Exhibit 99.1
News Release |
FOR IMMEDIATE RELEASE
News Media Contact: | Investor Relations Contact: | ||
Dan Wilinsky | Eric Boyer | ||
+1 303 397 2468 | +1 303 397 2969 | ||
dan.wilinsky@ihs.com | eric.boyer@ihs.com |
IHS Inc. Reports Fourth Quarter and Fiscal Year 2015 Results
ENGLEWOOD, Colo. (January 12, 2016) - IHS Inc. (NYSE: IHS), the leading global source of information and analytics, today reported results for the fourth quarter and fiscal year ended November 30, 2015.
• | Revenue including discontinued operations (disc-ops) of $589 million, up 1 percent from the prior-year period; revenue excluding disc-ops of $556 million, up 3 percent from the prior-year period |
• | Flat total organic revenue growth and 3 percent subscription organic revenue growth, excluding disc-ops |
• | Adjusted EBITDA including disc-ops of $200 million, up 7 percent from the prior-year period |
• | Adjusted earnings per diluted share (Adjusted EPS) including disc-ops of $1.68, unchanged from the prior year period |
Revenue including disc-ops, Adjusted EBITDA, Adjusted EPS, and free cash flow are non-GAAP financial measures used by management to measure operating performance. These terms are defined elsewhere in this release. Please see schedules appearing later in this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.
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Fourth Quarter and Full Year 2015 Financial Performance
Three months ended November 30, | Change | Year ended November 30, | Change | ||||||||||||||||||||||||||
(in thousands, except percentages and per share data) | 2015 | 2014 | $ | % | 2015 | 2014 | $ | % | |||||||||||||||||||||
Revenue (excluding disc-ops) | $ | 555,706 | $ | 541,132 | $ | 14,574 | 3 | % | $ | 2,184,335 | $ | 2,079,787 | $ | 104,548 | 5 | % | |||||||||||||
Revenue from disc-ops | 32,972 | 41,185 | (8,213 | ) | (20 | )% | 129,956 | 151,007 | (21,051 | ) | (14 | )% | |||||||||||||||||
Revenue including disc-ops | $ | 588,678 | $ | 582,317 | $ | 6,361 | 1 | % | $ | 2,314,291 | $ | 2,230,794 | $ | 83,497 | 4 | % | |||||||||||||
Net income | $ | 90,477 | $ | 60,118 | $ | 30,359 | 50 | % | $ | 240,193 | $ | 194,549 | $ | 45,644 | 23 | % | |||||||||||||
Adjusted EBITDA including disc-ops | $ | 199,690 | $ | 186,455 | $ | 13,235 | 7 | % | $ | 744,077 | $ | 689,804 | $ | 54,273 | 8 | % | |||||||||||||
GAAP EPS | $ | 1.32 | $ | 0.87 | $ | 0.45 | 52 | % | $ | 3.47 | $ | 2.81 | $ | 0.66 | 23 | % | |||||||||||||
Adjusted EPS including disc-ops | $ | 1.68 | $ | 1.68 | $ | — | — | % | $ | 6.07 | $ | 5.90 | $ | 0.17 | 3 | % | |||||||||||||
Cash flow from operations | $ | 115,978 | $ | 85,649 | $ | 30,329 | 35 | % | $ | 612,639 | $ | 628,099 | $ | (15,460 | ) | (2 | )% | ||||||||||||
Free cash flow | $ | 90,745 | $ | 54,510 | $ | 36,235 | 66 | % | $ | 489,718 | $ | 513,646 | $ | (23,928 | ) | (5 | )% |
“We made strong progress in the second half of the year in increasing operational efficiency and effectiveness,” said Jerre Stead, IHS chairman and chief executive officer. “In addition, we made some very important changes to capital allocation, and the two acquisitions announced in the past several weeks are examples of execution against our new acquisition strategy.”
“We continue to deliver solid profit and margin expansion, with Adjusted EBITDA including disc-ops of $200 million for the quarter, up 7 percent versus a year ago, and full year margin expansion of 130 basis points,” said Todd Hyatt, IHS chief financial officer.
Fourth Quarter and Full Year 2015 Revenue Performance
The subscription-based business grew 3 percent organically in the fourth quarter of 2015 compared to the same period of 2014, as described in the following table.
Three months ended November 30, | Percent change | Year ended November 30, | Percent change | ||||||||||||||||||||||||
(in thousands, except percentages) | 2015 | 2014 | Total | Organic | 2015 | 2014 | Total | Organic | |||||||||||||||||||
Subscription revenue | $ | 448,216 | $ | 424,768 | 6 | % | 3 | % | $ | 1,768,541 | $ | 1,643,844 | 8 | % | 5 | % | |||||||||||
Non-subscription revenue | 107,490 | 116,364 | (8 | )% | (10 | )% | 415,794 | 435,943 | (5 | )% | (9 | )% | |||||||||||||||
Revenue | 555,706 | 541,132 | 3 | % | — | % | 2,184,335 | 2,079,787 | 5 | % | 2 | % | |||||||||||||||
Revenue from disc-ops | 32,972 | 41,185 | (20 | )% | (18 | )% | 129,956 | 151,007 | (14 | )% | (12 | )% | |||||||||||||||
Revenue including disc-ops | $ | 588,678 | $ | 582,317 | 1 | % | (1 | )% | $ | 2,314,291 | $ | 2,230,794 | 4 | % | 1 | % |
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Fourth quarter 2015 revenue increased 3 percent compared to the fourth quarter of 2014, and full year 2015 revenue increased 5 percent compared to the same period in 2014. The components of revenue growth are described below by segment and in total.
Change in revenue (excluding disc-ops) | |||||||||||||||||
Fourth quarter 2015 vs. fourth quarter 2014 | 2015 vs. 2014 | ||||||||||||||||
(All amounts represent percentage points) | Organic | Acquisitive | Foreign Currency | Organic | Acquisitive | Foreign Currency | |||||||||||
Resources | (8 | )% | 1 | % | (2 | )% | (4 | )% | 1 | % | (2 | )% | |||||
Transportation | 9 | % | 4 | % | (1 | )% | 9 | % | 7 | % | (2 | )% | |||||
Consolidated Markets & Solutions | 3 | % | 11 | % | (2 | )% | 4 | % | 9 | % | (3 | )% | |||||
Total | — | % | 5 | % | (2 | )% | 2 | % | 5 | % | (2 | )% |
Fourth Quarter and Full Year 2015 Segment Performance
Segment results were as follows:
• | Resources. Fourth quarter revenue for Resources decreased $22 million, or 9 percent, to $215 million, and included negative 3 percent organic growth for the subscription-based business. Fourth quarter Adjusted EBITDA for Resources decreased $6 million, or 6 percent, to $91 million. Fourth quarter operating income for Resources decreased $19 million, or 25 percent, to $57 million. |
Full year 2015 revenue for Resources decreased $43 million, or 5 percent, to $885 million. Full year 2015 Adjusted EBITDA for Resources decreased $14 million, or 4 percent, to $357 million. Full year 2015 operating income for Resources decreased $38 million, or 13 percent, to $248 million.
• | Transportation. Fourth quarter revenue for Transportation increased $21 million, or 12 percent, to $199 million, and included 11 percent organic growth for the subscription-based business. Fourth quarter Adjusted EBITDA for Transportation increased $12 million, or 18 percent, to $79 million. Fourth quarter operating income for Transportation increased $7 million, or 15 percent, to $53 million. |
Full year 2015 revenue for Transportation increased $96 million, or 14 percent, to $758 million. Full year 2015 Adjusted EBITDA for Transportation increased $48 million, or 21 percent, to $283 million. Full year 2015 operating income for Transportation increased $33 million, or 21 percent, to $194 million.
• | Consolidated Markets & Solutions (CMS) excluding disc-ops. Fourth quarter revenue for CMS increased $16 million, or 13 percent, to $142 million, and included 4 percent organic growth for the subscription-based business. Fourth quarter Adjusted EBITDA for CMS increased $11 million, or 45 percent, to $34 million. Fourth quarter operating income for CMS increased $6 million, or 42 percent, to $20 million. |
Full year 2015 revenue for CMS increased $51 million, or 10 percent, to $541 million. Full year 2015 Adjusted EBITDA for CMS increased $19 million, or 21 percent, to $107 million. Full year 2015 operating income for CMS decreased $3 million, or 6 percent, to $49 million.
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Outlook (forward-looking statement)
For the year ending November 30, 2016, excluding discontinued operations and including the acquisitions of CarProof and OPIS, IHS expects:
• | Revenue in a range of $2.30 billion to $2.38 billion, including 2-3 percent subscription organic growth, neutral non-subscription organic growth, and total organic growth of 0-3 percent; |
• | Adjusted EBITDA in a range of $770 million to $800 million; and |
• | Adjusted EPS in a range of $6.00 to $6.30 per diluted share. |
Additionally, for the year ending November 30, 2016, IHS expects:
• | Depreciation expense to be approximately $100-105 million; |
• | Amortization expense related to acquired intangible assets to be approximately $170-180 million; |
• | Net interest expense to be approximately $100-105 million; |
• | Stock-based compensation expense to be approximately $120-130 million; |
• | An adjusted tax rate of approximately 27-28 percent; |
• | An effective tax rate of approximately 21-22 percent; |
• | Fully diluted shares to be approximately 68.5 million; and |
• | Capital expenditures to be approximately 5 percent of revenue. |
The above outlook assumes no further currency movements, acquisitions, divestitures, pension mark-to-market adjustments or unanticipated events. See discussion of non-GAAP financial measures at the end of this release.
As previously announced, IHS will hold a conference call to discuss fourth quarter and fiscal year 2015 results on January 12, 2016, at 8:00 a.m. EST. The conference call will be simultaneously webcast on the company’s website: www.ihs.com.
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Use of Non-GAAP Financial Measures
Non-GAAP results are presented only as a supplement to our financial statements based on U.S. generally accepted accounting principles (GAAP). Non-GAAP financial information is provided to enhance the reader’s understanding of our financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP and non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP. Reconciliations of the most directly comparable GAAP measures to non-GAAP measures, such as EBITDA, Adjusted EBITDA, Adjusted net income, Adjusted EPS, and free cash flow are provided within the schedules attached to this release.
We use non-GAAP measures in our operational and financial decision-making, believing that it is useful to exclude certain items in order to focus on what we deem to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations. As a result, internal
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management reports used during monthly operating reviews feature the Adjusted EBITDA, Adjusted net income, Adjusted EPS, and free cash flow metrics. We also believe that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures.
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. However, these measures can still be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of GAAP financial disclosures.
IHS Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “aim,” “strive,” “believe,” “project,” “predict,” "estimate," "expect," “continue,” "strategy," "future," "likely," "may," “might,” "should," "will," the negative of these terms and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding guidance relating to net income, net income per share, and expected operating results, such as revenue growth and earnings.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: economic and financial conditions, including volatility in interest and exchange rates; our ability to manage system failures, capacity constraints, and cyber risks; our ability to successfully manage risks associated with changes in demand for our products and services as well as changes in our targeted industries; our ability to develop new platforms to deliver our products and services, pricing, and other competitive pressures, and changes in laws and regulations governing our business; 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; our ability to successfully identify and integrate acquisitions into our existing businesses and manage risks associated therewith; our ability to satisfy our debt obligations and our other ongoing business obligations; and the other factors described under the caption “Risk Factors” in our most recent annual report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission.
Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Please consult our public filings at www.sec.gov or www.ihs.com.
About IHS Inc. (www.ihs.com)
IHS Inc. (NYSE: IHS) is the leading source of information, insight and analytics in critical areas that shape today’s business landscape. Businesses and governments in more than 140 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005.
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Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,600 people in 32 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners.
© 2016 IHS Inc. All rights reserved.
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IHS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per-share amounts)
As of | As of | ||||||
November 30, 2015 | November 30, 2014 | ||||||
(Unaudited) | (Audited) | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 291,580 | $ | 153,156 | |||
Accounts receivable, net | 355,913 | 421,374 | |||||
Income tax receivable | 4,585 | 2,283 | |||||
Deferred subscription costs | 52,752 | 51,021 | |||||
Assets held for sale | 193,377 | — | |||||
Other | 57,135 | 60,973 | |||||
Total current assets | 955,342 | 688,807 | |||||
Non-current assets: | |||||||
Property and equipment, net | 314,366 | 301,419 | |||||
Intangible assets, net | 1,014,691 | 1,091,109 | |||||
Goodwill | 3,287,459 | 3,157,324 | |||||
Deferred income taxes | 6,630 | 5,486 | |||||
Other | 22,593 | 27,991 | |||||
Total non-current assets | 4,645,739 | 4,583,329 | |||||
Total assets | $ | 5,601,081 | $ | 5,272,136 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Short-term debt | $ | 36,019 | $ | 36,257 | |||
Accounts payable | 59,180 | 52,245 | |||||
Accrued compensation | 105,477 | 101,875 | |||||
Accrued royalties | 33,306 | 37,346 | |||||
Other accrued expenses | 118,217 | 131,147 | |||||
Income tax payable | 23,339 | — | |||||
Deferred revenue | 552,498 | 596,187 | |||||
Liabilities held for sale | 32,097 | — | |||||
Total current liabilities | 960,133 | 955,057 | |||||
Long-term debt | 2,095,183 | 1,806,098 | |||||
Accrued pension and postretirement liability | 26,745 | 29,139 | |||||
Deferred income taxes | 259,524 | 271,125 | |||||
Other liabilities | 58,619 | 51,171 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Class A common stock, $0.01 par value per share, 160,000,000 shares authorized, 70,287,707 and 69,391,577 shares issued, and 67,523,885 and 68,372,176 shares outstanding at November 30, 2015 and November 30, 2014, respectively | 703 | 694 | |||||
Additional paid-in capital | 1,053,141 | 956,381 | |||||
Treasury stock, at cost: 2,763,822 and 1,019,401 shares at November 30, 2015 and November 30, 2014, respectively | (317,016 | ) | (105,873 | ) | |||
Retained earnings | 1,655,262 | 1,415,069 | |||||
Accumulated other comprehensive loss | (191,213 | ) | (106,725 | ) | |||
Total stockholders’ equity | 2,200,877 | 2,159,546 | |||||
Total liabilities and stockholders’ equity | $ | 5,601,081 | $ | 5,272,136 |
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IHS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per-share amounts)
(Unaudited)
Three months ended November 30, | Year ended November 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue | $ | 555,706 | $ | 541,132 | $ | 2,184,335 | $ | 2,079,787 | |||||||
Operating expenses: | |||||||||||||||
Cost of revenue (includes stock-based compensation expense of $1,920; $2,243; $6,892; and $8,520 for the three and twelve months ended November 30, 2015 and 2014, respectively) | 194,796 | 206,094 | 819,173 | 815,153 | |||||||||||
Selling, general and administrative (includes stock-based compensation expense of $30,679; $35,364; $122,024; and $150,737 for the three and twelve months ended November 30, 2015 and 2014, respectively) | 206,283 | 205,643 | 795,354 | 789,752 | |||||||||||
Depreciation and amortization | 55,576 | 47,478 | 215,080 | 181,243 | |||||||||||
Restructuring charges | 17,327 | 2,695 | 39,359 | 8,775 | |||||||||||
Acquisition-related costs | 879 | 884 | 1,472 | 1,901 | |||||||||||
Net periodic pension and postretirement expense | 2,990 | 2,432 | 4,478 | 6,774 | |||||||||||
Other expense (income), net | 247 | (1,837 | ) | 1,576 | (1,295 | ) | |||||||||
Total operating expenses | 478,098 | 463,389 | 1,876,492 | 1,802,303 | |||||||||||
Operating income | 77,608 | 77,743 | 307,843 | 277,484 | |||||||||||
Interest income | 319 | 251 | 933 | 988 | |||||||||||
Interest expense | (18,411 | ) | (13,234 | ) | (70,985 | ) | (55,384 | ) | |||||||
Non-operating expense, net | (18,092 | ) | (12,983 | ) | (70,052 | ) | (54,396 | ) | |||||||
Income from continuing operations before income taxes | 59,516 | 64,760 | 237,791 | 223,088 | |||||||||||
Provision for income taxes | (12,162 | ) | (10,770 | ) | (48,853 | ) | (45,126 | ) | |||||||
Income from continuing operations | 47,354 | 53,990 | 188,938 | 177,962 | |||||||||||
Income from discontinued operations, net | 43,123 | 6,128 | 51,255 | 16,587 | |||||||||||
Net income | $ | 90,477 | $ | 60,118 | $ | 240,193 | $ | 194,549 | |||||||
Basic earnings per share: | |||||||||||||||
Income from continuing operations | $ | 0.70 | $ | 0.79 | $ | 2.76 | $ | 2.61 | |||||||
Income from discontinued operations, net | 0.63 | 0.09 | 0.75 | 0.24 | |||||||||||
Basic earnings per share | $ | 1.33 | $ | 0.88 | $ | 3.51 | $ | 2.85 | |||||||
Weighted average shares used in computing basic earnings per share | 67,943 | 68,352 | 68,450 | 68,163 | |||||||||||
Diluted earnings per share: | |||||||||||||||
Income from continuing operations | $ | 0.69 | $ | 0.78 | $ | 2.73 | $ | 2.57 | |||||||
Income from discontinued operations, net | 0.63 | 0.09 | 0.74 | 0.24 | |||||||||||
Diluted earnings per share | $ | 1.32 | $ | 0.87 | $ | 3.47 | $ | 2.81 | |||||||
Weighted average shares used in computing diluted earnings per share | 68,747 | 69,281 | 69,289 | 69,120 |
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IHS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Year ended November 30, | |||||||
2015 | 2014 | ||||||
Operating activities: | |||||||
Net income | $ | 240,193 | $ | 194,549 | |||
Reconciliation of net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 235,501 | 202,145 | |||||
Stock-based compensation expense | 135,386 | 167,359 | |||||
Impairment of assets | 4,626 | — | |||||
Excess tax benefit from stock-based compensation | (5,494 | ) | (13,297 | ) | |||
Net periodic pension and postretirement expense | 4,478 | 6,774 | |||||
Pension and postretirement contributions | (5,854 | ) | (13,452 | ) | |||
Deferred income taxes | (34,927 | ) | (10,285 | ) | |||
Change in assets and liabilities: | |||||||
Accounts receivable, net | 56,058 | 36,418 | |||||
Other current assets | (15,569 | ) | (8,834 | ) | |||
Accounts payable | (4,131 | ) | (11,425 | ) | |||
Accrued expenses | (55 | ) | 36,073 | ||||
Income tax | 32,121 | 6,254 | |||||
Deferred revenue | (34,229 | ) | 29,713 | ||||
Other liabilities | 4,535 | 6,107 | |||||
Net cash provided by operating activities | 612,639 | 628,099 | |||||
Investing activities: | |||||||
Capital expenditures on property and equipment | (122,921 | ) | (114,453 | ) | |||
Acquisitions of businesses, net of cash acquired | (369,908 | ) | (210,395 | ) | |||
Intangible assets acquired | — | (714 | ) | ||||
Change in other assets | (3,727 | ) | (4,608 | ) | |||
Settlements of forward contracts | 597 | 6,159 | |||||
Net cash used in investing activities | (495,959 | ) | (324,011 | ) | |||
Financing activities: | |||||||
Proceeds from borrowings | 550,000 | 2,485,000 | |||||
Repayment of borrowings | (261,152 | ) | (2,817,236 | ) | |||
Payment of debt issuance costs | — | (18,994 | ) | ||||
Excess tax benefit from stock-based compensation | 5,494 | 13,297 | |||||
Repurchases of common stock | (248,868 | ) | (59,928 | ) | |||
Net cash provided by (used in) financing activities | 45,474 | (397,861 | ) | ||||
Foreign exchange impact on cash balance | (22,162 | ) | (11,438 | ) | |||
Net increase in cash and cash equivalents | 139,992 | (105,211 | ) | ||||
Cash and cash equivalents at the beginning of the period | 153,156 | 258,367 | |||||
Cash and cash equivalents at the end of the period | 293,148 | 153,156 | |||||
Less: Cash and cash equivalents associated with discontinued operations at the end of the period | (1,568 | ) | — | ||||
Cash and cash equivalents from continuing operations at the end of the period | $ | 291,580 | $ | 153,156 |
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IHS INC.
SUPPLEMENTAL REVENUE DISCLOSURE
(In thousands)
(Unaudited)
Three months ended November 30, | Percent change | Year ended November 30, | Percent change | ||||||||||||||||||||||||
2015 | 2014 | Total | Organic | 2015 | 2014 | Total | Organic | ||||||||||||||||||||
Revenue by segment: | |||||||||||||||||||||||||||
Resources | $ | 214,641 | $ | 236,734 | (9 | )% | (8 | )% | $ | 884,596 | $ | 927,211 | (5 | )% | (4 | )% | |||||||||||
Transportation | 199,029 | 178,288 | 12 | % | 9 | % | 758,404 | 662,547 | 14 | % | 9 | % | |||||||||||||||
CMS | 142,036 | 126,110 | 13 | % | 3 | % | 541,335 | 490,029 | 10 | % | 4 | % | |||||||||||||||
Revenue | 555,706 | 541,132 | 3 | % | — | % | 2,184,335 | 2,079,787 | 5 | % | 2 | % | |||||||||||||||
Revenue from disc-ops | 32,972 | 41,185 | (20 | )% | (18 | )% | 129,956 | 151,007 | (14 | )% | (12 | )% | |||||||||||||||
Revenue including disc-ops | $ | 588,678 | $ | 582,317 | 1 | % | (1 | )% | $ | 2,314,291 | $ | 2,230,794 | 4 | % | 1 | % | |||||||||||
Revenue by transaction type: | |||||||||||||||||||||||||||
Subscription | $ | 448,216 | $ | 424,768 | 6 | % | 3 | % | $ | 1,768,541 | $ | 1,643,844 | 8 | % | 5 | % | |||||||||||
Non-subscription | 107,490 | 116,364 | (8 | )% | (10 | )% | 415,794 | 435,943 | (5 | )% | (9 | )% | |||||||||||||||
Revenue | 555,706 | 541,132 | 3 | % | — | % | 2,184,335 | 2,079,787 | 5 | % | 2 | % | |||||||||||||||
Revenue from disc-ops | 32,972 | 41,185 | (20 | )% | (18 | )% | 129,956 | 151,007 | (14 | )% | (12 | )% | |||||||||||||||
Revenue including disc-ops | $ | 588,678 | $ | 582,317 | 1 | % | (1 | )% | $ | 2,314,291 | $ | 2,230,794 | 4 | % | 1 | % | |||||||||||
Revenue by region: | |||||||||||||||||||||||||||
Americas | $ | 370,606 | $ | 347,204 | 7 | % | 2 | % | $ | 1,459,743 | $ | 1,353,616 | 8 | % | 3 | % | |||||||||||
EMEA | 128,748 | 137,379 | (6 | )% | (4 | )% | 508,066 | 518,820 | (2 | )% | (1 | )% | |||||||||||||||
APAC | 56,352 | 56,549 | — | % | (2 | )% | 216,526 | 207,351 | 4 | % | 1 | % | |||||||||||||||
Revenue | 555,706 | 541,132 | 3 | % | — | % | 2,184,335 | 2,079,787 | 5 | % | 2 | % | |||||||||||||||
Revenue from disc-ops | 32,972 | 41,185 | (20 | )% | (18 | )% | 129,956 | 151,007 | (14 | )% | (12 | )% | |||||||||||||||
Revenue including disc-ops | $ | 588,678 | $ | 582,317 | 1 | % | (1 | )% | $ | 2,314,291 | $ | 2,230,794 | 4 | % | 1 | % |
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IHS INC.
RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands, except for per-share amounts)
(Unaudited)
Three months ended November 30, | Year ended November 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 90,477 | $ | 60,118 | $ | 240,193 | $ | 194,549 | |||||||
Interest income | (319 | ) | (251 | ) | (933 | ) | (988 | ) | |||||||
Interest expense | 18,411 | 13,234 | 70,985 | 55,384 | |||||||||||
Provision for income taxes | 12,162 | 10,770 | 48,853 | 45,126 | |||||||||||
Depreciation | 23,074 | 18,189 | 84,958 | 64,978 | |||||||||||
Amortization related to acquired intangible assets | 32,502 | 29,289 | 130,122 | 116,265 | |||||||||||
EBITDA (1)(6) | $ | 176,307 | $ | 131,349 | $ | 574,178 | $ | 475,314 | |||||||
Stock-based compensation expense | 32,599 | 37,607 | 128,916 | 159,257 | |||||||||||
Restructuring charges | 17,327 | 2,695 | 39,359 | 8,775 | |||||||||||
Acquisition-related costs | 879 | 884 | 1,472 | 1,901 | |||||||||||
Impairment of assets | — | — | 1,243 | — | |||||||||||
Loss on sale of assets | — | — | — | 2,654 | |||||||||||
Loss on debt extinguishment | — | 1,422 | — | 1,422 | |||||||||||
Pension mark-to-market and settlement expense | 2,492 | 1,459 | 2,492 | 1,459 | |||||||||||
Income from discontinued operations, net | (43,123 | ) | (6,128 | ) | (51,255 | ) | (16,587 | ) | |||||||
Adjusted EBITDA (2)(6) | 186,481 | 169,288 | 696,405 | 634,195 | |||||||||||
Adjusted EBITDA from disc-ops* | 13,209 | 17,167 | 47,672 | 55,609 | |||||||||||
Adjusted EBITDA including disc-ops | $ | 199,690 | $ | 186,455 | $ | 744,077 | $ | 689,804 | |||||||
Three months ended November 30, | Year ended November 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income | $ | 90,477 | $ | 60,118 | $ | 240,193 | $ | 194,549 | |||||||
Stock-based compensation expense | 32,599 | 37,607 | 128,916 | 159,257 | |||||||||||
Amortization related to acquired intangible assets | 32,502 | 29,289 | 130,122 | 116,265 | |||||||||||
Restructuring charges | 17,327 | 2,695 | 39,359 | 8,775 | |||||||||||
Acquisition-related costs | 879 | 884 | 1,472 | 1,901 | |||||||||||
Impairment of assets | — | — | 1,243 | — | |||||||||||
Loss on sale of assets | — | — | — | 2,654 | |||||||||||
Loss on debt extinguishment | — | 1,422 | — | 1,422 | |||||||||||
Pension mark-to-market and settlement expense | 2,492 | 1,459 | 2,492 | 1,459 | |||||||||||
Income from discontinued operations, net | (43,123 | ) | (6,128 | ) | (51,255 | ) | (16,587 | ) | |||||||
Income tax effect on adjusting items | (25,265 | ) | (21,212 | ) | (99,450 | ) | (95,239 | ) | |||||||
Adjusted net income (3) | $ | 107,888 | $ | 106,134 | $ | 393,092 | $ | 374,456 | |||||||
Adjusted EPS (4)(6) | $ | 1.57 | $ | 1.53 | $ | 5.67 | $ | 5.42 | |||||||
Adjusted EPS from disc-ops* | 0.11 | 0.15 | 0.40 | 0.48 | |||||||||||
Adjusted EPS including disc-ops | $ | 1.68 | $ | 1.68 | $ | 6.07 | $ | 5.90 | |||||||
Weighted average shares used in computing Adjusted EPS | 68,747 | 69,281 | 69,289 | 69,120 | |||||||||||
Three months ended November 30, | Year ended November 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net cash provided by operating activities | $ | 115,978 | $ | 85,649 | $ | 612,639 | $ | 628,099 | |||||||
Capital expenditures on property and equipment | (25,233 | ) | (31,139 | ) | (122,921 | ) | (114,453 | ) | |||||||
Free cash flow (5)(6) | $ | 90,745 | $ | 54,510 | $ | 489,718 | $ | 513,646 |
* See additional details on the supplemental schedules on pages 14-17 of this earnings release.
11
IHS INC.
RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands)
(Unaudited)
Three months ended November 30, 2015 | |||||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Disc-ops | Total | ||||||||||||||||||
Operating income | $ | 56,774 | $ | 53,109 | $ | 19,739 | $ | (52,014 | ) | $ | 3,039 | $ | 80,647 | ||||||||||
Adjustments: | |||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 32,599 | 1,618 | 34,217 | |||||||||||||||||
Depreciation and amortization | 22,652 | 20,889 | 11,870 | 165 | 5,168 | 60,744 | |||||||||||||||||
Restructuring charges | 11,082 | 3,896 | 2,348 | 1 | 1 | 17,328 | |||||||||||||||||
Acquisition-related costs | — | 876 | (1 | ) | 4 | — | 879 | ||||||||||||||||
Impairment of assets | — | — | — | — | 3,383 | 3,383 | |||||||||||||||||
Pension mark-to-market expense | — | — | — | 2,492 | — | 2,492 | |||||||||||||||||
Adjusted EBITDA | $ | 90,508 | $ | 78,770 | $ | 33,956 | $ | (16,753 | ) | $ | 13,209 | $ | 199,690 | ||||||||||
Three months ended November 30, 2014 | |||||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Disc-ops | Total | ||||||||||||||||||
Operating income | $ | 75,467 | $ | 46,208 | $ | 13,884 | $ | (57,816 | ) | $ | 9,645 | $ | 87,388 | ||||||||||
Adjustments: | |||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 37,607 | 2,029 | 39,636 | |||||||||||||||||
Depreciation and amortization | 19,547 | 19,513 | 8,211 | 207 | 5,320 | 52,798 | |||||||||||||||||
Restructuring charges | 1,397 | 476 | 820 | 2 | 174 | 2,869 | |||||||||||||||||
Acquisition-related costs | 25 | 352 | 506 | 1 | — | 884 | |||||||||||||||||
Loss on debt extinguishment | — | — | — | 1,422 | — | 1,422 | |||||||||||||||||
Pension mark-to-market expense | — | — | — | 1,459 | — | 1,459 | |||||||||||||||||
Adjusted EBITDA | $ | 96,436 | $ | 66,549 | $ | 23,421 | $ | (17,118 | ) | $ | 17,168 | $ | 186,456 | ||||||||||
Year ended November 30, 2015 | |||||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Disc-ops | Total | ||||||||||||||||||
Operating income | $ | 248,280 | $ | 193,668 | $ | 49,319 | $ | (183,424 | ) | $ | 15,886 | $ | 323,729 | ||||||||||
Adjustments: | |||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 128,916 | 6,470 | 135,386 | |||||||||||||||||
Depreciation and amortization | 85,924 | 80,696 | 48,135 | 325 | 20,421 | 235,501 | |||||||||||||||||
Restructuring charges | 22,611 | 7,457 | 9,289 | 2 | 1,512 | 40,871 | |||||||||||||||||
Acquisition-related costs | — | 911 | 8 | 553 | — | 1,472 | |||||||||||||||||
Impairment of assets | — | — | — | 1,243 | 3,383 | 4,626 | |||||||||||||||||
Pension mark-to-market expense | — | — | — | 2,492 | — | 2,492 | |||||||||||||||||
Adjusted EBITDA | $ | 356,815 | $ | 282,732 | $ | 106,751 | $ | (49,893 | ) | $ | 47,672 | $ | 744,077 | ||||||||||
Year ended November 30, 2014 | |||||||||||||||||||||||
Resources | Transportation | CMS | Shared Services | Disc-ops | Total | ||||||||||||||||||
Operating income | $ | 286,393 | $ | 160,361 | $ | 52,225 | $ | (221,495 | ) | $ | 26,109 | $ | 303,593 | ||||||||||
Adjustments: | |||||||||||||||||||||||
Stock-based compensation expense | — | — | — | 159,257 | 8,102 | 167,359 | |||||||||||||||||
Depreciation and amortization | 77,576 | 70,772 | 32,554 | 341 | 20,902 | 202,145 | |||||||||||||||||
Restructuring charges | 3,460 | 2,545 | 2,770 | — | 497 | 9,272 | |||||||||||||||||
Acquisition-related costs | 836 | 589 | 476 | — | — | 1,901 | |||||||||||||||||
Loss on sale of assets | 2,654 | — | — | — | — | 2,654 | |||||||||||||||||
Loss on debt extinguishment | — | — | — | 1,422 | — | 1,422 | |||||||||||||||||
Pension mark-to-market expense | — | — | — | 1,459 | — | 1,459 | |||||||||||||||||
Adjusted EBITDA | $ | 370,919 | $ | 234,267 | $ | 88,025 | $ | (59,016 | ) | $ | 55,610 | $ | 689,805 |
12
The following supplemental schedules provide a reconciliation from income to Adjusted EBITDA and from income to Adjusted EPS for continuing operations, discontinued operations, and a total view including discontinued operations.
13
IHS INC.
RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands, except for per-share amounts)
(Unaudited)
Three months ended November 30, 2015 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 47,354 | $ | 43,123 | $ | 90,477 | |||||
Interest income | (319 | ) | — | (319 | ) | ||||||
Interest expense | 18,411 | — | 18,411 | ||||||||
Provision for income taxes | 12,162 | (40,084 | ) | (27,922 | ) | ||||||
Depreciation | 23,074 | 1,255 | 24,329 | ||||||||
Amortization related to acquired intangible assets | 32,502 | 3,913 | 36,415 | ||||||||
EBITDA (1)(6) | $ | 133,184 | $ | 8,207 | $ | 141,391 | |||||
Stock-based compensation expense | 32,599 | 1,618 | 34,217 | ||||||||
Restructuring charges | 17,327 | 1 | 17,328 | ||||||||
Acquisition-related costs | 879 | — | 879 | ||||||||
Impairment of assets | — | 3,383 | 3,383 | ||||||||
Pension mark-to-market and settlement expense | 2,492 | — | 2,492 | ||||||||
Adjusted EBITDA (2)(6) | $ | 186,481 | $ | 13,209 | $ | 199,690 | |||||
Three months ended November 30, 2015 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 47,354 | $ | 43,123 | $ | 90,477 | |||||
Stock-based compensation expense | 32,599 | 1,618 | 34,217 | ||||||||
Amortization related to acquired intangible assets | 32,502 | 3,913 | 36,415 | ||||||||
Restructuring charges | 17,327 | 1 | 17,328 | ||||||||
Acquisition-related costs | 879 | — | 879 | ||||||||
Impairment of assets | — | 3,383 | 3,383 | ||||||||
Pension mark-to-market and settlement expense | 2,492 | — | 2,492 | ||||||||
Income tax effect on adjusting items | (25,265 | ) | (44,426 | ) | (69,691 | ) | |||||
Adjusted net income (3) | $ | 107,888 | $ | 7,612 | $ | 115,500 | |||||
Adjusted EPS (4)(6) | $ | 1.57 | $ | 0.11 | $ | 1.68 | |||||
Weighted average shares used in computing Adjusted EPS | 68,747 | 68,747 | 68,747 | ||||||||
14
IHS INC.
RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands, except for per-share amounts)
(Unaudited)
Three months ended November 30, 2014 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 53,990 | $ | 6,128 | $ | 60,118 | |||||
Interest income | (251 | ) | — | (251 | ) | ||||||
Interest expense | 13,234 | — | 13,234 | ||||||||
Provision for income taxes | 10,770 | 3,517 | 14,287 | ||||||||
Depreciation | 18,189 | 917 | 19,106 | ||||||||
Amortization related to acquired intangible assets | 29,289 | 4,403 | 33,692 | ||||||||
EBITDA (1)(6) | $ | 125,221 | $ | 14,965 | $ | 140,186 | |||||
Stock-based compensation expense | 37,607 | 2,029 | 39,636 | ||||||||
Restructuring charges | 2,695 | 174 | 2,869 | ||||||||
Acquisition-related costs | 884 | — | 884 | ||||||||
Loss on debt extinguishment | 1,422 | — | 1,422 | ||||||||
Pension mark-to-market and settlement expense | 1,459 | — | 1,459 | ||||||||
Adjusted EBITDA (2)(6) | $ | 169,288 | $ | 17,168 | $ | 186,456 | |||||
Three months ended November 30, 2014 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 53,990 | $ | 6,128 | $ | 60,118 | |||||
Stock-based compensation expense | 37,607 | 2,029 | 39,636 | ||||||||
Amortization related to acquired intangible assets | 29,289 | 4,403 | 33,692 | ||||||||
Restructuring charges | 2,695 | 174 | 2,869 | ||||||||
Acquisition-related costs | 884 | — | 884 | ||||||||
Loss on debt extinguishment | 1,422 | — | 1,422 | ||||||||
Pension mark-to-market and settlement expense | 1,459 | — | 1,459 | ||||||||
Income tax effect on adjusting items | (21,212 | ) | (2,346 | ) | (23,558 | ) | |||||
Adjusted net income (3) | $ | 106,134 | $ | 10,388 | $ | 116,522 | |||||
Adjusted EPS (4)(6) | $ | 1.53 | $ | 0.15 | $ | 1.68 | |||||
Weighted average shares used in computing Adjusted EPS | 69,281 | 69,281 | 69,281 | ||||||||
15
IHS INC.
RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands, except for per-share amounts)
(Unaudited)
Year ended November 30, 2015 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 188,938 | $ | 51,255 | $ | 240,193 | |||||
Interest income | (933 | ) | — | (933 | ) | ||||||
Interest expense | 70,985 | (1 | ) | 70,984 | |||||||
Provision for income taxes | 48,853 | (35,368 | ) | 13,485 | |||||||
Depreciation | 84,958 | 4,729 | 89,687 | ||||||||
Amortization related to acquired intangible assets | 130,122 | 15,692 | 145,814 | ||||||||
EBITDA (1)(6) | $ | 522,923 | $ | 36,307 | $ | 559,230 | |||||
Stock-based compensation expense | 128,916 | 6,470 | 135,386 | ||||||||
Restructuring charges | 39,359 | 1,512 | 40,871 | ||||||||
Acquisition-related costs | 1,472 | — | 1,472 | ||||||||
Impairment of assets | 1,243 | 3,383 | 4,626 | ||||||||
Pension mark-to-market and settlement expense | 2,492 | — | 2,492 | ||||||||
Adjusted EBITDA (2)(6) | $ | 696,405 | $ | 47,672 | $ | 744,077 | |||||
Year ended November 30, 2015 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 188,938 | $ | 51,255 | $ | 240,193 | |||||
Stock-based compensation expense | 128,916 | 6,470 | 135,386 | ||||||||
Amortization related to acquired intangible assets | 130,122 | 15,692 | 145,814 | ||||||||
Restructuring charges | 39,359 | 1,512 | 40,871 | ||||||||
Acquisition-related costs | 1,472 | — | 1,472 | ||||||||
Impairment of assets | 1,243 | 3,383 | 4,626 | ||||||||
Pension mark-to-market and settlement expense | 2,492 | — | 2,492 | ||||||||
Income tax effect on adjusting items | (99,450 | ) | (50,867 | ) | (150,317 | ) | |||||
Adjusted net income (3) | $ | 393,092 | $ | 27,445 | $ | 420,537 | |||||
Adjusted EPS (4)(6) | $ | 5.67 | $ | 0.40 | $ | 6.07 | |||||
Weighted average shares used in computing Adjusted EPS | 69,289 | 69,289 | 69,289 | ||||||||
16
IHS INC.
RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands, except for per-share amounts)
(Unaudited)
Year ended November 30, 2014 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 177,962 | $ | 16,587 | $ | 194,549 | |||||
Interest income | (988 | ) | — | (988 | ) | ||||||
Interest expense | 55,384 | — | 55,384 | ||||||||
Provision for income taxes | 45,126 | 9,522 | 54,648 | ||||||||
Depreciation | 64,978 | 3,369 | 68,347 | ||||||||
Amortization related to acquired intangible assets | 116,265 | 17,533 | 133,798 | ||||||||
EBITDA (1)(6) | $ | 458,727 | $ | 47,011 | $ | 505,738 | |||||
Stock-based compensation expense | 159,257 | 8,102 | 167,359 | ||||||||
Restructuring charges | 8,775 | 497 | 9,272 | ||||||||
Acquisition-related costs | 1,901 | — | 1,901 | ||||||||
Loss on sale of assets | 2,654 | — | 2,654 | ||||||||
Loss on debt extinguishment | 1,422 | — | 1,422 | ||||||||
Pension mark-to-market and settlement expense | 1,459 | — | 1,459 | ||||||||
Adjusted EBITDA (2)(6) | $ | 634,195 | $ | 55,610 | $ | 689,805 | |||||
Year ended November 30, 2014 | |||||||||||
Continuing operations | Disc-ops | Including disc-ops | |||||||||
Income | $ | 177,962 | $ | 16,587 | $ | 194,549 | |||||
Stock-based compensation expense | 159,257 | 8,102 | 167,359 | ||||||||
Amortization related to acquired intangible assets | 116,265 | 17,533 | 133,798 | ||||||||
Restructuring charges | 8,775 | 497 | 9,272 | ||||||||
Acquisition-related costs | 1,901 | — | 1,901 | ||||||||
Loss on sale of assets | 2,654 | — | 2,654 | ||||||||
Loss on debt extinguishment | 1,422 | — | 1,422 | ||||||||
Pension mark-to-market and settlement expense | 1,459 | — | 1,459 | ||||||||
Income tax effect on adjusting items | (95,239 | ) | (9,264 | ) | (104,503 | ) | |||||
Adjusted net income (3) | $ | 374,456 | $ | 33,455 | $ | 407,911 | |||||
Adjusted EPS (4)(6) | $ | 5.42 | $ | 0.48 | $ | 5.90 | |||||
Weighted average shares used in computing Adjusted EPS | 69,120 | 69,120 | 69,120 | ||||||||
17
(1) | EBITDA is defined as net income plus or minus net interest, plus provision for income taxes, depreciation, and amortization. |
(2) | Adjusted EBITDA further excludes primarily non-cash items and other items that we do not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, restructuring charges, acquisition-related costs, asset impairment charges, gain or loss on sale of assets, gain or loss on debt extinguishment, pension mark-to-market and settlement expense, and income or loss from discontinued operations). All of the items included in the reconciliation from net income to Adjusted EBITDA are either non-cash items or items that we do not consider to be useful in assessing our operating performance. In the case of the non-cash items, we believe that investors can better assess our operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect our ability to generate free cash flow or invest in our business. For example, by excluding depreciation and amortization from EBITDA, users can compare operating performance without regard to different accounting determinations such as useful life. In the case of the other items, we believe that investors can better assess operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance. |
(3) | Adjusted net income is defined as net income plus primarily non-cash items and other items that management does not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, amortization related to acquired intangible assets, restructuring charges, acquisition-related costs, asset impairment charges, gain or loss on sale of assets, gain or loss on debt extinguishment, pension mark-to-market and settlement expense, and income or loss from discontinued operations, all net of the related tax effects). |
(4) | Adjusted EPS is defined as Adjusted net income (as defined above) divided by diluted weighted average shares. |
(5) | Free cash flow is defined as net cash provided by operating activities less capital expenditures. |
(6) | EBITDA, Adjusted EBITDA, Adjusted EPS, and free cash flow are used by many of our investors, research analysts, investment bankers, and lenders to assess our operating performance. For example, a measure similar to Adjusted EBITDA is required by the lenders under our term loan and revolving credit agreements. |
18