IHS Inc.
Change in Calculation of Segment Operating Income
Beginning Q1 2007, we have changed our methodology for calculating and reporting segment
operating income.
Previously, we had allocated a large portion of our corporate costs to our two operating segments-Energy and Engineering. We continue to consolidate back-office functions and move to a shared
services model. As we change the way we manage the business, we reflect that change in the
way we report our segment operating income and we will no longer allocate corporate, or Shared
Services, costs to the segments. Rather, we now present our Shared Services in a separate
category alongside our Energy and Engineering segment disclosures.
This change will have no effect on how we calculate Adjusted EBITDA.
The following schedules are designed to help investors bridge the transition from our historical
segment operating income calculation to the new segment operating income calculation.
Schedule I -
This schedule shows segment operating income by quarter for 2005 and 2006 as
calculated under the new methodology, the old methodology (i.e., as published)
and the difference, which was the Shared Services costs allocation.
Schedule II -
This schedule presents the revised reconciliations of segment operating income
per the new methodology to Adjusted EBITDA for 2006 by quarter.
Schedule III - This schedule presents the revised reconciliations of segment operating income
per the new methodology to Adjusted EBITDA for 2005 by quarter.
IHS Inc.
Change in Calculation of Segment Operating Income
By Quarter: 2005 - 2006
(in 000s)
SCHEDULE I
Q1 2005
Q2 2005
Q3 2005
Q4 2005
FY 2005
New Segment Operating Income
Shared
Energy
Engineering Services
$ 14,682 $
8,601 $
(4,524) $
$ 14,050 $
3,104 $
(4,116) $
$ 17,114 $
1,731 $ (12,899) $
$ 17,529 $
14,930 $
(8,350) $
$ 63,376 $
28,365 $ (29,889) $
Total
IHS
18,759
13,038
5,946
24,109
61,852
Old Segment Operating Income - As Published
Total
Energy
Engineering Adjustments
IHS
$ 12,283 $
6,202 $
274 $ 18,759
$ 11,779 $
833 $
426 $ 13,038
$ 14,725 $
(658) $
(8,121) $ 5,946
$ 14,215 $
11,617 $
(1,723) $ 24,109
$ 53,003 $
17,993 $
(9,144) $ 61,852
Energy
$ 2,399
$ 2,271
$ 2,389
$ 3,314
$ 10,373
Difference
Shared
Engineering Services
$
2,399 $ (4,798)
$
2,271 $ (4,542)
$
2,389 $ (4,778)
$
3,313 $ (6,627)
$
10,372 $ (20,745)
Q1 2006
Q2 2006
Q3 2006
Q4 2006
FY 2006
$
$
$
$
$
21,413
18,560
21,779
18,433
80,185
$
$
$
$
$
$ 3,045
$ 3,524
$ 3,924
$ 5,202
$ 15,696
$
$
$
$
$
19,193
19,934
20,813
22,930
82,873
$
$
$
$
$
11,270
8,815
11,987
14,738
46,808
$
$
$
$
$
(9,050)
(10,189)
(11,021)
(19,235)
(49,496)
$
$
$
$
$
16,148
16,410
16,889
17,728
67,177
$
$
$
$
$
8,225
5,291
8,062
9,536
31,112
$
$
$
$
$
(2,960)
(3,141)
(3,172)
(8,831)
(18,104)
$
$
$
$
$
21,413
18,560
21,779
18,433
80,185
3,045
3,524
3,925
5,202
15,696
Total
IHS
$
$
$
$
$
-
$ (6,090) $
$ (7,048) $
$ (7,849) $
$ (10,404) $
$ (31,392) $
-
IHS Inc.
Revised Reconciliations of Segment Operating Income to Adjusted EBITDA
By Quarter: 2006
(in 000s)
SCHEDULE II
Operating income
Adjustments:
Stock-based compensation expense
CEO retirement costs
Depreciation and amortization
Restructuring and offering charges
(Gain) loss on sales of assets, net
Net periodic pension and post-retirement benefits
Minority interest
Adjusted EBITDA
Operating income
Adjustments:
Stock-based compensation expense
CEO retirement costs
Depreciation and amortization
Restructuring and offering charges
(Gain) loss on sales of assets, net
Net periodic pension and post-retirement benefits
Minority interest
Adjusted EBITDA
Operating income
Adjustments:
Stock-based compensation expense
CEO retirement costs
Depreciation and amortization
Restructuring and offering charges
(Gain) loss on sales of assets, net
Net periodic pension and post-retirement benefits
Minority interest
Adjusted EBITDA
Three Months Ended February 28, 2006
Shared
Total
Energy
Engineering Services
IHS
$ 19,193 $
11,270 $ (9,050) $ 21,413
$
1,701
20,894
$
1,460
(18)
(25)
12,687 $
3,666
3,666
209
3,370
20
2
(726)
(726)
(25)
(5,881) $ 27,700
Three Months Ended August 31, 2006
Shared
Total
Energy
Engineering Services
IHS
$ 20,813 $
11,987 $ (11,021) $ 21,779
$
2,584
23,397
$
1,301
53
(89)
13,252 $
4,440
4,440
333
4,218
53
(1,268)
(1,268)
(89)
(7,516) $ 29,133
Year Ended November 30, 2006
Shared
Total
Energy
Engineering Services
IHS
$ 82,873 $
46,808 $ (49,496) $ 80,185
$
8,935
444
92,252
$
21,702
21,702
1,857
1,857
5,673
1,106
15,714
1,836
823
3,103
56
56
(4,421)
(4,421)
(168)
(168)
54,205 $ (28,429) $ 118,028
Three Months Ended May 31, 2006
Shared
Total
Energy
Engineering Services
IHS
$ 19,934 $
8,815 $ (10,189) $ 18,560
$
1,805
21,739
$
1,266
(56)
10,025 $
4,359
4,359
271
3,342
(1,218)
(1,218)
(56)
(6,777) $ 24,987
Three Months Ended November 30, 2006
Shared
Total
Energy
Engineering Services
IHS
$ 22,930 $
14,738 $ (19,235) $ 18,433
$
2,845
444
26,219
$
1,646
1,854
3
2
18,243
$
9,237
9,237
1,857
1,857
293
4,784
803
3,101
3
(1,209)
(1,209)
2
(8,254) $ 36,208
IHS Inc.
Revised Reconciliations of Segment Operating Income to Adjusted EBITDA
By Quarter: 2005
(in 000s)
SCHEDULE III
Operating income
Adjustments:
Stock-based compensation expense
CEO retirement costs
Depreciation and amortization
Restructuring and offering charges
(Gain) loss on sales of assets, net
Net periodic pension and post-retirement benefits
Minority interest
Adjusted EBITDA
Operating income
Adjustments:
Stock-based compensation expense
CEO retirement costs
Depreciation and amortization
Restructuring and offering charges
(Gain) loss on sales of assets, net
Net periodic pension and post-retirement benefits
Minority interest
Adjusted EBITDA
Operating income
Adjustments:
Stock-based compensation expense
CEO retirement costs
Depreciation and amortization
Restructuring and offering charges
(Gain) loss on sales of assets, net
Net periodic pension and post-retirement benefits
Minority interest
Adjusted EBITDA
Three Months Ended February 28, 2005
Shared
Total
Energy
Engineering Services
IHS
$ 14,682 $
8,601 $ (4,524) $ 18,759
Three Months Ended May 31, 2005
Shared
Total
Energy Engineering Services
IHS
$ 14,050 $
3,104 $ (4,116) $ 13,038
1,672
$ 16,354
1,638
$ 15,688
$
1,040
7
9,648
$
1,274
1,274
195
2,907
(617)
(617)
(931)
(931)
7
(4,603) $ 21,399
$
1,024
3
11
4,142
$
1,230
1,230
197
2,859
(717)
(714)
(939)
(939)
11
(4,345) $ 15,485
Three Months Ended August 31, 2005
Shared
Total
Energy
Engineering Services
IHS
$ 17,114 $
1,731 $ (12,899) $ 5,946
Three Months Ended November 30, 2005
Shared
Total
Energy Engineering Services
IHS
$ 17,529 $
14,930 $ (8,350) $ 24,109
1,598
$ 18,712
1,609
$ 19,138
$
979
4,406
(32)
7,084 $
1,041
1,041
196
2,773
7,991
12,397
(911)
(911)
(32)
(4,582) $ 21,214
Year Ended November 30, 2005
Shared
Total
Energy
Engineering Services
IHS
$ 63,376 $
28,365 $ (29,889) $ 61,852
6,517
$ 69,893
$
5,272
5,272
4,118
784
11,419
4,406
9,297
13,703
3
(1,334)
(1,331)
(4,091)
(4,091)
(116)
(30)
(146)
36,776 $ (19,991) $ 86,678
$
1,075
(102)
15,903 $
1,727
1,727
196
2,880
1,306
1,306
(1,310)
(1,310)
(30)
(132)
(6,461) $ 28,580