UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________

FORM 10-Q

___________________________________________________



(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, ~~2018~~2019



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-36495

___________________________________________________

IHS MARKIT LTD.

(Exact name of registrant as specified in its charter)

___________________________________________________



Bermuda	001-36495	98-1166311
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification Number)

4th Floor, Ropemaker Place

25 Ropemaker Street

London, England

EC2Y 9LY

(Address of Principal Executive Offices)

+44 20 7260 2000

(Registrant’s telephone number, including area code)

___________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	x	Accelerated filer	o

Non-accelerated filer	o ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	o

		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

As of February 28, ~~2018~~2019, there were ~~399,825,076~~399,748,336 Common Shares outstanding (excluding 25,219,470 outstanding common shares held by the Markit Group Holdings Limited Employee Benefit Trust).

TABLE OF CONTENTS

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” ~~within~~as defined in the ~~meaning of the federal securities laws, including Section 27A of the~~Private Securities Litigation Reform Act of ~~1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). In this context, forward-looking~~1995. These statements, ~~often address expected~~which express management’s current views concerning future business, ~~and~~events, trends, contingencies, financial performance, ~~and~~or financial condition, appear at various places in this report and ~~often contain~~use words ~~such as~~like “aim,” “anticipate,” ~~“intend,” “plan,” “goal,” “seek,” “aim,” “strive,~~“assume,” “believe,” ~~“see,~~“continue,” ~~“project,” “predict,~~“could,” “estimate,” “expect,” ~~“continue,” “strategy,~~“forecast,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “see,” “seek,” “should,” “strategy,” “strive,” “target,” “will,” ~~“would,” “target,”~~and “would” and similar expressions, and variations or negatives of these words. Examples of forward-looking statements include, among others, statements we make regarding: guidance and predictions relating to expected operating results, such as revenue growth and earnings; strategic actions ~~including~~such as acquisitions, joint ventures, and dispositions, the anticipated benefits ~~from strategic actions including the merger between IHS Inc. and Markit Ltd.,~~therefrom, and our success in integrating acquired businesses; anticipated levels of capital expenditures in future periods; our belief that we have sufficient liquidity to fund our ongoing business operations; expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities, and governmental and regulatory investigations and proceedings; and our strategy for customer retention, growth, product development, market position, financial results, and reserves. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on ~~our~~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. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: economic and financial conditions, including volatility in interest and exchange rates; our ability to develop new products and services; our ability to manage system failures or capacity constraints; our ability to manage fraudulent or unpermitted data access or other cyber-security or privacy breaches; our ability to successfully manage risks associated with changes in demand for our products and services; our ability to manage our relationships with ~~third party~~third-party service providers; legislative, regulatory, and economic developments, including any new or proposed U.S. Treasury rule changes; the extent to which we are successful in gaining new long-term relationships with customers or retaining existing ones and the level of service failures that could lead customers to use competitors’ services; the anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion, and growth of our operations; our ability to ~~integrate the business successfully and to achieve anticipated synergies; our ability to~~ retain and hire key personnel; our ability to satisfy our debt obligations and our other ongoing business obligations; and the occurrence of any catastrophic events, including acts of terrorism or outbreak of war or hostilities. These risks, as well as other risks which would cause actual results to be significantly different from those expressed or implied by these forward-looking statements, are more fully discussed under the caption “Risk Factors” in our Annual Report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission (“SEC”). While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as

compared with those anticipated

in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on our consolidated financial condition, results of operations, credit rating, or liquidity. Therefore, you should not rely on any of these forward-looking statements.

Any forward-looking statement made by us in this Quarterly Report on Form 10-Q is based only on information currently available to usour management 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.

Website and Social Media Disclosure

We use our website (www.ihsmarkit.com) and corporate Twitter account (@IHSMarkit) as routine channels of distribution of company information, including news releases, analyst presentations, and supplemental financial information, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our website and our corporate Twitter account in addition to following press releases, SEC filings and public conference calls and webcasts. Additionally, we provide notifications of news or announcements as part of our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts.

None of the information provided on our website, in our press releases, public conference calls, and webcasts, or through social media channels is incorporated into, or deemed to be a part of, this quarterly report on Form 10-Q or in any other report or document we file with the SEC, and any references to our website or our social media channels are intended to be inactive textual references only.

PART I. FINANCIAL INFORMATION


Item 1.	Financial Statements

IHS MARKIT LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except par value)


	As of			As of			As of			As of
	February 28, 2018			November 30, 2017			February 28, 2019			November 30, 2018
	(Unaudited)			(Audited)			(Unaudited)			(Audited)
Assets
Current assets:
Cash and cash equivalents	$	156.0		$	133.8		$	133.2		$	120.0
Accounts receivable, net	802.7			693.5			980.4			792.9
Income tax receivable	34.4			31.9			15.2			20.8
Deferred subscription costs	78.0			62.8			88.1			77.3
Other current assets	94.7			93.0			109.3			88.4
Total current assets	1,165.8			1,015.0			1,326.2			1,099.4
Non-current assets:
Property and equipment, net	539.7			531.3			596.4			579.6
Intangible assets, net	4,128.6			4,188.3			4,443.0			4,484.8
Goodwill	8,810.4			8,778.5			9,916.5			9,836.0
Deferred income taxes	11.1			7.1			14.6			14.6
Other	41.1			34.2			86.7			47.9
Total non-current assets	13,530.9			13,539.4			15,057.2			14,962.9
Total assets	$	14,696.7		$	14,554.4		$	16,383.4		$	16,062.3
Liabilities and equity
Current liabilities:
Short-term debt	$	90.9		$	576.0		$	484.9		$	789.9
Accounts payable	50.1			53.4			56.4			63.8
Accrued compensation	59.7			157.4			96.6			214.1
Other accrued expenses	351.9			323.0			417.0			357.7
Income tax payable	8.5			5.5			6.0			8.0
Deferred revenue	919.3			790.8			1,026.3			886.8
Total current liabilities	1,480.4			1,906.1			2,087.2			2,320.3
Long-term debt, net	4,186.1			3,617.3			5,111.4			4,889.2
Accrued pension and postretirement liability	31.6			31.8			17.2			17.4
Deferred income taxes	691.0			869.8			701.0			699.9
Other liabilities	136.9			105.9			116.6			109.1
Commitments and contingencies
Redeemable noncontrolling interests	8.4			19.1			17.7			5.9
Shareholders' equity:
Common shares, $0.01 par value, 3,000.0 authorized, 472.2 and 468.7 issued, and 399.8 and 399.2 outstanding at February 28, 2018 and November 30, 2017, respectively	4.7			4.7
Common shares, $0.01 par value, 3,000.0 authorized, 475.7 and 472.9 issued, and 399.7 and 397.1 outstanding at February 28, 2019 and November 30, 2018, respectively							4.8			4.7
Additional paid-in capital	7,611.8			7,612.1			7,712.6			7,680.4
Treasury shares, at cost: 72.4 and 69.5 at February 28, 2018 and November 30, 2017, respectively	(1,889.3		)	(1,745.0		)
Treasury shares, at cost: 76.0 and 75.8 at February 28, 2019 and November 30, 2018, respectively							(2,126.8		)	(2,108.8		)
Retained earnings	2,464.8			2,217.6			2,906.4			2,743.1
Accumulated other comprehensive loss	(29.7		)	(85.0		)	(164.7		)	(298.9		)
Total shareholders' equity	8,162.3			8,004.4			8,332.3			8,020.5
Total liabilities and equity	$	14,696.7		$	14,554.4		$	16,383.4		$	16,062.3

See accompanying notes.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In millions, except for per-share amounts)


	Three months ended February 28,						Three months ended February 28,
	2018			2017			2019			2018
Revenue	$	932.1		$	844.2		$	1,046.4		$	932.1
Operating expenses:
Cost of revenue	342.9			327.0			399.8			342.9
Selling, general and administrative	290.3			268.0			300.3			290.3
Depreciation and amortization	130.6			120.8			142.3			130.6
Restructuring charges	—			(0.2		)	8.2			—
Acquisition-related costs	27.0			31.6			22.8			27.0
Net periodic pension and postretirement expense	0.2			0.4
Other expense, net	1.4			0.9
Other (income) expense, net							(2.0		)	1.4
Total operating expenses	792.4			748.5			871.4			792.2
Operating income	139.7			95.7			175.0			139.9
Interest income	0.7			0.5			0.4			0.7
Interest expense	(46.3		)	(31.8		)	(66.9		)	(46.3		)
Net periodic pension and postretirement expense							(0.3		)	(0.2		)
Non-operating expense, net	(45.6		)	(31.3		)	(66.8		)	(45.8		)
Income from continuing operations before income taxes and equity in loss of equity method investee	94.1			64.4			108.2			94.1
Benefit for income taxes	146.6			3.6			0.9			146.6
Equity in loss of equity method investee	—			(2.0		)	(0.1		)	—
Net income	240.7			66.0			109.0			240.7
Net loss attributable to noncontrolling interest	0.6			—			0.7			0.6
Net income attributable to IHS Markit Ltd.	$	241.3		$	66.0		$	109.7		$	241.3

Basic earnings per share attributable to IHS Markit Ltd.	$	0.61		$	0.16		$	0.28		$	0.61
Weighted average shares used in computing basic earnings per share	398.0			406.2			398.0			398.0

Diluted earnings per share attributable to IHS Markit Ltd.	$	0.59		$	0.16		$	0.27		$	0.59
Weighted average shares used in computing diluted earnings per share	412.1			422.2			408.0			412.1

See accompanying notes.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)


	Three months ended February 28,						Three months ended February 28,
	2018		2017				2019			2018
Net income	$	240.7	$	66.0			$	109.0		$	240.7
Other comprehensive income (loss), net of tax:
Net hedging activities⁽¹⁾	4.8		3.0				(1.5		)	4.8
Foreign currency translation adjustment	56.4		(24.9		)		135.7			56.4
Total other comprehensive income (loss)	61.2		(21.9		)
Total other comprehensive income							134.2			61.2
Comprehensive income	$	301.9	$	44.1			$	243.2		$	301.9
Comprehensive loss attributable to noncontrolling interest	0.6		—				0.7			0.6
Comprehensive income attributable to IHS Markit Ltd.	$	302.5	$	44.1			$	243.9		$	302.5
⁽¹⁾Net of tax expense of $1.2 million and $0.8 million for the three months ended February 28, 2018 and 2017, respectively.
⁽¹⁾Net of tax benefit (expense) of $0.4 million and $(1.2) million for the three months ended February 28, 2019 and 2018, respectively.						⁽¹⁾Net of tax benefit (expense) of $0.4 million and $(1.2) million for the three months ended February 28, 2019 and 2018, respectively.

See accompanying notes.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)


	Three months ended February 28,						Three months ended February 28,
	2018			2017			2019			2018
Operating activities:
Net income	$	240.7		$	66.0		$	109.0		$	240.7
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	130.6			120.8			142.3			130.6
Stock-based compensation expense	61.9			75.2			59.7			61.9
Net periodic pension and postretirement expense	0.2			0.4			0.3			0.2
Undistributed earnings of affiliates, net	—			1.4
Pension and postretirement contributions	(0.5		)	(0.6		)	(0.5		)	(0.5		)
Deferred income taxes	(187.9		)	8.8			(23.4		)	(187.9		)
Change in assets and liabilities:
Accounts receivable, net	(110.6		)	(16.7		)	(155.7		)	(110.6		)
Other current assets	(20.7		)	(40.9		)	(51.5		)	(20.7		)
Accounts payable	(1.1		)	(12.6		)	4.0			(1.1		)
Accrued expenses	(67.2		)	(68.9		)	(78.6		)	(67.2		)
Income tax	29.3			(21.9		)	3.3			29.3
Deferred revenue	125.3			137.4			162.9			125.3
Other liabilities	2.9			2.3			16.2			2.9
Net cash provided by operating activities	202.9			250.7			188.0			202.9
Investing activities:
Capital expenditures on property and equipment	(55.2		)	(71.7		)	(63.2		)	(55.2		)
Intangible assets acquired	(3.1		)	—			—			(3.1		)
Payments to acquire cost-method investments							(5.1		)	—
Change in other assets	0.1			2.6			(1.9		)	0.1
Settlements of forward contracts	3.1			2.7			1.4			3.1
Net cash used in investing activities	(55.1		)	(66.4		)	(68.8		)	(55.1		)
Financing activities:
Proceeds from borrowings	745.0			1,395.0			307.0			745.0
Repayment of borrowings	(657.0		)	(1,057.5		)	(392.9		)	(657.0		)
Payment of debt issuance costs	(7.0		)	(9.5		)	—			(7.0		)
Payments for purchase of noncontrolling interests	(7.7		)	—			—			(7.7		)
Proceeds from noncontrolling interests							12.5			—
Contingent consideration payments							(2.2		)	—
Proceeds from the exercise of employee stock options	56.9			97.3			25.7			56.9
Payments related to tax withholding for stock-based compensation	(76.6		)	(67.0		)	(62.0		)	(76.6		)
Repurchases of common shares	(172.5		)	(524.9		)	—			(172.5		)
Net cash used in financing activities	(118.9		)	(166.6		)	(111.9		)	(118.9		)
Foreign exchange impact on cash balance	(6.7		)	(1.8		)	5.9			(6.7		)
Net increase in cash and cash equivalents	22.2			15.9			13.2			22.2
Cash and cash equivalents at the beginning of the period	133.8			138.9			120.0			133.8
Cash and cash equivalents at the end of the period	$	156.0		$	154.8		$	133.2		$	156.0

See accompanying notes.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Unaudited)

(In millions)



	Common Shares				Additional Paid-In Capital								Accumulated Other Comprehensive Loss			Total Shareholders’ Equity			Redeemable Noncontrolling Interests
	Shares Outstanding		Amount		Additional Paid-In Capital			Treasury Shares			Retained Earnings		Accumulated Other Comprehensive Loss			Total Shareholders’ Equity			Redeemable Noncontrolling Interests
Balance at November 30, 2017 (Audited)	399.2		$	4.7	$	7,612.1		$	(1,745.0	)	$	2,217.6	$	(85.0	)	$	8,004.4		$	19.1
Repurchases of common shares	(3.9	)	—		—			(172.5		)	—		—			(172.5		)	—
Share-based award activity	2.1		—		(56.8		)	28.2			—		—			(28.6		)	—
Option exercises	2.4		—		56.5			—			—		—			56.5			—
Net income (loss)	—		—		—			—			241.3		—			241.3			(0.6		)
Impact of the Tax Cuts and Jobs Act of 2017	—		—		—			—			5.9		(5.9		)	—			—
Purchase of noncontrolling interests	—		—		—			—			—		—			—			(10.1		)
Other comprehensive income	—		—		—			—			—		61.2			61.2			—
Balance at February 28, 2018	399.8		$	4.7	$	7,611.8		$	(1,889.3	)	$	2,464.8	$	(29.7	)	$	8,162.3		$	8.4



	Common Shares		Additional Paid-In Capital					Accumulated Other Comprehensive Loss		Total Shareholders’ Equity			Redeemable Noncontrolling Interests
	Shares Outstanding	Amount	Additional Paid-In Capital	Treasury Shares		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity			Redeemable Noncontrolling Interests
Balance at November 30, 2018 (Audited)	397.1	4.7	7,680.4	(2,108.8	)	2,743.1		(298.9	)	$	8,020.5		$	5.9
Adjustment to opening retained earnings related to adoption of ASC Topic 606	—	—	—	—		56.0		—		56.0			—
Repurchases of common shares	—	—	—	—		—		—		—			—
Share-based award activity	1.7	0.1	8.5	(18.0	)	(2.4	)	—		(11.8		)	—
Option exercises	0.9	—	23.7	—		—		—		23.7			—
Net income (loss)	—	—	—	—		109.7		—		109.7			(0.7		)
Issuance of noncontrolling interests	—	—	—	—		—		—		—			12.5
Other comprehensive income	—	—	—	—		—		134.2		134.2			—
Balance at February 28, 2019	399.7	4.8	7,712.6	(2,126.8	)	2,906.4		(164.7	)	$	8,332.3		$	17.7

See accompanying notes.

IHS MARKIT LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


1.	Basis of Presentation and Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of IHS Markit have been prepared on substantially the same basis as our annual consolidated financial statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended November 30, ~~2017.~~2018. In our opinion, these condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented, and such adjustments are of a normal, recurring nature.

Our business has seasonal aspects. Our first quarter generally has our lowest quarterly levels of revenue and profit. We also experience event-driven seasonality in our business; for instance, CERAWeek, an annual energy conference, is typically held in the second quarter of each year. Another example is the biennial release of the Boiler Pressure Vessel Code (“BPVC”) engineering standard, which generates revenue for us predominantly in the third quarter of every other year. The most recent BPVC release was in the third quarter of 2017.

~~Recent Accounting Pronouncements~~Revenue Recognition

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, which establishes a comprehensive new revenue recognition model designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In March, April, and May 2016, the FASB issued ASU 2016-08, ASU 2016-10, and ASU 2016-12, respectively, which provide further revenue recognition guidance related to principal versus agent considerations, performance obligations and licensing, and narrow-scope improvements and practical expedients. ~~All of these~~These standards ~~will be effective for us~~have all been codified in the ~~first quarter of our fiscal year 2019. We have determined that~~FASB’s Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers.”

On December 1, 2018, we ~~will use~~adopted ASC Topic 606 using the modified retrospective transition method ~~upon adoption.~~ applied to our customer revenue contracts as of the adoption date. Revenue results for periods beginning after December 1, 2018 are presented in accordance with ASC Topic 606, while prior year amounts continue to be reported in accordance with ASC Topic 605, “Revenue Recognition.”

The following table shows the cumulative effect of the changes made to the December 1, 2018 consolidated balance sheet for the adoption of ASC Topic 606 related to contracts that were in effect at the time of adoption (in millions):



	November 30, 2018		Adjustments due to adoption of ASC Topic 606			December 1, 2018
Accounts receivable, net	$	792.9	$	29.8		$	822.7
Other current assets	88.4		4.2			92.6
Other non-current assets	47.9		9.5			57.4
Deferred revenue	886.8		(28.8		)	858.0
Deferred income taxes	699.9		16.3			716.2
Retained earnings	2,743.1		56.0			2,799.1

The net cumulative effect adjustment to retained earnings was primarily related to 1) the change in accounting for the license rights associated with certain term-based software license arrangements, which were historically recognized over the term of the contract, but are now recognized at contract inception based on estimated stand-alone selling price, and 2) the change in accounting for commission costs incurred to obtain a portion of our contracts, which costs were historically expensed as incurred, but are now deferred at contract inception and recognized over the expected customer life.

For the first quarter of 2019, the adoption of ASC Topic 606 did not result in a material difference between what we reported under ASC Topic 606 and what we would have reported under ASC Topic 605.

We ~~are currently~~disaggregate our revenue by segment (as described in Note 11) and by transaction type according to the following categories:

Recurring fixed revenue represents revenue generated from contracts specifying a relatively fixed fee for services delivered over the life of the contract. The fixed fee is typically paid annually or more periodically in advance. These contracts typically consist of subscriptions to our various information offerings and software maintenance, which provide continuous access to our platforms and associated data over the contract term. The revenue is usually recognized ratably over the contract term or for term-based software license arrangements, annually on renewal. The initial term of these contracts is typically annual (with some longer-term arrangements) and non-cancellable for the term of the subscription and may contain provisions for minimum monthly payments.

Recurring variable revenue represents revenue from contracts that specify a fee for services, which is typically not fixed. The variable fee is usually paid monthly in arrears. Recurring variable revenue is based on, among other factors, the number of trades processed, assets under management, or the number of positions we value, and revenue is recognized based on the specific factor used (e.g., for usage-based contracts, we recognize revenue in line with usage in the ~~contract review~~period). Many of these contracts do not have a maturity date, while the remainder have an initial term ranging from one to five years. Recurring variable revenue was derived entirely from the Financial Services segment for all periods presented.

Non-recurring revenue represents consulting (e.g., research and ~~assessment phase~~analysis, modeling, and forecasting), services, single-document product sales, perpetual license sales and associated services, conferences and events, and advertising. Revenue for services and other non-recurring revenue is recognized upon completion of the associated performance obligation.

The following table presents our ~~implementation planning,~~revenue by transaction type (in millions):



	Three months ended February 28,
	2019		2018
Recurring fixed revenue	$	767.2	$	683.3
Recurring variable revenue	136.0		117.1
Non-recurring revenue	143.2		131.7
Total revenue	$	1,046.4	$	932.1

Our customer contracts may include multiple performance obligations; for example, we typically sell software licenses with maintenance and other associated services. For these transactions, we recognize revenue based on the relative fair value to the customer of each performance obligation as each performance obligation is completed.

We record a receivable when a customer is billed or when revenue is recognized prior to billing a customer. Contract assets include unbilled amounts for multi-year customer contracts where payment is not yet due and where services have been provided up front but have not yet been billed. Contract assets were approximately $28.3 million as of February 28, 2019 and $29.8 million as of December 1, 2018, and are ~~continuing~~recorded in accounts receivable, net, in the consolidated balance sheets. Contract liabilities primarily include our obligations to ~~evaluate~~transfer goods or services for which we have received consideration (or an amount of consideration is due) from the ~~impact~~customer. As of February 28, 2019 and December 1, 2018, we had contract liabilities of $1,026.3 million and $858.0 million, respectively, which are recorded as deferred revenue in the consolidated balance sheets. The increase in contract liabilities from December 1, 2018 to February 28, 2019 was primarily due to billings of $984.2 million that were paid in advance or due from customers, partially offset by $815.9 million of revenue recognized for the three months ended February 28, 2019.

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to exceed one year. Certain sales commission programs are designed to promote the sale of products and services to new customers, and we therefore defer the incremental costs related to these ~~new standards on our~~programs over the expected customer life related to those products underlying the contracts. We record these expenses as selling, general and administrative expense within the consolidated ~~financial statements.~~statements of operations.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, which requires that lease assets and lease liabilities be recognized on the balance sheet, and that key information about leasing arrangements be disclosed. ~~The~~In July 2018, the FASB issued ASU ~~requires the use of~~

2018-11, which provides targeted improvements to ASU 2016-02 by providing an additional optional transition method and a ~~modified retrospective transition method.~~lessor practical expedient for lease and nonlease components. The standard will be effective for us in the first quarter of our fiscal year 2020, although early adoption is permitted. We are currently evaluating the impact of this new standard on our consolidated financial ~~statements.~~statements, but believe that the most significant impact of adoption will be the recognition of right-of-use assets and lease liabilities associated with our operating leases.

In August 2016, the FASB issued ASU 2016-15, which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU ~~should be~~is applied using a retrospective transition method to each period presented. ~~The~~We adopted the standard ~~will be effective for us~~ in the first quarter of ~~our fiscal year~~ 2019, ~~although early adoption is permitted. We are currently evaluating the~~and there was no material impact of ~~this new standard~~adoption on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ~~The~~We adopted the standard ~~will be effective for us~~ in the first quarter of ~~our fiscal 2019. We do not expect that the~~2019, and there was no material impact of adoption ~~of this ASU will have a significant impact~~ on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, which removes Step 2 from the goodwill impairment test. The standard will be effective for us in the first quarter of our fiscal 2021, although early adoption is permitted. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, which requires that the service cost component of pension expense be included in the same line item as other compensation costs arising from services rendered by employees, with the other components of pension expense being classified outside of a subtotal of income from operations. ~~The~~We adopted the standard ~~will be effective for us~~ in the first quarter of ~~our fiscal year 2019. We do not expect that~~2019, and the ~~adoption of this ASU will have a significant~~only impact on adoption was the reclassification of our ~~consolidated financial statements.~~net periodic pension and postretirement expense to non-operating expense. Because all of our pension plans are frozen, there is no service cost component of expense that remained in operating expense.

In May 2017, the FASB issued ASU 2017-09, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. We adopted the standard in the first quarter of 2019, and there was no material impact of adoption on our consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The standard will be effective for us in the first quarter of our fiscal year ~~2019.~~2020, although early adoption is permitted (but no sooner than the adoption of Topic 606). We early adopted this standard in the first quarter of 2019, and there was no material impact of adoption on our consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, which addresses the accounting for implementation costs associated with a hosted service. The standard provides that implementation costs be evaluated for capitalization using the same criteria as that used for internal-use software development costs, with amortization expense being recorded in the same income statement expense line as the hosted service costs and over the expected term of the hosting arrangement. The standard will be effective for us in the first quarter of our fiscal 2021, although early adoption is permitted. The amendments will be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, which provides targeted improvements to the accounting for hedging activities to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. The standard will be effective for us in the first quarter of our fiscal year 2020, although early adoption is permitted. We do not expect that the adoption of this ASU will have a significant impact on our consolidated financial statements.

In December 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”) to provide guidance on the application of U.S. generally accepted accounting principles (“GAAP”) in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to finalize the calculations for the income tax effects of the U.S. Tax Cuts and Jobs Act of 2017 (“the Act”). SAB 118 provides entities with a one-year measurement period from the December 22, 2017 enactment date to complete the accounting for the effects of the Act - see Note 8.

In February 2018, the FASB issued ASU 2018-02, which provides entities with the option to eliminate the stranded tax effects associated with the change in tax rates under the Act through a reclassification of the stranded tax effects from accumulated other comprehensive income (“AOCI”) to retained earnings. This ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. We have elected to early adopt this standard in the first quarter of our fiscal year 2018, which resulted in the reclassification of $5.9 million from AOCI to retained earnings.


2.	~~Business Combinations~~

In September 2017, we acquired automotiveMastermind Inc. (“aM”), a leading provider of predictive analytics and marketing automation software for the automotive industry. The purchase price consisted of initial cash consideration of approximately $433 million for 78 percent of aM, which includes an estimated $44 million contingent consideration payment based on underlying business performance through January 2018, to be paid in the second quarter of 2018. The contingent consideration liability is recorded within other current liabilities in our consolidated balance sheet. The acquisition of aM helps to fill out our existing automotive offerings by leveraging predictive analytics to improve the buyer experience in the new car dealer market. This acquisition is included in our Transportation segment.

In exchange for the remaining 22 percent of aM, we issued equity interests in aM’s immediate parent holding company to aM’s founders and certain employees. We will pay cash to acquire these interests over the next five years based on put/call provisions that tie the valuation to underlying adjusted EBITDA performance of aM. Since the purchase of the remaining 22 percent of the business requires continued service of the founders and employees, the arrangement will be treated as compensation expense that will be remeasured based on changes in the fair value of the equity interests; we have classified this expense as acquisition-related costs within the consolidated statements of operations and we have classified the associated accrued liability as other liabilities within the consolidated balance sheets. We have preliminarily estimated a range of $200 million to $225 million of unrecognized compensation expense related to this transaction that will be recognized over a weighted-average recognition period of approximately 4 years.

In September 2017, we also acquired Macroeconomic Advisers, a small independent research firm that specializes in monitoring, analyzing and forecasting developments in the U.S. economy. The purchase price allocation for these acquisitions is preliminary and may change upon completion of the determination of fair value of assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocation, net of acquired cash, for these two acquisitions (in millions):

Total
Assets:
Current assets $ 7.3
Property and equipment 1.1
Intangible assets 113.8
Goodwill 370.7
Other long-term assets 0.9
Total assets 493.8
Liabilities:
Current liabilities 4.6
Deferred revenue 1.4
Deferred taxes 42.9
Total liabilities 48.9
Purchase price $ 444.9


3.	Intangible Assets

The following table presents details of our intangible assets, other than goodwill, as of February 28, ~~2018~~2019 and November 30, ~~2017~~2018 (in millions):


	As of February 28, 2018							As of November 30, 2017							As of February 28, 2019							As of November 30, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Intangible assets subject to amortization:
Information databases	$	756.4	$	(360.5	)	$	395.9	$	753.7	$	(340.2	)	$	413.5	$	673.5	$	(346.5	)	$	327.0	$	671.0	$	(329.6	)	$	341.4
Customer relationships	2,977.3		(387.7		)	2,589.6		2,957.8		(348.6		)	2,609.2		3,504.3		(523.2		)	2,981.1		3,458.8		(473.3		)	2,985.5
Developed technology	836.7		(88.6		)	748.1		827.6		(73.4		)	754.2		942.2		(154.0		)	788.2		928.8		(133.1		)	795.7
Developed computer software	85.7		(56.6		)	29.1		85.6		(54.3		)	31.3		85.2		(65.4		)	19.8		85.0		(63.0		)	22.0
Trademarks	490.2		(125.7		)	364.5		488.9		(111.4		)	377.5		495.2		(168.3		)	326.9		493.8		(153.6		)	340.2
Other	8.3		(6.9		)	1.4		8.3		(5.7		)	2.6		1.1		(1.1		)	—		1.1		(1.1		)	—
Total intangible assets	$	5,154.6	$	(1,026.0	)	$	4,128.6	$	5,121.9	$	(933.6	)	$	4,188.3	$	5,701.5	$	(1,258.5	)	$	4,443.0	$	5,638.5	$	(1,153.7	)	$	4,484.8

Intangible assets amortization expense was ~~$89.0~~$95.7 million for the three months ended February 28, ~~2018~~2019, compared to ~~$84.7~~$89.0 million for the three months ended February 28, ~~2017.~~2018. The following table presents the estimated future amortization expense related to intangible assets held as of February 28, ~~2018~~2019 (in millions):


Year	Amount		Amount
Remainder of 2018	$	260.4
2019	$	321.0
Remainder of 2019			$	282.6
2020	$	313.7	$	371.7
2021	$	308.3	$	365.9
2022	$	289.2	$	347.2
2023			$	336.5
Thereafter	$	2,636.0	$	2,739.1

Goodwill, gross intangible assets, and net intangible assets ~~were~~are all subject to foreign currency translation effects. The change in net intangible assets from November 30, ~~2017~~2018 to February 28, ~~2018~~2019 was ~~primarily~~ due to current year amortization.


4.3.	Debt

The following table summarizes total indebtedness, including unamortized premiums, as of February 28, ~~2018~~2019 and November 30, ~~2017~~2018 (in millions):


	February 28, 2018			November 30, 2017			February 28, 2019			November 30, 2018
2016 revolving facility	$	990.0		$	886.0
2016 term loan:
2018 revolving facility							$	1,303.0		$	1,108.0
2018 term loan:
Tranche A-1	606.8			615.0			557.6			574.0
Tranche A-2	508.8			515.6			467.5			481.3
2017 term loan	—			500.0
364-day credit agreement							—			250.0
5.00% senior notes due 2022	750.0			750.0			750.0			750.0
4.125% senior notes due 2023							498.7			498.6
4.75% senior notes due 2025	815.3			815.8			813.4			813.8
4.00% senior notes due 2026	500.0			—			500.0			500.0
Institutional senior notes:
Series A	95.7			95.8
Series B	53.7			53.7
4.75% senior notes due 2028							747.4			747.3
Debt issuance costs	(47.0		)	(42.8		)	(48.3		)	(51.2		)
Capital leases	3.7			4.2			7.0			7.3
Total debt	$	4,277.0		$	4,193.3		$	5,596.3		$	5,679.1
Current portion	(90.9		)	(576.0		)	(484.9		)	(789.9		)
Total long-term debt	$	4,186.1		$	3,617.3		$	5,111.4		$	4,889.2

~~2016~~2018 revolving facility. ~~In July 2016,~~On June 25, 2018, we entered into a ~~$1.85~~$2.0 billion senior unsecured revolving credit agreement (“~~2016~~2018 revolving facility”). Borrowings under the ~~2016~~2018 revolving facility mature in ~~July 2021.~~June 2023. The interest rates for borrowings under the ~~2016~~2018 revolving facility are the applicable LIBOR plus a spread of 1.00 percent to 1.75 percent, depending upon our Leverage Ratio, which is defined as the ratio of Consolidated Funded Indebtedness to rolling four-quarter Consolidated Earnings Before Interest Expense, Taxes, Depreciation and Amortization (“EBITDA”), as such terms are defined in the revolving facility agreement.credit rating. A commitment fee on any unused balance is payable periodically and ranges from ~~0.13~~0.125 percent to 0.30 percent based upon our ~~Leverage Ratio.~~credit rating. The obligations under the 2018 revolving facility are not guaranteed by any of our subsidiaries. We had approximately ~~$1.6~~$1.5 million of outstanding letters of credit under the ~~2016~~2018 revolving facility as of February 28, ~~2018,~~2019, which ~~reduces~~reduced the available borrowing under the facility by an equivalent amount.

~~2016~~2018 term loan. ~~In July 2016,~~Coincident with entering into the 2018 revolving facility, we entered into a ~~$1.206 billion~~ senior unsecured amortizing term loan agreement (“~~2016~~2018 term loan”). The ~~2016~~2018 term loan has a final maturity date of July 2021. The obligations under the 2018 term loan are not guaranteed by any of our subsidiaries. The interest rates for borrowings under the ~~2016~~2018 term loan are the same as those under the ~~2016~~2018 revolving facility.

Subject to certain conditions, the ~~2016~~2018 revolving facility ~~and the 2016 term loan~~ may be expanded by up to an aggregate of ~~$500 million~~$1.0 billion in additional ~~commitments or term loans.~~commitments. The ~~2016~~2018 revolving facility and the ~~2016~~2018 term loan have certain financial and other covenants, including a maximum Leverage Ratio and a minimum Interest Coverage Ratio, which is defined as the ratio of Consolidated EBITDA to Consolidated Interest Expense, as such terms are defined in the agreements.

~~2017 term loan.~~364-Day Credit Agreement. On ~~January 26, 2017,~~June 25, 2018, we entered into a 364-day ~~$500 million senior unsecured~~Credit Agreement (the “364-Day Credit Agreement”) for a term loan ~~(“2017 term loan”).~~credit facility in an aggregate principal amount of $1.855 billion, which became available to be borrowed upon the satisfaction of certain conditions precedent, including the concurrent completion of our acquisition of Ipreo. On August 2, 2018, concurrent with the completion of our acquisition of Ipreo, we borrowed $250.0 million under the 364-Day Credit Agreement. The ~~2017 term loan was structured as a non-amortizing loan with repayment~~unutilized balance of ~~principal due at maturity.~~the commitment terminated upon completion of the acquisition. The interest rates for borrowings under the ~~2017 term loan~~364-Day Credit Agreement were the ~~same as those~~applicable LIBOR plus a spread of 1.00 percent to 1.75 percent, depending upon our credit rating. The spread over LIBOR was subject to a 0.25 percent step-up on the 180th day following the closing date of the agreement and a 0.50 percent step-up on the 270th day following the closing date. The obligations under the ~~2016 revolving facility.~~364-Day Credit Agreement were not guaranteed by any of our subsidiaries. The ~~2017 term loan~~364-Day Credit Agreement had certain financial and other covenants that were consistent with the ~~same as~~covenants contained in the ~~2016~~2018 revolving facility and the ~~2016~~2018 term loan, including a maximum Leverage Ratio and a minimum Interest Coverage Ratio, which was defined as the ratio of Consolidated EBITDA to Consolidated Interest Expense, as such terms were defined in the ~~agreement. The 2017 term loan was~~364-Day Credit Agreement. On January 7, 2019, we repaid ~~in January 2018~~the 364-Day Credit Agreement using cash on hand and borrowings ~~from~~under the ~~2016~~ revolving credit facility.

As of February 28, ~~2018,~~2019, we had approximately ~~$990.0 million~~$1.303 billion of outstanding borrowings under the ~~2016~~2018 revolving facility at a current annual interest rate of ~~3.11~~3.87 percent and approximately ~~$1.116~~$1.025 billion of outstanding borrowings under the ~~2016~~2018 term loans at a current weighted average annual interest rate of ~~3.59~~4.01 percent, including the effect of the interest rate swaps described in Note 5.

5.00% senior notes due 2022 (“5% ~~Notes”~~Notes due 2022”). In October 2014, IHS Inc. issued $750 million aggregate principal amount of senior unsecured notes due 2022 in an offering not subject to the registration requirements of the Securities Act of 1933, as amended (the Securities Act). In August 2015, we completed a registered exchange offer for the 5% ~~Notes.~~Notes due 2022. In July 2016, in connection with the ~~Merger,~~merger between IHS and Markit, we completed an exchange offer for $742.8 million of the outstanding 5% Notes due 2022 for an equal principal amount of new 5% senior unsecured notes issued by IHS Markit with the same maturity. Approximately $7.2 million of the 5% Notes due 2022 did not participate in the exchange offer. The new 5% Notes due 2022 are not, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction. The new 5% Notes due 2022 have been admitted ~~for trading~~ to the official list of The International Stock Exchange in the Channel ~~Islands Securities Exchange Authority.~~Islands.

The 5% Notes due 2022 bear interest at a fixed rate of 5.00 percent and mature on November 1, 2022. Interest on the 5% Notes due 2022 is due semiannually on May 1 and November 1 of each ~~year, commencing May 1, 2015.~~year. We may redeem the 5% Notes due 2022 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the Applicable Premium, as defined in the indenture governing the 5% ~~Notes.~~Notes due 2022. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a Change of Control Triggering Event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. In connection with the entry into the 2018 revolving facility and 2018 term loan, each guarantor of the 5% Notes due 2022 was released from its guarantees pursuant to the terms of the indenture under which such notes were issued. The fair value of the 5% Notes due 2022 as of February 28, ~~2018~~2019 was approximately ~~$778.1~~$775.8 million.

~~4.75%~~4.125% senior notes due ~~2025~~2023 (“~~4.75% Notes”~~4.125% Notes due 2023”). In ~~February 2017,~~July 2018, we issued $500 million aggregate principal amount of senior unsecured notes due ~~2025~~2023 in ana registered offering ~~not subject to the registration requirements of~~under the Securities Act. ~~In July 2017, we issued an additional $300 million aggregate principal amount of the 4.75%~~The 4.125% Notes ~~at a $16.5 million premium, resulting in an effective interest rate of 3.88 percent. The 4.75% notes~~due 2023 have been admitted for trading to the official list of The International Stock Exchange in the Channel ~~Islands Securities Exchange Authority.~~Islands. The ~~4.75%~~4.125% Notes due 2023 bear interest at a fixed rate of ~~4.75~~4.125 percent and mature on ~~February 15, 2025.~~August 1, 2023. Interest on the ~~4.75%~~4.125% Notes due 2023 is due semiannually on February 151 and August 151 of each ~~year, commencing August 15, 2017.~~year. The notes were issued at a discount which represented a price to the public of 99.707% of the principal amount. We may redeem the ~~4.75%~~4.125% Notes in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the Applicable Premium, as defined in the indenture governing the 4.75% Notes. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a Change of Control Triggering Event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. The fair value of the 4.75% Notes as of February 28, 2018 was approximately $819.0 million.

~~4.00% notes~~ due ~~2026 (“4% Notes”).~~ In December 2017, we issued $500 million aggregate principal amount of senior unsecured notes due 2026 in an offering not subject to the registration requirements of the Securities Act. The 4% Notes have been admitted for trading to the official list of the Channel Islands Securities Exchange Authority. The 4% Notes bear interest at a fixed rate of 4.00 percent and mature on March 1, 2026. Interest on the 4% Notes is due semiannually on March 1 and September 1 of each year, commencing March 1, 2018. We may redeem the 4% Notes2023 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the applicable premium, as defined in the indenture governing the ~~4% Notes.~~4.125% Notes due 2023. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. The fair value of the 4%4.125% Notes due 2023 as of February 28, ~~2018~~2019 was approximately ~~$485.0~~$504.1 million.

~~Institutional~~4.75% senior ~~notes.~~notes due 2025 (“4.75% Notes due 2025”). In ~~November 2015, Markit~~February 2017, we issued ~~two series~~$500 million aggregate principal amount of senior unsecured notes ~~having~~due 2025 in an offering not subject to the registration requirements of the Securities Act. In July 2017, we issued an additional $300 million aggregate principal amount of ~~$500~~the 4.75% Notes due 2025 at a $16.5 million premium, resulting in an effective interest rate of 3.88 percent. The 4.75% Notes due 2025 have been admitted for trading to ~~certain institutional investors. In November 2016, we completed an offer to repurchase approximately $350 million~~the official list of ~~these notes.~~ The ~~Series A notes~~International Stock Exchange in the Channel Islands. The 4.75% Notes due 2025 bear interest at a fixed rate of ~~3.73~~4.75 percent and mature on ~~November 4, 2022.~~February 15, 2025. Interest on the 4.75% Notes due 2025 is due semiannually on February 15 and August 15 of each year. We may redeem the 4.75% Notes due 2025 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the Applicable Premium, as defined in the indenture governing the 4.75% Notes due 2025. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a Change of Control Triggering Event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The ~~Series B~~indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. In connection with the entry into the 2018 revolving facility and 2018 term loan, each guarantor of the 4.75% Notes due 2025 was released from its guarantees pursuant to the terms of the indenture under which such notes were issued. The fair value of the 4.75% Notes due 2025 as of February 28, 2019 was approximately $818.6 million.

4.00% senior notes due 2026 (“4% Notes due 2026”). In December 2017, we issued $500 million aggregate principal amount of senior unsecured notes due 2026 in an offering not subject to the registration requirements of the Securities Act. The 4% Notes due 2026 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 4% Notes due 2026 bear interest at a fixed rate of ~~4.05~~4.00 percent and mature on ~~November 4, 2025.~~March 1, 2026. Interest on the 4% Notes due 2026 is ~~paid~~due semiannually ~~from~~on March 1 and September 1 of each year. We may redeem the ~~anniversary~~4% Notes due 2026 in whole or in part at a redemption price equal to 100 percent of ~~issuance. The institutional senior~~the principal amount of the notes ~~have certain financial and other covenants, including a maximum Consolidated Leverage Ratio and a minimum Interest Coverage Ratio,~~plus the applicable premium, as ~~such terms are~~ defined in the ~~Note Purchase~~indenture governing the 4% Notes due 2026. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a price equal to 101 percent of the principal amount thereof, plus accrued and ~~Guarantee Agreement. We believe~~unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. In connection with the entry into the 2018 revolving facility and 2018 term loan, each guarantor of the 4% Notes due 2026 was released from its guarantees pursuant to the terms of the indenture under which such notes were issued. The fair value of the ~~outstanding institutional senior notes~~4% Notes due 2026 as of February 28, ~~2018~~2019 was approximately ~~$146.7~~$486.9 million.

4.75% senior notes due 2028 (“4.75% Notes due 2028”). In July 2018, we issued $750 million aggregate principal amount of senior unsecured notes due 2028 in a registered offering under the Securities Act. The 4.75% Notes due 2028 have been admitted for trading to the official list of The International Stock Exchange in the Channel Islands. The 4.75% Notes due 2028 bear interest at a fixed rate of 4.75 percent and mature on August 1, 2028. Interest on the 4.75% Notes due 2028 is due semiannually on February 1 and August 1 of each year. The 4.75% Notes due 2028 were issued at a discount, which represented a price to the public of 99.628% of the principal amount. We may redeem the 4.75% Notes due 2028 in whole or in part at a redemption price equal to 100 percent of the principal amount of the notes plus the applicable premium, as defined in the indenture governing the 4.75% Notes due 2028. Additionally, at the option of the holders of the notes, we may be required to purchase all or a portion of the notes upon occurrence of a change of control triggering event as defined in the indenture, at a

price equal to 101 percent of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The indenture contains covenants that limit our ability to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the indenture contains a covenant that limits our ability to consolidate or merge with another entity or to sell all or substantially all of our assets to another entity. The indenture contains customary default provisions. The fair value of the 4.75% Notes due 2028 as of February 28, 2019 was approximately $760.0 million.

As of February 28, ~~2018,~~2019, we were in compliance with all of our debt covenants. We have classified short-term debt based on scheduled ~~term~~ loan ~~amortization~~ payments and intended repayments on our revolving facility based on expected cash availability over the next 12 months.

The carrying ~~value~~values of our variable rate debt instruments approximate their fair value because of the variable interest rates associated with those instruments. The fair values of the ~~5% Notes, the 4.75% Notes, the 4% Notes, and the institutional~~ senior notes were measured using observable inputs in markets that are not active; consequently, we have classified those notes within Level 2 of the fair value hierarchy.


5.4.	Derivatives

Our business is exposed to various market risks, including interest rate and foreign currency risks. We utilize derivative instruments to help us manage these risks. We do not hold or issue derivatives for speculative purposes.

Interest Rate Swaps

To mitigate interest rate exposure on our outstanding revolving facility debt, we utilize interest rate derivative contracts that effectively swap $400 million of floating rate debt at a 2.86 percent weighted-average fixed interest rate, plus the applicable spread on our floating rate debt. We entered into these swap contracts in November 2013 and January 2014, and the contracts expire between May and November 2020.

Because the terms of these swaps and the variable rate debt (as amended or extended over time) coincide, we do not expect any ineffectiveness. We have designated and accounted for these instruments as cash flow hedges, with changes in fair value being deferred in AOCI in our consolidated balance sheets.

Foreign Currency Forwards

To mitigate foreign currency exposure, we utilize short-term foreign currency forward contracts that manage market risks associated with fluctuations in balances that are denominated in currencies other than the local functional currency. We account for these forward contracts at fair value and recognize the associated realized and unrealized gains and losses in other expense, net, since we have not designated these contracts as hedges for accounting purposes. The notional amount of these outstanding foreign currency forward contracts was ~~$220.8~~$435.0 million and ~~$261.3~~$500.1 million as of February 28, ~~2018~~2019 and November 30, ~~2017,~~2018, respectively.

Fair Value of Derivatives

Since our derivative instruments are not listed on an exchange, we have evaluated fair value by reference to similar transactions in active markets; consequently, we have classified all of our derivative instruments within Level 2 of the fair value measurement hierarchy. ~~The following table shows the classification, location, and fair value of our derivative instruments as~~As of February 28, ~~2018~~2019 and November 30, ~~2017 (in millions):~~

Fair Value of Derivative Instruments Location on consolidated balance sheets
February 28, 2018 November 30, 2017
Assets:
Derivatives not designated as accounting hedges:
Foreign currency forwards 1.3
2.8
Other current assets
Total $ 1.3
$ 2.8

Liabilities:
Derivatives designated as accounting hedges:
Interest rate swaps $ 2.9
$ 8.9
Other liabilities
Derivatives not designated as accounting hedges:
Foreign currency forwards 1.5
1.7
Other accrued expenses
Total $ 4.4
$ 10.6

~~The net (gain) loss on foreign currency forwards that are not designated as hedging instruments for the~~ ~~three months endedFebruary 28,~~ 2018, we had assets of $10.4 million and ~~the three months ended February 28, 2017,~~$0.2 million, respectively, ~~was as follows (in millions):~~

Amount of (gain) loss recognized in the consolidated statements of operations
Three months ended February 28, Location on consolidated statements of operations
2018 2017
Foreign currency forwards $ (1.9 ) $ 3.6
Other expense, net

~~The following table provides information about the cumulative amount~~which were classified within other current assets, and we had liabilities of ~~unrecognized hedge losses recorded in AOCI, net of tax, as of February 28, 2018~~$1.7 million and ~~February 28, 2017,~~$1.6 million, respectively, ~~as well as the activity on our cash flow hedging instruments for the~~ ~~three months endedFebruary 28, 2018~~which were classified within other accrued expenses and ~~the three months ended February 28, 2017, respectively (in millions):~~

Three months ended February 28,
2018 2017
Beginning balance $ (3.9 ) $ (10.5 )
Amount of gain (loss) recognized in AOCI:
Interest rate swaps 3.6
1.2
Foreign currency forwards —
0.4
Amount of loss (gain) reclassified from AOCI to income:
Interest rate swaps ⁽¹⁾
1.2
1.7
Foreign currency forwards ⁽¹⁾
—
(0.3 )
Amount of loss reclassified from AOCI to retained earnings (4.2 ) —
Ending balance $ (3.3 ) $ (7.5 )

(1) Pre-tax amounts reclassified from AOCI related to interest rate swaps are recorded in interest expense, and pre-tax amounts reclassified from AOCI into income related to foreign currency forwards are recorded in revenue.

~~Approximately $2.3 million of the $2.9 million unrecognized pre-tax losses relating to the interest rate swaps are expected to be reclassified into interest expense within the next 12 months.~~other liabilities.


6.5.	Acquisition-related Costs

During the three months ended February 28, ~~2018,~~2019, we incurred approximately ~~$27.0~~$22.8 million in costs associated with acquisitions ~~including~~and divestitures, of which $15.3 million was performance compensation expense related to the automotiveMastermind (“aM”) acquisition described below, and the remainder was associated with employee severance charges and retention costs, contract termination costs for facility consolidations, and legal and professional ~~fees, and the performance compensation expense related to the aM acquisition described in Note 2.~~fees. Approximately ~~$6.3~~$2.4 million of the total charge was allocated to shared services, with ~~$15.9~~$15.3 million of the charge recorded in the Transportation segment, ~~$3.0~~$4.6 million in the Financial Services ~~segment, $1.4 million in the CMS~~ segment, and the remainder in the Resources ~~segment.~~and CMS segments.

In September 2017, we acquired aM, a leading provider of predictive analytics and marketing automation software for the automotive industry. We purchased approximately 78 percent of aM at that time. In exchange for the remaining 22 percent of

aM, we issued equity interests in aM’s immediate parent holding company to aM’s founders and certain employees. We will pay cash to acquire these interests over the next five years based on put/call provisions that tie the valuation to underlying adjusted EBITDA performance of aM. Since the purchase of the remaining 22 percent of the business requires continued service of the founders and employees, we are accounting for the arrangement as compensation expense that will be remeasured based on changes in the fair value of the equity interests; we have classified this expense as acquisition-related costs within the consolidated statements of operations and we have classified the associated accrued liability as other accrued expenses and other liabilities within the consolidated balance sheets. We currently estimate a compensation expense range of approximately $150 million to $175 million, to be recognized over a weighted-average recognition period of approximately 3.5 years.

The following table provides a reconciliation of the acquisition-related costs accrued liability, recorded in other accrued expenses and other liabilities, as of February 28, ~~2018~~2019 (in millions):


	Employee Severance and Other Termination Benefits			Contract Termination Costs			Other			Total			Employee Severance and Other Termination Benefits			Contract Termination Costs			Other			Total
Balance at November 30, 2017	$	13.9		$	17.6		$	23.7		$	55.2
Balance at November 30, 2018													$	2.5		$	16.8		$	68.7		$	88.0
Add: Costs incurred	8.3			0.2			17.3			25.8			2.8			0.1			20.4			23.3
Revision to prior estimates	1.0			0.2			—			1.2			—			(0.1		)	(0.4		)	(0.5		)
Less: Amount paid	(14.8		)	(3.1		)	(4.8		)	(22.7		)	(1.9		)	(1.8		)	(7.4		)	(11.1		)
Balance at February 28, 2018	$	8.4		$	14.9		$	36.2		$	59.5
Balance at February 28, 2019													$	3.4		$	15.0		$	81.3		$	99.7

As of February 28, ~~2018,~~2019, the ~~$59.5~~$99.7 million remaining liability was primarily in the Transportation segment, with the remainder in the Financial Services segment and in shared services. Approximately $79.4 million of the remaining liability is associated with the aM acquisition-related performance compensation liability. We expect that the significant majority of the remaining liability will be paid within the next 12 ~~months except for the aM acquisition-related performance compensation liability, which was approximately $24.9 million as of February 28, 2018.~~months.


7.6.	Stock-based Compensation

Stock-based compensation expense for the three months ended February 28, ~~2018~~2019 and February 28, ~~2017~~2018 was as follows (in millions):


	Three months ended February 28,				Three months ended February 28,
	2018		2017		2019		2018
Cost of revenue	$	18.0	$	15.9	$	17.3	$	18.0
Selling, general and administrative	43.9		59.3		42.4		43.9
Total stock-based compensation expense	$	61.9	$	75.2	$	59.7	$	61.9

No stock-based compensation cost was capitalized during the three months ended February 28, ~~2018~~2019 and February 28, ~~2017.~~2018.

As of February 28, ~~2018~~2019, there was $~~311.1~~321.2 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 ~~2.0~~2.1 years. Total unrecognized stock-based compensation cost will be adjusted for future changes in estimated ~~forfeitures.~~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 three months ended February 28, ~~2018:~~2019:


	Shares		Weighted- Average Grant Date Fair Value		Shares		Weighted- Average Grant Date Fair Value
	(in millions)				(in millions)
Balance at November 30, 2017	10.7		$	35.64
Balance at November 30, 2018					8.8		$	41.77
Granted	3.0		$	47.53	3.0		$	52.68
Vested	(4.5	)	$	33.89	(3.3	)	$	38.75
Forfeited	(0.2	)	$	40.09	(0.2	)	$	46.15
Balance at February 28, 2018	9.0		$	40.36
Balance at February 28, 2019					8.3		$	46.81

The total fair value of RSUs and RSAs that vested during the three months ended February 28, ~~2018~~2019 was ~~$211.3~~$169.2 million.

Stock Options. The following table summarizes stock option award activity during the three months ended February 28, ~~2018,~~2019, as well as stock options that are vested and expected to vest and stock options exercisable as of February 28, ~~2018:~~2019:

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 (2.4 ) $ 23.55

Forfeited —
$ —

Balance at February 28, 2018 22.9
$ 25.91
2.3 483.3
Vested and expected to vest at February 28, 2018 22.6
$ 25.90
2.2 477.3
Exercisable at February 28, 2018 11.2
$ 24.95
1.8 248.5



	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in millions)				(in years)	(in millions)
Balance at November 30, 2018	15.7		$	26.61
Exercised	(0.9	)	$	25.90
Forfeited	—		$	—
Balance at February 28, 2019	14.8		$	26.66	1.6	391.2
Vested and expected to vest at February 28, 2019	14.7		$	26.66	1.6	390.0
Exercisable at February 28, 2019	9.4		$	26.51	1.6	249.5

The aggregate intrinsic value amounts in the table above represent the difference between the closing price of our common shares on February 28, ~~2018~~2019 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 February 28, ~~2018.~~2019. In future periods, this amount will change depending on fluctuations in our share price. The total intrinsic value of stock options exercised during the three months ended February 28, ~~2018~~2019 was approximately ~~$56.3~~$23.5 million.


8.7.	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 months endedFebruary 28, ~~2018~~2019 was negative ~~156~~1 percent compared to negative 6156 percent for the three months ended February 28, ~~2017.~~2018. The negative 2018 tax rate is primarily due to the estimated one-time tax benefit associated with the Act of approximately $136 million, or 145 percentage points, and excess tax benefits on stock-based compensation of approximately $24 million, or 25 percentage points. The negative 20172019 tax rate is primarily due to tax benefits associated with excess tax benefits on stock-based compensation of approximately ~~$14~~$12 million ~~or 22 percentage points.~~

and change in partnership basis related to intangible assets of approximately $7 million. The ~~Tax Cuts and Jobs Act was enacted on December 22, 2017, which significantly revises U.S. corporate tax law. Among other things, the Act reduces the U.S. federal corporation~~negative 2018 tax rate is primarily due to ~~21 percent and implements a new system~~tax benefits associated with U.S. tax reform of taxation for non-U.S. earnings, including by imposing a one-time transition tax on the deemed repatriation of undistributed earnings of non-U.S. subsidiaries. Other significant changes include U.S. taxes on global intangible low-taxed income (“GILTI”) attributable to foreign subsidiaries and base erosion anti-abuse transactions, limitations on the deductibility of interest expense and executive compensation, and repeal of the deduction for domestic production activities. As a result of our current interpretation and estimated impact of the Act, we recorded adjustments totaling a net tax benefit ofapproximately $136 million ~~in the first quarter~~and excess tax benefits on stock-based compensation of 2018 to provisionally account for the estimated impact. This amount included a provisional estimate for the transition tax of $38 million, which will be payable over eight years, starting in 2019, and a provisional estimate decreasing net deferred tax liabilities by $174 million, resulting from the future reduction in the federal corporate income tax rate.

As of February 28, 2018, we have not completed our accounting for the tax effects of enactment of the Act because all of the necessary information is not currently available, prepared, or analyzed. As such, the amounts we have recorded are provisional estimates and as permitted by SAB 118, we will continue to assess the impacts of the Act and may record additional provisional amounts or adjustments to provisional estimates during fiscal year 2018. We expect to complete the accounting for these impacts of tax reform within the measurement period in accordance with SAB 118 as we complete our analysis and receive additional guidance from the Internal Revenue Service pertaining to the Act.

As a result of the Act, all previously undistributed foreign earnings have now been subjected to U.S. tax; however, we currently intend to continue to indefinitely reinvest these earnings outside the U.S. and accordingly, we have not provided non-U.S. deferred income taxes on these indefinitely reinvested earnings. It is not practicable to determine the amount of non-U.S. deferred taxes that might be required to be provided if such earnings were distributed in the future, due to complexities in the tax laws and in the hypothetical calculations that would have to be made.

We have not yet made a policy election with respect to our treatment of GILTI. We can either account for taxes on GILTI as incurred or recognize deferred taxes when basis differences exist that are expected to affect the amount of GILTI inclusion upon reversal. We are still in the process of analyzing the provisions of the Act associated with GILTI and the expected impact of GILTI on our consolidated financial statements.approximately $24 million.


9.8.	Commitments and Contingencies

From time to time, in the ordinary course of our business, we are involved in various legal, regulatory or administrative proceedings, lawsuits, government investigations, and other claims, including employment, commercial, intellectual property, and environmental, safety, and health matters. In addition, we may receive routine requests for information from governmental agencies in connection with their regulatory or investigatory authority. We review such proceedings, lawsuits, investigations, claims, and requests for information and take appropriate action as necessary. At the present time, we can give no assurance as to the outcome of any such pending proceedings, lawsuits, investigations, claims, or requests for information and we are unable to determine the ultimate resolution of or provide a reasonable estimate of the range of possible loss attributable to these matters or the effect they may have on us. However, we do not expect the outcome of such proceedings, lawsuits, claims, or requests for information to have a material adverse effect on our results of operations or financial condition. We have defended and will continue to vigorously defend ourselves in all matters.

On April 23, 2013 (prior to our acquisition of R.L. Polk & Co.), our CARFAX subsidiary (“CARFAX”) was served with a complaint filed in the U.S. District Court for the Southern District of New York, purportedly on behalf of certain auto and light truck dealers. The complaint alleges, among other things, that, in violation of antitrust laws, CARFAX entered into exclusive arrangements regarding the sale of CARFAX vehicle history reports with certain auto manufacturers and owners of two websites providing classified listings of used autos and light trucks. The complaint seeks three times the actual damages that a jury finds the plaintiffs have sustained, injunctive relief, costs and attorneys’ fees. On October 25, 2013, the plaintiffs served a

second amended complaint with similar allegations purporting to name approximately 469 auto dealers as plaintiffs, and counsel for plaintiffs indicated that there may be additional claimants. On September 30, 2016, the District Court granted CARFAX’s motion for summary judgment, dismissing all claims in the complaint. The plaintiffs have appealed the decision. On January 13, 2017, another group of auto and light truck dealers filed a complaint in the U.S. District Court for the Southern District of New York on substantially the same claims as described above. The complaint seeks three times the actual damages that a jury finds the plaintiffs have sustained, injunctive relief, costs, and attorneys’ fees. The court has stayed the case pending the outcome of the appeal of the first case described above.

In October 2015, the Division of Enforcement of the SEC opened a non-public civil investigation related to certain of our current and former securitized product indices, and requested that we provide certain documents and information. We responded to these inquiries in late 2015 and early 2016, and, to the extent the SEC has further inquiries, will continue to cooperate in this matter.


~~10.~~9.	Common Shares and Earnings per Share

Weighted-average shares outstanding for the three months ended February 28, ~~2018~~2019 and February 28, ~~2017~~2018 were calculated as follows (in millions):


	Three months ended February 28,		Three months ended February 28,
	2018	2017	2019	2018
Weighted-average shares outstanding:
Shares used in basic EPS calculation	398.0	406.2	398.0	398.0
Effect of dilutive securities:
RSUs/RSAs	4.5	5.7	3.0	4.5
Stock options	9.6	10.3	7.0	9.6
Shares used in diluted EPS calculation	412.1	422.2	408.0	412.1

Share Repurchase Programs

Our Board of Directors has authorized a share repurchase program of up to $3.25 billion of IHS Markit common shares through November 30, 2019, to be funded using our existing cash, cash equivalents, marketable securities and future cash flows, or through the incurrence of short- or long-term indebtedness, at management’s discretion. This repurchase program does not obligate us to repurchase any set dollar amount or number of shares and may be modified, suspended, or terminated at any time without prior notice. Under this program, we are authorized to repurchase our common shares on the open market from time to time, in privately negotiated transactions, or through accelerated share repurchase (ASR) agreements, subject to availability of common shares, price, market conditions, alternative uses of capital, and applicable regulatory requirements, at management’s discretion. As of February 28, ~~2018,~~2019, we had ~~$1.507~~$1.007 billion remaining available to repurchase under the program.

In August 2016, our Board of Directors separately and additionally authorized, subject to applicable regulatory requirements, the repurchase of our common shares surrendered by employees in an amount equal to the exercise price, if applicable, and statutory tax liability associated with the vesting of their equity awards, for which we pay the statutory tax on behalf of the employee and forgo receipt of the exercise price of the award from the employee, if applicable.

~~For the three months ended February 28, 2018, we repurchased approximately $249 million of common shares under these programs.~~

In March 2018, we funded a $500 million ASR agreement with a scheduled termination date in the second quarter of 2018. Upon funding of the ASR, we received an initial delivery of 8.5 million shares. The total number of shares ultimately to be repurchased under this ASR will generally be based on the daily volume-weighted average price of the shares during the calculation period for the ASR, less an agreed discount. At final settlement, we may be entitled to receive additional shares, or, under certain limited circumstances, be required to deliver shares to the relevant ASR counterparty.

Employee Benefit Trust (EBT) Shares

We have approximately 25.2 million outstanding common shares that are held by the Markit Group Holdings Limited Employee Benefit Trust. The trust is under our control using the variable interest entity model criteria; consequently, we have consolidated and classified the trust shares as treasury shares within our consolidated balance sheets.


~~11.~~10.	Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in AOCI by component (net of tax) for the three months ended February 28, 2018 (in millions):



	Foreign currency translation			Net pension and OPEB liability			Unrealized losses on hedging activities			Total
Balance at November 30, 2017	$	(68.1	)	$	(13.0	)	$	(3.9	)	$	(85.0	)
Other comprehensive income (loss) before reclassifications	56.4			—			3.6			60.0
Reclassifications from AOCI to income	—			—			1.2			1.2
Reclassifications from AOCI to retained earnings	—			(1.7		)	(4.2		)	(5.9		)
Balance at February 28, 2018	$	(11.7	)	$	(14.7	)	$	(3.3	)	$	(29.7	)

The following table summarizes the changes in AOCI by component (net of tax) for the three months ended February 28, 2019 (in millions):



	Foreign currency translation			Net pension and OPEB liability			Unrealized losses on hedging activities			Total
Balance at November 30, 2018	$	(288.5	)	$	(9.9	)	$	(0.5	)	$	(298.9	)
Other comprehensive income (loss) before reclassifications	135.7			—			(1.7		)	134.0
Reclassifications from AOCI to income	—			—			0.2			0.2
Balance at February 28, 2019	$	(152.8	)	$	(9.9	)	$	(2.0	)	$	(164.7	)


~~12.~~11.	Segment Information

We prepare our financial reports and analyze our business results within our four operating segments: Resources, Transportation, CMS, and Financial Services. We evaluate revenue performance at the segment level and ~~also~~ by transaction type. No single customer accounted for 10 percent or more of our total revenue for the three months ended February 28, ~~2018~~2019 and February 28, ~~2017.~~2018. There are no material inter-segment revenues for any period presented. Our shared services function includes corporate transactions that are not allocated to the reportable segments, including net periodic pension and postretirement expense, as well as certain corporate functions such as investor relations, procurement, corporate development, and portions of finance, legal, and marketing.

We evaluate segment operating performance at the Adjusted EBITDA level for each of our four segments. We define Adjusted EBITDA as net income before net interest, provision for income taxes, depreciation and amortization, stock-based compensation ~~cost,~~expense, restructuring charges, acquisition-related costs and performance compensation, 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. Information about the operations of our four segments is set forth below (in millions).

Three months ended February 28,
2018 2017
Revenue
Resources $ 205.3
$ 196.9
Transportation 269.6
224.9
CMS 137.6
126.5
Financial Services 319.6
295.9
Total revenue $ 932.1
$ 844.2

Adjusted EBITDA
Resources $ 84.9
$ 80.0
Transportation 109.7
89.8
CMS 31.8
28.6
Financial Services 145.4
129.2
Shared services (12.5 ) (7.4 )
Total Adjusted EBITDA $ 359.3
$ 320.2

Reconciliation to the consolidated statements of operations:
Interest income 0.7
0.5
Interest expense (46.3 ) (31.8 )
Benefit for income taxes 146.6
3.6
Depreciation (41.6 ) (36.1 )
Amortization related to acquired intangible assets (89.0 ) (84.7 )
Stock-based compensation expense (61.9 ) (75.2 )
Restructuring charges —
0.2
Acquisition-related costs (12.1 ) (31.6 )
Acquisition-related performance compensation (14.9 ) —
Share of joint venture results not attributable to Adjusted EBITDA —
0.4
Adjusted EBITDA attributable to noncontrolling interest 0.5
0.5
Net income attributable to IHS Markit Ltd. $ 241.3
$ 66.0

~~Revenue by transaction type was as follows (in millions):~~

Three months ended February 28,
2018 2017
Recurring fixed revenue $ 683.3
$ 617.1
Recurring variable revenue 117.1
106.4
Non-recurring revenue 131.7
120.7
Total revenue $ 932.1
$ 844.2



	Three months ended February 28,
	2019			2018
Revenue
Resources	$	216.8		$	205.3
Transportation	288.1			269.6
CMS	132.3			137.6
Financial Services	409.2			319.6
Total revenue	$	1,046.4		$	932.1

Adjusted EBITDA
Resources	$	93.2		$	84.9
Transportation	114.3			109.7
CMS	29.4			31.8
Financial Services	183.2			145.4
Shared services	(12.0		)	(12.5		)
Total Adjusted EBITDA	$	408.1		$	359.3

Reconciliation to the consolidated statements of operations:
Interest income	0.4			0.7
Interest expense	(66.9		)	(46.3		)
Benefit for income taxes	0.9			146.6
Depreciation	(46.6		)	(41.6		)
Amortization related to acquired intangible assets	(95.7		)	(89.0		)
Stock-based compensation expense	(59.7		)	(61.9		)
Restructuring charges	(8.2		)	—
Acquisition-related costs	(7.5		)	(12.1		)
Acquisition-related performance compensation	(15.3		)	(14.9		)
Loss on debt extinguishment	(0.2		)	—
Share of joint venture results not attributable to Adjusted EBITDA	(0.1		)	—
Adjusted EBITDA attributable to noncontrolling interest	0.5			0.5
Net income attributable to IHS Markit Ltd.	$	109.7		$	241.3


Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the financial condition and results of operations of IHS Markit Ltd. (“IHS Markit,” “we,” “us,” or “our”) as of and for the periods presented. The following discussion should be read in conjunction with our ~~2017~~2018 Annual Report on Form 10-K and the Condensed Consolidated Financial Statements and accompanying notes included in this Quarterly Report on Form 10-Q. References to ~~2018~~2019 are to our fiscal year ~~2018,~~2019, which began on December 1, ~~2017~~2018 and ends on November 30, ~~2018.~~2019.

Executive Summary

Business Overview

We are a world leader in critical information, analytics, and solutions for the major industries and markets that drive economies worldwide. We deliver 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. We have 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, we are committed to sustainable, profitable growth.

To best serve our customers, we are organized into the following four industry-focused segments:

•Resources, which includes our Energy and Chemicals product offerings;

Transportation, which includes our Automotive; Maritime & Trade; and Aerospace, Defense & Security product offerings;

Consolidated Markets & Solutions, which includes our Product Design; Technology, Media & ~~Telecom;~~Telecom (“TMT”); and Economics & Country Risk (“ECR”) product offerings; and

Financial Services, which includes our financial Information, Processing, and Solutions product ~~offerings.~~offerings, as well as our product offerings from Ipreo, our recent acquisition.

We believe that this ~~organization~~sales and operating model helps our customers do business with us by providing a cohesive, consistent, and effective product, sales, and marketing approach by segment.

Our recurring fixed revenue and recurring variable revenue represented approximately 86 percent of our total revenue for the three months ended February 28, ~~2018 and February 28, 2017.~~2019. Our recurring revenue is generally stable and predictable, and we have long-term relationships with many of our customers.

For ~~2018,~~2019, we ~~continue to focus~~are focusing our efforts on the following actions:

~~Integrate organizational structure.~~Increase in geographic, product, and customer penetration. We ~~have completed a significant portion~~believe that there are continued opportunities to add new customers and to increase the use of our ~~key merger integration activities, primarily related~~products and services by existing customers. We plan to add new customers and build our ~~shared services~~relationships with existing customers by leveraging our existing sales channels, broad product portfolio, global footprint, and ~~corporate organization. We intend~~industry expertise to ~~continue~~anticipate and respond to ~~integrate our people, platforms, processes, and products in a manner that allows us to take advantage of revenue and cost synergies that will strengthen~~ the ~~effectiveness and efficiency~~changing demands of our ~~business operations.~~end markets.

~~Innovate~~Introduce innovative offerings and ~~develop~~enhancements. In recent years, we have launched several new product offerings~~. We~~ addressing a wide array of customer needs, and we expect to continue to ~~create new commercial offerings from~~innovate using our existing data sets and industry expertise, converting core information to higher value advanced analytics. Our investment priorities ~~for new product offerings~~ are primarily in energy, automotive, and financial services, ~~and product design,~~ and we intend to continue to invest across ~~the~~our business to increase our customer value proposition.

Balance capital allocation.~~In 2018, we expect~~ Our capital allocation focus for the majority of 2019 will be to ~~focus~~de-lever to our capital ~~allocation strategy primarily on returning capital to shareholders through share repurchases. Longer~~policy target leverage ratio of 2.0-3.0x. Over the long term, we expect to balance capital allocation between returning capital to shareholders (through consistent share ~~repurchases~~repurchases) and completing mergers and acquisitions, focused primarily on targeted transactions in our core end markets that will allow us to continue to build out our strategic position.

Key Performance Indicators

We believe that revenue growth, Adjusted EBITDA (both in dollars and margin), and free cash flow are key financial measures of our success. Adjusted EBITDA and free cash flow are financial measures that are not prepared in accordance with U.S. generally accepted accounting principles (“non-GAAP”).

Revenue growth. We review year-over-year revenue growth in our segments as a key measure of our success in addressing customer needs. We measure revenue growth in terms of organic, acquisitive, and foreign currency impacts. We define these components as follows:

Organic – We define organic revenue growth as total revenue growth from continuing operations for all factors other than acquisitions and foreign currency movements. We drive this type of revenue growth through value realization (pricing), expanding wallet share of existing customers through up-selling and cross-selling efforts, securing new customer business, and through the sale of new or enhanced product offerings.

Acquisitive – We define acquisitive revenue as the revenue generated from acquired products and services from the date of acquisition to the first anniversary date of that acquisition. This type of growth comes as a result of our strategy to purchase, integrate, and leverage the value of assets we acquire. We also include the impact of divestitures in this ~~growth~~ metric.

Foreign currency – We define the foreign currency impact on revenue as the difference between current revenue at current exchange rates and current revenue at the corresponding prior period exchange rates. Due to the significance of revenue transacted in foreign currencies, we believe that it is important to measure the impact of foreign currency movements on revenue.

In addition to measuring and reporting revenue by segment, we also measure and report revenue by transaction type. Understanding revenue by transaction type helps us identify and address broad changes in product mix. We summarize our transaction type revenue into the following three categories:

Recurring fixed revenue represents revenue generated from contracts specifying a relatively fixed fee for services delivered over the life of the contract. The fixed fee is typically paid annually or more periodically in advance. These contracts typically consist of subscriptions to our various information offerings and software maintenance, which provide continuous access to our platforms and associated data over the contract term. The revenue is usually recognized ratably over the ~~life of the contract.~~contract term or for term-based software license arrangements, annually on renewal. The initial term of these contracts is typically annual and non-cancellable for the term of the subscription and may contain provisions for minimum monthly payments.

Recurring variable revenue represents revenue from contracts that specify a fee for services, which is typically not fixed. The variable fee is usually paid monthly in arrears. Recurring variable revenue is based on, among other factors, the number of trades processed, assets under management, or the number of positions we value. Many of these contracts do not have a maturity date, while the remainder have an initial term ranging from one to five years. Recurring variable revenue was derived entirely from the Financial Services segment for all periods presented.

Non-recurring revenue represents consulting (e.g., research and analysis, modeling, and forecasting), services, single-document product sales, ~~software~~perpetual license sales and associated services, conferences and events, and advertising. Our non-recurring products and services are an important part of our business because they complement our recurring business in creating strong and comprehensive customer relationships.

Non-GAAP measures. We use non-GAAP financial measures such as EBITDA, Adjusted EBITDA, and free cash flow in our operational and financial decision-making. We believe that such measures allow us to focus on what we deem to be more reliable indicators of ongoing operating performance (Adjusted EBITDA) and our ability to generate cash flow from operations (free cash flow). We also believe that investors may find these non-GAAP financial measures useful for the same reasons, although we caution readers that non-GAAP financial measures are not a substitute for U.S. GAAP financial measures or disclosures. None of these non-GAAP financial measures are recognized terms under U.S. GAAP and do not purport to be an alternative to net income or operating cash flow as an indicator of operating performance or any other U.S. GAAP measure. Throughout this MD&A, we provide reconciliations of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures.

EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA 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. We define EBITDA as net income plus or minus net interest, plus provision for income taxes, depreciation, and amortization. Our definition of 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 ~~settlement expense,~~other adjustments, the impact of joint ventures and noncontrolling interests, and discontinued operations).

Free Cash Flow. We define free cash flow as net cash provided by operating activities less capital expenditures.

Non-GAAP measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to us, 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 that the measures provide users with valuable insight into key components of U.S. GAAP financial disclosures. For example, a company with higher U.S. GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, excluding the effects of interest income and expense moderates the impact of a company’s capital structure on its performance. However, non-GAAP measures have limitations as an analytical tool. Because not all companies use identical calculations, our presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.

They are not presentations made in accordance with U.S. 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 U.S. GAAP or operating cash flows determined in accordance with U.S. GAAP. As a result, these performance measures should not be considered in isolation from, or as a substitute analysis for, results of operations as determined in accordance with U.S. GAAP.

Global Operations

Approximately 40 percent of our revenue is transacted outside of the United States; however, only about 20 percent of our revenue is transacted in currencies other than the U.S. dollar. As a result, a strengthening U.S. dollar relative to certain currencies has historically resulted in a negative impact on our revenue; conversely, a weakening U.S. dollar has historically resulted in a positive impact on our revenue. However, the impact on operating income is diminished due to certain operating expenses denominated in currencies other than the U.S. dollar. Our largest foreign currency exposures are the British Pound, Euro, Canadian Dollar, Singapore Dollar, and Indian Rupee.

Results of Operations

Total Revenue

~~First quarter 2018~~ ~~revenue~~Revenue for the three months ended February 28, 2019, increased 1012 percent compared to the ~~first quarter~~ of ~~2017~~.three months ended February 28, 2018. The table below displays the percentage change in revenue due to organic, acquisitive, and foreign currency factors when comparing the three months ended February 28, ~~2018~~2019 to the three months endedFebruary 28, ~~2017~~.2018.

Change in Total Revenue
Organic Acquisitive
Foreign
Currency
First quarter 2018 vs. first quarter 2017 6 % 2 % 2 %



	Change in Total Revenue
	Organic		Acquisitive		Foreign Currency
First quarter 2019 vs. first quarter 2018	5	%	8	%	(1	)%

We saw ~~broad-based~~solid organic revenue growth ~~across all four of~~in our Transportation, Resources, and Financial Services segments for the three months ended February 28, ~~2018~~2019, compared to the three months ended February 28, ~~2017, with particular strength in Transportation and Financial Services and improving performance in Resources and CMS.~~2018.

Acquisitive revenue growth for the three months ended February 28, ~~2018~~2019, compared to the three months ended February 28, ~~2017,~~2018, was primarily due to the aMIpreo acquisition in the ~~fourth~~third quarter of ~~2017.~~2018.

Foreign currency ~~effects~~ had a ~~2 percent impact~~negative effect on revenue growth for the three months ended February 28, ~~2018,~~2019, compared to the ~~same respective period in 2017.~~three months ended February 28, 2018. Due to the extent of our global operations, foreign currency movements could continue to positively or negatively affect our results in the future.

Revenue by Segment


	Three months ended February 28,				Percentage Change		Three months ended February 28,				Percentage Change
(In millions, except percentages)	2018		2017		Percentage Change		2019		2018		Percentage Change
Revenue:
Resources	$	205.3	$	196.9	4	%	$	216.8	$	205.3	6	%
Transportation	269.6		224.9		20	%	288.1		269.6		7	%
CMS	137.6		126.5		9	%	132.3		137.6		(4	)%
Financial Services	319.6		295.9		8	%	409.2		319.6		28	%
Total revenue	$	932.1	$	844.2	10	%	$	1,046.4	$	932.1	12	%

The percentage change in revenue for each segment was due to the factors described in the following table.


	Increase (decrease) in revenue						Increase in revenue
	First quarter 2018 vs. first quarter 2017						First quarter 2019 vs. First quarter 2018
	Organic		Acquisitive		Foreign Currency		Organic		Acquisitive		Foreign Currency
Resources	3	%	—	%	1	%	6	%	—	%	(1	)%
Transportation	10	%	7	%	2	%	8	%	—	%	(1	)%
CMS	5	%	1	%	2	%	(3	)%	—	%	(1	)%
Financial Services	6	%	—	%	3	%	6	%	24	%	(1	)%

Resources revenue for the three months ended February 28, ~~2018~~2019, compared to the three months ended February 28, ~~2017,~~2018, experienced positive organic revenue growth, with 5 percent recurring revenue growth and 16 percent non-recurring revenue growth. Total and recurring organic revenue growth benefited by approximately 1 percentage point as ~~our upstream energy results continue to improve and our chemicals, PGCR, and downstream pricing results remain strong.~~a result of the adoption of ASC Topic 606. Our Resources annual contract value (“ACV”), which represents the annualized value of recurring revenue contracts, ~~was approximately flat compared to~~increased slightly from the beginning of the year.

Transportation revenue for the three months ended February 28, ~~2018~~2019, compared to the three months ended February 28, ~~2017,~~2018, continued to experience ~~solid organic recurring and non-recurring growth, led primarily by our automotive product offerings. We continue to see~~ strong organic growth, ~~in our~~with 9 percent recurring revenue growth and 4 percent non-recurring revenue growth. Our automotive product ~~category~~offerings continue to provide the largest contribution to the growth, as our diversification in used and new car product offerings continues to provide balanced opportunities for ~~both our new~~growth. Our Aerospace, Defense & Security and used car offerings. Specific drivers of the strong performance in automotive includes our vehicle history report and used car listing services, supply chain forecasting, vehicle emissions analytics, digital marketing, and recall services.Maritime & Trade revenue was largely unchanged.

CMS revenue for the three months ended February 28, ~~2018~~2019, compared to the three months ended February 28, ~~2017, increased~~2018, decreased 3 percent organically, primarily driven by the uncertainty over a contract renewal in our TMT business line. A portion of the decline was also due to lower revenue in the first quarter of 2019 as ~~we see benefits from improving end markets and operational changes we have made over~~a result of the ~~past two years.~~off-year cycle of the BPVC engineering standard.

Financial Services revenue for the three months ended February 28, ~~2018,~~2019, compared to the three months ended February 28, ~~2017,~~2018, experienced strength across our Information ~~product offerings~~ and ~~our~~ Solutions ~~product offerings, with some moderation in our Processing~~ product offerings. Within our Information product offerings, revenue growth was led by our ~~indices offerings, with solid growth in our~~pricing and valuation services ~~equities~~offerings, and ~~bond pricing offerings as well.~~within our Solutions product offerings, revenue growth was ~~driven~~led by our ~~regulatory~~managed loan services and ~~compliance solutions, as well as loan servicing platform growth. Our~~analytics software offerings. Within our Processing product offerings, organic revenue growth declined slightly during the three months ended February 28, 2018, compared to the three months ended February 28, 2017, with decreased derivatives processing more than offsetting slight increases in loan processing due to ~~a difficult comparison to the strong results~~market softness in loans primary issuance, partially offset by improvements in derivatives processing. The Ipreo acquisition in the ~~prior year.~~

third quarter of 2018 provided the acquisitive growth, and while its first quarter 2019 revenue was less than expected due to lower market activity, primarily in equities, we expect more robust markets and improved revenue in the second quarter of 2019.

Revenue by Transaction Type


	Three months ended February 28,						Percent change				Three months ended February 28,						Percentage change
(in millions, except percentages)	2018			2017			Total		Organic		2019			2018			Total		Organic
Revenue:
Recurring fixed	$	683.3		$	617.1		11	%	6	%	$	767.2		$	683.3		12	%	5	%
Recurring variable	117.1			106.4			10	%	7	%	136.0			117.1			16	%	3	%
Non-recurring	131.7			120.7			9	%	8	%	143.2			131.7			9	%	8	%
Total revenue	$	932.1		$	844.2		10	%	6	%	$	1,046.4		$	932.1		12	%	5	%

As a percent of total revenue:
Recurring fixed	73		%	73		%					73		%	73		%
Recurring variable	13		%	13		%					13		%	13		%
Non-recurring	14		%	14		%					14		%	14		%

Recurring fixed revenue organic growth increased ~~measurably~~5 percent for the three months ended February 28, ~~2018,~~2019, compared to the three months ended February 28, ~~2017,~~2018, with Transportation, Resources, and Financial Services recurring offerings providing the largest contribution to the growth, ~~good results in CMS,~~ and ~~improving~~flat organic growth in ~~the Resources segment.~~CMS. Recurring variable revenue was composed entirely of Financial Services revenue, with ~~strong~~ organic growth coming from our Information and Solutions product offering ~~categories, offset by lower Processing revenue.~~categories.

~~Non-recurring~~The non-recurring organic revenue ~~increases~~increase for the three months ended February 28, ~~2018,~~2019, compared to the three months ended February 28, ~~2017, were~~2018, was primarily due to ~~continued~~ strength in Solutions product offerings within the ~~Transportation segment and positive contributions from the~~Financial Services segment. The Resources and Transportation segments also experienced organic growth, which was partially offset by lower revenues in the CMS ~~segments.~~segment as a result of the off-year cycle of the BPVC engineering standard.

Operating Expenses

The following table shows our operating expenses and the associated percentages of revenue.


	Three months ended February 28,						Percentage Change		Three months ended February 28,						Percentage Change
(In millions, except percentages)	2018			2017			Percentage Change		2019			2018			Percentage Change
Operating expenses:
Cost of revenue	$	342.9		$	327.0		5	%	$	399.8		$	342.9		17	%
SG&A expense	290.3			268.0			8	%	300.3			290.3			3	%
Total cost of revenue and SG&A expense	$	633.2		$	595.0		6	%	$	700.1		$	633.2		11	%

Depreciation and amortization expense	$	130.6		$	120.8		8	%	$	142.3		$	130.6		9	%

As a percent of revenue:
Total cost of revenue and SG&A expense	68		%	70		%			67		%	68		%
Depreciation and amortization expense	14		%	14		%			14		%	14		%

Cost of Revenue and SG&A Expense

In managing our business, we evaluate our costs by type (e.g., ~~salaries)~~salaries and benefits, facilities, IT) rather than by income statement classification. The increases in absolute total cost of revenue and SG&A expense ~~was~~were primarily due to the ~~aM acquisition and foreign currency effects.~~Ipreo acquisition. As a percentage of revenue, total cost of revenue and SG&A expense declined primarily because of ~~strong~~solid organic revenue growth in ~~2018,~~2019, as well as ongoing cost management ~~and rationalization efforts associated with acquisition integration.~~efforts.

Within our cost of revenue and SG&A expense, stock-based compensation expense decreased by approximately ~~$13~~$2 million for the three months ended February 28, ~~2018,~~2019, compared to the ~~same period in 2017,~~three months ended February 28, 2018, as ~~a result of fewer award grants in 2018, limited acceleration of share awards associated with severance activities, and fewer shares still vesting from pre-Markit merger awards.~~we continue to manage our equity compensation programs.

Depreciation and Amortization Expense

For the three months ended February 28, ~~2018~~2019, compared to the three months ended February 28, ~~2017,~~2018, depreciation and amortization expense increased on an absolute basis primarily because of the aMIpreo acquisition, but was relatively flat on a percentage of revenue basis.

Acquisition-related Costs

Please refer to Note 65 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a discussion of costs associated with our integration and other acquisition-related activities. During the three months ended February 28, ~~2018,~~2019, we recorded approximately ~~$27~~$23 million of direct and incremental costs associated with ~~acquisition-related~~acquisition and divestiture activities, primarily for performance compensation expense related to the aM acquisition, but also including employee severance charges and retention costs, contract termination costs for facility consolidations, and legal and professional ~~fees, and performance compensation expense related to the aM acquisition.~~fees.

Segment Adjusted EBITDA


	Three months ended February 28,						Percentage Change		Three months ended February 28,						Percentage Change
(In millions, except percentages)	2018			2017			Percentage Change		2019			2018			Percentage Change
Adjusted EBITDA:
Resources	$	84.9		$	80.0		6	%	$	93.2		$	84.9		10	%
Transportation	109.7			89.8			22	%	114.3			109.7			4	%
CMS	31.8			28.6			11	%	29.4			31.8			(8	)%
Financial Services	145.4			129.2			13	%	183.2			145.4			26	%
Shared services	(12.5		)	(7.4		)			(12.0		)	(12.5		)
Total Adjusted EBITDA	$	359.3		$	320.2		12	%	$	408.1		$	359.3		14	%

As a percent of segment revenue:
Resources	41		%	41		%			43		%	41		%
Transportation	41		%	40		%			40		%	41		%
CMS	23		%	23		%			22		%	23		%
Financial Services	46		%	44		%			45		%	46		%

For the three months ended February 28, ~~2018,~~2019, compared to the three months ended February 28, ~~2017,~~2018, Adjusted EBITDA increased primarily due to the Ipreo acquisition and the leverage in our business model, as incremental revenue drives higher margins. We ~~also~~ continue to focus our efforts on cost management and the Ipreo integration to improve overall margins. Resources segment Adjusted EBITDA increased due to ~~a return~~organic revenue growth within the segment. Transportation segment Adjusted EBITDA also increased due to continued organic revenue ~~growth. Transportation~~growth, while the Financial Services segment Adjusted EBITDA continued to increase because of ~~high~~organic revenue growth ~~that flowed through to segment Adjusted EBITDA. Financial Services segment Adjusted EBITDA growth was primarily due to~~and the ~~margin flow-through~~contribution from ~~strong revenue growth.~~the Ipreo acquisition.

As a percentage of revenue, total Adjusted EBITDA continued to improve due to margin expansion from revenue growth and continued integration and business leveraging efforts. Resources margin increased due to improved revenue growth, while Transportation’s margin was lower due to lower margin recall product offering revenue and higher marketing spend for our CARFAX brand to support new product initiatives. Financial Services’ lower Adjusted EBITDA margin ~~increase~~ was ~~compressed by low aM margins.~~due to the Ipreo acquisition.

Provision for 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 months ended February 28, ~~2018~~2019 was negative ~~156~~1 percent compared to negative 6156 percent for the three months ended February 28, ~~2017.~~2018. The negative 2018 tax rate is primarily due to the estimated one-time tax benefit associated with the Act of approximately $136 million, or 145 percentage points, and excess tax benefits on stock-based compensation of approximately $24 million, or 25 percentage points. The negative 20172019 tax rate is primarily due to tax benefits associated with excess tax benefits on stock-based compensation of approximately ~~$14~~$12 million ~~or 22 percentage points.~~

approximately $24 million.

EBITDA and Adjusted EBITDA (non-GAAP measures)

The following table provides reconciliations of our net income to EBITDA and Adjusted EBITDA for the three months ended February 28, ~~2018~~2019 and February 28, ~~2017.~~2018.


	Three months ended February 28,						Percentage Change		Three months ended February 28,						Percentage Change
(In millions, except percentages)	2018			2017					2019			2018
Net income attributable to IHS Markit Ltd.	$	241.3		$	66.0		266	%	$	109.7		$	241.3		(55	)%
Interest income	(0.7		)	(0.5		)			(0.4		)	(0.7		)
Interest expense	46.3			31.8					66.9			46.3
(Benefit) Provision for income taxes	(146.6		)	(3.6		)
Provision (benefit) for income taxes									(0.9		)	(146.6		)
Depreciation	41.6			36.1					46.6			41.6
Amortization	89.0			84.7					95.7			89.0
EBITDA	$	270.9		$	214.5		26	%	$	317.6		$	270.9		17	%
Stock-based compensation expense	61.9			75.2					59.7			61.9
Restructuring charges	—			(0.2		)			8.2			—
Acquisition-related costs	12.1			31.6					7.5			12.1
Acquisition-related performance compensation	14.9			—					15.3			14.9
Loss on debt extinguishment									0.2			—
Share of joint venture results not attributable to Adjusted EBITDA	—			(0.4		)			0.1			—
Adjusted EBITDA attributable to noncontrolling interest	(0.5		)	(0.5		)			(0.5		)	(0.5		)
Adjusted EBITDA	$	359.3		$	320.2		12	%	$	408.1		$	359.3		14	%
Adjusted EBITDA as a percentage of revenue	38.6		%	37.9		%			39.0		%	38.6		%

Our Adjusted EBITDA margin performance for the three months ended February 28, ~~2018,~~2019, compared to the three months ended February 28, ~~2017,~~2018, increased primarily because of margin flow-through on our organic revenue growth, as well as our continued ~~integration and~~ cost management efforts. The ~~expansion~~increase was ~~negatively impacted~~muted by ~~changes in foreign currency exchange rates, which resulted in higher revenue and expense amounts, as well as low aM~~lower Ipreo margins. We expect to continue to drive margin improvement through continued revenue growth, integration, and cost management activities.

Financial Condition


(In millions, except percentages)	As of February 28, 2018		As of November 30, 2017		Dollar change			Percent change		As of February 28, 2019		As of November 30, 2018		Dollar change			Percentage change
Accounts receivable, net	$	802.7	$	693.5	$	109.2		16	%	$	980.4	$	792.9	$	187.5		24	%
Accrued compensation	$	59.7	$	157.4	$	(97.7	)	(62	)%	$	96.6	$	214.1	$	(117.5	)	(55	)%
Deferred revenue	$	919.3	$	790.8	$	128.5		16	%	$	1,026.3	$	886.8	$	139.5		16	%

The increase in accounts receivable was due to increased billing activity in ~~the first quarter of 2018. The decrease in accrued~~2019. Accrued compensation ~~was~~decreased primarily due to the ~~2017~~2018 bonus payout made in the first quarter of ~~2018,~~2019, partially offset by the current year accrual. The increase in deferred revenue was due to increased billings in 2019, partially offset by the ~~first quarter of 2018.~~transition adjustment to ASC Topic 606.

Liquidity and Capital Resources

As of February 28, ~~2018~~2019, we had cash and cash equivalents of $~~156~~133 million, of which approximately $133 million was held by our non-U.K. subsidiaries. Cash held by our legacy IHS non-U.S. subsidiaries could be subject to non-U.S. income tax if we were to decide to repatriate any of that cash to the U.S.; however, our intent is to permanently reinvest these funds outside of the U.S. and our current plans do not indicate a need to repatriate them to fund our U.S. operations.. Our principal sources of liquidity include ~~funds~~cash generated by operating activities, ~~available~~ cash and cash equivalents on the balance sheet, and amounts available under ~~our~~a revolving credit facility. We had approximately ~~$4.28~~$5.60 billion of debt as of February 28, ~~2018,~~2019, consisting primarily of ~~$990 million~~$1.303 billion of revolving facility debt, ~~$1.12~~$1.03 billion of term loan debt, ~~$2.07~~and $3.31 billion of ~~senior notes, and $149 million of institutional~~ senior notes. As of February 28, ~~2018,~~2019, we had approximately ~~$858~~$695 million available under our revolving credit ~~facility, which was partially used to fund our $500 million ASR entered into in March 2018.~~facility.

In January 2019, we repaid the 364-Day Credit Agreement using cash on hand and borrowings under the revolving credit facility.

Our interest expense for the three months ended February 28, ~~2018,~~2019, compared to the three months ended February 28, ~~2017,~~2018, increased primarily because of a higher average debt balance due to ~~acquisitions and share repurchases,~~the Ipreo acquisition, as well as a higher effective interest rate due to an increased amount of fixed-rate debt.

Our Board of Directors has authorized a share repurchase program of up to $3.25 billion of IHS Markit common shares through November 30, 2019, to be funded using our existing cash, cash equivalents, marketable securities and future cash flows, or through the incurrence of short- or long-term indebtedness, at management’s discretion. This repurchase program does not obligate us to repurchase any set dollar amount or number of shares and may be modified, suspended, or terminated at any time without prior notice. Under this program, we are authorized to repurchase our common shares on the open market from time to time, in privately negotiated transactions, or through accelerated share repurchase agreements, subject to availability of common shares, price, market conditions, alternative uses of capital, and applicable regulatory requirements, at management’s discretion. As of February 28, ~~2018,~~2019, we had repurchased approximately ~~$1.74~~$2.24 billion under this authorization.

Our Board of Directors has separately authorized, subject to applicable regulatory requirements, the repurchase of our common shares surrendered by employees in an amount equal to the exercise price, if applicable, and statutory tax liability associated with the vesting of their equity awards, for which we pay the statutory tax on behalf of the employee and forgo receipt of the exercise price of the award from the employee, if applicable. Such repurchases have been authorized in addition to the share repurchase program described above.

~~Because of~~Based on our cash, debt, and cash flow positions, we believe that we will have sufficient liquidity to meet our ongoing working capital and capital expenditure needs. Our future capital requirements will depend on many factors, including the number and magnitude of future acquisitions, ~~and~~amount of share ~~repurchase programs,~~repurchases, the need for additional facilities or facility improvements, the timing and extent of spending to support product development efforts, information technology infrastructure investments, investments in our internal business applications, and the continued market acceptance of our offerings. We could be required, or could elect, to seek additional funding through public or private equity or debt financings; however, additional funds may not be available on terms acceptable to us.

Cash Flows


	Three months ended February 28,											Three months ended February 28,
(In millions, except percentages)	2018			2017			Dollar change			Percent change		2019			2018			Dollar change			Percentage change
Net cash provided by operating activities	$	202.9		$	250.7		$	(47.8	)	(19	)%	$	188.0		$	202.9		$	(14.9	)	(7	)%
Net cash used in investing activities	$	(55.1	)	$	(66.4	)	$	11.3		(17	)%	$	(68.8	)	$	(55.1	)	$	(13.7	)	25	%
Net cash used in financing activities	$	(118.9	)	$	(166.6	)	$	47.7		(29	)%	$	(111.9	)	$	(118.9	)	$	7.0		(6	)%

The decrease in net cash provided by operating activities was primarily due to higher bonus payments and higher interest ~~tax, and incentive compensation~~ payments ~~as well as increased working capital use.~~in the first quarter of 2019.

The ~~decrease~~increase in net cash used in investing activities was principally due to ~~lower~~the increase in capital expenditures ~~in the first quarter of 2018~~ compared to the prior year.

The decrease in net cash used in financing activities is primarily due to reducing debt balances in the first quarter of ~~2018 was primarily due to fewer share repurchases in 2018~~2019, compared to the ~~prior year.~~first quarter of 2018, when we used cash to fund share repurchases.

Free Cash Flow (non-GAAP measure)

The following table reconciles our non-GAAP free cash flow measure to net cash provided by operating activities.


	Three months ended February 28,											Three months ended February 28,
(In millions, except percentages)	2018			2017			Dollar change			Percent change		2019			2018			Dollar change			Percentage change
Net cash provided by operating activities	$	202.9		$	250.7							$	188.0		$	202.9
Capital expenditures on property and equipment	(55.2		)	(71.7		)						(63.2		)	(55.2		)
Free cash flow	$	147.7		$	179.0		$	(31.3	)	(17	)%	$	124.8		$	147.7		$	(22.9	)	(16	)%

The decrease in free cash flow was primarily due to lower net cash provided by operating activities ~~partially offset by decreased~~as a result of higher interest payments and bonus payments, as well as higher capital expenditure activity. Our free cash flow has historically been positive due to the robust cash generation attributes of our business model, and we expect that it will continue to be a significant source of funding for our business strategy of growth through organic and acquisitive means.

Credit Facility and Other Debt

Please refer to Note 43 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a discussion of the current status of our debt arrangements.

Share Repurchase Programs

Please refer to Note 109 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q and to Part II, Item 2 in this Quarterly Report on Form 10-Q for a discussion of our share repurchase programs.

Off-Balance Sheet Transactions

We have no off-balance sheet transactions.

Critical Accounting Policies

Our management makes a number of significant estimates, assumptions and judgments in the preparation of our financial statements. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our ~~2017~~2018 Annual Report on Form 10-K for a discussion of the estimates and judgments necessary in our accounting for revenue recognition, business combinations, goodwill and other intangible assets, income taxes, pensions, and stock-based compensation.

Recent Accounting Pronouncements

Please refer to Note 1 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a discussion of recent accounting pronouncements and their anticipated effect on our business.


Item 3.	Quantitative and Qualitative Disclosures About Market Risk

For information regarding our exposure to certain market risks, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk,” in our ~~2017~~2018 Annual Report on Form 10-K.

Borrowings under the ~~2016~~2018 revolving facility and ~~2016~~2018 term loans 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 February 28, ~~2018,~~2019, we had approximately ~~$2.106~~$2.3 billion of floating-rate debt at a ~~3.36~~3.91 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 our annual interest expense by approximately ~~$17~~$19.3 million ($2123.3 million without giving effect to any of our interest rate swaps).


Item 4.	Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act, as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act are effective at a reasonable assurance level to ensure that information required to be disclosed in the reports required to be filed or submitted under the Securities Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION


Item 1.	Legal Proceedings

Please refer to Note 98 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for information about legal proceedings.

Item 1A. Risk Factors

There have been no material changes to the risk factors associated with our business previously disclosed in “Item 1A. Risk Factors,” in our ~~2017~~ Annual Report on Form ~~10-K.~~10-K for the period ended November 30, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides detail about our share repurchases during the three months ended February 28, ~~2018~~2019.

Total Number of Shares
Purchased

Average
Price Paid
per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions)
December 1 - December 31, 2017:
Share repurchase programs ⁽¹⁾
2,020,320
$ 43.18
2,020,320
$ 1,592.2
Employee transactions ⁽²⁾
11,220
$ 45.09
N/A
N/A
January 1 - January 31, 2018:
Employee transactions ⁽²⁾
546,599
$ 45.93
N/A
N/A
February 1 - February 28, 2018:
Share repurchase programs ⁽¹⁾
1,866,947
$ 45.66
1,866,947
$ 1,506.9
Employee transactions ⁽²⁾
1,074,837
$ 47.47
N/A
N/A
Total share repurchases 5,519,923
$ 45.13
3,887,267



	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions)
December 1 - December 31, 2018:
Employee transactions	28,390	$	48.96	N/A	N/A
January 1 - January 31, 2019:
Employee transactions	147,956	$	48.03	N/A	N/A
February 1 - February 28, 2019:
Employee transactions	1,030,697	$	51.92	N/A	N/A
Total share repurchases	1,207,043	$	51.37	—

For the first quarter of ~~2018,~~2019, we repurchased approximately ~~$249~~$62 million of common shares ~~including approximately $172 million in open market share repurchases (described in note (1) below), and approximately $77 million in~~related to employee ~~transactions (described in note (2) below).~~

⁽¹⁾In August 2016, our Board of Directors authorized a share repurchase program of up to $1.5 billion of IHS Markit common shares from September 29, 2016 through November 30, 2017, to be funded using our existing cash, cash equivalents, marketable securities and future cash flows, or through the incurrence of short- or long-term indebtedness, at management’s discretion. In January 2017, our Board of Directors increased the size of the program to up to $2.25 billion of IHS Markit common shares and extended the program’s termination date to May 31, 2018. In October 2017, our Board of Directors increased the size of the program to up to $3.25 billion of IHS Markit common shares and extended the program’s termination date to November 30, 2019. This current repurchase program does not obligate us to repurchase any set dollar amount or number of shares and may be modified, suspended, or terminated at any time without prior notice. Under this program, we are authorized to repurchase our common shares on the open market from time to time, in privately negotiated transactions, or through accelerated share repurchase agreements, subject to availability of common shares, price, market conditions, alternative uses of capital, and applicable regulatory requirements, at management’s discretion.

⁽²⁾ ~~Amounts~~transactions. These amounts represent common shares repurchased from employees in an amount equal to the statutory tax liability associated with the vesting of their equity awards. We then pay the statutory tax on behalf of the employee. Our Board of Directors has approved this program in an effort to reduce the dilutive effects of employee equity grants. ~~This program is separate and additional to the repurchase program described in note (1).~~

Item 5. Other Information

Iran Threat Reduction and Syria Human Rights Act Disclosure

Under the Iran Threat Reduction and Syrian Human Rights Act of 2012, which added Section 13(r) of the Securities Exchange Act, we are required to include certain disclosures in our periodic reports if we or any of our affiliates knowingly engaged in certain specified activities during the period covered by the report. Disclosure is generally required even if the

transactions or dealings were conducted in compliance with applicable law and regulations. During the third quarter of 2014, we acquired Global Trade Information Services, a Virginia corporation (“GTIS”). GTIS publishes the Global Trade Atlas (the “GTA”), an online trade data system offering global merchandise trade statistics such as import and export data from official sources in more than 6590 countries. Included in the GTA is certain trade data sourced from Iran for which GTIS pays an annual fee of approximately ~~$30,000.~~$40,000. The procurement of this information is exempt from applicable economic sanctions laws and regulations as a funds transfer related to the exportation or importation of information and informational materials. Sales attributable to this Iranian trade data represented approximately ~~$75,000~~$50,000 in gross revenue for GTIS in the first quarter of ~~2018~~2019 and would have represented approximately 0.01 percent of our first quarter ~~2018~~2019 consolidated revenues and gross profits. Subject to any changes in the exempt status of such activities, we intend to continue these business activities as permissible under applicable export control and economic sanctions laws and regulations.


Item 6.	Exhibits


(a)	Index of Exhibits



Exhibit Number		Description
10.1+10.1		~~Second Amendment dated January 24, 2017 to contract of employment for Lance Uggla~~IHS Markit Ltd. Amended and Restated 2014 Equity Incentive Award Plan
10.2+*		~~Amended and Restated Terms of Employment for Adam Kansler~~
10.3+*		~~Amended and Restated Terms of Employment for Jonathan Gear~~
10.4+10.2		IHS Markit Ltd. 2014 Equity Incentive Award Plan - ~~2018~~2019 Form of Restricted Share Unit Agreement (Time Based)
10.5+10.3		IHS Markit Ltd. 2014 Equity Incentive Award Plan - ~~2018~~2019 Form of Performance Share Unit Agreement
10.4*		Amended and Restated Terms of Employment for Sari Granat dated July 16, 2018
10.5		Letter Agreement for Daniel Yergin dated July 2, 2010 (Incorporated by reference to Exhibit 10.22 to the IHS Inc. Annual Report on Form 10-K for the period ended November 30, 2010 (file no. 001-32511) filed with the Securities and Exchange Commission on January 18, 2011)
10.6		Amendment dated December 3, 2010 to Letter Agreement for Daniel Yergin dated July 2, 2010 (Incorporated by reference to Exhibit 10.1 to the IHS Inc. Quarterly Report on Form 10-Q for the period ended February 28, 2014 (file no. 001-32511) filed with the Securities and Exchange Commission on March 24, 2014)
10.7		Amendment dated December 28, 2012 to Letter Agreement for Daniel Yergin dated July 2, 2010 (Incorporated by reference to Exhibit 10.3 to the IHS Inc. Quarterly Report on Form 10-Q for the period ended February 28, 2013 (file no. 001-32511) filed with the Securities and Exchange Commission on March 25, 2013)
10.8*		Amendment dated July 8, 2016 to Letter Agreement for Daniel Yergin dated July 2, 2010
10.9*		Amended and Restated Terms of Employment for Daniel Yergin dated June 14, 2018
10.10*		Amendment dated February 14, 2019 to Amended and Restated Terms of Employment for Daniel Yergin dated June 14, 2018
31.1*		Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act
31.2*		Certification of the Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act
32*		Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

~~+ Compensatory plan or arrangement.~~

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March ~~27, 2018~~26, 2019.



IHS MARKIT LTD.

By:	/s/ Michael Easton
	Name:	Michael Easton
	Title:	Senior Vice President and Chief Accounting Officer

3432



		Page
PART I. Financial Information
	Item 1. Financial Statements	4
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2120
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	3029
	Item 4. Controls and Procedures	3130

PART II. Other Information
	Item 1. Legal Proceedings	3130
	Item 1A. Risk Factors	3130
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	3230
	Item 5. Other Information	3230
	Item 6. Exhibits	3331

SIGNATURE		3432



	Total
Assets:
Current assets	$	7.3
Property and equipment	1.1
Intangible assets	113.8
Goodwill	370.7
Other long-term assets	0.9
Total assets	493.8
Liabilities:
Current liabilities	4.6
Deferred revenue	1.4
Deferred taxes	42.9
Total liabilities	48.9
Purchase price	$	444.9



	Fair Value of Derivative Instruments				Location on consolidated balance sheets
	February 28, 2018		November 30, 2017		Location on consolidated balance sheets
Assets:
Derivatives not designated as accounting hedges:
Foreign currency forwards	1.3		2.8		Other current assets
Total	$	1.3	$	2.8

Liabilities:
Derivatives designated as accounting hedges:
Interest rate swaps	$	2.9	$	8.9	Other liabilities
Derivatives not designated as accounting hedges:
Foreign currency forwards	1.5		1.7		Other accrued expenses
Total	$	4.4	$	10.6



	Amount of (gain) loss recognized in the consolidated statements of operations
	Three months ended February 28,					Location on consolidated statements of operations
	2018			2017		Location on consolidated statements of operations
Foreign currency forwards	$	(1.9	)	$	3.6	Other expense, net