Form 8-K IHS Markit Ltd. For: Jun 23

June 23, 2021 6:05 AM EDT

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

Exhibit 99.1
logoinfoa37a.jpg
News Release



For immediate release                                 
Investor Relations Contact:
Eric Boyer
+1 303 397 2969
eric.boyer@ihsmarkit.com

IHS Markit Reports Second Quarter 2021 Results

LONDON (June 23, 2021) - IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions, today reported results for the second quarter ended May 31, 2021.

Revenue of $1.181 billion, with 13 percent total organic revenue growth

Net income of $159 million and diluted earnings per share (EPS) of $0.40

Adjusted EBITDA of $517 million and Adjusted earnings per diluted share (Adjusted EPS) of $0.81

Cash flow from operations of $372 million and free cash flow of $301 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.

1


Second Quarter 2021 Financial Performance
Three months ended May 31,ChangeSix months ended May 31,Change
(in millions, except percentages and per share data)20212020$%20212020$%
Revenue$1,181.4 $1,026.6 $154.8 15 %$2,301.3 $2,107.4 $193.9 %
Net income attributable to IHS Markit*$159.0 $71.7 $87.3 122 %$308.3 $556.7 $(248.4)(45)%
Adjusted EBITDA$517.4 $454.0 $63.4 14 %$984.2 $885.6 $98.6 11 %
GAAP EPS$0.40 $0.18 $0.22 122 %$0.77 $1.38 $(0.61)(44)%
Adjusted EPS$0.81 $0.69 $0.12 17 %$1.51 $1.35 $0.16 12 %
Cash flow from operations$372.0 $278.2 $93.8 34 %$616.5 $397.7 $218.8 55 %
Free cash flow$301.4 $208.6 $92.8 44 %$473.3 $326.0 $147.3 45 %
* Net income attributable to IHS Markit for the six months ended May 31, 2020 includes an approximate $372 million gain on sale related to the A&D business line divestiture in December 2019.

“We had another strong quarter as all of our end markets continue to recover and our teams execute at a high level,” said Lance Uggla, chairman and chief executive officer at IHS Markit.

“Our strong Q2 and first half results were in-line with our expectations and we remain on track to deliver strong full year results,” said Jonathan Gear, chief financial officer at IHS Markit.

Second Quarter 2021 Revenue Performance

Second quarter 2021 revenue increased 13 percent organically compared to the second quarter of 2020. The following table provides additional revenue information by transaction type.
Three months ended May 31,Percentage changeSix months ended May 31,Percentage change
(in millions, except percentages)20212020TotalOrganic20212020Total Organic
Recurring fixed$836.0 $755.2 11 %%$1,661.6 $1,559.3 %%
Recurring variable182.6 158.0 16 %11 %355.5 304.8 17 %14 %
Non-recurring162.8 113.4 44 %41 %284.2 243.3 17 %15 %
Total revenue$1,181.4 $1,026.6 15 %13 %$2,301.3 $2,107.4 %%

The components of revenue growth are described below by segment and in total.
 Change in revenueChange in revenue
Second quarter 2021 vs. Second quarter 2020Year to date 2021 vs. Year to date 2020
(All amounts represent percentage points)OrganicAcquisitiveForeign
Currency
TotalOrganicAcquisitiveForeign
Currency
Total
Financial Services%%%11 %%— %%11 %
Transportation39 %— %%41 %20 %— %%21 %
Resources— %— %%%(5)%— %— %(5)%
Consolidated Markets & Solutions%(1)%%%— %(1)%%— %
Total13 % %2 %15 %8 % %1 %9 %

2


Second Quarter 2021 Operating Performance

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

Financial Services. Second quarter revenue for Financial Services increased $50 million, or 11 percent, to $493 million, and included 9 percent total organic growth. Second quarter Adjusted EBITDA for Financial Services increased $7 million, or 3 percent, to $238 million.

Transportation. Second quarter revenue for Transportation increased $101 million, or 41 percent, to $344 million, and included 39 percent total organic growth. Second quarter Adjusted EBITDA for Transportation increased $69 million, or 68 percent, to $171 million.

Resources. Second quarter revenue for Resources increased $2 million, or 1 percent, to $221 million, with flat total organic growth. Second quarter Adjusted EBITDA for Resources decreased $5 million, or 5 percent, to $91 million.

Consolidated Markets & Solutions (CMS). Second quarter revenue for CMS increased $2 million, or 2 percent, to $123 million, and included 1 percent total organic growth. Second quarter Adjusted EBITDA for CMS decreased $6 million, or 18 percent to $29 million.

Outlook

IHS Markit will provide a fiscal year 2021 guidance update and supplemental information deck as part of its previously announced second quarter 2021 results conference call on June 23, 2021, 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.

###

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 should not be considered in isolation from, or as a substitute for, financial measures calculated in accordance with GAAP. Definitions and reconciliations of the non-GAAP measures, such as EBITDA, Adjusted EBITDA, Adjusted net income, Adjusted EPS, and free cash flow, to the most directly comparable GAAP measures are provided within the schedules attached to IHS Markit’s quarterly earnings releases on the Investor Relations section of the company’s website. 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.

We use non-GAAP measures in our operational and financial decision-making. We believe that such measures allow us 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. We also believe that investors may find these non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP financial measures or disclosures. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to any other GAAP measure.

3


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. Because not all companies use identical calculations, our presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. They are not presentations made in accordance with 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 communication 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. Examples of forward-looking statements include, among others, statements we make regarding: guidance and predictions relating to expected operating results, such as revenue growth and earnings; strategic actions such as acquisitions, joint ventures, and dispositions, the anticipated benefits therefrom, and our success in integrating acquired businesses; anticipated levels of capital expenditures in future periods; anticipated levels of indebtedness, capital allocation, dividends, and share repurchases in future periods; our belief that we have sufficient liquidity to fund our ongoing business operations; expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities, and governmental and regulatory investigations and proceedings; our strategy for customer retention, growth, product development, market position, financial results, and reserves; the completion of the merger with S&P Global Inc. (“S&P Global”) on anticipated terms and timing, including unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the combined company’s operations and other conditions to the completion of the merger; the ability of S&P Global and IHS Markit to integrate the business successfully and to achieve anticipated synergies; potential litigation relating to the proposed transaction that could be instituted against S&P Global, IHS Markit or their respective directors; the risk that disruptions from the proposed transaction will harm S&P Global’s and IHS Markit’s business, including current plans and operations; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; rating agency actions; potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect IHS Markit’s financial performance; and certain restrictions during the pendency of the merger that may impact IHS Markit’s ability to pursue certain business opportunities or strategic transactions. 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 changes in circumstances that are difficult to predict and many of which are outside of our control. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are more fully discussed under the caption “Risk Factors” in our Annual Report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission (“SEC”). However, those factors should not be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which are based only on information currently available to our management and speaks only as of the date of this
4


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 with the SEC or on our website at investor.ihsmarkit.com.

About IHS Markit (www.ihsmarkit.com)
IHS Markit (NYSE: 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 © 2021 IHS Markit Ltd. All rights reserved.
5


IHS MARKIT LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
As of May 31, 2021As of November 30, 2020
(Unaudited)(Audited)
Assets
Current assets:
Cash and cash equivalents$217.4 $125.6 
Accounts receivable, net870.9 891.7 
Deferred subscription costs99.7 84.3 
Assets held for sale865.3 — 
Other current assets129.5 131.7 
Total current assets2,182.8 1,233.3 
Non-current assets:
Property and equipment, net683.0 724.8 
Operating lease right-of-use assets, net280.1 296.8 
Intangible assets, net3,389.6 3,846.1 
Goodwill9,778.5 9,908.7 
Deferred income taxes27.1 27.1 
Other253.5 98.4 
Total non-current assets14,411.8 14,901.9 
Total assets$16,594.6 $16,135.2 
Liabilities and equity
Current liabilities:
Short-term debt$333.1 $268.1 
Accounts payable34.6 48.2 
Accrued compensation143.6 206.1 
Other accrued expenses389.3 477.6 
Income tax payable19.4 29.1 
Deferred revenue1,009.5 886.2 
Operating lease liabilities59.9 63.5 
Liabilities held for sale103.1 — 
Total current liabilities2,092.5 1,978.8 
Long-term debt, net4,643.8 4,641.7 
Deferred income taxes467.0 543.4 
Operating lease liabilities284.5 297.7 
Other liabilities178.0 130.4 
Commitments and contingencies
Redeemable noncontrolling interests13.1 13.8 
Shareholders' equity8,915.7 8,529.4 
Total liabilities and equity$16,594.6 $16,135.2 
6


IHS MARKIT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except for per-share amounts)
(Unaudited)
 
 Three months ended May 31,Six months ended May 31,
 2021202020212020
Revenue$1,181.4 $1,026.6 $2,301.3 $2,107.4 
Operating expenses:
Cost of revenue425.8 388.3 841.0 804.1 
Selling, general and administrative283.3 258.1 585.5 574.3 
Depreciation and amortization150.5 149.4 302.1 294.7 
Restructuring and impairment charges7.7 81.3 8.7 85.8 
Acquisition-related costs33.3 6.6 46.4 7.5 
Other expense (income), net5.2 (1.2)8.6 (374.0)
Total operating expenses905.8 882.5 1,792.3 1,392.4 
Operating income275.6 144.1 509.0 715.0 
Interest income— 0.2 0.1 0.6 
Interest expense(55.4)(60.0)(110.9)(121.2)
Net periodic pension and postretirement expense— (8.9)— (30.4)
Non-operating expense, net(55.4)(68.7)(110.8)(151.0)
Income from continuing operations before income taxes and equity in income of equity method investees220.2 75.4 398.2 564.0 
Provision for income taxes(57.6)(4.7)(87.9)(9.0)
Equity in (loss) income of equity-method investees(3.7)0.1 (2.7)(0.2)
Net income158.9 70.8 307.6 554.8 
Net loss attributable to noncontrolling interest0.1 0.9 0.7 1.9 
Net income attributable to IHS Markit Ltd.$159.0 $71.7 $308.3 $556.7 
Basic earnings per share attributable to IHS Markit Ltd.$0.40 $0.18 $0.77 $1.40 
Weighted average shares used in computing basic earnings per share398.8 397.0 398.1 396.4 
Diluted earnings per share attributable to IHS Markit Ltd.$0.40 $0.18 $0.77 $1.38 
Weighted average shares used in computing diluted earnings per share400.7 400.1 400.8 402.1 
7


IHS MARKIT LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
 Six months ended May 31,
 20212020
Operating activities:
Net income$307.6 $554.8 
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization302.1 294.7 
Stock-based compensation expense115.7 153.8 
Gain on sale of assets, net(0.2)(370.9)
Impairment of assets3.9 — 
Payments for acquisition-related performance compensation— (75.9)
Net periodic pension and postretirement expense— 30.4 
Undistributed earnings of affiliates, net2.7 0.5 
Pension and postretirement contributions— (31.1)
Deferred income taxes(20.4)(10.8)
Change in assets and liabilities:
Accounts receivable, net(0.3)7.0 
Other current assets(19.9)(51.2)
Accounts payable(8.4)(22.5)
Accrued expenses(177.0)(119.9)
Income tax(7.4)(70.1)
Deferred revenue119.5 78.7 
Other assets and liabilities(1.4)30.2 
Net cash provided by operating activities616.5 397.7 
Investing activities:
Capital expenditures on property and equipment(143.2)(147.6)
Acquisitions of businesses, net of cash acquired(46.9)(3.2)
Payments to acquire equity investments(156.3)(7.2)
Proceeds from sale of assets— 466.2 
Change in other assets0.6 (0.9)
Settlements of forward contracts11.8 (20.0)
Net cash (used in) provided by investing activities(334.0)287.3 
Financing activities:
Proceeds from borrowings565.0 541.4 
Repayment of borrowings(500.0)(283.9)
Contingent consideration payments(1.0)— 
Dividends paid(159.0)(135.3)
Repurchases of common shares— (750.0)
Proceeds from the exercise of employee stock options2.2 177.2 
Payments related to tax withholding for stock-based compensation(110.3)(111.7)
Net cash used in financing activities(203.1)(562.3)
Foreign exchange impact on cash balance12.4 (26.4)
Net increase in cash and cash equivalents91.8 96.3 
Cash and cash equivalents at the beginning of the period125.6 111.5 
Cash and cash equivalents at the end of the period$217.4 $207.8 
8


IHS MARKIT LTD.
SUPPLEMENTAL REVENUE DISCLOSURE
(In millions)
(Unaudited)
 Three months ended May 31,Percent changeSix months ended May 31,Percent change
 20212020TotalOrganic20212020TotalOrganic
Recurring revenue:
Financial Services$278.3 $262.2 %%$563.6 $529.5 %%
Transportation261.6 186.8 40 %38 %508.2 414.5 23 %21 %
Resources183.5 197.5 (7)%(8)%366.1 398.0 (8)%(8)%
CMS112.6 108.7 %%223.7 217.3 %%
Total recurring fixed revenue$836.0 $755.2 11 %%$1,661.6 $1,559.3 %%
Financial Services - variable182.6 158.0 16 %11 %355.5 304.8 17 %14 %
Total recurring revenue$1,018.6 $913.2 12 %10 %$2,017.1 $1,864.1 %%
Non-recurring revenue:
Financial Services$32.5 $23.3 39 %36 %$58.8 $45.2 30 %27 %
Transportation82.5 56.4 46 %41 %147.6 125.9 17 %14 %
Resources37.3 21.5 73 %73 %57.4 46.6 23 %23 %
CMS10.5 12.2 (14)%(10)%20.4 25.6 (20)%(18)%
Total non-recurring revenue$162.8 $113.4 44 %41 %$284.2 $243.3 17 %15 %
Total revenue:
Financial Services$493.4 $443.5 11 %%$977.9 $879.5 11 %%
Transportation344.1 243.2 41 %39 %655.8 540.4 21 %20 %
Resources220.8 219.0 %— %423.5 444.6 (5)%(5)%
CMS123.1 120.9 %%244.1 242.9 — %— %
Total revenue$1,181.4 $1,026.6 15 %13 %$2,301.3 $2,107.4 %%






9


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 May 31,Six months ended May 31,
2021202020212020
Net income attributable to IHS Markit Ltd.$159.0 $71.7 $308.3 $556.7 
Interest income— (0.2)(0.1)(0.6)
Interest expense55.4 60.0 110.9 121.2 
Provision for income taxes57.6 4.7 87.9 9.0 
Depreciation59.3 56.4 115.4 107.5 
Amortization related to acquired intangible assets91.2 93.0 186.7 187.2 
EBITDA (1)(6)
$422.5 $285.6 $809.1 $981.0 
Stock-based compensation expense49.9 71.2 115.7 153.8 
Restructuring and impairment charges7.7 81.3 8.7 85.8 
Acquisition-related costs29.4 2.1 38.6 2.8 
Acquisition-related performance compensation3.9 4.5 7.8 4.7 
Gain on sale of assets(0.1)1.4 (0.2)(370.9)
Pension mark-to-market and settlement expense— 8.8 — 30.0 
Adjusted EBITDA impacts from equity-method investments and noncontrolling interest4.1 (0.9)4.5 (1.6)
Adjusted EBITDA (2)(6)
$517.4 $454.0 $984.2 $885.6 
 Three months ended May 31,Six months ended May 31,
2021202020212020
Net income attributable to IHS Markit Ltd.$159.0 $71.7 $308.3 $556.7 
Stock-based compensation expense49.9 71.2 115.7 153.8 
Amortization related to acquired intangible assets91.2 93.0 186.7 187.2 
Restructuring and impairment charges7.7 81.3 8.7 85.8 
Acquisition-related costs29.4 2.1 38.6 2.8 
Acquisition-related performance compensation3.9 4.5 7.8 4.7 
Gain on sale of assets(0.1)1.4 (0.2)(370.9)
Pension mark-to-market and settlement expense— 8.8 — 30.0 
Income tax effect of above adjustments(20.9)(55.7)(61.6)(105.1)
Adjusted earnings impacts from equity-method investments and noncontrolling interest2.8 (0.7)2.7 (1.4)
Adjusted net income (3)
$322.9 $277.6 $606.7 $543.6 
Adjusted EPS (4)(6)
$0.81 $0.69 $1.51 $1.35 
Weighted average shares used in computing Adjusted EPS400.7 400.1 400.8 402.1 
Three months ended May 31,Six months ended May 31,
2021202020212020
Net cash provided by operating activities$372.0 $278.2 $616.5 $397.7 
Payments for acquisition-related performance compensation— — — 75.9 
Capital expenditures on property and equipment(70.6)(69.6)(143.2)(147.6)
Free cash flow (5)(6)
$301.4 $208.6 $473.3 $326.0 
10


IHS MARKIT LTD.
SUPPLEMENTAL SEGMENT OPERATING PROFIT MEASURE DISCLOSURE
(In millions)
(Unaudited)
Three months ended May 31,Six months ended May 31,
 2021202020212020
Adjusted EBITDA by segment:
Financial Services$237.8 $231.3 $470.7 $436.7 
Transportation170.7 101.6 317.4 219.6 
Resources91.4 96.2 165.6 186.4 
CMS28.7 35.0 54.8 64.4 
Shared services(11.2)(10.1)(24.3)(21.5)
Total Adjusted EBITDA$517.4 $454.0 $984.2 $885.6 
Adjusted EBITDA margin by segment:
Financial Services48.2 %52.2 %48.1 %49.7 %
Transportation49.6 %41.8 %48.4 %40.6 %
Resources41.4 %43.9 %39.1 %41.9 %
CMS23.3 %28.9 %22.4 %26.5 %
Total Adjusted EBITDA margin43.8 %44.2 %42.8 %42.0 %

11



(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, settlement, and other expense, the impact of equity-method investments 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, settlement, and other expense, the impact of noncontrolling interests, and 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 plus payments for acquisition-related performance compensation minus capital expenditures.
(6)EBITDA, Adjusted EBITDA, Adjusted EPS, and free cash flow are used by securities analysts, investors, and other interested parties to assess our operating performance. For example, a measure similar to Adjusted EBITDA is required by the lenders under our revolving credit agreement.
12
Q2 2021 Earnings Supplemental Financials June 23, 2021


 
Forward-looking statements This presentation 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 communication 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. Examples of forward-looking statements include, among others, statements we make regarding: the completion of the merger with S&P Global Inc. (“S&P Global”) on anticipated terms and timing, including unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the combined company’s operations and other conditions to the completion of the merger; the ability of S&P Global and IHS Markit to integrate the business successfully and to achieve anticipated synergies; potential litigation relating to the proposed transaction that could be instituted against S&P Global, IHS Markit or their respective directors; the risk that disruptions from the proposed transaction will harm S&P Global’s and IHS Markit’s business, including current plans and operations; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; rating agency actions; potential business uncertainty, including changes to existing business relationships, during the pendency of the merger that could affect IHS Markit’s financial performance; certain restrictions during the pendency of the merger that may impact IHS Markit’s ability to pursue certain business opportunities or strategic transactions; guidance and predictions relating to expected operating results, such as revenue growth and earnings; strategic actions such as acquisitions, joint ventures, and dispositions, the anticipated benefits therefrom, and our success in integrating acquired businesses; anticipated levels of capital expenditures in future periods; anticipated levels of indebtedness, capital allocation, dividends, and share repurchases in future periods; our belief that we have sufficient liquidity to fund our ongoing business operations; expectations of the effect on our financial condition of claims, litigation, environmental costs, contingent liabilities, and governmental and regulatory investigations and proceedings; and our strategy for customer retention, growth, product development, market position, financial results, and reserves. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on management’s current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are more fully discussed under the caption “Risk Factors” in our Annual Report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission (“SEC”). However, those factors should not be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward- looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on our consolidated financial condition, results of operations, credit rating, or liquidity. Therefore, you should not rely on any of these forward-looking statements. Any forward-looking statement made by us in this 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 with the SEC or on our website at investor.ihsmarkit.com. Non-GAAP measures Non-GAAP financial information is presented only as a supplement to IHS Markit’s financial information based on U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial information is provided to enhance the reader’s understanding of IHS Markit’s financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP and should not be considered in isolation from, or as a substitute for, financial measures calculated in accordance with GAAP. Definitions of IHS Markit non-GAAP measures and reconciliations to the most directly comparable GAAP measures are provided within the schedules attached to IHS Markit’s quarterly earnings releases on the Investor Relations section of the company’s website (investor.ihsmarkit.com). This presentation 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. IHS Markit uses non-GAAP measures in its operational and financial decision making. IHS Markit believes that such measures allow it to focus on what it deems to be more a reliable indicator of ongoing operating performance and its ability to generate cash flow from operations. IHS Markit also believes that investors may find these non-GAAP financial measures useful for the same reasons, although investors are cautioned that non-GAAP financial measures are not a substitute for GAAP financial measures or disclosures. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to any other GAAP measure. 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 IHS Markit’s performance against its peer companies because IHS Markit believes the measures provide users with valuable insight into key components of GAAP financial disclosures. However, non-GAAP measures have limitations as an analytical tool. Because not all companies use identical calculations, IHS Markit’s presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. They are not presentations made in accordance with 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, these performance measures should not be considered in isolation from, or as a substitute analysis for, results of operations as determined in accordance with GAAP.


 
Updating and increasing guidance for remainder of year $ in millions, except for per share amounts 2021 Updated Guidance IHS Markit Total Low Mid High Revenue * $4,635 $4,655 $4,675 Organic growth % Approximately 7 to 8% Adjusted EBITDA $2,020 $2,025 $2,030 Margin % Approximately 44% Adjusted EPS $3.15 $3.16 $3.17 Normalized EPS growth % Approximately 11% Growth * Updated revenue guidance includes approximately $30 million benefit from Fx Additional guidance items: • Depreciation expense of $240 - $250 million • Amortization (acquisition related intangibles) expense of $370 - $380 million • Net interest expense of $220 - $225 million • Stock-based compensation expense of $235 - $245 million • GAAP effective tax rate of 14% - 16% • Adjusted effective tax rate of 18% - 20% • Weighted average diluted shares between 400 - 403 million (Per merger agreement, we have paused share repurchases, which are limited to tax withholding requirements for share-based compensation) • Capital expenditures to be approximately 6.0% - 6.5% of revenue • Free Cash Flow conversion (as a % of Adjusted EBITDA) in the mid 60s% 2021 Prior Guidance IHS Markit Total Low Mid High $4,535 $4,585 $4,635 Approximately 6 to 8% $2,000 $2,015 $2,030 Approximately 44% $3.11 $3.14 $3.16 Approximately 10% Growth


 
Quarterly Revenue by Reported Segment


 
Quarterly Organic Growth (1) Q2 20 and FY20 Transportation non-recurring organic revenue growth including impact of cancelled events is -37% and -16% respectively and total organic revenue growth is -18% and -2% respectively. (2) Q2 20 and FY20 Resources non-recurring organic revenue growth including impact of cancelled events is -62% and -40% respectively and total organic revenue growth is -14% and -9% respectively. (3) Q3 20 and FY20 CMS non-recurring organic revenue growth including BPVC is -41% and -14% respectively and total organic revenue growth is -5% and 0% respectively. (4) Q2 20 total non-recurring organic revenue growth including impact of cancelled events is -40% and total organic revenue growth is -7%. Q3 20 total non-recurring revenue including BPVC is -22% and total organic revenue growth is -1%. FY 2020 total non-recurring revenue growth including events and BPVC is -21% and total organic growth is -1%.


 
Quarterly Financial Services Revenue


 
Quarterly Adjusted EBITDA View* by Reported Segment *Refer to financial earnings releases on investor.ihsmarkit.com for definitions and reconciliations to the nearest GAAP reported measures


 


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings