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Form 8-K IHS Inc. For: Jan 13

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January 13, 2015 6:03 AM EST




UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________

FORM 8-K
________________________


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January�13, 2015

Commission file number 001-32511
______________________

IHS�INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
�
133769440
(I.R.S. Employer
Identification Number)

15 Inverness Way East
Englewood, CO 80112
(Address of principal executive offices)
(303) 7900600
(Registrant's telephone number, including area code)

Former name or former address, if changed since last report: Not Applicable
______________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o�Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o�Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o�Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o�Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR�240.13e-4(c))


ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
�
On January�13, 2015, IHS Inc., a Delaware corporation ("IHS" or "we" or "us" or "our"), issued a media release announcing earnings for the fourth quarter and fiscal year ended November�30, 2014. The media release has been furnished with this Form 8-K as an exhibit and posted on our website (www.ihs.com). In addition, the media release has been distributed through a newswire release.

This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.





ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

99.1 Earnings release dated January�13, 2015.


SIGNATURES

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.

�
IHS INC.
�
�
�
Date: January 13, 2015
By:
/s/ Todd S. Hyatt
�
�
Todd S. Hyatt
�
�
Executive Vice President and Chief Financial Officer







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
�
�
�

IHS Inc. Reports Fourth Quarter and Fiscal Year 2014 Results

ENGLEWOOD, Colo. (January�13, 2015) - 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, 2014.

For the fourth quarter ended November�30, 2014, IHS reported:

"
Revenue of $582 million, up 4 percent from the prior-year period

"
Total organic revenue growth of 4 percent, anchored by 6 percent subscription organic revenue growth

"
Adjusted EBITDA of $186 million, up 10 percent from the prior-year period, resulting in a margin expansion of 170 basis points

"
Adjusted earnings per diluted share (Adjusted EPS) of $1.68, up 15 percent from the prior-year period

"
Full-year free cash flow conversion of 74 percent

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.

1

Fourth Quarter and Fiscal Year 2014 Financial Performance

�
Three months ended November 30,
�
Change
�
Year ended November 30,
�
Change
(in thousands, except percentages and per share data)
2014
�
2013
�
$
�
%
�
2014
�
2013
�
$
�
%
Revenue
$
582,317

�
$
559,675

�
$
22,642

�
4
�%
�
$
2,230,794

�
$
1,840,631

�
$
390,163

�
21
%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Net income
$
60,118

�
$
40,810

�
$
19,308

�
47
�%
�
$
194,549

�
$
131,733

�
$
62,816

�
48
%
Adjusted EBITDA
$
186,455

�
$
169,565

�
$
16,890

�
10
�%
�
$
689,804

�
$
561,768

�
$
128,036

�
23
%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
GAAP EPS
$
0.87

�
$
0.60

�
$
0.27

�
45
�%
�
$
2.81

�
$
1.95

�
$
0.86

�
44
%
Adjusted EPS
$
1.68

�
$
1.46

�
$
0.22

�
15
�%
�
$
5.90

�
$
5.06

�
$
0.84

�
17
%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Cash flow from operations
$
85,649

�
$
151,786

�
$
(66,137
)
�
(44
)%
�
$
628,099

�
$
496,155

�
$
131,944

�
27
%
Free cash flow
$
54,510

�
$
126,463

�
$
(71,953
)
�
(57
)%
�
$
513,646

�
$
405,421

�
$
108,225

�
27
%

We were pleased to see organic growth that developed as we expected and outlined on last quarters call, said Scott Key, IHS president and chief executive officer.� Our growth in the period was broad-based, reflecting our strategy of being the global multi-industry business information services leader.

Solid second-half margin expansion and full year cash flow demonstrates the fundamental operating leverage in our business model, said Todd Hyatt, IHS chief financial officer. These attributes continue to provide us with significant operational flexibility.

Fourth Quarter and Fiscal Year 2014 Revenue Performance

Fourth quarter 2014 revenue increased 4 percent compared to the fourth quarter of 2013, and fiscal year 2014 revenue increased 21 percent compared to 2013. The components of revenue growth are described below by segment and in total.
�
Increase in revenue
�
Fourth quarter 2014 vs. fourth quarter 2013
�
2014 vs. 2013
(All amounts represent percentage points)
Organic
�
Acquisitive
�
Foreign
Currency
�
Organic
�
Acquisitive
�
Foreign
Currency
Americas
4
%
�

%
�
(1
)%
�
4
%
�
23
%
�
(1
)%
EMEA
4
%
�
2
%
�

�%
�
6
%
�
5
%
�
2
�%
APAC
8
%
�
3
%
�
(1
)%
�
4
%
�
5
%
�
(1
)%
Total
4
%
�
1
%
�
(1
)%
�
4
%
�
17
%
�

�%

Excluding the effect of the BPVC engineering standard release in the third quarter of 2013, full-year 2014 total organic revenue growth was 5 percent.


2

The subscription-based business grew 6 percent organically in the fourth quarter and fiscal year 2014 compared to the same periods of 2013, as described in the following table.
�
Three months ended November 30,
�
Percent change
�
Year ended November 30,
�
Percent change
(in thousands, except percentages)
2014
�
2013
�
Total
�
Organic
�
2014
�
2013
�
Total
�
Organic
Subscription revenue
$
443,769

�
$
418,309

�
6
�%
�
6
�%
�
$
1,719,617

�
$
1,404,984

�
22
%
�
6
�%
Non-subscription revenue
138,548

�
141,366

�
(2
)%
�
(2
)%
�
511,177

�
435,647

�
17
%
�
(1
)%
Total revenue
$
582,317

�
$
559,675

�
4
�%
�
4
�%
�
$
2,230,794

�
$
1,840,631

�
21
%
�
4
�%

Excluding the effect of the BPVC engineering standard release in the third quarter of 2013, full-year 2014 non-subscription organic revenue growth was 1 percent and total organic revenue growth was 5 percent.

Fourth Quarter and Fiscal Year 2014 Segment Performance

On a consolidated basis, IHS continued to deliver solid organic revenue growth. Segment results were as follows:

"
Americas. Fourth quarter revenue for Americas increased $11 million, or 3 percent, to $380 million, and included 7 percent organic growth for the subscription-based business. Fourth quarter Adjusted EBITDA for Americas increased $9 million, or 7 percent, to $143 million. Fourth quarter operating income for Americas increased $4 million, or 5 percent, to $95 million.

Fiscal year 2014 revenue for Americas increased $308 million, or 26 percent, to $1.470 billion. Fiscal year 2014 Adjusted EBITDA for Americas increased $77 million, or 17 percent, to $535 million. Fiscal year 2014 operating income for Americas increased $53 million, or 17 percent, to $356 million.

Americas results for fiscal year 2014 benefited from the inclusion of R. L. Polk.

"
EMEA. Fourth quarter revenue for EMEA increased $7 million, or 5 percent, to $145 million, and included 5 percent organic growth for the subscription-based business. Fourth quarter Adjusted EBITDA for EMEA increased $5 million, or 12 percent, to $43 million. Fourth quarter operating income for EMEA increased $11 million, or 43 percent, to $36 million. EMEA profit benefited from revenue growth and prior investment in scaled infrastructure.

Fiscal year 2014 revenue for EMEA increased $66 million, or 14 percent, to $549 million. Fiscal year 2014 Adjusted EBITDA for EMEA increased $41 million, or 35 percent, to $156 million. Fiscal year 2014 operating income for EMEA increased $49 million, or 60 percent, to $130 million.

"
APAC. Fourth quarter revenue for APAC increased $5 million, or 10 percent, to $57 million, and included 6 percent organic growth for the subscription-based business. Fourth quarter Adjusted EBITDA for APAC increased $2 million, or 18 percent, to $17 million. Fourth quarter operating income for APAC increased $2 million, or 16 percent, to $15 million.

Fiscal year 2014 revenue for APAC increased $17 million, or 9 percent, to $211 million. Fiscal year 2014 Adjusted EBITDA for APAC increased $9 million, or 20 percent, to $54 million. Fiscal year 2014 operating income for APAC increased $7 million, or 16 percent, to $49 million.


3

Outlook (forward-looking statement)

This guidance reflects a thorough assessment of revenue risks and opportunities in each of our end markets, including anticipated slower revenue growth within the energy market, said Mr. Hyatt. In addition, this guidance includes current momentum and growth in the 60 percent of our business comprised of our non-energy product offerings.

For the year ending November 30, 2015, IHS expects:

"
Revenue in a range of $2.36 billion to $2.40 billion, including 6-7 percent organic growth on the subscription base and neutral non-subscription organic growth;

"
Adjusted EBITDA in a range of $750 million to $770 million; and

"
Adjusted EPS in a range of $6.10 to $6.30 per diluted share.

Additionally, for the year ending November 30, 2015, IHS expects:

"
Depreciation expense to be approximately $82-86 million;

"
Amortization expense related to acquired intangible assets to be approximately $135-140 million;

"
Net interest expense to be approximately $70-75 million;

"
Stock-based compensation expense to be approximately $150-160 million;

"
An adjusted tax rate of approximately 27-29 percent;

"
An effective tax rate of approximately 23-25 percent; and

"
Fully diluted shares to be approximately 70 million.
�
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 2014 results on January�13, 2015, at 8:00 a.m. EST. The conference call will be simultaneously webcast on the companys website: www.ihs.com.

###

Use of Non-GAAP Financial Measures
Non-GAAP results are presented only as a supplement to our financial statements based on U.S. generally accepted accounting principles (GAAP). Non-GAAP financial information is provided to enhance the readers 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.


4

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.

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 todays business landscape. Businesses and governments in more than 150 countries around the

5

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. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,800 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.
� 2015 IHS Inc. All rights reserved.



6


IHS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per-share amounts)

�
As�of
�
As�of
�
November�30, 2014
�
November�30, 2013
�
(Unaudited)
�
(Audited)
Assets
�
�
�
Current assets:
�
�
�
Cash and cash equivalents
$
153,156

�
$
258,367

Accounts receivable, net
421,374

�
459,263

Income tax receivable
2,283

�


Deferred subscription costs
51,021

�
49,327

Deferred income taxes
81,780

�
70,818

Other
60,973

�
43,065

Total current assets
770,587

�
880,840

Non-current assets:

�

Property and equipment, net
301,419

�
245,566

Intangible assets, net
1,091,109

�
1,144,464

Goodwill
3,157,324

�
3,065,181

Other
27,991

�
23,562

Total non-current assets
4,577,843

�
4,478,773

Total assets
$
5,348,430

�
$
5,359,613

Liabilities and stockholders equity
�
�
�
Current liabilities:
�
�
�
Short-term debt
$
36,257

�
$
395,527

Accounts payable
52,245

�
57,001

Accrued compensation
101,875

�
89,460

Accrued royalties
37,346

�
36,289

Other accrued expenses
131,147

�
98,187

Income tax payable


�
9,961

Deferred revenue
596,187

�
560,010

Total current liabilities
955,057

�
1,246,435

Long-term debt
1,806,098

�
1,779,065

Accrued pension and postretirement liability
29,139

�
27,191

Deferred income taxes
347,419

�
361,267

Other liabilities
51,171

�
38,692

Commitments and contingencies
�
�
�
Stockholders equity:
�
�
�
Class�A common stock, $0.01 par value per share, 160,000,000 shares authorized,�69,391,577 and 67,901,101 shares issued, and 68,372,176 and 67,382,298�shares outstanding at November 30, 2014 and November 30, 2013, respectively
694

�
679

Additional paid-in capital
956,381

�
788,670

Treasury stock, at cost: 1,019,401 and 518,803 shares at November 30, 2014 and November 30, 2013, respectively
(105,873
)
�
(45,945
)
Retained earnings
1,415,069

�
1,220,520

Accumulated other comprehensive loss
(106,725
)
�
(56,961
)
Total stockholders equity
2,159,546

�
1,906,963

Total liabilities and stockholders equity
$
5,348,430

�
$
5,359,613


7


IHS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per-share amounts)
(Unaudited)
�
�
Three months ended November 30,
�
Year ended November 30,
�
2014
�
2013
�
2014
�
2013
Revenue
$
582,317

�
$
559,675

�
$
2,230,794

�
$
1,840,631

Operating expenses:
�
�
�
�
�
�
�
Cost of revenue (includes stock-based compensation�expense of $2,243; $2,646; $8,520 and $8,271 for�the three and twelve months ended November 30, 2014 and 2013, respectively)
221,973

�
217,406

�
879,051

�
748,184

Selling, general and administrative (includes stock-based compensation expense of $37,393; $45,011; $158,839 and $154,180 for the three and twelve months ended November 30, 2014 and 2013, respectively)
215,513

�
215,807

�
828,158

�
680,989

Depreciation and amortization
52,798

�
50,950

�
202,145

�
158,737

Restructuring charges
2,869

�
2,175

�
9,272

�
13,458

Acquisition-related costs
884

�
5,369

�
1,901

�
23,428

Net periodic pension and postretirement expense
2,432

�
4,895

�
6,774

�
11,619

Other expense, net
(1,539
)
�
2,279

�
(99
)
�
6,012

Total operating expenses
494,930

�
498,881

�
1,927,202

�
1,642,427

Operating income
87,387

�
60,794

�
303,592

�
198,204

Interest income
251

�
392

�
988

�
1,271

Interest expense
(13,233
)
�
(16,226
)
�
(55,383
)
�
(44,582
)
Non-operating expense, net
(12,982
)
�
(15,834
)
�
(54,395
)
�
(43,311
)
Income from continuing operations before income taxes
74,405

�
44,960

�
249,197

�
154,893

Provision for income taxes
(14,287
)
�
(4,150
)
�
(54,648
)
�
(23,059
)
Income from continuing operations
60,118

�
40,810

�
194,549

�
131,834

Loss from discontinued operations, net


�


�


�
(101
)
Net income
$
60,118

�
$
40,810

�
$
194,549

�
$
131,733


�
�
�
�
�
�
�
Basic earnings per share:
�
�
�
�
�
�
�
Income from continuing operations
$
0.88

�
$
0.61

�
$
2.85

�
$
1.98

Loss from discontinued operations, net
$


�
$


�
$


�
$


Net income
$
0.88

�
$
0.61

�
$
2.85

�
$
1.98

Weighted average shares used in computing basic earnings per share
68,352

�
67,403

�
68,163

�
66,434


�
�
�
�
�
�
�
Diluted earnings per share:
�
�
�
�
�
�
�
Income from continuing operations
$
0.87

�
$
0.60

�
$
2.81

�
$
1.95

Loss from discontinued operations, net
$


�
$


�
$


�
$


Net income
$
0.87

�
$
0.60

�
$
2.81

�
$
1.95

Weighted average shares used in computing diluted earnings per share
69,281

�
68,416

�
69,120

�
67,442


8


IHS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
�
�
Year ended November 30,
�
2014
�
2013
Operating activities:
�
�
�
Net income
$
194,549

�
$
131,733

Reconciliation of net income to net cash provided by operating�activities:
�
�
�
Depreciation and amortization
202,145

�
158,737

Stock-based compensation expense
167,359

�
162,451

Impairment of assets


�
1,629

Excess tax benefit from stock-based compensation
(13,297
)
�
(14,334
)
Net periodic pension and postretirement expense
6,774

�
11,619

Pension and postretirement contributions
(13,452
)
�
(13,299
)
Deferred income taxes
(10,285
)
�
(34,312
)
Change in assets and liabilities:
�
�
�
Accounts receivable, net
36,418

�
(24,427
)
Other current assets
(8,834
)
�
(672
)
Accounts payable
(11,425
)
�
(10,069
)
Accrued expenses
36,073

�
50,753

Income tax payable
6,254

�
65,887

Deferred revenue
29,713

�
10,378

Other liabilities
6,107

�
81

Net cash provided by operating activities
628,099

�
496,155

Investing activities:
�
�
�
Capital expenditures on property and equipment
(114,453
)
�
(90,734
)
Acquisitions of businesses, net of cash acquired
(210,395
)
�
(1,487,034
)
Intangible assets acquired
(714
)
�


Change in other assets
(4,608
)
�
1,347

Settlements of forward contracts
6,159

�
4,524

Net cash used in investing activities
(324,011
)
�
(1,571,897
)
Financing activities:
�
�
�
Proceeds from borrowings
2,485,000

�
1,375,000

Repayment of borrowings
(2,817,236
)
�
(268,909
)
Payment of debt issuance costs
(18,994
)
�
(17,360
)
Excess tax benefit from stock-based compensation
13,297

�
14,334

Proceeds from the exercise of employee stock options


�
549

Repurchases of common stock
(59,928
)
�
(97,164
)
Net cash provided by (used in) financing activities
(397,861
)
�
1,006,450

Foreign exchange impact on cash balance
(11,438
)
�
(17,349
)
Net increase (decrease) in cash and cash equivalents
(105,211
)
�
(86,641
)
Cash and cash equivalents at the beginning of the period
258,367

�
345,008

Cash and cash equivalents at the end of the period
$
153,156

�
$
258,367


9


IHS INC.
SUPPLEMENTAL REVENUE DISCLOSURE
(In thousands)
(Unaudited)


�
Three months ended November 30,
�
Percent change
�
Year ended November 30,
�
Percent change
�
2014
�
2013
�
Total
�
Organic
�
2014
�
2013
�
Total
�
Organic
Revenue by segment:
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Americas
$
379,626

�
$
368,510

�
3
�%
�
4
�%
�
$
1,470,282

�
$
1,162,582

�
26
%
�
4
�%
EMEA
145,233

�
138,711

�
5
�%
�
4
�%
�
549,061

�
483,373

�
14
%
�
6
�%
APAC
57,458

�
52,454

�
10
�%
�
8
�%
�
211,451

�
194,676

�
9
%
�
4
�%
Total revenue
$
582,317

�
$
559,675

�
4
�%
�
4
�%
�
$
2,230,794

�
$
1,840,631

�
21
%
�
4
�%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Revenue by transaction type:
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Subscription
$
443,769

�
$
418,309

�
6
�%
�
6
�%
�
$
1,719,617

�
$
1,404,984

�
22
%
�
6
�%
Non-subscription
138,548

�
141,366

�
(2
)%
�
(2
)%
�
511,177

�
435,647

�
17
%
�
(1
)%
Total revenue
$
582,317

�
$
559,675

�
4
�%
�
4
�%
�
$
2,230,794

�
$
1,840,631

�
21
%
�
4
�%
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Revenue by product category:
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
Resources
$
236,734

�
$
234,584

�
1
�%
�
2
�%
�
$
927,211

�
$
865,125

�
7
%
�
5
�%
Industrials
198,058

�
181,626

�
9
�%
�
7
�%
�
736,394

�
427,623

�
72
%
�
4
�%
Horizontal products
147,525

�
143,465

�
3
�%
�
3
�%
�
567,189

�
547,883

�
4
%
�
3
�%
Total revenue
$
582,317

�
$
559,675

�
4
�%
�
4
�%
�
$
2,230,794

�
$
1,840,631

�
21
%
�
4
�%

Excluding the effect of the BPVC engineering standard release in the third quarter of 2013, full-year 2014 non-subscription organic revenue growth was 1 percent, Horizontal products organic revenue growth was 4 percent, and total organic revenue growth was 5 percent.

Resources Q4 organic revenue growth includes organic subscription revenue growth of 6 percent (8 percent when normalized for Q4 2013 past due renewal revenue catchups).

10


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,
�
2014
�
2013
�
2014
�
2013
Net income
$
60,118

�
$
40,810

�
$
194,549

�
$
131,733

Interest income
(251
)
�
(392
)
�
(988
)
�
(1,271
)
Interest expense
13,233

�
16,226

�
55,383

�
44,582

Provision for income taxes
14,287

�
4,150

�
54,648

�
23,059

Depreciation
19,106

�
15,104

�
68,347

�
48,799

Amortization related to acquired intangible assets
33,692

�
35,846

�
133,798

�
109,938

EBITDA (1)(6)
$
140,185

�
$
111,744

�
$
505,737

�
$
356,840

Stock-based compensation expense
39,636

�
47,657

�
167,359

�
162,451

Restructuring charges
2,869

�
2,175

�
9,272

�
13,458

Acquisition-related costs
884

�
5,369

�
1,901

�
23,428

Impairment of assets


�


�


�
1,629

Loss on sale of assets


�


�
2,654

�
1,241

Loss on debt extinguishment
1,422

�


�
1,422

�


Pension mark-to-market and settlement expense
1,459

�
2,620

�
1,459

�
2,620

Loss from discontinued operations, net


�


�


�
101

Adjusted EBITDA (2)(6)
$
186,455

�
$
169,565

�
$
689,804

�
$
561,768

�
�
�
�
�
�
�
�
�
Three months ended November 30,
�
Year ended November 30,
�
2014
�
2013
�
2014
�
2013
Net income
$
60,118

�
$
40,810

�
$
194,549

�
$
131,733

Stock-based compensation expense
39,636

�
47,657

�
167,359

�
162,451

Amortization related to acquired intangible assets
33,692

�
35,846

�
133,798

�
109,938

Restructuring charges
2,869

�
2,175

�
9,272

�
13,458

Acquisition-related costs
884

�
5,369

�
1,901

�
23,428

Impairment of assets


�


�


�
1,629

Loss on sale of assets


�


�
2,654

�
1,241

Loss on debt extinguishment
1,422

�


�
1,422

�


Pension mark-to-market and settlement expense
1,459

�
2,620

�
1,459

�
2,620

Loss from discontinued operations, net


�


�


�
101

Income tax effect on adjusting items
(23,558
)
�
(34,396
)
�
(104,511
)
�
(105,463
)
Adjusted net income (3)
$
116,522

�
$
100,081

�
$
407,903

�
$
341,136

Adjusted EPS (4)(6)
$
1.68

�
$
1.46

�
$
5.90

�
$
5.06

Weighted average shares used in computing Adjusted EPS
69,281

�
68,416

�
69,120

�
67,442

�
�
�
�
�
�
�
�
�
Three months ended November 30,
�
Year ended November 30,
�
2014
�
2013
�
2014
�
2013
Net cash provided by operating activities
$
85,649

�
$
151,786

�
$
628,099

�
$
496,155

Capital expenditures on property and equipment
(31,139
)
�
(25,323
)
�
(114,453
)
�
(90,734
)
Free cash flow (5)(6)
$
54,510

�
$
126,463

�
$
513,646

�
$
405,421




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, 2014
�
Americas
�
EMEA
�
APAC
�
Shared Services
�
Total
Operating income
$
94,935

�
$
35,540

�
$
15,205

�
$
(58,293
)
�
$
87,387

Adjustments:
�
�
�
�
�
�
�
�
�
Stock-based compensation expense


�


�


�
39,636

�
39,636

Depreciation and amortization
42,937

�
6,568

�
1,393

�
1,900

�
52,798

Restructuring charges
2,441

�
421

�
7

�


�
2,869

Acquisition-related costs
802

�
82

�


�


�
884

Loss on debt extinguishment
1,422

�


�


�


�
1,422

Pension mark-to-market expense


�


�


�
1,459

�
1,459

Adjusted EBITDA
$
142,537

�
$
42,611

�
$
16,605

�
$
(15,298
)
�
$
186,455

�
�
�
�
�
�
�
�
�
�
�
Three months ended November 30, 2013
�
Americas
�
EMEA
�
APAC
�
Shared Services
�
Total
Operating income
$
90,789

�
$
24,789

�
$
13,125

�
$
(67,909
)
�
$
60,794

Adjustments:
�
�
�
�
�
�
�
�
�
Stock-based compensation expense


�


�


�
47,657

�
47,657

Depreciation and amortization
39,644

�
8,631

�
868

�
1,807

�
50,950

Restructuring charges
1,038

�
1,003

�
134

�


�
2,175

Acquisition-related costs
1,785

�
3,584

�


�


�
5,369

Pension mark-to-market expense


�


�


�
2,620

�
2,620

Adjusted EBITDA
$
133,256

�
$
38,007

�
$
14,127

�
$
(15,825
)
�
$
169,565

�
�
�
�
�
�
�
�
�
�
�
Year ended November 30, 2014
�
Americas
�
EMEA
�
APAC
�
Shared Services
�
Total
Operating income
$
356,310

�
$
129,766

�
$
48,792

�
$
(231,276
)
�
$
303,592

Adjustments:
�
�
�
�
�
�
�
�
�
Stock-based compensation expense


�


�


�
167,359

�
167,359

Depreciation and amortization
167,351

�
22,730

�
4,798

�
7,266

�
202,145

Restructuring charges
5,776

�
3,096

�
400

�


�
9,272

Acquisition-related costs
1,498

�
403

�


�


�
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
$
535,011

�
$
155,995

�
$
53,990

�
$
(55,192
)
�
$
689,804

�
�
�
�
�
�
�
�
�
�
�
Year ended November 30, 2013
�
Americas
�
EMEA
�
APAC
�
Shared Services
�
Total
Operating income
$
303,803

�
$
81,048

�
$
42,089

�
$
(228,736
)
�
$
198,204

Adjustments:
�
�
�
�
�
�
�
�
�
Stock-based compensation expense


�


�


�
162,451

�
162,451

Depreciation and amortization
123,477

�
25,688

�
2,363

�
7,209

�
158,737

Restructuring charges
9,354

�
3,530

�
574

�


�
13,458

Acquisition-related costs
19,552

�
3,876

�


�


�
23,428

Impairment of assets
1,629

�


�


�


�
1,629

Loss on sale of assets


�
1,241

�


�


�
1,241

Pension mark-to-market expense


�


�


�
2,620

�
2,620

Adjusted EBITDA
$
457,815

�
$
115,383

�
$
45,026

�
$
(56,456
)
�
$
561,768


12



(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.

13

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