Good day, ladies and gentlemen and welcome to the Second Quarter 2016 IHS Incorporated Earnings Conference Call. [Operator Instructions] As a reminder, this conference call may be recorded. I would now like to transfer the call over to Eric Boyer, Vice President, Investor Relations. You may begin.

Good morning and thank you for joining us for the IHS second quarter earnings conference call. We issued our Q2 earnings release this morning. If you do not have a copy of this release, it is available on our website at ihs.com. Some of our comments and discussions on the quarter are based on non-GAAP measures. Our non-GAAP or adjusted numbers exclude stock-based compensation, amortization of acquired intangibles and other items. Our earnings release includes both our GAAP-based income statement and statement of cash flows and reconciliations to the non-GAAP measures discussed during this call. These reconciliation schedules are included in our release and can also be found on our website. The non-GAAP results are a supplement to the GAAP financial statements. IHS believes this non-GAAP presentation and the exclusion of these items is useful in order to focus on what we deem to be a more reliable indicator of ongoing operating performance. As a reminder, this conference call is being recorded and webcast and is a copyrighted property of IHS. Any rebroadcast of this information in whole or in part without the prior written consent of IHS is prohibited. Please keep in mind that this conference call, especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ and vary materially from the expectations can be found on IHS’ filings with the SEC and on the IHS website. After our prepared remarks, Jerre Stead, IHS Chairman and CEO and Todd Hyatt, IHS EVP and Chief Financial Officer will be available to take your questions. With that, it is my pleasure to turn the call over to Jerre Stead. Jerre?

Thank you, Eric. Good morning and thank you for joining us as we share our second quarter results and provide a brief update on our pending merger with Markit. June 1 was my one year anniversary returning as CEO for IHS. Over the past year, we reviewed our business and took quite quick decisive actions to improve operational execution, financial performance and shareholder returns. We have made great progress on the initiatives we spoke about at our Analyst Day in October last year, including organizational alignment, operational efficiencies, sales operations and capital deployment. We also improved our overall business portfolio by divesting assets that are no longer core to the future direction of the company in acquiring the high-performing information assets OPIS and CARPROOF. The results of these initiatives are evident through our solid financial performance despite the most challenging energy market downturn in our company’s history. We delivered double-digit organic growth within our transportation segment. We have effectively managed our resources segment while introducing new products and realigning our cost structure. And we made strong progress reshaping our CMS business. I am particularly proud of our bottom line performance and protecting our shareholders’ returns through a strong focus on margin expansion with 345 basis points of year-over-year expansion in Q2. This is even more impressive given the lower growth environment in which we are operating in. Finally, we announced the transformational merger of equals agreement with Markit, which will create an unparalleled information services powerhouse. My many, many thanks to our colleagues for their sense of urgency and their hard work in driving all that we have accomplished since my return. Now, I am pleased to cover with you our very strong quarter, one that surpassed our initial expectations, particularly with the very robust profit delivery. The high level…

Thank you, Jerre. Let’s start by reviewing the financial results for the second quarter. Revenue was $588 million, an increase of 6% on a reported basis and 8% when normalized for CERAWeek. Adjusted EBITDA was $201 million, an increase of 17% and margin expansion of 345 basis points and adjusted EPS was $1.60, an increase of 16%. Relative to revenue, we continued to see trends similar to those discussed on the last few calls. Total revenue growth, normalized for CERAWeek, was 8%, including 2% organic revenue growth, acquisitions of 7% and an FX drag of 1%. Subscription organic growth was 1% and non-subscription organic revenue growth was 6% normalized for CERAWeek. Reported revenue growth was negatively impacted by approximately $14 million of revenue from CERAWeek in Q1 this year versus Q2 in the prior year. On a reported basis, non-subs organic revenue growth was negative 6% and our total organic revenue growth was negative 1%. Looking at segment performance, transportation growth was 21%, which included 12% organic, 9% acquisitive and minimal FX impact. Organic revenue growth was comprised of 10% subscription growth and 19% non-subscription growth. We continue to see very strong growth in our automotive businesses and stable growth in the other transportation businesses. We remain confident in our auto businesses’ ability to continue its strong growth due to the diversity of its revenue being 60% used car focused and 40% new car focused as well as a number of growth drivers within each of these market segments. First, we expect the used car portion of our auto business, which includes CARFAX and CARPROOF, to benefit from continued penetration of the vehicle history report market and also from new products, such as used car listings and valuation services. The integration of our recent acquisition of CARPROOF is going well…

Thanks, Todd. I was very pleased with our Q2 performance given the energy industry challenges and we feel very positive about our leading assets and market position. Our non-energy businesses continue outstanding performance because of operational improvements and new product launches. We are especially pleased with our strong auto business performance, which we believe will continue to produce strong results through market cycles given our focus on both the new and used auto markets. And we continue to drive margin expansion through our new business line operating structure and other operating efficiencies as well as generating strong free cash flow. IHS has had great success during its 10 plus years as a public company. It has created tremendous value for our customers, colleagues and our shareholders. However, I believe the best is yet to come and very much look forward to leading the combined IHS Markit company for the next 18 months as we position for future success.

And with that, can we turn the call over to Q&A?

Thank you. [Operator Instructions] Our first question comes from the line of Bill Warmington of Wells Fargo. Your line is now open.

Good morning, everyone.

Hi, Bill.

So, first of all congratulations on the strong margins and I wanted to focus my question there. If you could give a little more color in terms of what’s driving the year-over-year improvement, should we expect it to continue and at what pace? And it sounds like one of the contributors based on your comments was a more decentralized cost management structure, so if you could comment on that? Thank you. Good luck on the merger vote on July 11.

Yes, thanks very much, Bill. I will start, Todd will pick up. We are not less decentralized on cost control. What we have given is specific targets to the business units. And when we put the business units in place this year, it was something we actually started 8 years ago. And we were able to put that in place where we have 9 business leaders today doing an outstanding job of meeting or exceeding their goals that we provided at the beginning of the year by making the right trade-offs much quicker. I feel very good about it. That was a great – 345 basis points was a great improvement in year-over-year. Todd, you want to pick up on where we expect it to continue?

Yes, I echo your point, Jerre. I do think we benefited from the business line operating model by letting the commercial leaders make decisions around the optimal deployment of the resources around sales, marketing, product development, product management. The other thing I would add is we have invested a lot, as you know, over the last 5 plus years building infrastructure in the company. And so we continue to see benefit within infrastructure and driving a more efficient cost footprint in that area. And then the other thing which I called out on the call, we have realigned some of the resourcing around our resources business, particularly in the non-sub area, where we have seen lower level of consulting over the last couple of years. We believe that there is still additional margin opportunity. We are positioned structurally to capture that opportunity and to continue to drive a more efficient cost footprint in the shared service areas and also to continue to allow the commercial leaders of the business to make good resourcing decisions around our commercial area. So, we are optimistic about the ability to continue to drive margin, Bill.

Great question, Bill. And I again just want to emphasize what Todd and I said. The business unit model that we are now operating with is proving to be very efficient and look forward to seeing that continue for years to come. Thanks, Bill. Next question.

Our next question comes from the line of Peter Appert of Piper Jaffray. Your line is now open.

Thanks. Good morning. Just picking on the margins then for a sec. The resources segment was particularly strong in the context of the revenue weakness. And Todd, you spoke a little bit about that. But I am wondering how much of this is one-time versus sustainable further improvement? And related to that, Todd, can you talk about any revision in your long-term expectations in terms of where you think the margins for legacy IHS can go?

Great question, Peter. We will have – Todd was hoping you would ask that question.

Peter, I think relative to energy and I called this out, we have been in front of the cost structure really going back to last year. So, we have consistently evaluated the resourcing level in that business. And to the extent we have had opportunity from some of the variable revenue we have realigned the cost of resources. So, we don’t expect this level of margin expansion to continue in resources, but we do expect to be able to maintain the absolute margin level that we have seen in this revenue environment. As far as long-term for IHS, I think when you look at CMS, where we have the royalty bearing part of the business, that’s an area that we do see with opportunity to get into the low to mid 30s, and I give Chad and Amy a lot of credit for this past quarter. Engineering Workbench, we had some nice wins in that area and bench machine continues to be a very strong product. We have a number of proposals out for future revenue in engineering. And then I think technology, we have been, not huge revenue growth, but effective transformation of the product between the transactional and the subscription. And we think we will really benefit from that. Transportation, if anything, I would say, we are holding margin back right now. We continue to invest pretty heavily in transportation and we are seeing significant growth in that area. So, we really haven’t fully pushed margin as hard as we can, but we are pleased with what we are seeing at the top line and we will continue to invest there as long as we have the opportunity. So long-term, I think transportation and energy are both businesses that can move margins into the upper 40s.

So, thanks, Peter. Great job, Todd.

Thank you. Our next question comes from the line of Jeff Silber of BMO Capital Markets. Your line is now open.

Thanks so much. Wanted to focus on the future, can you tell us what the goals are for the first year of the combined company in terms of what you expect to accomplish going forward?

Yes, I will start. Todd will pick up on it. When we made the announcement, we said several things. One was 20% year-over-year improvement in EPS. And well after close, as Todd mentioned, of the merger, we will give guidance the next day of the new company, if you will, which will be one full fiscal year of IHS and 4.5 months of Markit. And we will also plan to give guidance for 2017 with our new company probably in the November time because of what’s going on. We said that we would buyback $1 billion of shares in 2017 and ‘18. We will do that. We said we would deliver $125 million of cost savings over the next three years. We are on target to do that. And we said we deliver $100 million of revenue synergies and we are very much on target to do that. Todd, anything else?

Those are really the highlights, Jerre. I mean, we have talked about the adjusted tax rate being low to mid-20s, but that’s really been the financial lens we provide. And I think the key anchoring point is really this 20% adjusted EPS growth and the fact that we have levers that we can control to ensure that we deliver to that level.

We also said to wrap this up that after we complete the – while we complete the cost reductions, etcetera, we expect to move into the 40s from a margin standpoint with the total company in place. And I would tell you after all the work we have done getting ready for the close, I think our belief of the opportunities that we talked about at the time of the announcement are stronger than ever before. Thanks for the question.

Thank you. Our next question comes from the line of Brandon Dobell of William Blair. Your line is now open.

Thanks. I want to focus on transportation for a second. Just want to make sure your level of confidence in sustaining double-digit organic growth in that business, but also wanted to understand, let’s call it the year-on-year or just the impacts of all the big recalls in the emission scandals going on right now, so think about this year’s revenue versus next year’s revenue? Thanks.

Yes, great question, Brandon. Todd pick up on it, because we expect to see the continued growth largely because of the way our business is split about 60% in used car and 40% in new car, a lot of new products that Todd will talk about and then pick up on the recalls, Todd.

Yes. So, if we look at automotive and it did split at the 60-40 and we have talked in the past about the used car business, the CARFAX, CARPROOF, continue to see opportunity in the base vehicle history report business and continued to drive penetration of that market. But we have also talked about the used car listing product, which has been very strong in the U.S. and that’s obviously a significant market when we look at AutoTrader, when we look at Cars.com. So, we think there is opportunity there to further penetrate that market. We released valuation services product in both the U.S. and in Canada in the past year. Canada, we are driving revenue from that product. We have not yet monetized that in the U.S., but we see opportunity there. And it’s really this notion of onetime to lifetime products and services that we put around the car when we think about CARPROOF and CARFAX. So, we remained very bullish on the ability to drive continued strong double-digit growth in both of those businesses. Edward and team, when we look at the new car business, the legacy IHS Polk and I called some of these drivers out, but a lot of new products and a lot of industry opportunity with very rapidly changing markets. So, we talked at Investor Day about VPaC, the product that allows vehicle performance and compliance monitoring with a lot of the EPA and emission standards that are out. And we have had 13 new cells in that business. And this is a price point that’s anywhere from $150,000 upward to $1 million. We see continued opportunity on VPaC. Recall has been strong really for the last 3 years, but I think importantly, with recall it’s not just the volume, it’s a lot of the new products and services that we are bringing around our recall offerings. So, we have enhanced recall products that drive better dashboards, better management of the entire program for the OEMs. And so we are seeing up-sell on recall. And then we continue to see good revenue around the whole digital marketing area and that’s a space that’s been growing for the last several years. We see continued growth there, lot of things working well in automotive and a lot of this really being driven by Edward and team getting products into Markit and taking advantage of the trends that we are seeing in market. This has been – we have really been posting these types of results for the last couple of years and we see it continuing.

Thanks, Brandon. Next question.

Our next question comes from the line of Shlomo Rosenbaum of Stifel. Your line is now open.

Hi, good morning. Thank you very much for taking my question. Hey, Jerre, can you just comment a little bit more about what’s going on in the energy area? And just – you talked a little bit about some of the cuts have come where they have come from. Can you go over that again and just talk about the amount of bankruptcies that might be impacting your own forecast? And do you have some kind of visibility as to when we should actually see a bottoming of the subscription revenue decline or is this something that goes through the year? And then because of the continued decline, even if you baseline on the budgets over there, we should just see this continuing through a large portion of 2017? Thank you.

Yes, no, great question. I will start, Todd will pick up with the details. On the last call, I said that I thought we would see the beginning of the revenue pickup in late Q3 or Q4 of 2017. We also said that we expected – our experts expected to see oil get up around the $50 a barrel basis and then stay there for some periods of time. Both of those things have happened. Clearly today, the volatility question continues from this standpoint, not from whether there will be changes in output, but more changes of requirement. And as the global uncertainty economically continues, we will wait and see how all that plays out. I will say specifically that when we, as I said earlier, when we give you our guidance call for the balance of 2016 the day after we closed the merger, we will give you the most current color on that when we hopefully Brexit and a few of the other things will have settled down. But Todd pick up on the question of timing, I would say, our general view on the industry in total is that it’s at the bottom and flat. I do want to emphasize that this one is so different. Most of the changes have been these. This one is a very deep U and has continued to be. So, the behavior I think is different than any we have seen. Last quick point and then Todd will give you specifics on bankruptcies, etcetera. Most of the U.S. oil, the cost pulling it out of the ground runs between $45 and $50 or above. So, we are at a very interesting point from the U.S. standpoint. Other parts of the world, Saudi for example, as you know is much slower, but pick up on the particulars, Todd.

Yes, I think the first point, Shlomo, is although the price has begun to stabilize, I mean, there is still macro uncertainty. And we really haven’t seen energy companies make changes to their capital spending plans. I think our guys are forecasting next year that CapEx will rise in the single-digit in energy. And so for us that would be a positive, because we certainly need to see capital being deployed in order to have the ability to grow the business. When we look at energy, there are multiple lenses that you can look at. I think I will give you several. One is the geographic lens, Americas, EMEA, APAC. And in general, what we are seeing is a better market in APAC and EMEA and really those markets moving to flat sub base, but continue to see pressure in Americas which I will come back to when I talk about size of customers. The other lens that we look at is energy content, the information data versus energy insight, research advisory and software. And really what we have seen there really throughout is the energy insight has actually held up relatively well, which is encouraging, because I think it speaks to the value that we bring to the market. But energy insight is about 15% of the revenue. On energy analytics with software, people have deferred maintenance. On content, which is really where a lot of the challenges have been in the biggest part of energy really the impacts have been customers making strategic changes to their coverage and the geography and their operations, which then impact what they buy from us. And then the other factor is the smaller, call them the $100,000 revenue customers and less, we continue to see pressure there. So, if we look in that lens, we end up in the Americas with pressure coming from small companies. As we came into this, we had about 2,000. Roughly, a third of those have churned. And when we see continued pressure in that part of the business, we have talked about the large independence in the U.S. Most of those have made geographic shifts and strategic coverage shifts. But there still continues to be some pressure in Americas and in the U.S. And at this point, we are not prepared to call a bottom in Americas. I think the other thing that I would add is if we look at OPIS and we look at the upstream, we are doing very well. And OPIS is performing at 10% type growth rates. And so we continue to be encouraged with the diversity of the portfolio. But you know, at this point, I would say, pressure will continue to be in the U.S. and we will continue to see some impact on the sub base through the second half of the year.

Thanks, Todd. Thanks for the question.

Our next question comes from the line of Gary Bisbee of RBC. Your line is now open.

Hey, guys. Good morning.

Hi, Gary.

Todd, you made a comment where you have said that you have a lot of levers at your disposal or in your control to achieve that 20% adjusted EPS growth in the first year or in 2017, whatever it was from the merger. Can you just review what some of those are? And as part of that, maybe comment on FX and any impact you expect from the Brexit? Thank you.

Jerre really hit on the levers. I mean, it’s a very strong financial combination with substantial capital structure flexibility and generating $900 million of cash a year. So, as we look at the levers, we have shareholder returns certainly a notable lever when we look at $1 billion of buyback in each of 2017 and 2018. We will drive a more efficient tax structure. That will reduce our cost. We have synergies that are entirely within the company’s control to deliver and execute. Jerre mentioned, we have engaged BCG and we are well down the path with our Markit colleagues on working through synergies both in terms of revenue and expense. So, the financial lens on this is many things that we can control. Now we also – it’s important that we also continue to deliver solid operational results and have a commercial model that ensures that we are focused on delivery of good top line results across both the companies. So, it does start there, but then beyond that, many things that we can control. When we look at Brexit and we look at FX and I think the companies are similar in this respect. If we look at pound euro exposure and we will provide more detail in the July call, but call it about 10% of revenue in those currencies. But similar to IHS Markit has offsetting expense cost structures. So, we don’t see profit impact from currency change, but we certainly would expect to see some impact at the revenue level.

Thank you very much. Next question.

Thank you. Our next question comes from the line of Andrew Steinerman of JPMorgan. Your line is now open.

Hi. Should the resources non-subs organic revenue stay in the mid single-digit decline area in the second half of the year as we saw in the second fiscal quarter?

Todd?

Andrew, we are expecting it to continue to perform on a quarterly basis at about the level that it’s been. So, we would expect it to be slightly down versus last year. Yes.

Thank you. Next question.

Thank you. Our next question comes from the line of Manav Patnaik of Barclays. Your line is now open.

Yes, good morning gentlemen. Just wanted to touch a little bit more on the Brexit, just if you could remind us of your specific exposures to UK and then EU separately? And outside of FX, if you could just help us understand what are the main businesses in those areas in trying to assess what the potential impact from a weaker economy and so forth could be there?

Yes, happy to. Todd?

Well, for IHS, if we look at when we say main businesses, we are a global company, so obviously we sell all of our products throughout the world. Specifically in the UK, we have legacy IP from our maritime businesses and from our A&D business. I think those were the specific ones that have IP. But they do sell in APAC, they sell in the U.S. We have energy IP in Switzerland, but it sells globally. So I think from a product perspective, Manav, we don’t really see that Brexit will have an impact in terms of our ability. We sell out of – we can sell into Europe through – direct through our subsidiaries. We – IHS basically has the subsidiary in all of the major European countries. And we also have a structure that enables us to sell all of our global products through either our Swiss company or through our UK company. So we don’t really see an impact there. I think from a market perspective, we don’t see the rules impacting the ability for Markit to sell products into multiple geographies within the EU countries. It’s not really subject to the passporting of other financial service companies or companies that sell financial service products that are subject to passporting doesn’t really apply to Markit. So I think the big thing will be – two big things, one currency, which I talked about. Both companies have exposure to euros and to pounds. As I said, there will be a revenue impact if the dollar strengthens relative to those currencies, but we see an offsetting expense impact, so we don’t see a big profit headwind. And then I think the bigger thing will just be the macro economy. And how that affects us and how that affects other companies in terms of if we see a slowing in Europe.

The rest of the world.

For the rest of the world, that’s probably the biggest concern that I think we or any other company would have.

Right now. Thank you, Manav. Next question.

Our next question comes from the line of Andrew Jeffrey of SunTrust. Your line is now open.

Hi. This is Oscar Turner on for Andrew.

Hi, Oscar.

Hi. You mentioned you now expect increases in energy company CapEx budgets next year, I am just wondering how do you expect the timing of a recovery in energy subscription revenue would coincide with such increases, like what type of lag would you expect between CapEx budgets being increased and when we start to see a material changes in resources subscription revenue growth?

Yes. Good question. I will start, Todd will pick up. As you know, about 80% of our energy revenue is annual subscription base. So we will go through and explain the impact of that. The non-sub will pick up quicker because of the consulting needs that we have seen historically if and when the capital spending increases. So Todd?

As Jerre said I think non-sub will tend to leave sub. And energy tends to be an annual budget driven business. So budgets will be set in Q4 by energy companies that will take account of their plan spend for 2018. And so we would expect that once budgets are set and energy companies have spending plans in place that would provide a more favorable environment to deliver a stable level of sales for energy as we look ahead to 2018.

Thank you. Next question.

Thank you. Our next question comes from the line of Anj Singh of Credit Suisse. Your line is now open.

Hi, good morning. I have got a two part question on transportation, Jerre I know you have talked about driving more analytics based revenue overtime, so as it relates particularly to transportation, could you give us a sense of how much of that growth is being driven by analytics based products. And then the second part, as it relates to these new products, could you help us understand how much of these are focused on previously un-served demands versus perhaps where you have competitors and need to displace them? Thank you.

Yes, very good question and we will focus on the new car side first. Todd mentioned one of the big ones with VPaC sorry. And that will be – that’s clearly a new product addressing a new global requirement in the late teens and 20s on a mission control. So that’s a good example of the kind of products we are introducing that is very analytical. In fact that’s what it is exactly to be. Todd, do you want to pick up?

Well, I would say that much of what Edward and team were doing in automotive is analytics. If you look at digital marketing, helping customers better target potential customers with detailed car park information is really looking at offline to online model, the automotive audiences and sells campaign measurement services, I mean those are analytics. As Jerre said VPaC and great thing about the VPaC is we use the IHS production information, production forecast information, automotive sales forecast information and then bring emissions information into that in order to allow companies to run scenarios and allow them to develop a perspective on their level of compliance based on different assumptions around types of components that are going into the cars and where cars are being sold. So that’s a heavy analytic product. So much of what we are doing is around it. If we look at the used car business and we look at the valuation product, I mean in the valuation product actually develops a unique price for each car using not only comparable sales information but also using unique characteristics of that car from VHR information. So I think this is a group that’s been very effective at building analytic offerings around core information products. And I do think it’s the future opportunity that we have across all of our businesses.

Which is a large reason for the strong belief, we have of the organic growth to continue for years to come.

I even can say in energy that our vantage and performance evaluator in energy are essentially analytic products.

And actually a niche of our businesses, but that’s a great question. Thank you. Next question.

Thank you. Our next question comes from the line of Joseph Foresi with Cantor Fitzgerald. Your line is now open.

Hi. I was wondering what led to the performance in Asia. And then the second part of the question is, have you dug up into the impact on the Markit side from Brexit and does that impact your overall outlook post-merger? Thanks.

So you want to pick up on Asia, Todd?

Joseph, if you are going to have to help me specific reference on Asia.

Yes. Please, Joseph.

Yes. I mean it looked like it performed pretty well in the quarter, I was just wondering what drove that performance?

Yes. Asia had good non-subs performance in several of the product lines. But Asia is also relatively small number, so several million dollars in Asia tends to swing revenue a bit. But a couple of one-time sells in automotive were the big thing in Asia. New product design, I am sorry. Well, I referenced some of Chad’s Engineering Workbench wins were in Asia.

Continues to be. Can we get Joseph back on the line just for a second so we make sure we pick up the second part.

Yes. One moment.

Thank you.

Hi. Yes, no problem. The second question was just I know just talked about IHS’ impact from Brexit on the currency side and also which do globally, I didn’t know how much you have dug on to the Markit side of it and if you thought that it might have any impact on the overall outlook post-merger?

It’s a great question. Yes, we have dug deeply on that and continue to. I would say in general, what Todd just said about our business very much supplies in total where the balance between a stronger dollar against the euro and against the pound is almost nearly entirely offset from an expense standpoint that is in the euro and pound too, so pretty darn balance in total. Anything else on that, Todd?

No.

Again I think what Todd said the real critical piece to us there is right now what will happen on the global basis economies if anything based on all of the chatter going on today with that decision out of the UK last week. Again as I mentioned, the day after we close, we will give complete update and I hope we have much better visibility on that question then for 2016 and start to give an indication for 2017. Thank you, Joseph.

Thank you. Our next question comes from the line of Jeff Meuler of Baird. Your line is now open.

Yes. Thank you. I guess a follow-up on Joe’s second question. Just putting aside the potential Brexit impact on Markit, what about your due diligence process gave you confidence that their, I guess recent below longer term trend growth is a temporary phenomenon and that their long-term targets remain achievable in your eyes?

Great question. Todd pick up on that, because we spent as you would expect, a great deal of time before and now working on the synergies going forward.

Yes. Markit has a leading, a very strong information service business, which really I would say a leading franchise in the markets that it operates in. So if we look at fixed income, if we look at CBS information, pricing reference data that Markit provides to markets. And consistently has grown that business in the 5% to 7% range. And we see, given the market position that it has and growth opportunities around things like indices, the ability to continue to drive continued growth in that area, I think when we look at the solutions part of Markit, which has been a very high growth part of that portfolio, we see a number of future opportunities coming out of solutions. We believe that there is a substantial opportunity around KYC and KY3P. Markit has a very strong business with the market on-demand, the digital products that it provides to financial services. We like the enterprise data management product and believe that there could be applicability to that across some of our businesses. We like a lot of what Markit is doing around analytics. And so we feel good about that part of the business. And so for us, really the question was looking at the process and the overhang around process. And I think Markit has been very overt about that and about the headwinds and impact in the U.S. And then the likely impact as we look out in the next couple of years in Europe and the fact that it’s been down from a new issuances have been down and I think that’s a bit of an overhang last quarter. But in general, I think that the assets and processing are good assets that provide future growth opportunities. And when you look at the proxy, you will see that we did make some adjustments in terms of the revenue forecast to ensure that we had what we thought was a level of revenue that can be delivered. So that when our shareholders evaluated the deal, we ensured that the deal would provide high strong shareholder returns based on what we thought were realistic revenue projections.

And I would just add one other thing. Todd, that’s perfect. If you just step back for a minute, one of the things Lance and his team have done a great job of since they started the company some 14 years ago is finding places where there has been no competition, creating excellent products and continuing to lead. Todd gave you a couple of examples just now in solutions. So I think all-in-all, we feel very good. And what it does is provide a balance for us with the businesses, the major businesses we have going forward. Thanks. Next question.

Our next question comes from the line of Andre Benjamin of Goldman Sachs. Your line is now open.

Thanks. Good morning. Most of my questions have been answered. I guess I just wanted to touch based on whether there are any quarterly considerations that you would call out with regards to guidance ranges you pointed to for revenue and particularly EBITDA margins given the moving parts on investment versus cost rationalization efforts?

No, we have not done that. Certainly, the guidance we give has always been annual, will continue to be annual. My only suggestion would be if you look on a historical basis, you will see any seasonality at all, so no, nothing different on that subject. Thank you.

Thank you. Our next question comes from the line of Ato Garrett of Deutsche Bank. Your line is now open.

Hi, good morning.

Good morning.

In your prepared comments, you have made a comment about regarding some additional – or regarding some synergies that you were expecting from OPIS when you are looking at the impacts in merger with Markit, is that something additional that you had, that was new to the $100 million synergy target or is that just reiterating your confidence in those synergies?

Good question. It’s reiterated our confidence in the synergies. And as we have been able to work, as we have had OPIS as part of our team longer, we see even more potential synergies as we move forward. We will look forward to as we said, we have committed to $100 million of revenue synergies as we – in the next 2.5 years, 3 years. I feel very solid about it, it’s so interesting because you know and most people know that there is always a very cautious eye, maybe I would say cynical eye to companies when they announce that they are going to get great revenue synergies. The $100 million that we picked was after some very complete reviews. We have gone much further today. I look forward to being very transparent in reporting those revenue synergies as we move forward. And I would say we have a very high degree which we will demonstrate in the years ahead. OPIS will be a good addition – is a good addition to help us for that. Thank you.

Thank you. Our next question comes from the line of Toni Kaplan of Morgan Stanley. Your line is now open.

Thank you. Good morning.

Good morning Toni.

In the executive appointments press release from earlier this month, it looked like you appointed a Head of Financial Markets, which includes the infill and processing businesses from Markit as well as the economic and country risk products, so we are just wondering, should we expect that you will report those businesses together or do you plan on continuing like giving the granularity just given that those business models between Markit segments at least are very different? Thanks.

Very good question, Toni, we will report four segments, the three that we have been reporting on plus the Markit segments, financial Markit segments. Your question is a good one. Organizationally, where things report to get the maximum return we can from a revenue and cost synergies standpoint, but from an outside reporting standpoint, we will be very transparent, including giving good visibility each quarter on the three segments that Markit has been reporting on as well as our segment. So for efficiency standpoint and for the kind of synergies we expect they are reporting and your example is a good one with ECR moving into Adam’s business. But from a public outside reporting, it will stay very consistent, so we don’t have to go back and say, if we have done this, if we have done that, we will be very consistent with where we were when both of us were separate public companies. Thanks Toni.

Thank you. And our last question comes from the line of Shlomo Rosenbaum of Stifel. Your line is now open.

Thank you very much for squeezing me back in. I just wanted to understand the CARPROOF acquisition a little bit more, it seems like it all went into non-subscription revenue, I thought it was more of a CARFAX type of business, is that something that’s actually different from CARFAX or can you talk a little bit about that?

Yes, no, no. Very good.

That’s a great question, Shlomo. And we have talked about this. But CARPROOF sells VHRs on a pay-per-view basis, so it is a transactional product. If you go back and look at CARFAX 5-plus years ago, CARFAX sold its product on a pay-per-view basis. And then it transitioned that to an advantage product, which is basically an all you can eat product that’s priced relative to the size of the dealer, the number of cars and inventory. And so that’s something that Dick and team are evaluating with CARPROOF. Ultimately, we do see ability to transition that business model and we do believe that the all-you-can-eat model is a model that ultimately drives longer term value, because we want customers to use VHRs. It helps with the branding and it helps with selling things like used car listings. But I think the market in Canada and the CARPROOF market is not as evolved or as mature as the U.S. And that’s why Dick and team are managing both the businesses and we would expect that transition to occur in the future.

And the teams feel really good about the synergies going forward.

I just close. Thank you all for the questions today and the interest. We look forward to, as I said yesterday when I did our video for our IHS colleagues around the world, we look forward to great continued performance for years to come. We are eager to finish the legal piece of the merger and deliver our results that meet or exceed the guidance that we have given on as we talked about today. Very proud of what everybody has done and look forward to reporting to you and Q3 of the new company if you will. And it won’t be very long before we do that. So thanks, everybody. Eric?

We thank you for your interest in IHS. This call can be accessed via replay at 855-859-2056 or international dial-in 404-537-3406, conference ID 29217766 beginning in about 2 hours and running through July 5, 2016. In addition, the webcast will be archived for 1 year on our website at www.ihs.com. Thank you and we appreciate your interest and time.

Ladies and gentlemen, thank you for participating in today’s conference. That does conclude today’s program. You may all disconnect. Have a great day everyone.