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IHS Inc. Reports Fourth Quarter and Full-Year 2013 Results

Companies mentioned in this article: IHS Inc.

ENGLEWOOD, Colo. -- (BUSINESS WIRE) -- IHS Inc. (NYSE: IHS), the leading global source of information and analytics, today reported results for the fourth quarter and full year ended November 30, 2013.

  • Quarterly revenue of $560 million, up 35 percent from the prior-year period
  • Quarterly organic revenue growth rate for subscription-based business of 7 percent
  • Adjusted EBITDA of $170 million, or 30.3 percent of revenue for the quarter
  • Adjusted earnings per diluted share (adjusted EPS) of $1.46, up 3 percent from the prior-year period
  • Full-year free cash flow of $405 million, up 62 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.

Fourth Quarter and Full-Year 2013 Financial Performance

  Three months ended November 30,   Change   Year ended November 30,   Change

(in thousands, except
percentages and per share data)

2013   2012 $   % 2013   2012 $   %
Revenue $ 559,675 $ 414,358 $ 145,317 35 % $ 1,840,631 $ 1,529,869 $ 310,762 20 %
 
Net income $ 40,810 $ 46,420 $ (5,610 ) (12 )% $ 131,733 $ 158,168 $ (26,435 ) (17 )%
Adjusted EBITDA $ 169,565 $ 139,993 $ 29,572 21 % $ 561,768 $ 484,971 $ 76,797 16 %
 
GAAP EPS $ 0.60 $ 0.69 $ (0.09 ) (13 )% $ 1.95 $ 2.37 $ (0.42 ) (18 )%
Adjusted EPS $ 1.46 $ 1.42 $ 0.04 3 % $ 5.06 $ 4.75 $ 0.31 7 %
 
Cash flow from operations $ 151,786 $ 68,117 $ 83,669 123 % $ 496,155 $ 314,373 $ 181,782 58 %
Free cash flow $ 126,463 $ 53,084 $ 73,379 138 % $ 405,421 $ 249,641 $ 155,780 62 %
 

“We are very pleased with the results we were able to deliver this quarter, including 7 percent organic growth in our subscription business,” said Scott Key, IHS president and chief executive officer. “We saw improving pipelines as we entered the quarter and were further helped by the realization of some deals that had slipped out of third quarter and by very strong performance at Polk.”

“Full year free cash flow and free cash flow conversion were very robust,” said Todd Hyatt, IHS chief financial officer. “The cash generative nature of our business model should allow us to continue to de-lever throughout 2014.”

Fourth Quarter and Full-Year 2013 Revenue Performance

Fourth quarter 2013 revenue increased 35 percent compared to the fourth quarter of 2012, and full-year 2013 revenue increased 20 percent compared to the same period of 2012. The components of revenue growth for these periods are described below by segment and in total.

  Increase in revenue
Fourth quarter 2013 vs. fourth quarter 2012   2013 vs. 2012
(All amounts represent percentage points) Organic   Acquisitive  

Foreign
Currency

Organic   Acquisitive  

Foreign
Currency

Americas 6% 47% (1)% 4% 24% —%
EMEA 3% 12% —% 3% 7% (1)%
APAC (2)% 8% (1)% 7% 6% (1)%
Total 4% 32% (1)% 4% 17% (1)%
 

The subscription-based business grew 7 percent organically in the current quarter compared to the fourth quarter of 2012, as described in the following table.

  Three months ended November 30,   Percent change   Year ended November 30,   Percent change
(in thousands, except percentages) 2013   2012 Total   Organic 2013   2012 Total   Organic
Subscription revenue $ 418,309 $ 302,187 38% 7% $ 1,404,984 $ 1,157,347 21% 6%
Non-subscription revenue 141,366   112,171   26% (3)% 435,647   372,522   17% (3)%
Total revenue $ 559,675   $ 414,358   35% 4% $ 1,840,631   $ 1,529,869   20% 4%
 

Fourth Quarter and Full-Year 2013 Segment Performance

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

  • Americas. Fourth quarter revenue for the Americas increased $126 million, or 52 percent, to $369 million, and included 5 percent organic growth for the subscription-based business. Fourth quarter adjusted EBITDA for the Americas increased $33 million, or 33 percent, to $133 million. Fourth quarter operating income for the Americas increased $18 million, or 25 percent, to $91 million.

    Full-year revenue for the Americas increased $250 million, or 27 percent, to $1.163 billion. Full-year adjusted EBITDA for the Americas increased $89 million, or 24 percent, to $458 million. Full-year operating income for the Americas increased $41 million, or 16 percent, to $304 million.
  • EMEA. Fourth quarter revenue for EMEA increased $17 million, or 14 percent, to $139 million, and included 10 percent organic growth for the subscription-based business. Fourth quarter adjusted EBITDA for EMEA was relatively flat at $38 million. Fourth quarter operating income for EMEA decreased $1 million, or 3 percent, to $25 million.

    Full-year revenue for EMEA increased $40 million, or 9 percent, to $483 million. Full-year adjusted EBITDA for EMEA decreased $11 million, or 9 percent, to $115 million. Full-year operating income for EMEA decreased $14 million, or 15 percent, to $81 million. EMEA profit was impacted by product mix, investment in growth and increased selling costs.
  • APAC. Fourth quarter revenue for APAC increased $3 million, or 6 percent, to $52 million, and included 9 percent organic growth for the subscription-based business. Fourth quarter adjusted EBITDA for APAC decreased $3 million, or 17 percent, to $14 million. Fourth quarter operating income for APAC decreased $3 million, or 21 percent, to $13 million. APAC profit reflects continued investment in long-term growth in the region.

    Full-year revenue for APAC increased $21 million, or 12 percent, to $195 million. Full-year adjusted EBITDA for APAC decreased $2 million, or 5 percent, to $45 million. Full-year operating income for APAC decreased $4 million, or 9 percent, to $42 million.

Outlook (forward-looking statement)

For the year ending November 30, 2014, IHS expects:

  • Revenue in a range of $2.17 billion to $2.23 billion, including 6-7 percent organic growth on the subscription base;
  • Adjusted EBITDA in a range of $675 million to $705 million; and
  • Adjusted EPS in a range of $5.50 to $5.85 per diluted share.

Additionally, for the year ending November 30, 2014, IHS expects:

  • Depreciation expense to be approximately $75-80 million;
  • Amortization expense related to acquired intangible assets to be approximately $135-140 million;
  • Net interest expense to be approximately $55-60 million;
  • Stock-based compensation expense to be approximately $185-195 million;
  • An adjusted tax rate of approximately 28-30 percent;
  • An effective GAAP tax rate of approximately 20-22 percent; and
  • Fully diluted shares to be approximately 69-70 million.

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

For additional information related to the earnings conference call, see the related supplemental presentation posted to our website at www.ihs.com.

As previously announced, IHS will hold a conference call to discuss fourth quarter 2013 results on January 7, 2014, at 8:00 a.m. EST. 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 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 eliminate 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,” “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 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, and the other factors described under the caption “Risk Factors” in our most recent annual report on Form 10-K and subsequent Forms 10-Q, 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 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 is committed to sustainable, profitable growth and employs 8,000 people in 31 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.
© 2013 IHS Inc. All rights reserved.

   

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

 
As of As of
November 30, 2013 November 30, 2012
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 258,367 $ 345,008
Accounts receivable, net 459,263 372,117
Income tax receivable 20,464
Deferred subscription costs 49,327 47,065
Deferred income taxes 70,818 55,084
Other 43,065   24,145  
Total current assets 880,840   863,883  
Non-current assets:
Property and equipment, net 245,566 163,013
Intangible assets, net 1,144,464 554,552
Goodwill 3,065,181 1,959,223
Other 23,562   8,540  
Total non-current assets 4,478,773   2,685,328  
Total assets $ 5,359,613   $ 3,549,211  
Liabilities and stockholders’ equity
Current liabilities:
Short-term debt $ 395,527 $ 170,102
Accounts payable 57,001 52,079
Accrued compensation 89,460 50,497
Accrued royalties 36,289 33,637
Other accrued expenses 98,187 55,304
Income tax payable 9,961
Deferred revenue 560,010   515,318  
Total current liabilities 1,246,435 876,937
Long-term debt 1,779,065 890,922
Accrued pension and postretirement liability 27,191 30,027
Deferred income taxes 361,267 139,235
Other liabilities 38,692 27,732
Commitments and contingencies
Stockholders’ equity:

Class A common stock, $0.01 par value per share, 160,000,000 shares
authorized, 67,901,101 and 67,621,367 shares issued, and 67,382,298 and
65,577,530 shares outstanding at November 30, 2013 and November 30, 2012, respectively

679 676
Additional paid-in capital 788,670 681,409

Treasury stock, at cost: 518,803 and 2,043,837 shares at November 30, 2013 and November
30, 2012, respectively

(45,945 ) (139,821 )
Retained earnings 1,220,520 1,088,787
Accumulated other comprehensive loss (56,961 ) (46,693 )
Total stockholders’ equity 1,906,963   1,584,358  
Total liabilities and stockholders’ equity $ 5,359,613   $ 3,549,211  
 

IHS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per-share amounts)
(Unaudited)

   
Three months ended November 30, Year ended November 30,
2013   2012 2013   2012
Revenue 559,675 414,358 1,840,631 1,529,869
Operating expenses:

Cost of revenue (includes stock-based compensation expense
of $2,646; $1,739; $8,271 and $6,206 for the three and twelve
months ended November 30, 2013 and 2012, respectively)

217,406 158,907 748,184 624,514

Selling, general and administrative (includes stock-based
compensation expense of $45,011; $28,872; $154,180 and
$115,337 for the three and twelve months ended November
30, 2013 and 2012, respectively)

215,807 143,503 680,989 534,043
Depreciation and amortization 50,950 31,560 158,737 118,243
Restructuring charges 2,175 4,749 13,458 16,829
Acquisition-related costs 5,369 675 23,428 4,147
Net periodic pension and postretirement expense 4,895 18,919 11,619 24,917
Other expense (income), net 2,279   569   6,012   (111 )
Total operating expenses 498,881   358,882   1,642,427   1,322,582  
Operating income 60,794 55,476 198,204 207,287
Interest income 392 325 1,271 999
Interest expense (16,226 ) (5,736 ) (44,582 ) (20,573 )
Non-operating expense, net (15,834 ) (5,411 ) (43,311 ) (19,574 )
Income from continuing operations before income taxes 44,960 50,065 154,893 187,713
Provision for income taxes (4,150 ) (3,656 ) (23,059 ) (29,564 )
Income from continuing operations 40,810 46,409 131,834 158,149
Income (loss) from discontinued operations, net   11   (101 ) 19  
Net income $ 40,810   $ 46,420   $ 131,733   $ 158,168  
 
Basic earnings per share
Income from continuing operations $ 0.61 $ 0.70 $ 1.98 $ 2.40
Income (loss) from discontinued operations, net $   $   $   $  
Net income $ 0.61   $ 0.70   $ 1.98   $ 2.40  
Weighted average shares used in computing basic earnings per share 67,403   65,974   66,434   65,840  
 
Diluted earnings per share
Income from continuing operations $ 0.60 $ 0.69 $ 1.95 $ 2.37
Income (loss) from discontinued operations, net $   $   $   $  
Net income $ 0.60   $ 0.69   $ 1.95   $ 2.37  
Weighted average shares used in computing diluted earnings per share 68,416   67,136   67,442   66,735  
 

IHS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 
Year ended November 30,
2013   2012
Operating activities:
Net income $ 131,733 $ 158,168
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization 158,737 118,243
Stock-based compensation expense 162,451 121,543
Impairment of assets 1,629
Excess tax benefit from stock-based compensation (14,334 ) (13,199 )
Net periodic pension and postretirement expense 11,619 24,917
Pension and postretirement contributions (13,299 ) (68,339 )
Deferred income taxes (34,312 ) (16,451 )
Change in assets and liabilities:
Accounts receivable, net (24,427 ) (35,410 )
Other current assets (672 ) (2,246 )
Accounts payable (10,069 ) 22,383
Accrued expenses 50,753 (17,567 )
Income tax payable 65,887 21,220
Deferred revenue 10,378 692
Other liabilities 81   419  
Net cash provided by operating activities 496,155   314,373  
Investing activities:
Capital expenditures on property and equipment (90,734 ) (64,732 )
Acquisitions of businesses, net of cash acquired (1,487,034 ) (306,268 )
Intangible assets acquired (3,700 )
Change in other assets 1,347 1,708
Settlements of forward contracts 4,524   (2,268 )
Net cash used in investing activities (1,571,897 ) (375,260 )
Financing activities:
Proceeds from borrowings 1,375,000 750,001
Repayment of borrowings (268,909 ) (493,080 )
Payment of debt issuance costs (17,360 ) (824 )
Excess tax benefit from stock-based compensation 14,334 13,199
Proceeds from the exercise of employee stock options 549 2,938
Repurchases of common stock (97,164 ) (92,823 )
Net cash provided by financing activities 1,006,450   179,411  
Foreign exchange impact on cash balance (17,349 ) (8,201 )
Net increase (decrease) in cash and cash equivalents (86,641 ) 110,323
Cash and cash equivalents at the beginning of the period 345,008   234,685  
Cash and cash equivalents at the end of the period $ 258,367   $ 345,008  
 

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

       
Three months ended November 30, Percent change Year ended November 30, Percent change
2013   2012 Total   Organic 2013   2012 Total   Organic
Revenue by segment:
Americas revenue $ 368,510 $ 242,733 52% 6% $ 1,162,582 $ 912,490 27% 4%
EMEA revenue 138,711 121,947 14% 3% 483,373 443,385 9% 3%
APAC revenue 52,454   49,678   6% (2)% 194,676   173,994   12% 7%
Total revenue $ 559,675   $ 414,358   35% 4% $ 1,840,631   $ 1,529,869   20% 4%
 
Revenue by transaction type:

Subscription
revenue

$ 418,309 $ 302,187 38% 7% $ 1,404,984 $ 1,157,347 21% 6%

Non-subscription
revenue

141,366   112,171   26% (3)% 435,647   372,522   17% (3)%
Total revenue $ 559,675   $ 414,358   35% 4% $ 1,840,631   $ 1,529,869   20% 4%
 
Revenue by information domain:
Energy revenue $ 217,285 $ 191,103 $ 799,157 $ 712,061

Product Lifecycle
(PLC) revenue

260,805 137,274 735,481 501,569
Security revenue 31,250 33,328 116,101 120,852

Environment
revenue

28,443 31,873 103,396 103,751

Macroeconomic
Forecasting and
Intersection revenue

21,892   20,780   86,496   91,636  
Total revenue $ 559,675   $ 414,358   $ 1,840,631   $ 1,529,869  
 

IHS INC.
RECONCILIATION OF CONSOLIDATED NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands, except for per-share amounts)
(Unaudited)

   
Three months ended November 30, Year ended November 30,
2013   2012 2013   2012
Net income $ 40,810 $ 46,420 $ 131,733 $ 158,168
Interest income (392 ) (325 ) (1,271 ) (999 )
Interest expense 16,226 5,736 44,582 20,573
Provision for income taxes 4,150 3,656 23,059 29,564
Depreciation 15,104 10,289 48,799 36,131
Amortization related to acquired intangible assets 35,846   21,271   109,938   82,112  
EBITDA (1)(6) $ 111,744 $ 87,047 $ 356,840 $ 325,549
Stock-based compensation expense 47,657 30,611 162,451 121,543
Restructuring charges 2,175 4,749 13,458 16,829
Acquisition-related costs 5,369 675 23,428 4,147
Impairment of assets 1,629
Loss on sale of assets 1,241
Pension mark-to-market and settlement expense 2,620 16,922 2,620 16,922
(Income) loss from discontinued operations, net   (11 ) 101   (19 )
Adjusted EBITDA (2)(6) $ 169,565   $ 139,993   $ 561,768   $ 484,971  
 
 
Three months ended November 30, Year ended November 30,
2013 2012 2013 2012
Net income $ 40,810 $ 46,420 $ 131,733 $ 158,168
Stock-based compensation expense 47,657 30,611 162,451 121,543
Amortization related to acquired intangible assets 35,846 21,271 109,938 82,112
Restructuring charges 2,175 4,749 13,458 16,829
Acquisition-related costs 5,369 675 23,428 4,147
Impairment of assets 1,629
Loss on sale of assets 1,241
Pension mark-to-market and settlement expense 2,620 16,922 2,620 16,922
(Income) loss from discontinued operations, net (11 ) 101 (19 )
Income tax effect on adjusting items (34,396 ) (25,384 ) (105,463 ) (83,013 )
Adjusted net income (3) $ 100,081   $ 95,253   $ 341,136   $ 316,689  
Adjusted earnings per diluted share (4)(6) $ 1.46   $ 1.42   $ 5.06   $ 4.75  
Weighted average shares used in computing adjusted earnings per diluted share 68,416   67,136   67,442   66,735  
 
 
Three months ended November 30, Year ended November 30,
2013 2012 2013   2012
Net cash provided by operating activities $ 151,786 $ 68,117 $ 496,155 $ 314,373
Capital expenditures on property and equipment (25,323 ) (15,033 ) (90,734 ) (64,732 )
Free cash flow (5)(6) $ 126,463   $ 53,084   $ 405,421   $ 249,641  
 

IHS INC.
RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASUREMENTS TO
MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS
(In thousands)
(Unaudited)

 
Three months ended November 30, 2013
Americas   EMEA   APAC   Shared Services   Total
Operating income $ 90,789 $ 24,789 $ 13,125 $ (67,909 ) $ 60,794
Adjustments:
Stock-based compensation expense 47,657 47,657
Depreciation and amortization 39,644 8,631 868 1,807 50,950
Restructuring charges 1,038 1,003 134 2,175
Acquisition-related costs 1,785 3,584 5,369
Pension mark-to-market expense       2,620   2,620
Adjusted EBITDA $ 133,256   $ 38,007   $ 14,127   $ (15,825 ) $ 169,565
 
Three months ended November 30, 2012
Americas EMEA APAC Shared Services Total
Operating income $ 72,882 $ 25,591 $ 16,553 $ (59,550 ) $ 55,476
Adjustments:
Stock-based compensation expense 30,611 30,611
Depreciation and amortization 23,417 6,019 354 1,770 31,560
Restructuring charges 3,533 1,092 124 4,749
Acquisition-related costs 675 675

Pension mark-to-market and settlement expense

  5,762     11,160   16,922
Adjusted EBITDA $ 100,507   $ 38,464   $ 17,031   $ (16,009 ) $ 139,993
 
Year ended November 30, 2013
Americas EMEA APAC Shared Services Total
Operating income $ 303,803 $ 81,048 $ 42,089 $ (228,736 ) $ 198,204
Adjustments:
Stock-based compensation expense 162,451 162,451
Depreciation and amortization 123,477 25,688 2,363 7,209 158,737
Restructuring charges 9,354 3,530 574 13,458
Acquisition-related costs 19,552 3,876 23,428
Impairment of assets 1,629 1,629
Loss on sale of assets 1,241 1,241
Pension mark-to-market expense       2,620   2,620
Adjusted EBITDA $ 457,815   $ 115,383   $ 45,026   $ (56,456 ) $ 561,768
 
Year ended November 30, 2012
Americas EMEA APAC Shared Services Total
Operating income $ 262,953 $ 95,144 $ 46,042 $ (196,852 ) $ 207,287
Adjustments:
Stock-based compensation expense 121,543 121,543
Depreciation and amortization 88,456 22,188 1,065 6,534 118,243
Restructuring charges 13,430 3,033 366 16,829
Acquisition-related costs 3,929 218 4,147

Pension mark-to-market and settlement expense

  5,762     11,160   16,922
Adjusted EBITDA $ 368,768   $ 126,345   $ 47,473   $ (57,615 ) $ 484,971
 
(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, acquisition-related costs, restructuring charges, income or loss from discontinued operations, pension settlement and mark-to-market adjustments, and gain or loss on sale of assets). 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, pension settlement and mark-to-market adjustments, impairment of assets, gain or loss on sale of assets, and income or loss from discontinued operations).
(4) Adjusted earnings per diluted share 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 agreement.
 


Copyright © Business Wire 2014
Contact:

IHS Inc.
News Media Contact:
Dan Wilinsky, +1 303-397-2468
dan.wilinsky@ihs.com