IHS Inc. Reports Third Quarter 2014 Results

IHS Inc. (NYSE: IHS), the leading global source of information and analytics, today reported results for the third quarter ended August 31, 2014.

Revenue of $556 million, up 16 percent from the prior-year period
Total organic revenue growth of 5 percent, as normalized, anchored by 6 percent subscription organic revenue growth
Adjusted EBITDA of $174 million, up 21 percent from the prior-year period
Adjusted earnings per diluted share (Adjusted EPS) of $1.49, up 17 percent from the prior-year period
Free cash flow of $135 million, up 124 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.

Third Quarter and Year-to-Date 2014 Financial Performance

Three months ended August 31, Change Nine months ended August 31, Change

(in thousands, exceptpercentages and per sharedata)

2014 2013 $ % 2014 2013 $ % Revenue $ 556,011 $ 480,288 $ 75,723 16% $ 1,648,477 $ 1,280,956 $ 367,521 29% Net income $ 46,517 $ 23,362 $ 23,155 99% $ 134,431 $ 90,923 $ 43,508 48% Adjusted EBITDA $ 174,441 $ 143,853 $ 30,588 21% $ 503,349 $ 392,203 $ 111,146 28% GAAP EPS $ 0.68 $ 0.35 $ 0.33 94% $ 1.95 $ 1.36 $ 0.59 43% Adjusted EPS $ 1.49 $ 1.27 $ 0.22 17% $ 4.23 $ 3.61 $ 0.62 17% Cash flow from operations $ 167,476 $ 83,203 $ 84,273 101% $ 542,450 $ 344,369 $ 198,081 58% Free cash flow $ 135,198 $ 60,228 $ 74,970 124% $ 459,136 $ 278,958 $ 180,178 65%

“We are pleased with the solid progress on our commercial expansion initiatives this quarter as we continue to build our organic performance,” said Scott Key, IHS president and chief executive officer. “The disciplined execution of our strategy is resulting in a consistent delivery of organic revenue growth, profit growth and margin expansion as we are also building new growth in our sales and product pipelines.”

“We continue to drive strong cash flows, delivering $586 million of free cash flow over the last 12 months, and we also drove solid margin expansion in the quarter,” said Todd Hyatt, IHS chief financial officer. “These attributes of our business model provide us with great operational and capital structure flexibility.”

Third Quarter and Year-to-Date 2014 Revenue Performance

Third quarter 2014 revenue increased 16 percent compared to the third quarter of 2013, and year-to-date 2014 revenue increased 29 percent compared to the same period in 2013. The components of revenue growth are described below by segment and in total.

Increase in revenue Third quarter 2014 vs. third quarter 2013 Year-to-date 2014 vs. year-to-date 2013

(All amounts represent percentagepoints)

Organic Acquisitive Foreign

Currency

Organic Acquisitive Foreign

Currency

Americas 2 % 17 % —

4 % 34 %

(1)

EMEA 7 % 2 % 4 % 7 % 6 % 3 % APAC 5 % 2 % — % 3 % 5 %

— % Total 3 % 11 % 1 % 4 % 24 % 1 %

* Excluding the effect of the BPVC engineering standard release in the third quarter of 2013, Americas organic revenue growth was 3 percent for the three months ended August 31, 2014 (4 percent for the nine months ended August 31, 2014), EMEA organic revenue growth was 8 percent for both the three and nine months ended August 31, 2014, APAC organic revenue growth was 6 percent for the three months ended August 31, 2014 (3 percent for the nine months ended August 31, 2014), and total organic revenue growth was 5 percent for both the three and nine months ended August 31, 2014.

The subscription-based business grew 6 percent organically in the third quarter of 2014 compared to the third quarter of 2013, as described in the following table.

Three months ended August 31, Percent change Nine months ended August 31, Percent change

(in thousands, exceptpercentages)

2014 2013 Total Organic 2014 2013 Total Organic Subscription revenue $ 432,128 $ 365,025 18 % 6 % $ 1,275,848 $ 986,675 29 % 6 % Non-subscription revenue 123,883 115,263 7 %

(5)

372,629 294,281 27 % — % Total revenue $ 556,011 $ 480,288 16 % 3 % $ 1,648,477 $ 1,280,956 29 % 4 %

* Excluding the effect of the BPVC engineering standard release in the third quarter of 2013, non-subscription organic revenue growth was 1 percent for the three months ended August 31, 2014 (2 percent for the nine months ended August 31, 2014), and total organic revenue growth was 5 percent for both the three and nine months ended August 31, 2014.

Third Quarter and Year-to-Date 2014 Segment Performance

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

Americas. Third quarter revenue for Americas increased $56 million, or 18 percent, to $363 million, and included 5 percent organic growth for the subscription-based business. Third quarter Adjusted EBITDA for Americas increased $11 million, or 9 percent, to $134 million. Third quarter operating income for Americas increased $19 million, or 26 percent, to $90 million.Year-to-date revenue for Americas increased $297 million, or 37 percent, to $1.091 billion. Year-to-date Adjusted EBITDA for Americas increased $68 million, or 21 percent, to $392 million. Year-to-date operating income for Americas increased $48 million, or 23 percent, to $261 million.Americas results for both the third quarter and year-to-date 2014 periods benefited from the inclusion of R. L. Polk.

EMEA. Third quarter revenue for EMEA increased $16 million, or 13 percent, to $138 million, and included 8 percent organic growth for the subscription-based business. Third quarter Adjusted EBITDA for EMEA increased $15 million, or 56 percent, to $41 million. Third quarter operating income for EMEA increased $15 million, or 78 percent, to $35 million. EMEA profit benefited from revenue growth and prior investment in scaled infrastructure.Year-to-date revenue for EMEA increased $59 million, or 17 percent, to $404 million. Year-to-date Adjusted EBITDA for EMEA increased $36 million, or 47 percent, to $113 million. Year-to-date operating income for EMEA increased $38 million, or 67 percent, to $94 million.

APAC. Third quarter revenue for APAC increased $4 million, or 7 percent, to $54 million, and included 6 percent organic growth for the subscription-based business. Third quarter Adjusted EBITDA for APAC increased $3 million, or 30 percent, to $13 million. Third quarter operating income for APAC increased $2 million, or 18 percent, to $11 million.Year-to-date revenue for APAC increased $12 million, or 8 percent, to $154 million. Year-to-date Adjusted EBITDA for APAC increased $6 million, or 21 percent, to $37 million. Year-to-date operating income for APAC increased $5 million, or 16 percent, to $34 million.

Outlook (forward-looking statement)

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

Revenue in a range of $2.225 billion to $2.235 billion, including 6 percent organic growth on the subscription base;
Adjusted EBITDA in a range of $685 million to $695 million; and
Adjusted EPS in a range of $5.70 to $5.80 per diluted share.

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 third quarter 2014 results on September 18, 2014, 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 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, 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 approximately 8,000 people in 31 countries around the world.

IHS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per-share amounts)

As of As of August 31, 2014 November 30, 2013 (Unaudited) (Audited) Assets Current assets: Cash and cash equivalents $ 261,813 $ 258,367 Accounts receivable, net 365,591 459,263 Deferred subscription costs 50,535 49,327 Deferred income taxes 72,843 70,818 Other 60,965 43,065 Total current assets 811,747 880,840 Non-current assets: Property and equipment, net 281,952 245,566 Intangible assets, net 1,100,556 1,144,464 Goodwill 3,141,342 3,065,181 Other 17,195 23,562 Total non-current assets 4,541,045 4,478,773 Total assets $ 5,352,792 $ 5,359,613 Liabilities and stockholders’ equity Current liabilities: Short-term debt $ 218,793 $ 395,527 Accounts payable 47,111 57,001 Accrued compensation 86,418 89,460 Accrued royalties 27,729 36,289 Other accrued expenses 108,800 98,187 Income tax payable 35,330 9,961 Deferred revenue 613,134 560,010 Total current liabilities 1,137,315 1,246,435 Long-term debt 1,681,483 1,779,065 Accrued pension and postretirement liability 30,336 27,191 Deferred income taxes 338,336 361,267 Other liabilities 54,152 38,692 Commitments and contingencies Stockholders’ equity: Class A common stock, $0.01 par value per share, 160,000,000 shares authorized, 69,127,957 and 67,901,101 shares issued, and 68,172,435 and 67,382,298 shares outstanding at August 31, 2014 and November 30, 2013, respectively 691 679 Additional paid-in capital 915,562 788,670 Treasury stock, at cost: 955,522 and 518,803 shares at August 31, 2014 and November 30, 2013, respectively (97,227 ) (45,945 ) Retained earnings 1,354,951 1,220,520 Accumulated other comprehensive loss (62,807 ) (56,961 ) Total stockholders’ equity 2,111,170 1,906,963 Total liabilities and stockholders’ equity $ 5,352,792 $ 5,359,613

IHS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per-share amounts)

(Unaudited)

Three months ended August 31, Nine months ended August 31, 2014 2013 2014 2013 Revenue $ 556,011 $ 480,288 $ 1,648,477 $ 1,280,956 Operating expenses: Cost of revenue (includes stock-based compensation expense of $2,906; $2,649; $6,277 and $5,625 for the three and nine months ended August 31, 2014 and 2013, respectively) 219,208 198,279 657,078 530,778 Selling, general and administrative (includes stock-based compensation expense of $44,821; $41,584; $121,446 and $109,169 for the three and nine months ended August 31, 2014 and 2013, respectively) 211,285 179,344 612,645 465,182 Depreciation and amortization 50,568 42,431 149,347 107,787 Restructuring charges 2,368 3,264 6,403 11,283 Acquisition-related costs — 14,499 1,017 18,059 Net periodic pension and postretirement expense (income) (1,328 ) 2,242 4,342 6,724 Other expense, net 132 803 1,440 3,733 Total operating expenses 482,233 440,862 1,432,272 1,143,546 Operating income 73,778 39,426 216,205 137,410 Interest income 251 232 737 879 Interest expense (12,295 ) (16,072 ) (42,150 ) (28,356 ) Non-operating expense, net (12,044 ) (15,840 ) (41,413 ) (27,477 ) Income from continuing operations before income taxes 61,734 23,586 174,792 109,933 Provision for income taxes (15,217 ) (116 ) (40,361 ) (18,909 ) Income from continuing operations 46,517 23,470 134,431 91,024 Loss from discontinued operations, net — (108 ) — (101 ) Net income $ 46,517 $ 23,362 $ 134,431 $ 90,923 Basic earnings per share: Income from continuing operations $ 0.68 $ 0.35 $ 1.97 $ 1.38 Loss from discontinued operations, net $ — $ — $ — $ — Net income $ 0.68 $ 0.35 $ 1.97 $ 1.38 Weighted average shares used in computing basic earnings per share 68,269 66,650 68,100 66,112 Diluted earnings per share: Income from continuing operations $ 0.68 $ 0.35 $ 1.95 $ 1.36 Loss from discontinued operations, net $ — $ — $ — $ — Net income $ 0.68 $ 0.35 $ 1.95 $ 1.36 Weighted average shares used in computing diluted earnings per share 68,911 67,326 68,810 66,843

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

Nine months ended August 31, 2014 2013 Operating activities: Net income $ 134,431 $ 90,923 Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization 149,347 107,787 Stock-based compensation expense 127,723 114,794 Impairment of assets — 1,629 Excess tax benefit from stock-based compensation (11,609 ) (12,405 ) Net periodic pension and postretirement expense 4,342 6,724 Pension and postretirement contributions (2,080 ) (12,601 ) Deferred income taxes 8,337 (37,756 ) Change in assets and liabilities: Accounts receivable, net 93,234 43,662 Other current assets (11,490 ) 3,319 Accounts payable (9,682 ) (14,442 ) Accrued expenses (2,878 ) (371 ) Income tax payable 16,281 32,700 Deferred revenue 43,465 21,567 Other liabilities 3,029 (1,161 ) Net cash provided by operating activities 542,450 344,369 Investing activities: Capital expenditures on property and equipment (83,314 ) (65,411 ) Acquisitions of businesses, net of cash acquired (133,938 ) (1,481,288 ) Intangible assets acquired (714 ) — Change in other assets 3,846 (5,590 ) Settlements of forward contracts 1,345 2,853 Net cash used in investing activities (212,775 ) (1,549,436 ) Financing activities: Proceeds from borrowings 165,000 1,375,000 Repayment of borrowings (439,317 ) (128,648 ) Payment of debt issuance costs — (17,360 ) Excess tax benefit from stock-based compensation 11,609 12,405 Proceeds from the exercise of employee stock options — 549 Repurchases of common stock (51,282 ) (87,512 ) Net cash provided by (used in) financing activities (313,990 ) 1,154,434 Foreign exchange impact on cash balance (12,239 ) (23,380 ) Net increase (decrease) in cash and cash equivalents 3,446 (74,013 ) Cash and cash equivalents at the beginning of the period 258,367 345,008 Cash and cash equivalents at the end of the period $ 261,813 $ 270,995

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

Three months ended August 31, Percent change Nine months ended August 31, Percent change 2014 2013 Total Organic 2014 2013 Total Organic Revenue by segment: Americas $ 363,449 $ 307,281 18 % 2 % $ 1,090,656 $ 794,072 37 % 4 % EMEA 138,120 122,247 13 % 7 % 403,828 344,662 17 % 7 % APAC 54,442 50,760 7 % 5 % 153,993 142,222 8 % 3 % Total revenue $ 556,011 $ 480,288 16 % 3 % $ 1,648,477 $ 1,280,956 29 % 4 % Revenue by transaction type: Subscription $ 432,128 $ 365,025 18 % 6 % $ 1,275,848 $ 986,675 29 % 6 % Non-subscription 123,883 115,263 7 %

(5)

372,629 294,281 27 % — % Total revenue $ 556,011 $ 480,288 16 % 3 % $ 1,648,477 $ 1,280,956 29 % 4 % Revenue by product category: Resources $ 229,107 $ 218,345 5 % 6 % $ 690,477 $ 630,541 10 % 6 % Industrials 185,267 119,149 55 % 6 % 538,336 245,997 119 % 3 % Horizontal products 141,637 142,794

(1)

(3)

419,664 404,418 4 % 3 % Total revenue $ 556,011 $ 480,288 16 % 3 % $ 1,648,477 $ 1,280,956 29 % 4 %

Excluding the effect of the BPVC engineering standard release in the third quarter of 2013 results in the following organic revenue growth percentages:

Americas organic revenue growth was 3 percent for the three months ended August 31, 2014 and 4 percent for the nine months ended August 31, 2014;
EMEA organic revenue growth was 8 percent for both the three and nine months ended August 31, 2014;
APAC organic revenue growth was 6 percent for the three months ended August 31, 2014 and 3 percent for the nine months ended August 31, 2014;
Non-subscription organic revenue growth was 1 percent for the three months ended August 31, 2014 and 2 percent for the nine months ended August 31, 2014;
Horizontal products organic revenue growth was 2 percent for the three months ended August 31, 2014 and 4 percent for the nine months ended August 31, 2014; and
Total organic revenue growth was 5 percent for both the three and nine months ended August 31, 2014.

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 August 31, Nine months ended August 31, 2014 2013 2014 2013 Net income $ 46,517 $ 23,362 $ 134,431 $ 90,923 Interest income (251 ) (232 ) (737 ) (879 ) Interest expense 12,295 16,072 42,150 28,356 Provision for income taxes 15,217 116 40,361 18,909 Depreciation 17,361 12,964 49,241 33,695 Amortization related to acquired intangible assets 33,207 29,467 100,106 74,092 EBITDA (1)(6) $ 124,346 $ 81,749 $ 365,552 $ 245,096 Stock-based compensation expense 47,727 44,233 127,723 114,794 Restructuring charges 2,368 3,264 6,403 11,283 Acquisition-related costs — 14,499 1,017 18,059 Impairment of assets — — — 1,629 Loss on sale of assets — — 2,654 1,241 Loss from discontinued operations, net — 108 — 101 Adjusted EBITDA (2)(6) $ 174,441 $ 143,853 $ 503,349 $ 392,203 Three months ended August 31, Nine months ended August 31, 2014 2013 2014 2013 Net income $ 46,517 $ 23,362 $ 134,431 $ 90,923 Stock-based compensation expense 47,727 44,233 127,723 114,794 Amortization related to acquired intangible assets 33,207 29,467 100,106 74,092 Restructuring charges 2,368 3,264 6,403 11,283 Acquisition-related costs — 14,499 1,017 18,059 Impairment of assets — — — 1,629 Loss on sale of assets — — 2,654 1,241 Loss from discontinued operations, net — 108 — 101 Income tax effect on adjusting items (27,220 ) (29,428 ) (80,953 ) (71,067 ) Adjusted net income (3) $ 102,599 $ 85,505 $ 291,381 $ 241,055 Adjusted EPS (4)(6) $ 1.49 $ 1.27 $ 4.23 $ 3.61 Weighted average shares used in computing Adjusted EPS 68,911 67,326 68,810 66,843 Three months ended August 31, Nine months ended August 31, 2014 2013 2014 2013 Net cash provided by operating activities $ 167,476 $ 83,203 $ 542,450 $ 344,369 Capital expenditures on property and equipment (32,278 ) (22,975 ) (83,314 ) (65,411 ) Free cash flow (5)(6) $ 135,198 $ 60,228 $ 459,136 $ 278,958

IHS INC.

RECONCILIATION OF SEGMENT NON-GAAP FINANCIAL MEASUREMENTS TO

MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASUREMENTS

(In thousands)

(Unaudited)

Three months ended August 31, 2014 Americas EMEA APAC

Shared Services

Total Operating income $ 90,178 $ 35,166 $ 10,587 $ (62,153 ) $ 73,778 Adjustments: Stock-based compensation expense — — — 47,727 47,727 Depreciation and amortization 41,846 5,057 2,317 1,348 50,568 Restructuring charges 1,563 734 71 — 2,368 Adjusted EBITDA $ 133,587 $ 40,957 $ 12,975 $ (13,078 ) $ 174,441 Three months ended August 31, 2013 Americas EMEA APAC Shared Services Total Operating income $ 71,366 $ 19,788 $ 8,967 $ (60,695 ) $ 39,426 Adjustments: Stock-based compensation expense — — — 44,233 44,233 Depreciation and amortization 34,368 5,666 558 1,839 42,431 Restructuring charges 2,255 590 419 — 3,264 Acquisition-related costs 14,369 130 — — 14,499 Adjusted EBITDA $ 122,358 $ 26,174 $ 9,944 $ (14,623 ) $ 143,853 Nine months ended August 31, 2014 Americas EMEA APAC Shared Services Total Operating income $ 261,375 $ 94,226 $ 33,587 $ (172,983 ) $ 216,205 Adjustments: Stock-based compensation expense — — — 127,723 127,723 Depreciation and amortization 124,414 16,162 3,405 5,366 149,347 Restructuring charges 3,335 2,675 393 — 6,403 Acquisition-related costs 696 321 — — 1,017 Loss on sale of assets 2,654 — — — 2,654 Adjusted EBITDA $ 392,474 $ 113,384 $ 37,385 $ (39,894 ) $ 503,349 Nine months ended August 31, 2013 Americas EMEA APAC Shared Services Total Operating income $ 213,014 $ 56,259 $ 28,964 $ (160,827 ) $ 137,410 Adjustments: Stock-based compensation expense — — — 114,794 114,794 Depreciation and amortization 83,833 17,057 1,495 5,402 107,787 Restructuring charges 8,316 2,527 440 — 11,283 Acquisition-related costs 17,767 292 — — 18,059 Impairment of assets 1,629 — — — 1,629 Loss on sale of assets — 1,241 — — 1,241 Adjusted EBITDA $ 324,559 $ 77,376 $ 30,899 $ (40,631 ) $ 392,203 (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, 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, 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.

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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