IHS Markit (NYSE: INFO), a world leader in critical information,
analytics and solutions, today reported results for the fourth
quarter ended November 30, 2021.
- Revenue of $1.176 billion, with 10 percent total organic
revenue growth
- Net income of $737 million and diluted earnings per share (EPS)
of $1.83
- Adjusted EBITDA of $531 million and Adjusted earnings per
diluted share (Adjusted EPS) of $0.85
- Cash flow from operations of $449 million and free cash flow of
$375 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.
Fourth Quarter 2021 Financial
Performance
Three months ended November
30,
Change
Year ended November
30,
Change
(in millions, except percentages and
per share data)
2021
2020
$
%
2021
2020
$
%
Revenue
$
1,176.3
$
1,107.2
$
69.1
6
%
$
4,658.1
$
4,287.8
$
370.3
9
%
Net income attributable to IHS Markit*
$
737.2
$
151.1
$
586.1
388
%
$
1,206.8
$
870.7
$
336.1
39
%
Adjusted EBITDA
$
530.5
$
464.9
$
65.6
14
%
$
2,030.3
$
1,836.7
$
193.6
11
%
GAAP EPS
$
1.83
$
0.38
$
1.45
382
%
$
3.01
$
2.17
$
0.84
39
%
Adjusted EPS
$
0.85
$
0.72
$
0.13
18
%
$
3.21
$
2.84
$
0.37
13
%
Cash flow from operations
$
449.0
$
338.3
$
110.7
33
%
$
1,486.2
$
1,138.8
$
347.4
31
%
Free cash flow
$
374.7
$
275.3
$
99.4
36
%
$
1,191.9
$
939.9
$
252.0
27
%
* Net income attributable to IHS Markit
for the three months and year ended November 30, 2021 includes an
approximate $489 million gain on sale related to the MarkitSERV
business line divestiture in September 2021. Net income
attributable to IHS Markit for the year ended November 30, 2020
includes an approximate $377 million gain on sale related to the
A&D business line divestiture in December 2019.
“We had a great close to the year and had record organic revenue
growth for both the quarter and the year. We entered FY22 with
strong momentum across our businesses, which sets us up well for
the year. As we continue to expect the merger with S&P Global
to close in calendar Q1, I want to thank our colleagues, customers,
and shareholders for their support over the years. I look forward
to cheering for the combined IHS Markit and S&P Global in the
years to come,” said Lance Uggla, chairman and chief executive
officer at IHS Markit.
“Q4 was a strong finish to a great year for IHS Markit. I want
to thank our teams for maintaining their focus and delivering such
strong results while continuing to manage to the merger with
S&P Global,” said Jonathan Gear, chief financial officer at IHS
Markit.
Fourth Quarter 2021 Revenue Performance
Fourth quarter 2021 revenue increased 10 percent organically
compared to the fourth quarter of 2020. The following table
provides additional revenue information by transaction type.
Three months ended November
30,
Percentage change
(in millions, except
percentages)
2021
2020
Total
Organic
Recurring fixed
$
874.1
$
809.7
8
%
8
%
Recurring variable
144.4
158.5
(9
)%
11
%
Non-recurring
157.8
139.0
14
%
15
%
Total revenue
$
1,176.3
$
1,107.2
6
%
10
%
The components of revenue growth are described below by segment
and in total.
Change in revenue
Fourth quarter 2021 vs. Fourth
quarter 2020
(All amounts represent percentage
points)
Organic
Acquisitive
Foreign
Currency
Total
Financial Services
12
%
(9
) %
—
%
3
%
Transportation
12
%
—
%
—
%
12
%
Resources
2
%
—
%
—
%
2
%
Consolidated Markets & Solutions
10
%
(1
) %
—
%
9
%
Total
10
%
(4
) %
—
%
6
%
Fourth Quarter 2021 Operating Performance
Segment results were as follows (additional segment information
is included later in this release):
- Financial Services. Fourth quarter revenue for Financial
Services increased $14 million, or 3 percent, to $473 million, and
included 12 percent total organic growth. Fourth quarter Adjusted
EBITDA for Financial Services increased $27 million, or 12 percent,
to $251 million.
- Transportation. Fourth quarter revenue for Transportation
increased $39 million, or 12 percent, to $351 million, and included
12 percent total organic growth. Fourth quarter Adjusted EBITDA for
Transportation increased $19 million, or 13 percent, to $161
million.
- Resources. Fourth quarter revenue for Resources increased $5
million, or 2 percent, to $215 million, with a 2 percent total
organic increase. Fourth quarter Adjusted EBITDA for Resources
increased $6 million, or 7 percent, to $90 million.
- Consolidated Markets & Solutions (CMS). Fourth quarter
revenue for CMS increased $11 million, or 9 percent, to $137
million, and included 10 percent total organic growth. Fourth
quarter Adjusted EBITDA for CMS increased $7 million, or 24
percent, to $39 million.
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.
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;
the impact of the COVID-19 pandemic; 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
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 © 2022 IHS Markit Ltd. All
rights reserved.
IHS MARKIT LTD.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
As of November 30,
2021
As of November 30,
2020
(Unaudited)
(Audited)
Assets
Current assets:
Cash and cash equivalents
$
293.1
$
125.6
Accounts receivable, net
906.5
891.7
Deferred subscription costs
89.6
84.3
Assets held for sale
457.2
—
Other current assets
88.5
131.7
Total current assets
1,834.9
1,233.3
Non-current assets:
Property and equipment, net
706.5
724.8
Operating lease right-of-use
assets, net
250.1
296.8
Intangible assets, net
3,021.6
3,846.1
Goodwill
9,380.7
9,908.7
Deferred income taxes
32.7
27.1
Equity-method investments
1,612.8
20.3
Other
74.6
78.1
Total non-current assets
15,079.0
14,901.9
Total assets
$
16,913.9
$
16,135.2
Liabilities and equity
Current liabilities:
Short-term debt
$
747.3
$
268.1
Accounts payable
71.7
48.2
Accrued compensation
250.6
206.1
Other accrued expenses
511.9
477.6
Income tax payable
104.5
29.1
Deferred revenue
929.7
886.2
Operating lease liabilities
55.5
63.5
Liabilities held for sale
41.1
—
Total current liabilities
2,712.3
1,978.8
Long-term debt, net
3,899.7
4,641.7
Deferred income taxes
430.0
543.4
Operating lease liabilities
254.9
297.7
Other liabilities
114.6
130.4
Commitments and contingencies
Redeemable noncontrolling interests
13.0
13.8
Shareholders' equity
9,489.4
8,529.4
Total liabilities and equity
$
16,913.9
$
16,135.2
IHS MARKIT LTD.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In millions, except for
per-share amounts)
(Unaudited)
Three months ended November
30,
Year ended November
30,
2021
2020
2021
2020
Revenue
$
1,176.3
$
1,107.2
$
4,658.1
$
4,287.8
Operating expenses:
Cost of revenue
441.6
400.3
1,708.3
1,590.0
Selling, general and
administrative
309.9
295.0
1,181.0
1,128.0
Depreciation and
amortization
139.3
149.3
586.5
591.6
Restructuring and impairment
charges
20.2
63.2
31.4
161.1
Acquisition-related costs
55.0
29.1
125.8
45.3
Other income, net
(551.3
)
(4.0
)
(536.3
)
(378.7
)
Total operating expenses
414.7
932.9
3,096.7
3,137.3
Operating income
761.6
174.3
1,561.4
1,150.5
Interest income
0.1
0.2
0.3
1.0
Interest expense
(54.5
)
(57.7
)
(220.2
)
(236.6
)
Net periodic pension and
postretirement expense
—
(1.2
)
—
(31.6
)
Non-operating expense, net
(54.4
)
(58.7
)
(219.9
)
(267.2
)
Income from continuing operations before
income taxes and equity in loss of equity method investees
707.2
115.6
1,341.5
883.3
Benefit (provision) for income
taxes
24.3
35.6
(135.3
)
(13.3
)
Equity in income (loss) of
equity-method investees
5.8
(0.3
)
(0.2
)
(0.6
)
Net income
737.3
150.9
1,206.0
869.4
Net (income) loss attributable to
noncontrolling interests
(0.1
)
0.2
0.8
1.3
Net income attributable to IHS Markit
Ltd.
$
737.2
$
151.1
$
1,206.8
$
870.7
Basic earnings per share attributable to
IHS Markit Ltd.
$
1.85
$
0.38
$
3.03
$
2.19
Weighted average shares used in computing
basic earnings per share
399.1
396.6
398.6
396.8
Diluted earnings per share attributable to
IHS Markit Ltd.
$
1.83
$
0.38
$
3.01
$
2.17
Weighted average shares used in computing
diluted earnings per share
402.5
400.5
401.3
401.5
IHS MARKIT LTD.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Year ended November
30,
2021
2020
Operating activities:
Net income
$
1,206.0
$
869.4
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and
amortization
586.5
591.6
Stock-based compensation
expense
226.9
265.7
Gain on sale of assets, net
(534.6
)
(377.3
)
Impairment of assets
13.2
33.8
Payments for
acquisition-related performance compensation
—
(75.9
)
Net periodic pension and
postretirement expense
—
31.6
Undistributed loss of
equity-method investees, net
0.2
0.9
Pension and postretirement
contributions
—
(34.4
)
Deferred income taxes
(136.3
)
(134.7
)
Change in assets and
liabilities:
Accounts receivable, net
(68.7
)
1.6
Other current assets
15.5
(21.9
)
Accounts payable
30.1
(17.3
)
Accrued expenses
(23.1
)
11.4
Income tax
87.3
(41.2
)
Deferred revenue
85.2
5.7
Other assets and
liabilities
(2.0
)
29.8
Net cash provided by operating
activities
1,486.2
1,138.8
Investing activities:
Capital expenditures on property and
equipment
(294.3
)
(274.8
)
Acquisitions of businesses, net of cash
acquired
(46.9
)
(4.7
)
Payments to acquire equity investments
(307.8
)
(9.1
)
Proceeds from sale of assets
48.6
476.6
Change in other assets
1.8
(1.8
)
Settlements of forward contracts
0.2
18.8
Net cash (used in) provided by
investing activities
(598.4
)
205.0
Financing activities:
Proceeds from borrowings
565.0
861.7
Repayment of borrowings
(832.0
)
(1,086.7
)
Contingent consideration payments
(1.4
)
—
Dividends paid
(318.6
)
(270.4
)
Repurchases of common shares
—
(950.0
)
Proceeds from the exercise of employee
stock options
12.5
229.0
Payments related to tax withholding for
stock-based compensation
(123.1
)
(128.2
)
Net cash used in financing
activities
(697.6
)
(1,344.6
)
Foreign exchange impact on cash
balance
(22.7
)
14.9
Net increase in cash and cash
equivalents
167.5
14.1
Cash and cash equivalents at the beginning
of the period
125.6
111.5
Cash and cash equivalents at the end of
the period
$
293.1
$
125.6
IHS MARKIT LTD.
SUPPLEMENTAL REVENUE
DISCLOSURE
(In millions)
(Unaudited)
Three months ended November
30,
Percent change
Year ended November
30,
Percent change
2021
2020
Total
Organic
2021
2020
Total
Organic
Recurring revenue:
Financial Services
$
299.5
$
273.8
9
%
11
%
$
1,155.3
$
1,073.3
8
%
7
%
Transportation
272.7
237.5
15
%
15
%
1,048.5
878.8
19
%
18
%
Resources
185.7
188.0
(1
)%
(2
)%
736.4
776.3
(5
)%
(6
)%
CMS
116.2
110.4
5
%
6
%
455.5
436.8
4
%
4
%
Total recurring fixed
revenue
$
874.1
$
809.7
8
%
8
%
$
3,395.7
$
3,165.2
7
%
7
%
Financial Services -
variable
144.4
158.5
(9
)%
11
%
669.9
616.3
9
%
12
%
Total recurring
revenue
$
1,018.5
$
968.2
5
%
9
%
$
4,065.6
$
3,781.5
8
%
7
%
Non-recurring revenue:
Financial Services
$
29.2
$
26.6
10
%
18
%
$
115.5
$
94.4
22
%
23
%
Transportation
78.5
74.8
5
%
4
%
305.9
272.8
12
%
10
%
Resources
29.4
22.3
32
%
32
%
110.1
86.8
27
%
27
%
CMS
20.7
15.3
35
%
39
%
61.0
52.3
17
%
19
%
Total non-recurring
revenue
$
157.8
$
139.0
14
%
15
%
$
592.5
$
506.3
17
%
16
%
Total revenue:
Financial Services
$
473.1
$
458.9
3
%
12
%
$
1,940.7
$
1,784.0
9
%
10
%
Transportation
351.2
312.3
12
%
12
%
1,354.4
1,151.6
18
%
16
%
Resources
215.1
210.3
2
%
2
%
846.5
863.1
(2
)%
(2
)%
CMS
136.9
125.7
9
%
10
%
516.5
489.1
6
%
5
%
Total revenue
$
1,176.3
$
1,107.2
6
%
10
%
$
4,658.1
$
4,287.8
9
%
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 November
30,
Year ended November
30,
2021
2020
2021
2020
Net income attributable to IHS Markit
Ltd.
$
737.2
$
151.1
$
1,206.8
$
870.7
Interest income
(0.1
)
(0.2
)
(0.3
)
(1.0
)
Interest expense
54.5
57.7
220.2
236.6
Provision for income taxes
(24.3
)
(35.6
)
135.3
13.3
Depreciation
54.6
55.5
224.8
217.5
Amortization related to
acquired intangible assets
84.7
93.8
361.7
374.1
EBITDA (1)(6)
$
906.6
$
322.3
$
2,148.5
$
1,711.2
Stock-based compensation
expense
58.5
55.9
226.9
265.7
Restructuring and impairment
charges
20.2
63.2
31.4
161.1
Acquisition-related costs
56.1
31.8
115.4
38.4
Acquisition-related performance
compensation
(1.1
)
(2.7
)
10.4
6.9
Gain on sale of assets
(534.4
)
(6.8
)
(534.6
)
(377.3
)
Pension mark-to-market and
settlement expense
—
1.2
—
31.2
Adjusted EBITDA impacts from
equity-method investments and noncontrolling interests
24.6
—
32.3
(0.5
)
Adjusted EBITDA (2)(6)
$
530.5
$
464.9
$
2,030.3
$
1,836.7
Three months ended November
30,
Year ended November
30,
2021
2020
2021
2020
Net income attributable to IHS Markit
Ltd.
$
737.2
$
151.1
$
1,206.8
$
870.7
Stock-based compensation
expense
58.5
55.9
226.9
265.7
Amortization related to
acquired intangible assets
84.7
93.8
361.7
374.1
Restructuring and impairment
charges
20.2
63.2
31.4
161.1
Acquisition-related costs
56.1
31.8
115.4
38.4
Acquisition-related performance
compensation
(1.1
)
(2.7
)
10.4
6.9
Gain on sale of assets
(534.4
)
(6.8
)
(534.6
)
(377.3
)
Pension mark-to-market and
settlement expense
—
1.2
—
31.2
Income tax effect of above
adjustments
(100.6
)
(99.1
)
(153.5
)
(231.2
)
Adjusted earnings impacts from
equity-method investments and noncontrolling interests
20.8
—
24.9
(0.2
)
Adjusted net income (3)
$
341.4
$
288.4
$
1,289.4
$
1,139.4
Adjusted EPS (4)(6)
$
0.85
$
0.72
$
3.21
$
2.84
Weighted average shares used in computing
Adjusted EPS
402.5
400.5
401.3
401.5
Three months ended November
30,
Year ended November
30,
2021
2020
2021
2020
Net cash provided by operating
activities
$
449.0
$
338.3
$
1,486.2
$
1,138.8
Payments for
acquisition-related performance compensation
—
—
—
75.9
Capital expenditures on
property and equipment
(74.3
)
(63.0
)
(294.3
)
(274.8
)
Free cash flow (5)(6)
$
374.7
$
275.3
$
1,191.9
$
939.9
IHS MARKIT LTD.
SUPPLEMENTAL SEGMENT OPERATING
PROFIT MEASURE DISCLOSURE
(In millions)
(Unaudited)
Three months ended November
30,
Year ended November
30,
2021
2020
2021
2020
Adjusted EBITDA by segment:
Financial Services
$
250.6
$
223.5
$
962.0
$
886.1
Transportation
160.5
141.5
645.0
514.7
Resources
90.3
84.5
339.5
357.3
CMS
38.5
31.1
130.8
126.5
Shared services
(9.4
)
(15.7
)
(47.0
)
(47.9
)
Total Adjusted EBITDA
$
530.5
$
464.9
$
2,030.3
$
1,836.7
Adjusted EBITDA margin by
segment:
Financial Services
53.0
%
48.7
%
49.6
%
49.7
%
Transportation
45.7
%
45.3
%
47.6
%
44.7
%
Resources
42.0
%
40.2
%
40.1
%
41.4
%
CMS
28.1
%
24.7
%
25.3
%
25.9
%
Total Adjusted EBITDA margin
45.1
%
42.0
%
43.6
%
42.8
%
(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 and impairment charges,
acquisition-related costs and performance compensation, exceptional
litigation, net other gains and losses, pension mark-to-market and
settlement 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 or minus 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
and impairment charges, acquisition-related costs and performance
compensation, acquisition financing fees, net other gains and
losses, pension mark-to-market and settlement expense, the impact
of equity-method investments and 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220121005070/en/
Investor Relations: Eric Boyer +1 303 397 2969
eric.boyer@ihsmarkit.com
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