(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-3769440
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller Reporting Company
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o
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Page
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Item 1.
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Financial Statements
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As of
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|
As of
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||||
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February 28, 2013
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November 30, 2012
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||||
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(Unaudited)
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(Audited)
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||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
318,697
|
|
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$
|
345,008
|
|
Accounts receivable, net
|
412,974
|
|
|
372,117
|
|
||
Income tax receivable
|
15,458
|
|
|
20,464
|
|
||
Deferred subscription costs
|
52,594
|
|
|
47,065
|
|
||
Deferred income taxes
|
46,370
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|
|
55,084
|
|
||
Other
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29,979
|
|
|
24,145
|
|
||
Total current assets
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876,072
|
|
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863,883
|
|
||
Non-current assets:
|
|
|
|
||||
Property and equipment, net
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173,867
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|
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163,013
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|
||
Intangible assets, net
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540,646
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|
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554,552
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|
||
Goodwill
|
1,969,289
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1,959,223
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|
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Other
|
8,075
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|
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8,540
|
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Total non-current assets
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2,691,877
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|
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2,685,328
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Total assets
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$
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3,567,949
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|
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$
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3,549,211
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
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Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
169,511
|
|
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$
|
170,102
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Accounts payable
|
53,167
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|
|
52,079
|
|
||
Accrued compensation
|
34,776
|
|
|
50,497
|
|
||
Accrued royalties
|
35,432
|
|
|
33,637
|
|
||
Other accrued expenses
|
57,160
|
|
|
55,304
|
|
||
Deferred revenue
|
628,411
|
|
|
515,318
|
|
||
Total current liabilities
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978,457
|
|
|
876,937
|
|
||
Long-term debt
|
882,723
|
|
|
890,922
|
|
||
Accrued pension and postretirement liability
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21,280
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|
|
30,027
|
|
||
Deferred income taxes
|
118,980
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|
|
139,235
|
|
||
Other liabilities
|
27,602
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|
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27,732
|
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||
Commitments and contingencies
|
|
|
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||||
Stockholders’ equity:
|
|
|
|
||||
Class A common stock, $0.01 par value per share, 160,000,000 shares authorized, 67,621,367 shares issued, and 65,732,911 and 65,577,530 shares outstanding at February 28, 2013 and November 30, 2012, respectively
|
676
|
|
|
676
|
|
||
Additional paid-in capital
|
655,296
|
|
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681,409
|
|
||
Treasury stock, at cost: 1,888,456 and 2,043,837 shares at February 28, 2013 and November 30, 2012, respectively
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(149,858
|
)
|
|
(139,821
|
)
|
||
Retained earnings
|
1,113,458
|
|
|
1,088,787
|
|
||
Accumulated other comprehensive loss
|
(80,665
|
)
|
|
(46,693
|
)
|
||
Total stockholders’ equity
|
1,538,907
|
|
|
1,584,358
|
|
||
Total liabilities and stockholders’ equity
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$
|
3,567,949
|
|
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$
|
3,549,211
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|
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Three Months Ended
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||||||
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February 28, 2013
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February 29, 2012
|
||||
Revenue:
|
|
|
|
||||
Products
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$
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341,478
|
|
|
$
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297,981
|
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Services
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41,047
|
|
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44,762
|
|
||
Total revenue
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382,525
|
|
|
342,743
|
|
||
Operating expenses:
|
|
|
|
||||
Cost of revenue:
|
|
|
|
||||
Products
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140,285
|
|
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124,822
|
|
||
Services
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19,790
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|
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21,768
|
|
||
Total cost of revenue
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160,075
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146,590
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|
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Selling, general and administrative
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142,229
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125,176
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Depreciation and amortization
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32,479
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26,301
|
|
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Restructuring charges
|
4,788
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|
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7,485
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|
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Acquisition-related costs
|
1,895
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|
|
867
|
|
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Net periodic pension and postretirement expense
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2,240
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|
2,000
|
|
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Other expense (income), net
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2,419
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|
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(736
|
)
|
||
Total operating expenses
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346,125
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|
|
307,683
|
|
||
Operating income
|
36,400
|
|
|
35,060
|
|
||
Interest income
|
344
|
|
|
172
|
|
||
Interest expense
|
(6,120
|
)
|
|
(4,894
|
)
|
||
Non-operating expense, net
|
(5,776
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)
|
|
(4,722
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)
|
||
Income from continuing operations before income taxes
|
30,624
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|
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30,338
|
|
||
Provision for income taxes
|
(5,953
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)
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|
(6,863
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)
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||
Net income
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$
|
24,671
|
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|
$
|
23,475
|
|
|
|
|
|
||||
Basic earnings per share
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$
|
0.37
|
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$
|
0.36
|
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Weighted average shares used in computing basic earnings per share
|
65,790
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|
|
65,515
|
|
||
|
|
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|
||||
Diluted earnings per share
|
$
|
0.37
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$
|
0.35
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Weighted average shares used in computing diluted earnings per share
|
66,701
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|
|
66,451
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Three Months Ended
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||||||
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February 28, 2013
|
|
February 29, 2012
|
||||
Net income
|
|
$
|
24,671
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|
|
$
|
23,475
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Unrealized gain (loss) on hedging activities
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|
168
|
|
|
(229
|
)
|
||
Foreign currency translation adjustment
|
|
(34,140
|
)
|
|
9,016
|
|
||
Total other comprehensive income (loss)
|
|
(33,972
|
)
|
|
8,787
|
|
||
Comprehensive income (loss)
|
|
$
|
(9,301
|
)
|
|
$
|
32,262
|
|
|
Three Months Ended
|
||||||
|
February 28, 2013
|
|
February 29, 2012
|
||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
24,671
|
|
|
$
|
23,475
|
|
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
32,479
|
|
|
26,301
|
|
||
Stock-based compensation expense
|
39,762
|
|
|
33,920
|
|
||
Impairment of assets
|
1,629
|
|
|
—
|
|
||
Excess tax benefit from stock-based compensation
|
(11,345
|
)
|
|
(9,934
|
)
|
||
Net periodic pension and postretirement expense
|
2,240
|
|
|
2,000
|
|
||
Pension and postretirement contributions
|
(10,933
|
)
|
|
(65,883
|
)
|
||
Deferred income taxes
|
(15,534
|
)
|
|
8,566
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(33,696
|
)
|
|
(30,220
|
)
|
||
Other current assets
|
(12,978
|
)
|
|
(13,214
|
)
|
||
Accounts payable
|
(6,485
|
)
|
|
4,290
|
|
||
Accrued expenses
|
(8,930
|
)
|
|
(22,279
|
)
|
||
Income tax payable
|
16,063
|
|
|
(6,024
|
)
|
||
Deferred revenue
|
116,157
|
|
|
81,672
|
|
||
Other liabilities
|
(1,414
|
)
|
|
313
|
|
||
Net cash provided by operating activities
|
131,686
|
|
|
32,983
|
|
||
Investing activities:
|
|
|
|
||||
Capital expenditures on property and equipment
|
(19,367
|
)
|
|
(13,556
|
)
|
||
Acquisitions of businesses, net of cash acquired
|
(38,448
|
)
|
|
—
|
|
||
Change in other assets
|
(846
|
)
|
|
(242
|
)
|
||
Settlements of forward contracts
|
(776
|
)
|
|
(2,207
|
)
|
||
Net cash used in investing activities
|
(59,437
|
)
|
|
(16,005
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from borrowings
|
45,000
|
|
|
85,000
|
|
||
Repayment of borrowings
|
(53,786
|
)
|
|
(20,447
|
)
|
||
Excess tax benefit from stock-based compensation
|
11,345
|
|
|
9,934
|
|
||
Repurchases of common stock
|
(81,900
|
)
|
|
(28,436
|
)
|
||
Net cash provided by (used in) financing activities
|
(79,341
|
)
|
|
46,051
|
|
||
Foreign exchange impact on cash balance
|
(19,219
|
)
|
|
(1,128
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(26,311
|
)
|
|
61,901
|
|
||
Cash and cash equivalents at the beginning of the period
|
345,008
|
|
|
234,685
|
|
||
Cash and cash equivalents at the end of the period
|
$
|
318,697
|
|
|
$
|
296,586
|
|
|
Shares of
Class A
Common
Stock
|
|
Class A
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||||||
Balance at November 30, 2012 (Audited)
|
65,578
|
|
|
$
|
676
|
|
|
$
|
681,409
|
|
|
$
|
(139,821
|
)
|
|
$
|
1,088,787
|
|
|
$
|
(46,693
|
)
|
|
$
|
1,584,358
|
|
Stock-based award activity
|
623
|
|
|
—
|
|
|
(37,458
|
)
|
|
36,152
|
|
|
—
|
|
|
—
|
|
|
(1,306
|
)
|
||||||
Excess tax benefit on vested shares
|
—
|
|
|
—
|
|
|
11,345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,345
|
|
||||||
Repurchases of common stock
|
(468
|
)
|
|
—
|
|
|
—
|
|
|
(46,189
|
)
|
|
—
|
|
|
—
|
|
|
(46,189
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,671
|
|
|
—
|
|
|
24,671
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,972
|
)
|
|
(33,972
|
)
|
||||||
Balance at February 28, 2013
|
65,733
|
|
|
$
|
676
|
|
|
$
|
655,296
|
|
|
$
|
(149,858
|
)
|
|
$
|
1,113,458
|
|
|
$
|
(80,665
|
)
|
|
$
|
1,538,907
|
|
1.
|
Basis of Presentation and Significant Accounting Policies
|
2.
|
Business Combinations
|
3.
|
Commitments and Contingencies
|
4.
|
Restructuring Charges
|
|
Employee
Severance and
Other
Termination
Benefits
|
|
Contract
Termination
Costs
|
|
Other
|
|
Total
|
||||||||
Balance at November 30, 2012
|
$
|
3,163
|
|
|
$
|
1,503
|
|
|
$
|
59
|
|
|
$
|
4,725
|
|
Add: Restructuring costs incurred
|
4,774
|
|
|
—
|
|
|
111
|
|
|
4,885
|
|
||||
Revision to prior estimates
|
(172
|
)
|
|
75
|
|
|
—
|
|
|
(97
|
)
|
||||
Less: Amount paid
|
(2,458
|
)
|
|
(1,471
|
)
|
|
(170
|
)
|
|
(4,099
|
)
|
||||
Balance at February 28, 2013
|
$
|
5,307
|
|
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
5,414
|
|
5.
|
Acquisition-related Costs
|
|
Employee
Severance and
Other
Termination
Benefits
|
|
Contract
Termination
Costs
|
|
Other
|
|
Total
|
||||||||
Balance at November 30, 2012
|
$
|
584
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
668
|
|
Add: Costs incurred
|
162
|
|
|
607
|
|
|
1,312
|
|
|
2,081
|
|
||||
Revision to prior estimates
|
(146
|
)
|
|
(40
|
)
|
|
—
|
|
|
(186
|
)
|
||||
Less: Amount paid
|
(582
|
)
|
|
(518
|
)
|
|
(1,149
|
)
|
|
(2,249
|
)
|
||||
Balance at February 28, 2013
|
$
|
18
|
|
|
$
|
133
|
|
|
$
|
163
|
|
|
$
|
314
|
|
6.
|
Stock-based Compensation
|
|
Three Months Ended
|
||||||
|
February 28, 2013
|
|
February 29, 2012
|
||||
Cost of revenue
|
$
|
1,682
|
|
|
$
|
1,317
|
|
Selling, general and administrative
|
38,080
|
|
|
32,603
|
|
||
Total stock-based compensation expense
|
$
|
39,762
|
|
|
$
|
33,920
|
|
|
Three Months Ended
|
||||||
|
February 28, 2013
|
|
February 29, 2012
|
||||
Income tax benefits
|
$
|
13,718
|
|
|
$
|
12,082
|
|
|
Shares
|
|
Weighted-
Average Grant Date Fair Value |
|||
|
(in thousands)
|
|
|
|||
Balances, November 30, 2012
|
2,987
|
|
|
$
|
78.75
|
|
Granted
|
966
|
|
|
$
|
101.09
|
|
Vested
|
(973
|
)
|
|
$
|
68.88
|
|
Forfeited
|
(53
|
)
|
|
$
|
88.05
|
|
Balances, February 28, 2013
|
2,927
|
|
|
$
|
89.24
|
|
7.
|
Income Taxes
|
8.
|
Debt
|
9.
|
Pensions and Postretirement Benefits
|
|
Three months ended February 28, 2013
|
|
Three months ended February 29, 2012
|
||||||||||||||||||||||||||||
|
U.S.
RIP
|
|
U.K.
RIP
|
|
SIP
|
|
Total
|
|
U.S.
RIP
|
|
U.K.
RIP
|
|
SIP
|
|
Total
|
||||||||||||||||
Service costs incurred
|
$
|
2,525
|
|
|
$
|
48
|
|
|
$
|
25
|
|
|
$
|
2,598
|
|
|
$
|
2,544
|
|
|
$
|
33
|
|
|
$
|
47
|
|
|
2,624
|
|
|
Interest costs on projected benefit obligation
|
1,240
|
|
|
371
|
|
|
82
|
|
|
1,693
|
|
|
1,736
|
|
|
424
|
|
|
97
|
|
|
2,257
|
|
||||||||
Expected return on plan assets
|
(1,413
|
)
|
|
(408
|
)
|
|
—
|
|
|
(1,821
|
)
|
|
(2,122
|
)
|
|
(553
|
)
|
|
—
|
|
|
(2,675
|
)
|
||||||||
Amortization of prior service benefit
|
(336
|
)
|
|
—
|
|
|
—
|
|
|
(336
|
)
|
|
(336
|
)
|
|
—
|
|
|
(2
|
)
|
|
(338
|
)
|
||||||||
Amortization of transitional obligation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||||||
Net periodic pension expense (income)
|
$
|
2,016
|
|
|
$
|
11
|
|
|
$
|
107
|
|
|
$
|
2,134
|
|
|
$
|
1,822
|
|
|
$
|
(96
|
)
|
|
$
|
152
|
|
|
$
|
1,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
||||||
|
February 28, 2013
|
|
February 29, 2012
|
||||
Service costs incurred
|
$
|
6
|
|
|
$
|
5
|
|
Interest costs
|
100
|
|
|
117
|
|
||
Net periodic postretirement expense
|
$
|
106
|
|
|
$
|
122
|
|
10.
|
Earnings per Share
|
|
Three Months Ended
|
||||
|
February 28, 2013
|
|
February 29, 2012
|
||
Weighted average common shares outstanding:
|
|
|
|
||
Shares used in basic EPS calculation
|
65,790
|
|
|
65,515
|
|
Effect of dilutive securities:
|
|
|
|
||
Restricted stock units
|
907
|
|
|
894
|
|
Stock options and other stock-based awards
|
4
|
|
|
42
|
|
Shares used in diluted EPS calculation
|
66,701
|
|
|
66,451
|
|
11.
|
Derivatives
|
12.
|
Goodwill and Intangible Assets
|
|
As of February 28, 2013
|
|
As of November 30, 2012
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Information databases
|
$
|
291,370
|
|
|
$
|
(148,306
|
)
|
|
$
|
143,064
|
|
|
$
|
291,265
|
|
|
$
|
(141,072
|
)
|
|
$
|
150,193
|
|
Customer relationships
|
274,693
|
|
|
(68,166
|
)
|
|
206,527
|
|
|
266,168
|
|
|
(63,105
|
)
|
|
203,063
|
|
||||||
Non-compete agreements
|
4,315
|
|
|
(3,035
|
)
|
|
1,280
|
|
|
4,372
|
|
|
(2,615
|
)
|
|
1,757
|
|
||||||
Developed computer software
|
140,031
|
|
|
(50,660
|
)
|
|
89,371
|
|
|
141,570
|
|
|
(46,898
|
)
|
|
94,672
|
|
||||||
Other
|
49,181
|
|
|
(12,686
|
)
|
|
36,495
|
|
|
51,214
|
|
|
(12,163
|
)
|
|
39,051
|
|
||||||
Total
|
$
|
759,590
|
|
|
$
|
(282,853
|
)
|
|
$
|
476,737
|
|
|
$
|
754,589
|
|
|
$
|
(265,853
|
)
|
|
$
|
488,736
|
|
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks
|
62,775
|
|
|
—
|
|
|
62,775
|
|
|
64,618
|
|
|
—
|
|
|
64,618
|
|
||||||
Perpetual licenses
|
1,134
|
|
|
—
|
|
|
1,134
|
|
|
1,198
|
|
|
—
|
|
|
1,198
|
|
||||||
Total intangible assets
|
$
|
823,499
|
|
|
$
|
(282,853
|
)
|
|
$
|
540,646
|
|
|
$
|
820,405
|
|
|
$
|
(265,853
|
)
|
|
$
|
554,552
|
|
Year
|
|
Amount
|
||
Remainder of 2013
|
|
$
|
62,415
|
|
2014
|
|
$
|
73,428
|
|
2015
|
|
$
|
67,640
|
|
2016
|
|
$
|
59,934
|
|
2017
|
|
$
|
48,061
|
|
Thereafter
|
|
$
|
165,259
|
|
13.
|
Segment Information
|
|
Americas
|
|
EMEA
|
|
APAC
|
|
Shared
Services
|
|
Consolidated
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Three months ended February 28, 2013
|
|
|
|
|
|
|
|
|
|||||||||||
Revenue
|
$
|
229,166
|
|
|
$
|
109,471
|
|
|
$
|
43,888
|
|
|
$
|
—
|
|
|
$
|
382,525
|
|
Operating income
|
$
|
62,133
|
|
|
$
|
15,986
|
|
|
$
|
9,749
|
|
|
$
|
(51,468
|
)
|
|
$
|
36,400
|
|
Depreciation and amortization
|
$
|
24,284
|
|
|
$
|
5,917
|
|
|
$
|
461
|
|
|
$
|
1,817
|
|
|
$
|
32,479
|
|
Three months ended February 29, 2012
|
|
|
|
|
|
|
|
|
|||||||||||
Revenue
|
$
|
206,920
|
|
|
$
|
99,409
|
|
|
$
|
36,414
|
|
|
$
|
—
|
|
|
$
|
342,743
|
|
Operating income
|
$
|
51,304
|
|
|
$
|
20,897
|
|
|
$
|
7,995
|
|
|
$
|
(45,136
|
)
|
|
$
|
35,060
|
|
Depreciation and amortization
|
$
|
20,537
|
|
|
$
|
3,834
|
|
|
$
|
51
|
|
|
$
|
1,879
|
|
|
$
|
26,301
|
|
|
Three Months Ended
|
||||||
|
February 28, 2013
|
|
February 29, 2012
|
||||
Subscription revenue
|
$
|
307,727
|
|
|
$
|
273,390
|
|
Non-subscription revenue
|
74,798
|
|
|
69,353
|
|
||
Total revenue
|
$
|
382,525
|
|
|
$
|
342,743
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Vanguard – Vanguard is our plan for consolidating and standardizing billing systems, general ledgers, sales-force automation capabilities, and all supporting business processes. We are implementing Vanguard through a series of releases, which commenced in the summer of 2011 and all planned releases are expected to be completed by the end of calendar year 2013. In December 2012 and early March 2013, we implemented two more Vanguard releases and have now completed approximately 90 percent of our Vanguard implementation plan.
|
•
|
Product development – In 2012, we had a number of significant new product introductions and enhancements. We continue to focus on product development and expect to have a significant number of new product releases in 2013-2015 as well.
|
•
|
Customer Care Centers of Excellence – Our three regional Customer Care Centers of Excellence are now fully operational. These centers consolidate customer care and transaction processing capabilities, and simplify and standardize our approach to providing dedicated customer service.
|
•
|
Organic – We define organic revenue growth as total revenue growth from continuing operations for all factors other than acquisitions and foreign currency. We drive this type of revenue growth through value realization (pricing), expanding wallet share of existing customers through up-selling and cross-selling efforts, securing new customer business, and through the sale of new offerings.
|
•
|
Acquisitive – We define acquisitive revenue as the revenue generated from acquired products and services from the date of acquisition to the first anniversary date of that acquisition. This type of growth comes as a result of our strategy to purchase, integrate, and leverage the value of assets we acquire.
|
•
|
Foreign currency – We define the foreign currency impact on revenue as the difference between current revenue at current exchange rates and current revenue at the corresponding prior period exchange rates. Due to the significance of revenue transacted in foreign currencies, we measure the impact of foreign currency movements on revenue.
|
•
|
Subscription revenue
represents the significant majority of our revenue, and is comprised of subscriptions to our various information offerings and software maintenance.
|
•
|
Non-subscription revenue
represents consulting (e.g., research and analysis, modeling, and forecasting), services, single-document product sales, software license sales and associated services, conferences and events, and advertising. Our non-subscription products and services are an important part of our business because they complement our subscription business in creating strong and comprehensive customer relationships.
|
|
Increase in Total Revenue
|
|||||||
(All amounts represent percentage points)
|
Organic
|
|
Acquisitive
|
|
Foreign
Currency
|
|||
2013 vs. 2012
|
5
|
%
|
|
7
|
%
|
|
—
|
%
|
•
|
Displaybank Co., Ltd.; the CAPS™ electronic components database and tools business; IMS Group Holdings Ltd.; BDW Automotive GmbH; and XēDAR Corporation in the second quarter of 2012;
|
•
|
CyberRegs; GlobalSpec, Inc.; and Invention Machine in the third quarter of 2012; and
|
•
|
Exclusive Analysis; the business of Dodson Data Systems; and Energy Publishing in the first quarter of 2013.
|
|
Three Months Ended
|
|
Percentage
Change
|
|||||||
(In thousands, except percentages)
|
February 28, 2013
|
|
February 29, 2012
|
|
||||||
Revenue:
|
|
|
|
|
|
|||||
Americas
|
$
|
229,166
|
|
|
$
|
206,920
|
|
|
11
|
%
|
EMEA
|
109,471
|
|
|
99,409
|
|
|
10
|
%
|
||
APAC
|
43,888
|
|
|
36,414
|
|
|
21
|
%
|
||
Total revenue
|
$
|
382,525
|
|
|
$
|
342,743
|
|
|
12
|
%
|
|
|
|
|
|
|
|||||
As a percent of total revenue:
|
|
|
|
|
|
|||||
Americas
|
60
|
%
|
|
60
|
%
|
|
|
|||
EMEA
|
29
|
%
|
|
29
|
%
|
|
|
|||
APAC
|
11
|
%
|
|
11
|
%
|
|
|
|
Increase in Total Revenue
|
|||||||
|
2013 vs. 2012
|
|||||||
(All amounts represent percentage points)
|
Organic
|
|
Acquisitive
|
|
Foreign
Currency
|
|||
Americas revenue
|
3
|
%
|
|
8
|
%
|
|
—
|
%
|
EMEA revenue
|
4
|
%
|
|
6
|
%
|
|
1
|
%
|
APAC revenue
|
15
|
%
|
|
6
|
%
|
|
(1
|
)%
|
|
Three Months Ended
|
|
Percentage
Change
|
|||||||
(In thousands, except percentages)
|
February 28, 2013
|
|
February 29, 2012
|
|
||||||
Revenue:
|
|
|
|
|
|
|||||
Subscription
|
$
|
307,727
|
|
|
$
|
273,390
|
|
|
13
|
%
|
Non-subscription
|
74,798
|
|
|
69,353
|
|
|
8
|
%
|
||
Total revenue
|
$
|
382,525
|
|
|
$
|
342,743
|
|
|
12
|
%
|
|
|
|
|
|
|
|||||
As a percent of total revenue:
|
|
|
|
|
|
|||||
Subscription
|
80
|
%
|
|
80
|
%
|
|
|
|||
Non-subscription
|
20
|
%
|
|
20
|
%
|
|
|
|
Three Months Ended
|
|
Percentage
Change
|
|||||||
(In thousands, except percentages)
|
February 28, 2013
|
|
February 29, 2012
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|||||
Cost of revenue
|
$
|
160,075
|
|
|
$
|
146,590
|
|
|
9
|
%
|
SG&A expense
|
$
|
142,229
|
|
|
$
|
125,176
|
|
|
14
|
%
|
Depreciation and amortization expense
|
$
|
32,479
|
|
|
$
|
26,301
|
|
|
23
|
%
|
|
|
|
|
|
|
|||||
As a percent of revenue:
|
|
|
|
|
|
|||||
Cost of revenue
|
42
|
%
|
|
43
|
%
|
|
|
|||
SG&A expense
|
37
|
%
|
|
37
|
%
|
|
|
|||
Depreciation and amortization expense
|
8
|
%
|
|
8
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Supplemental information:
|
|
|
|
|
|
|||||
SG&A expense excluding stock-based compensation
|
$
|
104,149
|
|
|
$
|
92,573
|
|
|
13
|
%
|
As a percent of revenue
|
27
|
%
|
|
27
|
%
|
|
|
|
Three Months Ended
|
|
Percentage
Change |
|||||||
(In thousands, except percentages)
|
February 28, 2013
|
|
February 29, 2012
|
|
||||||
Operating income:
|
|
|
|
|
|
|||||
Americas
|
$
|
62,133
|
|
|
$
|
51,304
|
|
|
21
|
%
|
EMEA
|
15,986
|
|
|
20,897
|
|
|
(24
|
)%
|
||
APAC
|
9,749
|
|
|
7,995
|
|
|
22
|
%
|
||
Shared services
|
(51,468
|
)
|
|
(45,136
|
)
|
|
|
|||
Total operating income
|
$
|
36,400
|
|
|
$
|
35,060
|
|
|
4
|
%
|
|
|
|
|
|
|
|||||
As a percent of segment revenue:
|
|
|
|
|
|
|||||
Americas
|
27
|
%
|
|
25
|
%
|
|
|
|||
EMEA
|
15
|
%
|
|
21
|
%
|
|
|
|||
APAC
|
22
|
%
|
|
22
|
%
|
|
|
|
Three Months Ended
|
|
Percentage
Change |
|||||||
(In thousands, except percentages)
|
February 28, 2013
|
|
February 29, 2012
|
|
||||||
Net income
|
$
|
24,671
|
|
|
$
|
23,475
|
|
|
5
|
%
|
Interest income
|
(344
|
)
|
|
(172
|
)
|
|
|
|||
Interest expense
|
6,120
|
|
|
4,894
|
|
|
|
|||
Provision for income taxes
|
5,953
|
|
|
6,863
|
|
|
|
|||
Depreciation
|
9,880
|
|
|
8,132
|
|
|
|
|||
Amortization
|
22,599
|
|
|
18,169
|
|
|
|
|||
EBITDA
|
$
|
68,879
|
|
|
$
|
61,361
|
|
|
12
|
%
|
Stock-based compensation expense
|
39,762
|
|
|
33,920
|
|
|
|
|||
Restructuring charges
|
4,788
|
|
|
7,485
|
|
|
|
|||
Acquisition-related costs
|
1,895
|
|
|
867
|
|
|
|
|||
Impairment of assets
|
1,629
|
|
|
—
|
|
|
|
|||
Loss on sale of assets
|
1,241
|
|
|
—
|
|
|
|
|||
Adjusted EBITDA
|
$
|
118,194
|
|
|
$
|
103,633
|
|
|
14
|
%
|
Adjusted EBITDA as a percentage of revenue
|
30.9
|
%
|
|
30.2
|
%
|
|
|
(In thousands, except percentages)
|
As of February 28, 2013
|
|
As of November 30, 2012
|
|
Dollar change
|
|
Percent change
|
|||||||
Accounts receivable, net
|
$
|
412,974
|
|
|
$
|
372,117
|
|
|
$
|
40,857
|
|
|
11
|
%
|
Accrued compensation
|
$
|
34,776
|
|
|
$
|
50,497
|
|
|
$
|
(15,721
|
)
|
|
(31
|
)%
|
Deferred revenue
|
$
|
628,411
|
|
|
$
|
515,318
|
|
|
$
|
113,093
|
|
|
22
|
%
|
|
Three Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
February 28, 2013
|
|
February 29, 2012
|
|
Dollar change
|
|
Percent change
|
|||||||
Net cash provided by operating activities
|
$
|
131,686
|
|
|
$
|
32,983
|
|
|
$
|
98,703
|
|
|
299
|
%
|
Net cash used in investing activities
|
$
|
(59,437
|
)
|
|
$
|
(16,005
|
)
|
|
$
|
(43,432
|
)
|
|
271
|
%
|
Net cash provided by (used in) financing activities
|
$
|
(79,341
|
)
|
|
$
|
46,051
|
|
|
$
|
(125,392
|
)
|
|
(272
|
)%
|
|
Three Months Ended
|
|||||||||||||
(In thousands, except percentages)
|
February 28, 2013
|
|
February 29, 2012
|
|
Dollar change
|
|
Percent change
|
|||||||
Net cash provided by operating activities
|
$
|
131,686
|
|
|
$
|
32,983
|
|
|
|
|
|
|||
Capital expenditures on property and equipment
|
(19,367
|
)
|
|
(13,556
|
)
|
|
|
|
|
|||||
Free cash flow
|
$
|
112,319
|
|
|
$
|
19,427
|
|
|
$
|
92,892
|
|
|
478
|
%
|
Pension deficit funding
|
—
|
|
|
57,000
|
|
|
|
|
|
|||||
Adjusted free cash flow
|
$
|
112,319
|
|
|
$
|
76,427
|
|
|
$
|
35,892
|
|
|
47
|
%
|
Item 3.
|
Quantitative and Qualitative Disclosure About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
|
Total Number of Shares
Purchased (1)
|
|
Average
Price Paid
per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) (3)
|
||||||
December 1, 2012 to December 31, 2012:
|
|
|
|
|
|
|
|
||||||
Share repurchase program (1)
|
136,682
|
|
|
$
|
91.39
|
|
|
136,682
|
|
|
$
|
37,720
|
|
Employee transactions (2)
|
17,896
|
|
|
$
|
92.46
|
|
|
N/A
|
|
|
N/A
|
|
|
January 1, 2013 to January 31, 2013:
|
|
|
|
|
|
|
|
||||||
Share repurchase program (1)
|
106,332
|
|
|
$
|
100.11
|
|
|
106,332
|
|
|
$
|
27,075
|
|
Employee transactions (2)
|
163,672
|
|
|
$
|
101.23
|
|
|
N/A
|
|
|
N/A
|
|
|
February 1, 2013 to February 28, 2013:
|
|
|
|
|
|
|
|
||||||
Share repurchase program (1)
|
224,486
|
|
|
$
|
102.70
|
|
|
224,486
|
|
|
$
|
4,021
|
|
Employee transactions (2)
|
168,686
|
|
|
$
|
103.67
|
|
|
N/A
|
|
|
N/A
|
|
|
Total share repurchases
|
817,754
|
|
|
$
|
100.15
|
|
|
467,500
|
|
|
|
Item 6.
|
Exhibits
|
(a)
|
Index of Exhibits
|
Exhibit
Number
|
|
Description
|
10.1
|
|
Summary of Non-Employee Director Compensation
|
|
|
|
10.2
|
|
Amendment to Employment Agreement by and between IHS Inc. and Scott Key, dated as of December 28, 2012
|
|
|
|
10.3
|
|
Amendment to Employment Agreement by and between IHS Inc. and Daniel Yergin, dated as of December 28, 2012
|
|
|
|
10.4
|
|
Amendment to Employment Agreement by and between IHS Inc. and Richard Walker, dated as of December 28, 2012
|
|
|
|
31.1
|
|
Certification of the Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act.
|
|
|
|
31.2
|
|
Certification of the Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act.
|
|
|
|
32
|
|
Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
IHS INC.
|
||||
|
|
|||
By:
|
|
/s/ Heather Matzke-Hamlin
|
||
|
|
Name:
|
|
Heather Matzke-Hamlin
|
|
|
Title:
|
|
Senior Vice President and Chief Accounting Officer
|
Annual Director Compensation
|
|
$
|
Board Retainer
|
|
90,000
|
Committee Chair Retainer:
|
|
|
Nominating and Corporate Governance Committee
|
|
17,500
|
All Other Committees
|
|
30,000
|
Committee Member Retainer:
|
|
|
Audit Committee
|
|
15,000
|
All Other Committees
|
|
10,000
|
Lead Independent Director Retainer
|
|
30,000
|
Annual Equity Award (1)
|
|
150,000
|
|
|
|
(1)
On December 1 of each year of service, each nonemployee director shall receive an award consisting of restricted stock units whose underlying shares shall have, on the date of grant, a fair market value equal to $150,000. The award has a one-year vesting period. Directors may choose to defer receipt of the shares underlying the RSUs until after their termination of service.
|
|
|
1.
|
The
.
third sentence of Section 9 of the Letter Agreement (Release) beginning with “lf you execute such a release within such 60 day period” is hereby deleted and replaced in its entirety with the following:
|
2.
|
Except as expressly amended herein, the Letter Agreement remains in full force and effect in accordance with its terms.
|
|
IHS INC.
/s/ Jeffrey Sisson
By: _______________________
Jeffrey Sisson
Senior Vice President
Chief Human Resources Officer
|
Accepted and Agreed:
/s/ Scott Key
________________________
Employee Name: Scott Key
|
|
1.
|
The phrase “prior to or concurrently with the provision of such payment or benefit” at the end of the first sentence of Section 9 of the Letter Agreement (Release) beginning with “Other than if your employment terminates” is hereby deleted and replaces in its entirety with the following:
|
2.
|
The following sentence is added to Section 9 of the Letter Agreement (Release) following the first sentence beginning with “Other than if your employment terminates” and before the sentence beginning with “The payments or benefits you are eligible to receive”:
|
3.
|
Except as expressly amended herein, the Letter Agreement remains in full force and effect in accordance with its terms.
|
|
IHS Inc.
/s/ Jeffrey Sisson
By: _______________________
Jeffrey Sisson
Senior Vice President
Chief Human Resources Officer
|
Agreed and Accepted:
/s/ Daniel Yergin
____________________________
Employee Name: Daniel Yergin
|
|
|
IHS INC.
/s/ Jeffrey Sisson
By: _______________________
Jeffrey Sisson
Senior Vice President
Chief Human Resources Officer
|
Accepted and Agreed:
/s/ Richard Walker
____________________________
E
mployee Name: Richard Walker
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of IHS Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has material affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Jerre L. Stead
|
|
Jerre L. Stead
|
|
Chairman and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of IHS Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has material affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Todd S. Hyatt
|
|
Todd S. Hyatt
|
|
Senior Vice President, Chief Financial and IT Officer
|
|
/s/ Jerre L. Stead
|
|
Jerre L. Stead
|
|
Chairman and Chief Executive Officer
|
|
|
|
/s/ Todd S. Hyatt
|
|
Todd S. Hyatt
|
|
Senior Vice President, Chief Financial and IT Officer
|
|