ENGLEWOOD, Colo.--(BUSINESS WIRE)--IHS Inc. (NYSE:IHS), the leading global source of critical information and insight, today reported results for the third quarter ended August 31, 2011. Revenue for the third quarter of 2011 totaled $340 million, a 25 percent increase over third quarter 2010 revenue of $272 million. Net income for the third quarter of 2011 was $39.6 million, or $0.60 per diluted share, compared to third quarter 2010 net income of $34.6 million, or $0.53 per diluted share.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) totaled $100.3 million for the third quarter of 2011, up 22 percent from $82.2 million in the third quarter of 2010. Adjusted earnings per diluted share were $0.88 for the third quarter of 2011, an increase of 16 percent over the prior-year period. Adjusted EBITDA and adjusted earnings per share are non-GAAP (Generally Accepted Accounting Principles) financial measures used by management to measure operating performance. Please see the end of this release for more information about these non-GAAP measures.
“We delivered another quarter of strong profitable growth in this time of ever greater economic uncertainty,” said Jerre Stead, IHS chairman and chief executive officer. “With the closing of our largest acquisition in our company's history, SMT, and the successful first release of our Vanguard initiative, we continue to make important investments in scalable platforms which will help us deliver strong profitable growth for years to come.”
Third Quarter 2011 Details
Revenue for the third quarter of 2011 totaled $340 million, a 25 percent increase over third-quarter 2010 revenue of $272 million. Organic growth in the third quarter of 2011 was six percent after adjusting for the triennial release of a certain engineering standard in the third quarter of 2010 (three percent unadjusted). Acquisitions added 19 percent and foreign currency movements added three percent. The subscription-based business grew eight percent organically and represented 78 percent of total revenue.
| Three Months Ended August 31, | Absolute | Organic | Nine Months Ended August 31, | Absolute | Organic | ||||||||||||||||||||||||||||||||||||||||||||||
| 2011 | 2010 | % change | % change * | 2011 | 2010 | % change | % change * | ||||||||||||||||||||||||||||||||||||||||||||
| Subscription revenue | $ | 263,915 | $ | 209,073 | 26 | % | 8 | % | $ | 747,907 | $ | 609,916 | 23 | % | 8 | % | |||||||||||||||||||||||||||||||||||
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Non-subscription revenue |
76,551 | 62,539 | 22 | % | (1 | )% | 212,113 | 167,654 | 27 | % | 4 | % | |||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 340,466 | $ | 271,612 | 25 | % | 6 | % | $ | 960,020 | $ | 777,570 | 23 | % | 7 | % | |||||||||||||||||||||||||||||||||||
* Excludes approximately $7 million of non-subscription revenue associated with the triennial release of a certain engineering standard in the third quarter of 2010.
The company continued to grow its business overall in all three regions. The Americas segment increased its revenue during the third quarter by $37.1 million, or 22 percent, to $207.5 million. The EMEA segment grew its third quarter revenue by $19.9 million, or 26 percent, to $95.9 million. The APAC segment's revenue was up $11.8 million, or 47 percent, to $37.0 million.
Adjusted EBITDA for the third quarter of 2011 was $100.3 million, up $18.1 million, or 22 percent, over the prior-year period. Operating income increased $4.8 million, or 11 percent, to $49.9 million. Americas' operating income increased $16.5 million, or 35 percent, to $63.3 million. EMEA's operating income was up $3.4 million, or 22 percent, to $18.8 million. APAC's operating income grew $2.1 million, or 23 percent, to $10.9 million.
Year-to-Date 2011
Revenue for the nine months ended August 31, 2011, increased $182.5 million, or 23 percent, to $960 million. Organic revenue growth was seven percent overall (six percent unadjusted) and eight percent for the subscription-based portion of the business. Acquisitions added 15 percent, and foreign currency movements increased revenue by two percent during the first nine months of 2011. The Americas segment grew its revenue during the nine months ended August 31, 2011, by $94.8 million, or 19 percent, to $585 million. The EMEA segment increased its year-to-date 2011 revenue by $57.2 million, or 26 percent, to $275 million. The APAC segment increased its revenue by $30.4 million, or 44 percent, to $99 million, during the first nine months of 2011.
Adjusted EBITDA for year-to-date 2011 increased $47.9 million, or 20 percent, to $282 million. Operating income increased $10.6 million, or eight percent, year-over-year to $141 million. Americas’ operating income was $167.4 million, up $19.5 million, or 13 percent, over the prior-year period. EMEA grew its year-to-date 2011 operating income to $55.1 million, up $10.1 million, or 22 percent, over the same period of 2010. APAC’s operating income was $29.0 million, an increase of $6.0 million, or 26 percent, over last year.
Net income for the nine months ended August 31, 2011 increased $9.2 million, or nine percent, to $109.0 million, or $1.66 per diluted share.
Cash Flows
IHS generated $253 million of cash flow from operations during the nine months ended August 31, 2011, representing a 14 percent increase over last year's $221 million.
Balance Sheet
IHS ended third quarter 2011 with $203 million of cash and cash equivalents and $811 million of debt.
“We delivered more than $100 million of quarterly adjusted EBITDA for the first time in our company's history,” said Rich Walker, IHS executive vice president and chief financial officer. “Our free cash flow generation remains strong, and we continue to consider opportunities to secure access to capital so we can continue to grow."
Outlook (forward-looking statement)
For the year ending November 30, 2011, IHS expects:
- All-in revenue in a range of $1.307 to $1.337 billion; and
- All-in Adjusted EBITDA in a range of $399 to $407 million.
Additionally, for the year ending November 30, 2011, IHS also expects:
- Depreciation and amortization expense to be approximately $89 million;
- Net interest expense of approximately $11 million;
- Adjusted EPS between $3.33 and $3.43;
- Stock-based compensation expense to be approximately $86 million;
- Net pension expense to be approximately $11 million;
- An adjusted tax rate of approximately 25-26%; and
- Fully diluted shares to be approximately 66 million.
The above outlook assumes constant currencies and no further acquisitions or unanticipated events.
See discussion of Adjusted EBITDA and non-GAAP financial measures at the end of this release.
As previously announced, IHS will hold a conference call to discuss third quarter 2011 results on September 21, 2011, 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 the financial statements based on U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information is provided to enhance the reader's understanding of our financial performance, but no non-GAAP measure should 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 Adjusted EBITDA and adjusted earnings per diluted share, are provided within the schedules attached to this release.
EBITDA is defined as net income plus or minus net interest plus income taxes, depreciation and amortization. Adjusted EBITDA further excludes (i) non-cash items (e.g., stock-based compensation expense and non-cash pension and post-retirement expense) and (ii) items that management does not consider to be useful in assessing our operating performance (e.g., acquisition-related costs, restructuring charges, income or loss from discontinued operations, and gain or loss on sale of assets). Adjusted earnings per diluted share exclude similar items as adjusted EBITDA. None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure.
Management uses these non-GAAP measures in its operational and financial decision-making, believing that it is useful to eliminate certain items in order to focus on what it deems 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 and adjusted earnings per diluted share metrics. Management also believes 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. EBITDA, adjusted EBITDA, and adjusted earnings per diluted share are also 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 agreement.
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 management believes the measures provide users with valuable insight into key components of GAAP financial disclosures. For example, a company with greater GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, eliminating the effects of interest income and expense moderates the impact of a company's capital structure on its performance.
All of the items included in the reconciliation from net income to adjusted EBITDA are either (i) non-cash items (e.g., depreciation and amortization, stock-based compensation, non-cash pension and post-retirement expense) or (ii) items that we do not consider to be useful in assessing our operating performance (e.g., income taxes, acquisition-related costs, restructuring charges, income or loss from discontinued operations, and gain or loss on sale of assets). In the case of the non-cash items, management believes 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 eliminating 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, management believes 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.
IHS Forward-Looking Statements:
This release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words "expect," "anticipate," "believe," "intend," "estimate," "plan" and similar expressions. Although IHS and its management believe that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties-many of which are difficult to predict and generally beyond the control of IHS-that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified by IHS from time to time in its public filings. Other than as required by applicable law, IHS does not undertake any obligation to update or revise any forward-looking information or statements. Please consult our public filings at www.sec.gov or www.ihs.com.
About IHS Inc. (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Businesses and governments in more than 165 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 employs more than 5,100 people in more than 30 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. Copyright © 2011 IHS Inc. All rights reserved.
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IHS INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In thousands, except for share and per-share amounts) |
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| As of | As of | ||||||||||||||||
| August 31, 2011 | November 30, 2010 | ||||||||||||||||
| (Unaudited) | (Audited) | ||||||||||||||||
| Assets | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 202,872 | $ | 200,735 | |||||||||||||
| Accounts receivable, net | 248,864 | 256,552 | |||||||||||||||
| Income tax receivable | 557 | — | |||||||||||||||
| Deferred subscription costs | 40,734 | 41,449 | |||||||||||||||
| Deferred income taxes | 47,066 | 33,532 | |||||||||||||||
| Other | 30,762 | 20,466 | |||||||||||||||
| Total current assets | 570,855 | 552,734 | |||||||||||||||
| Non-current assets: | |||||||||||||||||
| Property and equipment, net | 125,496 | 93,193 | |||||||||||||||
| Intangible assets, net | 592,943 | 384,568 | |||||||||||||||
| Goodwill, net | 1,683,641 | 1,120,830 | |||||||||||||||
| Other | 7,147 | 4,377 | |||||||||||||||
| Total non-current assets | 2,409,227 | 1,602,968 | |||||||||||||||
| Total assets | $ | 2,980,082 | $ | 2,155,702 | |||||||||||||
| Liabilities and stockholders’ equity | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Short-term debt | $ | 287,078 | $ | 19,054 | |||||||||||||
| Accounts payable | 30,541 | 35,854 | |||||||||||||||
| Accrued compensation | 39,861 | 51,233 | |||||||||||||||
| Accrued royalties | 17,334 | 24,338 | |||||||||||||||
| Other accrued expenses | 55,604 | 51,307 | |||||||||||||||
| Income tax payable | — | 4,350 | |||||||||||||||
| Deferred revenue | 473,803 | 392,132 | |||||||||||||||
| Total current liabilities | 904,221 | 578,268 | |||||||||||||||
| Long-term debt | 523,803 | 275,095 | |||||||||||||||
| Accrued pension liability | 30,968 | 25,104 | |||||||||||||||
| Accrued post-retirement benefits | 10,203 | 10,056 | |||||||||||||||
| Deferred income taxes | 136,372 | 73,586 | |||||||||||||||
| Other liabilities | 20,758 | 17,512 | |||||||||||||||
| Commitments and contingencies | |||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||
| Class A common stock, $0.01 par value per share, 160,000,000 shares authorized, 67,365,244 and 66,250,283 shares issued, and 65,010,669 and 64,248,547 shares outstanding at August 31, 2011 and November 30, 2010, respectively | 674 | 662 | |||||||||||||||
| Additional paid-in capital | 613,836 | 541,108 | |||||||||||||||
| Treasury stock, at cost: 2,354,575 and 2,001,736 shares at August 31, 2011 and November 30, 2010, respectively | (129,586 | ) | (101,554 | ) | |||||||||||||
| Retained earnings | 969,527 | 860,497 | |||||||||||||||
| Accumulated other comprehensive loss | (100,694 | ) | (124,632 | ) | |||||||||||||
| Total stockholders’ equity | 1,353,757 | 1,176,081 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,980,082 | $ | 2,155,702 | |||||||||||||
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IHS INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except for per-share amounts) |
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(Unaudited) |
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| Three Months Ended August 31, | Nine Months Ended August 31, | ||||||||||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||
| Products | $ | 295,328 | $ | 239,580 | $ | 832,006 | $ | 676,445 | |||||||||||||||||||||||
| Services | 45,138 | 32,032 | 128,014 | 101,125 | |||||||||||||||||||||||||||
| Total revenue | 340,466 | 271,612 | 960,020 | 777,570 | |||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||||||||||
| Products | 121,866 | 98,037 | 347,288 | 277,878 | |||||||||||||||||||||||||||
| Services | 23,376 | 17,345 | 68,448 | 54,836 | |||||||||||||||||||||||||||
| Total cost of revenue (includes stock-based compensation expense of $854; $446; $2,638 and $3,203 for the three and nine months ended August 31, 2011 and 2010, respectively) | 145,242 | 115,382 | 415,736 | 332,714 | |||||||||||||||||||||||||||
| Selling, general and administrative (includes stock-based compensation expense of $21,570; $12,336; $61,175 and $46,521 for the three and nine months ended August 31, 2011 and 2010, respectively) | 117,353 | 86,203 | 324,793 | 259,914 | |||||||||||||||||||||||||||
| Depreciation and amortization | 23,496 | 14,406 | 62,411 | 42,505 | |||||||||||||||||||||||||||
| Restructuring charges | 356 | 9,104 | 1,058 | 9,022 | |||||||||||||||||||||||||||
| Acquisition-related costs | 1,540 | — | 6,089 | — | |||||||||||||||||||||||||||
| Net periodic pension and post-retirement expense | 2,792 | 1,191 | 8,257 | 3,579 | |||||||||||||||||||||||||||
| Other expense (income), net | (197 | ) | 262 | 416 | (852 | ) | |||||||||||||||||||||||||
| Total operating expenses | 290,582 | 226,548 | 818,760 | 646,882 | |||||||||||||||||||||||||||
| Operating income | 49,884 | 45,064 | 141,260 | 130,688 | |||||||||||||||||||||||||||
| Interest income | 163 | 188 | 654 | 386 | |||||||||||||||||||||||||||
| Interest expense | (2,967 | ) | (413 | ) | (6,774 | ) | (1,073 | ) | |||||||||||||||||||||||
| Non-operating expense, net | (2,804 | ) | (225 | ) | (6,120 | ) | (687 | ) | |||||||||||||||||||||||
| Income from continuing operations before income taxes | 47,080 | 44,839 | 135,140 | 130,001 | |||||||||||||||||||||||||||
| Provision for income taxes | (7,505 | ) | (10,303 | ) | (26,050 | ) | (30,362 | ) | |||||||||||||||||||||||
| Income from continuing operations | 39,575 | 34,536 | 109,090 | 99,639 | |||||||||||||||||||||||||||
| Income (loss) from discontinued operations, net | 17 | 23 | (60 | ) | 221 | ||||||||||||||||||||||||||
| Net income | $ | 39,592 | $ | 34,559 | $ | 109,030 | $ | 99,860 | |||||||||||||||||||||||
| Basic earnings per share: | |||||||||||||||||||||||||||||||
| Income from continuing operations | $ | 0.61 | $ | 0.54 | $ | 1.68 | $ | 1.56 | |||||||||||||||||||||||
| Income (loss) from discontinued operations, net | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
| Net income | $ | 0.61 | $ | 0.54 | $ | 1.68 | $ | 1.56 | |||||||||||||||||||||||
| Weighted average shares used in computing basic earnings per share | 65,022 | 64,122 | 64,864 | 63,881 | |||||||||||||||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||||||||||
| Income from continuing operations | $ | 0.60 | $ | 0.53 | $ | 1.66 | $ | 1.54 | |||||||||||||||||||||||
| Income (loss) from discontinued operations, net | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
| Net income | $ | 0.60 | $ | 0.53 | $ | 1.66 | $ | 1.55 | |||||||||||||||||||||||
| Weighted average shares used in computing diluted earnings per share | 65,677 | 64,720 | 65,555 | 64,574 | |||||||||||||||||||||||||||
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IHS INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(In thousands) |
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(Unaudited) |
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| Nine Months Ended August 31, | |||||||||||||||
| 2011 | 2010 | ||||||||||||||
| Operating activities: | |||||||||||||||
| Net income | $ | 109,030 | $ | 99,860 | |||||||||||
| Reconciliation of net income to net cash provided by operating activities: | |||||||||||||||
| Depreciation and amortization | 62,411 | 42,505 | |||||||||||||
| Stock-based compensation expense | 63,813 | 49,724 | |||||||||||||
| Excess tax benefit from stock-based compensation | (9,182 | ) | (5,024 | ) | |||||||||||
| Non-cash net periodic pension and post-retirement expense | 7,809 | 2,555 | |||||||||||||
| Deferred income taxes | 8,898 | 347 | |||||||||||||
| Change in assets and liabilities: | |||||||||||||||
| Accounts receivable, net | 35,737 | 14,591 | |||||||||||||
| Other current assets | (3,471 | ) | (1,098 | ) | |||||||||||
| Accounts payable | (7,838 | ) | 2,221 | ||||||||||||
| Accrued expenses | (26,439 | ) | (17,363 | ) | |||||||||||
| Income tax payable | (13,874 | ) | 2,825 | ||||||||||||
| Deferred revenue | 25,831 | 30,770 | |||||||||||||
| Other liabilities | 517 | (598 | ) | ||||||||||||
| Net cash provided by operating activities | 253,242 | 221,315 | |||||||||||||
| Investing activities: | |||||||||||||||
| Capital expenditures on property and equipment | (45,373 | ) | (23,187 | ) | |||||||||||
| Acquisitions of businesses, net of cash acquired | (699,992 | ) | (83,567 | ) | |||||||||||
| Intangible assets acquired | (2,985 | ) | — | ||||||||||||
| Change in other assets | (1,203 | ) | (889 | ) | |||||||||||
| Settlements of forward contracts | (2,849 | ) | (71 | ) | |||||||||||
| Net cash used in investing activities | (752,402 | ) | (107,714 | ) | |||||||||||
| Financing activities: | |||||||||||||||
| Proceeds from borrowings | 870,000 | 95,000 | |||||||||||||
| Repayment of borrowings | (353,368 | ) | (43,270 | ) | |||||||||||
| Payment of debt issuance costs | (6,326 | ) | — | ||||||||||||
| Excess tax benefit from stock-based compensation | 9,182 | 5,024 | |||||||||||||
| Proceeds from the exercise of employee stock options | 2,144 | 618 | |||||||||||||
| Repurchases of common stock | (28,032 | ) | (25,485 | ) | |||||||||||
| Net cash provided by financing activities | 493,600 | 31,887 | |||||||||||||
| Foreign exchange impact on cash balance | 7,697 | (12,538 | ) | ||||||||||||
| Net increase in cash and cash equivalents | 2,137 | 132,950 | |||||||||||||
| Cash and cash equivalents at the beginning of the period | 200,735 | 124,201 | |||||||||||||
| Cash and cash equivalents at the end of the period | $ | 202,872 | $ | 257,151 | |||||||||||
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SUPPLEMENTAL REVENUE DISCLOSURE |
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(In thousands) |
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(Unaudited) |
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| Three Months Ended August 31, | Absolute | Organic | Nine Months Ended August 31, | Absolute | Organic | ||||||||||||||||||||||||||||||||||||||
| 2011 | 2010 | % change | % change * | 2011 | 2010 | % change | % change * | ||||||||||||||||||||||||||||||||||||
| Revenue by segment: | |||||||||||||||||||||||||||||||||||||||||||
| Americas revenue | $ | 207,477 | $ | 170,359 | 22 | % | 7 | % | $ | 585,227 | $ | 490,381 | 19 | % | 7 | % | |||||||||||||||||||||||||||
| EMEA revenue | 95,945 | 76,011 | 26 | % | 2 | % | 275,446 | 218,198 | 26 | % | 5 | % | |||||||||||||||||||||||||||||||
| APAC revenue | 37,044 | 25,242 | 47 | % | 16 | % | 99,347 | 68,991 | 44 | % | 17 | % | |||||||||||||||||||||||||||||||
| Total revenue | $ | 340,466 | $ | 271,612 | 25 | % | 6 | % | $ | 960,020 | $ | 777,570 | 23 | % | 7 | % | |||||||||||||||||||||||||||
| Revenue by transaction type: | |||||||||||||||||||||||||||||||||||||||||||
| Subscription revenue | $ | 263,915 | $ | 209,073 | 26 | % | 8 | % | $ | 747,907 | $ | 609,916 | 23 | % | 8 | % | |||||||||||||||||||||||||||
| Consulting revenue | 24,353 | 16,330 | 49 | % | — | % | 59,822 | 43,300 | 38 | % | 2 | % | |||||||||||||||||||||||||||||||
| Transaction revenue | 16,697 | 21,070 | (21 | )% | 8 | % | 44,335 | 44,585 | (1 | )% | 8 | % | |||||||||||||||||||||||||||||||
| Other revenue | 35,501 | 25,139 | 41 | % | (7 | )% | 107,956 | 79,769 | 35 | % | 3 | % | |||||||||||||||||||||||||||||||
| Total revenue | $ | 340,466 | $ | 271,612 | 25 | % | 6 | % | $ | 960,020 | $ | 777,570 | 23 | % | 7 | % | |||||||||||||||||||||||||||
| Revenue by information domain: | |||||||||||||||||||||||||||||||||||||||||||
| Energy revenue | $ | 142,607 | $ | 117,391 | $ | 403,703 | $ | 350,440 | |||||||||||||||||||||||||||||||||||
| Product Lifecycle (PLC) revenue | 115,889 | 90,750 | 326,162 | 248,659 | |||||||||||||||||||||||||||||||||||||||
| Security revenue | 32,204 | 28,444 | 88,570 | 79,539 | |||||||||||||||||||||||||||||||||||||||
| Environment revenue | 25,235 | 13,315 | 68,778 | 37,913 | |||||||||||||||||||||||||||||||||||||||
| Macroeconomic Forecasting and Intersection revenue | 24,531 | 21,712 | 72,807 | 61,019 | |||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 340,466 | $ | 271,612 | $ | 960,020 | $ | 777,570 | |||||||||||||||||||||||||||||||||||
* Excludes approximately $7 million of revenue associated with the triennial release of a certain engineering standard in the third quarter of 2010.
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IHS INC. |
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RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TO |
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MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS |
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(In thousands, except for per-share amounts) |
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(Unaudited) |
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| Three Months Ended August 31, | Nine Months Ended August 31, | |||||||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
| Net income | $ | 39,592 | $ | 34,559 | $ | 109,030 | $ | 99,860 | ||||||||||||||||||||
| Interest income | (163 | ) | (188 | ) | (654 | ) | (386 | ) | ||||||||||||||||||||
| Interest expense | 2,967 | 413 | 6,774 | 1,073 | ||||||||||||||||||||||||
| Provision for income taxes | 7,505 | 10,303 | 26,050 | 30,362 | ||||||||||||||||||||||||
| Depreciation and amortization | 23,496 | 14,406 | 62,411 | 42,505 | ||||||||||||||||||||||||
| EBITDA | $ | 73,397 | $ | 59,493 | $ | 203,611 | $ | 173,414 | ||||||||||||||||||||
| Stock-based compensation expense | 22,424 | 12,782 | 63,813 | 49,724 | ||||||||||||||||||||||||
| Restructuring charges | 356 | 9,104 | 1,058 | 9,022 | ||||||||||||||||||||||||
| Acquisition-related costs | 1,540 | — | 6,089 | — | ||||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | 2,602 | 851 | 7,809 | 2,555 | ||||||||||||||||||||||||
| (Income) loss from discontinued operations, net | (17 | ) | (23 | ) | 60 | (221 | ) | |||||||||||||||||||||
| Adjusted EBITDA | $ | 100,302 | $ | 82,207 | $ | 282,440 | $ | 234,494 | ||||||||||||||||||||
| Three Months Ended August 31, | Nine Months Ended August 31, | |||||||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
| Earnings per diluted share | $ | 0.60 | $ | 0.53 | $ | 1.66 | $ | 1.55 | ||||||||||||||||||||
| Stock-based compensation expense | 0.22 | 0.13 | 0.63 | 0.49 | ||||||||||||||||||||||||
| Restructuring charges (credits) | — | 0.09 | 0.01 | 0.09 | ||||||||||||||||||||||||
| Acquisition-related costs | 0.02 | — | 0.08 | — | ||||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | 0.02 | 0.01 | 0.07 | 0.02 | ||||||||||||||||||||||||
| (Income) loss from discontinued operations, net | — | — | — | — | ||||||||||||||||||||||||
| Adjusted earnings per diluted share | $ | 0.88 | $ | 0.76 | $ | 2.46 | $ | 2.14 | ||||||||||||||||||||
| Note: Amounts may not sum due to rounding | ||||||||||||||||||||||||||||
| Three Months Ended August 31, | Nine Months Ended August 31, | |||||||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||
| Net cash provided by operating activities | 52,261 | 42,159 | 253,242 | 221,315 | ||||||||||||||||||||||||
| Capital expenditures on property and equipment | (12,842 | ) | (6,848 | ) | (45,373 | ) | (23,187 | ) | ||||||||||||||||||||
| Free cash flow | $ | 39,419 | $ | 35,311 | $ | 207,869 | $ | 198,128 | ||||||||||||||||||||
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IHS INC. |
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RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASUREMENTS TO |
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MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS |
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(In thousands) |
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(Unaudited) |
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| Three Months Ended August 31, 2011 | |||||||||||||||||||||||||||||||||
| Americas | EMEA | APAC | Shared Services | Total | |||||||||||||||||||||||||||||
| Operating income | $ | 63,272 | $ | 18,842 | $ | 10,911 | $ | (43,141 | ) | $ | 49,884 | ||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 22,424 | 22,424 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 18,082 | 4,772 | 48 | 594 | 23,496 | ||||||||||||||||||||||||||||
| Restructuring charges | — | — | — | 356 | 356 | ||||||||||||||||||||||||||||
| Acquisition-related costs | 1,540 | — | — | — | 1,540 | ||||||||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | — | — | — | 2,602 | 2,602 | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 82,894 | $ | 23,614 | $ | 10,959 | $ | (17,165 | ) | $ | 100,302 | ||||||||||||||||||||||
| Three Months Ended August 31, 2010 | |||||||||||||||||||||||||||||||||
| Americas | EMEA | APAC | Shared Services | Total | |||||||||||||||||||||||||||||
| Operating income | $ | 46,812 | $ | 15,439 | $ | 8,857 | $ | (26,044 | ) | $ | 45,064 | ||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | 12,782 | 12,782 | ||||||||||||||||||||||||||||
| Depreciation and amortization | 10,042 | 3,796 | 24 | 544 | 14,406 | ||||||||||||||||||||||||||||
| Restructuring charges | 7,716 | 1,338 | 50 | — | 9,104 | ||||||||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | — | — | — | 851 | 851 | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 64,570 | $ | 20,573 | $ | 8,931 | $ | (11,867 | ) | $ | 82,207 | ||||||||||||||||||||||
| Nine Months Ended August 31, 2011 | |||||||||||||||||||||||||||||||||
| Americas | EMEA | APAC | Shared Services | Total | |||||||||||||||||||||||||||||
| Operating income | $ | 167,377 | $ | 55,057 | $ | 29,037 | $ | (110,211 | ) | $ | 141,260 | ||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | 63,813 | 63,813 | ||||||||||||||||||||||||||||
| Depreciation and amortization | 47,510 | 13,062 | 134 | 1,705 | 62,411 | ||||||||||||||||||||||||||||
| Restructuring charges | 875 | 364 | — | (181 | ) | 1,058 | |||||||||||||||||||||||||||
| Acquisition-related costs | 5,687 | 402 | — | — | 6,089 | ||||||||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | — | — | — | 7,809 | 7,809 | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 221,449 | $ | 68,885 | $ | 29,171 | $ | (37,065 | ) | $ | 282,440 | ||||||||||||||||||||||
| Nine Months Ended August 31, 2010 | |||||||||||||||||||||||||||||||||
| Americas | EMEA | APAC | Shared Services | Total | |||||||||||||||||||||||||||||
| Operating income | $ | 147,910 | $ | 44,987 | $ | 23,033 | $ | (85,242 | ) | $ | 130,688 | ||||||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | 49,724 | 49,724 | ||||||||||||||||||||||||||||
| Depreciation and amortization | 29,213 | 11,614 | 74 | 1,604 | 42,505 | ||||||||||||||||||||||||||||
| Restructuring charges | 7,634 | 1,338 | 50 | — | 9,022 | ||||||||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | — | — | — | 2,555 | 2,555 | ||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 184,757 | $ | 57,939 | $ | 23,157 | $ | (31,359 | ) | $ | 234,494 | ||||||||||||||||||||||
|
IHS INC. |
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SUPPLEMENTAL INFORMATION |
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(In thousands) |
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(Unaudited) |
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| Three Months Ended August 31, 2011 | Three Months Ended August 31, 2010 | ||||||||||||||||||||||||||||||
| Pre-tax | After tax | Pre-tax | After tax | ||||||||||||||||||||||||||||
| Stock-based compensation expense | $ | 22,424 | $ | 14,582 | $ | 12,782 | $ | 8,338 | |||||||||||||||||||||||
| Restructuring charges | $ | 356 | $ | 221 | $ | 9,104 | $ | 5,645 | |||||||||||||||||||||||
| Acquisition-related costs | $ | 1,540 | $ | 1,540 | $ | — | $ | — | |||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | $ | 2,602 | $ | 1,612 | $ | 851 | $ | 529 | |||||||||||||||||||||||
| (Income) loss from discontinued operations, net | $ | (23 | ) | $ | (17 | ) | $ | (32 | ) | $ | (23 | ) | |||||||||||||||||||
| Nine Months Ended August 31, 2011 | Nine Months Ended August 31, 2010 | ||||||||||||||||||||||||||||||
| Pre-tax | After tax | Pre-tax | After tax | ||||||||||||||||||||||||||||
| Stock-based compensation expense | $ | 63,813 | $ | 41,369 | $ | 49,724 | $ | 31,611 | |||||||||||||||||||||||
| Restructuring charges | $ | 1,058 | $ | 673 | $ | 9,022 | $ | 5,594 | |||||||||||||||||||||||
| Acquisition-related costs | $ | 6,089 | $ | 5,017 | $ | — | $ | — | |||||||||||||||||||||||
| Non-cash net periodic pension and post-retirement expense | $ | 7,809 | $ | 4,841 | $ | 2,555 | $ | 1,585 | |||||||||||||||||||||||
| (Income) loss from discontinued operations, net | $ | 82 | $ | 60 | $ | (318 | ) | $ | (221 | ) | |||||||||||||||||||||