IHS Inc. (NYSE: IHS), the leading global source of information
and analytics, today reported results for the second quarter ended
May 31, 2015.
- Revenue of $591 million, up 4 percent
from the prior-year period
- Total organic revenue growth of 1
percent, with 5 percent subscription organic revenue growth
- Adjusted EBITDA of $185 million, up 7
percent from the prior-year period
- Adjusted earnings per diluted share
(Adjusted EPS) of $1.50, up 2 percent from the prior-year
period
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.
Second Quarter and Year-to-Date 2015 Financial
Performance
Three
months ended May 31, Change Six months ended May
31, Change
(in thousands, exceptpercentages
and per sharedata)
2015 2014 $
% 2015 2014 $
% Revenue $ 591,407 $ 568,008 $ 23,399 4 % $
1,137,668 $ 1,092,466 $ 45,202 4 % Net income $ 50,952 $
55,492 $ (4,540 ) (8 )% $ 90,472 $ 87,914 $ 2,558 3 % Adjusted
EBITDA $ 185,096 $ 172,733 $ 12,363 7 % $ 354,391 $ 328,908 $
25,483 8 % GAAP EPS $ 0.74 $ 0.81 $ (0.07 ) (9 )% $ 1.31 $
1.28 $ 0.03 2 % Adjusted EPS $ 1.50 $ 1.47 $ 0.03 2 % $ 2.85 $ 2.75
$ 0.10 4 % Cash flow from operations $ 146,246 $ 221,113 $
(74,867 ) (34 )% $ 334,284 $ 374,974 $ (40,690 ) (11 )% Free cash
flow $ 116,020 $ 194,687 $ (78,667 ) (40 )% $ 265,246 $ 323,938 $
(58,692 ) (18 )%
“I am pleased to be back once again in the CEO role at IHS,”
said Jerre Stead, IHS chairman and chief executive officer. “This
company has always had tremendous people and assets, and we have
immense opportunity to better capture the full potential from
them.”
“We continue to see strength in our Industrials product
offerings growth, offset by lower Resources revenue as a result of
market pressure in our energy product offerings,” said Todd Hyatt,
IHS chief financial officer. “Despite the macro industry situation,
we like our energy assets and are encouraged by the resiliency of
the subscription business, which we expect will deliver flat sales
in an environment where energy spend has been significantly
reduced.”
Second Quarter and Year-to-Date 2015 Revenue
Performance
Second quarter 2015 revenue increased 4 percent compared to the
second quarter of 2014, and year-to-date 2015 revenue increased 4
percent compared to the same period in 2014. The components of
revenue growth are described below by segment and in total.
Change in revenue Second quarter 2015 vs.
second quarter 2014 Year-to-date 2015 vs.
year-to-date 2014
(All amounts represent
percentagepoints)
Organic Acquisitive
ForeignCurrency
Organic Acquisitive
Foreign
Currency
Americas 1% 7 % (1)% 1% 5% (1)% EMEA 1% 2 % (5)% 1% 2% (4)% APAC
(2)% 6 % (2)% 2% 7% (2)%
Total 1% 6 %
(2)% 1% 5% (2)%
The subscription-based business grew 5 percent organically in
the second quarter of 2015 compared to the same period of 2014, as
described in the following table.
Three
months ended May 31, Percent change Six months ended
May 31, Percent change
(in thousands,
exceptpercentages)
2015 2014 Total
Organic 2015 2014 Total
Organic Subscription revenue $ 459,681 $
426,346 8% 5% $ 907,488 $ 843,720 8% 6% Non-subscription revenue
131,726 141,662 (7)% (12)% 230,180 248,746
(7)% (13)% Total revenue $ 591,407 $ 568,008
4% 1% $ 1,137,668 $ 1,092,466 4% 1%
Second Quarter and Year-to-Date 2015 Segment
Performance
Segment results were as follows:
- Americas. Second quarter revenue for
Americas increased $25 million, or 7 percent, to $402 million, and
included 6 percent organic growth for the subscription-based
business. Second quarter Adjusted EBITDA for Americas increased $7
million, or 5 percent, to $143 million. Second quarter operating
income for Americas decreased $7 million, or 8 percent, to $86
million.
Year-to-date revenue for Americas increased
$41 million, or 6 percent, to $768 million. Year-to-date Adjusted
EBITDA for Americas increased $13 million, or 5 percent, to $271
million. Year-to-date operating income for Americas decreased $12
million, or 7 percent, to $160 million.
- EMEA. Second quarter revenue for EMEA
decreased $2 million, or 2 percent, to $137 million, and included 3
percent organic growth for the subscription-based business. Second
quarter Adjusted EBITDA for EMEA was largely unchanged at $40
million. Second quarter operating income for EMEA decreased $3
million, or 8 percent, to $32 million.
Year-to-date revenue for EMEA decreased $2
million, or 1 percent, to $264 million. Year-to-date Adjusted
EBITDA for EMEA increased $3 million, or 4 percent, to $75 million.
Year-to-date operating income for EMEA decreased $2 million, or 4
percent, to $57 million.
- APAC. Second quarter revenue for APAC
increased $1 million, or 1 percent, to $53 million, and included 4
percent organic growth for the subscription-based business. Second
quarter Adjusted EBITDA for APAC increased $2 million, or 13
percent, to $15 million. Second quarter operating income for APAC
increased $1 million, or 6 percent, to $14 million.
Year-to-date revenue for APAC increased $6
million, or 7 percent, to $106 million. Year-to-date Adjusted
EBITDA for APAC increased $4 million, or 17 percent, to $29
million. Year-to-date operating income for APAC increased $2
million, or 7 percent, to $25 million.
Share Repurchase Programs
IHS has completed its previously announced $100 million share
repurchase program, and today announced that its board of directors
has approved a new program to repurchase up to $500 million of IHS
Class A common stock. IHS may repurchase shares in open market
purchases or through privately negotiated transactions in
compliance with Rule 10b-18 of the Securities Exchange Act of 1934,
as amended, subject to market conditions, applicable legal
requirements and other relevant factors. The repurchase program
does not obligate IHS to repurchase any set dollar amount or number
of shares and is scheduled to expire on November 30, 2017, but may
be suspended at any time at the company's discretion. The amount
authorized under the new share repurchase program includes share
repurchases of our Class A common stock associated with minimum
statutory tax withholdings for employee equity award vests, as
previously disclosed and approved by our board of directors.
“Our share repurchase programs demonstrate our continued
confidence in the IHS strategy of delivering long-term profitable
growth and our commitment to delivering value to our shareholders,”
said Stead.
Outlook (forward-looking statement)
For the year ending November 30, 2015, IHS raises guidance as
follows:
- Revenue in a range of $2.30 billion to
$2.34 billion, including 5-6 percent subscription organic growth
and negative non-subscription organic growth;
- Adjusted EBITDA in a range of $725
million to $740 million; and
- Adjusted EPS in a range of $5.80 to
$6.00 per diluted share.
Additionally, for the year ending November 30, 2015, IHS
expects:
- Depreciation expense to be
approximately $85-90 million;
- Amortization expense related to
acquired intangible assets to be approximately $145-150
million;
- Net interest expense to be
approximately $73-77 million; and
- Stock-based compensation expense to be
approximately $135-145 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 second quarter 2015 results on June 23, 2015, at 8:00
a.m. EDT. The conference call will be simultaneously webcast on the
company’s 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 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.
Because not all companies use identical calculations, our
presentation of non-GAAP financial measures may not be comparable
to other similarly-titled measures of other companies. However,
these measures can still be useful in evaluating our performance
against our peer companies because we believe the measures provide
users with valuable insight into key components of GAAP financial
disclosures.
IHS Forward-Looking Statements:
This release contains “forward-looking statements” within the
meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: “anticipate,”
“intend,” “plan,” “goal,” “seek,” “aim,” “strive,” “believe,”
“project,” “predict,” "estimate," "expect," “continue,” "strategy,"
"future," "likely," "may," “might,” "should," "will," the negative
of these terms and similar references to future periods. Examples
of forward-looking statements include, among others, statements we
make regarding guidance relating to net income, net income per
share, and expected operating results, such as revenue growth and
earnings.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following: economic and financial
conditions, including volatility in interest and exchange rates;
our ability to manage system failures, capacity constraints, and
cyber risks; our ability to successfully manage risks associated
with changes in demand for our products and services as well as
changes in our targeted industries; our ability to develop new
platforms to deliver our products and services, pricing, and other
competitive pressures, and changes in laws and regulations
governing our business; the extent to which we are successful in
gaining new long-term relationships with customers or retaining
existing ones and the level of service failures that could lead
customers to use competitors' services; our ability to successfully
identify and integrate acquisitions into our existing businesses
and manage risks associated therewith; our ability to satisfy our
debt obligations and our other ongoing business obligations; and
the other factors described under the caption “Risk Factors” in our
most recent annual report on Form 10-K, along with our other
filings with the U.S. Securities and Exchange Commission.
Any forward-looking statement made by us in this release is
based only on information currently available to us and speaks only
as of the date on which it is made. We undertake no obligation to
publicly update any forward-looking statement, whether written or
oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
Please consult our public filings at www.sec.gov or www.ihs.com.
About IHS Inc. (www.ihs.com)
IHS Inc. (NYSE: IHS) is the leading source of information,
insight and analytics in critical areas that shape today’s business
landscape. Businesses and governments in more than 150 countries
around the globe rely on the comprehensive content, expert
independent analysis and flexible delivery methods of IHS to make
high-impact decisions and develop strategies with speed and
confidence. IHS has been in business since 1959 and became a
publicly traded company on the New York Stock Exchange in 2005.
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.
IHS INC.CONDENSED CONSOLIDATED
BALANCE SHEETS(In thousands, except for share and per-share
amounts)
As of As of May 31, 2015 November
30, 2014 (Unaudited) (Audited) Assets
Current assets: Cash and cash equivalents $ 225,879 $ 153,156
Accounts receivable, net 365,265 421,374 Income tax receivable —
2,283 Deferred subscription costs 62,747 51,021 Deferred income
taxes 71,288 81,780 Other 70,490 60,973 Total current
assets 795,669 770,587 Non-current assets: Property
and equipment, net 316,999 301,419 Intangible assets, net 1,129,553
1,091,109 Goodwill 3,426,282 3,157,324 Other 24,326 27,991
Total non-current assets 4,897,160 4,577,843
Total assets $ 5,692,829 $ 5,348,430
Liabilities
and stockholders’ equity Current liabilities: Short-term debt $
36,001 $ 36,257 Accounts payable 52,116 52,245 Accrued compensation
60,545 101,875 Accrued royalties 32,327 37,346 Other accrued
expenses 118,956 131,147 Income tax payable 7,772 — Deferred
revenue 680,863 596,187 Total current liabilities
988,580 955,057 Long-term debt 2,093,091 1,806,098 Accrued pension
and postretirement liability 27,867 29,139 Deferred income taxes
362,285 347,419 Other liabilities 57,852 51,171 Commitments and
contingencies Stockholders’ equity: Class A common stock, $0.01 par
value per share, 160,000,000 shares authorized, 70,000,939 and
69,391,577 shares issued, and 68,428,175 and 68,372,176 shares
outstanding at May 31, 2015 and November 30, 2014, respectively 700
694 Additional paid-in capital 985,796 956,381 Treasury stock, at
cost: 1,572,764 and 1,019,401 shares at May 31, 2015 and November
30, 2014, respectively (173,396 ) (105,873 ) Retained earnings
1,505,541 1,415,069 Accumulated other comprehensive loss (155,487 )
(106,725 ) Total stockholders’ equity 2,163,154 2,159,546
Total liabilities and stockholders’ equity $ 5,692,829
$ 5,348,430
IHS INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands, except for per-share
amounts)(Unaudited)
Three months ended May 31, Six months ended May
31, 2015 2014 2015
2014 Revenue $ 591,407 $ 568,008 $ 1,137,668 $
1,092,466
Operating expenses: Cost of revenue (includes
stock-based compensation expense of $1,444; $1,511; $2,858; and
$3,371 for the three and six months ended May 31, 2015 and 2014,
respectively) 228,903 224,945 443,849 437,870 Selling, general and
administrative (includes stock-based compensation expense of
$32,900; $34,521; $64,976; and $76,625 for the three and six months
ended May 31, 2015 and 2014, respectively) 210,480 203,644 406,418
401,360 Depreciation and amortization 58,910 49,142 114,829 98,779
Restructuring charges 7,369 860 21,653 4,035 Acquisition-related
costs 301 77 477 1,017 Net periodic pension and postretirement
expense 497 2,834 993 5,670 Other expense (income), net 2,018
(267 ) 1,094 1,308 Total operating expenses
508,478 481,235 989,313 950,039
Operating income 82,929 86,773 148,355 142,427 Interest
income 180 235 340 486 Interest expense (17,454 ) (14,610 ) (34,448
) (29,855 ) Non-operating expense, net (17,274 ) (14,375 ) (34,108
) (29,369 ) Income from continuing operations before income taxes
65,655 72,398 114,247 113,058 Provision for income taxes (14,703 )
(16,906 ) (23,775 ) (25,144 )
Net income $ 50,952 $
55,492 $ 90,472 $ 87,914 Basic earnings
per share $ 0.74 $ 0.81 $ 1.32 $ 1.29
Weighted average shares used in computing basic earnings per share
68,802 68,216 68,752 68,015
Diluted earnings per share $ 0.74 $ 0.81 $ 1.31
$ 1.28 Weighted average shares used in computing
diluted earnings per share 69,111 68,697 69,258
68,730
IHS INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(In
thousands)(Unaudited)
Six months ended May 31, 2015
2014 Operating activities: Net income $ 90,472 $
87,914 Reconciliation of net income to net cash provided by
operating activities: Depreciation and amortization 114,829 98,779
Stock-based compensation expense 67,834 79,996 Impairment of assets
1,243 — Excess tax benefit from stock-based compensation (5,193 )
(10,327 ) Net periodic pension and postretirement expense 993 5,670
Pension and postretirement contributions (2,285 ) (1,650 ) Deferred
income taxes (3,944 ) 28,907 Change in assets and liabilities:
Accounts receivable, net 67,628 38,871 Other current assets (29,725
) (23,153 ) Accounts payable (7,002 ) 119 Accrued expenses (53,476
) (16,666 ) Income tax 20,242 (20,656 ) Deferred revenue 70,140
105,570 Other liabilities 2,528 1,600
Net cash
provided by operating activities 334,284 374,974
Investing activities: Capital expenditures on property and
equipment (69,038 ) (51,036 ) Acquisitions of businesses, net of
cash acquired (369,908 ) — Intangible assets acquired — (714 )
Change in other assets (339 ) 2,762 Settlements of forward
contracts 2,419 1,309
Net cash used in investing
activities (436,866 ) (47,679 )
Financing activities:
Proceeds from borrowings 440,000 30,000 Repayment of borrowings
(153,263 ) (348,086 ) Excess tax benefit from stock-based
compensation 5,193 10,327 Repurchases of common stock (105,247 )
(47,429 )
Net cash provided by (used in) financing
activities 186,683 (355,188 ) Foreign exchange impact on
cash balance (11,378 ) (9,476 ) Net increase (decrease) in cash and
cash equivalents 72,723 (37,369 ) Cash and cash equivalents at the
beginning of the period 153,156 258,367 Cash and cash
equivalents at the end of the period $ 225,879 $ 220,998
IHS INC.SUPPLEMENTAL REVENUE
DISCLOSURE(In thousands)(Unaudited)
Three months ended May 31, Percent change
Six months ended May 31, Percent change 2015
2014 Total Organic
2015 2014 Total
Organic Revenue by segment: Americas $ 401,881 $
376,787 7 % 1 % $ 767,962 $ 727,207 6 % 1 % EMEA 136,630 138,847 (2
)% 1 % 263,677 265,708 (1 )% 1 % APAC 52,896 52,374 1
% (2 )% 106,029 99,551 7 % 2 %
Total revenue $
591,407 $ 568,008 4 % 1 % $ 1,137,668 $
1,092,466 4 % 1 %
Revenue by transaction type:
Subscription $ 459,681 $ 426,346 8 % 5 % $ 907,488 $ 843,720 8 % 6
% Non-subscription 131,726 141,662 (7 )% (12 )%
230,180 248,746 (7 )% (13 )%
Total revenue $
591,407 $ 568,008 4 % 1 % $ 1,137,668 $
1,092,466 4 % 1 %
Revenue by product category:
Resources $ 234,673 $ 243,876 (4 )% (4 )% $ 452,242 $ 461,370 (2 )%
(2 )% Industrials 220,536 181,346 22 % 8 % 417,126 353,069 18 % 7 %
Horizontal products 136,198 142,786 (5 )% (1 )%
268,300 278,027 (3 )% (1 )%
Total revenue $
591,407 $ 568,008 4 % 1 % $ 1,137,668 $
1,092,466 4 % 1 %
IHS INC.RECONCILIATION OF
CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TOMOST DIRECTLY
COMPARABLE GAAP FINANCIAL MEASUREMENTS(In thousands, except
for per-share amounts)(Unaudited)
Three months ended May 31, Six months ended May
31, 2015 2014 2015
2014 Net income $ 50,952 $ 55,492 $ 90,472 $ 87,914
Interest income (180 ) (235 ) (340 ) (486 ) Interest expense 17,454
14,610 34,448 29,855 Provision for income taxes 14,703 16,906
23,775 25,144 Depreciation 22,259 16,090 43,172 31,880 Amortization
related to acquired intangible assets 36,651 33,052
71,657 66,899
EBITDA (1)(6) $ 141,839 $
135,915 $ 263,184 $ 241,206 Stock-based compensation expense 34,344
36,032 67,834 79,996 Restructuring charges 7,369 860 21,653 4,035
Acquisition-related costs 301 77 477 1,017 Impairment of assets
1,243 — 1,243 — Loss (gain) on sale of assets — (151 ) —
2,654
Adjusted EBITDA (2)(6) $ 185,096
$ 172,733 $ 354,391 $ 328,908
Three months ended May 31, Six months ended May 31,
2015 2014 2015 2014 Net income $
50,952 $ 55,492 $ 90,472 $ 87,914 Stock-based compensation expense
34,344 36,032 67,834 79,996 Amortization related to acquired
intangible assets 36,651 33,052 71,657 66,899 Restructuring charges
7,369 860 21,653 4,035 Acquisition-related costs 301 77 477 1,017
Impairment of assets 1,243 — 1,243 — Loss (gain) on sale of assets
— (151 ) — 2,654 Income tax effect on adjusting items (27,139 )
(24,511 ) (55,650 ) (53,733 )
Adjusted net income (3)
$ 103,721 $ 100,851 $ 197,686 $ 188,782
Adjusted EPS (4)(6) $ 1.50 $ 1.47 $
2.85 $ 2.75 Weighted average shares used in computing
Adjusted EPS 69,111 68,697 69,258 68,730
Three months ended May 31, Six months ended
May 31, 2015 2014 2015 2014
Net cash provided by operating activities $ 146,246 $
221,113 $ 334,284 $ 374,974 Capital expenditures on property and
equipment (30,226 ) (26,426 ) (69,038 ) (51,036 )
Free cash
flow (5)(6) $ 116,020 $ 194,687 $ 265,246
$ 323,938
IHS INC.RECONCILIATION OF
SEGMENT NON-GAAP FINANCIAL MEASUREMENTS TOMOST DIRECTLY
COMPARABLE GAAP FINANCIAL MEASUREMENTS(In
thousands)(Unaudited)
Three months ended May 31, 2015 Americas
EMEA APAC
Shared Services Total Operating
income $ 86,200 $ 31,775 $ 13,743 $ (48,789 ) $ 82,929
Adjustments: Stock-based compensation expense — — — 34,344 34,344
Depreciation and amortization 49,408 6,257 1,314 1,931 58,910
Restructuring charges 6,693 510 166 — 7,369 Acquisition-related
costs 218 83 — — 301 Impairment of assets — 1,243 —
— 1,243
Adjusted EBITDA $ 142,519
$ 39,868 $ 15,223 $ (12,514 ) $ 185,096
Three months ended May 31, 2014 Americas
EMEA APAC Shared Services Total
Operating income $ 93,587 $ 34,465 $ 12,938 $ (54,217 ) $
86,773 Adjustments: Stock-based compensation expense — — — 36,032
36,032 Depreciation and amortization 41,395 5,314 475 1,958 49,142
Restructuring charges 87 656 117 — 860 Acquisition-related costs
277 (200 ) — — 77 Gain on sale of assets (151 ) — — —
(151 )
Adjusted EBITDA $ 135,195 $ 40,235
$ 13,530 $ (16,227 ) $ 172,733
Six
months ended May 31, 2015 Americas EMEA
APAC Shared Services Total Operating
income $ 159,541 $ 56,948 $ 24,597 $ (92,731 ) $ 148,355
Adjustments: Stock-based compensation expense — — — 67,834 67,834
Depreciation and amortization 95,502 12,534 2,913 3,880 114,829
Restructuring charges 16,056 4,486 1,111 — 21,653
Acquisition-related costs 394 83 — — 477 Impairment of assets —
1,243 — — 1,243
Adjusted
EBITDA $ 271,493 $ 75,294 $ 28,621 $
(21,017 ) $ 354,391
Six months ended May 31,
2014 Americas EMEA APAC Shared
Services Total Operating income $ 171,197 $
59,060 $ 23,000 $ (110,830 ) $ 142,427 Adjustments: Stock-based
compensation expense — — — 79,996 79,996 Depreciation and
amortization 82,568 11,105 1,088 4,018 98,779 Restructuring charges
1,772 1,941 322 — 4,035 Acquisition-related costs 696 321 — — 1,017
Loss on sale of assets 2,654 — — —
2,654
Adjusted EBITDA $ 258,887 $ 72,427
$ 24,410 $ (26,816 ) $ 328,908
(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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150623005411/en/
IHS Inc.News Media Contact:Dan Wilinsky, +1
303-397-2468dan.wilinsky@ihs.comorInvestor Relations
Contact:Eric Boyer, +1 303-397-2969eric.boyer@ihs.com
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