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~~May 31, 2020



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)

+44207260 2000

(Registrant’s telephone number, including area code)

___________________________________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, $0.01 par value per share	INFO	New York Stock Exchange

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

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

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~~May 31, 2020, there were ~~399,825,076~~396,809,671 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; anticipated levels of indebtedness, capital allocation, dividends, and share repurchases 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: operating in competitive markets, 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~~qualified 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.~~hostilities; and risks related to public health and safety issues, including the COVID-19 pandemic, on our operations and the operations of our customers and suppliers. 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			May 31, 2020			November 30, 2019
	(Unaudited)			(Audited)			(Unaudited)			(Audited)
Assets
Current assets:
Cash and cash equivalents	$	156.0		$	133.8		$	207.8		$	111.5
Accounts receivable, net	802.7			693.5			876.1			890.7
Income tax receivable	34.4			31.9
Deferred subscription costs	78.0			62.8			91.9			72.1
Assets held for sale							—			115.3
Other current assets	94.7			93.0			126.6			118.2
Total current assets	1,165.8			1,015.0			1,302.4			1,307.8
Non-current assets:
Property and equipment, net	539.7			531.3			687.3			658.2
Operating lease right-of-use assets, net							347.4			—
Intangible assets, net	4,128.6			4,188.3			3,925.7			4,169.0
Goodwill	8,810.4			8,778.5			9,747.3			9,836.3
Deferred income taxes	11.1			7.1			17.8			17.8
Other	41.1			34.2			101.0			98.1
Total non-current assets	13,530.9			13,539.4			14,826.5			14,779.4
Total assets	$	14,696.7		$	14,554.4		$	16,128.9		$	16,087.2
Liabilities and equity
Current liabilities:
Short-term debt	$	90.9		$	576.0		$	251.0		$	251.1
Accounts payable	50.1			53.4			20.5			59.7
Accrued compensation	59.7			157.4			95.4			215.2
Other accrued expenses	351.9			323.0			413.0			479.1
Income tax payable	8.5			5.5			—			58.5
Deferred revenue	919.3			790.8			945.9			879.7
Operating lease liabilities							65.4			—
Liabilities held for sale							—			25.9
Total current liabilities	1,480.4			1,906.1			1,791.2			1,969.2
Long-term debt, net	4,186.1			3,617.3			5,136.5			4,874.4
Accrued pension and postretirement liability	31.6			31.8
Deferred income taxes	691.0			869.8			651.8			667.2
Operating lease liabilities							324.3			—
Other liabilities	136.9			105.9			103.5			145.5
Commitments and contingencies
Redeemable noncontrolling interests	8.4			19.1			13.2			15.1
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, 479.9 and 476.3 issued, and 396.8 and 398.3 outstanding at May 31, 2020 and November 30, 2019, respectively							4.8			4.8
Additional paid-in capital	7,611.8			7,612.1			7,759.9			7,769.4
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: 83.1 and 78.0 at May 31, 2020 and November 30, 2019, respectively							(2,921.9		)	(2,391.8		)
Retained earnings	2,464.8			2,217.6			3,677.8			3,295.0
Accumulated other comprehensive loss	(29.7		)	(85.0		)	(412.2		)	(261.6		)
Total shareholders' equity	8,162.3			8,004.4			8,108.4			8,415.8
Total liabilities and equity	$	14,696.7		$	14,554.4		$	16,128.9		$	16,087.2

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 May 31,						Six months ended May 31,
	2018			2017			2020			2019			2020			2019
Revenue	$	932.1		$	844.2		$	1,026.6		$	1,135.5		$	2,107.4		$	2,181.9
Operating expenses:
Cost of revenue	342.9			327.0			388.3			428.0			804.1			827.8
Selling, general and administrative	290.3			268.0			258.1			293.3			574.3			593.6
Depreciation and amortization	130.6			120.8			149.4			144.0			294.7			286.3
Restructuring charges	—			(0.2		)
Restructuring and impairment charges							81.3			1.7			85.8			9.9
Acquisition-related costs	27.0			31.6			6.6			21.4			7.5			44.2
Net periodic pension and postretirement expense	0.2			0.4
Other expense, net	1.4			0.9
Other (income) expense, net							(1.2		)	8.4			(374.0		)	6.4
Total operating expenses	792.4			748.5			882.5			896.8			1,392.4			1,768.2
Operating income	139.7			95.7			144.1			238.7			715.0			413.7
Interest income	0.7			0.5			0.2			0.6			0.6			1.0
Interest expense	(46.3		)	(31.8		)	(60.0		)	(65.8		)	(121.2		)	(132.7		)
Net periodic pension and postretirement expense							(8.9		)	(0.2		)	(30.4		)	(0.5		)
Non-operating expense, net	(45.6		)	(31.3		)	(68.7		)	(65.4		)	(151.0		)	(132.2		)
Income from continuing operations before income taxes and equity in loss of equity method investee	94.1			64.4
Benefit for income taxes	146.6			3.6
Equity in loss of equity method investee	—			(2.0		)
Income from continuing operations before income taxes and equity in income of equity method investees							75.4			173.3			564.0			281.5
Provision for income taxes							(4.7		)	(24.2		)	(9.0		)	(23.3		)
Equity in income (loss) of equity method investees							0.1			(0.2		)	(0.2		)	(0.3		)
Net income	240.7			66.0			70.8			148.9			554.8			257.9
Net loss attributable to noncontrolling interest	0.6			—			0.9			0.9			1.9			1.6
Net income attributable to IHS Markit Ltd.	$	241.3		$	66.0		$	71.7		$	149.8		$	556.7		$	259.5

Basic earnings per share attributable to IHS Markit Ltd.	$	0.61		$	0.16		$	0.18		$	0.37		$	1.40		$	0.65
Weighted average shares used in computing basic earnings per share	398.0			406.2			397.0			400.5			396.4			399.3

Diluted earnings per share attributable to IHS Markit Ltd.	$	0.59		$	0.16		$	0.18		$	0.37		$	1.38		$	0.63
Weighted average shares used in computing diluted earnings per share	412.1			422.2			400.1			409.3			402.1			408.7

See accompanying notes.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

~~(Unaudited)~~

(InUnaudited, in millions)


	Three months ended February 28,						Three months ended May 31,						Six months ended May 31,
	2018		2017				2020			2019			2020			2019
Net income	$	240.7	$	66.0			$	70.8		$	148.9		$	554.8		$	257.9
Other comprehensive income (loss), net of tax:
Net hedging activities⁽¹⁾	4.8		3.0				0.3			(1.9		)	0.4			(3.4		)
Net pension liability adjustment ⁽²⁾							10.7			—			15.6			—
Foreign currency translation adjustment	56.4		(24.9		)		(131.0		)	(175.7		)	(166.6		)	(40.0		)
Total other comprehensive income (loss)	61.2		(21.9		)
Comprehensive income	$	301.9	$	44.1
Total other comprehensive loss							(120.0		)	(177.6		)	(150.6		)	(43.4		)
Comprehensive (loss) income							$	(49.2	)	$	(28.7	)	$	404.2		$	214.5
Comprehensive loss attributable to noncontrolling interest	0.6		—				0.9			0.9			1.9			1.6
Comprehensive income attributable to IHS Markit Ltd.	$	302.5	$	44.1
⁽¹⁾Net of tax expense of $1.2 million and $0.8 million for the three months ended February 28, 2018 and 2017, respectively.
Comprehensive (loss) income attributable to IHS Markit Ltd.							$	(48.3	)	$	(27.8	)	$	406.1		$	216.1

⁽¹⁾Net of tax (expense) benefit of $(0.1) million, $0.4 million, $(0.1) million, and $0.8 million for the three and six months ended May 31, 2020, and May 31, 2019, respectively.						⁽¹⁾Net of tax (expense) benefit of $(0.1) million, $0.4 million, $(0.1) million, and $0.8 million for the three and six months ended May 31, 2020, and May 31, 2019, respectively.
⁽²⁾Net of tax expense of $2.9 million and $5.0 million for the three and six months ended May 31, 2020.						⁽²⁾Net of tax expense of $2.9 million and $5.0 million for the three and six months ended May 31, 2020.

See accompanying notes.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(Unaudited)~~

(InUnaudited, in millions)


	Three months ended February 28,						Six months ended May 31,
	2018			2017			2020			2019
Operating activities:
Net income	$	240.7		$	66.0		$	554.8		$	257.9
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	130.6			120.8			294.7			286.3
Stock-based compensation expense	61.9			75.2			153.8			113.3
Gain on sale of assets							(370.9		)	—
Payments for acquisition-related performance compensation							(75.9		)	—
Net periodic pension and postretirement expense	0.2			0.4			30.4			0.5
Undistributed earnings of affiliates, net	—			1.4			0.5			0.2
Pension and postretirement contributions	(0.5		)	(0.6		)	(31.1		)	(0.9		)
Deferred income taxes	(187.9		)	8.8			(10.8		)	(43.4		)
Change in assets and liabilities:
Accounts receivable, net	(110.6		)	(16.7		)	7.0			(27.6		)
Other current assets	(20.7		)	(40.9		)	(51.2		)	(54.0		)
Accounts payable	(1.1		)	(12.6		)	(22.5		)	(11.1		)
Accrued expenses	(67.2		)	(68.9		)	(119.9		)	(58.3		)
Income tax	29.3			(21.9		)	(70.1		)	32.0
Deferred revenue	125.3			137.4			78.7			88.6
Other liabilities	2.9			2.3			30.2			29.2
Net cash provided by operating activities	202.9			250.7			397.7			612.7
Investing activities:
Capital expenditures on property and equipment	(55.2		)	(71.7		)	(147.6		)	(129.9		)
Intangible assets acquired	(3.1		)	—
Acquisitions of businesses, net of cash acquired							(3.2		)	(32.6		)
Payments to acquire cost- and equity-method investments							(7.2		)	(5.6		)
Proceeds from sale of assets							466.2			—
Change in other assets	0.1			2.6			(0.9		)	(1.8		)
Settlements of forward contracts	3.1			2.7			(20.0		)	(2.2		)
Net cash used in investing activities	(55.1		)	(66.4		)
Net cash provided by (used in) investing activities							287.3			(172.1		)
Financing activities:
Proceeds from borrowings	745.0			1,395.0			541.4			1,339.2
Repayment of borrowings	(657.0		)	(1,057.5		)	(283.9		)	(1,762.9		)
Payment of debt issuance costs	(7.0		)	(9.5		)	—			(8.9		)
Payments for purchase of noncontrolling interests	(7.7		)	—
Proceeds from noncontrolling interests							—			12.5
Contingent consideration payments							—			(2.2		)
Dividends paid							(135.3		)	—
Repurchases of common shares							(750.0		)	—
Proceeds from the exercise of employee stock options	56.9			97.3			177.2			57.6
Payments related to tax withholding for stock-based compensation	(76.6		)	(67.0		)	(111.7		)	(62.7		)
Repurchases of common shares	(172.5		)	(524.9		)
Net cash used in financing activities	(118.9		)	(166.6		)	(562.3		)	(427.4		)
Foreign exchange impact on cash balance	(6.7		)	(1.8		)	(26.4		)	(23.7		)
Net increase in cash and cash equivalents	22.2			15.9
Net increase (decrease) in cash and cash equivalents							96.3			(10.5		)
Cash and cash equivalents at the beginning of the period	133.8			138.9			111.5			120.0
Cash and cash equivalents at the end of the period	$	156.0		$	154.8		$	207.8		$	109.5

See accompanying notes.

IHS MARKIT LTD.

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CHANGES IN EQUITY

~~(Unaudited)~~

(InUnaudited, in millions)

Common Shares
Additional
Paid-In
Capital

Accumulated Other
Comprehensive
Loss
Total Shareholders’ Equity Redeemable Noncontrolling Interests
Shares Outstanding Amount
Treasury
Shares

Retained
Earnings

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			—
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
Share-based award activity	0.2	—		0.5		50.5			(1.4		)	—			49.6			—
Option exercises	1.2	—		32.3		—			—			—			32.3			—
Net income (loss)	—	—		—		—			149.8			—			149.8			(0.9		)
Other comprehensive loss	—	—		—		—			—			(177.6		)	(177.6		)	—
Balance at May 31, 2019	401.1	$	4.8	$	7,745.4	$	(2,076.3	)	$	3,054.8		$	(342.3	)	$	8,386.4		$	16.8



	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, 2019 (Audited)	398.3		$	4.8	$	7,769.4		$	(2,391.8	)	$	3,295.0		$	(261.6	)	$	8,415.8		$	15.1
Repurchases of common shares	(6.5	)	—		—			(500.0		)	—			—			(500.0		)	—
Share-based award activity	2.2		—		(175.8		)	134.3			$	(21.6	)	—			(63.1		)	—
Option exercises	4.9		—		130.9			—			—			—			130.9			—
Dividends and dividend equivalents	—		—		—			—			(69.0		)	—			(69.0		)	—
Net income (loss)	—		—		—			—			485.0			—			485.0			(1.0		)
Other comprehensive income	—		—		—			—			—			(30.6		)	(30.6		)	—
Balance at February 29, 2020	398.9		$	4.8	$	7,724.5		$	(2,757.5	)	$	3,689.4		$	(292.2	)	$	8,369.0		$	14.1
Repurchases of common shares	(4.0	)	—		—			(250.0		)	—			—			(250.0		)	—
Share-based award activity	0.2		—		(10.9		)	85.6			(14.5		)	—			60.2			—
Option exercises	1.7		—		46.3			—			—			—			46.3			—
Dividends and dividend equivalents	—		—		—			—			(68.8		)	—			(68.8		)	—
Net income (loss)	—		—		—			—			71.7			—			71.7			(0.9		)
Other comprehensive loss	—		—		—			—			—			(120.0		)	(120.0		)	—
Balance at May 31, 2020	396.8		$	4.8	$	7,759.9		$	(2,921.9	)	$	3,677.8		$	(412.2	)	$	8,108.4		$	13.2

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.~~2019. 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.~~year; however, this event was cancelled in 2020 due to the COVID-19 pandemic. 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.~~2019.

~~Recent Accounting Pronouncements~~The preparation of financial statements in conformity with U.S. GAAP requires that we make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well the reported amounts of revenue and expense during the reporting period. We have considered the impact of the COVID-19 pandemic in determining our estimates. Actual results could differ from those estimates.

Leases

In ~~May 2014,~~February 2016, 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 standards will be effective for us in the first quarter of our fiscal year 2019. We have determined that we will use the modified retrospective transition method upon adoption. We are currently in the contract review and assessment phase of our implementation planning, and are continuing to evaluate the impact of these new standards on our consolidated financial statements.

~~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~~2018-11, which provides targeted improvements to ASU 2016-02 by providing an additional optional transition method and a lessor practical expedient for lease and nonlease components. These standards have been codified in the ~~use~~FASB’s Accounting Standards Codification (“ASC”) Topic 842, “Leases.”

We adopted the standard in the first quarter of aour fiscal year 2020 using the modified retrospective transition ~~method.~~method applied to our lease contracts as of the adoption date. We elected to use the transition relief package of practical expedients, but we did not elect to use the hindsight practical expedient in determining a lease term and impairment of the right-of-use (“ROU”) assets at the adoption date. We did not apply the lease accounting recognition requirements to leases with a term of one year or less.

We utilize operating leases for our various workplaces worldwide, and we also utilize operating leases for our data centers. These leases have remaining terms ranging from one to 12 years, many of which include renewal and early termination options. As of May 31, 2020, we have not considered extension and early termination options in our calculation of the ROU assets and lease liabilities because we do not believe that it is reasonably certain that we will exercise those options. We do not have any significant finance leases.

We determine if an arrangement is a lease at inception. We consider any contract where there is an identified asset that we have the right to control in determining whether the contract contains a lease. A ROU asset represents our right to use an underlying asset for the lease term, and the lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our operating leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. We calculate our incremental borrowing rates by extrapolating our current unsecured bond portfolio across the maturity ladder and adjusting the resultant corporate rate for the estimated spread for a secured borrowing and for foreign currencies, as appropriate. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease transactions are included in operating lease right-of-use assets, net, and current and non-current operating lease liabilities in the condensed consolidated balance sheets.

The following table shows the cumulative effect of the changes made to the December 1, 2019 consolidated balance sheet for the adoption of ASC Topic 842 related to lease contracts that were in effect at the time of adoption (in millions):



	November 30, 2019		Adjustments due to adoption of ASC Topic 842		December 1, 2019
Other current assets	3.4		(3.4	)	—
Operating lease right-of-use assets, net	—		380.7		380.7
Other accrued expenses	(9.6	)	9.6		—
Operating lease liabilities, current	—		(63.9	)	(63.9	)
Operating lease liabilities, non-current	—		(350.6	)	(350.6	)
Other liabilities	(27.6	)	27.6		—

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, which replaces the existing incurred loss impairment model with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. 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.~~

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 applied using a retrospective transition method to each period presented. 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 impact of this new standard 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 standard will be effective for us in the first quarter of our fiscal 2019.2021. We do not expect that the 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,~~August 2018, the FASB issued ASU ~~2017-07,~~2018-15, which ~~requires~~addresses the accounting for implementation costs associated with a hosted service. The standard provides that implementation costs be evaluated for capitalization using the ~~service cost component of pension~~same criteria as that used for internal-use software development costs, with amortization expense ~~be included~~being recorded in the same income statement expense line ~~item~~ as ~~other compensation~~the hosted service costs ~~arising from services rendered by employees, with~~and over the ~~other components~~expected term of ~~pension expense being classified outside of a subtotal of income from operations.~~the hosting arrangement. The standard will be effective for us in the first quarter of our fiscal ~~year 2019.~~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 ~~May 2017,~~December 2019, the FASB issued ASU ~~2017-09,~~2019-12, which ~~provides~~enhances and simplifies various aspects of the income tax accounting guidance, ~~about which~~including requirements such as tax basis step-up in goodwill obtained in a transaction that is not a business combination, ownership changes ~~to the terms or conditions of a share-based payment award require an entity to apply modification~~in investments, and interim-period accounting for enacted changes in ~~Topic 718.~~tax law. The standard will be effective for us in the first quarter of our fiscal year ~~2019. 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 2020,2022, 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 and Divestitures

Aerospace & Defense divestiture. On December 2, 2019, we completed the sale of our Aerospace & Defense (“A&D”) business line to Montagu Private Equity for approximately $466 million. The A&D assets were previously included in our Transportation segment. We recognized a gain of approximately $372 million on the sale, subject to final working capital adjustments. The gain is included in other (income) expense, net, in the condensed consolidated statements of operations. The transaction resulted in the divestiture of the following assets and liabilities (in millions):



Current assets	$	18.9
Property and equipment	$	4.5
Intangible assets	$	4.2
Goodwill	$	87.7
Current liabilities	$	(1.1	)
Deferred revenue	$	(24.8	)

automotiveMastermind equity interests acquisition. 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~~We purchased 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.

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~~agreed to pay cash to acquire ~~these~~ the

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 ~~will be treated~~ as compensation expense that ~~will be~~is remeasured based on changes in the fair value of the equity ~~interests; we~~interests. We have classified this expense as acquisition-related costs within the condensed consolidated statements of operations and we have classified the associated accrued liability aswithin other accrued expenses and other liabilities ~~within~~in the condensed consolidated balance sheets. In November 2019, the option holders exercised the put provision on 62.5 percent of their remaining 22 percent interest in the business for $75.9 million in cash, which we paid in December 2019. We ~~have preliminarily estimated a range of $200 million~~estimate the compensation expense associated with the remaining equity interests to ~~$225~~be approximately $70 to $75 million, of ~~unrecognized compensation~~which approximately $34.6 million has been recognized as of May 31, 2020. During the first quarter of 2020, due to a forfeiture and subsequent reallocation of equity interests to the remaining option holders, we reversed previously recognized expense ~~related to this transaction that~~for the forfeited interests, which resulted in negligible total first quarter 2020 acquisition-related performance compensation. We will ~~be recognized~~recognize the expense associated with the reallocated interests 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~~remaining life 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):options, through September 2022.

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.	Revenue

We disaggregate our revenue by segment (as described in Note 16) 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 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. 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. Subscription revenue is usually recognized ratably over the contract term or, for term-based software license arrangements, annually on renewal.

•

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 period). Most of these contracts have an initial term ranging from one to five years, with auto-renewal periods thereafter. Recurring variable revenue was derived entirely from the Financial Services segment for all periods presented.


•	Non-recurring revenue represents consulting, 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 revenue by transaction type (in millions):



	Three months ended May 31,				Six months ended May 31,
	2020		2019		2020		2019
Recurring fixed revenue	$	755.2	$	785.2	$	1,559.3	$	1,552.4
Recurring variable revenue	158.0		145.0		304.8		281.0
Non-recurring revenue	113.4		205.3		243.3		348.5
Total revenue	$	1,026.6	$	1,135.5	$	2,107.4	$	2,181.9

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 $25.7 million as of May 31, 2020 and $39.8 million as of November 30, 2019, and are recorded in accounts receivable, net, in the condensed consolidated balance sheets.

Contract liabilities primarily include our obligations to transfer goods or services for which we have received consideration (or an amount of consideration is due) from the customer. Billings represent amounts that were paid in advance or due from customers. We record our contract liabilities as deferred revenue in the condensed consolidated balance sheets.

The following table provides a reconciliation of our contract liabilities as of May 31, 2020 (in millions):



Balance at November 30, 2019	$	879.7
Billings	1,680.2
Revenue recognized	(1,614.0		)
Balance at May 31, 2020	$	945.9

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 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 condensed consolidated statements of operations.


4.	Leases

The following table presents lease cost, cash paid for amounts included in the measurement of lease liabilities, the weighted-average remaining lease term, and the weighted-average discount rate for our operating leases for the three and six months ended May 31, 2020 (in millions):



	Three months ended May 31, 2020		Six months ended May 31, 2020
Lease cost:
Operating lease cost	$	16.3	$	32.4
Variable lease cost	$	1.5	$	3.2

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	15.9	$	31.4

As of May 31, 2020:
Weighted-average remaining lease term			8.2 years
Weighted-average discount rate			2.0		%

As of May 31, 2020, maturities of operating lease liabilities under non-cancellable arrangements were as follows (in millions):



Year	Amount
Remainder of 2020	$	74.2
2021	62.7
2022	51.6
2023	45.0
2024	40.0
Thereafter	147.5
Total future minimum operating lease payments	421.0
Imputed interest	(31.3		)
Total operating lease liability	$	389.7


5.	Intangible Assets

The following table presents details of our intangible assets, other than goodwill, as of ~~February 28, 2018~~May 31, 2020 and November 30, ~~2017~~2019 (in millions):



	As of May 31, 2020							As of November 30, 2019
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Intangible assets subject to amortization:
Customer relationships	$	3,418.0	$	(705.5	)	$	2,712.5	$	3,476.1	$	(628.7	)	$	2,847.4
Developed technology	936.5		(243.5		)	693.0		949.6		(208.9		)	740.7
Information databases	588.6		(336.5		)	252.1		591.6		(310.9		)	280.7
Trademarks	485.9		(229.6		)	256.3		487.0		(203.0		)	284.0
Developed computer software	67.9		(58.5		)	9.4		76.3		(62.9		)	13.4
Other	4.1		(1.7		)	2.4		4.1		(1.3		)	2.8
Total intangible assets	$	5,501.0	$	(1,575.3	)	$	3,925.7	$	5,584.7	$	(1,415.7	)	$	4,169.0

As of February 28, 2018 As of November 30, 2017
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
Customer relationships 2,977.3
(387.7 ) 2,589.6
2,957.8
(348.6 ) 2,609.2
Developed technology 836.7
(88.6 ) 748.1
827.6
(73.4 ) 754.2
Developed computer software 85.7
(56.6 ) 29.1
85.6
(54.3 ) 31.3
Trademarks 490.2
(125.7 ) 364.5
488.9
(111.4 ) 377.5
Other 8.3
(6.9 ) 1.4
8.3
(5.7 ) 2.6
Total intangible assets $ 5,154.6
$ (1,026.0 ) $ 4,128.6
$ 5,121.9
$ (933.6 ) $ 4,188.3

Intangible assets amortization expense was ~~$89.0~~$93.0 million and $187.2 million for the three and six months ended~~February 28, 2018~~May 31, 2020, compared to ~~$84.7~~$94.6 million and $190.3 million for the three and six months ended ~~February 28, 2017.~~May 31, 2019. The following table presents the estimated future amortization expense related to intangible assets held as of ~~February 28, 2018~~May 31, 2020 (in millions):



Year	Amount
Remainder of 2020	$	184.8
2021	$	365.5
2022	$	348.8
2023	$	336.7
2024	$	318.1
Thereafter	$	2,371.8

Year Amount
Remainder of 2018 $ 260.4
2019 $ 321.0
2020 $ 313.7
2021 $ 308.3
2022 $ 289.2
Thereafter $ 2,636.0

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~~2019 to ~~February 28, 2018~~May 31, 2020 was primarily due to current year amortization.


4.6.	Debt

The following table summarizes total indebtedness, including unamortized premiums, as of ~~February 28, 2018~~May 31, 2020 and November 30, ~~2017~~2019 (in millions):



		May 31, 2020					November 30, 2019
	Maturity Date	Carrying Amount			Fair Value		Carrying Amount			Fair Value
Credit Facilities:
2019 revolving facility	November 2024	$	497.0		$	497.0	$	237.0		$	237.0
2019 credit agreement	April 2021	250.0			250.0		250.0			250.0
Senior Unsecured Notes:
5% senior notes due 2022	November 1, 2022	748.2			803.0		748.2			798.2
4.125% senior notes due 2023	August 1, 2023	499.1			543.3		498.9			528.8
3.625% senior notes due 2024	May 1, 2024	399.1			423.4		398.9			416.4
4.75% senior notes due 2025	February 15, 2025	810.8			871.3		811.8			873.6
4.00% senior notes due 2026	March 1, 2026	500.0			533.6		500.0			530.2
4.75% senior notes due 2028	August 1, 2028	747.7			860.4		747.6			838.4
4.25% senior notes due 2029	May 1, 2029	972.7			1,053.0		974.2			1,026.7
Debt issuance costs		(43.1		)	—		(47.7		)
Finance leases		6.0					6.6
Total debt		$	5,387.5				$	5,125.5
Current portion		(251.0		)			(251.1		)
Total long-term debt		$	5,136.5				$	4,874.4

February 28, 2018 November 30, 2017
2016 revolving facility $ 990.0
$ 886.0
2016 term loan:
Tranche A-1 606.8
615.0
Tranche A-2 508.8
515.6
2017 term loan —
500.0
5.00% senior notes due 2022 750.0
750.0
4.75% senior notes due 2025 815.3
815.8
4.00% senior notes due 2026 500.0
—
Institutional senior notes:
Series A 95.7
95.8
Series B 53.7
53.7
Debt issuance costs (47.0 ) (42.8 )
Capital leases 3.7
4.2
Total debt $ 4,277.0
$ 4,193.3
Current portion (90.9 ) (576.0 )
Total long-term debt $ 4,186.1
$ 3,617.3

~~2016~~2019 revolving facility. ~~In July 2016,~~On November 29, 2019, we entered into a ~~$1.85~~$1.25 billion senior unsecured revolving credit agreement (“~~2016~~2019 revolving facility”). Subject to certain conditions, the 2019 revolving facility may be expanded by up to an aggregate of $750 million in additional commitments. Borrowings under the ~~2016~~2019 revolving facility mature in ~~July 2021.~~November 2024. The interest rates for borrowings under the ~~2016~~2019 revolving facility are the applicable LIBOR plus a spread of 1.00 percent to ~~1.75~~1.625 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.corporate credit rating. A commitment fee on any unused balance is payable periodically and ranges from ~~0.13~~0.10 percent to ~~0.30~~0.25 percent based upon our ~~Leverage Ratio.~~corporate credit rating. We had approximately ~~$1.6~~$1.3 million of outstanding letters of credit under the ~~2016~~2019 revolving facility as of ~~February 28, 2018,~~May 31, 2020, which ~~reduces~~reduced the available borrowing under the facility by an equivalent amount.

~~2016 term loan.~~ 2019 credit agreement.In ~~July 2016,~~September 2019, we entered into a ~~$1.206 billion senior unsecured amortizing~~364-day credit agreement (the “2019 credit agreement”) for a term loan credit facility in an aggregate principal amount of $250.0 million. In April 2020, we amended the 2019 credit agreement ~~(“2016~~to extend the term ~~loan”). The 2016 term loan has a final maturity date of July~~through April 2021. The interest ~~rates~~rate for ~~borrowings~~borrowing under the ~~2016 term loan are~~2019 credit agreement is the ~~same as those under the 2016 revolving facility.~~applicable LIBOR plus a spread of 1.00 percent.

~~Subject to certain conditions, the 2016~~The 2019 revolving facility and the ~~2016 term loan may be expanded by up~~2019 credit agreement are subject to ~~an aggregate of $500 million in additional commitments or term loans. The 2016 revolving facility and the 2016 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.~~ On January 26, 2017, we entered into a 364-day $500 million senior unsecured term loan (“2017 term loan”). The 2017 term loan was structured as a non-amortizing loan with repayment of principal due at maturity. The interest rates for borrowings under the 2017 term loan were the same as those under the 2016 revolving facility. The 2017 term loan had certain financial covenants that were the same as the 2016 revolving facility and the 2016 term loan, including a maximum Leverage Ratio and minimum Interest Coverage Ratio, as such terms were defined in the agreement. The 2017 term loan was repaid in January 2018 using borrowings from the 2016 revolving facility.

As of ~~February 28, 2018,~~May 31, 2020, we had approximately ~~$990.0~~$497.0 million of outstanding borrowings under the ~~2016~~2019 revolving facility at a current annual interest rate of ~~3.11~~1.47 percent and ~~approximately $1.116 billion~~$250.0 million of outstanding borrowings under the ~~2016 term loans~~2019 credit agreement at a current weighted average annual interest rate of ~~3.59 percent, including the effect~~1.17 percent.

Senior Unsecured Notes. All of ~~the interest rate swaps described in Note 5.~~

~~5.00% senior notes due 2022 (“5% Notes”).~~ ~~In October 2014, IHS Inc. issued $750 million aggregate principal amount of~~our senior unsecured notes ~~due 2022~~(“Senior Notes”) are unsecured and bear interest at a fixed rate payable semiannually. The Senior Notes were issued in ~~an offering~~registered offerings under the Securities Act or in offerings 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~~and all the 5% Notes. In July 2016, in connection with the Merger, we completed an exchange offer for $742.8 million of the outstanding 5% Notes 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 did not participate in the exchange offer. The new 5% Notes are not, and will not be, registered under the Securities Act or the securities laws of any other jurisdiction. The new 5%Senior Notes 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 bear interest at a fixed rate of 5.00 percent and mature on November 1, 2022. Interest on the 5% Notes is due semiannually on May 1 and November 1 of each year, commencing May 1, 2015. We may redeem the 5% 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 indentureindentures governing the ~~5% Notes. Additionally,~~Senior Notes all provide that, at the option of the respective holders of the ~~notes,~~Senior Notes, we may be required to purchase all or a portion of ~~the notes~~such Senior Notes upon occurrence of a ~~Change~~change of ~~Control Triggering Event~~control triggering event as defined in the ~~indenture,~~respective indentures, 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~~All the indentures also contain (i) 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~~ transactions, (ii) covenants

that ~~limits~~limit 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~~entity, and (iii) customary default provisions. ~~The fair value of the 5% Notes as of February 28, 2018 was approximately $778.1 million.~~

~~4.75% notes due 2025 (“4.75% Notes”).~~ In February 2017, we issued $500 million aggregate principal amount of senior unsecured notes 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 the 4.75% Notes at a $16.5 million premium, resulting in an effective interest rate of 3.88 percent. The 4.75% notes have been admitted for trading to the official list of the Channel Islands Securities Exchange Authority. The 4.75% Notes bear interest at a fixed rate of 4.75 percent and mature on February 15, 2025. Interest on the 4.75% Notes is due semiannually on February 15 and August 15 of each year, commencing August 15, 2017. We may redeem the 4.75% 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% 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% 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% Notes as of February 28, 2018 was approximately $485.0 million.

~~Institutional senior notes.~~ In November 2015, Markit issued two series of senior unsecured notes having an aggregate principal amount of $500 million to certain institutional investors. In November 2016, we completed an offer to repurchase approximately $350 million of these notes. The Series A notes bear interest at a fixed rate of 3.73 percent and mature on November 4, 2022. The Series B notes bear interest at a fixed rate of 4.05 percent and mature on November 4, 2025. Interest is paid semiannually from the anniversary of issuance. The institutional senior notes have certain financial and other covenants, including a maximum Consolidated Leverage Ratio and a minimum Interest Coverage Ratio, as such terms are defined in the Note Purchase and Guarantee Agreement. We believe that the fair value of the outstanding institutional senior notes as of February 28, 2018 was approximately $146.7 million.

As of ~~February 28, 2018,~~May 31, 2020, 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 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.


5.7.	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~~$300 million of floating rate debt at a ~~2.86~~2.93 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~~August and November 2020.

Because the terms of these swaps and the variable rate debt (as amended or extended over time) effectively 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~~accumulated other comprehensive loss (“AOCI”) in our condensed 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 (income) 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~~$397.3 million and ~~$261.3~~$695.0 million as of ~~February 28, 2018~~May 31, 2020 and November 30, ~~2017,~~2019, 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~~As of ~~our derivative instruments as of February 28, 2018~~May 31, 2020, and November 30, ~~2017 (in millions):~~2019, we had assets of $3.7 million and $3.5 million, respectively, which were classified within other current assets, and we had liabilities of $3.2 million and $3.9 million, respectively, which were classified within other accrued expenses and other liabilities.


8.	Restructuring and Impairment Charges

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~~In the second quarter of 2020, as a result of efforts to moderate the impact of the COVID-19 pandemic on ~~foreign currency forwards that are not designated as hedging instruments for~~our business, we incurred restructuring charges of approximately $73.4 million across all segments, comprised primarily of employee severance charges. For the ~~three~~six months ended~~February 28, 2018~~ ~~and the three months ended February 28, 2017, respectively, was as follows (in millions):~~ May 31, 2020, we incurred approximately $77.9 million of restructuring charges.

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~~a reconciliation of the ~~cumulative amount of unrecognized hedge losses~~restructuring liability, recorded in ~~AOCI, net of tax,~~other accrued expenses, as of ~~February 28, 2018 and February 28, 2017, respectively, as well as the activity on our cash flow hedging instruments for the~~ ~~three months endedFebruary 28, 2018~~ ~~and the three months ended February 28, 2017, respectively~~May 31, 2020 (in millions):



	Employee Severance and Other Termination Benefits			Contract Termination Costs			Total
Balance at November 30, 2019	$	2.9		$	0.8		$	3.7
Add: Restructuring costs incurred	71.3			6.8			78.1
Revision to prior estimates	(0.2		)	—			(0.2		)
Less: Amount paid	(15.4		)	(3.8		)	(19.2		)
Balance at May 31, 2020	$	58.6		$	3.8		$	62.4

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~~As of May 31, 2020, approximately $14.6 million of the ~~$2.9~~remaining restructuring liability was in Resources, $13.0 million ~~unrecognized pre-tax losses relating~~in Transportation, $18.2 million in Shared Services, $14.4 million in Financial Services, and the remainder in CMS.

As part of our effort to moderate the ~~interest rate swaps are expected~~impact of the COVID-19 pandemic, we also evaluated our office facilities to ~~be reclassified into interest expense within~~determine where we could exit, consolidate, or otherwise optimize our use of office space throughout the ~~next 12 months.~~company. During the second quarter of 2020, we fully or partially abandoned multiple office locations, recording approximately $7.9 million of impairment charges in accordance with the impairment provisions of ASC Topic 360.


6.9.	~~Acquisition-related~~Acquisition-Related Costs

During the ~~three~~six months ended ~~February 28, 2018,~~May 31, 2020, we incurred approximately ~~$27.0~~$7.5 million in costs associated with acquisitions ~~including employee severance charges~~ and retention costs, contract termination costs for facility consolidations, legal and professional fees, and the performance compensation expense related to the aM acquisition described in Note 2. Approximately $6.3 million of the total charge was allocated to shared services, with $15.9 million of the charge recorded in the Transportation segment, $3.0 million in the Financial Services segment, $1.4 million in the CMS segment, and the remainder in the Resources segment.divestitures.

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~~May 31, 2020 (in millions):



	Contract Termination Costs			Other			Total
Balance at November 30, 2019	$	8.2		$	112.6		$	120.8
Add: Costs incurred	0.4			8.1			8.5
Revision to prior estimates	(0.8		)	(0.2		)	(1.0		)
Less: ASC Topic 842 adjustment	(6.6		)	—			(6.6		)
Less: Amount paid	(0.9		)	(86.3		)	(87.2		)
Balance at May 31, 2020	$	0.3		$	34.2		$	34.5

Employee
Severance and
Other
Termination
Benefits

Contract
Termination
Costs
Other Total
Balance at November 30, 2017 $ 13.9
$ 17.6
$ 23.7
$ 55.2
Add: Costs incurred 8.3
0.2
17.3
25.8
Revision to prior estimates 1.0
0.2
—
1.2
Less: Amount paid (14.8 ) (3.1 ) (4.8 ) (22.7 )
Balance at February 28, 2018 $ 8.4
$ 14.9
$ 36.2
$ 59.5

The ASC Topic 842 transition adjustment is related to the net cease-use liabilities associated with facility abandonments that were reclassified to ROU asset and operating lease liabilities at the transition date. As of ~~February 28, 2018, the $59.5 million remaining liability was primarily in the Transportation segment and in shared services. We expect that the significant majority~~May 31, 2020, substantially all of the remaining liability ~~will be paid within the next 12 months except for~~is associated with the aM acquisition-related performance compensation liability ~~which was approximately $24.9 million as of February 28, 2018.~~described in Note 2.


7.10.	~~Stock-based~~Stock-Based Compensation

Stock-based compensation expense for the three and six months ended~~February 28, 2018~~May 31, 2020 and ~~February 28, 2017~~May 31, 2019 was as follows (in millions):



	Three months ended May 31,				Six months ended May 31,
	2020		2019		2020		2019
Cost of revenue	$	20.6	$	15.6	$	44.6	$	32.9
Selling, general and administrative	50.6		38.0		109.2		80.4
Total stock-based compensation expense	$	71.2	$	53.6	$	153.8	$	113.3

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

No stock-based compensation cost was capitalized during the three and six months ended~~February 28, 2018~~May 31, 2020 and ~~February 28, 2017.~~May 31, 2019.

As of ~~February 28, 2018~~May 31, 2020, there was ~~$311.1~~$275.6 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~~1.8 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~~six months ended ~~February 28, 2018:~~May 31, 2020:



	Shares		Weighted- Average Grant Date Fair Value
	(in millions)
Balance at November 30, 2019	8.2		$	47.41
Granted	2.5		$	80.04
Vested	(3.8	)	$	43.58
Forfeited	(0.2	)	$	59.35
Balance at May 31, 2020	6.7		$	61.72

Shares Weighted-
Average Grant
Date Fair Value
(in millions)
Balance at November 30, 2017 10.7
$ 35.64
Granted 3.0
$ 47.53
Vested (4.5 ) $ 33.89
Forfeited (0.2 ) $ 40.09
Balance at February 28, 2018 9.0
$ 40.36

The total fair value of RSUs and RSAs that vested during the ~~three~~six months ended ~~February 28, 2018~~May 31, 2020 was ~~$211.3~~$295.8 million.

Stock Options. The following table summarizes stock option award activity during the ~~three~~six months ended ~~February 28, 2018,~~May 31, 2020, as well as stock options ~~that are vested~~outstanding and ~~expected to vest and stock options~~ exercisable as of ~~February 28, 2018:~~May 31, 2020:



	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in millions)				(in years)	(in millions)
Balance at November 30, 2019	9.0		$	26.81
Exercised	(6.6	)	$	26.69
Balance at May 31, 2020	2.4		$	27.15	1.0	$	100.1
Exercisable at May 31, 2020	2.0		$	26.90	0.8	$	86.7

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

The aggregate intrinsic value amounts in the table above represent the difference between the closing price of our common shares on ~~February 28, 2018~~May 31, 2020 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.~~May 31, 2020. 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~~six months ended ~~February 28, 2018~~May 31, 2020 was approximately ~~$56.3~~$325.4 million.


8.11.	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 and six months ended~~February 28, 2018~~ May 31, 2020 was ~~negative 156~~6 percent and 2 percent, respectively, compared to ~~negative 6~~14 percent and 8 percent for the three and six months ended ~~February 28, 2017.~~May 31, 2019. The ~~negative 2018~~low tax ~~rate is~~rates for the three and six months ended May 31, 2020 are primarily due to ~~the estimated one-time~~ tax ~~benefit~~benefits associated with the ~~Act~~tax-efficient divestiture of the A&D business line (U.K. share sales are exempt from tax) of approximately ~~$136~~$9 million ~~or 145 percentage points,~~and $38 million, and excess tax benefits on stock-based compensation of approximately ~~$24~~$12 million ~~or 25 percentage points.~~and $76 million, partially offset by U.S. minimum tax impacts of approximately $20 million and $31 million, respectively. The ~~negative 2017~~low 2019 tax ~~rate is~~rates are primarily due to tax benefits associated with excess tax benefits on stock-based compensation of approximately ~~$14~~$6 million ~~or 22 percentage points.~~and $18 million, respectively, for the three

~~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 tax rate~~six months ended May 31, 2019, as well as a change in partnership basis related to ~~21 percent and implements a new system~~intangible assets 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 of $136 million in the first quarter 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.approximately $7 million.

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.


9.12.	Pensions and Postretirement Benefits

During the first quarter of 2020, we incurred settlement expense of approximately $11.6 million related to lump-sum distributions to participants in our U.S. RIP, SIP, and U.K. RIP plans. We also converted to termination accounting for our U.K. RIP at the end of the first quarter, which resulted in an expense recognition of actuarial loss in excess of corridor of approximately $9.6 million.

During the second quarter of 2020, we transferred our U.S. RIP annuity liability and our U.K. RIP liability to third-party insurers, which resulted in additional settlement expense of approximately $8.9 million.


13.	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.~~authority or from private third parties pursuant to valid court orders or subpoenas. 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.~~14.	Common Shares and Earnings per Share

Weighted-average shares outstanding for the three and six months ended~~February 28, 2018~~May 31, 2020 and ~~February 28, 2017~~May 31, 2019 were calculated as follows (in millions):



	Three months ended May 31,		Six months ended May 31,
	2020	2019	2020	2019
Weighted-average shares outstanding:
Shares used in basic EPS calculation	397.0	400.5	396.4	399.3
Effect of dilutive securities:
RSUs/RSAs	1.2	1.6	2.5	2.3
Stock options	1.9	7.2	3.2	7.1
Shares used in diluted EPS calculation	400.1	409.3	402.1	408.7

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

Approximately 1.8 million weighted-average potentially dilutive equity awards were excluded from the dilution calculation above because they would have had an antidilutive effect on earnings per share.

Share Repurchase Programs

~~Our~~In October 2019, our Board of Directors ~~has~~ authorized a share repurchase program of up to ~~$3.25~~$2.5 billion of IHS Markit common shares from October 17, 2019 through November 30, ~~2019,~~2021, 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 program replaced the previous share repurchase program that was originally set to terminate on November 30, 2019, but was early terminated by our Board of Directors. This October 2019 share 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~~the repurchase 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,~~May 31, 2020, we had ~~$1.507~~$1.75 billion remaining available to repurchase under the program.

In December 2019, we funded a $500 million accelerated share repurchase (“ASR”) agreement with a scheduled termination date in the first quarter of 2020. Upon funding of the ASR, we received an initial delivery of 5.547 million shares. At the completion of the ASR in February 2020, we received an additional 0.944 million shares.

In March 2020, we funded a $250 million ASR agreement with a scheduled termination date in the second quarter of 2020. Upon funding of the ASR, we received an initial delivery of 2.807 million shares. At the completion of the ASR in May 2020, we received an additional 1.214 million shares.

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~~Dividends

On January 17, 2020, our Board of Directors approved a cash dividend of $0.17 per common share issued and outstanding to the ~~three months ended~~holders of record as of February ~~28, 2018, we repurchased approximately $249~~6, 2020. A cash dividend of $67.7 million was paid on February 14, 2020, and dividend equivalents of ~~common shares under these programs.~~

~~In March 2018, we funded a $500~~$1.3 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.~~were accrued on unvested equity awards. The total ~~number~~$69.0 million associated with the dividend was recorded as a reduction to retained earnings.

On April 16, 2020, our Board of ~~shares ultimately to be repurchased under this ASR will generally be based on the daily volume-weighted average price~~Directors approved a cash dividend 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$0.17 per common share issued and outstanding to the ~~relevant ASR counterparty.~~holders of record as of April 30, 2020. A cash dividend of $67.6 million was paid on May 15, 2020, and dividend equivalents of $1.2 million were accrued on unvested equity awards. The total $68.8 million associated with the dividend was recorded as a reduction to retained earnings.

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 condensed consolidated balance sheets.

15.Accumulated Other Comprehensive Income (Loss)


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

The following table summarizes the changes in AOCI by component (net of tax) for the three and six months ended ~~February 28, 2018~~May 31, 2019 (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 )



	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	)
Other comprehensive loss	(175.7		)	—			(1.9		)	(177.6		)
Balance at May 31, 2019	$	(328.5	)	$	(9.9	)	$	(3.9	)	$	(342.3	)

The following table summarizes the changes in AOCI by component (net of tax) for the three and six months ended May 31, 2020 (in millions):



	Foreign currency translation			Net pension and OPEB liability			Unrealized losses on hedging activities			Total
Balance at November 30, 2019	$	(242.3	)	$	(15.6	)	$	(3.7	)	$	(261.6	)
Other comprehensive loss before reclassifications	(35.6		)	—			(0.7		)	(36.3		)
Reclassifications from AOCI to income	—			4.9			0.8			5.7
Balance at February 29, 2020	$	(277.9	)	$	(10.7	)	$	(3.6	)	$	(292.2	)
Other comprehensive loss before reclassifications	(131.0		)	0.8			(0.7		)	(130.9		)
Reclassifications from AOCI to income	—			9.9			1.0			10.9
Balance at May 31, 2020	$	(408.9	)	$	—		$	(3.3	)	$	(412.2	)


~~12.~~16.	Segment Information

We prepare our financial reports and analyze our business results within our four operating segments: Financial Services, Transportation, Resources, ~~Transportation, CMS,~~ and ~~Financial Services.~~CMS. 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 and six months ended ~~February 28, 2018~~May 31, 2020 and ~~February 28, 2017.~~May 31, 2019. 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 May 31,						Six months ended May 31,
	2020			2019			2020			2019
Revenue
Financial Services	$	443.5		$	432.9		$	879.5		$	842.1
Transportation	243.2			318.6			540.4			606.7
Resources	219.0			249.4			444.6			466.2
CMS	120.9			134.6			242.9			266.9
Total revenue	$	1,026.6		$	1,135.5		$	2,107.4		$	2,181.9

Adjusted EBITDA
Financial Services	$	231.3		$	205.6		$	436.7		$	388.8
Transportation	101.6			136.6			219.6			250.9
Resources	96.2			109.2			186.4			202.4
CMS	35.0			29.3			64.4			58.7
Shared services	(10.1		)	(15.7		)	(21.5		)	(27.7		)
Total Adjusted EBITDA	$	454.0		$	465.0		$	885.6		$	873.1

Reconciliation to the condensed consolidated statements of operations:
Interest income	0.2			0.6			0.6			1.0
Interest expense	(60.0		)	(65.8		)	(121.2		)	(132.7		)
Provision for income taxes	(4.7		)	(24.2		)	(9.0		)	(23.3		)
Depreciation	(56.4		)	(49.4		)	(107.5		)	(96.0		)
Amortization related to acquired intangible assets	(93.0		)	(94.6		)	(187.2		)	(190.3		)
Stock-based compensation expense	(71.2		)	(53.6		)	(153.8		)	(113.3		)
Restructuring and impairment charges	(81.3		)	(1.7		)	(85.8		)	(9.9		)
Acquisition-related costs	(2.1		)	(6.0		)	(2.8		)	(13.5		)
Acquisition-related performance compensation	(4.5		)	(15.4		)	(4.7		)	(30.7		)
Loss on debt extinguishment	—			(5.8		)	—			(6.0		)
Gain on sale of assets	(1.4		)	—			370.9			—
Pension mark-to-market and settlement expense	(8.8		)	—			(30.0		)	—
Share of joint venture results not attributable to Adjusted EBITDA	0.1			(0.2		)	(0.2		)	(0.3		)
Adjusted EBITDA attributable to noncontrolling interest	0.8			0.9			1.8			1.4
Net income attributable to IHS Markit Ltd.	$	71.7		$	149.8		$	556.7		$	259.5

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


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~~2019 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~~2020 are to our fiscal year ~~2018,~~2020, which began on December 1, ~~2017~~2019 and ends on November 30, ~~2018.~~2020.

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:


•	Financial Services, which includes our financial Information, Solutions, and Processing product offerings;


•	Transportation, which includes our Automotive and Maritime & Trade product offerings;


•	Resources, which includes our Upstream, Downstream, Power, Chemical, and Agricultural product offerings;


•	Consolidated Markets & Solutions, which includes our Product Design; Economics & Country Risk (“ECR”), and Rootmetrics product offerings.

•~~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; and Economics & Country Risk product offerings; and~~

~~Financial Services, which includes our financial Information, Processing, and Solutions product offerings.~~

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.

On December 2, 2019, we completed the divestiture of our Aerospace & Defense (“A&D”) business line for approximately $466 million, which was previously included in our Transportation segment. Proceeds from the divestiture were primarily used to fund our first quarter accelerated share repurchase (“ASR”).

Our recurring fixed revenue and recurring variable revenue represented approximately 8688 percent of our total revenue for the ~~three~~six months ended ~~February 28, 2018 and February 28, 2017.~~May 31, 2020. Our recurring revenue is generally stable and predictable, and we have long-term relationships with many of our customers.

For ~~2018,~~the six months ended May 31, 2020, we ~~continue to focus~~focused our efforts on the following actions:

•

Increase in geographic, product, and customer penetration. We believe there are continued opportunities to add new customers and to increase the use of our products and services by existing customers. We plan to add new customers and build our relationships with existing customers by leveraging our existing sales channels, broad product portfolio, global footprint, and industry expertise to anticipate and respond to the changing demands of our end markets.

•

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

•

Balance capital allocation. We will continue to manage to our capital policy target leverage ratio, and intend to return 50 to 75 percent of our annual capital capacity to shareholders through share repurchases and a quarterly dividend. We will continue to evaluate the long-term potential and strategic fit of our asset portfolio, and we will also continue to evaluate potential 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.

•

Respond effectively to the COVID-19 pandemic. In response to the COVID-19 pandemic, we have strengthened our position as a trusted partner with customers by helping them assess, plan, and respond to the challenges within each of their markets. From an employee standpoint, we transitioned to a global work-at-home model and believe that employee productivity has maintained during this period. We also took proactive cost reduction actions to address both near-term necessities and long-term optimization opportunities. These actions will help us to protect against further downside revenue risk, if needed, and to invest in additional initiatives to support our long-term growth. We continue to carefully monitor and evaluate the potential length and depth of the COVID-19 pandemic and its economic impact on our financial condition and results of operations.

~~Integrate organizational structure.~~ ~~We have completed a significant portion~~In early March 2020, we cancelled all of our ~~key merger integration activities, primarily~~large customer events scheduled for the second quarter of 2020. The cancellation of those events reduced non-recurring revenue by approximately $50 million. In our Transportation segment, we saw a near-term disruption to consumer spending that impacted our automotive customers, and we voluntarily provided temporary price relief for our dealer customers in an effort to mitigate the sudden negative impact on their sales. In our Resources segment, we experienced pressure as a result of significantly lower oil prices and the related todecrease in capital expenditure spending. We anticipate a continuing adverse impact on our ~~shared~~Resources revenue as our annual subscription contracts

come up for renewal and our customers focused on cost management make decisions about the amount of products and services ~~and corporate organization. We intend to continue to integrate~~they purchase from us. In our ~~people, platforms, processes, and products in a manner that allows us to take advantage of~~Financial Services segment, we experienced lower revenue ~~and cost synergies that will strengthen the effectiveness and efficiency~~within certain of our ~~business operations.~~

~~Innovate and develop new~~Solutions product offerings~~. We expect~~ due to continue to create new commercial offerings from our existing data sets, converting core information to higher value analytics. Our investment priorities for new product offerings are primarily in energy, automotive, financialsome services ~~and product design, and we intend to continue to invest across the business to increase our customer value proposition.~~being delayed.

~~Balance capital allocation.~~ In 2018, we expect to focus our capital allocation strategy primarily on returning capital to shareholders through share repurchases. Longer term, we expect to balance capital allocation between share repurchases 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 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 metric.

~~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.


•	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.

~~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 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 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. Most of these contracts have an initial term ranging from one to five years, with auto-renewal periods thereafter. Recurring variable revenue was derived entirely from the Financial Services segment for all periods presented.


•	Non-recurring revenue represents consulting, services, single-document product sales, 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.

~~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, and the revenue is usually recognized over the life of the contract. 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 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 securities analysts, investors, and other interested parties to assess our operating performance. For example, a measure similar to Adjusted EBITDA is required by the lenders under our revolving credit agreement. 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, settlement, and other expense, 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 payments for acquisition-related performance compensation and capital expenditures.

~~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, 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 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 for revenue are the British Pound, Euro, and Canadian ~~Dollar, Singapore Dollar, and Indian Rupee.~~Dollar.

Results of Operations

Total Revenue

~~First quarter 2018~~ ~~revenue increased~~Revenue for the three and six months ended May 31, 2020, decreased 10 percent and 3 percent, respectively, compared to the ~~first quarter~~ of ~~2017~~.three and six months ended May 31, 2019. The table below displays the percentage change in revenue due to organic, acquisitive, and foreign currency factors when comparing the three and six months ended ~~February 28, 2018~~May 31, 2020 to the three and six months ended~~February 28, 2017~~. May 31, 2019.

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
Second quarter 2020 vs. Second quarter 2019	(7	)%	(2	)%	(1	)%
Year-to-date 2020 vs. Year-to-date 2019	(1	)%	(2	)%	—	%

~~We saw broad-based organic~~Organic revenue growth ~~across all four of our~~in the Financial Services and CMS segments for the three and six months ended~~February 28, 2018~~, May 31, 2020, compared to the three and six months ended ~~February 28, 2017, with particular strength~~May 31, 2019, was more than offset by organic revenue declines in the Transportation and Resources segments, due to the current economic environment impacting primarily the dealer-facing products in Transportation and ~~Financial Services and improving performance~~Upstream products in Resources, as well as our event cancellations in the second quarter of 2020. Excluding the impact of our event cancellations, organic revenue declined 3 percent and ~~CMS.~~grew 1 percent for the three and six months ended May 31, 2020, respectively.

~~Acquisitive~~The acquisitive revenue ~~growth~~change for the three and six months ended~~February 28, 2018~~, May 31, 2020, compared to the three and six months ended ~~February 28, 2017,~~May 31, 2019, was primarily due to the ~~aM acquisition in~~A&D divestiture and sale of our TMT market intelligence assets, partially offset by the ~~fourth quarter of 2017.~~Agribusiness acquisition.

Foreign currency ~~effects~~ had a ~~2 percent impact~~negligible effect on revenue growth for the three and six months ended ~~February 28, 2018,~~May 31, 2020, compared to the ~~same respective period in 2017.~~three and six months ended May 31, 2019. 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 May 31,				Percentage Change			Six months ended May 31,					Percentage Change
(In millions, except percentages)	2018		2017		Percentage Change		2020		2019				2020			2019			Percentage Change
Revenue:											Percentage Change
Financial Services							$	443.5	$	432.9	2	%		$	879.5		$	842.1	4	%
Transportation							243.2		318.6		(24	)%		540.4			606.7		(11	)%
Resources	$	205.3	$	196.9	4	%	219.0		249.4		(12	)%		444.6			466.2		(5	)%
Transportation	269.6		224.9		20	%
CMS	137.6		126.5		9	%	120.9		134.6		(10	)%		242.9			266.9		(9	)%
Financial Services	319.6		295.9		8	%
Total revenue	$	932.1	$	844.2	10	%	$	1,026.6	$	1,135.5	(10	)%		$	2,107.4		$	2,181.9	(3	)%

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


	Increase (decrease) in revenue						Change in revenue
	First quarter 2018 vs. first quarter 2017						Second quarter 2020 vs. Second quarter 2019						Year-to-date 2020 vs. Year-to-date 2019
	Organic		Acquisitive		Foreign Currency		Organic		Acquisitive		Foreign Currency		Organic		Acquisitive		Foreign Currency
Financial Services							3	%	—	%	(1	)%	5	%	—	%	—	%
Transportation							(18	)%	(5	)%	—	%	(5	)%	(5	)%	—	%
Resources	3	%	—	%	1	%	(14	)%	2	%	(1	)%	(7	)%	3	%	—	%
Transportation	10	%	7	%	2	%
CMS	5	%	1	%	2	%	2	%	(11	)%	(1	)%	2	%	(11	)%	—	%
Financial Services	6	%	—	%	3	%

Financial Services revenue for the three and six months ended May 31, 2020, compared to the three and six months ended May 31, 2019, increased organically from strength across our Information and Processing product offerings, while Solutions product offerings had lower growth. Within our Information product offerings, organic revenue growth was led by our core pricing, valuation, equities, and indices offerings. Within our Solutions product offerings, organic revenue growth was slightly negative in the three months ended May 31, 2020, due to a difficult year-over-year comparison and some services being delayed, but was partially offset by continued strength in private capital markets and corporate actions offerings. Within our Processing product offerings, organic revenue growth was led by increased derivative processing activity as a result of increased market volatility.

Transportation revenue for the three and six months ended May 31, 2020, compared to the three and six months ended May 31, 2019, experienced a significant slowdown in organic growth as a result of the COVID-19 impact on our automotive offerings. Revenue from the dealer-facing portion of our automotive offerings was negatively impacted by our temporary price relief for dealer customers, a pause in new sales activity, and cancellations from financially distressed customers. Non-recurring organic revenue growth was also down for the three and six months ended May 31, 2020, reflecting lower recall and marketing revenues. Our automotive product offerings continue to provide the largest contribution to Transportation revenue, and our diversification in used and new car product offerings allows for balanced opportunities for growth. A portion of our Transportation revenue decline was also due to the cancellation of certain Maritime events; excluding the events cancellations, Transportation organic revenue declined 16 percent and 4 percent for the three and six months ended May 31, 2020.

Resources revenue for the three and six months ended~~February 28, 2018~~, May 31, 2020, compared to the three and six months ended ~~February 28, 2017,~~May 31, 2019, experienced ~~positive~~significant organic revenue declines, primarily as a result of the cancellation of our annual CERAWeek event in March 2020. Excluding events cancellations, our Resources segment for the three months ended May 31, 2020, had a 1 percent organic revenue decline, comprised of 1 percent recurring growth, offset by 15 percent non-recurring decline. Excluding events cancellations, organic revenue growth ~~as our upstream energy results continue to improve and our chemicals, PGCR, and downstream pricing results remain strong.~~was flat for the six months ended May 31, 2020. Our Resources annual contract value (“ACV”), which represents the annualized value of recurring revenue contracts, ~~was approximately flat compared to the beginning of the year.~~decreased $20

~~Transportation~~million in the second quarter and declined approximately 1 percent on a trailing annual basis. As a result of COVID-19 and the current economic environment, we anticipate continued pressure on the Upstream portion of our Resources organic revenue growth over the near term.

CMS revenue for the three and six months ended~~February 28, 2018~~, May 31, 2020, compared to the three and six months ended ~~February 28, 2017, continued~~May 31, 2019, increased primarily due to ~~experience solid organic recurring and non-recurring~~revenue growth ~~led primarily~~from our Product Design product offerings, partially offset by ~~our automotive product offerings. We continue to see strong organic growth~~weakness in our ~~automotive~~TMT product ~~category for both our new 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.

~~CMS revenue for the~~ ~~three months endedFebruary 28, 2018, compared to the three months ended February 28, 2017, increased as we see benefits from improving end markets and operational changes we have made over the past two years.~~

Financial Services revenue for the three months ended February 28, 2018, compared to the three months ended February 28, 2017, 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 valuation services, equities and bond pricing offerings as well. Solutions product offerings growth was driven by our regulatory and compliance solutions, as well as loan servicing platform growth. Our Processing product offerings 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 in the prior year.

Revenue by Transaction Type


	Three months ended February 28,						Percent change				Three months ended May 31,						Percentage change				Six months ended May 31,						Percentage change
(in millions, except percentages)	2018			2017			Total		Organic		2020			2019			Total		Organic		2020			2019			Total		Organic
Revenue:
Recurring fixed	$	683.3		$	617.1		11	%	6	%	$	755.2		$	785.2		(4	)%	(1	)%	$	1,559.3		$	1,552.4		—	%	3	%
Recurring variable	117.1			106.4			10	%	7	%	158.0			145.0			9	%	10	%	304.8			281.0			8	%	9	%
Non-recurring	131.7			120.7			9	%	8	%	113.4			205.3			(45	)%	(40	)%	243.3			348.5			(30	)%	(26	)%
Total revenue	$	932.1		$	844.2		10	%	6	%	$	1,026.6		$	1,135.5		(10	)%	(7	)%	$	2,107.4		$	2,181.9		(3	)%	(1	)%

As a percent of total revenue:
Recurring fixed	73		%	73		%					74		%	69		%					74		%	71		%
Recurring variable	13		%	13		%					15		%	13		%					14		%	13		%
Non-recurring	14		%	14		%					11		%	18		%					12		%	16		%

Recurring fixed revenue organic growth decreased 1 percent and increased ~~measurably~~3 percent for the three and six months ended ~~February 28, 2018,~~May 31, 2020, respectively, compared to the three and six months ended ~~February 28, 2017, with Transportation and~~May 31, 2019, largely due to contributions from our Financial Services recurring ~~offerings providing the largest contribution to the growth, good results in CMS, and improving growth in the Resources segment.~~offerings. 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.

~~Non-recurring~~The non-recurring organic revenue ~~increases~~decline for the three and six months ended ~~February 28, 2018,~~May 31, 2020, compared to the three and six months ended ~~February 28, 2017, were primarily due to continued strength~~May 31, 2019, was significantly impacted by the cancellation of our large customer events in the second quarter of 2020, which negatively impacted non-recurring revenue by approximately $50 million. We also experienced lower OEM activity within our Transportation segment, lower energy consulting, and ~~positive contributions from~~a difficult year-over-year comparison in Financial Services. We anticipate continued headwinds in non-recurring organic revenue growth for the ~~Resources~~near future as customers evaluate their various information and ~~CMS segments.~~advisory needs. Excluding the events cancellations, organic revenue declined 26 percent and 16 percent for the three and six months ended May 31, 2020.

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 May 31,						Percentage Change			Six months ended May 31,							Percentage Change
(In millions, except percentages)	2018			2017			Percentage Change		2020			2019					2020				2019				Percentage Change
Operating expenses:															Percentage Change
Cost of revenue	$	342.9		$	327.0		5	%	$	388.3		$	428.0		(9	)%		$	804.1			$	827.8		(3	)%
SG&A expense	290.3			268.0			8	%	258.1			293.3			(12	)%		574.3				593.6			(3	)%
Total cost of revenue and SG&A expense	$	633.2		$	595.0		6	%	$	646.4		$	721.3		(10	)%		$	1,378.4			$	1,421.4		(3	)%

Depreciation and amortization expense	$	130.6		$	120.8		8	%	$	149.4		$	144.0		4	%		$	294.7			$	286.3		3	%

As a percent of revenue:
Total cost of revenue and SG&A expense	68		%	70		%			63		%	64		%				65		%		65		%
Depreciation and amortization expense	14		%	14		%			15		%	13		%				14		%		13		%

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~~decreases in absolute total cost of revenue and SG&A expense ~~was primarily~~were largely due to the ~~aM acquisition and foreign currency effects. As a percentage~~execution of ~~revenue, total~~our cost reduction activities we put in place at the onset of ~~revenue and SG&A expense declined primarily because of strong organic revenue growth in 2018, as well as ongoing cost management and rationalization efforts associated with acquisition integration.~~the COVID-19 pandemic.

Within our cost of revenue and SG&A expense, stock-based compensation expense ~~decreased~~increased by approximately ~~$13~~$18 million and $41 million for the three and six months ended ~~February 28, 2018,~~May 31, 2020, respectively, compared to the ~~same period in 2017, as a result of fewer award grants in 2018, limited acceleration of~~three and six months ended May 31, 2019, which was largely due to our higher share ~~awards~~price, related employer tax impacts associated with ~~severance activities,~~the exercise of stock options, and ~~fewer shares still vesting from pre-Markit merger awards.~~accelerations for employees impacted by cost reduction activities.

Depreciation and Amortization Expense

For the three and six months ended~~February 28, 2018~~, May 31, 2020, compared to the three and six months ended ~~February 28, 2017,~~May 31, 2019, depreciation and amortization expense increased on an absolute and percentage basis primarily because of ~~the aM acquisition, but was relatively flat on a percentage of revenue basis.~~capitalized software development investments.

~~Acquisition-related Costs~~Restructuring and Impairment Charges

Please refer to Note 68 to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a discussion of costs associated with our recent cost reduction initiatives. During the three and six months ended May 31, 2020, we recorded approximately $81.3 million and $85.8 million, respectively, of direct and incremental costs associated with restructuring and impairment charges, including employee severance and the abandonment or partial abandonment of various office locations around the world.

Acquisition-Related Costs

Please refer to Note 9 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 and six months ended ~~February 28, 2018,~~May 31, 2020, we recorded approximately ~~$27~~$6.6 million and $7.5 million, respectively, of direct and incremental costs associated with ~~acquisition-related activities, including employee severance charges~~acquisition and ~~retention costs, contract termination costs for facility consolidations, legal and professional fees, and performance compensation expense related to the aM acquisition.~~divestiture activities.

Segment Adjusted EBITDA


	Three months ended February 28,						Percentage Change		Three months ended May 31,						Percentage Change			Six months ended May 31,							Percentage Change
(In millions, except percentages)	2018			2017					2020			2019					2020				2019
Adjusted EBITDA:
Financial Services									$	231.3		$	205.6		13	%		$	436.7			$	388.8		12	%
Transportation									101.6			136.6			(26	)%		219.6				250.9			(12	)%
Resources	$	84.9		$	80.0		6	%	96.2			109.2			(12	)%		186.4				202.4			(8	)%
Transportation	109.7			89.8			22	%
CMS	31.8			28.6			11	%	35.0			29.3			19	%		64.4				58.7			10	%
Financial Services	145.4			129.2			13	%
Shared services	(12.5		)	(7.4		)			(10.1		)	(15.7		)				(21.5		)		(27.7		)
Total Adjusted EBITDA	$	359.3		$	320.2		12	%	$	454.0		$	465.0		(2	)%		$	885.6			$	873.1		1	%

As a percent of segment revenue:
Financial Services									52		%	47		%				50		%		46		%
Transportation									42		%	43		%				41		%		41		%
Resources	41		%	41		%			44		%	44		%				42		%		43		%
Transportation	41		%	40		%
CMS	23		%	23		%			29		%	22		%				27		%		22		%
Financial Services	46		%	44		%

For the three and six months ended ~~February 28, 2018,~~May 31, 2020, compared to the three and six months ended ~~February 28, 2017,~~May 31, 2019, Adjusted EBITDA decreased for the three months ended May 31, 2020, and increased for the six months ended May 31, 2020, primarily due to the leverage in our business model ~~as incremental~~and cost reduction efforts, partially offset by the sale of our A&D business line and the impact of the COVID-19 pandemic and economic disruption on our revenue ~~drives higher margins.~~growth. We ~~also~~ continue to focus our efforts on organic revenue growth and cost management to improve overall margins. ~~Resources~~Financial Services segment Adjusted EBITDA ~~increased due to a return to revenue growth. Transportation segment Adjusted EBITDA~~and associated margin continued to increase because of ~~high~~organic revenue growth ~~that flowed through to segment Adjusted EBITDA.~~and favorable product mix. We expect some moderation in Financial Services ~~segment~~margin due to increased investment and an anticipated increase in lower margin services revenue. The decline in Adjusted EBITDA ~~growth~~for the Transportation segment was ~~primarily~~ due to the significant slowdown in revenue activity as a result of the COVID-19 pandemic, as well as the divestiture of the A&D business line. Resources Adjusted EBITDA and associated margin ~~flow-through from strong~~decreased due to the slowdown in organic revenue growth.

As a percentage of revenue, Adjusted EBITDA continued to improve due to margin expansion from revenue growth and continued integration and business leveraging efforts. Transportation’s Adjusted EBITDA margin increase was compressed by low aM margins.

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 and six months ended ~~February 28, 2018~~May 31, 2020 was ~~negative 156~~6 percent and 2 percent, respectively, compared to ~~negative 6~~14 percent and 8 percent for the three and six months ended ~~February 28, 2017.~~May 31, 2019. The ~~negative 2018~~low tax ~~rate is~~rates for the three and six months ended May 31, 2020 are primarily due to ~~the estimated one-time~~ tax ~~benefit~~benefits associated with the ~~Act~~tax-efficient divestiture of the A&D business line (U.K. share sales are exempt from tax) of approximately ~~$136~~$9 million ~~or 145 percentage points,~~and $38 million, and excess tax benefits on stock-based compensation of approximately ~~$24~~$12 million ~~or 25 percentage points.~~and $76 million, partially offset by U.S. minimum tax impacts of approximately $20 million and $31 million, respectively. The ~~negative 2017~~low 2019 tax ~~rate is~~rates are primarily due to tax benefits associated with excess tax benefits on stock-based compensation of approximately ~~$14~~$6 million ~~or 22 percentage points.~~

~~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 tax rate to 21 percent and implements a new system 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 of $136$18 million, ~~in the first quarter of 2018 to provisionally account~~respectively, for the ~~estimated impact. This amount included~~three and six months ended May 31, 2019, as well as a ~~provisional estimate for the transition tax~~change in partnership basis related to intangible assets 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.approximately $7 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 and six months ended ~~February 28, 2018~~May 31, 2020 and ~~February 28, 2017.~~May 31, 2019.


	Three months ended February 28,						Percentage Change		Three months ended May 31,						Percentage Change			Six months ended May 31,							Percentage Change
(In millions, except percentages)	2018			2017					2020			2019					2020				2019
Net income attributable to IHS Markit Ltd.	$	241.3		$	66.0		266	%	$	71.7		$	149.8			(52	)%		$	556.7			$	259.5		115	%
Interest income	(0.7		)	(0.5		)			(0.2		)	(0.6		)				(0.6		)		(1.0		)
Interest expense	46.3			31.8					60.0			65.8						121.2				132.7
(Benefit) Provision for income taxes	(146.6		)	(3.6		)
Provision for income taxes									4.7			24.2						9.0				23.3
Depreciation	41.6			36.1					56.4			49.4						107.5				96.0
Amortization	89.0			84.7					93.0			94.6						187.2				190.3
EBITDA	$	270.9		$	214.5		26	%	$	285.6		$	383.2		(25	)%		$	981.0			$	700.8		40	%
Stock-based compensation expense	61.9			75.2					71.2			53.6						153.8				113.3
Restructuring charges	—			(0.2		)
Restructuring and impairment charges									81.3			1.7						85.8				9.9
Acquisition-related costs	12.1			31.6					2.1			6.0						2.8				13.5
Acquisition-related performance compensation	14.9			—
Consideration related to acquisition earn-out									4.5			15.4						4.7				30.7
Loss on debt extinguishment									—			5.8						—				6.0
Loss (gain) on sale of assets									1.4			—						(370.9		)		—
Pension mark-to-market and settlement expense									8.8			—						30.0				—
Share of joint venture results not attributable to Adjusted EBITDA	—			(0.4		)			(0.1		)	0.2						0.2				0.3
Adjusted EBITDA attributable to noncontrolling interest	(0.5		)	(0.5		)			(0.8		)	(0.9		)				(1.8		)		(1.4		)
Adjusted EBITDA	$	359.3		$	320.2		12	%	$	454.0		$	465.0		(2	)%		$	885.6			$	873.1		1	%
Adjusted EBITDA as a percentage of revenue	38.6		%	37.9		%			44.2		%	41.0		%				42.0		%		40.0		%

Our Adjusted EBITDA margin performance for the three and six months ended ~~February 28, 2018,~~May 31, 2020, compared to the three and six months ended ~~February 28, 2017,~~May 31, 2019, increased primarily because of ~~margin flow-through on our organic~~cost reduction efforts to moderate the negative impact of revenue growth, as well as our continued integration and cost management efforts. The expansion was negatively impacted by changes in foreign currency exchange rates, which resulted in higher revenue and expense amounts, as well as low aM margins.declines. We expect to ~~continue to~~ drive full-year margin improvement, ~~through continued~~albeit from lower revenue growth and tighter cost management ~~activities.~~activities as a result of COVID-19 and the current economic environment. These near-term pressures may adversely affect our ability to grow Adjusted EBITDA as quickly as anticipated in the near term.

Financial Condition


(In millions, except percentages)	As of February 28, 2018		As of November 30, 2017		Dollar change			Percent change		As of May 31, 2020		As of November 30, 2019		Dollar change			Percentage change
Accounts receivable, net	$	802.7	$	693.5	$	109.2		16	%	$	876.1	$	890.7	$	(14.6	)	(2	)%
Accrued compensation	$	59.7	$	157.4	$	(97.7	)	(62	)%	$	95.4	$	215.2	$	(119.8	)	(56	)%
Deferred revenue	$	919.3	$	790.8	$	128.5		16	%	$	945.9	$	879.7	$	66.2		8	%

The ~~increase~~decrease in accounts receivable was primarily due to ~~increased billing activity~~lower billings in the second quarter of 2020, while the deferred revenue increase was primarily due to higher billings in the first quarter of ~~2018. The decrease in accrued~~2020. Accrued compensation ~~was~~decreased primarily due to the ~~2017~~2019 bonus payout made in the first quarter of ~~2018,~~2020, partially offset by the current year accrual. ~~The increase in deferred revenue was due to increased billings in the first quarter of 2018.~~

Liquidity and Capital Resources

As of ~~February 28, 2018~~May 31, 2020, we had cash and cash equivalents of $~~156~~207.8 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 a revolving credit facility. We had approximately $5.39 billion of debt as of May 31, 2020, consisting primarily of $497.0 of revolving facility debt and $4.68 billion of senior notes. As of May 31, 2020, we had approximately $751.7 million available under our revolving credit facility. We had approximately $4.28 billion of debt as of February 28, 2018, consisting primarily of $990 million of revolving facility debt, $1.12 billion of term loan debt, $2.07 billion of senior notes, and $149 million of institutional senior notes. As of February 28, 2018, we had approximately $858 million available under our revolving credit facility, which was partially used to fund our $500 million ASR entered into in March 2018.

Our interest expense for the three and six months ended ~~February 28, 2018,~~May 31, 2020, compared to the three and six months ended ~~February 28, 2017, increased~~May 31, 2019, decreased primarily because of ~~a higher average debt balance due~~lower floating interest rates in 2020 compared to ~~acquisitions~~the prior year.

Our Board of Directors approved quarterly cash dividends of $0.17 per share during each of the first and ~~share repurchases, as well as a higher effective interest rate due to an increased amount~~second quarter of ~~fixed-rate debt.~~2020, which resulted in approximately $135.3 million of cash payouts during 2020.

Our Board of Directors has authorized a share repurchase program of up to ~~$3.25~~$2.5 billion of IHS Markit common shares through November 30, ~~2019,~~2021, 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,~~In December 2019, we ~~had repurchased approximately $1.74 billion~~entered into an ASR to repurchase $500 million under this authorization, and in March 2020, we entered into an ASR to repurchase $250 million 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, amount of share repurchases and ~~share repurchase programs,~~dividends, 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. Given current market conditions as a result of COVID-19, we are focused on maintaining high levels of liquidity and capital structure flexibility. We maintain a solid balance sheet, investor grade rating, a well-positioned debt maturity ladder, and a strong diversified bank group. We expect to return to share repurchases later this year or early next year while maintaining our capital policy target of operating within our 2.0-3.0x gross leverage range.

Cash Flows


	Three months ended February 28,											Six months ended May 31,
(In millions, except percentages)	2018			2017			Dollar change			Percent change		2020			2019			Dollar change			Percentage change
Net cash provided by operating activities	$	202.9		$	250.7		$	(47.8	)	(19	)%	$	397.7		$	612.7		$	(215.0	)	(35	)%
Net cash used in investing activities	$	(55.1	)	$	(66.4	)	$	11.3		(17	)%
Net cash provided by (used in) investing activities												$	287.3		$	(172.1	)	$	459.4		(267	)%
Net cash used in financing activities	$	(118.9	)	$	(166.6	)	$	47.7		(29	)%	$	(562.3	)	$	(427.4	)	$	(134.9	)	32	%

The decrease in net cash provided by operating activities was primarily due to ~~higher interest, tax, and incentive~~$75.9 million of payments for acquisition-related performance compensation ~~payments,~~associated with the aM acquisition described in Note 2, as well as ~~increased~~distributions associated with the settlement of our U.S. and U.K. pension plans, incremental cash tax payments associated with recent divestiture activity, and negative impacts on working capital ~~use.~~from the current market conditions.

The increase in net cash provided by investing activities was primarily due to the sale of the A&D business line.

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

~~The decrease~~increase in net cash used in financing activities ~~in the first quarter of 2018 was~~is primarily due to ~~fewer~~the $750 million in share repurchases ~~in 2018 compared to the prior year.~~and our dividend payout, partially offset by increased proceeds from stock option exercises.

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,											Six months ended May 31,
(In millions, except percentages)	2018			2017			Dollar change			Percent change		2020			2019			Dollar change			Percentage change
Net cash provided by operating activities	$	202.9		$	250.7							$	397.7		$	612.7
Payments for acquisition-related performance compensation												75.9			—
Capital expenditures on property and equipment	(55.2		)	(71.7		)						(147.6		)	(129.9		)
Free cash flow	$	147.7		$	179.0		$	(31.3	)	(17	)%	$	326.0		$	482.8		$	(156.8	)	(32	)%

The decrease in free cash flow was primarily due to ~~lower net cash provided by operating activities, partially offset by decreased~~higher capital expenditure ~~activity.~~activity, distributions associated with the settlement of our U.S. and U.K. pension plans, incremental cash tax payments associated with recent divestitures, and negative impacts on working capital from the current market conditions. The payments for acquisition-related performance compensation are associated with the exercise of put provisions by aM equity interest holders, as further described in Note 2. 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 46 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 1014 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~~2019 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~~2019 Annual Report on Form 10-K.

~~Borrowings under the 2016~~Our 2019 revolving facility and ~~2016 term loans~~2019 credit agreement are subject to variable interest rates. We use interest rate swaps in order to fix a portion of our variable rate debt as part of our overall interest rate risk management strategy. As of ~~February 28, 2018,~~May 31, 2020, we had ~~approximately $2.106 billion~~$747 million of floating-rate debt at a ~~3.36~~1.37 percent weighted-average interest ~~rate, of which $400 million was subject to effective floating-to-fixed interest rate swaps.~~rate. 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~~$4.5 million ($217.5 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 913 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, 2019, except as set forth below. The risk factor set forth below updates, and should be read together with, the risk factors disclosed in “Item 1A. Risk Factors,” in our 2019 Annual Report on Form 10-K and our Quarterly Report on Form 10-Q for the three months ended February 29, 2020.

The COVID-19 pandemic has had and could continue to have a material adverse effect on our business, financial condition, results of operations, or cash flows.

The COVID-19 pandemic and the mitigation efforts by governments to attempt to control its spread, including travel bans and restrictions, social distancing, quarantines, and business shutdowns, have caused significant economic disruption and adversely impacted the global economy, leading to reduced consumer spending and disruptions and volatility in the global financial and commodities markets. Even if such measures are relaxed at any point, they may be put back into place or increased if the spread of the pandemic continues or increases in the future. As a result of these measures and the general economic disruption, we experienced a decrease to our revenue in the second quarter of 2020, particularly in our Resources and Transportation segments. For example, we cancelled our large customer events scheduled for the second quarter of 2020, offered voluntary price relief for dealer customers in our Transportation segment, and experienced a pause in new sales activity and cancellations from financially distressed customers. Continued economic disruption or an extended economic recession may also cause lower activity levels in the end markets we service or declining financial performance of our customers, which could result in lower demand, cancellations, reductions, or delays for our products and services. As a result of COVID-19 and the current economic environment, we may experience continued pressure on organic revenue growth over the near term until economic conditions improve. A return to more ordinary course economic activity is dependent on the duration and severity of the COVID-19 pandemic, which are in turn dependent on a series of evolving factors, including the severity and transmission rate of the virus, the extent and effectiveness of containment efforts, and future policy decisions made by governments across the globe as they react to evolving local and global conditions. We continue to work with our stakeholders (including customers, employees, suppliers, business partners, and local communities) to attempt to mitigate this global pandemic on our business. These mitigation efforts have included implementing our business continuity program in which we transitioned to a global work-at-home model, proactively reducing costs intended to allow us to protect against further downside revenue risk,

and investing in additional initiatives to support our long-term growth, while also focusing on maintaining liquidity and capital structure flexibility. However, we cannot assure you that we will be successful in any of these mitigation efforts. To the extent the COVID-19 pandemic adversely affects our business, results of operations, financial condition, or cash flows, it may also have the effect of heightening many of the other risks described in “Risk Factors” set forth in our annual report on Form 10-K for the year ended November 30, 2019.

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~~May 31, 2020.

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)
March 1 - March 31, 2019:
Employee transactions ⁽¹⁾	3,413	$	62.71	N/A	N/A
Share repurchase program ⁽²⁾	2,807,412	$	62.17	2,807,412	$	1,750.0
April 1 - April 30, 2020:
Employee transactions ⁽¹⁾	5,899	$	65.43	N/A	N/A
May 1 - May 31, 2020:
Employee transactions ⁽¹⁾	16,531	$	68.03	N/A	N/A
Share repurchase program ⁽²⁾	1,213,567	$	62.17	1,213,567	$	1,750.0
Total share repurchases	4,046,822	$	62.20	4,020,979

For the ~~first~~second quarter of ~~2018,~~2020, we repurchased approximately ~~$249~~$252 million of common shares, including ~~approximately $172~~$250 million in open market share repurchases (described in note ~~(1)~~(2) below), and approximately ~~$77~~$1.7 million in employee transactions (described in note ~~(2)~~(1) 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 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)~~(2).

⁽²⁾ In October 2019, our Board of Directors authorized a share repurchase program of up to $2.5 billion of IHS Markit common shares through November 30, 2021, 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 the repurchase 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.

In March 2020, we funded a $250 million accelerated share repurchase (“ASR”) with a scheduled termination date in the second quarter of 2020. Upon funding of the ASR, we received an initial delivery of 2.807 million shares. At the completion of the ASR in May 2020, we received an additional 1.214 million shares. The average price paid per share presented above reflects the average price for the 4.021 million total shares repurchased through the ASR.

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~~paid an annual fee of approximately ~~$30,000.~~$40,000 through December 2019. The procurement of this information iswas exempt from applicable economic sanctions laws and regulations as a funds transfer related to the exportation or importation of information and informational materials. ~~Sales~~GTIS did not renew its subscription for calendar year 2020 and no longer receives the trade data sourced from Iran. No sales were attributable to ~~this~~ Iranian trade data ~~represented approximately $75,000 in gross revenue for GTIS~~ in the ~~first~~second quarter of ~~2018 and would have represented approximately 0.01 percent of our first quarter 2018 consolidated revenues and gross profits.~~2020. Subject to any changes in the exempt status of such activities, we ~~intend to continue~~may, in the future, resume 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~~First Amendment to Credit Agreement, dated ~~January 24, 2017~~as of April 3, 2020, by and among IHS Markit Ltd., as the borrower, the lenders party thereto and PNC Bank, National Association, as administrative agent (Incorporated by reference to ~~contract~~Exhibit 10.1 of ~~employment for Lance Uggla~~the IHS Markit Ltd. Current Report on Form 8-K (file no. 001-36495) filed on April 6, 2020)
10.2+*		~~Amended~~IHS Markit Ltd. Summary of Revised 2020 and ~~Restated Terms~~2021 Non-Employee Director Compensation Program (Effective May 1, 2020) (Incorporated by reference to Exhibit 10.1 of ~~Employment for Adam Kansler~~the IHS Markit Ltd. Current Report on Form 8-K (file no. 001-36495) filed on April 20, 2020)
10.3+*		~~Amended and Restated Terms of Employment for Jonathan Gear~~
10.4+*		IHS Markit Ltd. 2014 Equity Incentive Award Plan - ~~2018~~2020 Form of Restricted Share Unit Agreement ~~(Time Based)~~(Non-Employee Directors) (Incorporated by reference to Exhibit 10.2 of the IHS Markit Ltd. Current Report on Form 8-K (file no. 001-36495) filed on April 20, 2020)
10.5+*10.4+		IHS Markit Ltd. 2014 Equity Incentive Award Plan - ~~2018~~2020 Form of ~~Performance~~Deferred Share Unit Agreement (Non-Employee Directors) (Incorporated by reference to Exhibit 10.3 of the IHS Markit Ltd. Current Report on Form 8-K (file no. 001-36495) filed on April 20, 2020)
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 - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
104		The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL

* Filed herewith.

+ Compensatory plan or ~~arrangement.~~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~~June 23, 2020.



IHS MARKIT LTD.

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

3435



		Page
PART I. Financial Information
	Item 1. Financial Statements	4
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	3031
	Item 4. Controls and Procedures	3132

PART II. Other Information
	Item 1. Legal Proceedings	3132
	Item 1A. Risk Factors	3132
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	32
	~~Item 5. Other Information~~	32
	~~Item 6. Exhibits~~	33
	Item 5. Other Information	33
	~~SIGNATURE~~Item 6. Exhibits	34

SIGNATURE		35



	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



Year	Amount
Remainder of 2018	$	260.4
2019	$	321.0
2020	$	313.7
2021	$	308.3
2022	$	289.2
Thereafter	$	2,636.0



	February 28, 2018			November 30, 2017
2016 revolving facility	$	990.0		$	886.0
2016 term loan:
Tranche A-1	606.8			615.0
Tranche A-2	508.8			515.6
2017 term loan	—			500.0
5.00% senior notes due 2022	750.0			750.0
4.75% senior notes due 2025	815.3			815.8
4.00% senior notes due 2026	500.0			—
Institutional senior notes:
Series A	95.7			95.8
Series B	53.7			53.7
Debt issuance costs	(47.0		)	(42.8		)
Capital leases	3.7			4.2
Total debt	$	4,277.0		$	4,193.3
Current portion	(90.9		)	(576.0		)
Total long-term debt	$	4,186.1		$	3,617.3



	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