IHS Markit (INFO) 8-K IHS Markit Reports Fourth Quarter 2018 Results

Exhibit 99.1

News Release

For immediate release

Investor Relations Contact:

Eric Boyer

+1 303 397 2969

eric.boyer@ihsmarkit.com

IHS Markit Reports Fourth Quarter 2018 Results

LONDON (January 15, 2019) - IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, today reported results for the fourth quarter ended November 30, 2018.

• Revenue of $1.068 billion, including total organic revenue growth of 5 percent

• Net income of $81 million and diluted earnings per share (EPS) of $0.20

• Adjusted EBITDA of $417 million and Adjusted earnings per diluted share (Adjusted EPS) of $0.57

• Cash flow from operations of $358 million and free cash flow of $303 million

Adjusted EBITDA, Adjusted EPS, and free cash flow are non-GAAP financial measures used by management to measure operating performance. These terms are defined elsewhere in this release. Please see schedules appearing later in this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.

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Fourth Quarter and Year-to-Date 2018 Financial Performance

	Three months ended November 30,				Change					Year ended November 30,				Change
(in millions, except percentages and per share data)	2018		2017		$			%		2018		2017		$		%
Revenue	$	1,067.8	$	944.7	$	123.1		13	%	$	4,009.2	$	3,599.7	$	409.5	11	%
Net income attributable to IHS Markit*	$	81.8	$	105.7	$	(23.9	)	(23	)%	$	542.3	$	416.9	$	125.4	30	%
Adjusted EBITDA	$	417.0	$	366.0	$	51.0		14	%	$	1,564.9	$	1,389.9	$	175.0	13	%
GAAP EPS	$	0.20	$	0.26	$	(0.06	)	(23	)%	$	1.33	$	1.00	$	0.33	33	%
Adjusted EPS	$	0.57	$	0.52	$	0.05		10	%	$	2.29	$	2.07	$	0.22	11	%
Cash flow from operations	$	357.5	$	242.9	$	114.6		47	%	$	1,289.5	$	961.5	$	328.0	34	%
Free cash flow	$	303.3	$	174.5	$	128.8		74	%	$	1,066.8	$	701.3	$	365.5	52	%
* Net income attributable to IHS Markit for the year ended November 30, 2018 includes a one-time tax benefit associated with U.S. tax reform estimated at approximately $141 million.

“We had a very successful 2018 and delivered strong diversified financial results that were in line with our expectations. Operationally, our teams are performing at a high level, and we are well positioned within each of our end markets, which gives us confidence to achieve our 2019 guidance,” said Lance Uggla, chairman and chief executive officer at IHS Markit.

“We had a solid Q4 to finish a strong year in which we delivered 6 percent organic revenue growth, Adjusted EBITDA margin expansion, double-digit Adjusted EPS growth, and produced $1.067 billion of free cash flow,” said Todd Hyatt, chief financial officer at IHS Markit.

Fourth Quarter 2018 Revenue Performance

Fourth quarter2018 revenue increased 13 percent compared to the fourth quarter of 2017. The following table provides additional revenue information by transaction type.

	Three months ended November 30,				Percent change
(in millions, except percentages)	2018		2017		Total		Organic
Recurring fixed	$	762.4	$	664.4	15	%	6	%
Recurring variable	138.5		117.0		18	%	3	%
Non-recurring	166.9		163.3		2	%	1	%
Total revenue	$	1,067.8	$	944.7	13	%	5	%

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

	Change in revenue
	Fourth quarter 2018 vs. fourth quarter 2017
(All amounts represent percentage points)	Organic		Acquisitive		Foreign Currency		Total
Resources	4	%	—	%	(1	)%	3	%
Transportation	10	%	2	%	(1	)%	11	%
Consolidated Markets & Solutions	—	%	—	%	(1	)%	(1	)%
Financial Services	4	%	24	%	(1	)%	27	%
Total	5	%	9	%	(1	)%	13	%

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Fourth Quarter2018 Operating Performance

Segment results were as follows (additional segment information is included later in this release):

• Resources. Fourth quarter revenue for Resources increased $6 million, or 3 percent, to $223 million, with recurring revenue increasing 4 percent organically. Fourth quarter Adjusted EBITDA for Resources increased $7 million, or 7 percent, to $99 million.

• Transportation. Fourth quarter revenue for Transportation increased $30 million, or 11 percent, to $297 million, and included 10 percent organic growth for the recurring-based business. Fourth quarter Adjusted EBITDA for Transportation increased $6 million, or 6 percent, to $117 million.

• Consolidated Markets & Solutions (CMS). Fourth quarter revenue for CMS decreased $1 million, or 1 percent, to $139 million, and had 2 percent organic growth for the recurring-based business. Fourth quarter Adjusted EBITDA for CMS increased $3 million, or 8 percent, to $35 million.

• Financial Services. Fourth quarter revenue for Financial Services increased $88 million, or 27 percent, to $409 million, and included 4 percent total organic growth. Fourth quarter Adjusted EBITDA for Financial Services increased $32 million, or 21 percent, to $179 million.

Outlook (forward-looking statement)

For the year ending November 30, 2019, IHS Markit expects:

• Revenue in a range of $4.425 billion to $4.500 billion, including total organic growth of 5 percent to 6 percent including Ipreo for the 4 month stub period, and total organic growth of 6 percent to 7 percent including Ipreo for the full 12 months;

• Adjusted EBITDA in a range of $1.75 billion to $1.78 billion; and

• Adjusted EPS in a range of $2.52 to $2.57 per diluted share.

Additionally, for the year ending November 30, 2019, IHS Markit expects:

• Depreciation expense to be approximately $220 million to $225 million;

• Amortization expense related to acquired intangible assets to be approximately $370 million to $380 million;

• Net interest expense to be approximately $245 million to $250 million;

• Stock-based compensation expense to be approximately $215 million to $225 million;

• A GAAP effective tax rate of approximately 14 percent to 16 percent;

• An adjusted effective tax rate of approximately 18 percent to 20 percent;

• Weighted average diluted shares of approximately 410 million to 415 million;

• Capital expenditures to be approximately 6.0 percent to 6.5 percent of revenue; and

• Free cash flow conversion as a percentage of Adjusted EBITDA in the mid-60’s.

The above outlook assumes no further currency movements, acquisitions, divestitures, pension mark-to-market adjustments or unanticipated events. See discussion of non-GAAP financial measures at the end of this release.

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As previously announced, IHS Markit will hold a conference call to discuss fourth quarter2018 results on January 15, 2019, at 8:00 a.m. ET. The conference call will be simultaneously webcast on the Investor Relations section of the company’s website: investor.ihsmarkit.com. A replay of the earnings webcast will be available approximately two hours after the conclusion of the live event. The webcast recording will be available for one year on the Investor Relations section of the company’s website.

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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 management reports used during monthly operating reviews feature the Adjusted EBITDA, Adjusted net income, Adjusted EPS, and free cash flow metrics. We also believe that investors may find non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures. This communication also includes certain forward-looking non-GAAP financial measures. IHS Markit is unable to present a reconciliation of this forward-looking non-GAAP financial information because management cannot reliably predict all of the necessary components of such measures. Accordingly, investors are cautioned not to place undue reliance on this information.

Non-GAAP measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to IHS Markit, many of which present non-GAAP measures when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of GAAP financial disclosures. However, non-GAAP measures have limitations as an analytical tool. Non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies. They are not presentations made in accordance with GAAP, are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. As a result, you should not consider such performance measures in isolation from, or as a substitute analysis for, results of operations as determined in accordance with GAAP.

Forward-Looking Statements

This communication contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements, which express management’s current views concerning future business, events, trends, contingencies, financial performance, or financial condition, appear at various places in this report and use words like “aim,” “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “see,” “seek,” “should,” “strategy,” “strive,” “target,” “will,” and “would” and similar expressions, and variations or negatives of these words. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and

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changes in circumstances that are difficult to predict and many of which are outside of our control. A detailed discussion of some of the risks and uncertainties that could cause our actual results and financial condition to differ materially from the forward-looking statements is described under the caption “Risk Factors” in our most recent annual report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this communication. Any forward-looking statement made by us in this communication is based only on information currently available to our management and speaks only as of the date of this communication. We do not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Please consult our public filings at www.sec.gov or www.ihsmarkit.com.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2019 IHS Markit Ltd. All rights reserved.

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IHS MARKIT LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

	As of November 30, 2018		As of November 30, 2017
	(Unaudited)		(Audited)
Assets
Current assets:
Cash and cash equivalents	$	120.0	$	133.8
Accounts receivable, net	792.9		693.5
Income tax receivable	20.8		31.9
Deferred subscription costs	77.3		62.8
Other current assets	88.4		93.0
Total current assets	1,099.4		1,015.0
Non-current assets:
Property and equipment, net	579.6		531.3
Intangible assets, net	4,484.8		4,188.3
Goodwill	9,836.0		8,778.5
Deferred income taxes	14.6		7.1
Other	47.9		34.2
Total non-current assets	14,962.9		13,539.4
Total assets	$	16,062.3	$	14,554.4
Liabilities and equity
Current liabilities:
Short-term debt	$	789.9	$	576.0
Accounts payable	63.8		53.4
Accrued compensation	214.1		157.4
Other accrued expenses	357.7		323.0
Income tax payable	8.0		5.5
Deferred revenue	886.8		790.8
Total current liabilities	2,320.3		1,906.1
Long-term debt, net	4,889.2		3,617.3
Accrued pension and postretirement liability	17.4		31.8
Deferred income taxes	699.9		869.8
Other liabilities	109.1		105.9
Commitments and contingencies
Redeemable noncontrolling interests	5.9		19.1
Shareholders' equity	8,020.5		8,004.4
Total liabilities and equity	$	16,062.3	$	14,554.4

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IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except for per-share amounts)

(Unaudited, except for year ended November 30, 2017)

	Three months ended November 30,						Year ended November 30,
	2018			2017			2018			2017
Revenue	$	1,067.8		$	944.7		$	4,009.2		$	3,599.7
Operating expenses:
Cost of revenue	409.1			342.1			1,495.7			1,348.4
Selling, general and administrative	315.6			285.0			1,192.8			1,096.0
Depreciation and amortization	145.5			128.1			541.2			492.5
Restructuring charges	1.3			0.8			1.7			—
Acquisition-related costs	40.3			36.1			134.8			113.0
Net periodic pension and postretirement expense (income)	1.0			3.0			(5.6		)	6.9
Other expense (income), net	(4.2		)	10.4			1.7			18.7
Total operating expenses	908.6			805.5			3,362.3			3,075.5
Operating income	159.2			139.2			646.9			524.2
Interest income	0.6			0.6			3.1			2.2
Interest expense	(67.4		)	(43.3		)	(225.7		)	(154.3		)
Non-operating expense, net	(66.8		)	(42.7		)	(222.6		)	(152.1		)
Income from continuing operations before income taxes and equity in loss of equity method investee	92.4			96.5			424.3			372.1
Benefit (provision) for income taxes	(11.3		)	8.6			115.4			49.9
Equity in loss of equity method investee	(0.3		)	—			(0.5		)	(5.0		)
Net income	80.8			105.1			539.2			417.0
Net loss (income) attributable to noncontrolling interest	1.0			0.6			3.1			(0.1		)
Net income attributable to IHS Markit Ltd.	$	81.8		$	105.7		$	542.3		$	416.9
Basic earnings per share attributable to IHS Markit Ltd.	$	0.21		$	0.27		$	1.38		$	1.04
Weighted average shares used in computing basic earnings per share	394.5			397.6			394.4			400.3
Diluted earnings per share attributable to IHS Markit Ltd.	$	0.20		$	0.26		$	1.33		$	1.00
Weighted average shares used in computing diluted earnings per share	406.7			412.9			406.9			416.2

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IHS MARKIT LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

	Year ended November 30,
	2018			2017
	(Unaudited)			(Audited)
Operating activities:
Net income	$	539.2		$	417.0
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	541.2			492.5
Stock-based compensation expense	241.7			261.9
Net periodic pension and postretirement expense (income)	(5.6		)	6.9
Undistributed earnings of affiliates, net	(0.8		)	5.2
Pension and postretirement contributions	(2.6		)	(5.7		)
Deferred income taxes	(211.7		)	(100.1		)
Change in assets and liabilities:
Accounts receivable, net	(11.8		)	(27.5		)
Other current assets	(2.2		)	(34.6		)
Accounts payable	10.9			(20.0		)
Accrued expenses	104.1			(42.8		)
Income tax	23.5			(14.7		)
Deferred revenue	26.6			4.7
Other liabilities	37.0			18.7
Net cash provided by operating activities	1,289.5			961.5
Investing activities:
Capital expenditures on property and equipment	(222.7		)	(260.2		)
Acquisitions of businesses, net of cash acquired	(1,876.2		)	(401.1		)
Change in other assets	(6.2		)	0.5
Settlements of forward contracts	(7.0		)	14.5
Net cash used in investing activities	(2,112.1		)	(646.3		)
Financing activities:
Proceeds from borrowings	4,617.0			3,194.5
Repayment of borrowings	(3,122.6		)	(2,381.2		)
Payment of debt issuance costs	(30.8		)	(14.4		)
Payments for purchase of noncontrolling interests	(10.1		)	(57.0		)
Proceeds from noncontrolling interests	—			7.5
Contingent consideration payments	(43.0		)	(2.6		)
Repurchases of common shares	(672.5		)	(1,317.8		)
Proceeds from the exercise of employee stock options	230.0			331.6
Payments related to tax withholding for stock-based compensation	(95.0		)	(89.9		)
Net cash provided by (used in) financing activities	873.0			(329.3		)
Foreign exchange impact on cash balance	(64.2		)	9.0
Net decrease in cash and cash equivalents	(13.8		)	(5.1		)
Cash and cash equivalents at the beginning of the period	133.8			138.9
Cash and cash equivalents at the end of the period	$	120.0		$	133.8

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IHS MARKIT LTD.

SUPPLEMENTAL REVENUE DISCLOSURE

(In millions)

(Unaudited)

	Three months ended November 30,				Percent change				Year ended November 30,				Percent change
	2018		2017		Total		Organic		2018		2017		Total		Organic
Recurring revenue:
Resources	$	187.2	$	180.7	4	%	4	%	$	738.2	$	711.2	4	%	4	%
Transportation	213.5		188.1		14	%	10	%	829.4		689.7		20	%	11	%
CMS	119.1		117.5		1	%	2	%	476.6		457.5		4	%	3	%
Financial Services - fixed	242.6		178.1		36	%	7	%	817.3		691.6		18	%	7	%
Total recurring fixed revenue	$	762.4	$	664.4	15	%	6	%	$	2,861.5	$	2,550.0	12	%	6	%
Financial Services - variable	138.5		117.0		18	%	3	%	506.3		449.0		13	%	6	%
Total recurring revenue	$	900.9	$	781.4	15	%	6	%	$	3,367.8	$	2,999.0	12	%	6	%
Non-recurring revenue:
Resources	$	35.5	$	35.7	(1	)%	1	%	$	138.3	$	128.1	8	%	8	%
Transportation	83.8		79.2		6	%	9	%	330.8		301.9		10	%	11	%
CMS	19.9		22.5		(12	)%	(11	)%	76.2		78.4		(3	)%	(5	)%
Financial Services	27.7		25.9		7	%	(12	)%	96.1		92.3		4	%	(4	)%
Total non-recurring revenue	$	166.9	$	163.3	2	%	1	%	$	641.4	$	600.7	7	%	6	%
Total revenue (segment):
Resources	$	222.7	$	216.4	3	%	4	%	$	876.5	$	839.3	4	%	4	%
Transportation	297.3		267.3		11	%	10	%	1,160.2		991.6		17	%	11	%
CMS	139.0		140.0		(1	)%	—	%	552.8		535.9		3	%	2	%
Financial Services	408.8		321.0		27	%	4	%	1,419.7		1,232.9		15	%	6	%
Total revenue	$	1,067.8	$	944.7	13	%	5	%	$	4,009.2	$	3,599.7	11	%	6	%

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IHS MARKIT LTD.

RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASURES TO

MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES

(In millions, except for per-share amounts)

(Unaudited)

	Three months ended November 30,						Year ended November 30,
	2018			2017			2018			2017
Net income attributable to IHS Markit Ltd.	$	81.8		$	105.7		$	542.3		$	416.9
Interest income	(0.6		)	(0.6		)	(3.1		)	(2.2		)
Interest expense	67.4			43.3			225.7			154.3
Provision (benefit) for income taxes*	11.3			(8.6		)	(115.4		)	(49.9		)
Depreciation	46.1			43.6			175.1			157.0
Amortization related to acquired intangible assets	99.4			84.5			366.1			335.5
EBITDA (1)(6)	$	305.4		$	267.9		$	1,190.7		$	1,011.6
Stock-based compensation expense	69.6			58.7			241.7			261.9
Restructuring charges	1.3			0.8			1.7			—
Acquisition-related costs	23.3			26.2			80.7			103.1
Acquisition-related performance compensation	17.0			9.9			54.1			9.9
Loss on debt extinguishment	—			—			4.7			—
Pension mark-to-market and settlement (gain) expense	0.8			2.7			(6.5		)	5.4
Share of joint venture results not attributable to Adjusted EBITDA	0.3			—			0.5			(1.2		)
Adjusted EBITDA attributable to noncontrolling interest	(0.7		)	(0.2		)	(2.7		)	(0.8		)
Adjusted EBITDA (2)(6)	$	417.0		$	366.0		$	1,564.9		$	1,389.9
	Three months ended November 30,						Year ended November 30,
	2018			2017			2018			2017
Net income attributable to IHS Markit Ltd.	$	81.8		$	105.7		$	542.3		$	416.9
Stock-based compensation expense	69.6			58.7			241.7			261.9
Amortization related to acquired intangible assets	99.4			84.5			366.1			335.5
Restructuring charges	1.3			0.8			1.7			—
Acquisition-related costs	23.3			26.2			80.7			103.1
Acquisition-related performance compensation	17.0			9.9			54.1			9.9
Acquisition financing fees	—			—			4.9			—
Loss on debt extinguishment	—			—			4.7			—
Pension mark-to-market and settlement (gain) expense	0.8			2.7			(6.5		)	5.4
Income tax effect of above adjustments*	(59.6		)	(72.2		)	(355.2		)	(271.3		)
Adjusted earnings attributable to noncontrolling interest	(0.2		)	(0.1		)	(1.4		)	(1.4		)
Adjusted net income (3)	$	233.4		$	216.2		$	933.1		$	860.0
Adjusted EPS (4)(6)	$	0.57		$	0.52		$	2.29		$	2.07
Weighted average shares used in computing Adjusted EPS	406.7			412.9			406.9			416.2
* Income tax effect for the year ended November 30, 2018 includes a one-time tax benefit associated with U.S. tax reform estimated at approximately $141 million.
	Three months ended November 30,						Year ended November 30,
	2018			2017			2018			2017
Net cash provided by operating activities	$	357.5		$	242.9		$	1,289.5		$	961.5
Capital expenditures on property and equipment	(54.2		)	(68.4		)	(222.7		)	(260.2		)
Free cash flow (5)(6)	$	303.3		$	174.5		$	1,066.8		$	701.3

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IHS MARKIT LTD.

SUPPLEMENTAL SEGMENT OPERATING PROFIT MEASURE DISCLOSURE

(In millions)

(Unaudited)

	Three months ended November 30,						Year ended November 30,
	2018			2017			2018			2017
Adjusted EBITDA by segment:
Resources	$	98.9		$	92.1		$	369.4		$	360.2
Transportation	116.8			110.6			479.3			408.6
CMS	35.4			32.8			127.4			125.2
Financial Services	179.4			147.7			636.9			553.7
Shared services	(13.5		)	(17.2		)	(48.1		)	(57.8		)
Total Adjusted EBITDA	$	417.0		$	366.0		$	1,564.9		$	1,389.9
Adjusted EBITDA margin by segment:
Resources	44.4		%	42.6		%	42.1		%	42.9		%
Transportation	39.3		%	41.4		%	41.3		%	41.2		%
CMS	25.5		%	23.4		%	23.0		%	23.4		%
Financial Services	43.9		%	46.0		%	44.9		%	44.9		%
Total Adjusted EBITDA margin	39.1		%	38.7		%	39.0		%	38.6		%

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(1) EBITDA is defined as net income plus or minus net interest, plus provision for income taxes, depreciation, and amortization.

(2) Adjusted EBITDA further excludes primarily non-cash items and other items that we do not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, restructuring charges, acquisition-related costs and performance compensation, exceptional litigation, net other gains and losses, pension mark-to-market and other adjustments, the impact of joint ventures and noncontrolling interests, and discontinued operations). All of the items included in the reconciliation from net income to Adjusted EBITDA are either non-cash items or items that we do not consider to be useful in assessing our operating performance. In the case of the non-cash items, we believe that investors can better assess our operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect our ability to generate free cash flow or invest in our business. For example, by excluding depreciation and amortization from EBITDA, users can compare operating performance without regard to different accounting determinations such as useful life. In the case of the other items, we believe that investors can better assess operating performance if the measures are presented without these items because their financial impact does not reflect ongoing operating performance.

(3) Adjusted net income is defined as net income plus primarily non-cash items and other items that management does not consider to be useful in assessing our operating performance (e.g., stock-based compensation expense, amortization related to acquired intangible assets, restructuring charges, acquisition-related costs and performance compensation, acquisition financing fees, net other gains and losses, pension mark-to-market expense and other adjustments, and the impact of noncontrolling interests, all net of the related tax effects).

(4) Adjusted EPS is defined as Adjusted net income (as defined above) divided by diluted weighted average shares.

(5) Free cash flow is defined as net cash provided by operating activities less capital expenditures.

(6) EBITDA, Adjusted EBITDA, Adjusted EPS, and free cash flow are used by many of our investors, research analysts, investment bankers, and lenders to assess our operating performance. For example, a measure similar to Adjusted EBITDA is required by the lenders under our term loan and revolving credit agreements.

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