above.

Second Quarter and Year-to-Date 2017 Operating Performance

Segment results were as follows (additional segment information is included on pages 9 and 11):

•

Resources. Second quarter revenue for Resources increased $3 million, or 1 percent, to $224 million, and declined 6 percent organically for the recurring-based business. Second quarter Adjusted EBITDA for Resources increased $6 million, or 7 percent, to $100 million, primarily due to the shift in timing of our annual CERAWeek conference from the first quarter in 2016 to the second quarter in 2017.

Year-to-date revenue for Resources decreased $16 million, or 4 percent, to $421 million. Year-to-date Adjusted EBITDA for Resources decreased $1 million, or 1 percent, to $180 million.


•	Transportation. Second quarter revenue for Transportation increased $11 million, or 5 percent, to $242 million, and included 9 percent organic growth for the recurring-based business. Second quarter Adjusted EBITDA for Transportation increased $8 million, or 8 percent, to $98 million.

Year-to-date revenue for Transportation increased $37 million, or 8 percent, to $467 million. Year-to-date Adjusted EBITDA for Transportation increased $24 million, or 15 percent, to $188 million.


•	Consolidated Markets & Solutions (CMS). Second quarter revenue for CMS decreased $5 million, or 4 percent, to $131 million, and had 1 percent organic growth for the recurring-based business. Second quarter Adjusted EBITDA for CMS increased $1 million, or 3 percent, to $32 million.

Year-to-date revenue for CMS decreased $12 million, or 4 percent, to $257 million. Year-to-date Adjusted EBITDA for CMS increased $2 million, or 3 percent, to $60 million.


•	Financial Services. Second quarter revenue for Financial Services was $309 million, and included 8 percent total organic growth. Second quarter Adjusted EBITDA for Financial Services was $139 million.

Year-to-date revenue for Financial Services was $605 million. Year-to-date Adjusted EBITDA for Financial Services was $268 million.

Outlook (forward-looking statement)

For the year ending November 30, 2017, IHS Markit expects:


•	Revenue in a range of $3.490 billion to $3.560 billion, including total organic growth of 2 percent to 4 percent;


•	Adjusted EBITDA in a range of $1.375 billion to $1.400 billion; and


•	Adjusted EPS in a range of $2.02 to $2.08 per diluted share.

Additionally, for the year ending November 30, 2017, IHS Markit expects:


•	Depreciation expense to be approximately $155 million to $165 million;


•	Net interest expense to be approximately $145 million to $150 million;


•	Amortization expense related to acquired intangible assets to be approximately $325 million to $340 million;


•	Stock-based compensation expense to be approximately $240 million to $250 million;


•	A GAAP effective tax rate of approximately 5 percent to 10 percent, excluding any future excess tax benefits related to stock-based compensation;


•	An adjusted effective tax rate of approximately 20 percent to 23 percent;


•	Weighted average diluted shares of approximately 413 million to 417 million;


•	Capital expenditures to be approximately 7 percent to 8 percent of revenue; and


•	Free cash flow conversion as a percentage of Adjusted EBITDA in the mid-50s.

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 second quarter 2017 results on June 27, 2017, 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.

###

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,” “target,” 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 our 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 U.S. Securities and Exchange Commission. 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 report. 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

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 key business and government customers, including 85 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 © 2017 IHS Markit Ltd. All rights reserved.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)



	As of May 31, 2017		As of November 30, 2016
	(Unaudited)		(Audited)
Assets
Current assets:
Cash and cash equivalents	$	162.5	$	138.9
Accounts receivable, net	669.7		635.6
Income tax receivable	32.2		26.0
Deferred subscription costs	66.6		55.6
Other current assets	93.2		77.4
Total current assets	1,024.2		933.5
Non-current assets:
Property and equipment, net	470.1		416.2
Intangible assets, net	4,236.3		4,351.8
Goodwill	8,277.1		8,209.8
Deferred income taxes	14.8		14.8
Other	48.7		10.5
Total non-current assets	13,047.0		13,003.1
Total assets	$	14,071.2	$	13,936.6
Liabilities and shareholders' equity
Current liabilities:
Short-term debt	$	561.2	$	104.6
Accounts payable	60.0		58.9
Accrued compensation	84.5		174.0
Accrued royalties	35.2		35.7
Other accrued expenses	243.8		257.1
Income tax payable	5.5		11.9
Deferred revenue	869.4		770.2
Total current liabilities	1,859.6		1,412.4
Long-term debt	3,423.2		3,279.3
Accrued pension and postretirement liability	32.5		33.0
Deferred income taxes	974.1		995.1
Other liabilities	114.9		74.7
Commitments and contingencies
Redeemable noncontrolling interest	58.3		57.7
Shareholders' equity	7,608.6		8,084.4
Total liabilities and shareholders' equity	$	14,071.2	$	13,936.6

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except for per-share amounts)

(Unaudited)



	Three months ended May 31,						Six months ended May 31,
	2017			2016			2017			2016
Revenue	$	906.1		$	587.9		$	1,750.3		$	1,136.4
Operating expenses:
Cost of revenue	337.7			212.3			664.7			423.1
Selling, general and administrative	274.2			207.0			542.2			393.5
Depreciation and amortization	122.8			64.3			243.6			124.8
Restructuring charges	(0.5		)	7.6			(0.7		)	13.3
Acquisition-related costs	30.4			11.5			62.0			15.3
Net periodic pension and postretirement expense	0.4			0.5			0.8			0.8
Other expense (income), net	4.3			(0.3		)	5.2			0.9
Total operating expenses	769.3			502.9			1,517.8			971.7
Operating income	136.8			85.0			232.5			164.7
Interest income	0.6			0.4			1.1			0.7
Interest expense	(37.7		)	(27.2		)	(69.5		)	(55.4		)
Non-operating expense, net	(37.1		)	(26.8		)	(68.4		)	(54.7		)
Income from continuing operations before income taxes and equity in loss of equity method investee	99.7			58.2			164.1			110.0
Benefit (provision) for income taxes	1.0			(13.4		)	4.6			(23.8		)
Equity in loss of equity method investee	(1.9		)	—			(3.9		)	—
Income from continuing operations	98.8			44.8			164.8			86.2
Income from discontinued operations, net	—			5.2			—			9.0
Net income	98.8			50.0			164.8			95.2
Net loss attributable to noncontrolling interest	0.5			—			0.5			—
Net income attributable to IHS Markit Ltd.	$	99.3		$	50.0		$	165.3		$	95.2

Basic earnings per share:
Income from continuing operations attributable to IHS Markit Ltd.	$	0.25		$	0.19		$	0.41		$	0.36
Income from discontinued operations, net	—			0.02			—			0.04
Net income attributable to IHS Markit Ltd.	$	0.25		$	0.21		$	0.41		$	0.40
Weighted average shares used in computing basic earnings per share	399.7			240.3			403.0			240.1

Diluted earnings per share:
Income from continuing operations attributable to IHS Markit Ltd.	$	0.24		$	0.19		$	0.39		$	0.36
Income from discontinued operations, net	—			0.02			—			0.04
Net income attributable to IHS Markit Ltd.	$	0.24		$	0.21		$	0.39		$	0.39
Weighted average shares used in computing diluted earnings per share	415.6			241.1			418.9			241.8

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)



	Six months ended May 31,
	2017			2016
Operating activities:
Net income attributable to IHS Markit Ltd.	$	165.3		$	95.2
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	243.6			124.8
Stock-based compensation expense	139.8			64.5
Gain on sale of business	—			(43.3		)
Excess tax benefit from stock-based compensation	—			(0.1		)
Net periodic pension and postretirement expense	0.8			0.8
Undistributed earnings of affiliates, net	0.6			—
Pension and postretirement contributions	(1.3		)	(1.7		)
Deferred income taxes	(22.5		)	25.6
Change in assets and liabilities:
Accounts receivable, net	(10.4		)	13.0
Other current assets	(41.4		)	(28.8		)
Accounts payable	(13.8		)	(19.9		)
Accrued expenses	(96.1		)	(15.6		)
Income tax	(11.0		)	24.8
Deferred revenue	94.0			80.8
Other liabilities	3.7			8.4
Net cash provided by operating activities	451.3			328.5
Investing activities:
Capital expenditures on property and equipment	(130.5		)	(52.7		)
Acquisitions of businesses, net of cash acquired	—			(1,113.4		)
Proceeds from sale of business	—			190.2
Change in other assets	(0.3		)	4.3
Settlements of forward contracts	9.0			(4.1		)
Net cash used in investing activities	(121.8		)	(975.7		)
Financing activities:
Proceeds from borrowings	1,790.0			1,100.0
Repayment of borrowings	(1,185.2		)	(270.0		)
Payment of debt issuance costs	(9.5		)	(15.4		)
Excess tax benefit from stock-based compensation	—			0.1
Proceeds from the exercise of employee stock options	187.5			—
Repurchases of common shares	(1,076.0		)	(106.0		)
Net cash (used in) provided by financing activities	(293.2		)	708.7
Foreign exchange impact on cash balance	(12.7		)	(9.1		)
Net increase in cash and cash equivalents	23.6			52.4
Cash and cash equivalents at the beginning of the period	138.9			293.1
Cash and cash equivalents at the end of the period	$	162.5		$	345.5

IHS MARKIT LTD.

SUPPLEMENTAL REVENUE DISCLOSURE

(In millions)

(Unaudited)



	Three months ended May 31,				Percent change						Six months ended May 31,				Percent change
	2017		2016		Total		Reported Organic		Normalized Organic*		2017		2016		Total		Organic
Recurring revenue:
Resources	$	176.8	$	190.7	(7	)%	(6	)%			$	353.6	$	371.4	(5	)%	(7	)%
Transportation	167.1		155.2		8	%	9	%			327.9		303.6		8	%	9	%
CMS	113.7		116.1		(2	)%	1	%			225.3		230.2		(2	)%	1	%
Financial Services - fixed	173.0		—		N/A		4	%			340.9		—		N/A		3	%
Total recurring fixed revenue	$	630.6	$	462.0	36	%	2	%			1,247.7		905.2		38	%	1	%
Financial Services - variable	$	116.0	$	—	N/A		14	%			222.4		—		N/A		13	%
Total recurring revenue	$	746.6	$	462.0	62	%	3	%			$	1,470.1	$	905.2	62	%	3	%

Non-recurring revenue:
Resources	$	47.0	$	30.4	55	%	54	%	5	%	$	67.1	$	65.6	2	%	—	%
Transportation	75.2		75.7		(1	)%	1	%	6	%	139.3		127.0		10	%	8	%
CMS	16.9		19.8		(15	)%	(13	)%			31.8		38.6		(18	)%	(16	)%
Financial Services	20.4		—		N/A		11	%			42.0		—		N/A		20	%
Total non-recurring revenue	$	159.5	$	125.9	27	%	12	%	4	%	$	280.2	$	231.2	21	%	4	%

Total revenue (segment):
Resources	$	223.8	$	221.1	1	%	3	%	(4	)%	$	420.7	$	437.0	(4	)%	(6	)%
Transportation	242.3		230.9		5	%	6	%	8	%	467.2		430.6		8	%	8	%
CMS	130.6		135.9		(4	)%	(1	)%			257.1		268.8		(4	)%	(2	)%
Financial Services	309.4		—		N/A		8	%			605.3		—		N/A		8	%
Total revenue	$	906.1	$	587.9	54	%	5	%	3	%	$	1,750.3	$	1,136.4	54	%	3	%

* These percentages are normalized for the timing shift effect for certain Resources and Transportation conference events.

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 May 31,						Six months ended May 31,
	2017			2016			2017			2016
Net income attributable to IHS Markit Ltd.	$	99.3		$	50.0		$	165.3		$	95.2
Interest income	(0.6		)	(0.4		)	(1.1		)	(0.7		)
Interest expense	37.7			27.2			69.5			55.4
(Benefit) Provision for income taxes	(1.0		)	13.4			(4.6		)	23.8
Depreciation	39.1			24.5			75.2			48.0
Amortization related to acquired intangible assets	83.7			39.8			168.4			76.8
EBITDA ⁽¹⁾⁽⁶⁾	$	258.2		$	154.5		$	472.7		$	298.5
Stock-based compensation expense	64.6			32.1			139.8			62.2
Restructuring charges	(0.5		)	7.6			(0.7		)	13.3
Acquisition-related costs	30.4			11.5			62.0			15.3
Share of joint venture results not attributable to Adjusted EBITDA	(0.4		)	—			(0.8		)	—
Adjusted EBITDA attributable to noncontrolling interest	0.6			—			0.1			—
Income from discontinued operations, net	—			(5.2		)	—			(9.0		)
Adjusted EBITDA ⁽²⁾⁽⁶⁾	$	352.9		$	200.5		$	673.1		$	380.3

	Three months ended May 31,						Six months ended May 31,
	2017			2016			2017			2016
Net income attributable to IHS Markit Ltd.	$	99.3		$	50.0		$	165.3		$	95.2
Stock-based compensation expense	64.6			32.1			139.8			62.2
Amortization related to acquired intangible assets	83.7			39.8			168.4			76.8
Restructuring charges	(0.5		)	7.6			(0.7		)	13.3
Acquisition-related costs	30.4			11.5			62.0			15.3
Acquisition financing fees	—			—			—			5.0
Income tax effect of above adjustments	(61.6		)	(27.6		)	(127.0		)	(55.1		)
Adjusted earnings attributable to noncontrolling interest	(0.5		)	—			(0.9		)	—
Income from discontinued operations, net	—			(5.2		)	—			(9.0		)
Adjusted net income ⁽³⁾	$	215.4		$	108.2		$	406.9		$	203.7
Adjusted EPS ⁽⁴⁾⁽⁶⁾	$	0.52		$	0.45		$	0.97		$	0.84
Weighted average shares used in computing Adjusted EPS	415.6			241.1			418.9			241.8

	Three months ended May 31,						Six months ended May 31,
	2017			2016			2017			2016
Net cash provided by operating activities	$	200.6		$	176.7		$	451.3		$	328.5
Capital expenditures on property and equipment	(58.8		)	(28.2		)	(130.5		)	(52.7		)
Free cash flow ⁽⁵⁾⁽⁶⁾	$	141.8		$	148.5		$	320.8		$	275.8

IHS MARKIT LTD.

SUPPLEMENTAL SEGMENT OPERATING PROFIT MEASURE DISCLOSURE

(In millions)

(Unaudited)



	Three months ended May 31,						Six months ended May 31,
	2017			2016			2017			2016
Adjusted EBITDA by segment:
Resources*	$	99.7		$	93.5		$	179.7		$	180.9
Transportation	98.2			90.6			188.0			164.0
CMS	31.7			30.8			60.3			58.3
Financial Services	138.8			—			268.0			—
Shared services	(15.5		)	(14.4		)	(22.9		)	(22.9		)
Total Adjusted EBITDA	$	352.9		$	200.5		$	673.1		$	380.3
* The increase in Adjusted EBITDA for the Resources segment is primarily due to the shift in timing of our annual CERAWeek conference from the first quarter in 2016 to the second quarter in 2017.

Adjusted EBITDA margin by segment:
Resources	44.5		%	42.3		%	42.7		%	41.4		%
Transportation	40.5		%	39.2		%	40.2		%	38.1		%
CMS	24.3		%	22.7		%	23.5		%	21.7		%
Financial Services	44.9		%	N/A			44.3		%	N/A
Total Adjusted EBITDA margin	38.9		%	34.1		%	38.5		%	33.5		%


(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, 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). 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, acquisition financing fees, net other gains and losses, pension mark-to-market and settlement expense, the impact of noncontrolling interests, and discontinued operations, 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.

IHS Markit Ltd. - FORM 8-K - EX-99.1 - MEDIA RELEASE - June 27, 2017

Attached files

IHS Markit Ltd. Reports