item 14 principal accountant fees services information required item incorporated reference information set forth section entitled “ratification appointment independent registered public accountantsaccounting nonaudit fees” proxy statement part iv item 15 item 14 principal accounting fees services information required item incorporated reference information set forth section entitled “ratification appointment independent registered public accounting firmaccounting fees” proxy statement part iv item 15 item 14 principal accountant fees services information required item 14 set forth proxy statement incorporated herein reference part iv item 15 item 14 principal accountant fees services information required item 14 set forth proxy statement incorporated herein reference part iv item 15 item 14 principal accounting fees services information required item incorporated reference information set forth section entitled ratification appointment independent registered public accounting firmaccounting fees proxy statement part iv item 15 item 14 principal accountant fees services information required item incorporated reference information set forth section entitled ratification appointment independent registered public accounting firmaccounting fees proxy statement part iv item 15 item 14 principal accountant fees services information required item 14 set forth proxy statement incorporated herein reference part iv item 15 item 14 principal accountant fees services information required item incorporated reference information set forth section entitled ratification appointment independent registered public accounting firmaccounting fees proxy statement part iv item 15 item 14 principal accountant fees services information required item incorporated reference information set forth section entitled “ratification appointment independent registered public accounting firmaccounting fees” proxy statement part iv item 15 item 14 principal accountant fees services information required item incorporated reference information set forth section entitled “ratification appointment independent registered public accountantsaccounting nonaudit fees” proxy statement part iv item 15 item 14 principal accountant fees services information required item incorporated reference information set forth section entitled “ratification appointment independent registered public accountantsaudit auditrelated tax fees” proxy statement part iv item 15 item 7 management’s discussion analysis financial condition results operations described “forwardlooking statements” section start form 10k make forwardlooking statements throughout report forwardlooking statements generally identified use words “may” “might” “will” “should” “expect” “plan” “anticipate” “believe” “estimate” “predict” “potential” “continue” negative terms similar expressions forwardlooking statements based current expectations assumptions projections subject risks uncertainties may cause actual results differ materially forwardlooking statements detailed discussion risks uncertainties could cause actual results events differ materially forwardlooking statements outlined “risk factors” section elsewhere form 10k intend update publicly revise forwardlooking statements whether result new information future events otherwise following discussion financial condition operating results read conjunction “selected financial data” consolidated financial statements accompanying notes included form 10k important information disclosure routinely post website wwwihscom executive summary business overview leading source information insight critical areas shape todays business landscape including energy power design supply chain defense risk security environment health safety ehs sustainability country industry forecasting commodities pricing cost businesses governments 165 countries around globe rely comprehensive content expert independent analysis flexible delivery methods make highimpact decisions develop strategies speed confidence business since 1959 incorporated state delaware 1994 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa employ 5500 people 30 countries around world inherent strategies firm commitment put customers first everything believe maintaining disciplined “outsidein” approach allow us better serve customers stockholders achieve goal organized business around customers geographies reside americas emea apac structure allows us tailor expand solutions offer meet unique needs customers globally local markets sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscriptions usually oneyear periods historically seen high renewal rates subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest levels revenue profit trends amplified product mix recent acquisitions generate larger proportion sales fourth quarter also experience eventdriven seasonality business instance ihs ceraweek annual energy executive gathering held second quarter another example triennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every third year bpvc benefit recently occurred third quarter 2010 investing business highest rate companys history series initiatives designed boost colleague productivity increase efficiencies develop new enhanced products create scalable platforms designed accommodate future revenue growth without incur proportional increases costs support growth initiatives include limited • vanguard plan consolidating standardizing billing systems general ledgers salesforce automation capabilities supporting business processes implemented first two releases vanguard 2011 current plan calls substantially finance leadtocash systems migrated vanguard end 2012 • customer care centers excellence opened three customer care centers excellence one region january 2012 centers consolidate customercare processes simplify standardize approach providing dedicated customer service • newton plan centralize number data centers time taking us dozens data centers currently three ihs grown acquisitions number data centers grown well • product development expect introduce 2012 new products product enhancements history global operations approximately 48 revenue transacted outside united states however 30 revenue transacted currencies us dollar result strengthening us dollar relative certain currencies negative impact revenue conversely weakening us dollar positive impact revenue however impact operating income diminished due certain operating expenses denominated currencies us dollar largest foreign currency exposures order magnitude british pound canadian dollar euro see qualitative quantitative disclosures market risk foreign currency exchange rate risk additional discussion impacts foreign currencies operations key performance indicators believe revenue growth adjusted ebitda dollars margin free cash flow key measures success adjusted ebitda free cash flow nongaap financial measures defined rules securities exchange commission discussed following paragraphs revenue growth review yearoveryear revenue growth segments key measure success addressing customer needs region world measure revenue growth terms organic acquisitive foreign currency impacts define components follows • organic define organic revenue growth total revenue growth continuing operations factors acquisitions foreign currency drive type revenue growth value realization pricing expanding wallet share existing customers upselling crossselling efforts securing new customer business sale new offerings • acquisitive define acquisitionrelated revenue generated acquired products services date acquisition first anniversary date acquisition type growth comes result strategy purchase integrate leverage value assets acquire • foreign currency define foreign currency impact revenue difference current revenue current exchange rates current revenue corresponding prior period exchange rates due significance revenue transacted foreign currencies measure impact foreign currency movements revenue nongaap measures use nongaap measures adjusted ebitda free cash flow operational financial decisionmaking believing measures allow us focus deem reliable indicators ongoing operating performance adjusted ebitda ability generate cash flow operations free cash flow also believe investors may find nongaap financial measures useful reasons although caution readers nongaap financial measures substitute gaap financial measures disclosures none nongaap financial measures recognized terms gaap purport alternative net income operating cash flow indicator operating performance gaap measure throughout section management’s discussion analysis ihs website provide reconciliations nongaap financial measures directly comparable gaap measures adjusted ebitda adjusted ebitda used many investors research analysts investment bankers lenders assess operating performance example measure similar adjusted ebitda required lenders term loan revolving credit agreement define ebitda net income plus minus net interest plus provision income taxes depreciation amortization definition adjusted ebitda excludes noncash items eg stockbased compensation expense ii items management consider useful assessing operating performance eg acquisitionrelated costs restructuring charges income loss discontinued operations gain loss sale assets free cash flow define free cash flow net cash provided operating activities less capital expenditures companies use identical calculations presentation nongaap financial measures may comparable similarly titled measures companies however measures still useful evaluating performance peer companies believe measures provide users valuable insight key components gaap financial disclosures example company higher gaap net income may appealing investors net income heavily comprised gains asset sales likewise eliminating effects interest income expense moderates impact company’s capital structure performance business combinations year ended november 30 2011 completed following acquisitions among others april 16 2011 acquired odspetrodata holdings ltd odspetrodata approximately 75 million cash net cash acquired odspetrodata premier provider data information market intelligence offshore energy industry expect odspetrodata products services extend offerings upstream energy sector provision high quality data research across range critical highvalue offshore markets drilling rigs marine seismic vessels field development operations april 26 2011 acquired dyadem international ltd dyadem approximately 49 million cash net cash acquired dyadem market leader operational risk management quality risk management solutions expect acquisition dyadem provide customers software solutions help achieve regulatory compliance business continuity may 2 2011 acquired chemical market associates inc cmai approximately 73 million cash net cash acquired cmai leading provider market business advisory services worldwide petrochemical specialty chemicals fertilizer plastics fibers chloralkali industries expect cmai’s comprehensive information analysis add eventdriven supplychain information strategy cmais price discovery analysis business broaden commodities cost information capabilities august 10 2011 acquired seismic microtechnology smt approximately 502 million cash net cash acquired smt global leader windowsbased exploration production software solutions used geoscientists worldwide evaluate potential reservoirs plan field development result acquisition expect provide robust valuable integrated solution set information software insight support energy customers worldwide november 10 2011 acquired purvin gertz approximately 29 million cash net cash acquired purvin gertz wellestablished global advisory market research firm provides technical commercial strategic advice international clients petroleum refining natural gas natural gas liquids crude oil petrochemical industries expect acquisition enhance focused actionable analysis deep industry knowledge product service portfolio critical senior executives key decision makers consolidated financial statements include results operations cash flows business combinations beginning respective dates acquisition pricing information customize many sales offerings meet individual customer needs base pricing number factors including number customer locations number simultaneous users breadth content included offering level offering customization employ difficult us evaluate pricing impacts periodtoperiod basis analysis complicated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue items cost operating business incur cost revenue primarily acquire manage deliver offerings costs include personnel information technology occupancy costs well royalty payments thirdparty information providers royalty payments based level subscription sales certain product offerings sales general administrative expenses include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly commensurate volume sold particularly subscriptionbased business revenue driven sale specifications standards portion content obtained standards development organizations stockbased compensation expense issue equity awards employees almost exclusively restricted stock units record cost respective vesting periods typical vesting period three years none grants exceed eight years november 30 2011 approximately 30 million stockbased awards outstanding approximately 10 million performancebased awards assuming target payout performance awards 2012 beyond majority annual grants highestranking employees performancebased awards vesting performance shares granted 2010 2011 principally based achieving certain financial performance levels fiscal years 2012 2013 november 30 2011 estimated target number shares issuable 2012 2013 fiscal years vest using estimates addition estimated 2012 grants projected stockbased compensation expense 2012 expected around 115120 million grant date fair values differ projections change actual performance levels achieve could result change actual amount stockbased compensation recognize example event achieve projected performance metrics 2012 2013 stockbased compensation expense could decrease conversely exceed projected performance metrics stockbased compensation could increase pension postretirement benefits provide following pension postretirement plans •us retirement income plan us rip definedbenefit plan covers majority employees united states •uk retirement income plan uk rip frozen definedbenefit plan covers limited number employees united kingdom •postretirement medical plan contributory plan provides access group rates us employees meet specified conditions •supplemental income plan sip plan nonqualified pension plan certain company personnel 2011 undertook comprehensive review us rip designed ensure maintained marketcompetitive employee benefits decreasing volatility result analysis took steps resulted settlement retiree pension obligations change pension plan investment strategies change pension accounting policy accelerated funding plan contributions accomplished settlement retiree obligations purchasing annuities retiree population thirdparty insurer resulted significant reduction overall plan liability changed pension plan investment strategy better match remaining pension assets remaining pension obligations changed pension accounting policy accelerated recognition method recognize gains losses income statement quickly previous method accelerated plan funding contributing approximately 65 million plan december 2011 first month fiscal 2012 approximately 57 million contribution allowed us bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs fiscal 2012 expect offer lumpsum buyouts former colleagues yet receiving benefits believe many 70 former colleagues accept offer reduce pension obligations assets allowing us reduce volatility plan estimated 8 million 2012 pension expense excludes settlement charges associated offer well fourth quarter adjustments need record new pension accounting policy first quarter fiscal 2012 also made decision close us rip new participants effective january 1 2012 2010 approved plan design change us rip effective march 1 2011 resulted 53 million reduction liability amortized remaining average future working lifetime employee group approximately six years 2010 also made decision discontinue future benefit accruals uk rip resulted 08 million reduction liability curtailment us rip underfunded november 30 2011 uk rip overfunded date postretirement medical plan sip unfunded restructuring charges third quarter 2010 announced various plans streamline operations merge functions result reduced aggregate workforce approximately 3 consolidated several office locations changes primarily affected americas emea segments restructuring charge recorded 2010 consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closures relocations legal expenses associated employee terminations incurred third quarter 2010 entire 91 million restructuring charge recorded third quarter 2010 approximately 77 million charge related americas segment 13 million pertained emea segment remainder apac recorded 01 million restructuring credit second quarter 2010 second quarter 2011 recorded additional 07 million net restructuring costs americas segment represented revision third quarter 2010 estimate cost exit space one facilities partially offset favorable resolution employee severance costs fourth quarter 2011 recorded 05 million restructuring charges severance costs associated consolidation positions recently established accounting customer care centers excellence locations provision income taxes effective tax rate 165 227 216 years ended november 30 2011 2010 2009 respectively see consolidated financial statements included form 10k additional disclosure income taxes critical accounting policies estimates consolidated financial statements prepared accordance us gaap applying us gaap make significant estimates judgments affect reported amounts assets liabilities revenues expenses well disclosure contingent assets liabilities many instances reasonably could used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions approximately 77 revenue derived sale subscriptions initially deferred recognized ratably delivered subscription period generally 12 months standard agreements typically require significant judgments revenue recognized nonstandard agreements generally make judgments revenue recognition matters •whether sufficient legally binding terms conditions exist •whether customer acceptance achieved •progress certain consulting projects revenue recognized proportional performance basis review customer agreements utilize advice legal counsel appropriate evaluating binding nature contract terms conditions well whether customer acceptance achieved estimate progress consulting project deliverables based knowledge judgment current status individual consulting engagements historically judgments estimates reasonably accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions several highly subjective variables including future cash flows discount rates asset lives also different valuation models component selection requires considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable recognize assumptions inherently uncertain depending size purchase price particular acquisition mix intangible assets acquired purchase price allocation could materially impacted applying different set assumptions estimates goodwill intangible assets make various assumptions goodwill intangible assets including estimated useful lives whether potential impairment events occurred perform impairment analyses carrying values goodwill indefinitelived intangible assets least annually additionally review carrying value goodwill intangible assets whenever events changes circumstances indicate carrying amounts may recoverable examples events changes circumstances many subjective nature include following •significant negative industry economic trends •a significant change manner use acquired assets strategy •a significant decrease market value asset •a significant change legal factors business climate could affect value asset impairment indicator present perform analysis confirm whether impairment actually occurred amount required charge finitelived intangible assets review carrying amount least annually determine whether current events circumstances require adjustment carrying amount finitelived intangible asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value indefinitelived intangible assets goodwill evaluate impairment comparing amount carrying value assets exceeds fair value primarily based estimated discounted cash flows exercise judgment selecting assumptions used estimated discounted cash flows analysis goodwill determine fair value reporting unit compare fair value reporting unit carrying value carrying value exceeds fair value reporting unit calculate compare implied fair value goodwill carrying amount goodwill record impairment charge excess carrying value implied fair value determination fair value requires number significant assumptions judgments including assumptions future economic conditions revenue growth operating margins discount rates use different estimates assumptions within projected future cash flows model use methodology projected future cash flow model could result significantly different fair values goodwill intangible assets income taxes exercise significant judgment determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets recorded reserves related uncertain tax positions valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits defined benefit plans cover majority employees us limited number employees uk discontinued future benefit accruals uk plan 2010 also postretirement plans us provide medical benefits certain retirees eligible dependents make number key assumptions measuring plan obligations many highly susceptible change period assumptions include discount rate longterm expected return plan assets rate future salary increases various demographic assumptions follows •discount rate utilized bond matching model averages bond universe 500 aagraded noncallable bonds 10th 90th percentiles maturity group proxy setting discount rate yearend •asset returns based upon anticipated average rate earnings expected invested funds plan longterm •salary increase assumptions based upon historical experience anticipated future management actions •demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience depending assumptions estimates used net periodic pension postretirement benefit expense could vary significantly within range possible outcomes could material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2011 would resulted following effects 2011 pension expense projected benefit obligation pbo november 30 2011 thousands stockbased compensation stock plans provide grant various equity awards including performancebased awards november 30 2011 outstanding stockbased awards 30 million shares stock approximately 10 million shares subject performancebased metrics assuming target payout performance awards 2013 beyond timebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures estimated forfeiture rate based historical experience update calculations quarterly based actual experience performancebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures assume shares vest target evaluate assumption quarter adjust appropriate appears probable shares vest level target example event achieve projected performance metrics 2012 2013 stockbased compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase since outstanding options exercisable 01 million shares common stock november 30 2011 changes valuation assumptions stock options materially affect financial results however number options granted materially increases future likelihood changes valuation assumptions could materially impact financial results also increases results operations total revenue total revenue 2011 increased 25 compared period 2010 total revenue 2010 increased 11 compared period 2009 table displays percentage point change revenue due organic acquisitive foreign currency factors comparing 2011 2010 2009 excludes impact nonsubscription revenue associated triennial release certain engineering standard unadjusted organic revenue growth approximately 8 2011 vs 2010 9 organic revenue growth year ended november 30 2011 broadbased nature transaction types domains contributing growth subscriptionbased business representing 77 total revenue increased 8 organically excluding 2010 revenue associated triennial release boiler pressure vessel code bpvc engineering standard nonsubscription businesses representing 23 total revenue contributed positively overall growth well acquisitionrelated revenue growth 2011 due acquisitions made year well runout acquisitions made 2010 acquisitions made 2011 include following • odspetrodata dyadem cmai second quarter 2011 • smt third quarter 2011 • purvin gertz fourth quarter 2011 2010 vs 2009 5 organic revenue growth 2010 driven primarily 6 increase subscriptionbased business subscriptions make significant portion overall business therefore changes subscription sales patterns proportionately larger impact direction total revenues also benefited growth within nonsubscription parts business including revenue triennial release boiler pressure vessel code bpvc engineering standard acquisitionrelated revenue growth 2010 due acquisitions made 2010 well runout acquisitions made 2009 acquisitions made 2010 include following •emerging energy research eer first quarter 2010 •csm worldwide csm quantitative micro software qms second quarter 2010 •access intelligence atrion syntex isuppliscreen digest fourth quarter 2010 evaluate revenue segment order better understand customers’ needs geographies reside also supplementally review revenue transaction type information domain understanding revenue transaction type helps us identify changes related recurring revenue product margin revenue information domain helps us understand performance based defined capabilities revenue segment geography percentage change geography segment due factors described following table apac operations evolved management structure region also evolved includes responsibility overseeing india accordingly included indias 2011 results apac geographic segment reclassified indias 2010 2009 results emea apac 2011 vs 2010 experienced broadbased organic revenue growth three geographies subscriptionbased revenue energy domain revenue providing key contributions growth doubled presence latin america apac primarily investment 2011 effort take advantage highopportunity markets 2010 vs 2009 began see turn organic revenue growth numbers second quarter 2010 growth rate still positive decelerating attributed general difficult worldwide economic conditions began experience period modestly accelerating organic growth led continuing increases subscription business three regions also benefit bpvc sales 2010 numbers aided overall growth nonsubscription portion business apac continued grow areas business revenue transaction type summarize transaction type revenue following categories • subscription revenue represents significant majority revenue comprised subscriptions various information databases software maintenance • consulting revenue represents customer relationships engaged perform various professional services research analysis modeling forecasting similar work consulting offerings primarily focused energyresources manufacturingservices public sector • transaction revenue typically represents singledocument product sales typically sold ecommerce telesales channels usually deliver products customers part onetime unique sale • revenue consists variety revenue streams including software license sales associated services conferences events advertising data storage services 2011 vs 2010 relative 22 subscription revenue growth year ended november 30 2011 approximately 8 due organic growth trend especially important us subscriptionbased revenue core business model subscriptions represent steady predictable source revenue us 77 revenue currently comes subscription base excluding bpvc engineering standard impact 2010 three components nonsubscription part business positive organic growth signals us business continues grow areas even difficult economic times 2010 vs 2009 2010 approximately half subscriptionbased revenue increase due organic growth half due acquisitionrelated growth 2010 consulting revenue due acquisition activity offset 9 organic revenue declines experienced 16 transaction organic revenue growth 2010 large part due sales bpvc third quarter 2010 revenue growth primarily due acquisition activity 2010 revenue information domain 2011 vs 2010 year ended november 30 2011 energy domain revenue still significant source revenue growth domain highlights continued broadbased strength energy offerings across geographic segments product lifecycle revenue increases primarily due fourth quarter 2010 acquisition isuppli security revenue continues particularly strengthened maritime offerings environment’s increases primarily due recent acquisitions results also benefiting modest organic growth macroeconomic forecasting intersection revenue supports domains experienced average organic growth fiscal 2011 domains positive organic growth 2011 2010 vs 2009 energy domain revenue grew 2010 continued see improving trends core energy subscription offerings product lifecycle revenue increases driven inclusion bpvc sales well continuing solid organic growth inclusion csm worldwide acquisition continued see good organic growth security revenue large part due sales maritime offerings environment’s significant revenue increases primarily due acquisitions helped positive organic growth macroeconomic forecasting intersection revenue supports domains increased proportionally increases saw domains positive organic growth 2010 operating expenses following table shows operating expenses associated percentages revenue cost revenue sales margins 2011 2010 2009 cost revenue increased line increase revenue sales margins define revenue less cost sales divided total sales also largely unchanged total three years following table shows sales margin percentages percentage point change operating segment discussed recent periods rate sales margin expansion slowing due product mix changes acquisition businesses lower margins although seen margin improvement acquisitions completed within last year coincides goal expectation bring acquisition margin profiles throughout first year ownership anticipate sales margin expansion flat slightly near term selling general administrative sga expense evaluate sga expense excluding stockbased compensation expense continue invest people continue manage cost structure business sga expense consequently remained relatively flat percentage revenue compared prioryear periods depreciation amortization expense 2011 compared 2010 depreciation amortization expense increased primarily due increase depreciable amortizable assets acquisitions well increase approximately 23 million increase capital expenditures 2010 compared 2009 depreciation amortization expense increased primarily due increase depreciable amortizable assets acquisitions well increase approximately 4 million capital expenditures acquisitionrelated costs please refer note 10 consolidated financial statements form 10k discussion 2011 costs incurred integration acquisitionrelated activities incurred 80 million costs 2011 activities acquisitions key component growth strategy expect continue perform similar activities future acquisitions intend continue identifying costs separate line item financial statements restructuring please refer note 9 consolidated financial statements form 10k discussion restructuring activities incurred 91 million restructuring charges third quarter 2010 second quarter 2011 increased restructuring cost estimate net 07 million represented increased contract termination costs exit space one facilities partially offset favorable resolution employee severance costs fourth quarter 2011 recorded 05 million restructuring charges severance costs associated consolidation positions recently established accounting customer care centers excellence locations operating income segment geography 2011 vs 2010 decrease americas operating income margin primarily driven effects recent acquisition activity particularly form increased depreciation amortization associated acquired intangible assets well associated integration acquisitionrelated costs emea operating income margin relatively flat minor fluctuations attributable increased depreciation amortization sga costs decrease apac operating income margin primarily result increase sga investment drive growth opportunities emerging market shared services operating expense increased primarily change pension accounting annuitization retiree pension obligations well increase stockbased compensation expense 2011 allocate stockbased compensation expense shared services function 2010 vs 2009 fiscal 2010 impacted recording net 90 million restructuring charge without charge operating income percentage revenue 2010 would 173 increase americas operating income primarily due increasing strength subscription revenue growth partially offset third quarter 2010 restructuring charge 77 million related americas segment also saw positive benefit addition acquisition activity year increase operating income emea segment 2010 primarily due high organic growth rate within revenue leveraging emea cost structure positive benefit recent acquisitions region emea increase partially offset emea portion third quarter 2010 restructuring charge 13 million increase apac operating income primarily due csm worldwide acquisition significant operations apac region increase also driven continuing strength businesses apac segment shared services operating expense increased primarily increase stockbased compensation expense 2010 provision income taxes effective tax rate year ended november 30 2011 165 compared 227 2010 216 2009 low 2011 rate compared 2010 2009 due primarily domestic pretax income lesser portion total pretax income result 34 million increase net periodic pension postretirement expense adjusted ebitda nongaap measure reconciling items included following table either noncash items eg depreciation amortization stockbased compensation noncash pension postretirement expense ii items consider useful assessing operating performance eg income taxes acquisitionrelated costs restructuring charges income loss discontinued operations gain loss sale assets case noncash items believe investors better assess operating performance measures presented without items unlike cash expenses adjustments affect ability generate free cash flow invest business example eliminating depreciation amortization ebitda users compare operating performance without regard different accounting determinations useful life case items believe investors better assess operating performance measures presented without items financial impact reflect ongoing operating performance adjusted ebitda 2011 increased primarily organic revenue growth acquisitions leverage business model despite fact continued invest substantially core business key transformative initiatives although acquisitions weighed margins 2011 lesser extent year progressed typically tend see margin expansion accelerate first three four quarters ownership saw progressive improvement acquisitions year fourth quarter 2011 acquisitions collective margin exceeded overall margin 2010 adjusted ebitda increased many reasons 2011 addition focus costs discontinued operations first quarter 2010 sold small noncore south africa business approximately 2 million gain loss sale business included building certain intellectual property fourth quarter 2011 discontinued small printandadvertising business focused narrow declining market discontinuation business included abandoning certain intellectual property fourth quarter 2011 also discontinued minor governmentservices business currently undertaking formal structured review product portfolio focus assessing growth profile strategic fit offerings ensuring support core businesses enable sustainable high growth rates provide scalable market capability total group assets reviewing including two businesses described represents approximately five percent total annual revenue 2011 businesses may treated discontinued operations ultimately decide sell abandon providing meet accounting criteria treatment discontinued operations financial condition increase accounts receivable balance primarily due acquisitions made 2011 increase also driven strong sales fourth quarter 2011 change accrued compensation primarily due impact payroll timing increased number employees added primarily acquisitions completed 2011 increase deferred revenue primarily attributable acquisitionrelated growth also includes solid organic growth liquidity capital resources november 30 2011 cash equivalents 235 million approximately 183 million currently held foreign subsidiaries cash held foreign subsidiaries available fund domestic operations deemed earnings subsidiaries indefinitely reinvested see note 12 consolidated financial statements form 10k also 803 million debt november 30 2011 contributed increase interest expense 2011 continue result increased interest expense near future generated strong cash flows operations last years year ended november 30 2011 ratio free cash flow adjusted ebitda 72 cash debt cash flow positions well financing secured january october 2011 believe sufficient cash meet working capital expenditure needs historically required make cash contributions us rip pension plan funded status however due global economic downturn negatively impacted returns pension assets required make cash contribution us rip fiscal 2012 considering requirement various changes pension strategy including annuitization retiree pension obligations bringing pension deficit current funding 2012 pension costs made 65 million contribution pension plan december 2011 first month 2012 fiscal year future capital requirements depend many factors including level future acquisitions need additional facilities facility improvements timing extent spending support product development efforts expansion sales marketing activities timing introductions new products changing technology investments internal business applications continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions however additional funds may available terms acceptable us expect capital expenditures decrease percent revenue 41 2011 35 2012 long run generally expect capital expenditures annually represent 3 4 revenue cash flows meaningful 2011 vs 2010 increase net cash provided operating activities principally due continued profitable business growth evidenced healthy organic revenue growth rates subscriptionbased business model continues cash flow generator aided positive working capital characteristics generally require substantial working capital increases support growth well relatively low levels required capital expenditures increase net cash used investing activities principally due significant acquisition activities second third quarters 2011 particularly acquisition smt also significantly increased capital expenditures various investment initiatives facilities infrastructure increase net cash provided financing activities 2011 principally due borrowings credit facility fund acquisition smt 2010 vs 2009 similar 2011 increase net cash provided operating activities principally due profitable business growth year payables accrued liabilities balances increased year offset higher receivables balances related growth well cash outflows relating third quarter 2010 restructuring activity increase net cash used investing activities almost due increased acquisition activity 2010 compared 2009 increased capital expenditures 2010 accounting remainder difference continue believe important us reinvest earnings cash flows business increase return stockholders increase net cash provided financing activities principally due increased borrowings credit facility fund acquisitions partially offset increase repurchases common stock share repurchase program used statutory withholding requirements associated vesting shares employee stock program free cash flow nongaap measure following table reconciles nongaap free cash flow measure net cash provided operating activities free cash flow historically healthy expect continue significant source funding business strategy growth organic acquisitive means credit facility debt please refer note 8 consolidated financial statements form 10k discussion current status credit facility arrangements including amendment completed october 2011 increase facility share repurchase program please refer part ii item 5 note 16 consolidated financial statements form 10k discussion share repurchase programs offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2011 along obligations associated term loan future periods obligations expected settled cash thousands four pension postretirement benefit plans following estimated cash contributions 2012 •us rip made 65 million contribution us rip december 2011 first month fiscal 2012 comprised approximately 57 million bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs •uk rip expect contribute approximately 17 million uk rip 2012 •sip expect contribute approximately 08 million sip 2012 •postretirement medical plan expect contribute approximately 08 million postretirement medical plan 2012 455 million outstanding borrowings credit facility revolver current annual interest rate 175 credit facility fiveyear term ending january 2016 recent accounting pronouncements please refer note 2 consolidated financial statements form 10k discussion recent accounting pronouncements anticipated effect business item 7a item 7 management’s discussion analysis financial condition results operations following discussion financial condition operating results read conjunction “selected financial data” consolidated financial statements accompanying notes included form 10k ihs one leading global providers critical technical information decisionsupport tools related services customers energy defense aerospace construction electronics automotive industries developed comprehensive collection technical information highly relevant industries serve decisionsupport tools enable customers quickly easily search analyze information integrate work flows operational research strategic advisory services combine information tools extensive industry expertise meet needs customers rely offerings facilitate decisionmaking support key processes improve productivity customers range governments large multinational corporations smaller companies technical professionals 100 countries manage business energy engineering operating segments energy segment develops delivers critical oil gas industry data exploration development production transportation activities major global energy producers oil companies also provide decisionsupport tools operational research strategic advisory services customers well utilities transportation petrochemical coal power companies example major global oil companies use offerings support broad range decisionmaking processes identify attractive exploration investments assess likelihood successful oil production projects develop detailed planning scenarios engineering segment provides offerings two broad categories products technical standards parts information products include broad range technical specifications standards regulations parts data design guides information customers targeted industries also expertise developing decisionsupport tools enhance accessibility usability information offer targeted advisory services designed maximize utilization integration information within customers’ business processes serve largest engineeringintensive companies around world defense aerospace construction electronics automotive industries example provide largest aerospace companies desktop access industry specifications standards parts logistics procurement data engineering methods related analytical tools executive summary subscriptionbased business model sell offerings primarily subscriptions result subscriptionbased business model historically high renewal rates generate recurring revenue cash flow generally recognize revenue subscriptions usually oneyear periods ratably term subscription however business seasonal aspects example certain sales nondeferred subscriptions occurred frequently first fourth quarters consequently generally recognized greater percentage revenue income quarters also firstquarter results benefited inclusion results ceraweek annual energy executive conference subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income due historical timing alignment sales correspond certain customers’ budget funding cycles cash flow provided operating activities tends higher first half fiscal year receive subscription payments serve world’s largest corporations across multiple industries well governments organizations 100 countries generate approximately half total revenue outside united states primary operations outside united states united kingdom canada switzerland operating profit outside united states historically exceeded domestic operating profit revenue offerings revenue type offering periods presented set forth acquisitions part growth strategy intend continue augment offerings selectively acquiring information assets organizations particular intend penetrate selected informationintensive industries already significant presence defense aerospace construction electronics internal growth selective acquisitions 2006 made following acquisitions · canadian hydrodynamics ltd chd july 2006 acquired assets calgary canadabased chd approximately 35 million using existing cash hand chd leading provider comprehensive drillstem test information western canadian sedimentary basin chd database available exclusively ihs accumap one energy product offerings partner dataset since 1995 · geoplus june 2006 acquired assets geoplus tulsa oklahoma approximately 421 million using existing cash hand geoplus pcbased software family petra® popular platform used oil gas companies analyze subsurface data existing oil gas wells · construction research communications limited crc within engineering segment acquired crc limited london uk june 2006 approximately 58 million net acquired cash using existing cash hand crc created building research establishment bre emap construct deliver wide range bre products relating construction industry ranging environmental issues fire safety · cds december 1 2005 acquired assets contentanddataservices cds business approximately 330 million serves several industries targeted engineering segment core product business extensive database includes technical attributes alternatives obsolescence environmental data electronic component parts also made three acquisitions 2005 aggregate purchase price approximately 35 million 2004 made following acquisitions · usa information systems inc usa acquired outstanding capital stock usa total purchase price approximately 194 million net acquired cash fourth quarter 2004 usa provides decisionsupport tools lesser extent critical information governments government contractors · intermat inc acquired assets intermat total purchase price approximately 53 million fourth quarter 2004 intermat provides decisionsupport tools parts management parts cleansing predictive obsolescence projects · cera acquired outstanding capital stock cera total purchase price approximately 291 million net acquired cash beginning fourth quarter 2004 cera provides syndicated research strategic advisory services energy companies · international petrodata limited ipl acquired assets ipl total purchase price approximately 161 million first quarter 2004 ipl provides critical geological information oil gas exploration production markets canada consolidated financial statements include results operations cash flows acquisitions beginning respective dates acquisition segments table presents split revenue type offering two segments’ results operations primarily driven organic growth acquisitions organic growth driven several factors including ability penetrate existing customers generate new customers raise prices introduction new offerings periodic updates existing offerings execution sales marketing plans world economic events pricing information many sales customized annual basis meet individual customer needs based number factors including number customer locations number simultaneous users breadth content included offering light customized nature many offerings pricing terms also customized addition difficulty contrasting price changes period exacerbated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue products period global operations serve world’s largest corporations across multiple industries well governments organizations 100 countries generated revenue 2604 million outside united states year ended november 30 2006 represented almost half total revenue primary operations outside united states united kingdom canada switzerland operating profit outside united states historically exceeded domestic operating profit set forth years ended november 30 revenue indicated country based location subsidiary generating revenue differs cases location customer international operations expose us foreigncurrency risk fluctuations foreigncurrency rates increased revenues approximately 01 million 27 million 132 million years ended november 30 2006 2005 2004 respectively increased decreased operating income approximately 33 million 25 million 14 million respective periods see “qualitative quantitative disclosures market riskforeign currency risk” restructuring offering charges fourth quarter 2006 executed restructuring initiative principally affecting engineering segment initiative undertaken focus offerings growth potential also added benefit trimming cost structure course restructuring reduced aggregate workforce approximately 40 employees 25 million restructuring charge incurred entirety fourth quarter 2006 comprised entirely employee severance termination benefits costs amount disbursed 04 million november 30 2006 expect realize approximately 4 million annual pretax savings slightly less 4 million cash flow improvement restructuring primarily beginning first quarter 2007 similarly third quarter 2005 executed restructuring initiative affecting engineering segment certain corporate costs initiative undertaken reduce costs integrate operations previous acquisitions streamline data delivery processes realign marketing efforts support core product initiatives course restructuring reduced aggregate workforce 100 employees closed two offices one us one uk also incurred 08 million 55 million costs associated 2006 secondary 2005 initial public offerings respectively required expense costs since issue shares connection either offering rather shares sold exiting shareholders us discontinued operations third quarter 2005 classified business energy segment held sale business held sale manufacturing operation part core operations continually evaluate opportunities align business activities within core operations first quarter 2006 revised estimate wrote value assets discontinued operation 10 million based experience date sales process third quarter 2006 sold business unrelated third party approximately 03 million recognized loss less 01 million sale business related results operations shown discontinued operation net tax consolidated statement operations related net loss discontinued operation approximately 19 million 23 million 20 million years ended november 30 2006 2005 2004 respectively discontinuing business material impact results operations liquidity items cost operating business incur cost revenue primarily acquire manage deliver critical information decisionsupport tools costs include royalty payments thirdparty information providers well personnel information technology occupancy costs related activities royalty payments generally vary based subscription sales engineering segment cost revenue services offerings primarily comprised personnel costs selling general administrative expenses primarily include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly variable volume sold particularly energy segment generally pay royalties critical information within engineering segment portion critical information revenue driven sale specifications standards content obtained sdos certain sdos may increase royalty payments pay use specifications standards information result engineering operating margins may decline costs public company beginning 2004 selling general administrative costs increased prepared become sustain public company expect continue incur selling general administrative expenses related operating public company legal accounting expenses cost investor relations function costs related section 404 sarbanesoxley act director officer insurance premiums also incurred costs modify longterm incentive plans reflect customary public company compensatory arrangements november 2004 conducted offer purchase outstanding options shares capital stock issued pursuant stock option plans maintained one subsidiaries stockbased compensation expense year ended november 30 2004 included 99 million onetime cash charge settle options ihs group inc’s 1998 2002 nonqualified stock option plans repurchase ihs group inc shares previously issued upon exercise options ii 119 million noncash charge relating vested restricted stock units issued ihs inc’s 2004 longterm incentive plan also issued restricted stock record cost vesting period none exceed five years november 30 2006 18 million outstanding nonvested shares options granted officers employees nonemployee directors form performance shares performance units restricted shares restricted stock units stock options assuming performance measures met expect stockbased compensation expense next three years approximate following projected stockbased compensation expense increased relative similar projection october 2006 prospectus projection includes annual award grant january 2007 projection reflect expected future award grants subsequent january 31 2007 pension postretirement benefits net periodic pension postretirement benefits primarily comprised us pension income uk pension expense us postretirement benefit expense shown net basis net periodic pension postretirement benefits income comprised following first quarter 2006 notified employees certain changes adopted human resources committee board directors regarding us pension postretirement benefit plans started accounting impact changes beginning february 2006 communication date changes employees amendments us plans impacted plans follows · us pension planpreviously engineering segment employees entitled participate pension plan may 2006 usbased employees became eligible participate plan nearly doubling active participants time future benefit earned plan changed resulting simplified calculation reduced future benefit compared prior calculation grandfathered employees · postretirement benefit planthe amendment limited benefits paid future healthcare costs resulted postretirement benefit income 2006 opposed expense 2005 november 30 2004 us pension plan postretirement benefit plan spun previously part singleemployer plan included operating companies consolidate sponsored consolidated subsidiary consequence spinoff plans prepaid pension asset accrued postretirement benefit liability reduced prepaid pension asset accrued postretirement benefit liability attributable nonihs inc plans recorded 60 million net charge equity period ended november 30 2004 additionally net periodic pension postretirement benefit income decreased 2005 compared 2004 result spinoff provision income taxes effective tax rate 315 316 208 years ended november 30 2006 2005 2004 respectively lower effective tax rate fiscal year 2004 principally due two items recognition fourth quarter tax benefit dividendsreceived deduction dividends preferred stock investment tax benefit release substantially valuation allowance foreign tax credits result extension credit carryforward period included american jobs creation act 2004 expect fiscal year 2007 effective tax rate higher fiscal year 2006 rate see consolidated financial statements included elsewhere form 10k critical accounting policies estimates consolidated financial statements prepared accordance accounting principles generally accepted united states gaap apply gaap must make significant estimates affect reported amounts assets liabilities revenues expenses related disclosure contingent assets liabilities many instances could reasonably used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable circumstances evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions nonstandard agreements make judgments determine appropriately account judgments generally involve assessments regarding matters · whether sufficient legally binding terms conditions exist · whether customer acceptance achieved evaluate binding nature terms conditions agreements well whether customer acceptance achieved based managements judgments appropriate advice legal counsel historically judgments accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience goodwill intangible assets account business acquisitions accordance provisions sfas 141 business combinations using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions regarding multiple highly subjective variables including respect future cash flows discount rates asset lives use different valuation models therefore require considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable inherently uncertain depending size purchase price particular acquisition well mix intangible assets acquired financials results could materially impacted application different set assumptions estimates review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable examples events changes circumstances many subjective nature include significant negative industry economic trends significant changes manner use acquired assets strategy significant decrease market value asset significant change legal factors business climate could affect value asset assess impairment comparing fair value identifiable intangible asset goodwill carrying value determination fair value involves significant management judgment described impairments expensed incurred specifically test impairment follows intangible assets subject amortization intangible asset subject amortization reviewed impairment accordance sfas 144 accounting impairment disposal longlived assets compare expected undiscounted future operating cash flows associated finitelived assets respective carrying values determine asset fully recoverable expected future operating cash flows sufficient recover carrying value estimate fair value asset impairment recognized carrying amount asset recoverable carrying value exceeds fair value projected cash flows require several assumptions related among things relevant market factors revenue growth operating margins believe assumptions reasonable changes assumptions may material impact financial results indefinitelived intangible assets accordance sfas 142 goodwill intangible assets perform impairment test indefinitelived intangible assets comparing asset’s fair value carrying value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill accordance sfas 142 test goodwill impairment reporting unit level defined reference operating segments determined sfas 131 disclosures segments enterprise related information reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach · first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values · second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting units goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess use different estimates assumptions within discounted cash flow model determining fair value reporting units using methodology discounted cash flow model could result different values reporting units could result impairment charge income taxes account income taxes accordance sfas 109 accounting income taxes significant judgment required determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made accounting income taxes requires us exercise judgment known issues discussion tax authorities transactions yet settled result maintain tax liability contingencies regularly assess adequacy tax liability record liabilities known tax contingencies period probable liability incurred adjust tax contingencies period probable actual results differ estimates actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits defined benefit plans cover employees us certain employees uk also postretirement plans us accounting plans subject guidance provided sfas 87 employers’ accounting pensions sfas 106 employers’ accounting postretirement benefits pensions statements require management make certain assumptions relating longterm rate return plan assets discount rates used measure future obligations expenses salary increases inflation healthcarecosttrend rates assumptions believe accounting estimates related pension postretirement plans critical accounting estimates highly susceptible change period based market conditions key assumptions measuring plan obligations include discount rate future salary increases longterm expected return plan assets various demographic assumptions follows · methodology used determine discount rate discounts projected plan cash flows measurement date using spot rates provided citigroup pension discount curve single discount rate computed present value benefit cash flows using single rate equals present value computed using citigroup pension discount curve similar exercise performed using high yield bonds values compared changes corporate bond indices determine discount rate · asset returns based upon anticipated average rate earnings expected invested funds plan longterm · salary increase assumptions based upon historical experience anticipated future management actions · demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year depending assumptions estimates used net periodic pension postretirement benefit income could vary within range outcomes material impact financial results fiftybasispoint change certain assumptions would following effects 2006 pension results stockbased compensation two sharebased compensation plans provide grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stockbased awards covered employee annual incentive awards determine fair value stock options using blackscholes pricing model valuation model requires management make assumptions apply judgment determine fair value awards assumptions judgments include estimating · future volatility stock price · expected dividend yield · future employee turnover rates · future employee stock option exercise behaviors particular significant judgment required estimating future volatility stock price since publicly traded year volatility rate based basket peercompanystock prices determination company considered peer highly subjective given 01 million options outstanding november 30 2006 changes assumptions likely materially affect financial results however number options granted materially increases future likelihood changes valuation assumptions could materially impact financial results also increases november 30 2006 approximately 18 million stockbased awards outstanding approximately 04 million performancebased awards vesting period performancebased awards based achieving certain financial performance levels fiscal years 2006 2007 quarterly basis assess likelihood performance criteria met adjust compensation expense accordingly november 30 2006 estimated 100 performancebased metrics met 2006 2007 causing 04 million performancebased awards vest february 28 2008 result recognize 33 million performancerelated stockbased compensation expense next 15 months change actual financial performance levels achieved company could result change current estimate timing recognition related expense example event achieve none performance metrics underlying awards remaining unamortized performancebased stockcompensation expense would recognized next 5 years believe assumptions related performancebased stock awards critical susceptible change period based market uncertain conditions beyond control results operations set forth results operations expressed percentage revenue set forth revenue operating income energy engineering segments years ended november 30 2006 2005 2004 certain corporate transactions allocated operating segments unallocated amounts include corporatelevel restructuring offering charges stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gains sales corporate assets 1 includes asset impairments 20 million 2004 asset impairments 2006 2005 2 includes 19 million 44 million restructuring charge 2006 2005 respectively restructuring charge 2004 also includes gains sales assets net 51 million 2004 material gains losses sales assets 2006 2005 3 includes following items year ended november 30 2006 compared year ended november 30 2005 revenue 5508 million year ended november 30 2006 compared 4761 million year ended november 30 2005 increase 747 million 16 revenue increased primarily due organic growth contributed 603 million acquisitions contributed approximately 156 million revenue energy segment 2943 million year ended november 30 2006 compared 2423 million year ended november 30 2005 increase 520 million 21 increase principally due organic growth contributed 463 million also acquisitions contributed 50 million remainder change attributable foreigncurrency movements organic growth 2006 driven principally price increases expanding subscription base higher onetime sales certain data favorable energyindustry conditions revenue engineering segment 2565 million year ended november 30 2006 compared 2338 million year ended november 30 2005 increase 227 million 10 increase primarily driven organic growth increased revenue 140 million acquisitions also contributed 107 million partially offset foreigncurrency movements organic growth resulted primarily price increases increased sales within specificationsandstandards partsmanagement offerings cost revenue cost revenue 2524 million year ended november 30 2006 compared 2282 million year ended november 30 2005 increase 242 million 11 percentage revenue cost revenue decreased 458 2006 479 2005 margins within energy segment increased primarily due increased revenue discussed relatively fixedcost structure margins within engineering business benefited cost savings 2005 restructuring relatively flat effective royalty rates selling general administrative expenses selling general administrative expenses 2024 million year ended november 30 2006 compared 1676 million year ended november 30 2005 increase 348 million 21 stockbased compensation expense increased 141 million year including 47 million pertaining retirement former chief executive officer fourth quarter 2006 acquisitions contributed 37 million increase ceo retirement costs added 19 million remainder increase primarily due increased salesandmarketing backoffice costs support increased sales corporate level increased costs related first year publicly traded company cost savings 2005 restructuring partially offset percentage revenue selling general administrative expenses excluding stockbased compensation expense 333 year ended november 30 2006 342 year ended november 30 2005 depreciation amortization expenses depreciation amortization expenses 157 million year ended november 30 2006 compared 114 million year ended november 30 2005 increase 43 million 38 increase primarily due acquisitions restructuring offering charges restructuring offering charges 31 million year ended november 30 2006 compared 137 million year ended november 30 2005 decrease 106 million restructuring initiative undertaken 2006 much smaller scope expense 25 million 2006 compared 82 million 2005 additionally offering charges related secondary offering 08 million much smaller associated initial public offering 55 million operating income operating income 802 million year ended november 30 2006 compared 619 million year ended november 30 2005 increase 183 million 30 percentage revenue operating income increased 146 2006 130 2005 operating income energy segment 672 million year ended november 30 2006 compared 530 million year ended november 30 2005 increase 142 million 27 increase primarily attributable increased revenue discussed coupled relatively fixed cost structure partially offset higher allocated corporate costs operating income engineering segment 311 million year ended november 30 2006 compared 180 million year ended november 30 2005 increase 131 million 73 increase primarily driven increased sales combined costs savings resulting thirdquarter 2005 restructuring also incurred 25 million restructuring charges 2005 2006 provision income taxes effective tax rate year ended november 30 2006 315 compared 316 year ended november 30 2005 effective tax rate 2006 reflects benefits release certain tax reserves tax exempt interest income offset increase valuation allowance realizability foreign tax credits effective tax rate 2005 reflects benefit favorable outcome tax audits period changes certain estimates impact nondeductible items year ended november 30 2005 compared year ended november 30 2004 revenue 4761 million year ended november 30 2005 compared 3940 million year ended november 30 2004 increase 821 million 21 revenue increased primarily due acquisitions contributed approximately 406 million organic growth contributed 308 million foreigncurrency movements contributed 27 million remainder change primarily attributable firstquarter 2004 dissolution joint venture within engineering segment revenue energy segment 2423 million year ended november 30 2005 compared 1858 million year ended november 30 2004 increase 565 million 30 increase principally due 2004 acquisitions contributed 313 million organic growth contributed 240 million foreigncurrency movements contributed 12 million acquisition growth resulted primarily cera organic growth 2005 driven expanding subscription base growth within service decisionsupporttools offerings introduction new products functionalities favorable energyindustry conditions revenue engineering segment 2338 million year ended november 30 2005 compared 2082 million year ended november 30 2004 increase 256 million 12 increase primarily driven acquisitions contributed 93 million organic growth increased revenue 68 million foreigncurrency movements contributed 14 million remainder change attributable firstquarter 2004 dissolution joint venture organic growth resulted primarily expanding subscription base doubledigit growth parts management product line cost revenue cost revenue 2282 million year ended november 30 2005 compared 1844 million year ended november 30 2004 increase 438 million 24 percentage revenue cost revenue increased 468 479 margins within energy segment remained relatively flat slight margin improvements energycritical information decisionsupporttools products offset higher sales volumes lowermargin energy services due inclusion fullyear’s worth cera results engineering margins decreased primarily result continued increases effective royalty rates related sales critical information primary source engineering revenue firstquarter 2004 dissolution joint venture within engineering segment also adversely impacted engineering margin selling general administrative expenses selling general administrative expenses 1676 million year ended november 30 2005 compared 1536 million year ended november 30 2004 increase 140 million 9 acquisitions contributed 158 million increase remainder increase primarily due increased salesandmarketing backoffice costs support increased sales corporate level increased costs related implementation publiccompany infrastructure processes systems preparation initial public offering offsetting increase decrease stockbased compensation expense 171 million 2004 47 million 2005 stockbased compensation expense higher 2004 due costs associated termination stockoption plans maintained one subsidiaries percentage revenue selling general administrative expenses excluding stockbased compensation expense 342 year ended november 30 2005 347 year ended november 30 2004 depreciation amortization expenses depreciation amortization expenses 114 million year ended november 30 2005 compared 96 million year ended november 30 2004 increase 18 million 19 increase primarily due acquisitions restructuring offering charges restructuring offering charges 137 million year ended november 30 2005 restructuring costs 82 million comprised primarily termination costs offering costs 55 million related costs associated initial public offering similar expenses year ended november 30 2004 third quarter 2005 executed restructuring initiative affecting engineering segment certain unallocated corporate costs initiative undertaken reduce costs integration operations previous acquisitions streamline datadelivery processes realign marketing efforts support coreproduct initiatives restructuring reduced aggregate workforce 100 employees closed two offices one us one uk see “executive summaryrestructuring offering charges” net gain sales assets net gain sales assets 13 million year ended november 30 2005 compared 55 million year ended november 30 2004 decrease 42 million results year ended november 30 2004 included 44 million gain firstquarter 2004 dissolution joint venture net periodic pension postretirement benefits net periodic pension postretirement benefits income 41 million year ended november 30 2005 compared 58 million year ended november 30 2004 decrease 17 million 29 decrease primarily due november 30 2004 spinoff ihs’s us retirement plan well increased actuarial losses resulting lowerthanexpected asset returns previous years operating income operating income 619 million year ended november 30 2005 compared 529 million year ended november 30 2004 increase 90 million 17 percentage revenue operating income 13 years ended november 30 2005 2004 operating income energy segment 530 million year ended november 30 2005 compared 352 million year ended november 30 2004 increase 178 million 51 increase primarily attributable increased revenue based semifixed cost structure partially offset operating expense increases caused acquisitions efforts comply requirements sarbanesoxley act backoffice system implementation costs increased corporatecost allocations resulting planned publiccompany infrastructure costs operating income engineering segment 180 million year ended november 30 2005 compared 330 million year ended november 30 2004 decrease 150 million 46 operating income decreased primarily due 44 million restructuring charge 2005 increasing royalty rates reduced margins increased selling general administrative expenses resulting additional spending salesandmarketing resources programs increased corporatecost allocations resulting planned publiccompany infrastructure costs additionally results year ended november 30 2004 included nonrecurring gain approximately 44 million dissolution joint venture provision income taxes effective tax rate year ended november 30 2005 316 compared 208 year ended november 30 2004 effective tax rate 2005 period reflects benefit favorable outcome tax audits period changes certain estimates impact nondeductible items effective tax rate 2004 lower 2005 principally due two nonrecurring items recognized fourth quarter 2004 first benefits recognized dividendsreceived deduction dividends preferred stock investment second benefit recognized release substantially valuation allowance foreign tax credits primarily due extension credit carryforward period included american jobs creation act 2004 quarterly results operations following table presents unaudited quarterly results operations last eight quarters read following table conjunction consolidated financial statements related notes included elsewhere form 10k prepared unaudited information basis audited consolidated financial statements table includes adjustments consisting normal recurring adjustments consider necessary fair presentation financial position operating results quarters presented operating results quarter necessarily indicative result future quarters full year since sales nondeferred subscriptions occur frequently fourth first quarters generally recognize greater percentage revenue income quarters additionally first quarter benefits ceraweek annual executive conference liquidity capital resources november 30 2006 cash equivalents 1800 million shortterm investments 21 million virtually debt generated strong cash flows operations last years result factors well availability funds credit facility believe sufficient cash meet anticipated working capital expenditure needs future capital requirements depend many factors including timing extent spending support product development efforts expansion sales marketing activities timing introductions new products increased administrative costs public company changing technology continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions additional funds may available terms acceptable us expect capital expenditures excluding potential acquisitions approximately 11 million 2007 share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee later 2006 board directors approved additional programa stock buyback programwhereby ihs acquiring one million shares per year open market fully offset dilutive effect employee equity programs cash flow net cash provided operating activities 1157 million year ended november 30 2006 compared 483 million year ended november 30 2005 increase attributable growing business accompanied higher earnings expanding margins favorable timing collections accounts receivable year net cash provided operating activities approximately 670 million year ended november 30 2004 decrease net cash provided operating activities principally attributable three items first 2005 disbursed 97 million cash payments made connection november 2004 offer exchange options shares second disbursed approximately 53 million 2005 stemming thirdquarter restructuring initiative additional 21 million charge noncash related accelerated vesting restricted shares last funded approximately 47 million initial public offering expenses 2005 see “executive summaryrestructuring offering charges” net cash used investing activities 723 million year ended november 30 2006 compared 393 million year ended november 30 2005 increase net cash used primarily attributable increased acquisition activity 2006we disbursed 845 million 2006 acquisitions opposed 35 million 2005and increased capital expenditures offset greater purchases investments 2005 year implemented cashmanagement policy net cash used investing activities amounted approximately 393 million year ended november 30 2005 net cash provided investing activities amounted approximately 346 million year ended november 30 2004 2005 purchases sales businesses relatively insignificant resulting net outflow cash 22 million contrast 2004 liquidated noncore assets acquired four businesses resulting net inflow cash 346 million additionally implemented cashmanagement policy third quarter 2005 resulting purchase 284 million investments 2005 net cash provided financing activities 28 million year ended november 30 2006 net cash used financing activities 04 million year ended november 30 2005 december 1 2005 adopted sfas 123r sharebased payment standard amended sfas 95 statement cash flows require excess tax benefits reported financing cash inflow rather reduction taxes paid accordingly recognized 105 million benefit 2006 relating vesting equity awards period amount partially offset purchase 76 million treasury stock 2006 net cash used financing activities 04 million 2005 compared 20 million 2004 use cash relates principally 18 million cash dividend substantially entire amount used 2005 used repay debt credit facility party 125 million unsecured revolving credit agreement revolver feature allowing us increase facility maximum 250 million agreement expires january 2010 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 75 basis points 160 basis points agent bank’s base rate facility fee payable periodically 15 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations capital lease obligations maximum leverage ratio maintenance fixed charge coverage ratio defined revolver november 30 2006 compliance covenants agreement outstanding borrowings however outstanding letters credit totaling approximately 16 million november 30 2006 offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2006 future periods obligations expected settled cash expect contribute us pension plan 2007 since currently overfunded expect contribute 2 million 2007 uk pension plan currently underfunded see consolidated financial statements included elsewhere form 10k recent accounting pronouncements july 2006 financial accounting standards board fasb issued fasb interpretation 48 accounting uncertainty income taxesan interpretation fasb statement 109 fin 48 provides clarification related process associated accounting uncertain tax positions recognized consolidated financial statements fin 48 prescribes morelikelythannot threshold financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance related among things classification accounting interest penalties associated tax positions disclosure requirements required adopt fin 48 december 1 2007 although early adoption permitted currently evaluating impact adopting fin 48 consolidated financial statements september 2006 fasb issued sfas 157 fair value measurements sfas 157 among requirements sfas 157 defines fair value establishes framework measuring fair value also expands disclosure use fair value measure assets liabilities sfas 157 effective beginning first fiscal year begins november 15 2007 currently evaluating impact sfas 157 financial position results operations september 2006 fasb issued sfas 158 employer’s accounting defined benefit pension postretirement plansan amendment fasb statements 87 88 106 132r sfas 158 sfas 158 requires employer business entity sponsors one single employer benefit plans 1 recognize funded status benefit statement financial position 2 recognize component comprehensive income net tax gains losses prior service costs credits arise period recognized components net periodic benefit cost 3 measure defined benefit plan assets obligations date employer’s fiscal year end statement financial position 4 disclose notes financial statements additional information certain effects net periodic benefit cost next fiscal year arise delayed recognition gains losses prior service costs credits transition asset obligations plan adopt sfas 158 effective end company’s fiscal year ending november 30 2007 sfas no158 effective november 30 2006 total assets would approximately 22 million lower total liabilities would approximately 5 million lower shareholders’ equity would approximately 17 million lower net pension liabilities dependent upon future events circumstances impact time adoption sfas no158 may differ amounts adoption sfas 158 expected effect company’s compliance debt covenants item 7a item 7 management’s discussion analysis financial condition results operations following discussion financial condition operating results read conjunction information disclosures elsewhere form 10k including “selected financial data” consolidated financial statements accompanying notes website social media disclosure following discussion includes forwardlooking statements described “cautionary note regarding forwardlooking statements” form 10k detailed discussion risks uncertainties could cause actual results events differ materially forwardlooking statements outlined “risk factors” form 10k executive summary business overview leading source information insight analytics critical areas shape todays business landscape businesses governments 140 countries around globe rely comprehensive content expert independent analysis flexible delivery methods aim embed solutions within entire spectrum customers’ organization enabling executive level capital deployment strategies following decisionmaking activities throughout organizations frontline employees tasked managing company’s complex core daily operations business since 1959 became publicly traded company new york stock exchange 2005 best serve customers recently reorganized business following three industry workflowfocused segments •resources includes energy chemicals product offerings • transportation includes automotive maritime trade aerospace defense security product offerings • consolidated markets solutions includes product design technology media telecom tmt economics country risk ecr product offerings expect sales operating model make easier customers business us providing cohesive consistent effective product sales marketing approach segment subscriptions represented approximately 81 percent total revenue 2015 subscription agreements typically annual noncancellable term subscription may contain provisions minimum monthly payments subscription revenue generally stable predictable longterm relationships many customers business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest quarterly levels revenue profit also experience eventdriven seasonality business instance ihs energy ceraweek annual energy executive gathering held second quarter 2015 held first quarter 2016 another example biennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every year recent bpvc release third quarter 2015 focused commercial expansion operational excellence continuing introduce new enhanced product offerings analytics expanding customer relationships improving internal systems processes 2016 expect better align focus operations recent transition new operating segment structure believe structure simplify operating model improve operational performance driving greater speed clarity accountability specifically intend following align organizational structure transitioned industry workflowfocused organizational structure consistent new segments described expect transition allow us operate greater efficiency managing commercial operations including sales marketing product management development segment anticipate transition also increase speed decisionmaking drive consistency remove complexity part effort undertaking portfolio evaluation determine strategic fit longterm growth potential profitability within business model determined oerm globalspec product offerings longer aligned strategic goals therefore decided divest product groups continue evaluate longterm potential strategic fit assets optimize product platforms investment priorities product platforms primarily energy transportation product design intend continue invest analytics across business increase customer value proposition leverage existing information delivery platforms simplify capital allocation simplifying mergers acquisitions strategy focus fewer larger deals allow us increase productivity integration efforts absence larger scaled acquisition opportunities plan deploy capital towards 500 million share buyback program believe achieves best balance scaling acquisitions returning capital shareholders see strategic acquisitions divestitures discussion recent acquisitions reflect change strategy key performance indicators believe revenue growth adjusted ebitda dollars margin free cash flow key financial measures success adjusted ebitda free cash flow financial measures prepared accordance us generally accepted accounting principles nongaap revenue growth review yearoveryear revenue growth segments key measure success addressing customer needs region world operate measure revenue growth terms organic acquisitive foreign currency impacts define components follows • organic define organic revenue growth total revenue growth continuing operations factors acquisitions foreign currency movements drive type revenue growth value realization pricing expanding wallet share existing customers upselling crossselling efforts securing new customer business sale new enhanced product offerings • acquisitive define acquisitionrelated revenue generated acquired products services date acquisition first anniversary date acquisition type growth comes result strategy purchase integrate leverage value assets acquire also include impact divestitures growth metric • foreign currency define foreign currency impact revenue difference current revenue current exchange rates current revenue corresponding prior period exchange rates due significance revenue transacted foreign currencies believe important measure impact foreign currency movements revenue addition measuring reporting revenue segment also measure report revenue transaction type geography understanding revenue transaction type helps us identify broad changes product mix revenue geography provides us information regional dynamics summarize transaction type revenue following two categories • subscription revenue represents significant majority revenue consists subscriptions various information offerings software maintenance • nonsubscription revenue represents consulting eg research analysis modeling forecasting services singledocument product sales software license sales associated services conferences events advertising nonsubscription products services important part business complement subscription business creating strong comprehensive customer relationships nongaap measures use nongaap financial measures ebitda adjusted ebitda free cash flow operational financial decisionmaking believe measures allow us focus deem reliable indicators ongoing operating performance adjusted ebitda ability generate cash flow operations free cash flow also believe investors may find nongaap financial measures useful reasons although caution readers nongaap financial measures substitute gaap financial measures disclosures none nongaap financial measures recognized terms gaap purport alternative net income operating cash flow indicator operating performance gaap measure throughout section management’s discussion analysis website wwwihscom provide reconciliations nongaap financial measures directly comparable gaap measures ebitda adjusted ebitda adjusted ebitda used many investors research analysts investment bankers lenders assess operating performance example measure similar adjusted ebitda required lenders term loan revolving credit agreements define ebitda net income plus minus net interest plus provision income taxes depreciation amortization definition adjusted ebitda excludes primarily noncash items consider useful assessing operating performance eg stockbased compensation expense restructuring charges acquisitionrelated costs asset impairment charges gain loss sale assets gain loss debt extinguishment pension marktomarket settlement expense income loss discontinued operations free cash flow define free cash flow net cash provided operating activities less capital expenditures companies use identical calculations presentation nongaap financial measures may comparable similarly titled measures companies however measures still useful evaluating performance peer companies believe measures provide users valuable insight key components gaap financial disclosures example company higher gaap net income may appealing investors net income heavily comprised gains asset sales likewise eliminating effects interest income expense moderates impact company’s capital structure performance strategic acquisitions divestitures paid total purchase price approximately 370 million acquisitions completed year ended november 30 2015 paid total purchase price approximately 210 million acquisitions completed year ended november 30 2014 paid total purchase price approximately 16 billion acquisitions completed year ended november 30 2013 consolidated financial statements include results operations cash flows business combinations beginning respective dates acquisition acquisitions continue important part growth strategy latter half 2015 began narrowing criteria acquisitions focus fewer larger deals emphasis opportunities transportation assets diversify energy portfolio december 2015 acquired carproof corporation carproof canadabased company offers products services vehicle history appraisal valuation automotive industry approximately 460 million net cash acquired january 2016 announced signed definitive agreement acquire oil price information service opis internationally referenced pricing reporting agency serves oil natural gas biofuels industries 650 million detailed description recent acquisition activity see item 8 financial statements supplementary data notes consolidated financial statements note 3 part ii form 10k 2015 conducted complete review entire business portfolio result review determined oerm globalspec product offerings longer fit strategic goals therefore decided divest product groups classified discontinued operations accompanying financial statements footnotes continue evaluate longterm potential strategic fit assets global operations approximately 40 percent revenue transacted outside united states however 20 percent revenue transacted currencies us dollar result strengthening us dollar relative certain currencies historically resulted negative impact revenue conversely weakening us dollar historically resulted positive impact revenue however impact operating income diminished due certain operating expenses denominated currencies us dollar largest foreign currency revenue exposures british pound canadian dollar euro see quantitative qualitative disclosures market risk foreign currency exchange rate risk additional discussion impacts foreign currencies operations pricing information customize many sales offerings meet individual customer needs base pricing number factors including number customer locations number simultaneous users various segmentation methods customer size breadth content included offering level offering customization employ difficult us evaluate pricing impacts periodtoperiod basis analysis complicated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue items cost operating business incur cost revenue primarily acquiring managing delivering offerings costs include personnel information technology data acquisition occupancy costs well royalty payments thirdparty information providers royalty payments largely associated certain product design offerings primarily based either level subscription sales number licenses sold sales general administrative expenses include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly commensurate volume sold particularly subscriptionbased business revenue driven sale specifications standards portion content obtained standards development organizations stockbased compensation expense issue equity awards employees primarily form restricted stock units record cost respective vesting periods typical vesting period three years november 30 2015 approximately 22 million unvested stockbased awards outstanding approximately 12 million performancebased awards majority annual grants highestranking employees performancebased awards vesting performance shares granted 2014 2015 principally based achieving certain financial performance levels fiscal years 2016 2017 respectively november 30 2015 believe target number shares issuable 2015 2016 fiscal years vest based meeting certain performance targets using estimates addition estimated 2016 grants projected stockbased compensation expense 2016 expected approximately 120130 million grant date fair values 2016 grants differ projections change actual performance levels achieve could result change actual amount stockbased compensation recognize example event achieve projected performance metrics 2016 2017 stockbased compensation expense could decrease conversely exceed projected performance metrics stockbased compensation could increase critical accounting policies estimates consolidated financial statements prepared accordance us gaap applying us gaap make significant estimates judgments affect reported amounts assets liabilities revenues expenses well disclosure contingent assets liabilities believe accounting estimates judgments reasonable made many instances alternative estimates judgments would also acceptable addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions approximately 81 percent 2015 revenue derived sale subscriptions initially deferred recognized ratably delivered subscription period billed recognized monthly basis standard agreements typically require significant judgments revenue recognized nonstandard agreements generally make judgments revenue recognition matters whether sufficient legally binding terms conditions exist whether customer acceptance received review customer agreements utilize advice legal counsel appropriate evaluating binding nature contract terms conditions well whether customer acceptance achieved estimate progress consulting project deliverables based knowledge judgment current status individual consulting engagements historically judgments estimates reasonably accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions several highly subjective variables including future cash flows discount rates asset lives also different valuation models component selection requires considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable recognize assumptions inherently uncertain depending size purchase price particular acquisition mix intangible assets acquired purchase price allocation could materially impacted applying different set assumptions estimates goodwill intangible assets make various assumptions goodwill intangible assets including estimated useful lives whether potential impairment events occurred perform impairment analyses carrying values goodwill indefinitelived intangible assets least annually additionally review carrying value goodwill intangible assets whenever events changes circumstances indicate carrying amounts may recoverable examples events changes circumstances many subjective nature include following •significant negative industry economic trends •a significant change manner use acquired assets strategy •a significant decrease market value asset •a significant change legal factors business climate could affect value asset •a change segments impairment indicator present perform analysis confirm whether impairment actually occurred amount required charge finitelived intangible assets review carrying amount least annually determine whether current events circumstances indicate triggering event could require adjustment carrying amount finitelived intangible asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived exercise judgment selecting assumptions used estimated future undiscounted cash flows analysis impairment measured amount carrying value assets exceeds fair value indefinitelived intangible assets goodwill first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value primarily based estimated discounted cash flows exercise judgment selecting assumptions used estimated discounted cash flows analysis goodwill determine fair value reporting unit compare fair value reporting unit carrying value carrying value exceeds fair value reporting unit calculate compare implied fair value goodwill carrying amount goodwill record impairment charge excess carrying value implied fair value determination fair value requires number significant assumptions judgments including assumptions future economic conditions revenue growth operating margins discount rates use different estimates assumptions within projected future cash flows model use methodology projected future cash flow model could result significantly different fair values goodwill intangible assets income taxes exercise significant judgment determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets permanent reinvestment assertion regarding foreign earnings recorded reserves related uncertain tax positions valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent 10 percent greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets pension expense associated pension liability requires use judgment determining assumptions estimated longterm rate return plan assets discount rate well various demographic assumptions pension investment strategy designed align majority pension assets underlying pension liability minimizes volatility caused changes asset returns discount rates pension expense estimates updated actual experience remeasurement process fourth quarter sooner earlier remeasurements required 2015 used 47 percent expected longterm rate return plan assets 42 percent discount rate us rip actual return us rip plan assets 2015 negative 08 percent difference actual return plan assets expected return plan assets largely mitigated offsetting change pension liability resulting movements discount rate change mortality assumptions pension postretirement benefit assumptions determined follows • utilize bond matching model averages bond universe 500 aagraded noncallable bonds 10th 90th percentiles maturity group proxy setting discount rate yearend • asset returns based upon anticipated average rate earnings expected invested funds plan longterm determined expected return plan assets using discount rate approximates return debt securities portfolio slight uplift impact portion plan assets invested equity securities • demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience • mortality assumptions based recognized actuarial tables depending assumptions estimates used net periodic pension postretirement benefit expense could vary significantly within range possible outcomes could material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2015 would resulted following effects 2015 pension expense projected benefit obligation pbo november 30 2015 thousands stockbased compensation stock plans provide grant various equity awards including performancebased awards timebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures estimated forfeiture rate based historical experience periodically review forfeiture assumptions based actual experience performancebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures quarter evaluate probability number shares expected vest adjust stockbased compensation expense accordingly example event achieve projected performance metrics 2016 2017 stockbased compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase results operations total revenue total revenue 2015 increased 5 percent compared period 2014 total revenue 2014 increased 23 percent compared period 2013 table displays percentage point change revenue due organic acquisitive foreign currency factors comparing 2015 2014 2013 organic revenue growth 2015 2014 primarily attributable organic subscription growth provided 5 percent organic revenue growth rate 2015 6 percent organic revenue growth rate 2014 subscriptionbased business represented 81 percent total revenue 2015 79 percent total revenue 2014 nonsubscription business decreased organically 9 percent 2015 2 percent 2014 2015 growth rate adversely impacted lower consulting software services revenue mostly resources segment nonsubscription revenue decline 2015 partially offset approximately 8 million positive sales impact associated biennial cycle bpvc standard recently released third quarter 2015 acquisitionrelated revenue growth 2015 primarily due 2015 acquisitions well runout 2014 acquisitions 2015 acquisitions included following •joc group infonetics rushmore reviews first quarter 2015 •dataium rootmetrics second quarter 2015 acquisitionrelated revenue growth 2014 primarily due runout r l polk acquisition polk acquisition third quarter 2013 well runout 2013 acquisitions 2014 acquisitions also contributed increase included following •global trade information services pci acrylonitrile august 2014 •displaysearch solarbuzz pacwest consulting partners november 2014 foreign currency movements significant adverse impact 2015 revenue growth us dollar continued strengthen foreign currencies foreign currency movements negligible impact 2014 revenue growth due extent global operations foreign currency movements could continue adverse impact results future revenue segment percentage change revenue segment due factors described following table resources revenue encountered significant headwinds 2015 experiencing lower subscription organic growth due industry dynamics 2 percent growth 2015 compared 7 percent growth 2014 2015 constant currency basis resources organic subscription base represents annualized value subscription contracts declined approximately 35 million 5 percent subscription base approximately 750 million beginning year subscription base decline result negative resources subscription organic revenue growth 2016 economic challenges energy industry also contributed sharp declines organic nonsubscription revenue results 2015 negative 2 percent growth rate 2014 negative 27 percent growth rate 2015 transportation revenue increases 2014 2015 driven strengthening organic revenue growth acquisitions subscription nonsubscription offerings continue see strong organic growth automotive businesses stable organic growth transportation businesses acquisition carproof corporation december 2015 anticipate growth automotive business future cms organic revenue growth 2015 2014 due primarily growth product design offerings cms total growth 2015 also benefited tmt acquisition activity year revenue transaction type subscriptions represent steady predictable source revenue us evidenced 5 percent 6 percent organic subscription revenue growth 2015 2014 respectively trend especially important us subscription based revenue core business model transportation subscription offerings provided largest contribution growth accelerating 7 percent 2014 11 percent 2015 cms subscription offerings steady approximately 5 percent organic growth 2014 4 percent 2015 expect continued pressure resources organic subscription growth rate reduction energy subscription base result negative resources subscription organic revenue growth 2016 also result lower total ihs subscription organic revenue growth 2016 organic nonsubscription revenue growth negative 9 percent 2015 negative 2 percent 2014 negative nonsubscription organic growth 2015 primarily due negative 27 percent resources organic growth partially offset transportation nonsubscription organic growth 5 percent flat cms nonsubscription organic growth organic nonsubscription revenue growth 2014 primarily due bpvc release 2013 revenue region americas organic revenue growth 3 percent 2015 driven largely 6 percent subscription organic revenue growth partially offset negative 9 percent nonsubscription organic revenue growth americas organic revenue growth 4 percent 2014 driven largely 6 percent subscription organic revenue growth partially offset negative 3 percent nonsubscription organic revenue growth organic revenue growth periods primarily due strong transportation segment growth region secondarily organic revenue growth contribution 2014 resources segment emea organic revenue growth negative 1 percent 2015 driven 1 percent subscription organic revenue growth offset negative 9 percent nonsubscription organic revenue growth emea organic revenue growth 5 percent 2014 driven 7 percent subscription organic revenue growth primarily strong resources segment growth offset negative 1 percent nonsubscription organic revenue growth foreign currency effects impacted emea revenue negative 4 percent 2015 reflecting strengthening us dollar foreign currencies apac organic revenue growth 1 percent 2015 driven 6 percent subscription organic revenue growth mostly offset negative 13 percent nonsubscription organic revenue growth apac organic revenue growth 4 percent 2014 driven 6 percent subscription organic revenue growth partially offset negative 2 percent nonsubscription organic revenue growth foreign currency effects impacted apac revenue negative 2 percent 2015 also reflecting strengthening us dollar foreign currencies operating expenses following table shows operating expenses associated percentages revenue cost revenue sga expense managing business evaluate costs type eg salaries rather income statement classification percent revenue cost revenue sga expense steadily decreased since 2013 primarily result ongoing cost management lower revenue growth environment due changes stockbased compensation discussed also seen improvement percentage seek increase subscriptionbased offerings typically carry higher margins nonsubscription offerings continue invest areas automotive energy asset valuation offerings drive future growth business expect continue invest people platforms processes products support goals increase top bottomline growth within cost revenue sga expense increases decreases stockbased compensation expense primarily due timing changes number shares expected vest performancebased awards percentage revenue stockbased compensation 6 percent 8 percent 9 percent years ended november 30 2015 2014 2013 respectively depreciation amortization expense depreciation expense increasing primarily result increases capital expenditures various infrastructure software development initiatives amortization expense increasing due continued acquisitionrelated activity restructuring incurred 39 million restructuring charges 2015 reflects continuing efforts consolidate positions locations data centers particularly realigned new segment structure simplified reduced centralized marketing sales support shares services cost structures incurred 9 million restructuring charges 2014 12 million restructuring charges 2013 continue realize benefits respect infrastructure initiatives allow us simplify processes standardize platforms order enable existing workforce accomplish fewer resources acquisitionrelated costs 2015 incurred 1 million costs associated acquisitions including severance lease abandonments professional fees incurred 2 million acquisitionrelated costs 2014 23 million acquisitionrelated costs 2013 increased costs 2013 primarily attributable polk acquisition including investment adviser fees severance lease abandonment legal professional fees acquisitions key component growth strategy expect continue incur similar costs future acquisitions pension postretirement expense following table shows components net periodic pension postretirement expense net service cost decreased 2014 2015 due july 2014 decision discontinue future service accruals us rip sip fourth quarter marktomarket adjustments three years largely due updated actuarial census data assumptions well asset underperformance exclude fourth quarter marktomarket adjustment adjusted ebitda metric regard item indicative ongoing operating performance expect 2016 net service cost prior fourth quarter marktomarket adjustments approximately 2 million operating income segment decrease resources operating income 2015 primarily due higher restructuring costs well increase depreciation expense increase transportation operating income 2014 2015 primarily due strong revenue performance associated leverage operating model activity cms segment reflects improvements due acquisition rootmetrics 2015 better cms operational performance offset increased depreciation amortization restructuring costs changes shared services operating expense primarily result changes stockbased compensation expense years directly assign stockbased compensation expense shared services function provision income taxes effective tax rate continuing operations year ended november 30 2015 205 percent compared 202 percent 2014 108 percent 2013 effective tax rate fiscal year 2014 varied effective tax rate fiscal year 2013 primarily result significant us presence polk business acquired 2013 higher effective tax rate jurisdictions adjusted ebitda continuing operations nongaap measure adjusted ebitda margin performance steadily increasing focus efforts managing costs lower revenue growth environment expect continue improving margins result realignment new segment structure operating efficiencies including reductions marketing sales operations sales support financial condition decrease accounts receivable balance primarily due lower sales resources segment 2015 continued strength cash collections accrued compensation increased due higher levels bonus accrual related annual incentive plan partially offset lower accrued commissions decrease deferred revenue primarily due lower sales resources segment current year liquidity capital resources november 30 2015 cash equivalents 292 million approximately 266 million held foreign subsidiaries cash held foreign subsidiaries could subject us federal income tax decide repatriate cash us however intent permanently reinvest funds outside us current plans indicate need repatriate fund operations jurisdictions outside held also approximately 21 billion debt november 30 2015 consisting primarily 750 million senior notes 710 million revolving facility debt 665 million term loan debt november 30 2015 approximately 590 million available revolving credit facility december 2015 acquired carproof approximately 460 million net cash acquired using combination cash borrowings revolving credit facility january 2016 announced signed definitive agreement acquire opis 650 million expect finance transaction additional bank borrowings upon completion opis acquisition expected occur first quarter 2016 debt balance approximately 31 billion gross leverage approximately 39x since 39x would exceed current credit agreement leverage limits obtained credit facility backstop pursue amendment bank group prior closing opis allow us exceed current 375x limit interest expense increased 2015 compared 2014 primarily higher portion fixed rate debt due refinancing fourth quarter 2014 well higher average debt balance result acquisitions share repurchases expect interest expense higher 2016 compared 2015 primarily due fullyear impact 400 million floatingtofixed interest rate swaps higher floating rate costs due recent rate increases elevated leverage ratio higher debt balance first quarter 2015 board directors authorized us repurchase 100 million outstanding stock completed repurchase program june 2015 announced new 500 million repurchase program share repurchases november 2017 new repurchase program obligate us repurchase set dollar amount number shares amount authorized new program includes open market share repurchases well repurchases stock surrendered employees amount equal statutory tax liability associated vesting equity awards pay statutory tax behalf employee 2015 repurchased 111 million program expect repurchase additional 110 million first quarter 2016 absence larger scaled acquisition opportunities expect deploy capital towards repurchase program november 30 2015 ratio free cash flow adjusted ebitda approximately 66 percent anticipate ratio continue mid60s range going forward cash debt cash flow positions believe sufficient liquidity meet ongoing working capital expenditure needs future capital requirements depend many factors including number magnitude future acquisitions share repurchase programs need additional facilities facility improvements timing extent spending support product development efforts information technology infrastructure investments internal business applications continued market acceptance offerings could required could elect seek additional funding public private equity debt financings however additional funds may available terms acceptable us expect capital expenditures 2016 approximately 5 percent revenue cash flows decrease net cash provided operating activities 2015 primarily due lower sales resources segment current year well higher restructuring costs interest payments partially offset continued strength cash collections lower amount cash paid taxes increase net cash provided operating activities 2013 2014 largely due business performance improvements including strong cash collections 2014 well additive cash flow recent acquisitions notably polk acquisition subscriptionbased business model continues cash flow generator aided positive working capital characteristics generally require substantial working capital increases support growth significant amount net cash used investing activities 2013 principally due polk acquisition completed 2013 increase net cash used investing activities 2014 2015 attributable higher level acquisition activity 2014 net cash provided financing activities 2013 principally due significant amount borrowings used fund polk acquisition addition associated debt issuance costs 2014 began repay borrowings reduced debt leverage 2015 increased borrowings used principally help finance acquisitions share repurchase activities versus focus reducing debt leverage 2014 free cash flow nongaap measure following table reconciles nongaap free cash flow measure net cash provided operating activities free cash flow historically strong expect continue significant source funding business strategy growth organic acquisitive means credit facility debt please refer item 8 financial statements supplementary data notes consolidated financial statements note 8 part ii form 10k discussion current status debt arrangements share repurchase programs please refer part ii item 5 item 8 financial statements supplementary data notes consolidated financial statements note 16 part ii form 10k discussion share repurchase programs offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2015 along obligations associated term loans notes future periods obligations expected settled cash thousands expect contribute approximately 3 million pension postretirement benefit plans 2016 addition term loans notes november 30 2015 also 710 million outstanding borrowings 13 billion 2014 revolving facility current annual interest rate 170 percent facility fiveyear term ending october 2019 also approximately 6 million capital lease obligations november 30 2015 recent accounting pronouncements please refer item 8 financial statements supplementary data notes consolidated financial statements note 2 part ii form 10k discussion recent accounting pronouncements anticipated effect business item 7a item 7 management’s discussion analysis financial condition results operations described “cautionary note regarding forwardlooking statements” section start form 10k make forwardlooking statements throughout report forwardlooking statements generally identified use words “may” “might” “will” “should” “expect” “plan” “anticipate” “believe” “estimate” “predict” “potential” “continue” negative terms similar expressions forwardlooking statements based current expectations assumptions projections subject risks uncertainties may cause actual results differ materially forwardlooking statements detailed discussion risks uncertainties could cause actual results events differ materially forwardlooking statements outlined “risk factors” section elsewhere form 10k intend update publicly revise forwardlooking statements whether result new information future events otherwise following discussion financial condition operating results read conjunction “selected financial data” consolidated financial statements accompanying notes included form 10k important information disclosure routinely post website wwwihscom website information contained site connected site incorporated reference report executive summary business overview leading source information insight analytics critical areas shape todays business landscape businesses governments 165 countries around globe rely comprehensive content expert independent analysis flexible delivery methods aim embed solutions within entire spectrum customers’ organization enabling executive level capital deployment strategies following decisionmaking activities throughout organizations frontline employees tasked managing company’s complex core daily operations business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa committed sustainable profitable growth employ approximately 8000 people 31 countries around world inherent strategies firm commitment put customers first everything believe maintaining disciplined “outsidein” approach allow us better serve customers stockholders achieve goal organized business around customers geographies reside americas emea apac structure allows us tailor expand solutions offer meet unique needs customers globally local markets subscriptions represent approximately 76 percent total revenue sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscription agreements typically noncancellable may contain provisions minimum monthly payments historically seen high renewal rates subscription revenue timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest quarterly levels revenue profit also experience eventdriven seasonality business instance ihs ceraweek annual energy executive gathering held second quarter another example biennial release previously triennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every year bpvc benefit recently occurred third quarter 2013 continued invest business significant rate series initiatives designed boost colleague productivity increase efficiencies develop new enhanced products create scalable platforms designed accommodate future revenue growth without incur proportional increases costs support growth result efforts accomplished following • substantially completed core infrastructure initiatives including vanguard plan consolidating standardizing billing systems general ledgers salesforce automation capabilities supporting business processes three customer care centers excellence consolidate customercare transactionprocessing capabilities simplify standardize approach providing dedicated customer service • continued new integrated product development rollouts delivered multiple releases ihs connect platform energy economics country risk offerings introduced engineering workbench platform product design industry bolstered solutions energy operational excellence risk management oerm automotive arenas • completed strategic acquisitions energy chemicals economic country risk automotive acquisition r l polk co polk acquisition third quarter 2013 largest acquisition ever completed anticipate combination existing automotive products polk suite products services allow us establish automotive business strategic partner automotive industry worldwide • launched target 1000 sales program focuses sales resources highgrowth highopportunity accounts 2014 focused following two priorities • operational excellence expect capitalize infrastructure investments allow employees jobs efficiently effectively including engaging supporting new existing customers • commercial expansion expect continue pace releasing new integrated product platforms offerings 2014 also plan hire new global account executives drive new expanded business key geomarkets well realigning field inside sales forces maximize customer experience key performance indicators believe revenue growth adjusted ebitda dollars margin free cash flow key measures success adjusted ebitda free cash flow financial measures prepared accordance us generally accepted accounting principles nongaap revenue growth review yearoveryear revenue growth segments key measure success addressing customer needs region world operate measure revenue growth terms organic acquisitive foreign currency impacts define components follows • organic define organic revenue growth total revenue growth continuing operations factors acquisitions foreign currency movements drive type revenue growth value realization pricing expanding wallet share existing customers upselling crossselling efforts securing new customer business sale new enhanced product offerings • acquisitive define acquisitionrelated revenue generated acquired products services date acquisition first anniversary date acquisition type growth comes result strategy purchase integrate leverage value assets acquire also include impact divestitures growth metric • foreign currency define foreign currency impact revenue difference current revenue current exchange rates current revenue corresponding prior period exchange rates due significance revenue transacted foreign currencies measure impact foreign currency movements revenue also measure report revenue transaction type understanding revenue transaction type helps us identify broad changes product mix summarize transaction type revenue following two categories • subscription revenue represents significant majority revenue comprised subscriptions various information offerings software maintenance • nonsubscription revenue represents consulting eg research analysis modeling forecasting services singledocument product sales software license sales associated services conferences events advertising nonsubscription products services important part business complement subscription business creating strong comprehensive customer relationships nongaap measures use nongaap financial measures ebitda adjusted ebitda free cash flow operational financial decisionmaking believe measures allow us focus deem reliable indicators ongoing operating performance adjusted ebitda ability generate cash flow operations free cash flow also believe investors may find nongaap financial measures useful reasons although caution readers nongaap financial measures substitute gaap financial measures disclosures none nongaap financial measures recognized terms gaap purport alternative net income operating cash flow indicator operating performance gaap measure throughout section management’s discussion analysis website wwwihscom provide reconciliations nongaap financial measures directly comparable gaap measures ebitda adjusted ebitda adjusted ebitda used many investors research analysts investment bankers lenders assess operating performance example measure similar adjusted ebitda required lenders term loans revolving credit agreement define ebitda net income plus minus net interest plus provision income taxes depreciation amortization definition adjusted ebitda excludes primarily noncash items management consider useful assessing operating performance eg stockbased compensation acquisitionrelated costs restructuring charges income loss discontinued operations pension settlement marktomarket adjustments gain loss sale assets free cash flow define free cash flow net cash provided operating activities less capital expenditures companies use identical calculations presentation nongaap financial measures may comparable similarly titled measures companies however measures still useful evaluating performance peer companies believe measures provide users valuable insight key components gaap financial disclosures example company higher gaap net income may appealing investors net income heavily comprised gains asset sales likewise eliminating effects interest income expense moderates impact company’s capital structure performance business combinations paid total purchase price approximately 16 billion acquisitions completed year ended november 30 2013 paid total purchase price approximately 306 million acquisitions completed year ended november 30 2012 paid total purchase price approximately 730 million acquisitions completed year ended november 30 2011 consolidated financial statements include results operations cash flows business combinations beginning respective dates acquisition acquisitions key part growth strategy expect continue important us focus acquisitions longterm growth potential target highgrowth markets fill strategic need business portfolio seek provide comprehensive solutions customers acquisitions provide us increased organic growth potential integrate new offerings customers global operations approximately 45 percent revenue transacted outside united states however 25 percent revenue transacted currencies us dollar result strengthening us dollar relative certain currencies negative impact revenue conversely weakening us dollar positive impact revenue however impact operating income diminished due certain operating expenses denominated currencies us dollar largest foreign currency exposures order magnitude british pound canadian dollar euro see quantitative qualitative disclosures market risk foreign currency exchange rate risk additional discussion impacts foreign currencies operations pricing information customize many sales offerings meet individual customer needs base pricing number factors including number customer locations number simultaneous users various segmentation methods customer size breadth content included offering level offering customization employ difficult us evaluate pricing impacts periodtoperiod basis analysis complicated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue items cost operating business incur cost revenue primarily acquiring managing delivering offerings costs include personnel information technology occupancy costs well royalty payments thirdparty information providers royalty payments based level subscription sales certain product offerings sales general administrative expenses include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly commensurate volume sold particularly subscriptionbased business revenue driven sale specifications standards portion content obtained standards development organizations stockbased compensation expense issue equity awards employees almost exclusively restricted stock units record cost respective vesting periods typical vesting period three years november 30 2013 approximately 27 million unvested stockbased awards outstanding approximately 12 million performancebased awards majority annual grants highestranking employees performancebased awards vesting performance shares granted 2012 2013 principally based achieving certain financial performance levels fiscal years 2014 2015 respectively november 30 2013 believe target number shares issuable 2014 2015 fiscal years vest based meeting certain performance targets using estimates addition estimated 2014 grants projected stockbased compensation expense 2014 expected approximately 185195 million grant date fair values 2014 grants differ projections change actual performance levels achieve could result change actual amount stockbased compensation recognize example event achieve projected performance metrics 2014 2015 stockbased compensation expense could decrease conversely exceed projected performance metrics stockbased compensation could increase pension postretirement benefits provide following pension postretirement plans • us retirement income plan us rip closed definedbenefit plan covers substantial number employees united states • uk retirement income plan uk rip frozen definedbenefit plan covers limited number employees united kingdom • postretirement medical plan contributory fixed payment plan provides access group rates us employees meet specified conditions • supplemental income plan sip plan nonqualified pension plan certain company personnel 2013 benefited comprehensive review us rip undertook 2011 designed ensure maintained marketcompetitive employee benefits decreasing volatility result 2011 analysis took following steps 2011 2012 • settled certain pension obligations 2011 settled retiree obligations purchasing annuities retiree population thirdparty insurer 2012 offered lumpsum buyouts former colleagues yet receiving benefits nearly 60 percent eligible participants accepting offer combination settlements resulted significant reduction pension obligations assets allowing us reduce volatility plan • changed pension plan investment strategies pension plan investment strategy creates better match pension assets pension obligations aim approximately 75 percent us rip assets invested fixed income securities durations similar expected timing pension obligation payouts • changed pension accounting policy 2011 changed pension accounting policy accelerated recognition method recognizes gains losses income statement quickly previous method including marktomarket pension adjustment record fourth quarter year • accelerated funding plan contributions accelerated plan funding contributing approximately 65 million plan december 2011 first month fiscal 2012 approximately 57 million contribution allowed us bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs december 2012 first month fiscal 2013 contributed approximately 10 million us rip fund estimated 2013 pension costs • closed plan future participants first quarter fiscal 2012 made decision close us rip new participants effective january 1 2012 place us rip benefits colleagues hired january 1 2012 receive company nonelective contribution 401k plan balances active employee end year critical accounting policies estimates consolidated financial statements prepared accordance us gaap applying us gaap make significant estimates judgments affect reported amounts assets liabilities revenues expenses well disclosure contingent assets liabilities believe accounting estimates judgments reasonable made many instances reasonably could used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions approximately 76 percent revenue derived sale subscriptions initially deferred recognized ratably delivered subscription period standard agreements typically require significant judgments revenue recognized nonstandard agreements generally make judgments revenue recognition matters •whether sufficient legally binding terms conditions exist •whether customer acceptance achieved •progress certain consulting projects revenue recognized proportional performance basis review customer agreements utilize advice legal counsel appropriate evaluating binding nature contract terms conditions well whether customer acceptance achieved estimate progress consulting project deliverables based knowledge judgment current status individual consulting engagements historically judgments estimates reasonably accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions several highly subjective variables including future cash flows discount rates asset lives also different valuation models component selection requires considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable recognize assumptions inherently uncertain depending size purchase price particular acquisition mix intangible assets acquired purchase price allocation could materially impacted applying different set assumptions estimates goodwill intangible assets make various assumptions goodwill intangible assets including estimated useful lives whether potential impairment events occurred perform impairment analyses carrying values goodwill indefinitelived intangible assets least annually additionally review carrying value goodwill intangible assets whenever events changes circumstances indicate carrying amounts may recoverable examples events changes circumstances many subjective nature include following •significant negative industry economic trends •a significant change manner use acquired assets strategy •a significant decrease market value asset •a significant change legal factors business climate could affect value asset impairment indicator present perform analysis confirm whether impairment actually occurred amount required charge finitelived intangible assets review carrying amount least annually determine whether current events circumstances require adjustment carrying amount finitelived intangible asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value indefinitelived intangible assets goodwill first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value primarily based estimated discounted cash flows exercise judgment selecting assumptions used estimated discounted cash flows analysis goodwill determine fair value reporting unit compare fair value reporting unit carrying value carrying value exceeds fair value reporting unit calculate compare implied fair value goodwill carrying amount goodwill record impairment charge excess carrying value implied fair value determination fair value requires number significant assumptions judgments including assumptions future economic conditions revenue growth operating margins discount rates use different estimates assumptions within projected future cash flows model use methodology projected future cash flow model could result significantly different fair values goodwill intangible assets income taxes exercise significant judgment determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets recorded reserves related uncertain tax positions valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits account pension postretirement plans accordance us gaap fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent ten percent greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets pension expense associated pension liability calculated us gaap requires use assumptions estimated longterm rate return plan assets discount rate well various demographic assumptions pension investment strategy designed align majority pension assets underlying pension liability minimizes volatility caused changes asset returns discount rates pension expense estimates updated actual experience remeasurement process fourth quarter sooner earlier remeasurements required year ended november 30 2013 used 45 percent expected longterm rate return plan assets 49 percent discount rate us rip actual return plan assets period negative 05 percent difference actual return plan assets expected return plan assets largely mitigated offsetting change pension liability resulting movements discount rate consistent pension investment strategy pension postretirement benefit assumptions determined follows • utilize bond matching model averages bond universe 500 aagraded noncallable bonds 10th 90th percentiles maturity group proxy setting discount rate yearend • asset returns based upon anticipated average rate earnings expected invested funds plan longterm determined expected return plan assets using discount rate approximates return debt securities portfolio slight uplift impact portion plan assets invested equity securities • demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience depending assumptions estimates used net periodic pension postretirement benefit expense could vary significantly within range possible outcomes could material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2013 would resulted following effects 2013 pension expense projected benefit obligation pbo november 30 2013 thousands stockbased compensation stock plans provide grant various equity awards including performancebased awards timebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures estimated forfeiture rate based historical experience periodically review forfeiture assumptions based actual experience performancebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures quarter evaluate probability number shares expected vest adjust stockbased compensation expense appropriate example event achieve projected performance metrics 2014 2015 stockbased compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase results operations total revenue total revenue 2013 increased 20 percent compared period 2012 total revenue 2012 increased 15 percent compared period 2011 table displays percentage point change revenue due organic acquisitive foreign currency factors comparing 2013 2012 2011 2013 vs 2012 four percent organic revenue growth year ended november 30 2013 primarily attributable continued strength subscriptionbased business provided six percent organic revenue growth rate 2013 subscriptionbased business represented 76 percent total revenue nonsubscription business decreased organically three percent acquisitionrelated revenue growth 2013 primarily due polk acquisition third quarter 2013 portion growth due acquisitions made last twelve months well runout acquisitions made 2012 addition polk acquisition acquisitions 2013 include following • exclusive analysis business dodson data systems energy publishing first quarter 2013 • fekete associates waterborne energy second quarter 2013 • pfc energy third quarter 2013 foreign currency moved adversely 2013 compared 2012 resulted negative impact revenue period due extent global operations foreign currency movements could continue adverse impact results future 2012 vs 2011 five percent organic revenue growth 2012 primarily attributable strength subscriptionbased business provided eight percent organic revenue growth rate 2012 subscriptionbased business represented approximately 76 percent total revenue nonsubscription business decreased organically four percent acquisitionrelated revenue growth 2012 due acquisitions made 2012 well runout acquisitions made 2011 acquisitions made 2012 include following • caps displaybank ims research bdw automotive second quarter 2012 • xēdar cyberregs globalspec invention machine third quarter 2012 foreign currency moved adversely 2012 compared 2011 resulted negative impact revenue period revenue segment percentage change geography segment due factors described following table 2013 vs 2012 experienced organic revenue growth three geographies subscriptionbased revenue driving majority increases geographies subscription revenue continues provide stable revenue stream generates significant cash flow organic growth americas driven largely six percent organic increase subscription revenue partially offset three percent organic decline nonsubscription revenue reflecting slight decline consulting revenue decrease software license revenue emeas organic growth driven largely six percent organic increase subscription revenue partially offset seven percent organic decline nonsubscription revenue reflecting continuing economic softness region apacs organic growth continues solid performer seven percent organic growth rate subscriptions similar seven percent organic growth rate nonsubscriptions 2012 vs 2011 experienced organic revenue growth three geographies subscriptionbased revenue driving majority increases organic growth americas driven largely seven percent organic increase subscription revenue partially offset ten percent organic decline nonsubscription revenue caused significant increases sales cycles delays customer decisions key projects primarily due macroeconomic geopolitical uncertainty emeas organic growth broadbased subscriptions growing six percent rate nonsubscriptions growing eight percent portion nonsubscription increase primarily due increase consulting revenue apacs organic growth strong contributor 12 percent growth rate subscriptions one percent growth rate nonsubscriptions revenue transaction type 2013 vs 2012 relative 21 percent subscription revenue growth year ended november 30 2013 compared 2012 approximately six percent due organic growth trend especially important us subscriptionbased revenue core business model subscriptions represent steady predictable source revenue us continue see good traction pricing practices stable renewal rates 17 percent increase nonsubscription business primarily due acquisitions nonsubscription revenue decreasing three percent organically year reflecting mix underperforming nonstrategic assets weakness customers discretionary spending globally impact us governments sequestration expect see improvement nonsubscription business 2014 sales pipelines appear strengthening 2012 vs 2011 relative 13 percent subscription revenue growth year ended november 30 2012 approximately eight percent due organic growth 22 percent increase nonsubscription business primarily due acquisitions nonsubscription revenue decreasing four percent organically year nonsubscription performance 2012 slowed key service lines new license revenue sales cycles extended pause customers discretionary capital expense spending operating expenses following table shows operating expenses associated percentages revenue cost revenue 2013 2012 2011 cost revenue increased line increase revenue continue invest people platforms processes products support goals increase top bottomline growth selling general administrative sga expense evaluate sga expense excluding stockbased compensation expense continue invest business also strive invest necessary drive scale growth key industries core markets sga expense consequently remained relatively flat percentage revenue 2013 2012 2011 stockbased compensation expense continued increase year result increase number employees increase stock price achievement overachievement certain performance metrics although dont intend increase share grant levels stock price appreciates would expect increased stockbased compensation expense future years depreciation amortization expense 2013 compared 2012 depreciation amortization expense increased primarily due increase depreciable amortizable assets acquisitions well increase approximately 26 million capital expenditures related various infrastructure initiatives 2012 compared 2011 depreciation amortization expense increased primarily due increase depreciable amortizable assets acquisitions well increase approximately 10 million capital expenditures restructuring incurred 13 million restructuring charges 2013 consistent 2012 levels significantly higher 2011 continue realize benefits respect vanguard company initiatives allow us simplify processes standardize platforms order enable existing workforce accomplish fewer resources acquisitionrelated costs incurred 23 million costs 2013 acquisitionrelated activities primarily related polk acquisition acquisitionrelated costs 2013 included investment adviser fees severance lease abandonment legal professional fees acquisitions key component growth strategy expect continue incur similar costs future acquisitions incurred 4 million acquisitionrelated costs 2012 8 million acquisitionrelated costs 2011 increase 2013 primarily attributable costs related polk acquisition pension postretirement expense following table shows components net periodic pension postretirement expense 2011 2012 pension postretirement expense considerably higher historically due settlement costs incurred annuitize retirees 2011 facilitate lumpsum buyout offers made 2012 fourth quarter marktomarket adjustments 2011 2012 significantly higher 2013 due annuitization lumpsum settlement buyout offers 2013 fourth quarter marktomarket adjustment largely due updated actuarial census data assumptions exclude settlement expense fourth quarter marktomarket adjustment adjusted ebitda metric regard items indicative ongoing operating performance expect 2014 net service cost prior fourth quarter marktomarket adjustments approximately 11 million completed major elements us rip redesign previously outlined incur settlement expense 2013 dont expect incur settlement expense 2014 operating income segment 2013 vs 2012 decrease americas operating income margin primarily driven increases depreciation expense associated increasing capital expenditures amortization expense primarily associated intangible assets acquired polk acquisition acquisitionrelated costs primarily associated polk acquisition significance intangible assets acquired polk acquisition polks significant americas presence anticipate operating income margin americas continue lower previous years decrease emea operating income margin primarily driven product mix investment growth increased selling costs increases intangible asset amortization acquisitionrelated costs well loss sale emea assets contributed decline decrease apac operating income margin primarily due product mix changes continued investment sales operations teams region shared services operating expense increased primarily increase stockbased compensation expense 2013 allocate stockbased compensation expense shared services function portion increase offset decrease pension postretirement expense 2012 vs 2011 increase americas operating income margin primarily driven cost management efforts region emea operating income margin relatively flat percentage segment revenue americas continued manage costs emea region despite increases depreciation amortization costs compared prior year decrease apac operating income margin largely due increased investment sales operations teams region shared services operating expense increased primarily increase stockbased compensation expense 2012 portion increase offset decrease pension postretirement expense provision income taxes effective tax rate year ended november 30 2013 149 percent compared 157 percent 2012 165 percent 2011 effective tax rate fiscal year 2013 varied effective tax rates fiscal years 2012 2011 primarily result higher profit levels lower tax rates incentive credits foreign tax jurisdictions due part significant us presence polk business expect effective tax rate increase next year adjusted ebitda nongaap measure adjusted ebitda margin performance 2013 decreased primarily result significant 2013 acquisition activity discrete onetime investments anticipate margins increase 2014 expect see improvements core margins recent acquisition portfolio margins fully integrate acquisitions business 2012 adjusted ebitda increased primarily organic subscription revenue growth acquisitions leverage business model despite fact continued invest substantially core business key transformative initiatives financial condition increase accounts receivable balance primarily due acquisitions made 2013 increase accrued compensation primarily due higher attainment certain performance objectives associated annual incentive plan well increase accrued payroll increase accrued bonus employees recently added acquisitions increase deferred revenue due organic growth acquisitions liquidity capital resources november 30 2013 cash equivalents 258 million approximately 191 million held foreign subsidiaries cash held foreign subsidiaries available fund domestic operations deemed earnings subsidiaries indefinitely reinvested also 22 billion debt november 30 2013 resulted increase interest expense 2013 expect increased debt continue increase interest expense near future 2013 free cash flow 405 million ratio free cash flow adjusted ebitda 72 percent cash debt cash flow positions believe sufficient cash meet ongoing working capital expenditure needs historically required make cash contributions us rip pension plan funded status however due global economic downturn negatively impacted returns pension assets required make cash contribution us rip fiscal 2012 considering requirement various changes pension strategy including annuitization retiree pension obligations bringing pension deficit current funding 2012 pension costs made 65 million contribution pension plan december 2011 first month 2012 fiscal year approximately 57 million contribution used annuitization bringing deficit current remaining 8 million used fund expected 2012 pension costs december 2012 first month 2013 fiscal year made 10 million contribution pension plan fund estimated 2013 pension costs required expect contribute us rip 2014 third quarter 2013 completed polk acquisition funded combination cash stock funded cash portion transaction consideration using cash hand cash existing revolver new bank term loan credit agreements require systematic reduction leverage ratio defined item 8 financial statements supplementary data notes consolidated financial statements note 8 part ii form 10k 25 basis points per quarter first year ending 300 100 leverage ratio effective quarter ending august 31 2014 thereafter leverage ratio covenant require us use cash flows ongoing operations equity financing reduce debt required levels november 30 2013 leverage ratio 341x compared maximum permitted leverage ratio november 30 2013 375x continuing reduce leverage ratio future capital requirements depend many factors including level future acquisitions need additional facilities facility improvements timing extent spending support product development efforts information technology infrastructure investments internal business applications continued market acceptance offerings could required could elect seek additional funding public private equity debt financings however additional funds may available terms acceptable us currently expect capital expenditures approximately five six percent revenue 2014 cash flows 2013 vs 2012 increase net cash provided operating activities largely due continued business performance improvements part improvement also came decreased funding us rip 10 million 2013 compared 65 million 2012 additive cash flow recent acquisitions notably polk acquisition favorable cash tax refund timing subscriptionbased business model continues cash flow generator aided positive working capital characteristics generally require substantial working capital increases support growth increase net cash used investing activities principally due polk acquisition completed 2013 part increase also attributable increased capital expenditures associated continued investment product development infrastructure initiatives increase net cash provided financing activities 2013 principally due significant amount borrowings used fund polk acquisition addition associated debt issuance costs fourth quarter 2012 began treasury share repurchase program continued first quarter 2013 total purchase price approximately 96 million 50 million purchased fourth quarter 2012 46 million purchased first quarter 2013 2012 vs 2011 decrease net cash provided operating activities principally due 65 million pension funding contribution made december 2011 partially offset continued improvements business performance decrease net cash used investing activities principally due smaller acquisitions completed 2012 compared 2011 particularly 502 million acquisition seismic microtechnology smt 2011 part decrease offset increased capital expenditures associated continued investment business decrease net cash provided financing activities 2012 principally due significant amount borrowings credit facility 2011 used fund acquisition smt 2012 also began treasury share repurchase program fourth quarter contributed significant financing cash outflows free cash flow nongaap measure following table reconciles nongaap free cash flow measure net cash provided operating activities free cash flow historically healthy allow us reduce leverage ratio 2014 expect continue significant source funding business strategy growth organic acquisitive means credit facility debt please refer item 8 financial statements supplementary data notes consolidated financial statements note 8 part ii form 10k discussion current status term loans revolving credit agreement share repurchase programs please refer part ii item 5 item 8 financial statements supplementary data notes consolidated financial statements note 16 part ii form 10k discussion share repurchase programs offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2013 along obligations associated term loans future periods obligations expected settled cash thousands four pension postretirement benefit plans following estimated cash contributions 2014 • us rip currently expect make contribution us rip 2014 • uk rip expect contribute approximately 18 million uk rip 2014 • sip expect contribute approximately 08 million sip 2014 • postretirement medical plan expect contribute approximately 08 million postretirement medical plan 2014 addition term loan debt also 770 million outstanding borrowings credit facility revolver current annual interest rate 243 percent credit facility fiveyear term ending january 2016 also approximately 8 million capital lease obligations recent accounting pronouncements please refer item 8 financial statements supplementary data notes consolidated financial statements note 2 part ii form 10k discussion recent accounting pronouncements anticipated effect business item 7a item 7 managements discussion analysis financial condition results operations following discussion financial condition operating results read conjunction selected historical consolidated financial data consolidated financial statements accompanying notes included form 10k ihs one leading global providers critical technical information decisionsupport tools related services customers energy defense aerospace construction electronics automotive industries developed comprehensive collection technical information highly relevant industries serve decisionsupport tools enable customers quickly easily search analyze information well integrate work flows operational research strategic advisory services combine information tools extensive industry expertise meet needs customers rely offerings facilitate decision making support key processes improve productivity manage business energy engineering operating segments energy segment develops delivers critical oil gas industry data exploration development production transportation activities major global energy producers national independent oil companies segment also provides decisionsupport tools operational research strategic advisory services customers well utilities transportation petrochemical coal power companies engineering segment provides solutions incorporating technical specifications standards regulations parts data design guides information customers targeted industries segment serves largest engineeringintensive companies around world defense aerospace construction electronics automotive industries executive summary subscriptionbased business model 75 revenue year ended november 30 2005 derived subscriptions offerings subscriptionbased business model historically high renewal rates generate recurring revenue cash flows generally recognize revenue subscriptions usually oneyear periods ratably term subscription less 10 subscriptionbased revenue year ended november 30 2005 recognized time sale instances continuing responsibility maintain update underlying information since sales nondeferred subscriptions occur frequently fourth first quarters generally recognize greater percentage revenue income quarters subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income greater percentage annual subscription sales made fourth quarter due large volume offerings first introduced fourth calendar quarter prior years renewed annual basis also sales cycle number nondeferred subscription products particularly sold governmental academic customers intentionally aligned customers budgeting funding cycles often results increased sales fourth calendar quarter result cash flow operations tends higher first fiscal quarter receive subscription payments revenue offerings revenue type offering periods presented set forth acquisitions part growth strategy intend continue augment offerings selectively acquiring information services organizations particular intend penetrate selected informationintensive industries already significant presence defense aerospace construction electronics internal growth selective acquisitions december 1 2005 acquired contentanddataservices business approximately 33 million serves industries targeted engineering segment core product business extensive database includes technical attributes alternatives obsolescence environmental data electronic component parts intend incorporate database direct parts management projects existing parts databases haystack® enhance overall parts data offerings business also provides solutions complement parts obsolescence products purchase price paid existing cash hand also made three acquisitions 2005 aggregate purchase price approximately 35 million 2004 made following acquisitions •cera acquired outstanding capital stock cera total purchase price approximately 31 million beginning fourth quarter 2004 cera provides syndicated research strategic advisory services energy companies •usa information systems inc usa acquired outstanding capital stock usa total purchase price approximately 20 million fourth quarter 2004 usa provides decisionsupport tools lesser extent critical information governments government contractors •international petrodata limited ipl acquired assets ipl total purchase price approximately 16 million first quarter 2004 ipl provides critical geological information oil gas exploration production markets canada •intermat inc acquired assets intermat total purchase price approximately 5 million fourth quarter 2004 intermat provides decisionsupport tools parts management parts cleansing predictive obsolescence projects consolidated financial statements include results operations cash flows acquisitions beginning respective dates acquisition see also consolidated financial statements included elsewhere form 10k combined effect acquisitions operating income year ended november 30 2004 set forth make significant acquisitions 2003 segments table presents split revenue type offering two segments results operations primarily driven organic growth acquisitions organic growth driven several factors including introduction new offerings periodic updates existing offerings execution sales marketing plans world economic events ability penetrate existing customers generate new customers raise prices discussion impact acquisitions three years ended november 30 2005 see acquisitions pricing information many sales customized annual basis meet individual customer needs based number factors including number customer locations number simultaneous users breadth content included offering light customized nature many offerings pricing terms also customized addition difficulty contrasting price changes period exacerbated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue products period global operations serve worlds largest corporations across multiple industries well governments organizations 100 countries generated revenue 2309 million outside united states year ended november 30 2005 represented almost half total revenue primary operations outside united states united kingdom canada switzerland operating profit outside united states historically exceeded domestic operating profit set forth years ended november 30 revenue indicated country based location subsidiary generating revenue differs cases location customer international operations expose us foreigncurrency risk fluctuations foreigncurrency rates increased revenues approximately 117 million 132 million 27 million years ended november 30 2003 2004 2005 respectively increased decreased operating income approximately 27 million 14 million 25 million respective periods see qualitative quantitative disclosures market riskforeign currency risk restructuring offering charges third quarter 2005 executed restructuring initiative affecting engineering segment certain corporate costs initiative undertaken reduce costs integrate operations previous acquisitions streamline data delivery processes realign marketing efforts support core product initiatives course restructuring reduced aggregate workforce 100 employees closed two offices one us one uk restructuring charge approximately 82 million incurred third quarter 2005 comprised primarily termination costs amount disbursed approximately 53 million november 30 2005 approximately 21 million charge related accelerated vesting restricted shares anticipate realizing net annual savings approximately 60 million restructuring primarily reductions cost revenue selling general administrative expenses addition net cash flows expected improve approximately 6 million annually result restructuring benefits restructuring realized primarily beginning fourth quarter 2005 also incurred 55 million costs associated initial public offering required expense costs since issue shares connection initial public offering rather shares sold selling shareholders us discontinued operations third quarter 2005 classified business energy segment held sale continually evaluate opportunities align business activities within core operations business held sale manufacturing operation part core operations actively seeking buyer business believe probable sold third quarter 2006 periods presented form 10k related results operations shown discontinued operation net tax consolidated statement operations related net loss discontinued operation approximately 02 million 20 million 23 million years ended november 30 2003 2004 2005 respectively discontinuing business expected material impact future results operations liquidity items cost operating business incur cost revenue primarily acquire manage deliver critical information costs include royalty payments thirdparty information providers well personnel information technology occupancy costs related activities royalty payments generally vary based subscription sales engineering segment cost revenue services offerings primarily comprised personnel costs selling general administrative expenses primarily include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses fixed costs particularly energy segment generally pay royalties critical information within engineering segment portion critical information revenue driven sale specifications standards content obtained sdos last years within segment certain sdos increased royalty payments pay use specifications standards information result engineering operating margins declined costs public company beginning 2004 selling general administrative costs increased prepared become public company expect continue incur additional selling general administrative expenses related operating public company increased legal accounting expenses cost investor relations function costs related section 404 sarbanesoxley act increased director officer insurance premiums also incurred costs modify longterm incentive plans reflect customary public company compensatory arrangements november 2004 conducted offer purchase outstanding options shares capital stock issued pursuant stock option plans maintained one subsidiaries compensation expense related equity awards year ended november 30 2004 included 99 million onetime cash charge settle options ihs group incs 1998 2002 nonqualified stock option plans repurchase ihs group inc shares previously issued upon exercise options ii 119 million noncash charge relating vested restricted stock units issued ihs incs 2004 longterm incentive plan also issued restricted stock record cost three fiveyear vesting period 2005 granted 839015 shares class common stock officers employees form performance shares performance unit awards restricted shares restricted stock awards assuming performance measures met expect compensation expense next three years approximate following pension postretirement benefits net periodic pension postretirement benefits primarily comprised pension income expense postretirement benefit expense shown net basis years ended november 30 2003 2004 2005 recognized periodic pension benefit income 129 million 105 million 65 million respectively primarily result overfunded us pension plan income reduced postemployment benefits expense 43 million 47 million 24 million years ended november 30 2003 2004 2005 respectively resulting net periodic pension postretirement benefits income reflected statement operations 86 million 58 million 41 million respective periods november 30 2004 us pension plan postretirement benefit plan spun previously part singleemployer plan included operating companies consolidate sponsored consolidated subsidiary consequence spinoff plans prepaid pension asset accrued postretirement benefit liability reduced prepaid pension asset accrued postretirement benefit liability attributable nonihs inc plans recorded 60 million net charge equity period ended november 30 2004 additionally net periodic pension postretirement benefit income decreased 2005 compared 2004 result spinoff net amount income declining last three years primarily due amortization actuarial losses resulting lower expected asset returns 2000 2002 expect net amount income continue decline foreseeable future stockbased compensation ihs group inc whollyowned subsidiary maintained stock option plan provided granting nonqualified stock options certain employees purchase shares common stock ihs group inc connection stock option plan formed valuation committee board directors determine fair value underlying common stock absence public trading market means establishing march 2004 fair value per share committee reviewed discounted net cash flow analysis comparable company valuation analysis prepared committee management comparable company analysis employed six peer companies six industry multiples eg price earnings ratio equity valuetolast 12 months ebitda ratios yielded average fully diluted per share price 965 per share median fully diluted per share value 875 per share comparable companies selected based assessment overall business model size inherent growth rates companies based comparable company analysis committee determined fair value ihs group inc shares range 875 925 per share fully diluted basis consistent discounted cash flow analysis referenced order select specific per share amount range committee opted set fair market value ihs group inc common stock midpoint range 900 per share establishing fair value ihs group inc common stock connection november 22 2004 offer exchange options stock restricted stock andor deferred stock units committee used discounted net cash flow analysis estimate supplemented comparable company valuation analysis prepared consistent basis resulted average share price 980 median share price 925 per share analysis incorporated six comparable companies six valuation multiples employed march 2004 analysis light analyses committee determined enterprise value ihs group inc changed since march 2004 valuation however determining fully diluted per share value committee concluded would appropriate consider increased level cash balance sheet proper increase per share equity value ihs group inc resulted fair value 942 per share management chose obtain independent appraisal believed would redundant narrow variation results obtained two analyses connection november 2004 offer exchange options shares option holders shareholders also received allocation restricted shares deferred stock units ihs inc order determine value securities valuation committee reviewed comparison valuation multiples within comparable public companies guideline public company approach analysis based discounted cash flow method estimate value ihs inc common stock underlying restricted shares deferred stock units committee determined methods provide reasonable estimate value ihs inc common stock value ihs incs restricted shares deferred stock units 912 per shareunit november 2004 primary reason difference 912 per share fair value november 2004 grant restricted shares deferred stock units 1600 price per share initial public offering relates improvement financial results increased level trailing twelve months revenue adjusted ebitda past nine months approximately 19 10 respectively moreover experienced increase organic growth rate revenue line approximately 5 2004 approximately 9 first nine months 2005 addition adjusted ebitda growth approximately 7 2004 versus 2003 adjusted ebitda increased approximately 17 first nine months 2005 versus first nine months 2004 finally accretion fair value also relates declining uncertainty surrounding likelihood us successfully completing initial public offering first four months 2005 issued 262333 restricted shares valued 1200 per share based fair value used connection note conversion transaction third party june 2005 july 2005 issued 4100 7000 restricted shares respectively valued shares 1318 per share represents liquidity discount price believe shares would traded may 2005 see notes consolidated financial statements included elsewhere form 10k accrued 218 million november 30 2004 connection offer exchange options shares comprised 44 million relating cost revenue 174 million relating selling general administrative expenses see notes consolidated financial statements included elsewhere form 10k provision income taxes effective tax rate 360 208 316 years ended november 30 2003 2004 2005 respectively effective tax rate 2005 included benefit favorable outcome tax audits period well impact nondeductible items lower effective tax rate 2004 principally due two items recognition fourth quarter tax benefit dividendsreceived deduction dividends preferred stock investment tax benefit release substantially valuation allowance foreign tax credits result extension credit carryforward period included american jobs creation act 2004 expect 2006 effective tax rate slightly higher 2005 rate see note 15 consolidated financial statements included elsewhere form 10k critical accounting policies estimates consolidated financial statements prepared accordance accounting principles generally accepted united states gaap apply gaap must make significant estimates affect reported amounts assets liabilities revenues expenses related disclosure contingent assets liabilities many instances could reasonably used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable circumstances evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions nonstandard agreements make judgments determine appropriately account judgments generally involve assessments regarding matters •whether sufficient legally binding terms conditions exist •whether customer acceptance achieved evaluate binding nature terms conditions agreements well whether customer acceptance achieved based managements judgments appropriate advice legal counsel historically judgments accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions including respect future cash flows discount rates asset lives therefore require considerable judgment determinations affect amount amortization expense recognized future periods review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable examples events changes circumstances include significant negative industry economic trends significant changes manner use acquired assets strategy significant decrease market value asset significant change legal factors business climate could affect value asset assess impairment comparing fair value identifiable intangible asset goodwill carrying value determination fair value involves significant management judgment impairments expensed incurred specifically test impairment follows identifiable intangible assets compare expected undiscounted future operating cash flows associated finitelived assets respective carrying values determine asset fully recoverable expected future operating cash flows sufficient recover carrying value estimate fair value asset impairment recognized carrying amount asset recoverable carrying value exceeds fair value goodwill test goodwill impairment reporting unit level reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach •we first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step •in second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting units goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess determine fair value reporting units based combination various techniques including present value future cash flows comparisons earnings multiples peer companies since valuation identifiable intangible assets goodwill requires significant estimates judgment future performance fair values future results could affected current estimates future performance fair values change tested goodwill impairment fourth quarter 2005 based goodwill balance end third quarter 2005 concluded impairment existed time management chose obtain independent appraisal support view recoverability goodwill engineering services reporting unit continue monitor impairment indicators accordingly income taxes account income taxes accordance sfas 109 accounting income taxes significant judgment required determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made accounting income taxes requires us exercise judgment known issues discussion tax authorities transactions yet settled result maintain tax liability contingencies regularly assess adequacy tax liability record liabilities known tax contingencies period probable liability incurred adjust tax contingencies period probable actual results differ estimates actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits defined benefit plans cover majority employees us uk also postretirement welfare plans us provide medical benefits retirees eligible dependents life insurance certain retirees accounting plans subject guidance provided sfas 87 employers accounting pensions sfas 106 employers accounting postretirement benefits pensions statements require management make certain assumptions relating longterm rate return plan assets discount rates used measure future obligations expenses salary increases inflation health care cost trend rates assumptions believe accounting estimates related pension postretirement plans critical accounting estimates highly susceptible change period based market conditions performed analysis highyield bonds end 2005 compared results appropriate indices industry trends support discount rates used determining pension liabilities united states united kingdom year ended november 30 2005 discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint change certain assumptions would following effects 2005 pension results assumed healthcarecosttrend rates significant effect amounts reported retiree healthcare plan onepercentagepoint change assumed healthcarecosttrend rates would following effects consolidated basis 515 million unrecognized pension postretirement benefit losses november 30 2005 actuarial losses primarily comprised cumulative investment returns lower actuarially assumed investment returns losses due increased pension postretirement benefit liabilities resulting falling interest rates pension income postretirement benefit expense includes amortization actuarial losses exceed specified thresholds result expected losses excess thresholds foreseeable future anticipate net periodic pension postretirement benefit income continue decrease results operations set forth results operations expressed percentage revenue set forth revenue operating income energy engineering segments years ended november 30 2003 2004 2005 certain corporate transactions allocated operating segments unallocated amounts include corporatelevel restructuring offering charges compensation expense related equity awards net periodic pension postretirement benefits income corporatelevel impairments gains sales corporate assets 1includes asset impairments 06 million 20 million years ended november 30 2003 2004 respectively asset impairments year ended november 30 2005 2includes gains sales assets net 02 million 51 million years ended november 30 2003 2004 material gains sales assets 2005 additionally 2005 includes 44 million restructuring charge 3includes following items year ended november 30 2005 compared year ended november 30 2004 revenue 4761 million year ended november 30 2005 compared 3940 million year ended november 30 2004 increase 821 million 21 revenue increased primarily due 2004 acquisitions contributed approximately 406 million organic growth contributed 308 million foreigncurrency movements contributed 27 million remainder change primarily attributable firstquarter 2004 dissolution joint venture within engineering segment revenue energy segment 2423 million year ended november 30 2005 compared 1858 million year ended november 30 2004 increase 565 million 30 increase principally due 2004 acquisitions contributed 313 million organic growth contributed 240 million foreigncurrency movements contributed 12 million acquisition growth resulted primarily cera organic growth 2005 driven expanding subscription base growth within service decisionsupporttools offerings introduction new products functionalities favorable energyindustry conditions revenue engineering segment 2338 million year ended november 30 2005 compared 2082 million year ended november 30 2004 increase 256 million 12 acquisitions contributed 93 million organic growth increased revenue 68 million foreigncurrency movements contributed 14 million remainder change attributable firstquarter 2004 dissolution joint venture organic growth resulted primarily expanding subscription base doubledigit growth parts management product line cost revenue cost revenue 2282 million year ended november 30 2005 compared 1844 million year ended november 30 2004 increase 438 million 24 percentage revenue cost revenue increased 468 479 margins within energy segment remained relatively flat slight margin improvements energycritical information decisionsupporttools products offset higher sales volumes lowermargin energy services due inclusion fullyears worth cera results engineering margins decreased primarily result continued increases effective royalty rates related sales critical information primary source engineering revenue firstquarter 2004 dissolution joint venture within engineering segment also adversely impacted engineering margin selling general administrative expenses selling general administrative expenses 1629 million year ended november 30 2005 compared 1365 million year ended november 30 2004 increase 264 million 19 acquisitions contributed 158 million increase remainder increase primarily due increased salesandmarketing backoffice costs support increased sales corporate level increased costs related implementation publiccompany infrastructure processes systems preparation initial public offering percentage revenue selling general administrative expenses 342 year ended november 30 2005 347 year ended november 30 2004 depreciation amortization expenses depreciation amortization expenses 114 million year ended november 30 2005 compared 96 million year ended november 30 2004 increase 18 million 19 increase primarily due acquisitions restructuring offering charges restructuring offering charges 137 million year ended november 30 2005 restructuring costs 82 million comprised primarily termination costs offering costs 55 million related costs associated initial public offering similar expenses year ended november 30 2004 third quarter 2005 executed restructuring initiative affecting engineering segment certain unallocated corporate costs initiative undertaken reduce costs integration operations previous acquisitions streamline datadelivery processes realign marketing efforts support coreproduct initiatives restructuring reduced aggregate workforce 100 employees closed two offices one us one uk see executive summaryrestructuring offering charges compensation expense related equity awards compensation expense related equity awards 53 million year ended november 30 2005 compared 218 million year ended november 30 2004 decrease 165 million november 2004 conducted offer purchase outstanding options shares capital stock issued pursuant stock option plans maintained one subsidiaries offer included issuance deferred stock units restricted shares ihs inc exchange previously outstanding options shares expense amount year ended november 30 2004 includes 99 million onetime cash charge purchase options outstanding plans purchase shares acquired upon exercise options ii 119 million noncash charge relating issuance vested deferred stock units connection offer 218 million total charge 44 million relates cost revenue 171 million relates selling general administrative expenses 03 million relates discontinued operations similar offer made 2005 net gain sales assets net gain sales assets 13 million year ended november 30 2005 compared 55 million year ended november 30 2004 decrease 42 million results year ended november 30 2004 included 44 million gain firstquarter 2004 dissolution joint venture net periodic pension postretirement benefits net periodic pension postretirement benefits income 41 million year ended november 30 2005 compared 58 million year ended november 30 2004 decrease 17 million 29 decrease primarily due november 30 2004 spinoff ihss us retirement plan well increased actuarial losses resulting lowerthanexpected asset returns previous years earnings unconsolidated subsidiaries earnings unconsolidated subsidiaries 01 million year ended november 30 2005 compared 04 million year ended november 30 2004 net expense income net expense income 11 million year ended november 30 2005 compared 32 million year ended november 30 2004 change primarily attributable foreigncurrency movements operating income operating income 619 million year ended november 30 2005 compared 529 million year ended november 30 2004 increase 90 million 17 percentage revenue operating income 13 years ended november 30 2005 2004 operating income energy segment 530 million year ended november 30 2005 compared 352 million year ended november 30 2004 increase 178 million 51 increase primarily attributable increased revenue based semifixed cost structure partially offset operating expense increases caused acquisitions efforts comply requirements sarbanesoxley act backoffice system implementation costs increased corporatecost allocations resulting planned publiccompany infrastructure costs operating income engineering segment 180 million year ended november 30 2005 compared 330 million year ended november 30 2004 decrease 150 million 46 operating income decreased primarily due 44 million restructuring charge 2005 increasing royalty rates reduced margins increased selling general administrative expenses resulting additional spending salesandmarketing resources programs increased corporatecost allocations resulting planned publiccompany infrastructure costs additionally results year ended november 30 2004 included nonrecurring gain approximately 44 million dissolution joint venture interest income interest income 35 million year ended november 30 2005 compared 11 million year ended november 30 2004 increase 24 million interest income increased primarily result increased cash primarily function proceeds received fourthquarter 2004 sale noncore asset 942 million well increased interest rates also third quarter 2005 implemented cash investment policy purchased shortterm marketable securities interest expense interest expense 08 million year ended november 30 2005 compared 05 million year ended november 30 2004 increase 03 million firstquarter 2005 wrote certain deferred financing costs associated previous credit facility entered new credit facility january 2005 provision income taxes effective tax rate year ended november 30 2005 316 compared 208 year ended november 30 2004 effective tax rate 2005 period reflects benefit favorable outcome tax audits period changes certain estimates impact non deductible items effective tax rate 2004 lower 2005 principally due two nonrecurring items recognized fourth quarter 2004 first benefits recognized dividendsreceived deduction dividends preferred stock investment second benefit recognized release substantially valuation allowance foreign tax credits primarily due extension credit carryforward period included american jobs creation act 2004 loss discontinued operations net loss discontinued operations net 22 million year ended november 30 2005 compared 20 million year ended november 30 2004 increase 02 million year ended november 30 2004 compared year ended november 30 2003 revenue 3940 million year ended november 30 2004 compared 3458 million year ended november 30 2003 representing increase 482 million 14 increase primarily attributable internal growth contributed approximately 178 million 2004 acquisitions increased revenue 166 million favorable foreigncurrency movements increased revenue 132 million internal growth primarily driven increased sales critical information decisionsupport tools energy engineering operating segments well modest price increases revenue energy segment 1858 million year ended november 30 2004 compared 1562 million year ended november 30 2003 representing increase 296 million 19 2004 revenue increase within energy segment included increases revenue 143 million 36 million 117 million critical information decisionsupport tools services respectively revenue increases critical information decisionsupport tools stemmed organic growth foreign exchange movements acquisitions increase services revenue primarily resulted acquisition cera revenue engineering segment 2082 million year ended november 30 2004 compared 1897 million year ended november 30 2003 representing increase 185 million 10 2004 revenue increase within engineering segment included increases revenue 190 million 23 million critical information decisionsupport tools offerings respectively partially offset 28 million reduction services revenue increase revenue sale critical information split nearly evenly organic growth favorable foreigncurrency movements organic growth primarily attributable recent updates existing products improved performance largest information offering specs standards reduction services revenue mainly reflects managements decision exit certain less profitable noncore service offerings cost revenue cost revenue 1844 million year ended november 30 2004 compared 1607 million year ended november 30 2003 representing increase 237 million 15 percentage revenue cost revenue remained relatively constant 465 2003 compared 468 2004 ability leverage fixed cost component cost structure offset foreign exchange effects expenses lower margins companies acquired 2004 continued increase effective rate royalty expense selling general administrative expenses selling general administrative expenses 1365 million year ended november 30 2004 compared 1199 million year ended november 30 2003 representing increase 166 million 14 increase due part increase corporate costs 65 million primarily associated proposed initial public offering including costs related section 404 sarbanesoxley act assembly current management team also reflected increase expenses 58 million 2004 acquisitions well foreigncurrency movements 44 million despite increased costs selling general administrative expenses remained constant percentage revenue result ability leverage costs increased revenue also selling general administrative expenses companies acquired 2004 less percentage revenue depreciation amortization expenses depreciation amortization expenses 96 million year ended november 30 2004 compared 89 million year ended november 30 2003 representing increase 07 million 8 increase primarily attributable assets acquired part 2004 acquisitions partially offset reduced depreciable asset base resulted part asset impairments compensation expense related equity awards compensation expense related equity awards 218 million year ended november 30 2004 reflecting costs offer purchase outstanding options shares capital stock issued pursuant stock option plans maintained one subsidiaries compensation expense related equity awards year ended november 30 2003 net gain sales assets net gain sales assets 55 million year ended november 30 2004 compared 02 million year ended november 30 2003 representing increase 53 million gain 2004 resulted sale corporate assets dissolution joint venture settlement revenuebased earnout arrangement relating noncore business sold 2002 gain 2003 resulted revenuebased earnout settled 2004 revenuebased earnout consideration received sale noncore business 2002 paid quarterly four years since earnout contingent upon future profitability business recognized gain sale received earnout proceeds impairment assets impairment assets 20 million year ended november 30 2004 compared 06 million year ended november 30 2003 representing increase 14 million 2004 wrote value decisionsupport tool developed energy segment 2003 wrote decisionsupport tool net periodic pension postretirement benefits net periodic pension postretirement benefits income 58 million year ended november 30 2004 compared 86 million year ended november 30 2003 representing decrease 28 million 32 decrease primarily due increased amortization actuarial losses resulting lower expected asset returns 2000 2002 earnings unconsolidated subsidiaries earnings unconsolidated subsidiaries 04 million year ended november 30 2004 compared 32 million year ended november 30 2003 representing decrease 28 million 86 decrease principally attributable dissolution joint venture early 2004 prior dissolution joint venture accounted using equity method net expense income net expense 32 million year ended november 30 2004 compared 11 million year ended november 30 2003 representing increase 21 million increase principally attributable foreigncurrency movements integration costs relating acquisitions operating income operating income 529 million year ended november 30 2004 compared 666 million year ended november 30 2003 representing decrease 137 million 21 decrease primarily attributable 218 million charge compensation expense related equity awards 2004 decrease unfavorable foreigncurrency movements well decline net periodic pension postretirement benefits income declines partially offset 55 million gain net sales assets well increases internal growth operating income energy segment 352 million year ended november 30 2004 compared 299 million year ended november 30 2003 representing increase 53 million 18 increase attributable increased sales acquisitions 2004 partially offset 20 million asset impairment higher corporate costs allocated segment operating income engineering segment 330 million year ended november 30 2004 compared 282 million year ended november 30 2003 representing increase 48 million 17 increase primarily comprised 51 million net gain sales assets well increase sales increases partially offset higher corporate costs allocated segment interest income interest income 11 million year ended november 30 2004 compared 14 million year ended november 30 2003 representing decrease 03 million 16 decrease attributable lower average interest rates interest expense interest expense 05 million year ended november 30 2004 compared 11 million year ended november 30 2003 representing decrease 06 million 59 decrease attributable fact substantially repaid longterm debt 2003 reduced levels borrowings 2004 provision income taxes effective tax rate 208 360 2004 2003 respectively lower effective tax rate 2004 principally due recognition tax benefit dividendsreceived deduction dividends preferred stock investment decrease also reflected tax benefit resulting release substantially valuation allowance foreign tax credits primarily related extension credit carryforward period included american jobs creation act 2004 loss discontinued operations net loss discontinued operations net 20 million year ended november 30 2004 compared 02 million year ended november 30 2003 loss greater 2004 primarily due fact purchased business fourth quarter 2003 quarterly results operations following table presents unaudited quarterly results operations last eight quarters read following table conjunction consolidated financial statements related notes included elsewhere form 10k prepared unaudited information basis audited consolidated financial statements table includes adjustments consisting normal recurring adjustments consider necessary fair presentation financial position operating results quarters presented operating results quarter necessarily indicative result future quarters full year 1fourthquarter 2004 revenue 1184 million higher first three quarters 2004 result among things acquisitions completed fourth quarter 2004 cera usa intermat particular acquisitions contributed 116 million revenue fourth quarter 2004 acquisitions contributed 67 million cost revenue 52 million selling general administrative expense fourth quarter 2004 since sales nondeferred subscriptions occur frequently fourth first quarters generally recognize greater percentage revenue income quarters additionally first quarter benefits ceraweek annual executive conference liquidity capital resources november 30 2005 2004 cash equivalents 1324 million 1245 million respectively amounts include 942 million september 2004 sale investment affiliate also historically generated strong cash flows operations result factors well availability funds credit facility believe sufficient cash meet working capital expenditure needs future capital requirements depend many factors including timing extent spending support product development efforts expansion sales marketing activities timing introductions new products increased administrative costs public company changing technology continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions additional funds may available terms acceptable us expect capital expenditures excluding potential acquisitions less 8 million 2006 cash flow net cash provided operating activities approximately 483 million year ended november 30 2005 net cash provided operating activities approximately 670 million year ended november 30 2004 decrease net cash provided operating activities principally attributable three items first 2005 disbursed 97 million cash payments made connection november 2004 offer exchange options shares second disbursed approximately 53 million 2005 stemming thirdquarter restructuring initiative additional 21 million charge noncash related accelerated vesting restricted shares last funded approximately 47 million initial public offering expenses 2005 see executive summaryrestructuring offering charges net cash provided operating activities 670 million 2004 compared 601 million 2003 increase 2003 2004 primarily attributable higher levels operating income 2004 higher levels cash flow resulting changes working capital net cash used investing activities amounted approximately 393 million year ended november 30 2005 net cash provided investing activities amounted approximately 346 million year ended november 30 2004 2005 purchases sales businesses relatively insignificant resulting net outflow cash 22 million contrast 2004 liquidated noncore assets acquired four businesses resulting net inflow cash 346 million additionally implemented cashmanagement policy third quarter 2005 resulting purchase 284 million investments 2005 net cash provided investing activities 346 million 2004 amount principally resulted 1049 million proceeds sales assets investment affiliate partially offset 703 million cash outflows related 2004 acquisitions net cash used investing activities 49 million 2003 related principally 41 million capital expenditures net cash used financing activities 04 million 2005 20 million 2004 442 million 2003 2004 uses cash relates principally 18 million cash dividend substantially amounts used 2005 2003 used repay debt credit facility january 7 2005 entered 125 million unsecured revolving credit agreement feature allowing us expand facility maximum 250 million based leverage time borrowings origination fees debt costs approximately 05 million amortized life agreement expires january 2010 credit agreement includes various operating financial covenants example covenants limit capitalized lease obligations borrowings leasing purchasing fixed assets outstanding given time 10 million limit unsecured indebtedness may outstanding given time indebtedness outstanding credit agreement 20 million prohibit us acquiring new businesses amount available credit agreement plus cash equivalents would less 15 million acquisition must also maintain fixed coverage charge ratio generally defined ratio consolidated ebitda plus rent expenses consolidated fixed charges exceeds 110 100 leverage ratio generally defined ratio indebtedness consolidated ebitda may exceed 200 100 november 30 2005 compliance covenants agreement borrowings outstanding agreement borrowing capacity agreement limited outstanding letters credit 19 million november 30 2005 use support insurance coverage leases certain customer contracts see also consolidated financial statements included elsewhere form 10k interest agreement payable periodically ranges libor plus 75 basis points libor plus 1375 basis points facility fee payable periodically ranges 15 basis points 25 basis points offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2005 future periods obligations expected settled cash addition guaranteed minimum royalty payments totaling 55 million november 30 2005 substantially expire 2006 historically make payments guarantees royalties paid sales exceeded minimum guarantees based guarantees outstanding november 30 2005 expect make payments guarantees 2006 expect contribute us pension plan 2005 since currently overfunded expect contribute 08 million 2006 uk pension plan currently underfunded see consolidated financial statements included elsewhere form 10k recent accounting pronouncement december 16 2004 financial accounting standards board fasb issued sfas 123 revised 2004 share based payment revision sfas 123 accounting stockbased compensation sfas 123r supersedes apb opinion 25 accounting stock issued employees amends fasb statement 95 statement cash flows generally approach sfas 123r similar approach described sfas 123 however sfas 123r requires sharebased payments employees including grants employee stock options recognized income statement based fair values pro forma disclosure longer alternative sfas 123r permits public companies adopt requirements using one two methods 1a modified prospective method compensation cost recognized beginning effective date based requirements sfas 123r sharebased payments granted effective date b based requirements sfas 123 awards granted employees prior effective date sfas 123r remain unvested effective date 2a modified retrospective method includes requirements modified prospective method described also permits entities restate based amounts previously recognized sfas 123 purposes pro forma disclosures either prior periods presented b prior interim periods year adoption use modified prospective method adopt sfas 123r effective december 1 2005 permitted sfas 123r currently account sharebased payments employees using apb opinion 25s intrinsic value method generally recognize compensation cost employee stock options subsequent november 30 2004 cancelled outstanding options consequently adoption sfas 123r impact results operations grant sharebased payments future adopted sfas 123r prior periods impact standard would approximated impact sfas 123 described disclosure pro forma net income earnings per share notes consolidated financial statements appearing elsewhere form 10k item 7a item 7 managements discussion analysis financial condition results operations following discussion financial condition operating results read conjunction selected financial data consolidated financial statements accompanying notes included form 10k ihs leading provider comprehensive source critical information insight sizable growing global information market customers rely products services facilitate crucial decisionmaking support key processes improve productivity provide informationdriven solutions meet customers needs include gaining insight global energy market movements managing product lifecycles meeting growing environmental challenges assessing national corporate security issues ihs customers range governments large multinational corporations small companies technical professionals business 180 countries heart critical information products services data obtained public sources third parties proprietary databases transform data critical information insight useful customers available need combining data proprietary thirdparty technology create graphical user interfaces interactive search navigation tools online databases deliver products primarily internetbased applications portals many cases combination data internetbased tools provides customer unique solution products also delivered traditional media transform critical information insight products services analysis teams experts vision source critical information insight critical information insightor bothare missioncritical customers achieving business goals anywhere around globe intend source trust rely come first targeted four specific information domains energy product lifecycle security environmental believe best opportunity source customers four strategic information domains represents significant market opportunity goal leading source critical information insight addition domains often interrelated interlinked thus intersections represent areas critical interest customers market opportunity ihs since four information domains represent areas customers needs critical information insight use domains set priorities design business objectives continue deliver critical information insight four information domains prepare analyze financial reports include four domains two operating segments energy segment focused primarily energy information domain engineering segment focused primarily product lifecycle security environmental information domains however discussed see business greatest opportunities serve customers occur intersection information domains accordingly may increasing overlap among information domains two operating segments expect overlap well ongoing evolution operating model drive changes way manage business changes continue way discuss business report operating segments may change executive summary subscriptionbased business model sell offerings primarily subscriptions result subscriptionbased business model historically high renewal rates generate recurring revenue cash flow generally recognize revenue subscriptions usually oneyear periods ratably term subscription however business seasonal aspects example firstquarter results benefited inclusion results ceraweek annual energy executive conference also janes business typically generates higher revenue operating profit second half year due timing certain publications subscriptions generally paid full within onetotwo months subscription period commences result timing cash flows generally precedes recognition revenue income due historical timing alignment sales correspond certain customers budget funding cycles cash flow provided operating activities tends higher first half fiscal year receive subscription payments ihs customers governments large multinational corporations well small companies technical professionals business 180 countries generate approximately half total revenue outside united states primary operations outside united states united kingdom canada switzerland operating profit outside united states historically exceeded domestic operating profit revenue offerings revenue type offering periods presented set forth acquisitions completed integrated 16 strategic acquisitions last three years relatively large others small filled strategic need larger acquisitions enable us achieve greater reach given domainfor example janes business similarly bolton tuckin acquisitions generally smaller tend consist databases datasets eds gcs provide strategic broadening critical information offerings bolton acquisitions often come little overhead require minimal integration deliver higher incremental margins larger acquisitions 2007 made following acquisitions •exploration data services eds october 2007 acquired assets livingston txbased eds subsidiary geodigit llc collectively maintain market extensive geological data covering subsurface gulf mexico 63 million using existing cash hand acquired assets include eds catalog interpreted formation tops 25000 offshore wells wwwedsmapscom geodigits mms offshore well data base maps well header data •environmax inc october 2007 acquired salt lake citybased environmax inc leading provider environmental management information systems solutions primarily government defense markets terms purchase included 221 million paid cash hand 65000 shares ihs stock issued oneyear lock valued 38 million total price 254 million net cash acquired •pcnalert august 2007 acquired assets pcnalert supplyedge inc pasadena calif 10 million allcash transaction pcnalert delivers leading component event management solutions including product change notifications endoflife notifications electronic components industry •john herold inc herold august 2007 acquired norwalk ctbased herold independent research firm provides indepth analyses key financial operational data 400 global oil gas companies acquired herold approximately 472 million net acquired cash using existing cash hand •strategic decision group corporations oil gas consulting practice sdg july 2007 acquired assets sdg provider strategic consulting services leading enterprises global oil gas industry 82 million using 51 million existing cash onhand 31 million note payable sdg managed service within cambridge energy research associates cera ihs company •janes information group janes june 2007 executed agreement woodbridge international holdings sa woodbridge purchase janes leading provider information defense industry governments parties completed transaction date terms transaction included delivery 4399000 shares class common stock valued 1715 million less 01 million cash exchange outstanding equity debt janes woodbridge agreed threeyear lockup agreement restricts ability sell ihs shares •geological consulting services gcs june 2007 acquired inventory assets gcs houstona provider formation tops data files electronic media covering south texas east texas north louisiana south arkansas mississippi alabama floridafor 82 million using existing cash hand •rapidata march 2007 acquired certain assets including rapidata™ product well known comprehensive well test pressure completions data western canadian sedimentary basin ihs purchased rapidata rapid technology corporation calgary alberta canada approximately 63 million using existing cash hand •geological data services inc gds january 2007 acquired majority assets gds addison texas provider interpreted subsurface data formationtops covering permian basin us midcontinent rocky mountain regions acquired gds 80 million using existing cash hand purchase prices 2007 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands 2006 made following acquisitions •canadian hydrodynamics ltd chd july 2006 acquired assets calgary canadabased chd approximately 35 million using existing cash hand chd leading provider comprehensive drillstem test information western canadian sedimentary basin chd database available exclusively ihs accumap one energy product offerings partner dataset since 1995 •geoplus june 2006 acquired assets geoplus tulsa oklahoma approximately 421 million using existing cash hand geoplus pcbased software family petra® popular platform used oil gas companies analyze subsurface data existing oil gas wells •construction research communications limited crc june 2006 acquired crc limited london uk approximately 58 million net acquired cash using existing cash hand crc created building research establishment bre emap construct deliver wide range bre products relating construction industry ranging environmental issues fire safety •cds december 2005 acquired assets contentanddataservices cds business approximately 330 million serves several industries targeted engineering segment core product business extensive database includes technical attributes alternatives obsolescence environmental data electronic component parts also made three acquisitions 2005 aggregate purchase price approximately 35 million consolidated financial statements include results operations cash flows acquisitions beginning respective dates acquisition segments table presents split revenue type offering two segments results operations primarily driven organic growth acquisitions organic growth driven several factors including ability penetrate existing customers generate new customers raise prices introduce new offerings update existing offerings execute sales marketing plans world economic events pricing information many sales customized annual basis meet individual customer needs based number factors including number customer locations number simultaneous users breadth content included offering light customized nature many offerings pricing terms also customized addition difficulty contrasting price changes period exacerbated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue products period global operations serve worlds largest corporations across multiple industries well governments organizations 100 countries generated revenue 3329 million outside united states year ended november 30 2007 represented almost half total revenue primary operations outside united states united kingdom canada switzerland operating profit outside united states historically exceeded domestic operating profit set forth years ended november 30 revenue indicated country based location subsidiary generating revenue differs cases location customer international operations expose us foreigncurrency risk fluctuations foreigncurrency rates increased revenues approximately 150 million 01 million 27 million years ended november 30 2007 2006 2005 respectively increased decreased operating income approximately 44 million 33 million 25 million respective periods see qualitative quantitative disclosures market riskforeign currency risk restructuring offering charges fourth quarter 2006 executed restructuring initiative principally affecting engineering segment initiative undertaken focus offerings growth potential also added benefit trimming cost structure course restructuring reduced aggregate workforce approximately 40 employees 25 million restructuring charge incurred entirety fourth quarter 2006 comprised entirely employee severance termination benefits costs amount disbursed 04 million november 30 2006 similarly third quarter 2005 executed restructuring initiative affecting engineering segment certain corporate costs initiative undertaken reduce costs integrate operations previous acquisitions streamline data delivery processes realign marketing efforts support core product initiatives course restructuring reduced aggregate workforce 100 employees closed two offices one us one uk also incurred 08 million 55 million costs associated 2006 secondary 2005 initial public offerings respectively required expense costs since issue shares connection either offering rather shares sold exiting shareholders us discontinued operations third quarter 2005 classified business energy segment held sale business held sale manufacturing operation part core operations continually evaluate opportunities align business activities within core operations first quarter 2006 revised estimate wrote value assets discontinued operation 10 million based experience date sales process third quarter 2006 sold business unrelated third party approximately 03 million recognized loss less 01 million sale business related results operations shown discontinued operation net tax consolidated statement operations related net loss discontinued operation approximately 19 million 23 million 20 million years ended november 30 2006 2005 2004 respectively discontinuing business material impact results operations liquidity items cost operating business incur cost revenue primarily acquire manage deliver critical information decisionsupport tools costs include royalty payments thirdparty information providers well personnel information technology occupancy costs related activities royalty payments generally vary based subscription sales engineering segment cost revenue services offerings primarily comprised personnel costs selling general administrative expenses primarily include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly variable volume sold particularly energy segment generally pay royalties critical information within engineering segment portion critical information revenue driven sale specifications standards content obtained sdos stockbased compensation expense issued equitybased compensatory awards primarily restricted stock units record cost vesting period none exceed five years november 30 2007 27 million outstanding nonvested shares options granted officers employees nonemployee directors form performance shares performance units restricted shares restricted stock units stock options assuming performance measures met expect stockbased compensation expense next three years approximate following projection includes annual award grant made february 1 2008 reflect expected future award grants thereafter pension postretirement benefits net periodic pension postretirement benefits primarily comprised us pension income uk pension expense us postretirement benefit expense shown net basis net periodic pension postretirement benefits income comprised following first quarter 2006 notified us employees certain changes adopted human resources committee board directors regarding us pension postretirement benefit plans started accounting impact changes beginning february 2006 communication date changes employees amendments us plans impacted plans follows •us pension planpreviously engineering segment corporate employees entitled participate pension plan may 2006 usbased employees became eligible participate plan nearly doubling active participants time future benefit earned plan changed resulting simplified calculation reduced future benefit compared prior calculation grandfathered employees •postretirement benefit planthe amendment limited benefits paid future healthcare costs resulted postretirement benefit income 2007 2006 opposed expense 2005 provision income taxes effective tax rate 317 315 316 years ended november 30 2007 2006 2005 respectively expect fiscal year 2008 effective tax rate slightly higher fiscal year 2007 rate see consolidated financial statements included elsewhere form 10k critical accounting policies estimates consolidated financial statements prepared accordance accounting principles generally accepted united states gaap apply gaap must make significant estimates affect reported amounts assets liabilities revenues expenses related disclosure contingent assets liabilities many instances could reasonably used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable circumstances evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions nonstandard agreements make judgments determine appropriately account judgments generally involve assessments regarding matters •whether sufficient legally binding terms conditions exist •whether customer acceptance achieved evaluate binding nature terms conditions agreements well whether customer acceptance achieved based managements judgments appropriate advice legal counsel historically judgments accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations account business acquisitions accordance provisions sfas 141 business combinations using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions regarding multiple highly subjective variables including respect future cash flows discount rates asset lives use different valuation models therefore require considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable inherently uncertain depending size purchase price particular acquisition well mix intangible assets acquired financials results could materially impacted application different set assumptions estimates goodwill intangible assets review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable examples events changes circumstances many subjective nature include significant negative industry economic trends significant changes manner use acquired assets strategy significant decrease market value asset significant change legal factors business climate could affect value asset assess impairment comparing fair value identifiable intangible asset goodwill carrying value determination fair value involves significant management judgment described impairments expensed incurred specifically test impairment follows intangible assets subject amortization intangible asset subject amortization reviewed impairment indicators present accordance sfas 144 accounting impairment disposal longlived assets compare expected undiscounted future operating cash flows associated finitelived assets respective carrying values determine asset fully recoverable expected future operating cash flows sufficient recover carrying value estimate fair value asset impairment recognized carrying amount asset recoverable carrying value exceeds fair value projected cash flows require several assumptions related among things relevant market factors revenue growth operating margins believe assumptions reasonable changes assumptions may material impact financial results indefinitelived intangible assets accordance sfas 142 goodwill intangible assets perform impairment test indefinitelived intangible assets comparing assets fair value carrying value least annual basis impairment charge recognized assets estimated fair value less carrying value estimate fair value based projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill accordance sfas 142 test goodwill impairment reporting unit level defined reference sfas 131 disclosures segments enterprise related information least annual basis reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach •we first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values •in second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting units goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess use different estimates assumptions within discounted cash flow model determining fair value reporting units using methodology discounted cash flow model could result different values reporting units could result impairment charge income taxes account income taxes accordance sfas 109 accounting income taxes significant judgment required determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made accounting income taxes requires us exercise judgment known issues discussion tax authorities transactions yet settled result maintain tax liability contingencies regularly assess adequacy tax liability record liabilities known tax contingencies period probable liability incurred adjust tax contingencies period probable actual results differ estimates actual results differ estimates used adjust estimates future periods operating results financial position could materially affected july 2006 financial accounting standards board fasb issued fasb interpretation 48 accounting uncertainty income taxesan interpretation fasb statement 109 fin 48 provides clarification related process associated accounting uncertain tax positions recognized consolidated financial statements fin 48 prescribes morelikelythannot threshold financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance related among things classification accounting interest penalties associated tax positions disclosure requirements required adopt fin 48 december 1 2007 first day 2008 fiscal year currently evaluating impact adopting fin 48 consolidated financial statements pension postretirement benefits defined benefit plans cover majority employees us uk also postretirement plans us provide medical benefits retirees eligible dependents accounting plans subject guidance provided sfas 87 employers accounting pensions sfas 106 employers accounting postretirement benefits pensions sfas 158 employers accounting defined benefit plans postretirement plans statements require management make certain assumptions relating longterm rate return plan assets discount rates used measure future obligations expenses salary increases inflation healthcarecosttrend rates assumptions believe accounting estimates related pension postretirement plans critical accounting estimates highly susceptible change period based market conditions key assumptions measuring plan obligations include discount rate future salary increases longterm expected return plan assets various demographic assumptions follows •the methodology used determine discount rate discounts projected plan cash flows measurement date using spot rates provided citigroup pension discount curve single discount rate computed present value benefit cash flows using single rate equals present value computed using citigroup pension discount curve similar exercise performed using high yield bonds values compared changes corporate bond indices determine discount rate •asset returns based upon anticipated average rate earnings expected invested funds plan longterm •salary increase assumptions based upon historical experience anticipated future management actions •demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience depending assumptions estimates used net periodic pension postretirement benefit income could vary within range outcomes material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2007 would following effects 2007 pension expense stockbased compensation one sharebased compensation plan amended restated ihs inc 2004 longterm incentive plan 2004 longterm incentive plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stockbased awards covered employee annual incentive awards amended restated ihs inc 2004 directors stock plan subplan 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan november 30 2007 approximately 24 million stockbased awards outstanding approximately 12 million performancebased awards assuming maximum potential payout performance awards vesting 03 million performancebased award shares occur february 29 2008 based certain financial performance levels met fiscal year 2007 vesting remaining performance shares principally based achieving certain financial performance levels fiscal year 2009 possible reduction payout additional designated performance metrics met 2008 november 30 2007 estimated maximum number shares issuable vest based 2007 actual performance projected performance 2008 2009 projected sharebased compensation expense reflects estimate change actual performance levels achieved company could result change actual amount stock based compensation recognize example event achieve performance metrics 2009 performancebased stock compensation expense would substantially decrease believe assumptions related performancebased stock awards critical susceptible change period based market uncertain conditions beyond control determine fair value stock options using blackscholes pricing model valuation model requires management make assumptions apply judgment determine fair value awards assumptions judgments include estimating •the future volatility stock price •expected dividend yield •future employee turnover rates •future employee stock option exercise behaviors particular significant judgment required estimating future volatility stock price since publicly traded two years volatility rate based basket peercompanystock prices determination company considered peer highly subjective given 03 million options outstanding november 30 2007 changes assumptions likely materially affect financial results however number options granted materially increases future likelihood changes valuation assumptions could materially impact financial results also increases results operations set forth results operations expressed percentage revenue set forth revenue operating income energy engineering segments years ended november 30 2007 2006 2005 certain sharedservices functions allocated operating segments unallocated amounts include corporatelevel restructuring offering charges stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gains sales corporate assets year ended november 30 2007 compared year ended november 30 2006 revenue 6884 million year ended november 30 2007 compared 5508 million year ended november 30 2006 increase 1376 million 25 revenue increased primarily due organic growth contributed 640 million acquisitions grew revenue 587 million impact foreign currency added 150 million revenue energy segment 3735 million year ended november 30 2007 compared 2943 million year ended november 30 2006 increase 792 million 27 increase principally due organic growth contributed 517 million additionally acquisitions added 208 million favorable foreign currency movements grew revenue 68 million organic growth year ended november 30 2007 primarily driven price increases growth certain criticalinformation subscription products decisionsupport tools stronger results ceraweek higher demand services favorable energyindustry conditions revenue engineering segment 3149 million year ended november 30 2007 compared 2565 million year ended november 30 2006 increase 584 million 23 acquisitions added 379 million organic growth contributed 123 million also foreign currency movements grew revenue 82 million organic growth partially driven sales onceeverythreeyear release certain engineering standard boiler pressure vessel code also increased sales specificationsandstandards partsmanagement offerings partially offset lower services revenue decreased due fourth quarter2006 restructuring cost revenue cost revenue 3026 million year ended november 30 2007 compared 2524 million year ended november 30 2006 increase 501 million 20 percentage revenue cost revenue decreased 440 458 margins within energy segment increased principally due additional revenue discussed coupled ability leverage relatively fixedcost structure margins within engineering segment declined slightly despite increased revenue discussed relatively flat effective royalty rates onceeverythreeyear release certain engineering standard boiler pressure vessel code janes acquisition carried lower margins overall portfolio additionally margins negatively impacted modification certain agency relationships selling general administrative expenses selling general administrative expenses sga 2496 million year ended november 30 2007 compared 2007 million year ended november 30 2006 increase 489 million 24 stockbased compensation expense included sga increased 105 million remaining 384 million sga increase 116 million organic 228 million due acquisitions 40 million related foreignexchange movements percentage revenue excluding stockbased compensation expense sga 320 year ended november 30 2007 330 year ended november 30 2006 organic increase sga related several factors including increased selling expense higher sales revised commission structure costs associated human resources information system implementation ongoing transformational initiatives meritbased salary increases depreciation amortization expenses depreciation amortization expenses 255 million year ended november 30 2007 compared 157 million year ended november 30 2006 increase 98 million 62 increase primarily due acquisitions operating income operating income 1166 million year ended november 30 2007 compared 802 million year ended november 30 2006 increase 364 million 45 percentage revenue operating income increased 169 year ended november 30 2007 146 year ended november 30 2006 operating income energy segment 1219 million year ended november 30 2007 compared 829 million year ended november 30 2006 increase 391 million 47 increase primarily attributable increased revenue discussed coupled ability leverage relatively fixedcost structure operating income engineering segment 600 million year ended november 30 2007 compared 468 million year ended november 30 2006 increase 132 million 28 operating income increased due sales onceeverythreeyear release certain engineering standard boiler pressure vessel code additionally increased sales subscriptionsbased business partially offset lower services revenue due fourthquarter2006 restructuring additionally operating income negatively impacted modification certain agency relationships operating expenses shared services 653 million year ended november 30 2007 compared 495 million year ended november 30 2006 increase 158 million 32 increased stockbased compensation expense contributed 85 million costs associated human resources information system implementation ongoing transformational initiatives meritbased salary increases also contributed increase provision income taxes effective tax rate year ended november 30 2007 317 compared 315 year ended november 30 2006 effective tax rate 2007 reflects benefits release valuation allowance certain deferredtax assets including foreigntax credits release certain tax reserves offset impact changes certain estimates effective tax rate 2006 reflects benefits release certain tax reserves taxexempt interest income offset increase valuation allowance realizability foreigntax credits year ended november 30 2006 compared year ended november 30 2005 revenue 5508 million year ended november 30 2006 compared 4761 million year ended november 30 2005 increase 747 million 16 revenue increased primarily due organic growth contributed 603 million acquisitions contributed approximately 156 million revenue energy segment 2943 million year ended november 30 2006 compared 2423 million year ended november 30 2005 increase 520 million 21 increase principally due organic growth contributed 463 million also acquisitions contributed 50 million remainder change attributable foreigncurrency movements organic growth 2006 driven principally price increases expanding subscription base higher onetime sales certain data favorable energyindustry conditions revenue engineering segment 2565 million year ended november 30 2006 compared 2338 million year ended november 30 2005 increase 227 million 10 increase primarily driven organic growth increased revenue 140 million acquisitions also contributed 107 million partially offset foreigncurrency movements organic growth resulted primarily price increases increased sales within specificationsandstandards partsmanagement offerings cost revenue cost revenue 2524 million year ended november 30 2006 compared 2282 million year ended november 30 2005 increase 242 million 11 percentage revenue cost revenue decreased 458 2006 479 2005 margins within energy segment increased primarily due increased revenue discussed relatively fixedcost structure margins within engineering business benefited cost savings 2005 restructuring relatively flat effective royalty rates selling general administrative expenses selling general administrative expenses 2007 million year ended november 30 2006 compared 1668 million year ended november 30 2005 increase 339 million 20 stockbased compensation expense increased 141 million year including 47 million pertaining retirement former chief executive officer fourth quarter 2006 acquisitions contributed 37 million increase ceo retirement costs added 19 million remainder increase primarily due increased salesandmarketing backoffice costs support increased sales corporate level increased costs related first year publicly traded company cost savings 2005 restructuring partially offset percentage revenue selling general administrative expenses excluding stockbased compensation expense 330 year ended november 30 2006 341 year ended november 30 2005 depreciation amortization expenses depreciation amortization expenses 157 million year ended november 30 2006 compared 114 million year ended november 30 2005 increase 43 million 38 increase primarily due acquisitions restructuring offering charges restructuring offering charges 31 million year ended november 30 2006 compared 137 million year ended november 30 2005 decrease 106 million restructuring initiative undertaken 2006 much smaller scope expense 25 million 2006 compared 82 million 2005 additionally offering charges related secondary offering 08 million much smaller associated initial public offering 55 million operating income operating income 802 million year ended november 30 2006 compared 619 million year ended november 30 2005 increase 183 million 30 percentage revenue operating income increased 146 2006 130 2005 operating income energy segment 829 million year ended november 30 2006 compared 634 million year ended november 30 2005 increase 195 million 31 increase primarily attributable increased revenue discussed coupled relatively fixedcost structure operating income engineering segment 468 million year ended november 30 2006 compared 284 million year ended november 30 2005 increase 184 million 65 increase primarily driven increased sales combined costs savings resulting thirdquarter 2005 restructuring also incurred 25 million restructuring charges 2005 2006 operating expenses shared services 495 million year ended november 30 2006 compared 299 million year ended november 30 2005 increase 196 million 66 increased stockbased compensation expense contributed 164 million costs associated ongoing transformational initiatives meritbased salary increases also contributed increase provision income taxes effective tax rate year ended november 30 2006 315 compared 316 year ended november 30 2005 effective tax rate 2006 reflects benefits release certain tax reserves tax exempt interest income offset increase valuation allowance realizability foreign tax credits effective tax rate 2005 reflects benefit favorable outcome tax audits period changes certain estimates impact nondeductible items liquidity capital resources november 30 2007 cash equivalents 1485 million shortterm investments 105 million virtually debt generated strong cash flows operations last years result factors well availability funds credit facility believe sufficient cash meet anticipated working capital expenditure needs future capital requirements depend many factors including timing extent spending support product development efforts expansion sales marketing activities timing introductions new products ongoing companywide initiatives changing technology continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions additional funds may available terms acceptable us expect capital expenditures excluding potential acquisitions approximately 14 million 2008 share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee later 2006 board directors approved additional programa stock buyback programwhereby ihs authorized acquire one million shares per year open market fully offset dilutive effect employee equity programs program renewed board directors late 2007 fiscal year 2008 2007 repurchased 689962 shares class common stock approximately 292 million 4229 per share pursuant stock buyback program 159251 shares approximately 93 million 5851 per share related shares withheld taxes cash flow net cash provided operating activities 1417 million year ended november 30 2007 compared 1157 million year ended november 30 2006 increase principally due business growing profitably year primarily due increased pricing expanding subscription base increased sales positive impact acquisitions subscriptionbased business model typically generates high rate cash flow aided following •relatively low levels required capital expenditures •positive working capital characteristics generally require substantial working capital increases support growth •a cashfortax rate continues trend lower effective tax rate •our wellcapitalized balance sheet positive cash flow impact growing business 2007 partially offset following •annual bonus payments paid first quarter year approximately 7 million higher 2007 2006 •receivable collections robust end 2006 enhancing cash flow expense 2007 •the effective rate cash paid taxes increased slightly 2007 net cash provided operating activities 1157 million year ended november 30 2006 compared 483 million year ended november 30 2005 increase principally due business growing profitably year primarily due increased pricing expanding subscription base increased sales positive impact acquisitions subscriptionbased business model typically generates high rate cash flow aided items noted additionally yearoveryear comparison aided unusually strong receivable collections end 2006 net cash used investing activities 1338 million year ended november 30 2007 compared 723 million year ended november 30 2006 increase cash used investing activities primarily driven two events first disbursed 302 million acquisitions 2007 2006 second 85 million net cash outflow 2007 due purchases salesmaturities investments contrast 257 million net cash inflow 2006 due purchases salesmaturities investments net cash used investing activities 723 million year ended november 30 2006 compared 393 million year ended november 30 2005 increase net cash used primarily attributable increased acquisition activity 2006we disbursed 845 million 2006 acquisitions opposed 35 million 2005and increased capital expenditures offset greater purchases investments 2005 year implemented cashmanagement policy net cash used financing activities 380 million year ended november 30 2007 net cash provided financing activities 28 million year ended november 30 2006 difference cash flows primarily caused additional 309 million disbursed 2007 buyback shares additionally recognized 95 million tax benefit equity compensation plans discussed 2006 net cash provided financing activities 28 million year ended november 30 2006 net cash used financing activities 04 million year ended november 30 2005 december 1 2005 first day fiscal 2006 year adopted sfas 123r sharebased payment standard amended sfas 95 statement cash flows require excess tax benefits reported financing cash inflow rather reduction taxes paid accordingly recognized 105 million benefit 2006 relating vesting equity awards period amount partially offset 76 million buyback shares 2006 credit facility september 7 2007 entered amended restated credit agreement revolver 385 million unsecured revolving credit agreement allows us certain conditions increase facility maximum 500 million agreement expires september 2012 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling four quarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 50 basis points 125 basis points agent banks base rate commitment fee payable periodically ranges 10 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations capital lease obligations maximum leverage interest coverage ratios defined revolver november 30 2007 compliance covenants agreement outstanding borrowings however outstanding letters credit totaling approximately 18 million november 30 2007 served reduce amount available 3832 million offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2007 future periods obligations expected settled cash expect contribute us pension plan 2008 since currently overfunded 2008 expect contribute 27 million uk pension plan 03 million supplemental income plan currently underfunded see consolidated financial statements included elsewhere form 10k recent accounting pronouncements july 2006 financial accounting standards board fasb issued fasb interpretation 48 accounting uncertainty income taxesan interpretation fasb statement 109 fin 48 provides clarification related process associated accounting uncertain tax positions recognized consolidated financial statements fin 48 prescribes morelikelythannot threshold financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance related among things classification accounting interest penalties associated tax positions disclosure requirements required adopt fin 48 december 1 2007 first day 2008 fiscal year currently evaluating impact adopting fin 48 consolidated financial statements september 2006 fasb issued sfas 157 fair value measurements sfas 157 among requirements sfas 157 defines fair value establishes framework measuring fair value also expands disclosure use fair value measure assets liabilities sfas 157 effective beginning first fiscal year begins november 15 2007 required adopt sfas 157 december 1 2007 subsequent standards issuance fasb issued exposure draft provides one year deferral implementation sfas 157 nonfinancial assets liabilities expect adoption sfas 157 material impact financial statements september 2006 fasb issued sfas 158 employers accounting defined benefit pension postretirement plansan amendment fasb statements 87 88 106 132r sfas 158 effective annual fiscal year ending november 30 2007 standard requires employer recognize funded status defined benefit pension andor postretirement benefit plans asset liability statement financial position funded status difference projected benefit obligation market value plan assets defined benefit pension plans difference accumulated benefit obligation market value plan assets post retirement benefit plans sfas 158 also requires employer recognize changes funded status year changes occur comprehensive income result adoption sfas 158 prepaid asset related overfunded us defined benefit pension plan decreased 33 million liabilities related defined benefit pension postretirement plans decreased 21 million accumulated comprehensive income net related deferred income taxes decreased approximately 09 million november 30 2007 portion change accumulated comprehensive income related adoption sfas 158 recognized statement operations component net periodic pension benefit income future periods amount estimated approximately 35 million tax 2008 addition statement requires companies measure plan assets obligations date yearend statement financial position limited exceptions measurement date provision effective annual 2008 year end impact financial statements currently measure plan assets obligations fiscal yearend impact adopting sfas 158 displayed table december 2007 fasb issued sfas 141r business combinations sfas 160 accounting reporting noncontrolling interest consolidated financial statements amendment arb 51 new standards significantly change accounting reporting business combination transactions noncontrolling minority interests consolidated financial statements sfas nos 141r 160 required adopted simultaneously effective first annual reporting period beginning december 15 2008 thus required adopt standards december 1 2009 first day 2010 fiscal year earlier adoption prohibited currently evaluating impact adopting sfas nos 141r sfas 160 consolidated financial statements item 7a item 7 management’s discussion analysis financial condition results operations following discussion financial condition operating results read conjunction information disclosures elsewhere form 10k including “selected financial data” consolidated financial statements accompanying notes website social media disclosure following discussion includes forwardlooking statements described “cautionary note regarding forwardlooking statements” form 10k detailed discussion risks uncertainties could cause actual results events differ materially forwardlooking statements outlined “risk factors” form 10k executive summary business overview leading source information insight analytics critical areas shape todays business landscape businesses governments 150 countries around globe rely comprehensive content expert independent analysis flexible delivery methods aim embed solutions within entire spectrum customers’ organization enabling executive level capital deployment strategies following decisionmaking activities throughout organizations frontline employees tasked managing company’s complex core daily operations business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa committed sustainable profitable growth employ approximately 8800 people 32 countries around world inherent strategies firm commitment put customers first everything best serve customers close possible organized geographies three business segments americas emea apac integrated global organization designed make easier customers business us providing cohesive consistent effective salesandmarketing approach local region subscriptions represented approximately 77 percent total revenue 2014 subscription agreements typically annual noncancellable term subscription may contain provisions minimum monthly payments subscription revenue timing cash flows generally precedes recognition revenue income therefore typically good revenue visibility business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest quarterly levels revenue profit also experience eventdriven seasonality business instance ihs energy ceraweek annual energy executive gathering held second quarter another example biennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every year recently recognized benefit connection bpvc release third quarter 2013 2014 focused advancing strategic priorities commercial expansion operational excellence described • commercial expansion introduced number new products analytics 2014 including five major technical releases ihs connect business market intelligence platform provides efficient access industry analysis indepth market research economic forecasts made progress ihs engineering workbench two major commercial launches engineering360 knowledge collections well completing development releases energy platforms ihs sphera operational excellence risk management enterprise platform also made progress expanding customer relationships leveraging global footprint 2014 focused working target 1000 accounts includes existing customers potential new customers building business momentum global field sales teams inside sales infrastructure ecommerce platform • operational excellence continue concentrate focus improving internal systems processes allow us efficient every day efforts designed allow us capture new growth expand margins fully leverage global infrastructure 2014 made progress developing sales systems pipelines opportunity management addition refining erp system accounting customer care centers excellence 2015 expect continue focus key strategic priorities well expand business strategic acquisitions key performance indicators believe revenue growth adjusted ebitda dollars margin free cash flow key measures success adjusted ebitda free cash flow financial measures prepared accordance us generally accepted accounting principles nongaap revenue growth review yearoveryear revenue growth segments key measure success addressing customer needs region world operate measure revenue growth terms organic acquisitive foreign currency impacts define components follows • organic define organic revenue growth total revenue growth continuing operations factors acquisitions foreign currency movements drive type revenue growth value realization pricing expanding wallet share existing customers upselling crossselling efforts securing new customer business sale new enhanced product offerings • acquisitive define acquisitionrelated revenue generated acquired products services date acquisition first anniversary date acquisition type growth comes result strategy purchase integrate leverage value assets acquire also include impact divestitures growth metric • foreign currency define foreign currency impact revenue difference current revenue current exchange rates current revenue corresponding prior period exchange rates due significance revenue transacted foreign currencies measure impact foreign currency movements revenue also measure report revenue transaction type understanding revenue transaction type helps us identify broad changes product mix summarize transaction type revenue following two categories • subscription revenue represents significant majority revenue comprised subscriptions various information offerings software maintenance • nonsubscription revenue represents consulting eg research analysis modeling forecasting services singledocument product sales software license sales associated services conferences events advertising nonsubscription products services important part business complement subscription business creating strong comprehensive customer relationships also recently begun measuring reporting revenue product category helps us understand performance based capabilities within key vertical industries horizontal workflows nongaap measures use nongaap financial measures ebitda adjusted ebitda free cash flow operational financial decisionmaking believe measures allow us focus deem reliable indicators ongoing operating performance adjusted ebitda ability generate cash flow operations free cash flow also believe investors may find nongaap financial measures useful reasons although caution readers nongaap financial measures substitute gaap financial measures disclosures none nongaap financial measures recognized terms gaap purport alternative net income operating cash flow indicator operating performance gaap measure throughout section management’s discussion analysis website wwwihscom provide reconciliations nongaap financial measures directly comparable gaap measures ebitda adjusted ebitda adjusted ebitda used many investors research analysts investment bankers lenders assess operating performance example measure similar adjusted ebitda required lenders term loan revolving credit agreements define ebitda net income plus minus net interest plus provision income taxes depreciation amortization definition adjusted ebitda excludes primarily noncash items management consider useful assessing operating performance eg stockbased compensation expense restructuring charges acquisitionrelated costs asset impairment charges gain loss sale assets gain loss debt extinguishment pension marktomarket settlement expense income loss discontinued operations free cash flow define free cash flow net cash provided operating activities less capital expenditures companies use identical calculations presentation nongaap financial measures may comparable similarly titled measures companies however measures still useful evaluating performance peer companies believe measures provide users valuable insight key components gaap financial disclosures example company higher gaap net income may appealing investors net income heavily comprised gains asset sales likewise eliminating effects interest income expense moderates impact company’s capital structure performance strategic acquisitions paid total purchase price approximately 210 million acquisitions completed year ended november 30 2014 paid total purchase price approximately 16 billion acquisitions completed year ended november 30 2013 paid total purchase price approximately 306 million acquisitions completed year ended november 30 2012 consolidated financial statements include results operations cash flows business combinations beginning respective dates acquisition acquisitions key part growth strategy expect continue important us focus acquisitions longterm growth potential target highgrowth markets fill strategic need business portfolio seek provide comprehensive solutions customers example acquisition r l polk acquisition july 2013 supported value creation proposition providing comprehensive global view automotive value chain customers acquisitions also provide us increased organic growth potential integrate new offerings customers detailed description recent acquisition activity see item 8 financial statements supplementary data notes consolidated financial statements note 3 part ii form 10k global operations approximately 40 percent revenue transacted outside united states however 20 percent revenue transacted currencies us dollar result strengthening us dollar relative certain currencies historically resulted negative impact revenue conversely weakening us dollar historically resulted positive impact revenue however impact operating income diminished due certain operating expenses denominated currencies us dollar largest foreign currency revenue exposures order magnitude british pound canadian dollar euro see quantitative qualitative disclosures market risk foreign currency exchange rate risk additional discussion impacts foreign currencies operations pricing information customize many sales offerings meet individual customer needs base pricing number factors including number customer locations number simultaneous users various segmentation methods customer size breadth content included offering level offering customization employ difficult us evaluate pricing impacts periodtoperiod basis analysis complicated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue items cost operating business incur cost revenue primarily acquiring managing delivering offerings costs include personnel information technology occupancy costs well royalty payments thirdparty information providers royalty payments based level subscription sales certain product offerings sales general administrative expenses include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly commensurate volume sold particularly subscriptionbased business revenue driven sale specifications standards portion content obtained standards development organizations stockbased compensation expense issue equity awards employees almost exclusively restricted stock units record cost respective vesting periods typical vesting period three years november 30 2014 approximately 23 million unvested stockbased awards outstanding approximately 13 million performancebased awards majority annual grants highestranking employees performancebased awards vesting performance shares granted 2013 2014 principally based achieving certain financial performance levels fiscal years 2015 2016 respectively november 30 2014 believe target number shares issuable 2015 2016 fiscal years vest based meeting certain performance targets using estimates addition estimated 2015 grants projected stockbased compensation expense 2015 expected approximately 150160 million grant date fair values 2015 grants differ projections change actual performance levels achieve could result change actual amount stockbased compensation recognize example event achieve projected performance metrics 2015 2016 stockbased compensation expense could decrease conversely exceed projected performance metrics stockbased compensation could increase pension postretirement benefits provide following pension postretirement plans • us retirement income plan us rip frozen definedbenefit plan covers substantial number employees united states • uk retirement income plan uk rip frozen definedbenefit plan covers limited number employees united kingdom • postretirement medical plan contributory fixed payment plan provides access group rates us employees meet specified conditions • supplemental income plan sip plan nonqualified pension plan certain company personnel effective july 11 2014 discontinued future accruals us rip sip lieu future accruals us rip sip provide annual company nonelective contribution 401k accounts affected eligible employees active employees end calendar year critical accounting policies estimates consolidated financial statements prepared accordance us gaap applying us gaap make significant estimates judgments affect reported amounts assets liabilities revenues expenses well disclosure contingent assets liabilities believe accounting estimates judgments reasonable made many instances alternative estimates judgments would also acceptable addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions approximately 77 percent 2014 revenue derived sale subscriptions initially deferred recognized ratably delivered subscription period standard agreements typically require significant judgments revenue recognized nonstandard agreements generally make judgments revenue recognition matters whether sufficient legally binding terms conditions exist whether customer acceptance received review customer agreements utilize advice legal counsel appropriate evaluating binding nature contract terms conditions well whether customer acceptance achieved estimate progress consulting project deliverables based knowledge judgment current status individual consulting engagements historically judgments estimates reasonably accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions several highly subjective variables including future cash flows discount rates asset lives also different valuation models component selection requires considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable recognize assumptions inherently uncertain depending size purchase price particular acquisition mix intangible assets acquired purchase price allocation could materially impacted applying different set assumptions estimates goodwill intangible assets make various assumptions goodwill intangible assets including estimated useful lives whether potential impairment events occurred perform impairment analyses carrying values goodwill indefinitelived intangible assets least annually additionally review carrying value goodwill intangible assets whenever events changes circumstances indicate carrying amounts may recoverable examples events changes circumstances many subjective nature include following •significant negative industry economic trends •a significant change manner use acquired assets strategy •a significant decrease market value asset •a significant change legal factors business climate could affect value asset impairment indicator present perform analysis confirm whether impairment actually occurred amount required charge finitelived intangible assets review carrying amount least annually determine whether current events circumstances require adjustment carrying amount finitelived intangible asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived exercise judgment selecting assumptions used estimated future undiscounted cash flows analysis impairment measured amount carrying value assets exceeds fair value indefinitelived intangible assets goodwill first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value primarily based estimated discounted cash flows exercise judgment selecting assumptions used estimated discounted cash flows analysis goodwill determine fair value reporting unit compare fair value reporting unit carrying value carrying value exceeds fair value reporting unit calculate compare implied fair value goodwill carrying amount goodwill record impairment charge excess carrying value implied fair value determination fair value requires number significant assumptions judgments including assumptions future economic conditions revenue growth operating margins discount rates use different estimates assumptions within projected future cash flows model use methodology projected future cash flow model could result significantly different fair values goodwill intangible assets income taxes exercise significant judgment determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets recorded reserves related uncertain tax positions valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent 10 percent greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets pension expense associated pension liability requires use judgment determining assumptions estimated longterm rate return plan assets discount rate well various demographic assumptions pension investment strategy designed align majority pension assets underlying pension liability minimizes volatility caused changes asset returns discount rates pension expense estimates updated actual experience remeasurement process fourth quarter sooner earlier remeasurements required 2014 result us rip plan freeze july 11 2014 associated remeasurement used fullyear weightedaverage 52 percent expected longterm rate return plan assets 47 percent discount rate us rip actual return us rip plan assets 2014 14 percent difference actual return plan assets expected return plan assets largely mitigated offsetting change pension liability resulting movements discount rate pension postretirement benefit assumptions determined follows • utilize bond matching model averages bond universe 500 aagraded noncallable bonds 10th 90th percentiles maturity group proxy setting discount rate yearend • asset returns based upon anticipated average rate earnings expected invested funds plan longterm determined expected return plan assets using discount rate approximates return debt securities portfolio slight uplift impact portion plan assets invested equity securities • demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience • mortality assumptions based recognized actuarial tables new mortality table studies released 2014 significantly increase life expectancy assumptions incorporated new assumptions analysis depending assumptions estimates used net periodic pension postretirement benefit expense could vary significantly within range possible outcomes could material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2014 would resulted following effects 2014 pension expense projected benefit obligation pbo november 30 2014 thousands stockbased compensation stock plans provide grant various equity awards including performancebased awards timebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures estimated forfeiture rate based historical experience periodically review forfeiture assumptions based actual experience performancebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures quarter evaluate probability number shares expected vest adjust stockbased compensation expense appropriate example event achieve projected performance metrics 2015 2016 stockbased compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase results operations total revenue total revenue 2014 increased 21 percent compared period 2013 total revenue 2013 increased 20 percent compared period 2012 table displays percentage point change revenue due organic acquisitive foreign currency factors comparing 2014 2013 2012 organic revenue growth 2014 2013 primarily attributable continued consistent performance subscriptionbased business provided 6 percent organic revenue growth rate 2014 2013 subscriptionbased business represented 77 percent total revenue 2014 76 percent total revenue 2013 nonsubscription business decreased organically 1 percent 2014 growth rate adversely impacted biennial cycle bpvc standard last released third quarter 2013 normalizing bpvc release cycle 1 percent nonsubscription organic revenue growth rate year ended november 30 2014 nonsubscription business decreased organically 2013 3 percent decreased 5 percent normalized bpvc release acquisitionrelated revenue growth 2014 primarily due runout polk acquisition third quarter 2013 well runout 2013 acquisitions 2014 acquisitions also contributed increase included following •global trade information services pci acrylonitrile august 2014 •displaysearch solarbuzz pacwest consulting partners november 2014 acquisitionrelated revenue growth 2013 primarily due polk acquisition third quarter 2013 well 2013 acquisitions runout 2012 acquisitions addition polk acquisition 2013 acquisitions included following •exclusive analysis business dodson data systems energy publishing first quarter 2013 •fekete associates waterborne energy second quarter 2013 •pfc energy third quarter 2013 foreign currency movements negligible impact 2014 increase revenue minor adverse impact 2013 increase revenue due extent global operations foreign currency movements could continue adverse impact results future revenue segment americas revenue percent total revenue increased 2013 2014 principally result polk acquisition whose revenue predominantly generated us percentage change revenue geographic segment due factors described following table continue experience organic revenue growth three geographies subscriptionbased revenue driving majority increases geographies subscription revenue continues provide stable revenue stream generates predictable significant cash flow acquisitive growth three geographic segments years mostly due polk acquisition third quarter 2013 regional geographic foreign currency movements largely offset 2014 slight adverse effect 2013 americas organic revenue growth driven largely 5 percent increase subscription revenue 2014 6 percent increase subscription revenue 2013 americas nonsubscription organic revenue growth declined 2 percent 2014 3 percent 2013 normalizing bpvc impact americas nonsubscription organic revenue growth declined 1 percent 2014 6 percent 2013 decline reflected decrease consulting revenue software license revenue emea organic revenue growth driven largely 7 percent increase subscription revenue 2014 6 percent increase subscription revenue 2013 emea nonsubscription organic revenue growth 4 percent 2014 negative 7 percent 2013 2014 nonsubscription organic revenue improvement reflected improving economics region 2013 results result lingering economic softness emea apac organic revenue growth driven largely 6 percent increase subscription revenue 2014 7 percent increase subscription revenue 2013 apac nonsubscription organic revenue growth flat 2014 compared 7 percent organic growth rate 2013 nonsubscription growth primarily due consulting engagements first nine months 2013 revenue transaction type subscriptions represent steady predictable source revenue us continue see consistent growth stable renewal rates evidenced 6 percent organic subscription revenue growth 2014 2013 trend especially important us subscriptionbased revenue core business model majority remaining growth due polk acquisition organic nonsubscription revenue growth negative 1 percent 2014 negative 3 percent 2013 normalizing bpvc impact organic nonsubscription revenue growth 1 percent 2014 negative 5 percent 2013 decline reflected mix underperforming nonstrategic assets weakness customers discretionary spending globally impact us governments sequestration revenue product category resources revenue increases 2014 2013 largely due 5 percent organic revenue growth 2014 6 percent organic growth 2013 industrials revenue increases years primarily driven polk acquisition aided 2014 4 percent organic growth impacted 2013 negative 2 percent organic growth horizontal products revenue increases 2014 2013 largely due 3 percent organic revenue growth 2014 4 percent organic revenue growth 2013 normalized bpvc impact horizontal products organic revenue growth 4 percent 2014 2 percent 2013 terms product categories resources organic growth may negatively impacted 2015 due current energy market environment industrials organic revenue growth improved 2014 expect see continued yearoveryear organic growth improvement industrials 2015 operating expenses following table shows operating expenses associated percentages revenue cost revenue percent revenue cost revenue decreased 2014 primarily due product mix improvements particularly typically higher costs bpvc release year also seen decreases cost revenue percent sales focus becoming operationally efficient expect continue invest people platforms processes products support goals increase top bottomline growth selling general administrative sga expense evaluate sga expense excluding stockbased compensation expense sga expense percent revenue increased slightly 2013 2014 expand sales marketing forces drive scale growth key industries core markets increase stockbased compensation expense 2012 2013 result increase number employees increase stock price achievement overachievement certain performance metrics slight increase stockbased compensation 2013 2014 reflected progress towards goal managing stockbased compensation expense relatively flat dollar basis depreciation amortization expense depreciation amortization expense remained relatively flat percentage revenue increased total dollar amount primarily due increase depreciable amortizable assets polk acquisition well increases capital expenditures approximately 24 million 2014 26 million 2013 related various infrastructure initiatives restructuring incurred 9 million restructuring charges 2014 reflects continuing efforts consolidate positions locations data centers incurred 13 million restructuring charges 2013 17 million restructuring charges 2012 continue realize benefits respect infrastructure initiatives allow us simplify processes standardize platforms order enable existing workforce accomplish fewer resources acquisitionrelated costs 2014 incurred 2 million costs associated acquisitions including severance lease abandonments professional fees incurred 23 million acquisitionrelated costs 2013 4 million acquisitionrelated costs 2012 increased costs 2013 primarily attributable polk acquisition including investment adviser fees severance lease abandonment legal professional fees acquisitions key component growth strategy expect continue incur similar costs future acquisitions pension postretirement expense following table shows components net periodic pension postretirement expense net service cost decreased 2014 due decision discontinue future accruals us rip sip settlement expense fourth quarter marktomarket adjustment 2012 associated lumpsum buyout offers made year fourth quarter marktomarket adjustments 2013 2014 largely due updated actuarial census data assumptions including new mortality table assumption 2014 exclude settlement expense fourth quarter marktomarket adjustment adjusted ebitda metric regard items indicative ongoing operating performance expect 2015 net service cost prior fourth quarter marktomarket adjustments approximately 2 million loss sale assets 2013 2014 disposed certain noncore nonstrategic assets part continuing evaluation asset portfolio operating income segment decrease americas operating income margin 2012 2014 primarily driven increases depreciation expense associated increasing capital expenditures amortization expense primarily associated intangible assets acquired polk acquisition interest expense associated increased debt leverage fund polk acquisition significance intangible assets acquired polk acquisition increased interest expense associated recent debt refinancing anticipate operating income margin americas continue lower previous years 2013 emea operating income margin declined primarily product mix investment growth increased selling costs increases intangible asset amortization acquisitionrelated costs well loss sale emea assets contributed 2013 decline 2014 saw reversal trend result improved economics region completion emea sales reorganization 2013 decrease apac operating income margin primarily due product mix changes continued investment sales operations teams region 2014 continued invest apac sales operations teams seek increase footprint region shared services operating expense increased primarily increase stockbased compensation expense 2014 allocate stockbased compensation expense shared services function portion increase offset decrease pension postretirement expense provision income taxes effective tax rate year ended november 30 2014 219 percent compared 149 percent 2013 157 percent 2012 effective tax rate fiscal year 2014 varied effective tax rates fiscal years 2013 2012 primarily result significant us presence polk business higher effective tax rate jurisdictions adjusted ebitda nongaap measure adjusted ebitda margin performance 2013 decreased primarily result significant 2013 acquisition activity discrete onetime investments margin performance 2014 improved 2013 continued focus acquisition integration result operating leverage business model anticipate margins increase 2015 continue focus improving core margins leveraging subscriptionbased business model integrating acquisitions financial condition decrease accounts receivable balance primarily due strength cash collections 2014 increase accrued compensation primarily due higher attainment certain performance objectives associated annual incentive plan well increase accrued commissions increase deferred revenue due organic growth business liquidity capital resources november 30 2014 cash equivalents 153 million approximately 109 million held foreign subsidiaries cash held foreign subsidiaries could subject us federal income tax decided repatriate cash us however intent permanently reinvest funds outside us current plans demonstrate need repatriate fund operations jurisdictions outside held also 18 billion debt november 30 2014 resulted increase interest expense 2014 compared 2013 expect increased debt well recent refinancing fix interest rates larger portion debt result higher interest expense near future 2014 free cash flow 514 million ratio free cash flow adjusted ebitda approximately 74 percent longer term anticipate ratio mid60s range reflecting increased interest expense increase cash taxes cash debt cash flow positions believe sufficient cash meet ongoing working capital expenditure needs historically required make cash contributions us rip pension plan funded status however due global economic downturn negatively impacted returns pension assets required make cash contribution us rip fiscal 2012 considering requirement various changes pension strategy made 65 million contribution pension plan december 2011 first month 2012 fiscal year december 2012 first month 2013 fiscal year made 10 million contribution pension plan fund estimated 2013 pension costs september 2014 made 10 million contribution us rip order increase plan funding avoid certain additional variable rate premium costs required currently expect contribute us rip 2015 third quarter 2013 completed polk acquisition funded combination cash stock funded cash portion transaction consideration using cash hand cash existing revolving credit facility new bank term loan october 2014 refinanced revolving credit facility term loans completed bond offering terms conditions new agreements including financial covenants offer us flexibility pursue growth strategies leverage ratio november 30 2014 approximately 26x credit agreements allow leverage 35x ability temporarily increase leverage 375x two quarters november 30 2014 approximately 915 million available revolving credit facility please refer item 8 financial statements supplementary data notes consolidated financial statements note 8 part ii form 10k discussion current status debt arrangements future capital requirements depend many factors including level future acquisitions need additional facilities facility improvements timing extent spending support product development efforts information technology infrastructure investments internal business applications continued market acceptance offerings could required could elect seek additional funding public private equity debt financings however additional funds may available terms acceptable us currently expect capital expenditures approximately 5 6 percent revenue 2015 cash flows increase net cash provided operating activities largely due continued business performance improvements including strong cash collections 2014 part improvement also came decreased funding us rip 10 million 2014 2013 compared 65 million 2012 additive cash flow recent acquisitions notably polk acquisition favorable cash tax refund timing 2013 subscriptionbased business model continues cash flow generator aided positive working capital characteristics generally require substantial working capital increases support growth increase net cash used investing activities 2013 principally due polk acquisition completed 2013 part investing activity increases 2012 2014 attributable increased capital expenditures associated continued investment product development infrastructure initiatives increase net cash provided financing activities 2013 principally due significant amount borrowings used fund polk acquisition addition associated debt issuance costs 2014 began repay borrowings reduced debt leverage fourth quarter 2012 began treasury share repurchase program continued first quarter 2013 total purchase price approximately 96 million 50 million purchased fourth quarter 2012 46 million purchased first quarter 2013 free cash flow nongaap measure following table reconciles nongaap free cash flow measure net cash provided operating activities free cash flow historically strong expect continue significant source funding business strategy growth organic acquisitive means credit facility debt please refer item 8 financial statements supplementary data notes consolidated financial statements note 8 part ii form 10k discussion current status debt arrangements share repurchase programs please refer part ii item 5 item 8 financial statements supplementary data notes consolidated financial statements note 16 part ii form 10k discussion share repurchase programs offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2014 along obligations associated term loans notes future periods obligations expected settled cash thousands expect contribute approximately 3 million pension postretirement benefit plans 2015 addition term loans notes also 385 million outstanding borrowings 13 billion 2014 revolving facility current annual interest rate 165 percent facility fiveyear term ending october 2019 also approximately 7 million capital lease obligations recent accounting pronouncements please refer item 8 financial statements supplementary data notes consolidated financial statements note 2 part ii form 10k discussion recent accounting pronouncements anticipated effect business item 7a item 7 managements discussion analysis financial condition results operations information annual report form 10k includes forwardlooking statements within meaning section 27a securities act 1933 amended section 21e securities exchange act 1934 amended statements historical facts included form 10k including without limitation certain statements managements discussion analysis financial condition results operations may constitute forwardlooking statements forwardlooking statements involve risks uncertainties actual results could differ materially indicated statements result certain factors fully discussed headings forwardlooking statements risk factors following discussion financial condition operating results read conjunction selected financial data consolidated financial statements accompanying notes included form 10k executive summary discussed completely businessoverview ihs leading provider comprehensive source critical information insight sizable growing global market customers rely products services facilitate crucial decisionmaking support key processes improve productivity heart products services data obtained public sources third parties proprietary databases transform data critical information insight useful customers available make critical business decisions data transformed critical information combine proprietary thirdparty technology create graphical user interfaces search navigation tools online delivery systems deliver individual documents transform information insight products services analysis interpretation teams experts sell offerings primarily subscriptions result subscriptionbased business model historically high renewal rates generate recurring revenue cash flow generally recognize revenue subscriptions usually oneyear periods ratably term subscription subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income historically business seasonal aspects however continued organic growth subscriptionbased business model combined several acquisitions recent years seasonal aspects diminished although fourth quarter revenue profit tends slightly higher quarters due product mix typically sold fourth quarter first quarter also benefits inclusion results ceraweek annual energy executive gathering serve worlds largest corporations across multiple industries well governments organizations 100 countries primary operations outside united states united kingdom canada switzerland structured business around customers geographies reside americas includes united states canada latin america emea europe middle east africa india also included region apac asia pacific region includes many countries china japan south korea malaysia australia allows us tailor expand solutions offer meet unique needs customers globally local markets targeted four specific information domainsenergy product lifecycle security environment since four information domains represent areas customers needs critical information insight use domains set priorities design business strategies addition certain product lines intersect multiple domains categorized products intersection allocated specific domain continue deliver critical information insight four information domains prepare financial reports analyze business across three reportable geographic segments information customers need address complex business issues continues converge intersection information domains serve reorganized management structure 2008 geographic focus point contact customers new integrated global organization make easier customers business us providing cohesive consistent effective sales marketing approach region structuring business around customers geographies reside able tailor expand solutions offer meet unique needs customers globally local markets also able better manage critical information insight activities according best practices new structure provides solid foundation growth market capabilities allows us efficient method bringing new products services customers supports growth existing accounts new customers markets result transformation defined operating segments changed geographic segments third quarter 2008 inherent strategies firm commitment put customers first everything believe maintaining disciplined outsidein approach allow us better serve customers shareholders primary strategy achieve strengthen leading position inand intersection ofour targeted information domains also intend continue driving margin quality improvement operational transformation support strategies several ongoing crossfunctional projects led members senior leadership team operational transformation evolution one started three years ago continue years come designed initiatives purely costcutting events rather multifaceted endeavors designed simultaneously improve quality offerings optimizing efficiency effectiveness processes involved segments generate approximately half total revenue outside united states primary operations outside united states united kingdom canada switzerland table presents split revenue type offering three segments results operations primarily driven organic growth acquisitions foreign currency also impacts results segments organic growth driven several factors including ability penetrate existing customers generate new customers raise prices introduce new offerings update existing offerings execute sales marketing plans world economic events within insight services deliver consulting services customers consulting services year ended november 30 2008 represented less 7 total revenue acquisitions completed 23 strategic acquisitions last three years relatively large others small filled strategic need larger acquisitions enable us achieve greater reach given multiple domainsfor example global insight business similarly bolton tuckin acquisitions generally smaller tend consist databases datasets divestco usa inc provide strategic broadening critical information offerings bolton acquisitions often come little overhead deliver higher incremental margins larger acquisitions 2008 made following acquisitions •global insight inc global insight october 2008 completed acquisition global insight inc based lexington massachusetts recognized leader providing comprehensive global economic information analysis consulting services corporations financial institutions governments around world acquisition closed 1172 million cash approximately 13 million shares ihs common stock valued 443 million based closing price ihs oct 10 2008 terms transaction include lockup agreement restricting salability ihs shares 10 percent shares restricted one year 50 percent two years 40 percent three years acquisition global insight puts ihs center todays important business decisions significantly enhances value products services adding critical economicfocused offerings full range information insight ihs already offers november 30 2008 begun first phase implementation plan streamline operations global insight eliminate redundancies result acquisition plan contemplates certain reductions personnel well certain facility consolidations related acquisition accordance plan initial implementation recorded severance cost approximately 8 million facility consolidation costs approximately 5 million preliminary purchase accounting assumed liabilities november 30 2008 cash payments incurred various times first nine months 2009 •divestco usa inc divestco september 2008 acquired us product portfolio divestco strategic provider comprehensive data analytical tools oil gas industry approximately 30 million cash •documental solutions llc documental solutions september 2008 acquired documental solutions llc falls church virginia approximately 222 million cash documental solutions leading provider market intelligence analysis tools defense aerospace industry •jfa international jfa march 2008 acquired assets jfa london england based provider strategic analysis energy industrys exploration production sectors jfa acquired £20 million approximately 39 million based exchange rate date acquisition •environmental software providers esp march 2008 acquired environmental software providers business name electric software products inc based mountain view california approximately 187 million cash esp provider enterprise information solutions used companies assist managing environmental sustainability programs •dolphin software inc dolphin march 2008 acquired dolphin lake oswego oregon approximately 237 million cash dolphin leader developing using chemical data information software used companies record track chemicals stored used facilities •prime publications limited prime march 2008 acquired prime owns 50 interest lloyds registerfairplay limited lrf joint venture leading source global maritime information lrf preeminent brand name maritime information industry organization provides comprehensive details current world merchant fleet tankers cargo carrier passenger ships complete range products services assist worlds maritime community investment lrf primary asset prime lloyds register london england joint venture partner owning 50 ihs accounts joint venture equity method accounting ihs acquired 100 percent stock prime approximately £380 million approximately 761 million based exchange rate date acquisition included £107 million noninterest bearing seller notes valued 160 million november 30 2008 remainder paid cash •mccloskey group limited mccloskey december 2007 acquired mccloskey leading provider news critical information insight international coal markets located near london england acquired mccloskey £139 million approximately 282 million based exchange rate date acquisition using cash hand consolidated financials include results operations cash flows acquisitions beginning respective dates acquisition pricing information many sales customized annual basis meet individual customer needs based number factors including number customer locations number simultaneous users breadth content included offering light customized nature many offerings pricing terms also customized addition difficulty contrasting price changes period exacerbated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue products period global operations serve worlds largest corporations across multiple industries well governments organizations 100 countries generated revenue 4302 million revenue outside united states year ended november 30 2008 represented slightly half total revenue primary operations outside united states united kingdom canada switzerland international operations expose us foreigncurrency risk fluctuations foreign currency rates decreased increased revenues 26 million 150 million 01 million years ended november 30 2008 2007 2006 respectively increased decreased operating income 10 million 44 million 33 million respective periods see qualitative quantitative disclosures market riskforeign currency risk restructuring offering charges third quarter 2008 executed restructuring initiative primarily affected americas emea segments onetime involuntary benefit arrangements exit costs accounted provisions sfas 146 accounting costs associated exit disposal activities costs arising defined benefit pension plans providing enhanced benefits accounted provisions sfas 88 employers accounting settlements curtailments defined benefit pension plans termination benefits restructuring related expenses consist direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closure including noncash expenses related fixed asset leasehold improvement writeoffs expenses include legal expenses associated employee terminations incurred quarter initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality critical information insight deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices result initiative expect realize annual improvement pretax income 80 million 100 million beginning fourth quarter 2008 fourth quarter 2006 executed restructuring initiative undertaken focus offerings growth potential also added benefit trimming cost structure course restructuring reduced aggregate workforce approximately 40 employees 25 million restructuring charge incurred entirety fourth quarter 2006 comprised entirely employee severance termination benefits costs also incurred 08 million costs associated 2006 secondary offering required expense costs since issue shares connection offering rather shares offering sold existing shareholders items cost operating business incur cost revenue primarily acquire manage deliver critical information insight costs include personnel information technology occupancy costs related activities well royalty payments thirdparty information providers royalty payments generally vary based subscription sales certain product offerings cost revenue services offerings primarily comprised personnel costs selling general administrative expenses primarily include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly variable volume sold particularly subscription based business within certain product offerings portion critical information revenue driven sale specifications standards content obtained sdos stockbased compensation expense issued equitybased compensatory awards primarily restricted stock units record cost vesting period typical vesting period three years none grants exceed five years november 30 2008 approximately 24 million stockbased awards outstanding approximately 13 million performancebased awards assuming maximum potential payout performance awards highestranking employees 100 percent annual grants typically performancebased awards vesting performance shares granted date principally based achieving certain financial performance levels fiscal years 2009 2010 november 30 2008 estimated maximum number shares issuable 2009 fiscal year vest target number shares issuable 2010 2011 fiscal years vest using estimates projected sharebased compensation expense 2009 estimated 55 60 million incorporates grants change actual performance levels achieved company could result change actual amount stock based compensation recognize example event achieve projected performance metrics 2009 2010 2011 stock based compensation expense would decrease pension postretirement benefits one defined benefit plan covers majority employees us rip another defined benefit plan covers limited number employees uk rip plans overfunded november 30 2008 also postretirement plans us provide medical benefits certain retirees eligible dependents lastly unfunded supplemental income plan sip nonqualified pension plan certain company personnel net periodic pension postretirement benefits historically comprised us pension income uk pension expense us postretirement benefit income sip expense shown net basis net periodic pension postretirement benefits income comprised following provision income taxes effective tax rate 287 317 315 years ended november 30 2008 2007 2006 respectively expect fiscal year 2009 effective tax rate comparable fiscal year 2008 rate see consolidated financial statements included elsewhere form 10k critical accounting policies estimates consolidated financial statements prepared accordance accounting principles generally accepted united states gaap apply gaap must make significant estimates affect reported amounts assets liabilities revenues expenses related disclosure contingent assets liabilities many instances could reasonably used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable circumstances evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions nonstandard agreements make judgments determine appropriately account judgments generally involve assessments regarding matters •whether sufficient legally binding terms conditions exist •whether customer acceptance achieved •progress certain consulting projects revenue recognized proportional performance basis evaluate binding nature terms conditions agreements well whether customer acceptance achieved evaluate progress deliverables based managements judgments appropriate advice legal counsel historically judgments accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations account business acquisitions accordance provisions sfas 141 business combinations using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions regarding multiple highly subjective variables including respect future cash flows discount rates asset lives use different valuation models therefore require considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable inherently uncertain depending size purchase price particular acquisition well mix intangible assets acquired financials results could materially impacted application different set assumptions estimates goodwill intangible assets review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable examples events changes circumstances many subjective nature include significant negative industry economic trends significant changes manner use acquired assets strategy significant decrease market value asset significant change legal factors business climate could affect value asset assess impairment comparing fair value identifiable intangible asset goodwill carrying value determination fair value involves significant management judgment described impairments expensed incurred specifically test impairment follows intangible assets subject amortization intangible asset subject amortization reviewed impairment indicators present accordance sfas 144 accounting impairment disposal longlived assets compare expected undiscounted future operating cash flows associated finitelived assets respective carrying values determine asset fully recoverable expected future operating cash flows sufficient recover carrying value estimate fair value asset impairment recognized carrying amount asset recoverable carrying value exceeds fair value projected cash flows require several assumptions related among things relevant market factors revenue growth operating margins also assess economic life assets amortize assets periods believe assumptions reasonable changes assumptions may material impact financial results indefinitelived intangible assets accordance sfas 142 goodwill intangible assets perform impairment test indefinitelived intangible assets comparing assets fair value carrying value least annual basis impairment charge recognized assets estimated fair value less carrying value estimate fair value based projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill accordance sfas 142 test goodwill impairment reporting unit level defined reference sfas 131 disclosures segments enterprise related information least annual basis reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach •we first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values •if necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting units goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess use different estimates assumptions within discounted cash flow model determining fair value reporting units using methodology discounted cash flow model could result different values reporting units could result impairment charge income taxes account income taxes accordance sfas 109 accounting income taxes significant judgment required determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made december 1 2007 adopted fasb interpretation 48 accounting income taxes fin 48 prescribes recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance derecognition classification interest penalties accounting interim periods disclosure transition upon adoption fin 48 recorded cumulative effect adjustment 14 million increase beginning retained earnings following adoption fin 48 include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes previously included interest penalties interest income expense income expense respectively actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits defined benefit plans cover majority employees us employees uk also postretirement plans us provide medical benefits certain retirees eligible dependents accounting plans subject guidance provided sfas 87 employers accounting pensions sfas 106 employers accounting postretirement benefits pensions sfas 158 employers accounting defined benefit plans postretirement plans statements require management make certain assumptions relating longterm rate return plan assets discount rates used measure future obligations expenses salary increases inflation healthcarecosttrend rates assumptions believe accounting estimates related pension postretirement plans critical accounting estimates highly susceptible change period based market conditions key assumptions measuring plan obligations include discount rate future salary increases longterm expected return plan assets various demographic assumptions follows •the methodology used determine discount rate discounts projected plan cash flows measurement date using spot rates provided citigroup pension discount curve single discount rate computed present value benefit cash flows using single rate equals present value computed using citigroup pension discount curve similar exercise performed using high yield bonds values compared changes corporate bond indices determine discount rate •asset returns based upon anticipated average rate earnings expected invested funds plan longterm •salary increase assumptions based upon historical experience anticipated future management actions •demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience •the ihs subsidy capped different rates per month depending individual retirees medicare eligibility depending assumptions estimates used net periodic pension postretirement benefit income could vary within range outcomes material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2008 would following effects 2008 pension expense stockbased compensation one sharebased compensation plan amended restated ihs inc 2004 longterm incentive plan 2004 longterm incentive plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards amended restated ihs inc 2004 directors stock plan subplan 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan november 30 2008 approximately 24 million stockbased awards outstanding approximately 13 million performancebased awards assuming maximum potential payout performance awards november 30 2008 estimated maximum number shares issuable 2009 fiscal year vest target number shares issuable 2010 2011 fiscal years vest using estimates projected sharebased compensation expense 2009 estimated 55 60 million incorporates grants change actual performance levels achieved company could result change actual amount stock based compensation recognize example event achieve projected performance metrics 2009 2010 2011 stock based compensation expense would decrease believe assumptions related performancebased stock awards critical susceptible change period based market uncertain conditions beyond control determine fair value stock options using blackscholes pricing model valuation model requires management make assumptions apply judgment determine fair value awards assumptions judgments include estimating •the future volatility stock price •expected dividend yield •future employee turnover rates •future employee stock option exercise behaviors given 03 million options outstanding november 30 2008 changes assumptions likely materially affect financial results however number options granted materially increases future likelihood changes valuation assumptions could materially impact financial results also increases results operations set forth results operations expressed percentage revenue set forth revenue operating income segments years ended november 30 2008 2007 2006 certain sharedservices functions allocated operating segments unallocated amounts include corporatelevel restructuring offering charges stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gains sales corporate assets year ended november 30 2008 compared year ended november 30 2007 revenue 8440 million year ended november 30 2008 compared 6884 million year ended november 30 2007 increase 1556 million 23 increase driven part acquisitions contributed 1100 million organic growth contributed 482 million negative impact foreign currency 26 million revenue americas segment 5209 million year ended november 30 2008 compared 4280 million year ended november 30 2007 increase 929 million 22 increase driven primarily acquisitions added 604 million organic growth contributed 301 million favorable foreign currency rates added 24 million revenue growth organic growth 2008 driven price increases growth certain critical information subscription products primarily within energy domain revenue products 4407 million 2008 767 million 21 compared 2007 revenue services 803 million 2008 162 million 25 compared 2007 revenue emea segment 2635 million year ended november 30 2008 compared 2103 million year ended november 30 2007 increase 532 million 25 increase driven primarily acquisitions contributed 428 million organic growth contributed 154 million unfavorable foreign currency rates adversely impacted revenue 50 million organic growth driven primarily price increases growth certain critical information subscription products primarily within energy domain revenue products 2275 million 2008 450 million 25 compared 2007 revenue services 359 million 2008 82 million 29 compared 2007 revenue apac segment 596 million year ended november 30 2008 compared 501 million year ended november 30 2007 increase 95 million 19 increase driven part acquisitions contributed 68 million organic growth contributed 27 million foreign currency rates minimal impact revenue organic growth driven primarily increased sales specificationsandstandards offerings 2008 revenue products 7223 million 2008 1327 million 23 compared 2007 increase primarily due critical information products increased 578 million 12 2008 revenue services 1217 million 2008 229 million 23 compared 2007 services revenue growth partly attributable acquisition global insight well strong organic growth first half 2008 revenue energy domain 4429 million year ended november 30 2008 increase 694 million 19 year ended november 30 2007 increase primarily due increase critical information sales product lifecycle domain revenue 2906 million year ended november 30 2008 increase 124 million 4 year ended november 30 2007 increase due increases critical information products revenue security domain 752 million year ended november 30 2008 increase 399 million year ended november 30 2007 increase primarily due increase revenue ihs janes offerings acquired june 2007 environment domain revenue 225 million year ended november 30 2008 acquisitions made since fourth quarter 2007 intersection revenue includes product lines intersect multiple domains 128 million 2008 cost revenue cost revenue 3727 million year ended november 30 2008 compared 3026 million year ended november 30 2007 increase 702 million 23 percentage revenue cost revenue increased 442 440 cost revenue percentage revenue within americas segment decreased 418 425 resulting increased sales critical information products relatively fixedcost base cost revenue percentage revenue within emea segment increased 479 462 principally due increase lower margin services cost revenue percentage revenue within apac segment decreased 411 451 principally due increase sale higher margin insight products selling general administrative expenses selling general administrative sga expenses 2955 million year ended november 30 2008 compared 2496 million year ended november 30 2007 increase 459 million 18 stockbased compensation expense included sga increased 93 million 386 million organic sga growth 76 million incurred costs related quotetocash system implementation initiatives acquisitions contributed 310 million increase foreign currency movements decreased sga 20 million percentage revenue excluding stockbased compensation expense sga 304 year ended november 30 2008 320 year ended november 30 2007 restructuring charge third quarter 2008 executed restructuring initiative primarily affected americas emea segments initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality critical information insight deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices restructuring charge 125 million incurred entirety third quarter 2008 comprised primarily employee severance termination benefits lease termination costs fourth quarter 2008 04 million restructuring charge reversed resulting 121 million charge full year 2008 approximately 58 million charge related americas segment 59 million pertained emea segment 04 million related corporate costs depreciation amortization expenses depreciation amortization expenses 394 million year ended november 30 2008 compared 255 million year ended november 30 2007 increase 139 million 55 increase primarily due acquisitions operating income operating income 1335 million year ended november 30 2008 compared 1166 million year ended november 30 2007 increase 169 million 15 percentage revenue operating income decreased 158 year ended november 30 2008 169 year ended november 30 2007 primarily due restructuring charge 2008 operating income americas segment 1608 million year ended november 30 2008 compared 1338 million year ended november 30 2007 increase 270 million 20 increase principally due additional revenue discussed coupled ability leverage relatively fixedcost structure subscriptionsbased products partially offset increase amortization assets related acquisitions well restructuring charge 2008 percentage revenue americas operating income decreased 309 313 2007 operating income emea segment 443 million year ended november 30 2008 compared 352 million year ended november 30 2007 increase 91 million 26 operating income increased due increased sales organic growth acquisition revenue partially offset higher amortization assets related acquisitions well restructuring charge 2008 percentage revenue emea operating income remained relatively flat 168 year ended november 30 2008 compared 167 year ended november 30 2007 operating income apac segment 181 million year ended november 30 2008 compared 126 million year ended november 30 2007 increase 55 million 44 operating income increased due increased sales higher margin subscriptionsbased products percentage revenue apac operating income increased 303 year ended november 30 2008 251 year ended november 30 2007 operating expenses shared services 896 million year ended november 30 2008 compared 650 million year ended november 30 2007 increase 246 million 38 percentage revenue operating expenses shared services 106 94 year ended november 30 2007 stockbased compensation increased 95 million 400 million increase costs also due quotetocash system implementation ongoing transformational initiatives provision income taxes effective tax rate year ended november 30 2008 287 compared 317 year ended november 30 2007 2008 rate reflects impact recent internal legal entity reorganization within emea year ended november 30 2007 compared year ended november 30 2006 revenue 6884 million year ended november 30 2007 compared 5508 million year ended november 30 2006 increase 1376 million 25 increase driven organic growth contributed 640 million acquisitions contributed 587 million impact foreign currency contributed 150 million revenue americas segment 4280 million year ended november 30 2007 compared 3463 million year ended november 30 2006 increase 817 million 24 increase revenue driven organic growth contributed 458 million 13 acquisitions contributed 313 million 9 favorable foreign currency rates added 46 million 1 organic growth year ended november 30 2007 primarily driven price increases growth certain critical information subscription products insight products organic growth also partially driven stronger results ceraweek increase consulting related projects revenue emea segment 2103 million year ended november 30 2007 compared 1636 million year ended november 30 2006 increase 467 million 29 increase revenue driven primarily acquisitions contributed 229 million 14 organic growth increased 144 million 9 organic growth driven increased sales specificationsandstandards partsmanagement offerings favorable foreign currency rates added 94 million 6 revenue apac segment 501 million year ended november 30 2007 compared 409 million year ended november 30 2006 increase 92 million 23 increase revenue driven part acquisitions contributed 45 million 11 part organic growth contributed 37 million 9 due growth energy domain products region foreign currency rates 10 million 2 favorable impact year ended november 30 2008 revenue products 5896 million fiscal year 2007 1149 million 24 compared 2006 revenue services 988 million 2007 227 million 30 2006 product revenue growth driven critical information subscription product growth well insight product growth increase services revenue driven primarily growth insight services stronger ceraweek results 2007 revenue energy domain 3735 million year ended november 30 2007 increase 792 million 27 fiscal year 2006 increase primarily due increase critical information sales product lifecycle domain revenue 2783 million year ended november 30 2007 increase 218 million 8 2006 increase primarily due increase sales specifications standards products revenue security environment domains 353 13 million respectively fiscal year 2007 initial year domains based acquisitions made 2007 cost revenue cost revenue 3026 million year ended november 30 2007 compared 2524 million year ended november 30 2006 increase 502 million 20 percentage revenue cost revenue improved 440 458 percentage revenue americas cost revenue decreased 425 2007 453 2006 decrease principally due additional revenue discussed coupled ability leverage relatively fixedcost structure subscriptionbased products percentage revenue emea cost revenue increased 462 2007 456 2006 increase percentage revenue principally due products ihs janes acquisition lower margins overall portfolio modification certain agency relationships 2007 percentage revenue apac cost revenue increased 451 2007 446 2006 increase percentage revenue principally due higher percentage revenue coming lower margin services selling general administrative expenses sga expenses 2496 million year ended november 30 2007 compared 2007 million year ended november 30 2006 increase 489 million 24 stockbased compensation expense included sga increased 105 million 293 million organic sga growth 116 million due several factors including increased selling expense higher sales revised commission structure costs associated human resources information system implementation ongoing transformational initiatives meritbased salary increases acquisitions contributed 228 million increase foreign currency movements increased sga 40 million percentage revenue excluding stockbased compensation expense sga 320 year ended november 30 2007 330 year ended november 30 2006 depreciation amortization expenses depreciation amortization expenses 255 million year ended november 30 2007 compared 157 million year ended november 30 2006 increase 98 million 62 increase primarily due acquisitions operating income operating income 1166 million year ended november 30 2007 compared 802 million year ended november 30 2006 increase 364 million 45 percentage revenue operating income increased 169 year ended november 30 2007 146 year ended november 30 2006 operating income americas segment 1338 million year ended november 30 2007 compared 914 million year ended november 30 2006 increase 424 million 46 increase primarily attributable increased revenue discussed coupled ability leverage relatively fixedcost structure percentage revenue americas operating income increased 313 2007 264 2006 operating income emea segment 352 million year ended november 30 2007 compared 301 million year ended november 30 2006 increase 51 million 17 operating income increased due increased sales organic growth acquisition revenue partially offset higher amortization assets related acquisitions 2007 percentage revenue emea operating income decreased 167 2007 184 2006 operating income apac segment 126 million year ended november 30 2007 compared 87 million year ended november 30 2006 increase 39 million 44 increase primarily attributable increased revenue discussed coupled ability leverage relatively fixedcost structure percentage revenue apac operating income increased 251 2007 213 2006 operating expenses shared services 650 million year ended november 30 2007 compared 500 million year ended november 30 2006 increase 150 million 30 increased stock based compensation expense contributed 85 million costs associated human resources information system implementation ongoing transformational initiatives meritbased salary increases also contributed increase provision income taxes effective tax rate year ended november 30 2007 317 compared 315 year ended november 30 2006 effective tax rate 2007 reflects benefits release valuation allowance certain deferred tax assets including foreign tax credits release certain tax reserves offset impact changes certain estimates effective tax rate 2006 reflects benefits release certain tax reserves taxexempt interest income offset increase valuation allowance realizability foreign tax credits financial condition accounts receivable accounts receivable increased 323 million 18 2078 million november 30 2008 compared 1755 million november 30 2007 increase due organic acquisition related growth slight deterioration accounts receivable aging prepaid pension asset prepaid pension asset 88 million november 30 2008 823 million 911 million november 30 2007 decrease result adverse market conditions impacting investments us pension plan second half 2008 plan remains overfunded november 30 2008 deferred revenue deferred revenue 2881 million november 30 2008 compared 2394 million november 30 2007 increase 487 million 20 eliminating impact acquisitions foreign currency deferred revenue growth 17 increase primarily due increase subscriptionbased sales throughout 2008 lesser extent end 2007 pending renewals reduced deferred revenue balance november 30 2007 liquidity capital resources november 30 2008 cash equivalents 310 million 960 million shortterm debt generated strong cash flows operations last years result factors well availability funds credit facility believe sufficient cash meet anticipated working capital expenditure needs future capital requirements depend many factors including timing extent spending support product development efforts expansion sales marketing activities timing introductions new products ongoing companywide initiatives changing technology continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions additional funds may available terms acceptable us expect capital expenditures excluding potential acquisitions approximately 20 million 2009 share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee later 2006 board directors approved additional programa stock buyback programwhereby ihs authorized acquire one million shares per year open market fully offset dilutive effect employee equity programs program renewed board directors late 2007 fiscal year 2008 later 2008 board directors approved expansion repurchase program remainder fiscal year 2008 could invest 250 million repurchase additional shares year ended november 30 2008 repurchased 1199595 shares class common stock approximately 655 million 5464 per share pursuant stock buyback program 316581 shares approximately 188 million 5943 per share related shares withheld taxes cash flow net cash provided operating activities 1892 million year ended november 30 2008 compared 1417 million year ended november 30 2007 increase principally due business growing profitably year primarily due increased pricing expanding subscription base increased sales continued positive impact acquisitions subscriptionbased business model typically generates high rate cash flow aided following •relatively low levels required capital expenditures •positive working capital characteristics generally require substantial working capital increases support growth •a cashfortax rate continues trend lower effective tax rate •our wellcapitalized balance sheet positive cash flow impact growing business 2008 partially offset following •annual bonus payments paid first quarter year approximately 6 million higher 2008 2007 •receivable collections robust end 2007 enhancing cash flow detriment 2008 •payments approximately 11 million related third quarter restructuring charge 2008 net cash provided operating activities 1417 million year ended november 30 2007 compared 1157 million year ended november 30 2006 increase principally due business growing profitably year primarily due increased pricing expanding subscription base increased sales positive impact acquisitions net cash used investing activities 2849 million year ended november 30 2008 compared 1338 million year ended november 30 2007 increase cash used investing activities primarily driven acquisitions 2008 used 2728 million acquisitions businesses compared 1146 million 2007 net cash used investing activities 1338 million year ended november 30 2007 compared 723 million year ended november 30 2006 increase cash used investing activities primarily driven two events first disbursed 302 million acquisitions 2007 2006 second 85 million net cash outflow 2007 due purchases salesmaturities investments contrast 257 million net cash inflow 2006 due purchases salesmaturities investments net cash used financing activities 35 million year ended november 30 2008 compared 380 million year ended november 30 2007 difference cash flows primarily caused net borrowings 769 million 2008 offset 844 million treasury stock repurchases 2008 net cash used financing activities 380 million year ended november 30 2007 net cash provided financing activities 28 million year ended november 30 2006 difference cash flows primarily caused additional 309 million disbursed 2007 buyback shares additionally recognized 95 million tax benefit equity compensation plans 2006 credit facility september 7 2007 entered amended restated credit agreement revolver 385 million unsecured revolving credit agreement allows us certain conditions increase facility maximum 500 million agreement expires september 2012 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling four quarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 50 basis points 125 basis points agent banks base rate commitment fee payable periodically ranges 10 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations capital lease obligations maximum leverage interest coverage ratios defined revolver november 30 2008 compliance covenants agreement 800 million outstanding borrowings addition outstanding letters credit totaling approximately 12 million november 30 2008 offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2008 future periods obligations expected settled cash expect required contributions us rip 2009 however expect contribute approximately 21 million uk rip 2009 also expect contribute approximately 05 million sip 2009 employer contributions postretirement benefit plan expected paid year ending november 30 2009 approximately 08 million recent accounting pronouncements september 2006 fasb issued sfas 157 fair value measurements defines fair value establishes framework measuring fair value expands disclosures fair value measurements adoption provisions sfas 157 related nonfinancial assets liabilities delayed fiscal years begin november 15 2008 provisions sfas 157 relating financial assets liabilities effective financial statements issued fiscal years beginning november 15 2007 adopted provisions relating financial assets liabilities december 1 2007 material impact consolidated financial statements currently evaluating impact adopting provisions within sfas 157 related nonfinancial assets liabilities consolidated financial statements december 2007 fasb issued sfas 141r business combinations sfas 160 accounting reporting noncontrolling interest consolidated financial statements amendment arb 51 new standards significantly change accounting reporting business combination transactions noncontrolling minority interests consolidated financial statements sfas nos 141r 160 required adopted simultaneously effective first annual reporting period beginning december 15 2008 thus required adopt standards december 1 2009 first day 2010 fiscal year earlier adoption prohibited currently evaluating impact adopting sfas nos 141r 160 consolidated financial statements march 2008 fasb issued sfas 161 disclosures derivative instruments hedging activities sfas 161 requires additional disclosures related use derivative instruments accounting derivatives impact financial statements sfas 161 effective fiscal years interim periods beginning november 15 2008 thus required adopt standard december 1 2008 first day 2009 fiscal year sfas 161 material impact consolidated financial statements may 2008 fasb issued sfas 162 hierarchy general accepted accounting principles statement documents hierarchy various sources accounting principles framework selecting principles used preparing financial statements statement shall effective 60 days following securities exchange commissions approval public company accounting oversight board amendments au section 411 meaning present fairly conformity generally accepted accounting principles sfas 162 material impact consolidated financial statements item 7a item 7 management’s discussion analysis financial condition results operations information annual report form 10k includes “forwardlooking statements” within meaning section 27a securities act 1933 amended section 21e securities exchange act 1934 amended statements historical facts included form 10k including without limitation certain statements “management’s discussion analysis financial condition results operations” may constitute forwardlooking statements forwardlooking statements involve risks uncertainties actual results could differ materially indicated statements result certain factors fully discussed headings “forwardlooking statements” “risk factors” following discussion financial condition operating results read conjunction “selected financial data” consolidated financial statements accompanying notes included form 10k executive summary corporate strategy ihs leading source critical information insight pivotal areas shape today’s global business landscape energy product lifecycle security environment supported extensive expert analysis macroeconomic forecasting businesses governments rely comprehensive information expert analysis ihs make highimpact decisions develop strategies speed confidence ihs employs 4100 colleagues 28 countries vision source critical information insight powers growth value customers intend source customers trust rely upon come first need better understand present anticipate future strategy designed allocate company’s resources optimal manner achieve four externally benchmarked corporate objectives see “business corporate objectives” strategy several key elements • unrelenting focus customers first drives actions decisions investments • offering customers uniquely broad scope proprietary information analysis critical addressing evolving business challenges managing workflows • enhancing offerings organic development focused partnerships acquisitions reinforce strengthen uniqueness scale scope • investing people supporting systems processes continuously expand potential organization best serve customers close possible organized geographies also prepare financial reports analyze business according geographic organization three reportable geographic segments americas includes united states canada latin america emea includes europe middle east africa india apac asia pacific integrated global organization makes easier customers business us providing cohesive consistent effective salesandmarketing approach geography structuring business around customers regions reside better able serve unique needs customers local markets globally regional structure provides solid foundation profitable growth provides efficient method bringing new products services customers supports growth existing accounts new customers markets ihs continued build sustainable advantage target markets employing strategy aligns critical information four pivotal areas impact today’s global businesses energy product lifecycle security environment supported extensive expert analysis macroeconomic forecasting domains represent significant opportunities globally address customer needs virtually every industry regions focus domains believe best significant market opportunities source critical information insight customers domains often interrelated interlinked intersections represent areas critical interest customers market opportunities ihs capitalize deep vast information capabilities expertise business combinations march 3 2008 acquired prime publications limited prime owned 50 interest lloyd’s registerfairplay limited fairplay joint venture leading source global maritime information fairplay preeminent brand name maritime information industry organization provides comprehensive details current world merchant fleet tankers cargo carrier passenger ships complete range products services assist world’s maritime community investment fairplay primary asset prime ihs accounted joint venture equity method accounting march 2008 november 30 2008 december 1 2008 obtained additional 01 ownership interest majority position venture’s governing board giving us 501 controlling interest joint venture accordingly began consolidating fairplay within results june 17 2009 acquired remaining 499 fairplay lloyd’s register giving us 100 ownership fairplay remaining 499 interest acquired approximately 64 million september 2 2009 acquired logtech canada ltd logtech leader development pragmatic costeffective software solutions services digital log data petroleum industry acquired logtech approximately 3 million net cash acquired september 17 2009 acquired environmental support solutions inc ess leading provider environmental health safety crisis management software enterprise sustainability approximately 59 million net cash acquired consolidated financial statements include results operations cash flows business combinations beginning respective dates acquisition noted began consolidating fairplay december 1 2008 upon gaining control venture prior thereto investment fairplay accounted equity method segments generate half total revenue outside united states primary operations outside united states united kingdom canada switzerland table presents split revenue three segments’ results operations primarily driven organic growth acquisitions foreign currency also impacts results segments organic growth driven several factors including ability penetrate existing customers generate new customers raise prices introduce new offerings update existing offerings execute sales marketing plans world economic events pricing information many sales customized annual basis meet individual customer needs based number factors including number customer locations number simultaneous users breadth content included offering light customized nature many offerings pricing terms also customized addition difficulty contrasting price changes period exacerbated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue products period global operations serve world’s largest corporations across multiple industries well governments organizations 100 countries generated 458 million revenue outside united states year ended november 30 2009 represented slightly less half total revenue primary operations outside united states united kingdom canada switzerland international operations expose us foreigncurrency risk fluctuations foreign currency rates increased decreased revenues 368 million 26 million 150 million years ended november 30 2009 2008 2007 respectively increased decreased operating income 51 million 10 million 44 million respective periods see “qualitative quantitative disclosures market riskforeign currency risk” restructuring charges third quarter 2008 executed restructuring initiative primarily affected americas emea segments restructuring related expenses consist direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closure including noncash expenses related fixed asset leasehold improvement writeoffs expenses include legal expenses associated employee terminations incurred quarter initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality critical information insight deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices related acquisition global insight october 2008 established plan streamline operations global insight eliminate redundancies result acquisition plan included certain reductions personnel well certain facility consolidations related acquisition restructuring plan recorded original preliminary purchase accounting 2008 subsequently finalized 2009 items cost operating business incur cost revenue primarily acquire manage deliver critical information insight costs include personnel information technology occupancy costs related activities well royalty payments thirdparty information providers royalty payments generally vary based subscription sales certain product offerings cost revenue services offerings primarily comprised personnel costs selling general administrative expenses primarily include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly variable volume sold particularly subscriptionbased business within certain product offerings portion revenue driven sale specifications standards portion content obtained sdos stockbased compensation expense issued equitybased compensatory awards almost exclusively restricted stock units record cost vesting period typical vesting period three years none grants exceed five years november 30 2009 approximately 27 million stockbased awards outstanding approximately 12 million performancebased awards assuming target payout performance awards highestranking employees 100 percent annual grants typically performancebased awards vesting performance shares granted date principally based achieving certain financial performance levels fiscal years 2010 2011 november 30 2009 estimated target number shares issuable 2010 2011 fiscal years vest using estimates addition estimated 2010 grants projected sharebased compensation expense 2010 expected around 65 million grant date fair values differ projections change actual performance levels achieved company could result change actual amount stock based compensation recognize example event achieve projected performance metrics 2010 2011 stock based compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase pension postretirement benefits one definedbenefit plan covers majority employees us rip another defined benefit plan covers limited number employees uk rip plans underfunded november 30 2009 also postretirement plans us provide medical benefits certain retirees eligible dependents lastly unfunded supplemental income plan sip nonqualified pension plan certain company personnel net periodic pension postretirement benefits historically comprised us pension income uk pension expense us postretirement benefit income sip expense shown net basis net periodic pension postretirement benefits income comprised following expect pension expense 3 5 million fiscal year 2010 provision income taxes effective tax rate 233 287 317 years ended november 30 2009 2008 2007 respectively expect fiscal year 2010 effective tax rate slightly higher fiscal year 2009 rate see consolidated financial statements included elsewhere form 10k critical accounting policies estimates consolidated financial statements prepared accordance accounting principles generally accepted united states gaap apply gaap must make significant estimates affect reported amounts assets liabilities revenues expenses related disclosure contingent assets liabilities many instances could reasonably used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable circumstances evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions nonstandard agreements make judgments determine appropriately account judgments generally involve assessments regarding matters • whether sufficient legally binding terms conditions exist • whether customer acceptance achieved • progress certain consulting projects revenue recognized proportional performance basis evaluate binding nature terms conditions agreements well whether customer acceptance achieved evaluate progress deliverables based management’s judgments appropriate advice legal counsel historically judgments accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions regarding multiple highly subjective variables including respect future cash flows discount rates asset lives use different valuation models therefore require considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable inherently uncertain depending size purchase price particular acquisition well mix intangible assets acquired financial results could materially impacted application different set assumptions estimates goodwill intangible assets review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable examples events changes circumstances many subjective nature include significant negative industry economic trends significant changes manner use acquired assets strategy significant decrease market value asset significant change legal factors business climate could affect value asset assess impairment comparing fair value identifiable indefinitelived intangible asset goodwill carrying value determination fair value involves significant management judgment described impairments expensed incurred specifically test impairment follows intangible assets subject amortization intangible asset subject amortization reviewed impairment indicators present compare expected undiscounted future operating cash flows associated finitelived assets respective carrying values determine asset fully recoverable expected future operating cash flows sufficient recover carrying value estimate fair value asset impairment recognized carrying amount asset recoverable measured amount carrying value exceeds fair value projected cash flows require several assumptions related among things relevant market factors revenue growth operating margins also assess economic life assets amortize assets periods believe assumptions reasonable changes assumptions may material impact financial results indefinitelived intangible assets perform impairment test indefinitelived intangible assets comparing asset’s fair value carrying value least annual basis impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment “reporting unit” level least annual basis reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach • first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values • necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting unit’s goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess using different estimates assumptions within discounted cash flow model determining fair value reporting units using methodology discounted cash flow model could result different values reporting units could result impairment charge income taxes significant judgment required determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets recorded reserves related uncertain tax positions valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits defined benefit plans cover majority employees us limited number employees uk also postretirement plans us provide medical benefits certain retirees eligible dependents applicable accounting guidelines require management make certain assumptions relating longterm rate return plan assets discount rates used measure future obligations expenses salary increases inflation healthcarecosttrend rates assumptions believe accounting estimates related pension postretirement plans critical accounting estimates highly susceptible change period based market conditions key assumptions measuring plan obligations include discount rate future salary increases longterm expected return plan assets various demographic assumptions follows • methodology used determine discount rate discounts projected plan cash flows measurement date using spot rates provided citigroup pension discount curve single discount rate computed present value benefit cash flows using single rate equals present value computed using citigroup pension discount curve similar exercise performed using highyield bonds values compared corporate bond indices determine discount rate • asset returns based upon anticipated average rate earnings expected invested funds plan longterm • salary increase assumptions based upon historical experience anticipated future management actions • demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience • ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility depending assumptions estimates used net periodic pension postretirement benefit income could vary within range outcomes material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2009 would following effects 2009 pension expense stockbased compensation one sharebased compensation plan amended restated ihs inc 2004 longterm incentive plan “2004 longterm incentive plan” provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stockbased awards covered employee annual incentive awards amended restated ihs inc 2004 directors stock plan subplan 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan november 30 2009 outstanding stockbased awards 27 million shares restricted stock approximately 12 million shares subject performancebased awards assuming target payout performance awards november 30 2009 estimated target number shares issuable 2010 2011 fiscal years vest using estimates addition estimated 2010 grants projected sharebased compensation expense 2010 expected around 65 million grant date fair values differ projections change actual performance levels achieved company could result change actual amount stock based compensation recognize example event achieve projected performance metrics 2010 2011 2012 stock based compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase believe assumptions related performancebased stock awards critical susceptible change period based market uncertain conditions beyond control estimate fair value stock options using blackscholes pricing model valuation model requires management make assumptions apply judgment determine fair value awards assumptions judgments include estimating • future volatility stock price • expected dividend yield • future employee turnover rates • future employee stock option exercise behaviors given outstanding options exercisable 02 million shares common stock november 30 2009 changes assumptions likely materially affect financial results however number options granted materially increases future likelihood changes valuation assumptions could materially impact financial results also increases results operations set forth results operations expressed percentage revenue set forth revenue operating income segments years ended november 30 2009 2008 2007 certain sharedservices functions allocated operating segments unallocated amounts include corporatelevel restructuring offering charges stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gains sales corporate assets segment information revenue transaction type follows revenue information domain follows year ended november 30 2009 compared year ended november 30 revenue 967 million year ended november 30 2009 increase 15 prior year increase driven acquisitions contributed 16 organic growth contributed 3 foreign currency rates adverse impact 4 subscription revenue 749 million year ended november 30 2009 increase 19 prior year represented 77 total revenue organically grew 9 due part higher sales energy product lifecycle information among things consulting revenue 60 million increase 8 2008 organic basis consulting revenue 25 due softness energy domain houses consulting business transaction revenue 59 million decrease 15 prior year organic basis transaction revenue 18 due slowing product lifecycle energy single document businesses organic decreases consulting transaction revenues due fact greatly impacted economic environment subscription business revenue 99 million 2009 increase 8 2008 revenue flat organically higher sales product lifecycle parts products offset lower energy software sales revenue americas segment 603 million year ended november 30 2009 increase 16 prior year increase driven acquisitions added 14 organic growth 3 foreign currency rates held revenue approximately 2 subscriptionbased revenue accounted 77 americas revenue 2009 grew organically 6 offset consulting transaction revenue organically 15 19 respectively revenue types increased 4 organically due stronger software sales greater parts services revenue emea segment 288 million year ended november 30 2009 increase 9 prior year increase driven primarily acquisitions contributed 18 organic revenue growth 1 foreign currency rates held revenue approximately 10 subscriptionbased revenue accounted 78 emea revenue 2009 increased 12 organically mostly offset nonsubscription revenue types consulting transaction revenue declined year consulting transaction revenue organically 39 21 respectively revenue decreased 14 organically due lower software sales revenue apac segment 77 million year ended november 30 2009 increase 29 prior year increase driven acquisitions contributed 20 organic growth contributed 13 foreign currency movements held revenue 4 organic increase due primarily growth subscription revenue represents 81 revenue apac region grew organically 14 revenue energy domain 449 million year ended november 30 2009 increase 1 prior year growth primarily due increase subscriptionbased business largely offset impact unfavorable foreign currency rates decrease consulting revenue product lifecycle domain revenue 299 million year ended november 30 2009 increase 3 prior year increase primarily due increase subscriptionbased business well acquisitions partially offset impact unfavorable foreign currency rates revenue security domain 106 million year ended november 30 2009 increase 40 year ended november 30 2008 increase primarily result consolidating fairplay december 1 2008 although higher subscription based revenue also contributed security growth environment domain revenue 33 million year ended november 30 2009 increase 48 primarily result acquisitions macroeconomic forecasting intersection revenue includes offerings intersect multiple domains 81 million 2009 primarily attributable global insight acquisition october 2008 domains experienced positive organic growth 2009 cost revenue cost revenue 410 million year ended november 30 2009 increase 10 total sales margins define revenue net costs sales percentage revenue increased 576 558 sales margins within americas segment increased 589 582 sales margins within emea segment increased 552 521 lastly sales margins within apac segment increased 627 589 improvement sales margins three regions company overall driven sales mix reported higher rates growth higher margin subscription products cost reductions resulting third quarter 2008 restructuring general subscriptionbased revenue generates higher contribution margins relatively fixed cost structure whereas consulting transaction revenue comparatively lower contribution margins due variable nature costs associated revenue streams expect rate margin improvement may moderate 2010 sales mix currency rates may pressure margins since lapped positive margin comparisons stemming third quarter 2008 restructuring selling general administrative expenses selling general administrative sga expenses 333 million year ended november 30 2009 increase 37 million 13 stockbased compensation expense included sga increased 16 million 55 million acquisitions increased sga 44 million foreign currency movements decreased sga 12 million excluding stockbased compensation sga decreased organically 11 million percentage revenue 287 2009 304 2008 decrease reflects attention cost control investing certain initiatives quotetocash initiative depreciation amortization expenses depreciation amortization expense 49 million year ended november 30 2009 increase 25 prior year increase primarily due addition depreciable amortizable assets acquisitions made within last year well increase capital expenditures 14 million 2008 operating income operating income 180 million year ended november 30 2009 increase 35 percentage revenue operating income increased 186 year ended november 30 2009 158 year ended november 30 2008 fiscal 2008 however impacted recording 12 million restructuring charge without charge operating income percentage revenue 2008 would 173 operating income americas segment 192 million year ended november 30 2009 increase 19 percentage revenue americas operating income increased 318 309 2008 although 2008 include restructuring charge 58 million without restructuring charge operating income percentage revenue would 320 2008 operating income emea segment 61 million year ended november 30 2009 increase 37 percentage revenue emea operating income increased 210 year ended november 30 2009 compared 168 year ended november 30 2008 increase primarily due higher sales margins 2009 fact 2008 included 59 million restructuring charge without restructuring charge operating income percentage revenue would 191 2008 operating income apac segment 25 million year ended november 30 2009 increase 36 percentage revenue apac operating income improved 321 year ended november 30 2009 303 year ended november 30 2008 increase due mix products sold higher growth higher margin subscriptionbased products 2009 operating expenses shared services 97 million year ended november 30 2009 increase 8 percentage revenue operating expenses shared services 100 year ended november 30 2009 compared 106 year ended november 30 2008 decrease primarily due cost control 2009 partially offset increase stockbased compensation expense provision income taxes effective tax rate year ended november 30 2009 233 compared 287 year ended november 30 2008 decrease reflects full year impact internal legal entity reorganization within emea occurred third quarter 2008 year ended november 30 2008 compared year ended november 30 2007 revenue 844 million year ended november 30 2008 increase 23 prior year increase driven part acquisitions contributed 16 organic growth contributed 7 negative impact foreign currency less 1 subscription revenue 627 million year ended november 30 2008 increase 24 prior year represented 74 total revenue organically grew 11 due part higher sales energy subscription products consulting revenue 56 million increase 7 2007 organic consulting revenue 15 transaction revenue 70 million decrease 3 prior year organic transaction revenue 1 organic decreases consulting transaction revenues due fact greatly impacted economic environment revenue 91 million 2008 increase 59 2007 revenue increased 14 organically due increased sales smaller product offerings within category revenue americas segment 521 million year ended november 30 2008 increase 22 prior year increase driven acquisitions added 14 organic growth 7 due growth certain subscription products foreign currency rates improved revenue approximately 1 subscriptionbased revenue accounted 76 americas revenue 2008 revenue emea segment 263 million year ended november 30 2008 increase 25 prior year increase driven primarily acquisitions contributed 20 organic revenue growth increased 7 foreign currency rates held revenue approximately 2 subscriptionbased revenue accounted 70 emea revenue 2008 revenue apac segment 60 million year ended november 30 2008 increase 19 prior year increase driven acquisitions contributed 14 organic growth contributed 5 organic increase due primarily growth specifications standards offerings foreign currency rates minimal impact revenue energy domain 443 million year ended november 30 2008 increase 19 year ended november 30 2007 product lifecycle domain revenue 291 million year ended november 30 2008 increase 4 year ended november 30 2007 increases primarily due increases subscription revenue security domain 75 million year ended november 30 2008 increase 100 prior year increase primarily due increase revenue ihs jane’s offerings acquired june 2007 environment domain revenue 22 million year ended november 30 2008 relates exclusively acquisitions made since fourth quarter 2007 macroeconomic forecasting intersection revenue includes product lines intersect multiple domains 13 million 2008 cost revenue cost revenue 373 million year ended november 30 2008 compared 303 million year ended november 30 2007 increase 23 general subscriptionbased revenue generates higher contribution margins leverages relatively fixed cost structure whereas consulting transaction revenue comparatively lower contribution margins due variable costs associated revenue streams total sales margins decreased slightly 558 560 sales margins within americas segment increased 582 575 resulting increased sales higher margin subscription products relatively fixedcost base sales margins within emea segment decreased 521 538 principally due increase lower margin services sales margins within apac segment increased 589 549 principally due increase sale higher margin subscription products selling general administrative expenses sga expenses 296 million year ended november 30 2008 increase 18 stockbased compensation expense included sga increased 9 million 39 million organic growth within sga 8 million incurred costs related quotetocash system implementation initiatives acquisitions also contributed 31 million increase foreign currency movements decreased sga 2 million percentage revenue excluding stockbased compensation expense sga 304 year ended november 30 2008 320 year ended november 30 2007 restructuring charge third quarter 2008 executed restructuring initiative primarily affected americas emea segments initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality critical information insight deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices restructuring charge 125 million incurred entirety third quarter 2008 comprised primarily employee severance termination benefits lease termination costs fourth quarter 2008 04 million restructuring charge reversed resulting net 12 million charge full year 2008 approximately 58 million charge related americas segment 59 million pertained emea segment 04 million related corporate costs depreciation amortization expenses depreciation amortization expenses 39 million year ended november 30 2008 compared 25 million year ended november 30 2007 increase 14 million 55 increase primarily due acquisitions operating income operating income 134 million year ended november 30 2008 compared 117 million year ended november 30 2007 increase 17 million 15 percentage revenue operating income decreased 158 year ended november 30 2008 169 year ended november 30 2007 primarily due 15 impact restructuring charge 2008 operating income americas segment 161 million year ended november 30 2008 compared 134 million year ended november 30 2007 increase 27 million 20 increase principally due additional revenue discussed coupled ability leverage relatively fixedcost structure subscriptionbased products partially offset increase amortization assets related acquisitions well restructuring charge 2008 percentage revenue americas operating income decreased 309 313 2007 due primarily 11 impact restructuring charge operating income emea segment 44 million year ended november 30 2008 compared 35 million year ended november 30 2007 increase 9 million 26 operating income increased due increased sales organic growth acquisition revenue partially offset higher amortization assets related acquisitions well restructuring charge 2008 percentage revenue emea operating income remained relatively flat 168 year ended november 30 2008 compared 167 year ended november 30 2007 though 2008 unfavorably impacted 24 impact restructuring charge operating income apac segment 18 million year ended november 30 2008 compared 13 million year ended november 30 2007 increase 44 operating income increased due increased sales higher margin subscriptionsbased products percentage revenue apac operating income increased 303 year ended november 30 2008 251 year ended november 30 2007 operating expenses shared services 90 million year ended november 30 2008 compared 65 million year ended november 30 2007 increase 38 percentage revenue operating expenses shared services 106 94 year ended november 30 2007 stockbased compensation increased 10 million 40 million increase costs also due quotetocash system implementation ongoing transformational initiatives provision income taxes effective tax rate year ended november 30 2008 287 compared 317 year ended november 30 2007 2008 rate reflects impact internal legal entity reorganization within emea third quarter 2008 financial condition accounts receivable accounts receivable decreased 4 million 2 204 million november 30 2009 primarily due improved collections late 2009 accrued pension liabilityprepaid pension asset pension liability 19 million november 30 2009 compared 68 million november 30 2008 additionally prepaid pension asset decreased zero compared 88 million november 30 2008 changes result change status us uk plans overfunded november 30 2008 underfunded november 30 2009 change results amortization 2008 actuarial losses increase liabilities primarily resulting decrease discount rate assumption 2009 deferred revenue deferred revenue 319 million november 30 2009 compared 288 million november 30 2008 increase 31 million 11 eliminating impact acquisitions foreign currency organic increase deferred revenue 2 compared organic growth 17 2008 decrease growth reflects impact timing subscription renewals end 2008 well slowing subscription sales growth throughout 2009 liquidity capital resources november 30 2009 cash equivalents 1242 million 926 million shortterm debt 01 million long term debt generated strong cash flows operations last years result factors well availability funds credit facility believe sufficient cash meet anticipated working capital expenditure needs future capital requirements depend many factors including timing extent spending support product development efforts expansion sales marketing activities timing introductions new products ongoing companywide initiatives changing technology continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions additional funds may available terms acceptable us expect capital expenditures excluding potential acquisitions approximately 35 million 2010 share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee additionally board directors periodically approves additional buyback programs whereby ihs acquires shares open market fully offset dilutive effect employee equity programs year ended november 30 2009 accepted 229060 shares surrendered employees tax withholding program approximately 10 million 4575 per share shares repurchased 2009 pursuant share buyback program since inception programs withheld tax 928454 shares class common stock approximately 46 million 4972 per share repurchased 1889557 shares approximately 95 million 5013 per share pursuant stock buyback program cash flow net cash provided operating activities 235 million year ended november 30 2009 compared 189 million year ended november 30 2008 increase principally due business growing profitably year positive receivables collections 2009 continued positive impact acquisitions subscriptionbased business model typically generates high rate cash flow aided following • relatively low levels required capital expenditures • positive working capital characteristics generally require substantial working capital increases support growth • cashfortax rate continues trend lower effective tax rate • wellcapitalized balance sheet positive cash flow impact growing business 2009 partially offset decreased accounts payable accrued expenses paid certain restructuring costs 2009 well payments standards groups 2009 accrued november 2008 net cash provided operating activities 189 million year ended november 30 2008 compared 142 million year ended november 30 2007 increase principally due business growing profitably year expanding subscription base increased sales continued positive impact acquisitions positive cash flow impact growing business 2008 partially offset higher annual bonuses paid 2008 robust receivable collections end 2007 payments approximately 11 million related third quarter 2008 restructuring charge net cash used investing activities 154 million year ended november 30 2009 compared 285 million year ended november 30 2008 decrease cash used investing activities primarily driven fact decreased acquisition volume 2009 used 125 million acquisitions businesses compared 273 million 2008 net cash used investing activities 285 million year ended november 30 2008 compared 134 million year ended november 30 2007 increase cash used investing activities primarily driven acquisitions 2008 used 273 million acquire businesses compared 115 million 2007 net cash provided financing activities nominal year ended november 30 2009 compared 35 million use cash year ended november 30 2008 2009 net repayment borrowings 4 million 2008 net borrowings 77 million credit facility notes payable addition 2009 10 million repurchases common stock 2008 84 million active open market net cash used financing activities 35 million year ended november 30 2008 compared 38 million year ended november 30 2007 difference cash flows primarily caused net borrowings 77 million 2008 partially offset 46 million increase treasury stock repurchases 2008 credit facility september 7 2007 entered amended restated credit agreement “revolver” 385 million revolver allows us certain conditions increase facility maximum 500 million agreement expires september 2012 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling four quarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 50 basis points 125 basis points agent bank’s base rate commitment fee payable periodically ranges 10 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations capital lease obligations maximum leverage interest coverage ratios defined revolver november 30 2009 compliance covenants agreement 85 million outstanding borrowings annual interest rate 075 addition outstanding letters credit totaling approximately 11 million november 30 2009 november 30 2009 also 74 million noninterest bearing notes issued sellers prime notes due upon demand therefore recorded “shortterm debt” accompanying consolidated balance sheets offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2009 future periods obligations expected settled cash expect contribute approximately 22 million uk rip approximately 07 million sip 2010 expect make contributions us rip 2010 recent accounting pronouncements december 2007 financial accounting standards board fasb revised guidance business combinations accounting noncontrolling interests revisions significantly change accounting reporting business combination transactions noncontrolling minority interests consolidated financial statements new guidance acquisition related costs required expensed incurred addition assets acquired liabilities assumed business combination arise contingencies recognized fair value acquisition date fair value determined measurement period fair value cannot determined companies typically account acquired contingencies using existing guidance revisions required adopted simultaneously effective first annual reporting period beginning december 15 2008 thus required adopt standards december 1 2009 first day 2010 fiscal year earlier adoption prohibited adopt new provisions first quarter fiscal 2010 expect adoption noncontrolling interest guidance material effect consolidated financial position results operations new guidance business combinations expect material impact accounting future acquisitions october 2009 fasb’s emerging issues task force revised guidance revenue recognition multipledeliverable revenue arrangements revised guidance enable companies separately account multiple revenuegenerating activities deliverables perform customers existing us gaap requires company use vendorspecific objective evidence “vsoe” third party evidence selling price separate deliverables multipledeliverable arrangement revised guidance allow use estimated selling price neither vsoe thirdparty evidence available revised guidance require additional disclosures information entity’s multipledeliverable arrangements requirements revised guidance may applied prospectively revenue arrangements entered materially modified fiscal years beginning june 15 2010 although early adoption permitted company currently evaluating impact update financial position results operations plan early retroactively adopt new guidance item 7a item 7 management’s discussion analysis financial condition results operations described “forwardlooking statements” section start form 10k make forwardlooking statements throughout report forwardlooking statements generally identified use words “may” “might” “will” “should” “expect” “plan” “anticipate” “believe” “estimate” “predict” “potential” “continue” negative terms similar expressions forwardlooking statements based current expectations assumptions projections subject risks uncertainties may cause actual results differ materially forwardlooking statements detailed discussion risks uncertainties could cause actual results events differ materially forwardlooking statements outlined “risk factors” section intend update publicly revise forwardlooking statements whether result new information future events otherwise following discussion financial condition operating results read conjunction “selected financial data” consolidated financial statements accompanying notes included form 10k important information disclosure routinely post website wwwihscom business overview leading source information insight pivotal areas shape today’s business landscape energy economics geopolitical risk sustainability supply chain management businesses governments around globe rely comprehensive content expert independent analysis flexible delivery methods make highimpact decisions develop strategies business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa employ 4400 people 30 countries around world source raw data transform information series transformational steps reduce uncertainty inherent unrefined data enhances usefulness inherent strategies firm commitment put customers first everything believe maintaining disciplined “outsidein” approach allow us better serve customers shareholders achieve goal organized business around customers geographies reside americas emea apac structure allows us tailor expand solutions offer meet unique needs customers globally local markets sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscriptions usually oneyear periods historically seen high renewal rates subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income historically business seasonal aspects second quarter 2010 benefited inclusion revenue ceraweek annual energy executive gathering prior years conference held first quarter year intend hold ceraweek conference second quarter foreseeable future third quarter 2010 benefited inclusion revenue generated triennial release boiler pressure vessel code bpvc engineering standard global operations serve world’s largest corporations across multiple industries well governments organizations 100 countries approximately 47 revenue transacted outside united states however 30 revenue transacted currencies us dollar result strengthening us dollar relative certain currencies negative impact revenue conversely weakening us dollar positive impact revenue however impact operating income diminished due certain operating expenses denominated currencies us dollar largest foreign currency exposures order magnitude british pound canadian dollar euro fluctuations foreign currency rates increased decreased revenues 61 million 368 million 26 million years ended november 30 2010 2009 2008 respectively increased decreased operating income 11 million 51 million 10 million respective periods see “qualitative quantitative disclosures market riskforeign currency risk” key performance indicators believe revenue growth adjusted ebitda dollars margin free cash flow key measures success adjusted ebitda free cash flow nongaap financial measures defined rules securities exchange commission discussed following paragraphs revenue growth review yearoveryear revenue growth segments key measure success addressing customer needs region world measure revenue growth terms organic acquisitive foreign currency impacts define components follows organicwe define organic revenue growth total revenue growth due factors acquisitions foreign currency drive type revenue growth value realization pricing expanding wallet share existing customers upselling crossselling efforts securing new customer business sale new offerings acquisitivewe define acquisitionrelated revenue generated acquired products services date acquisition first anniversary date acquisition type growth comes result strategy purchase integrate leverage value assets acquire foreign currencywe define foreign currency impact revenue difference current revenue current exchange rates current revenue prior period exchange rates significance revenue transacted foreign currencies feel important measure impact foreign currency movements revenue nongaap measures use nongaap measures adjusted ebitda free cash flow operational financial decisionmaking believing measures allow us focus deem reliable indicators ongoing operating performance ability generate cash flow operations also believe investors may find nongaap financial measures useful reasons although caution readers nongaap financial measures substitute gaap financial measures disclosures none nongaap financial measures recognized terms gaap purport alternative net income operating cash flow indicator operating performance gaap measure throughout section management’s discussion analysis ihs website provide reconciliations nongaap financial measures directly comparable gaap measures adjusted ebitda adjusted ebitda used many investors research analysts investment bankers lenders assess operating performance example measure similar ebitda required lenders term loan revolving credit agreement define ebitda net income plus minus net interest plus provision income taxes depreciation amortization definition adjusted ebitda also excludes noncash items stockbased compensation expense net periodic pension postretirement benefits expense gains losses sales assets restructuring charges gains losses discontinued operations items management utilize assessing operating performance free cash flow define free cash flow net cash provided operating activities less capital expenditures companies use identical calculations presentation nongaap financial measures may comparable similarly titled measures companies however measures still useful evaluating performance peer companies believe measures provide users valuable insight key components gaap financial disclosures example company higher gaap net income may appealing investors net income heavily comprised gains asset sales likewise eliminating effects interest income expense moderates impact company’s capital structure performance business combinations effective december 1 2009 accounting business combinations follows new accounting guidance business combinations noncontrolling interests adoption guidance significant impact financial position results operations following paragraphs summarize acquisitions completed fiscal 2010 february 10 2010 acquired emerging energy research llc eer approximately 18 million net cash acquired eer leading advisory firm whose mission help clients understand leverage exploit technological regulatory competitive trends global emerging energy sector recorded approximately 5 million intangible assets 14 million goodwill result transaction march 17 2010 acquired csm worldwide inc approximately 25 million net cash acquired csm worldwide leading automotive market forecasting firm dedicated providing automotive suppliers market information production power train sales forecasting trusted automotive market forecasting services strategic advisory solutions world’s top automotive manufacturers suppliers financial organizations recorded approximately 8 million intangible assets 25 million goodwill result transaction may 5 2010 acquired quantitative micro software llc qms approximately 40 million net cash acquired qms worldwide leader windowsbased econometric forecasting software applications recorded approximately 13 million intangible assets 29 million goodwill result transaction september 7 2010 acquired certain chemical energy portfolio business assets access intelligence approximately 79 million net cash acquired purchased businesses order extend breadth information available current ihs energy customers support development additional products services broad range industries along supply chain recorded approximately 31 million intangible assets 58 million goodwill result transaction september 22 2010 acquired atrion international inc approximately 56 million net cash acquired atrion company combines regulatory expertise industryleading technology streamline generation management distribution hazardous materials communication documents reports recorded approximately 26 million intangible assets 40 million goodwill result transaction september 22 2010 also acquired syntex management systems inc approximately 23 million net cash acquired syntex leading provider operational risk management software services help companies ensure health safety workers protecting environment managing costs recorded approximately 11 million intangible assets 20 million goodwill result transaction november 19 2010 acquired isuppli inc approximately 94 million net cash acquired isuppli global leader technology value chain research advisory services transaction also included screen digest limited leading digital media technology research company recently acquired isuppli preliminarily recorded approximately 28 million intangible assets 70 million goodwill result transaction consolidated financial statements include results operations cash flows business combinations beginning respective dates acquisition pricing information customize many sales offerings meet individual customer needs base pricing number factors including number customer locations number simultaneous users breadth content included offering level offering customization employ difficult us evaluate pricing impacts periodtoperiod basis analysis complicated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue restructuring charges 2010 third quarter 2010 announced various plans streamline operations merge functions result reduced aggregate workforce approximately 3 consolidated several locations changes primarily affected americas emea segments restructuring charge recorded 2010 consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closures relocations legal expenses associated employee terminations incurred quarter entire 91 million restructuring charge recorded third quarter 2010 approximately 77 million charge related americas segment 13 million pertained emea segment remainder apac recorded 01 million restructuring credit second quarter 2010 2008 third quarter 2008 executed restructuring initiative primarily affected americas emea segments restructuring related expenses consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closures including noncash expenses related fixed asset leasehold improvement writeoffs legal expenses associated employee terminations incurred quarter initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality products services deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices restructuring charge incurred entirety third quarter 2008 approximately 58 million charge related americas segment 59 million pertained emea segment 04 million related shared services majority liability paid 2008 remaining liability november 30 2008 10 million overaccrual 07 million reversed 2009 remaining balance substantially paid november 30 2009 items cost operating business incur cost revenue primarily acquire manage deliver offerings costs include personnel information technology occupancy costs well royalty payments thirdparty information providers royalty payments based level subscription sales certain product offerings selling general administrative expenses include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly variable volume sold particularly subscriptionbased business revenue driven sale specifications standards portion content obtained standards development organizations stockbased compensation expense issued stockbased compensation awards almost exclusively restricted stock units record cost respective vesting periods typical vesting period three years none grants exceed eight years november 30 2010 approximately 29 million stockbased awards outstanding approximately 10 million performancebased awards assuming target payout performance awards 2012 beyond majority annual grants highestranking employees performancebased awards vesting performance shares granted date principally based achieving certain financial performance levels fiscal years 2011 2012 november 30 2010 estimated target number shares issuable 2011 2012 fiscal years vest using estimates addition estimated 2011 grants projected sharebased compensation expense 2011 expected around 80 million grant date fair values differ projections change actual performance levels achieve could result change actual amount stock based compensation recognize example event achieve projected performance metrics 2011 2012 stockbased compensation expense could decrease conversely exceed projected performance metrics stockbased compensation could increase pension postretirement benefits provide following pension postretirement plans us ripthis definedbenefit plan covers majority employees united states uk ripthis definedbenefit plan covers limited number employees united kingdom postretirement medical planthis plan contributory plan provides access group rates us employees meet specified conditions supplemental income plan sipthis plan nonqualified pension plan certain company personnel 2010 approved plan design change us rip effective march 1 2011 resulted 53 million reduction liability amortized remaining average future working lifetime employee group approximately six years 2010 also made decision discontinue future benefit accruals uk rip resulted 08 million reduction liability curtailment us rip uk rip underfunded november 30 2010 postretirement medical plan sip unfunded net periodic pension postretirement benefits income expense comprised following expect net pension expense approximately 11 million fiscal year 2011 provision income taxes effective tax rate 237 232 281 years ended november 30 2010 2009 2008 respectively expect fiscal year 2011 effective tax rate slightly lower fiscal year 2010 rate see consolidated financial statements included form 10k additional disclosure income taxes critical accounting policies estimates consolidated financial statements prepared accordance us gaap applying us gaap make significant estimates judgments affect reported amounts assets liabilities revenues expenses well disclosure contingent assets liabilities many instances reasonably could used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions approximately 78 revenue derived sale subscriptions initially deferred recognized ratably delivered subscription period generally 12 months standard agreements typically require significant judgments revenue recognized nonstandard agreements generally make judgments revenue recognition matters whether sufficient legally binding terms conditions exist whether customer acceptance achieved progress certain consulting projects revenue recognized proportional performance basis review customer agreements utilize advice legal counsel appropriate evaluating binding nature contract terms conditions well whether customer acceptance achieved estimate progress consulting project deliverables based knowledge judgment current status individual consulting engagements historically judgments estimates reasonably accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions several highly subjective variables including future cash flows discount rates asset lives also different valuation models component selection requires considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable recognize assumptions inherently uncertain depending size purchase price particular acquisition mix intangible assets acquired purchase price allocation could materially impacted applying different set assumptions estimates goodwill intangible assets make various assumptions goodwill intangible assets including estimated useful lives whether potential impairment events occurred perform impairment analysis carrying values goodwill indefinitelived intangible assets least annually additionally review carrying value goodwill intangible assets whenever events changes circumstances indicate carrying amount may recoverable examples events changes circumstances many subjective nature include following significant negative industry economic trends significant change manner use acquired assets strategy significant decrease market value asset significant change legal factors business climate could affect value asset impairment indicator present perform analysis confirm whether impairment actually occurred amount required charge begin analysis determining fair value asset calculate based projected future cash flows determination fair value requires number significant assumptions judgments including assumptions future economic conditions revenue growth operating margins discount rates finitelived intangible assets review carrying amount least annually determine whether current events circumstances require adjustment carrying amount finitelived intangible asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value indefinitelived intangible assets goodwill evaluate impairment comparing amount carrying value assets exceeds fair value primarily based estimated discounted cash flows exercise judgment selecting assumptions used estimated discounted cash flows analysis goodwill determine fair value reporting unit compare fair value reporting unit carrying value carrying value exceeds fair value reporting unit calculate compare implied fair value goodwill carrying amount goodwill record impairment charge excess carrying value implied fair value use different estimates assumptions within projected future cash flows model use methodology projected future cash flow model could result significantly different fair values goodwill intangible assets income taxes exercise significant judgment determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets recorded reserves related uncertain tax positions valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits defined benefit plans cover majority employees us limited number employees uk also postretirement plans us provide medical benefits certain retirees eligible dependents make number key assumptions measuring plan obligations many highly susceptible change period assumptions include discount rate longterm expected return plan assets rate future salary increases various demographic assumptions follows discount ratewe utilized bond matching model averages bond universe 500 aagraded noncallable bonds 10th 90th percentiles maturity group proxy setting discount rate yearend asset returns based upon anticipated average rate earnings expected invested funds plan longterm salary increase assumptions based upon historical experience anticipated future management actions demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience depending assumptions estimates used net periodic pension postretirement benefit expense could vary significantly within range possible outcomes could material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2010 would resulted following effects 2010 pension expense projected benefit obligation pbo november 30 2010 stockbased compensation stock plans provide grant various equity awards including performancebased awards november 30 2010 outstanding stockbased awards 29 million shares stock approximately 10 million shares subject performancebased awards assuming target payout performance awards 2012 beyond timebased grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures estimated forfeiture rate based historical experience update calculations quarterly based actual experience performancebased grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures assume shares vest target evaluate assumption quarter adjust appropriate appears probable shares vest level target example event achieve projected performance metrics 2011 2012 2013 stock based compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase since outstanding options exercisable 02 million shares common stock november 30 2010 changes valuation assumptions stock options materially affect financial results however number options granted materially increases future likelihood changes valuation assumptions could materially impact financial results also increases results operations total revenue total revenue 2010 increased 11 compared 2009 total revenue 2009 increased 15 compared 2008 table displays percentage point change revenue due organic acquisitive foreign currency factors comparing 2010 2009 2008 2010 vs 2009 5 organic revenue growth 2010 driven primarily 6 increase subscriptionbased business subscriptions make approximately 78 overall business therefore changes subscription sales patterns proportionately larger impact direction total revenues also benefited growth within nonsubscription parts business including revenue triennial release boiler pressure vessel code bpvc engineering standard acquisitionrelated revenue growth 2010 due acquisitions made year well runout acquisitions made 2009 acquisitions made 2010 include following emerging energy research eer first quarter 2010 csm worldwide csm quantitative micro software qms second quarter 2010 access intelligence atrion syntex isuppliscreen digest fourth quarter 2010 2009 vs 2008 3 organic revenue growth 2009 driven primarily 9 increase subscriptionbased business due part higher sales energy product lifecycle information increase partially offset significant organic decreases nonsubscription businesses notably consulting transaction revenue suffered softness business due difficult economy acquisitionrelated revenue growth 2009 partially due acquisitions made 2009 primarily due fourth quarter 2008 acquisition global insight acquisitions made 2009 include following remaining 499 interest fairplay giving us 100 ownership fairplay third quarter 2009 logtech canada ltd logtech environmental support solutions inc ess fourth quarter 2009 evaluate revenue segment order better understand customers’ needs geographies reside also supplementally review revenue transaction type information domain understanding revenue transaction type helps us identify changes related recurring revenue product margin revenue information domain helps us understand performance based capabilities define revenue segment geography percentage change geography segment due factors described following table 2010 vs 2009 began see turn organic revenue growth numbers second quarter 2010 growth rate still positive decelerating attributed general difficult worldwide economic conditions experiencing period modestly accelerating organic growth led continuing increases subscription business three regions also benefit bpvc sales 2010 numbers aided overall growth nonsubscription portion business apac continuing grow areas business expect continue expanding sales efforts region 2009 vs 2008 worldwide economic conditions 2009 negative impact americas emea regions growth still saw positive organic revenue growth region growth rates recent historical results subscriptionbased organic revenue growth positive region largely offset organic decreases consulting transaction revenue apac region expanded areas business began concentrating efforts address emerging markets region revenue transaction type 2010 vs 2009 subscriptionbased revenue core business model continue maintain high percentage revenue subscriptions 2010 approximately half subscriptionbased revenue increase due organic growth half due acquisitionrelated growth 2010 consulting revenue due acquisition activity offset 9 organic revenue declines experienced 16 transaction organic revenue growth 2010 large part due sales bpvc third quarter 2010 revenue growth primarily due acquisition activity 2010 2009 vs 2008 subscriptionbased revenue grew 9 organically 2009 due part higher sales energy product lifecycle information among things consulting revenue decreased 25 organically due softness demand consulting services primarily energy domain transaction revenue 18 organically due slowing product lifecycle energy single document businesses organic decreases consulting transaction revenues pronounced adversely affected economic environment subscription business revenue flat organically higher sales product lifecycle parts products offset lower energy software sales revenue information domain 2010 vs 2009 energy domain revenue continues significant source revenue grew 2010 continued see improving trends core energy subscription offerings product lifecycle revenue increases driven inclusion bpvc sales well continuing solid organic growth inclusion csm worldwide acquisition continue see good organic growth security revenue large part due sales maritime offerings environment’s significant revenue increases primarily due recent acquisitions helped positive organic growth macroeconomic forecasting intersection revenue supports domains increased proportionally increases saw domains positive organic growth 2010 2009 vs 2008 revenue growth energy domain primarily due increase subscriptionbased business largely offset impact unfavorable foreign currency rates decrease consulting revenue product lifecycle domain growth primarily due increase subscriptionbased business well acquisitions partially offset impact unfavorable foreign currency rates revenue growth security domain primarily result consolidating fairplay december 1 2008 although higher subscriptionbased revenue also contributed increase environment domain revenue growth primarily result acquisitions macroeconomic forecasting intersection revenue growth primarily attributable global insight acquisition october 2008 domains experienced positive organic growth 2009 operating expenses continuously evaluate operating expenses look opportunities improve margins manage expenses 2010 eliminated approximately three percent worldwide workforce also continued make progress vanguard initiative plan consolidating standardizing billing systems general ledgers salesforce automation capabilities supporting business processes taking phased implementation approach vanguard order ensure disruption business customers following table shows operating expenses associated percentages revenue cost revenue sales margins 2010 2009 2008 cost revenue increased line increase revenue sales margins define revenue less cost sales divided total sales also largely unchanged total three years following table shows sales margin percentages percentage point change operating segment discussed recent periods rate sales margin expansion slowing due product mix changes acquisition businesses lower margins also moderated sales margin expansion although case many acquisitions expect bring margin profile throughout first year ownership anticipate sales margin expansion flat slightly near term 2009 improvement sales margins three regions company overall driven primarily sales mix experienced higher growth rates subscription products cost reductions resulting third quarter 2008 restructuring general subscriptionbased revenue generates higher contribution margins relatively fixed cost structure whereas consulting transaction revenue comparatively lower contribution margins due variable nature costs associated revenue streams selling general administrative sga expense typically evaluate sga expense excluding stockbased compensation expense 2010 total dollar increase line item primarily due acquisitionrelated activity percentage improvements category reflect continued focus cost structure business 2009 total dollar increase sga expense also driven primarily acquisitionrelated activity partially offset foreign currency movements depreciation amortization expense 2010 compared 2009 depreciation amortization expense increased primarily due increase depreciable amortizable assets acquisitions well increase approximately 4 million capital expenditures 2009 compared 2008 increase primarily due addition depreciable amortizable assets acquisitions made 2009 well increase capital expenditures 14 million 2008 restructuring restructured 2008 2010 fully explained note 4 consolidated financial statements form 10k result recent restructuring third quarter 2010 expect realize 810 million improvement annually pretax income adjusted ebitda result actions operating income segment geography 2010 vs 2009 fiscal 2010 impacted recording net 90 million restructuring charge without charge operating income percentage revenue 2010 would 182 increase americas operating income primarily due increasing strength subscription revenue growth partially offset third quarter 2010 restructuring charge 77 million related americas segment also saw positive benefit addition acquisition activity year increase operating income emea segment 2010 primarily due high organic growth rate within revenue leveraging emea cost structure positive benefit recent acquisitions region emea increase partially offset emea portion third quarter 2010 restructuring charge 13 million increase apac operating income primarily due csm worldwide acquisition significant operations apac region increase also driven continuing strength businesses apac segment shared services operating income decreased primarily increase stockbased compensation expense 2010 allocate stockbased compensation expense shared services function 2009 vs 2008 fiscal 2008 impacted recording 121 million restructuring charge without charge operating income percentage revenue 2008 would 172 operating income americas segment 2008 included restructuring charge 58 million without restructuring charge operating income percentage revenue would 320 2008 line 2009 operating income emea segment increased primarily due higher sales margins 2009 fact 2008 included 59 million restructuring charge without restructuring charge operating income percentage revenue would 188 2008 operating income apac segment increased due mix products sold higher growth higher margin subscriptionbased products 2009 provision income taxes effective tax rates year ended november 30 2010 237 compared 232 2009 281 2008 2010 effective tax rates reflect benefit tax election made second quarter 2010 2009 rate reflects impact several emea activities including discrete period tax benefits recognized successful outcome appeal favorable ruling well full year impact internal legal entity reorganization within emea occurred third quarter 2008 adjusted ebitda nongaap measure reconciling items included following table either noncash items eg depreciation amortization stockbased compensation noncash pension postretirement expense ii items consider useful assessing operating performance eg income taxes restructuring charges gain sale assets case noncash items believe investors better assess operating performance measures presented without items unlike cash expenses adjustments affect ability generate free cash flow invest business example eliminating depreciation amortization ebitda users compare operating performance without regard different accounting determinations useful life case items believe investors better assess operating performance measures presented without items financial impact reflect ongoing operating performance 2010 adjusted ebitda increased primarily improving organic revenue growth acquisitions made focus costs leverage business model 2009 adjusted ebitda increased reasons continue use mechanisms improve overall results financial condition increase accounts receivable balance due combination organic growth addition 2010 acquisitions change accrued compensation primarily due impact payroll timing increased number employees added primarily acquisitions 2010 increase deferred subscription revenue primarily attributable acquisitive growth also includes robust organic growth november 30 2010 organic growth rate implied within deferred subscription revenue 10 leading indicator subscriptionbased business rely primarily directionally accurate indicator liquidity capital resources november 30 2010 cash equivalents 201 million 294 million debt generated strong cash flows operations last years trailing twelve month basis conversion adjusted ebitda free cash flow 72 excluding restructuring payments conversion ratio 75 cash debt cash flow positions well new financing secured january 2011 see note 8 consolidated financial statements form 10k believe sufficient cash meet working capital expenditure needs future capital requirements depend many factors including level future acquisitions need additional facilities facility improvements timing extent spending support product development efforts expansion sales marketing activities timing introductions new products changing technology investments internal business applications continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions however additional funds may available terms acceptable us expect incur approximately 3540 million capital expenditures 2011 cash flows 1 meaningful 2010 vs 2009 increase net cash provided operating activities principally due profitable business growth year evidenced increased sales activity led higher deferred subscription revenue balance payables accrued liabilities balances increased year offset higher receivables balances related growth well cash outflows relating third quarter 2010 restructuring activity subscriptionbased business model continues cash flow generator aided following factors positive working capital characteristics generally require substantial working capital increases support growth cashfortax rate trending effective tax rate 30 wellcapitalized balance sheet increase net cash used investing activities almost due increased acquisition activity 2010 compared 2009 increased capital expenditures 2010 accounting remainder difference continue believe important us reinvest earnings cash flows business increase return shareholders increase net cash provided financing activities principally due increased borrowings credit facility fund acquisitions partially offset increase repurchases common stock share repurchase program used statutory withholding requirements associated vesting shares employee stock program 2009 vs 2008 increase net cash provided operating activities principally due business growing profitably year positive receivables collections 2009 continued positive impact acquisitions positive cash flow impact growing business 2009 partially offset decreased accounts payable accrued expenses paid certain restructuring costs 2009 well payments standards groups 2009 accrued november 2008 decrease cash used investing activities primarily driven fact decreased acquisition volume 2009 used 125 million acquisitions businesses compared 273 million 2008 2009 cash flows financing activities included net repayment borrowings 4 million 2008 net borrowings 77 million credit facility notes payable addition 2009 10 million repurchases common stock 2008 84 million active open market 2008 free cash flow nongaap measure following table reconciles nongaap free cash flow measure net cash provided operating activities free cash flow historically healthy expect continue significant source funding business strategy growth organic acquisitive means credit facility debt please refer note 8 consolidated financial statements form 10k discussion current status credit facility debt including new financing arrangement completed january 2011 2010 particularly fourth quarter made significant additional borrowings revolving credit agreement order fund acquisitions working capital requirements january 2011 elected implement new credit facility since less two years remaining prior credit facility market conditions improved substantially completing new 1 billion credit facility added capacity fund future acquisitions share repurchase program please refer part ii item 5 note 16 consolidated financial statements form 10k discussion share repurchase programs associated activity offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2010 along obligations associated term loan entered january 5 2011 future periods obligations expected settled cash expect contribute approximately 17 million uk rip approximately 07 million sip 2011 expect make contributions us rip 2011 recent accounting pronouncements october 2009 fasb issued guidance revenue recognition become effective us beginning december 1 2010 new guidance vendor specific objective evidence vsoe third party evidence deliverables arrangement cannot determined best estimate selling price required separate deliverables allocate arrangement consideration using relative selling price method new guidance includes new disclosure requirements application relative selling price method affects timing amount revenue recognition adoption update material impact financial position results operations item 7a item 7 management’s discussion analysis financial condition results operations described “forwardlooking statements” section start form 10k make forwardlooking statements throughout report forwardlooking statements generally identified use words “may” “might” “will” “should” “expect” “plan” “anticipate” “believe” “estimate” “predict” “potential” “continue” negative terms similar expressions forwardlooking statements based current expectations assumptions projections subject risks uncertainties may cause actual results differ materially forwardlooking statements detailed discussion risks uncertainties could cause actual results events differ materially forwardlooking statements outlined “risk factors” section elsewhere form 10k intend update publicly revise forwardlooking statements whether result new information future events otherwise following discussion financial condition operating results read conjunction “selected financial data” consolidated financial statements accompanying notes included form 10k important information disclosure routinely post website wwwihscom executive summary business overview leading source information insight analytics critical areas shape todays business landscape businesses governments 165 countries around globe rely comprehensive content expert independent analysis flexible delivery methods make highimpact decisions develop strategies speed confidence business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa committed sustainable profitable growth employ 6000 people 31 countries around world inherent strategies firm commitment put customers first everything believe maintaining disciplined “outsidein” approach allow us better serve customers stockholders achieve goal organized business around customers geographies reside americas emea apac structure allows us tailor expand solutions offer meet unique needs customers globally local markets subscriptions represent 75 total revenue sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscriptions usually oneyear periods historically seen high renewal rates subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest levels revenue profit also experience eventdriven seasonality business instance ihs ceraweek annual energy executive gathering held second quarter another example triennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every third year bpvc benefit recently occurred third quarter 2010 2012 invested people platforms processes products significant rate series initiatives designed boost colleague productivity increase efficiencies develop new enhanced products create scalable platforms designed accommodate future revenue growth without incur proportional increases costs support growth initiatives include limited • vanguard plan consolidating standardizing billing systems general ledgers salesforce automation capabilities supporting business processes implementing vanguard series releases commenced summer 2011 expected completed end calendar 2013 early december 2012 implemented fourth release approximately 70 revenue transactions flowing vanguard system • product development 2012 significant number new product introductions enhancements continue focus product development expect significant number new product introductions enhancements 2013 well • customer care centers excellence three regional customer care centers excellence fully operational centers consolidate customercare transactionprocessing capabilities simplify standardize approach providing dedicated customer service global operations approximately 50 revenue transacted outside united states however 30 revenue transacted currencies us dollar result strengthening us dollar relative certain currencies negative impact revenue conversely weakening us dollar positive impact revenue however impact operating income diminished due certain operating expenses denominated currencies us dollar largest foreign currency exposures order magnitude british pound canadian dollar euro see qualitative quantitative disclosures market risk foreign currency exchange rate risk additional discussion impacts foreign currencies operations key performance indicators believe revenue growth adjusted ebitda dollars margin free cash flow key measures success adjusted ebitda free cash flow nongaap financial measures defined rules securities exchange commission discussed following paragraphs revenue growth review yearoveryear revenue growth segments key measure success addressing customer needs region world operate measure revenue growth terms organic acquisitive foreign currency impacts define components follows • organic define organic revenue growth total revenue growth continuing operations factors acquisitions foreign currency drive type revenue growth value realization pricing expanding wallet share existing customers upselling crossselling efforts securing new customer business sale new offerings • acquisitive define acquisitionrelated revenue generated acquired products services date acquisition first anniversary date acquisition type growth comes result strategy purchase integrate leverage value assets acquire • foreign currency define foreign currency impact revenue difference current revenue current exchange rates current revenue corresponding prior period exchange rates due significance revenue transacted foreign currencies measure impact foreign currency movements revenue also review revenue transaction type understanding revenue transaction type helps us identify broad changes product mix summarize transaction type revenue following two categories • subscription revenue represents significant majority revenue comprised subscriptions various information offerings software maintenance • nonsubscription revenue represents consulting services eg research analysis modeling forecasting singledocument product sales software license sales associated services conferences events advertising nonsubscription products services important part business complement subscription business creating strong comprehensive customer relationships nongaap measures use nongaap financial measures adjusted ebitda free cash flow operational financial decisionmaking believe measures allow us focus deem reliable indicators ongoing operating performance adjusted ebitda ability generate cash flow operations free cash flow also believe investors may find nongaap financial measures useful reasons although caution readers nongaap financial measures substitute gaap financial measures disclosures none nongaap financial measures recognized terms gaap purport alternative net income operating cash flow indicator operating performance gaap measure throughout section management’s discussion analysis ihs website provide reconciliations nongaap financial measures directly comparable gaap measures adjusted ebitda adjusted ebitda used many investors research analysts investment bankers lenders assess operating performance example measure similar adjusted ebitda required lenders term loans revolving credit agreement define ebitda net income plus minus net interest plus provision income taxes depreciation amortization definition adjusted ebitda excludes noncash items eg stockbased compensation expense ii items management consider useful assessing operating performance eg acquisitionrelated costs restructuring charges income loss discontinued operations pension settlement marktomarket adjustments gain loss sale assets free cash flow define free cash flow net cash provided operating activities less capital expenditures define adjusted free cash flow free cash flow plus pension deficit funding contributed early 2012 companies use identical calculations presentation nongaap financial measures may comparable similarly titled measures companies however measures still useful evaluating performance peer companies believe measures provide users valuable insight key components gaap financial disclosures example company higher gaap net income may appealing investors net income heavily comprised gains asset sales likewise eliminating effects interest income expense moderates impact company’s capital structure performance business combinations year ended november 30 2012 completed eight business combinations total purchase price approximately 306 million year ended november 30 2011 completed five primary business combinations total purchase price approximately 730 million year ended november 30 2010 completed seven business combinations total purchase price approximately 335 million consolidated financial statements include results operations cash flows business combinations beginning respective dates acquisition acquisitions key part growth strategy expect continue important us focus acquisitions longterm growth potential target highgrowth markets fill strategic need business portfolio seek provide comprehensive solutions customers timely integration acquisitions provides us increased organic growth potential connect offerings customers pricing information customize many sales offerings meet individual customer needs base pricing number factors including number customer locations number simultaneous users breadth content included offering level offering customization employ difficult us evaluate pricing impacts periodtoperiod basis analysis complicated fact offering sets purchased customers often constant periods result able precisely differentiate pricing volume impacts changes revenue items cost operating business incur cost revenue primarily acquire manage deliver offerings costs include personnel information technology occupancy costs well royalty payments thirdparty information providers royalty payments based level subscription sales certain product offerings sales general administrative expenses include wages personnel costs commissions corporate occupancy costs marketing costs large portion operating expenses directly commensurate volume sold particularly subscriptionbased business revenue driven sale specifications standards portion content obtained standards development organizations stockbased compensation expense issue equity awards employees almost exclusively restricted stock units record cost respective vesting periods typical vesting period three years none grants exceed eight years november 30 2012 approximately 28 million stockbased awards outstanding approximately 11 million performancebased awards majority annual grants highestranking employees performancebased awards vesting performance shares granted 2011 2012 principally based achieving certain financial performance levels fiscal years 2013 2014 november 30 2012 believe target number shares issuable 2013 2014 fiscal years vest based meeting certain performance targets using estimates addition estimated 2013 grants projected stockbased compensation expense 2013 expected approximately 138142 million grant date fair values differ projections change actual performance levels achieve could result change actual amount stockbased compensation recognize example event achieve projected performance metrics 2013 2014 stockbased compensation expense could decrease conversely exceed projected performance metrics stockbased compensation could increase pension postretirement benefits provide following pension postretirement plans • us retirement income plan us rip closed definedbenefit plan covers majority employees united states • uk retirement income plan uk rip frozen definedbenefit plan covers limited number employees united kingdom • postretirement medical plan contributory plan provides access group rates us employees meet specified conditions • supplemental income plan sip plan nonqualified pension plan certain company personnel 2011 undertook comprehensive review us rip designed ensure maintained marketcompetitive employee benefits decreasing volatility result analysis took following steps 2011 2012 • settled certain pension obligations 2011 settled retiree obligations purchasing annuities retiree population thirdparty insurer 2012 offered lumpsum buyouts former colleagues yet receiving benefits nearly 60 eligible participants accepting offer combination settlements resulted significant reduction pension obligations assets allowing us reduce volatility plan • changed pension plan investment strategies pension plan investment strategy creates better match pension assets pension obligations approximately 75 us rip assets invested fixed income securities durations similar expected timing pension obligation payouts • changed pension accounting policy 2011 changed pension accounting policy accelerated recognition method recognizes gains losses income statement quickly previous method including marktomarket pension adjustment record fourth quarter year • accelerated funding plan contributions accelerated plan funding contributing approximately 65 million plan december 2011 first month fiscal 2012 approximately 57 million contribution allowed us bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs december 2012 first month fiscal 2013 contributed approximately 10 million us rip fund estimated 2013 pension costs • closed plan future participants first quarter fiscal 2012 made decision close us rip new participants effective january 1 2012 place us rip benefits colleagues hired january 1 2012 receive company nonelective contribution 401k plan balances active employee end year restructuring charges continue evaluate opportunities streamline operations last three years incurred direct incremental costs associated consolidating positions centers excellence complete successive vanguard releases eliminating positions accomplish operational efficiencies closing facilities consolidating legacy data centers including certain contract termination costs expect continue incur costs related similar activities future periods resulting additional restructuring charges discontinued operations continue evaluate product portfolio focus assessing growth profile strategic fit offerings ensuring support core businesses enable sustainable high growth rates provide scalable market capability businesses may treated discontinued operations ultimately decide sell abandon providing meet accounting criteria treatment discontinued operations critical accounting policies estimates consolidated financial statements prepared accordance us gaap applying us gaap make significant estimates judgments affect reported amounts assets liabilities revenues expenses well disclosure contingent assets liabilities believe accounting estimates judgments reasonable made many instances reasonably could used different accounting estimates addition changes accounting estimates reasonably likely occur period accordingly actual results could differ significantly estimates extent material differences estimates actual results financial condition results operations affected base estimates historical experience assumptions believe reasonable evaluate estimates ongoing basis refer accounting estimates type critical accounting policies estimates discussed revenue recognition majority offerings provided agreements containing standard terms conditions approximately 76 revenue derived sale subscriptions initially deferred recognized ratably delivered subscription period generally 12 months standard agreements typically require significant judgments revenue recognized nonstandard agreements generally make judgments revenue recognition matters •whether sufficient legally binding terms conditions exist •whether customer acceptance achieved •progress certain consulting projects revenue recognized proportional performance basis review customer agreements utilize advice legal counsel appropriate evaluating binding nature contract terms conditions well whether customer acceptance achieved estimate progress consulting project deliverables based knowledge judgment current status individual consulting engagements historically judgments estimates reasonably accurate experienced significant disputes customers regarding timing acceptance delivered products services however actual experience future periods respect binding terms conditions customer acceptance may differ historical experience business combinations allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process identify attribute values estimated lives intangible assets acquired determinations involve significant estimates assumptions several highly subjective variables including future cash flows discount rates asset lives also different valuation models component selection requires considerable judgment estimates assumptions may based part availability listed market prices transparent market data determinations affect amount amortization expense recognized future periods base fair value estimates assumptions believe reasonable recognize assumptions inherently uncertain depending size purchase price particular acquisition mix intangible assets acquired purchase price allocation could materially impacted applying different set assumptions estimates goodwill intangible assets make various assumptions goodwill intangible assets including estimated useful lives whether potential impairment events occurred perform impairment analyses carrying values goodwill indefinitelived intangible assets least annually additionally review carrying value goodwill intangible assets whenever events changes circumstances indicate carrying amounts may recoverable examples events changes circumstances many subjective nature include following •significant negative industry economic trends •a significant change manner use acquired assets strategy •a significant decrease market value asset •a significant change legal factors business climate could affect value asset impairment indicator present perform analysis confirm whether impairment actually occurred amount required charge finitelived intangible assets review carrying amount least annually determine whether current events circumstances require adjustment carrying amount finitelived intangible asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value indefinitelived intangible assets goodwill first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value primarily based estimated discounted cash flows exercise judgment selecting assumptions used estimated discounted cash flows analysis goodwill determine fair value reporting unit compare fair value reporting unit carrying value carrying value exceeds fair value reporting unit calculate compare implied fair value goodwill carrying amount goodwill record impairment charge excess carrying value implied fair value determination fair value requires number significant assumptions judgments including assumptions future economic conditions revenue growth operating margins discount rates use different estimates assumptions within projected future cash flows model use methodology projected future cash flow model could result significantly different fair values goodwill intangible assets income taxes exercise significant judgment determining provision income taxes current tax assets liabilities deferred tax assets liabilities future taxable income purposes assessing ability realize future benefit deferred tax assets recorded reserves related uncertain tax positions valuation allowance established reduce deferred tax assets amount considered likely realized generation future taxable income tax planning opportunities extent determination made establish adjust valuation allowance expense benefit recorded period determination made actual results differ estimates used adjust estimates future periods operating results financial position could materially affected pension postretirement benefits account pension postretirement plans accordance us generally accepted accounting principles fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent 10 greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets make number key assumptions measuring plan obligations many highly susceptible change period assumptions include discount rate longterm expected return plan assets various demographic assumptions follows • discount rate utilized bond matching model averages bond universe 500 aagraded noncallable bonds 10th 90th percentiles maturity group proxy setting discount rate yearend • asset returns based upon anticipated average rate earnings expected invested funds plan longterm • demographic assumptions turnover retirement disability based upon historical experience monitored continuing basis determine adjustments assumptions warranted order better reflect anticipated future experience depending assumptions estimates used net periodic pension postretirement benefit expense could vary significantly within range possible outcomes could material impact financial results discount rates expected rates return plan assets selected end given fiscal year impact expense subsequent year fiftybasispoint decrease certain assumptions made beginning 2012 would resulted following effects 2012 pension expense projected benefit obligation pbo november 30 2012 thousands stockbased compensation stock plans provide grant various equity awards including performancebased awards timebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures estimated forfeiture rate based historical experience update calculations quarterly based actual experience performancebased restricted stock unit grants calculate stockbased compensation cost multiplying grant date fair market value number shares granted reduced estimated forfeitures quarter evaluate probability number shares expected vest adjust appropriate example event achieve projected performance metrics 2013 2014 stockbased compensation expense would decrease conversely exceed projected performance metrics stockbased compensation would increase results operations total revenue total revenue 2012 increased 15 compared period 2011 total revenue 2011 increased 25 compared period 2010 table displays percentage point change revenue due organic acquisitive foreign currency factors comparing 2012 2011 2010 excludes impact nonsubscription revenue associated triennial release certain engineering standard unadjusted organic revenue growth approximately 8 2012 vs 2011 5 organic revenue growth year ended november 30 2012 primarily attributable continued strength subscriptionbased business consistently provided organic revenue growth rate seven percent higher last two half years subscriptionbased business represented 76 total revenue nonsubscription business decreased organically four percent acquisitionrelated revenue growth 2012 due acquisitions made year well runout acquisitions made 2011 acquisitions made 2012 include following • caps displaybank ims research bdw automotive second quarter 2012 • xēdar cyberregs globalspec invention machine third quarter 2012 2011 vs 2010 9 organic revenue growth 2011 broadbased nature subscription nonsubscription business contributing growth subscriptionbased business representing 77 total revenue increased 8 organically excluding 2010 revenue associated triennial release bpvc nonsubscription businesses contributed positively overall growth well acquisitionrelated revenue growth 2011 due acquisitions made 2011 well runout acquisitions made 2010 acquisitions made 2011 include following • odspetrodata dyadem cmai second quarter 2011 • smt third quarter 2011 • purvin gertz fourth quarter 2011 revenue segment geography percentage change geography segment due factors described following table 2012 vs 2011 experienced organic revenue growth three geographies subscriptionbased revenue driving majority increases organic growth americas driven largely seven percent organic increase subscription revenue partially offset ten percent organic decline nonsubscription revenue caused significant increases sales cycles delays customer decisions key projects due macroeconomic geopolitical uncertainty emeas organic growth broadbased subscriptions growing six percent rate nonsubscriptions growing eight percent portion nonsubscription increase primarily due increase consulting revenue apacs organic growth continues strong contributor 12 percent growth rate subscriptions one percent growth rate nonsubscriptions 2011 vs 2010 experienced broadbased organic revenue growth three geographies subscriptionbased revenue energy revenue providing key contributions growth doubled presence latin america apac primarily investment 2011 effort take advantage highopportunity geographies revenue transaction type 2012 vs 2011 relative 13 percent subscription revenue growth year ended november 30 2012 approximately eight percent due organic growth trend especially important us subscriptionbased revenue core business model subscriptions represent steady predictable source revenue us continue see good traction pricing practices stable renewal rates 22 increase nonsubscription business primarily due acquisitions nonsubscription revenue decreasing four percent organically year nonsubscription performance slowed key service lines new license revenue sales cycles extended pause customers discretionary capital expense spending 2011 vs 2010 relative 22 percent subscription revenue growth year ended november 30 2011 approximately eight percent due organic growth nonsubscription business also performed well 2011 positive organic growth areas excluding bpvc engineering standard impact 2010 operating expenses following table shows operating expenses associated percentages revenue cost revenue 2012 2011 2010 cost revenue increased line increase revenue continue invest people platforms processes products support goals increase top bottomline growth selling general administrative sga expense evaluate sga expense excluding stockbased compensation expense continue invest business also strive invest necessary drive scale growth key industries core markets sga expense consequently remained relatively flat percentage revenue compared prioryear periods stockbased compensation expense continued increase year result increase number employees increase stock price achievement overachievement certain performance metrics expect stockbased compensation expense continue grow future years utilize stock plan reward provide incentive colleagues help business succeed depreciation amortization expense 2012 compared 2011 depreciation amortization expense increased primarily due increase depreciable amortizable assets acquisitions well increase approximately 10 million capital expenditures 2011 compared 2010 depreciation amortization expense increased primarily due increase depreciable amortizable assets acquisitions well increase approximately 23 million capital expenditures related various investment initiatives facilities infrastructure restructuring incurred 17 million restructuring charges 2012 increase prior years benefits starting realize respect vanguard company priorities allow us simplify processes standardize platforms order enable existing workforce accomplish fewer resources acquisitionrelated costs incurred 4 million costs 2012 integration acquisitionrelated activities acquisitions key component growth strategy expect continue perform similar activities future acquisitions intend continue identifying costs separate line item financial statements pension postretirement expense following table shows components net periodic pension postretirement expense thousands 2011 2012 pension postretirement expense considerably higher due settlement costs incurred annuitize retirees 2011 facilitate lumpsum buyout offers made 2012 pension postretirement expense impacted fourth quarter marktomarket adjustments recorded accordance accounting policy pension postretirement benefits expect 2013 net service cost prior fourth quarter marktomarket adjustments approximately 9 million completed major elements us rip redesign previously outlined expect incur settlement expense 2013 operating income segment geography 2012 vs 2011 increase americas operating income margin primarily driven cost management efforts region continuing carefully manage business costs difficult economic times emea operating income margin relatively flat percentage segment revenue americas continue manage costs region despite increases depreciation amortization costs compared prior year decrease apac operating income margin continues driven increased investment sales operations teams region shared services operating expense increased primarily increase stockbased compensation expense 2012 allocate stockbased compensation expense shared services function portion increase offset decrease pension postretirement expense 2011 vs 2010 decrease americas operating income margin primarily driven effects recent acquisition activity particularly form increased depreciation amortization associated acquired intangible assets well associated integration acquisitionrelated costs emea operating income margin relatively flat minor fluctuations attributable increased depreciation amortization sga costs decrease apac operating income margin primarily result increase sga investment drive growth opportunities emerging market shared services operating expense increased primarily change pension accounting annuitization retiree pension obligations well increase stockbased compensation expense 2011 provision income taxes effective tax rate year ended november 30 2012 157 compared 165 2011 227 2010 effective tax rate fiscal year 2012 varies effective tax rates fiscal years 2011 2010 primarily result higher profit levels lower tax rates incentive credits foreign tax jurisdictions discrete nature certain tax benefits received 2012 expect effective tax rate increase next year adjusted ebitda nongaap measure adjusted ebitda 2012 increased primarily organic subscription revenue growth acquisitions leverage business model despite fact continued invest substantially core business key transformative initiatives 2011 adjusted ebitda increased many reasons 2012 addition seeing continuing improvement recent acquisitions collective margin year progressed financial condition increase accounts receivable balance primarily due acquisitions made 2012 higher sales line overall increase revenue decrease accrued compensation primarily due lower attainment certain performance objectives associated annual incentive plan well payroll accrual timing difference increase deferred revenue primarily due organic growth organic growth rate deferred revenue muted timing billings associated sap implementation well timing certain renewals liquidity capital resources november 30 2012 cash equivalents 345 million approximately 276 million currently held foreign subsidiaries cash held foreign subsidiaries available fund domestic operations deemed earnings subsidiaries indefinitely reinvested also 1061 billion debt november 30 2012 contributed increase interest expense 2012 continue result increased interest expense near future generated strong cash flows operations last years cash debt cash flow additional financing secured august 2012 believe sufficient cash meet working capital expenditure needs historically required make cash contributions us rip pension plan funded status however due global economic downturn negatively impacted returns pension assets required make cash contribution us rip fiscal 2012 considering requirement various changes pension strategy including annuitization retiree pension obligations bringing pension deficit current funding 2012 pension costs made 65 million contribution pension plan december 2011 first month 2012 fiscal year approximately 57 million contribution used annuitization bringing deficit current remaining 8 million used fund expected 2012 pension costs december 2012 first month 2013 fiscal year made 10 million contribution pension plan fund estimated 2013 pension costs anticipate continue contribute approximately amount future years cover annual service costs future capital requirements depend many factors including level future acquisitions need additional facilities facility improvements timing extent spending support product development efforts information technology infrastructure investments internal business applications continued market acceptance offerings could required could elect seek additional funding public private equity debt financing possible future acquisitions however additional funds may available terms acceptable us expect capital expenditures approximately five percent revenue 2013 cash flows 2012 vs 2011 decrease net cash provided operating activities principally due 65 million pension funding contribution made december 2011 partially offset continued improvements business performance subscriptionbased business model continues cash flow generator aided positive working capital characteristics generally require substantial working capital increases support growth decrease net cash used investing activities principally due smaller acquisitions completed 2012 compared 2011 particularly acquisition smt part decrease offset increased capital expenditures associated continued investment business decrease net cash provided financing activities 2012 principally due significant amount borrowings credit facility 2011 used fund acquisition smt 2012 also began treasury share repurchase program fourth quarter contributed significant financing cash outflows 2011 vs 2010 increase net cash provided operating activities principally due continued profitable business growth evidenced healthy organic revenue growth rates increase net cash used investing activities principally due significant acquisition activities second third quarters 2011 particularly acquisition smt also significantly increased capital expenditures various investment initiatives facilities infrastructure increase net cash provided financing activities 2012 principally due borrowings credit facility fund acquisition smt free cash flow nongaap measure following table reconciles nongaap free cash flow measure net cash provided operating activities free cash flow historically healthy expect continue significant source funding business strategy growth organic acquisitive means credit facility debt please refer note 8 consolidated financial statements form 10k discussion current status term loans revolving credit agreement including recent expansion credit facility completion new term loan agreement utilized proceeds august 29 2012 term loan transactions reduce outstanding borrowings revolver consequently net increase debt position result transactions additional capacity created within revolver used general corporate purposes including acquisitions working capital share repurchase programs please refer part ii item 5 note 16 consolidated financial statements form 10k discussion share repurchase programs offbalance sheet transactions offbalance sheet transactions contractual obligations commercial commitments various contractual obligations commercial commitments recorded liabilities consolidated financial statements items certain purchase commitments executory contracts recognized liabilities consolidated financial statements required disclosed following table summarizes contractual obligations commercial commitments november 30 2012 along obligations associated term loans future periods obligations expected settled cash thousands four pension postretirement benefit plans following estimated cash contributions 2013 • us rip made 10 million contribution us rip december 2012 first month fiscal 2013 primarily used fund estimated 2013 pension costs • uk rip expect contribute approximately 18 million uk rip 2013 • sip expect contribute approximately 07 million sip 2013 • postretirement medical plan expect contribute approximately 09 million postretirement medical plan 2013 310 million outstanding borrowings credit facility revolver current annual interest rate 175 credit facility fiveyear term ending january 2016 recent accounting pronouncements please refer note 2 consolidated financial statements form 10k discussion recent accounting pronouncements anticipated effect business item 7a item 7a quantitative qualitative disclosure market risk interest rate risk november 30 2011 investments cash equivalents therefore exposed material interest rate risk investments term loan subject variable interest rates april june 2011 entered fouryear interest rate derivative contracts swap variable interest rates fixed 100 million term loan credit facility borrowings also subject variable interest rates hypothetical 10 adverse movement interest rates related term loan credit facility borrowings derivative contracts would resulted increase approximately 14 million interest expense foreign currency exchange rate risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased decreased revenues 161 million 61 million 368 million years ended november 30 2011 2010 2009 respectively increased decreased operating income 14 million 11 million 51 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders’ equity 2011 recorded cumulative translation loss 7 million reflecting changes exchange rates various currencies compared us dollar 10 change currencies primarily exposed would impacted 2011 revenue operating income approximately 376 million 44 million respectively approximately 69 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents foreign currency interest rate derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk interest rate risk exposure changes interest rates relates primarily portfolio investments primary objective investment portfolio preserve principal maximizing yields accomplished maintaining welldiversified portfolio highquality investmentgrade securities effective maturity within next twelve months hypothetical 50basispoint increase interest rates november 30 2006 would immaterial impact fair value portfolio also may exposed time changes interest rates may adversely affect results operations financial position exposed interest rate risk november 30 2006 since outstanding variablerate debt date foreign currency risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased revenues 01 million 27 million 132 million years ended november 30 2006 2005 2004 respectively increased decreased operating income 33 million 25 million 14 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders’ equity 2006 recorded cumulative translation gains 74 million reflecting changes exchange rates various currencies compared us dollar 10 change currencies primarily exposed would impacted 2006 revenue operating income approximately 146 million 26 million respectively credit risk exposed credit risk associated cash equivalents investments foreign currency options forwards trade receivables believe cash equivalents investments foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas although large number customers dispersed across different industries geographic areas prolonged economic downturn could increase exposure credit risk trade receivables perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk market risk refers potential losses adverse changes market rates prices exposed market risk primarily form interest rate foreign currency exchange rate credit risk actively monitor exposures order manage exposures use derivative financial instruments including interest rate swaps foreign currency forwards objective reduce fluctuations revenue earnings cash flows resulting changes interest rates foreign currency rates use derivatives speculative purposes interest rate risk november 30 2015 investments cash equivalents therefore exposed material interest rate risk investments 2014 revolving facility 2013 term loan borrowings subject variable interest rates use interest rate swaps order fix portion variable rate debt part overall interest rate risk management strategy november 30 2015 1375 million floatingrate debt 176 percent weightedaverage interest rate 400 million subject effective floatingtofixed interest rate swaps hypothetical increase interest rates 100 basis points applied floating rate indebtedness would increase annual interest expense approximately 10 million 14 million without giving effect interest rate swaps foreign currency exchange rate risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased decreased revenues 46 million 3 million 8 million years ended november 30 2015 2014 2013 respectively increased decreased operating income 10 million 2 million 0 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders’ equity 2015 recorded cumulative translation loss 80 million reflecting changes exchange rates various currencies compared us dollar hypothetical ten percent change currencies primarily exposed would impacted 2015 revenue operating income approximately 40 million 4 million respectively approximately 80 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents foreign currency interest rate derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk market risk refers potential losses adverse changes market rates prices exposed market risk primarily form interest rate foreign currency exchange rate credit risk actively monitor exposures order manage exposures use derivative financial instruments including interest rate swaps foreign currency forwards objective reduce fluctuations revenue earnings cash flows resulting changes interest rates foreign currency rates use derivatives speculative purposes interest rate risk november 30 2013 investments cash equivalents therefore exposed material interest rate risk investments credit facility term loan borrowings subject variable interest rates use interest rate swaps order fix portion variable rate debt part overall interest rate risk management strategy november 30 2013 2167 million floatingrate debt 244 percent weightedaverage interest rate 100 million subject effective floatingtofixed interest rate swaps hypothetical increase interest rates 100 basis points applied floating rate indebtedness would increase annual interest expense approximately 21 million 22 million without giving effect interest rate swaps foreign currency exchange rate risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased decreased revenues 8 million 9 million 16 million years ended november 30 2013 2012 2011 respectively increased operating income 01 million 1 million 1 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders’ equity 2013 recorded cumulative translation loss 11 million reflecting changes exchange rates various currencies compared us dollar hypothetical ten percent change currencies primarily exposed would impacted 2013 revenue operating income approximately 43 million 5 million respectively approximately 75 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents foreign currency interest rate derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a qualitative quantitative disclosures market risk interest rate risk exposure market risk related changes interest rates relates primarily portfolio investments primary objective investment portfolio preserve principal maximizing yields accomplished maintaining welldiversified portfolio highquality investmentgrade securities effective maturity within next twelve months hypothetical 50basispoint increase interest rates november 30 2005 would decreased fair value portfolio approximately 01 million also may exposed time changes interest rates may adversely affect results operations financial position exposed interest rate risk november 30 2005 since outstanding debt date foreign currency risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased revenues 117 million 132 million 27 million years ended november 30 2003 2004 2005 respectively increased decreased operating income 27 million 14 million 25 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders equity 2005 recorded cumulative translation gains 37 million reflecting changes exchange rates various currencies compared us dollar beginning january 2005 implemented foreigncurrency hedging program reduce foreign currency exposures particular entered forward contracts energy segments swiss based subsidiary effectively convert portion accounts receivable denominated foreign currency swiss franc subsidiarys functional currency additionally also entered forward contracts effectively convert portion operating income denominated foreign currencies swiss franc subsidiarys functional currency forward contracts entered counterparty investment grade financial institution november 30 2005 contracted commercial bank material cost us acquire total chf 203 million £10 million december 2005 fixed price 182 million chf 21 million respectively approximately 01 million current risk management assets associated foreign exchange contracts november 30 2005 approximately 27 million current risk management liabilities associated foreign exchange contracts november 30 2005 applicable exchange rates increase decrease 10 levels november 30 2005 current risk management asset would increase decrease approximately 01 million risk management liability would increase decrease approximately 14 million november 30 2004 forward contracts place utilize financial derivatives trading speculative purposes 10 change currencies primarily exposed would impacted 2005 revenue operating income approximately 114 million 24 million respectively credit risk exposed credit risk associated cash equivalents investments foreign currency options forwards trade receivables believe cash equivalents investments foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas although large number customers dispersed across different industries geographic areas prolonged economic downturn could increase exposure credit risk trade receivables perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk interest rate risk exposure changes interest rates relates primarily portfolio investments primary objective investment portfolio preserve principal maximizing yields accomplished maintaining welldiversified portfolio highquality investmentgrade securities effective maturity within next twelve months hypothetical 50basispoint increase interest rates november 30 2007 would immaterial impact fair value portfolio also may exposed time changes interest rates may adversely affect results operations financial position exposed interest rate risk november 30 2007 since outstanding variablerate debt date foreign currency risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased revenues 150 million 01 million 27 million years ended november 30 2007 2006 2005 respectively increased decreased operating income 44 million 33 million 25 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders equity 2007 recorded cumulative translation gains 180 million reflecting changes exchange rates various currencies compared us dollar 10 change currencies primarily exposed would impacted 2007 revenue operating income approximately 193 million 22 million respectively credit risk exposed credit risk associated cash equivalents investments trade receivables believe cash equivalents investments foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas although large number customers dispersed across different industries geographic areas prolonged economic downturn could increase exposure credit risk trade receivables perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk market risk refers potential losses adverse changes market rates prices exposed market risk primarily form interest rate foreign currency exchange rate credit risk actively monitor exposures order manage exposures use derivative financial instruments including interest rate swaps foreign currency forwards objective reduce fluctuations revenue earnings cash flows resulting changes interest rates foreign currency rates use derivatives speculative purposes interest rate risk november 30 2014 investments cash equivalents therefore exposed material interest rate risk investments 2014 revolving facility 2013 term loan borrowings subject variable interest rates use interest rate swaps order fix portion variable rate debt part overall interest rate risk management strategy november 30 2014 1085 million floatingrate debt 168 percent weightedaverage interest rate 100 million subject effective floatingtofixed interest rate swaps hypothetical increase interest rates 100 basis points applied floating rate indebtedness would increase annual interest expense approximately 10 million 11 million without giving effect interest rate swaps foreign currency exchange rate risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased decreased revenues 3 million 8 million 9 million years ended november 30 2014 2013 2012 respectively increased decreased operating income 2 million 0 million 1 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders’ equity 2014 recorded cumulative translation loss 37 million reflecting changes exchange rates various currencies compared us dollar hypothetical ten percent change currencies primarily exposed would impacted 2014 revenue operating income approximately 45 million 10 million respectively approximately 80 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents foreign currency interest rate derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk interest rate risk november 30 2008 investments cash equivalents therefore exposed material interest rate risk investments may exposed time changes interest rates may adversely affect results operations financial position related debt 10 adverse change interest rates would result hypothetical increase 03 million interest expense foreign currency risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates decreased increased revenues 26 million 150 million 01 million year ended november 30 2008 2007 2006 respectively increased decreased operating income 10 million 44 million 33 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders equity 2008 recorded cumulative translation losses 970 million reflecting changes exchange rates various currencies compared us dollar 10 change currencies primarily exposed would impacted 2008 revenue operating income approximately 238 million 10 million respectively approximately 67 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents investments trade receivables believe cash equivalents investments foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas although large number customers dispersed across different industries geographic areas current economic downturn could increase exposure credit risk trade receivables perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk interest rate risk november 30 2009 investments cash equivalents therefore exposed material interest rate risk investments may exposed time changes interest rates may adversely affect results operations financial position related debt 10 adverse change interest rates would result hypothetical increase less 01 million interest expense foreign currency risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates decreased increased revenues 368 million 26 million 150 million year ended november 30 2009 2008 2007 respectively increased decreased operating income 51 million 10 million 44 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders’ equity 2009 recorded cumulative translation gain 42 million reflecting changes exchange rates various currencies compared us dollar 10 change currencies primarily exposed would impacted 2009 revenue operating income approximately 285 million 56 million respectively approximately 67 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents investments trade receivables believe cash equivalents investments foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas although large number customers dispersed across different industries geographic areas current economic downturn could increase exposure credit risk trade receivables perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosures market risk interest rate risk november 30 2010 investments cash equivalents therefore exposed material interest rate risk investments may exposed time changes interest rates may adversely affect results operations financial position related debt 10 adverse change interest rates would result hypothetical increase approximately 03 million interest expense foreign currency exchange rate risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased decreased revenues 61 million 368 million 26 million years ended november 30 2010 2009 2008 respectively increased decreased operating income 11 million 51 million 10 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component shareholders’ equity 2010 recorded cumulative translation loss 18 million reflecting changes exchange rates various currencies compared us dollar 10 change currencies primarily exposed would impacted 2010 revenue operating income approximately 311 million 64 million respectively approximately 56 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents foreign currency derivatives trade receivables believe cash equivalents foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 7a quantitative qualitative disclosure market risk interest rate risk november 30 2012 investments cash equivalents therefore exposed material interest rate risk investments term loan subject variable interest rates april june 2011 mitigate interest rate exposure outstanding credit facility debt entered two interest rate derivative contracts effectively swap 100 million floating rate debt fixed rate debt 330 weighted average interest rate includes current credit facility spread interest rate swaps expire july 2015 credit facility borrowings also subject variable interest rates hypothetical 10 adverse movement interest rates related term loan credit facility borrowings derivative contracts would resulted increase approximately 08 million interest expense foreign currency exchange rate risk consolidated financial statements expressed us dollars portion business conducted currencies us dollars changes exchange rates currencies us dollars affect revenues earnings carrying values assets liabilities consolidated balance sheet either positively negatively fluctuations foreign currency rates increased decreased revenues 93 million 161 million 61 million years ended november 30 2012 2011 2010 respectively increased operating income 09 million 14 million 11 million respective periods translation effects changes exchange rates consolidated balance sheet recorded within cumulative translation adjustment component stockholders’ equity 2012 recorded cumulative translation gain 62 million reflecting changes exchange rates various currencies compared us dollar 10 change currencies primarily exposed would impacted 2012 revenue operating income approximately 429 million 15 million respectively approximately 71 total revenue earned subsidiaries us dollar functional currency credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents foreign currency interest rate derivatives present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered one counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses item 8 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc company november 30 2011 2010 related consolidated statements operations changes stockholders equity cash flows three years period ended november 30 2011 consolidated financial statements responsibility companys management responsibility express opinion consolidated financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2011 2010 consolidated results operations cash flows three years period ended november 30 2011 conformity us generally accepted accounting principles discussed note 2 consolidated financial statements company elected change method accounting actuarial gains losses calculation marketrelated value plan assets related pension postretirement benefit plans fourth quarter year ended november 30 2011 also audited accordance standards public company accounting oversight board united states ihs incs internal control financial reporting november 30 2011 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission report dated january 23 2012 expressed unqualified opinion thereon ernst young denver colorado january 23 2012 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2011 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission coso based evaluation management concluded internal control financial reporting effective november 30 2011 managements evaluation include assessing effectiveness internal control financial reporting seismic microtechnology smt acquired august 10 2011 smt included consolidated financial statements constituted 5578 million 5232 million total net assets respectively november 30 2011 272 million 66 million revenues net income respectively year ended net income generated smt business includes amortization expense related acquired intangible assets interest expense related borrowings made effect acquisition independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 23 2012 jerre l stead jerre l stead chairman chief executive officer richard walker richard walker executive vice president chief financial officer report independent registered public accounting firm internal control financial reporting board directors stockholders ihs inc audited ihs incs internal control financial reporting november 30 2011 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission coso criteria ihs incs management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate indicated accompanying managements report internal control financial reporting managements assessment conclusion effectiveness internal control financial reporting include internal controls seismic microtechnology acquired ihs inc august 10 2011 included 2011 consolidated financial statements ihs inc constituted 5578 million 5232 million total net assets respectively november 30 2011 272 million 66 million revenues net income respectively year ended audit internal control financial reporting ihs inc also include evaluation internal control financial reporting seismic microtechnology opinion ihs inc maintained material respects effective internal control financial reporting november 30 2011 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2011 2010 related consolidated statements operations changes stockholders equity cash flows three years period ended november 30 2011 report dated january 23 2012 expressed unqualified opinion thereon ernst young denver colorado january 23 2012 ihs inc consolidated balance sheets thousands except share pershare amounts see accompanying notes ihs inc consolidated statements operations thousands except pershare amounts see accompanying notes ihs inc consolidated statements cash flows thousands see accompanying notes ihs inc consolidated statement changes stockholders’ equity thousands see accompanying notes ihs inc notes consolidated financial statements 1 nature business leading source information insight critical areas shape todays business landscape including energy power design supply chain defense risk security environmental health safety ehs sustainability country industry forecasting commodities pricing cost businesses governments 165 countries around globe rely comprehensive content expert independent analysis flexible delivery methods ihs make highimpact decisions develop strategies speed confidence ihs business since 1959 incorporated state delaware 1994 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa ihs employs 5500 people 30 countries around world organized business around customers geographies reside americas emea apac integrated global organization makes easier customers business us providing cohesive consistent effective salesandmarketing approach local geography sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscriptions usually oneyear periods historically seen high renewal rates subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest levels revenue profit trends amplified product mix recent acquisitions generate larger proportion sales fourth quarter also eventdriven seasonality business instance ceraweek annual energy executive gathering held second quarter another example triennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every third year bpvc benefit recently occurred third quarter 2010 2 significant accounting policies fiscal year end fiscal year ends november 30 year references herein individual years mean year ended november 30 example 2011 means year ended november 30 2011 consolidation policy consolidated financial statements include accounts whollyowned majorityowned controlled subsidiaries significant intercompany accounts transactions eliminated consolidation use estimates preparation financial statements conformity generally accepted accounting principles requires make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements well reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition valuation longlived intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance probable credit losses allowance based upon management’s assessment known credit risks well general industry economic conditions specific accounts receivable writtenoff upon notification bankruptcy determined account significantly past due collection efforts unsuccessful fair value financial instruments carrying values financial instruments including cash accounts receivable accounts payable shortterm longterm debt approximate fair value financial instruments included pension plan assets stated fair value categorized following fair value hierarchy level 1 quoted prices unadjusted identical assets liabilities active markets accessible measurement date level 2 inputs quoted prices within level 1 observable either directly indirectly including limited quoted prices markets active quoted prices active markets similar assets liabilities observable inputs quoted prices interest rates yield curves level 3 unobservable inputs reflecting assumptions market participants would use pricing asset liability including assumptions risk revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured majority revenue derived sale subscriptions critical information initially deferred recognized ratably delivered subscription period generally 12 months revenue recognized upon delivery nonsubscriptionbased sales certain locations use dealers distribute critical information insight revenue products sold dealers recognized follows •for subscriptionbased services revenue recognized ratably delivered end user subscription period •for nonsubscriptionbased products revenue recognized upon delivery dealer defer revenue limited number sales subscriptions act sales agent third parties continuing responsibility maintain update underlying database recognize revenue net basis upon sale subscriptions delivery information tools services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standardprice book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation proportionally based upon performance progress terms contract see discussion “multipleelement arrangements” contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer software beginning sell software products maintenance contracts result recent acquisitions addition meeting standard revenue recognition criteria described software license revenue must also meet requirement vendorspecific objective evidence “vsoe” fair value undelivered elements exists significant portion software licenses sold multipleelement arrangements include either maintenance limited circumstances maintenance professional services use residual method determine amount license revenue recognized residual method consideration allocated undelivered elements based upon vsoe fair value elements residual arrangement fee allocated recognized license revenue recognize license revenue upon delivery maintenance revenue recognized ratably maintenance period usually one three years established vsoe fair value maintenance independent maintenance renewals demonstrate consistent relationship pricing maintenance percentage discounted undiscounted license list price vsoe fair value professional services established based daily rates sold standalone basis multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees subscription offerings decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis using relative selling price method allocate fair value element arrangement based generally standalone sales products services recognize elements contract follows •subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery •for nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period •in instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties commissions associated customer subscriptions costs deferred amortized expense period subscriptions generally subscription periods 12 months duration property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized leases certain circumstances enter leases free rent periods rent escalations term lease cases calculate total payments term lease record ratably rent expense term identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired evaluate intangible assets goodwill impairment least annually well whenever events changes circumstances indicate carrying amounts may recoverable impairments expensed incurred finitelived intangible assets identifiable intangible assets finite lives generally amortized straightline basis respective lives follows indefinitelived intangible assets perform impairment test indefinitelived intangible assets consist trade names perpetual licenses comparing asset’s fair value carrying value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based relief royalty method using projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment reporting unit level reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach •we first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values deficiencies reporting unit fair values versus carrying values fiscal years ended november 30 2011 2010 2009 •if necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting unit’s goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss deficiency income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred revenue pension postretirement benefits accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates pension postretirement benefits fourth quarter 2011 changed method accounting actuarial gains losses related pension postretirement benefit plans historically recognized actuarial gains losses component stockholders equity consolidated balance sheet gains losses amortized operating results average remaining service period active plan participants average remaining life expectancy almost plan participants inactive extent gains losses outside corridor amount equivalent 10 greater marketrelated value plan assets plans benefit obligation beginning year new method net actuarial gains losses excess corridor recognized immediately operating results fourth quarter fiscal year upon remeasurement date believe preferable accelerate recognition deferred gains losses income rather delay recognition change designed reduce complexity operating results quickly recognizing effects economic interest rate conditions plan obligations investments assumptions additionally us retirement income plan longer use calculated value marketrelated value plan assets reflects changes fair value plan assets five years instead use actual fair value plan assets measurement date change aligns method computing marketrelated value plan assets us retirement income plan method used funded plan applied changes retrospectively adjusting prior periods presented cumulative effect change retained earnings december 1 2008 reduction 526 million offset accumulated comprehensive income oci table shows impacts adjustments made financial statements result change accounting thousands except per share amounts represents previously reported amounts adjusted discontinued operations presentation see note 11 treasury stock ihs stock retention buyback programs transactions utilize cost method accounting regarding inventory costing method treasury stock transactions employ weightedaverage cost method earnings per share basic eps computed dividing net income weighted average number common shares outstanding period diluted eps computed using weighted average number common shares dilutive potential common shares outstanding period diluted eps reflects potential dilution could occur securities exercised converted common shares foreign currency absent circumstances contrary functional currency foreign subsidiaries subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included comprehensive income transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreignexchangetransaction gains losses included results operations time utilize forwardcontract instruments manage market risks associated fluctuations certain foreigncurrency exchange rates relate specific balances accounts notes receivable payable denominated foreign currencies end reporting period nonfunctional foreigncurrencydenominated receivable cash balances remeasured functional currency reporting entities current market rates change value remeasurement reported foreign exchange gain loss period income expense accompanying consolidated statements operations resulting gains losses forward foreign currency contracts described also included income expense mitigate exchange rate risk associated assets impairment longlived assets review carrying amounts longlived assets determine whether current events circumstances warrant adjustment carrying amounts annually longlived asset finite life considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stockbased compensation sharebased payments employees including restricted stock unit stock option grants recognized income statement based fair values addition estimate forfeitures grant date compensation cost recognized based number awards expected vest adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value nonvested share awards expense vesting period straightline basis awards performance conditions evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date stock options estimate fair value awards date grant using blackscholes pricing model amortize value stock options expense vesting period straightline basis recent accounting pronouncements june 2011 fasb issued guidance presentation comprehensive income become effective us first quarter 2013 new guidance entity option present total comprehensive income components net income components comprehensive income either single continuous statement comprehensive income two separate consecutive statements guidance change components must reported comprehensive income item comprehensive income must reclassified net income evaluating presentation options asu however expect changes impact consolidated financial statements change presentation september 2011 fasb issued guidance testing goodwill impairment become effective us first quarter 2013 however early adoption permitted new guidance entity option first assess qualitative factors determine whether existence events circumstances leads determination likely fair value reporting unit less carrying amount entity determines threshold met performing twostep impairment test unnecessary currently evaluating whether elect use new qualitative approach impairment testing 3 business combinations year ended november 30 2011 completed following acquisitions among others odspetrodata holdings ltd odspetrodata april 16 2011 acquired odspetrodata approximately 75 million cash net cash acquired odspetrodata premier provider data information market intelligence offshore energy industry expect odspetrodata products services extend offerings upstream energy sector provision high quality data research across range critical highvalue offshore markets drilling rigs marine seismic vessels field development operations dyadem international ltd dyadem april 26 2011 acquired dyadem approximately 49 million cash net cash acquired dyadem market leader operational risk management quality risk management solutions expect acquisition dyadem provide customers software solutions help achieve regulatory compliance business continuity chemical market associates inc cmai may 2 2011 acquired cmai approximately 73 million cash net cash acquired cmai leading provider market business advisory services worldwide petrochemical specialty chemicals fertilizer plastics fibers chloralkali industries expect cmai’s comprehensive information analysis add eventdriven supplychain information strategy cmais price discovery analysis business broaden commodities cost information capabilities seismic microtechnology smt august 10 2011 acquired smt approximately 502 million cash net cash acquired smt global leader windowsbased exploration production software solutions used geoscientists worldwide evaluate potential reservoirs plan field development result acquisition expect provide robust valuable integrated solution set information software insight support energy customers worldwide purvin gertz november 10 2011 acquired purvin gertz approximately 29 million cash net cash acquired purvin gertz wellestablished global advisory market research firm provides technical commercial strategic advice international clients petroleum refining natural gas natural gas liquids crude oil petrochemical industries expect acquisition enhance focused actionable analysis deep industry knowledge product service portfolio critical senior executives key decision makers following table summarizes initial purchase price allocation net acquired cash acquisitions completed 2011 thousands included revenue expenses acquisition operations appropriate geographic segment date respective acquisition acquisitions contributed 803 million revenue year ended november 30 2011 78 million income continuing operations period following unaudited pro forma information prepared acquisitions completed 2011 consummated december 1 2009 information presented informational purposes necessarily indicative operating results would occurred acquisitions consummated date information used predictive measure future financial position results operations liquidity 2010 made following acquisitions emerging energy research llc eer february 10 2010 acquired eer approximately 18 million net cash acquired eer leading advisory firm whose mission help clients understand leverage exploit technological regulatory competitive trends global emerging energy sector csm worldwide inc csm march 17 2010 acquired csm approximately 25 million net cash acquired csm leading automotive market forecasting firm dedicated providing automotive suppliers market information production power train sales forecasting trusted automotive market forecasting services strategic advisory solutions world’s top automotive manufacturers suppliers financial organizations quantitative micro software llc qms may 5 2010 acquired qms approximately 40 million net cash acquired qms worldwide leader windowsbased econometric forecasting software applications access intelligence september 7 2010 acquired certain chemical energy portfolio business assets access intelligence approximately 79 million net cash acquired purchased businesses order extend breadth information available current ihs energy customers support development additional products services broad range industries along supply chain atrion international inc atrion september 22 2010 acquired atrion approximately 56 million net cash acquired atrion company combines regulatory expertise industryleading technology streamline generation management distribution hazardous materials communication documents reports syntex management systems inc syntex september 22 2010 acquired syntex approximately 23 million net cash acquired syntex leading provider operational risk management software services help companies ensure health safety workers protecting environment managing costs isuppli inc isuppli november 19 2010 acquired isuppli approximately 94 million net cash acquired isuppli global leader technology value chain research advisory services transaction also included screen digest limited leading digital media technology research company recently acquired isuppli purchase prices 2010 acquisitions excluding acquired cash initially allocated follows thousands 2009 made following acquisitions prime publications limited prime lloyd’s registerfairplay limited fairplay march 3 2008 acquired prime publications limited prime owned 50 interest lloyd’s registerfairplay limited fairplay joint venture leading source global maritime information fairplay preeminent brand name maritime information industry organization provides comprehensive details current world merchant fleet tankers cargo carrier passenger ships complete range products services assist world’s maritime community investment fairplay primary asset prime ihs accounted joint venture equity method accounting march 2008 november 30 2008 december 1 2008 obtained additional 01 ownership interest majority position venture’s governing board giving us 501 controlling interest joint venture accordingly began consolidating fairplay within results june 17 2009 acquired remaining 499 fairplay lloyd’s register giving us 100 ownership fairplay remaining 499 interest acquired approximately 64 million logtech canada ltd logtech september 2 2009 acquired logtech leader development pragmatic costeffective software solutions services digital log data petroleum industry acquired logtech 3 million net cash acquired environmental support solutions inc ess september 17 2009 acquired ess leading provider environmental health safety crisis management software enterprise sustainability approximately 59 million net cash acquired purchase prices 2009 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands includes cumulative purchase price 50 interest acquired 2008 remaining 50 interest acquired 2009 individual purchase prices impacted foreign currency fluctuation 4 accounts receivable accounts receivable balance consists following november 30 2011 2010 thousands record accounts receivable allowance probable accounts receivable balance collected amounts comprising allowance based upon management’s estimates historical collection trends activity accounts receivable allowance consists following november 30 2011 2010 2009 respectively thousands 5 property equipment property equipment consists following november 30 2011 2010 thousands depreciation expense approximately 238 million 187 million 151 million years ended november 30 2011 2010 2009 respectively 6 intangible assets following table presents details intangible assets goodwill thousands intangible asset amortization expense 642 million 407 million 340 million years ended november 30 2011 2010 2009 respectively estimated future amortization expense related intangible assets held november 30 2011 follows changes intangible assets 2011 2010 primarily result acquisitions see note 3 lesser extent foreign currency exchange rate fluctuations 7 derivatives april june 2011 mitigate interest rate exposure outstanding credit facility debt entered two interest rate derivative contracts effectively swap 100 million floating rate debt fixed rate debt 330 weighted average interest rate includes current credit facility spread interest rate swaps expire july 2015 terms swaps variable rate debt coincide expect ineffectiveness designated accounted instruments cash flow hedges changes fair value deferred accumulated comprehensive loss consolidated balance sheets since swaps listed exchange evaluated fair value reference similar transactions active markets consequently classified swaps within level 2 fair value measurement hierarchy november 30 2011 fair market value swaps loss 31 million current marktomarket loss position recorded liabilities consolidated balance sheets 8 debt january 5 2011 entered 10 billion syndicated bank credit agreement collectively credit facility october 11 2011 amended credit facility increase total facility 10 billion 1276 billion facility consists 351 million term loan 925 million revolver borrowings credit facility unsecured loan revolver included credit facility fiveyear term ending january 2016 interest rates borrowings amended credit facility applicable libor plus 100 175 depending upon leverage ratio defined ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda defined credit facility commitment fee unused balance payable periodically ranges 015 030 based upon leverage ratio credit facility contains certain financial covenants including maximum leverage ratio maximum interest coverage ratio defined credit facility november 30 2011 compliance covenants credit facility 455 million outstanding borrowings revolver current annual interest rate 175 approximately 346 million outstanding borrowings term loan current weighted average annual interest rate 180 classified 330 million revolver borrowings longterm 125 million shortterm based upon current estimate expected repayments next twelve months shortterm debt also includes 18 million scheduled term loan principal repayments next twelve months approximately 05 million outstanding letters credit agreement november 30 2011 maturities outstanding borrowings term loan november 30 2011 follows thousands debt november 30 2011 also included approximately 2 million noninterest bearing notes issued sellers prime publications limited company purchased 2008 notes due upon demand therefore recorded shortterm debt consolidated balance sheets november 30 2010 still operating 2007 amended restated credit agreement 385 million credit facility also approximately 39 million noninterest bearing notes associated prime acquisition date 9 restructuring charges credits net restructuring charges credits 12 million 90 million 07 million years ended november 30 2011 2010 2009 respectively 2010 2011 restructuring charges described 2009 restructuring credit related revision estimate 2008 restructuring initiative third quarter 2010 announced various plans streamline operations merge functions result reduced aggregate workforce approximately 3 consolidated several locations changes primarily affected americas emea segments restructuring charge recorded 2010 consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closures relocations legal expenses associated employee terminations incurred quarter entire 91 million restructuring charge recorded third quarter 2010 offset 01 million restructuring credit second quarter 2010 approximately 77 million charge related americas segment 13 million pertained emea segment remainder apac second quarter 2011 recorded additional 07 million net restructuring costs americas segment represented revision third quarter 2010 estimate cost exit space one facilities partially offset favorable resolution employee severance costs fourth quarter 2011 recorded 05 million restructuring charges severance costs associated consolidation positions emea segment recently established accounting customer care centers excellence locations following table shows 2010 2011 restructuring activity provides reconciliation restructuring liability november 30 2011 excludes 01 million restructuring credit discussed november 30 2011 entire remaining 05 million liability emea segment expected paid 2012 10 acquisitionrelated costs year ended november 30 2011 incurred 80 million costs complete acquisitions leverage synergies recent business combinations result activities eliminated approximately 40 positions closed one acquired offices changes affected americas emea segments acquisitionrelated charges recorded consist direct incremental costs associated severance outplacement employeerelated benefits facility closure contract termination costs legal investment banking due diligence valuation service fees associated recent acquisitions incurred year ended november 30 2011 approximately 76 million charge related americas segment 04 million pertained emea segment following table shows composition 2011 charges provides reconciliation related accrued liability november 30 2011 november 30 2011 remaining 23 million liability americas segment expected paid 2012 11 discontinued operations effective december 31 2009 sold small noncore south african business approximately 2 million gain loss sale business included building certain intellectual property exchange sale assets received two threeyear notes receivable one secured mortgage building second secured pledge shares south african company december 2010 received full payment note receivable secured mortgage building fourth quarter 2011 discontinued operations small printandadvertising business focused narrow declining market abandonment business included certain intellectual property also discontinued minor governmentservices business period operating results discontinued operations years ended november 30 2011 2010 2009 respectively follows thousands 12 income taxes amounts income continuing operations income taxes noncontrolling interests us foreign jurisdictions years ended november 30 2011 2010 2009 respectively follows thousands provision income tax expense benefit continuing operations years ended november 30 2011 2010 2009 respectively follows thousands following table presents reconciliation provision income taxes us statutory tax rate years ended november 30 2011 2010 2009 respectively thousands undistributed earnings foreign subsidiaries approximately 278 million november 30 2011 earnings considered indefinitely reinvested include earnings certain subsidiaries considered distributed accordingly provision us federal state income taxes provided earnings repatriate earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexity associated hypothetical calculation significant components deferred tax assets liabilities november 30 2011 2010 follows thousands november 30 2011 loss carryforwards tax purposes totaling approximately 904 million comprised 672 million us net operating loss carryforwards 48 million us capitalloss carryforwards 183 million foreign loss carryforwards available offset future taxable income used us net operating loss carryforwards begin expire 2018 us capital loss carryforwards expire 2012 foreign tax loss carryforwards generally may carried forward indefinitely us net operating loss carryforwards increased result cmai acquisition whose carryforwards begin expire 2029 recording additional isuppli carryforwards us capital loss incurred 2007 previously deferred loss stock investment realized believe realization deferred tax asset related us capital loss likely occur accordingly placed valuation allowance asset analyzed foreign net operating losses placed valuation allowances determined realization likely occur november 30 2011 approximately 50 million foreign tax credit ftc carryforwards approximately 04 million research development rd credit carryforwards available offset future us tax liabilities used ftc carryforwards expire 2016 2021 rd credit carryforwards expire 2026 2027 believe likely realize ftc rd tax credit assets valuation allowance deferred tax assets increased 01 million 2011 increase primarily attributable certain deferred tax assets acquisitions provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes summary activities associated reserve unrecognized tax benefits interest penalties follows thousands november 30 2011 total amount unrecognized tax benefits 22 million 02 million related interest penalties include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes reasonably possible experience 04 million decrease reserve unrecognized tax benefits within next twelve months would experience decrease relation uncertainties associated closing statutes subsidiaries file income tax returns us federal various us state foreign jurisdictions tax years remain subject examination follows years examination relate preacquisition tax years recently acquired companies 2004 2005 us tax returns amended november 2010 carry back portion capital loss tax years open examination items changed 13 pensions postretirement benefits defined benefit plans sponsor noncontributory definedbenefit retirement plan us rip us employees least one year service also frozen definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom also unfunded supplemental income plan sip nonqualified pension plan certain us employees earn federally stipulated amount benefits three plans generally based years service either average cumulative base compensation plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees 2011 made number changes us rip strategy settled retiree obligations purchasing annuities retiree population thirdparty insurer resulted significant reduction overall plan liability changed pension plan investment strategy better match remaining pension assets remaining pension obligations accelerated plan funding contributing approximately 650 million plan december 2011 first month fiscal 2012 approximately 57 million contribution allowed us bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs first quarter fiscal 2012 also made decision close us rip new participants effective january 1 2012 2010 company approved plan design change us rip effective march 1 2011 change considered prospective plan amendment pursuant existing pension accounting guidance accordingly reflected modification us rip within november 30 2010 balance sheet resulted 53 million reduction liability amortized remaining average future working lifetime employee group approximately six years 2010 also made decision discontinue future benefit accruals uk rip resulted 08 million reduction liability curtailment november 30 2011 us rip plan assets consist primarily fixedincome securities moderate amount equity securities reflects change investment strategy november 30 2010 us rip plan assets consisted primarily equity securities smaller holdings bonds assets uk rip plan assets consist primarily equity securities smaller holdings bonds assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rip’s established investment policy seeks align expected rate return discount rate allowing equity variability allow upside market potential would strengthen overall asset position plan uk rip’s established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following table compares target asset allocation percentages actual asset allocations end 2011 investment return assumptions plans determined obtaining independent estimates expected long term rates return asset class applying returns assets weightedaverage basis discussed contributed approximately 650 million us rip early fiscal 2012 expect contribute 17 million uk rip 08 million sip 2012 following table provides expected benefit payments pension plans thousands please refer note 2 discussion accounting changes related pension postretirement benefit plans net periodic pension expense income pension plans comprised following thousands changes projected benefit obligation plan assets funded status pension plans follows thousands amortization amounts expected recognized net periodic pension postretirement expense income fiscal year ending november 30 2012 pretax thousands pension expense income actuarially calculated annually based data available beginning year determine expected return plan assets multiplying expected longterm rate return assets marketrelated value plan assets marketrelated value plan assets fair value plan assets assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 fair value measurements financial instruments included plan assets carried fair value november 30 2011 2010 measured fair value recurring basis classified follows thousands part change investment strategy exited insurance company pooled separate account investment positions corporate common stocks 2011 postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees leave ihs age 55 least 10 years service additionally ihs subsidizes cost coverage retireemedical coverage certain grandfathered employees ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 ihs provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 530 550 november 30 2011 2010 respectively net periodic postretirement expense income changes related projected benefit obligation follows thousands 1 amended plan 2006 plan amended limit benefits paid future healthcare costs ihs longer subsidizes cost coverage retireemedical coverage certain employees grandfathered ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility change resulted 159 million negative plan amendment amortized period time resulting net periodic postretirement benefit income 2006 2010 following table provides expected cash outflows postretirement benefit plan thousands onepercentagepoint change assumed healthcarecosttrend rates would effect service cost interest cost postretirement benefit obligation november 30 2011 ihs subsidy capped defined contribution plan employees certain subsidiaries may participate defined contribution plans benefit expense relating plans approximately 79 million 69 million 54 million 2011 2010 2009 respectively 14 stockbased compensation november 30 2011 one stockbased compensation plan amended restated ihs inc 2004 longterm incentive plan ltip provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards 2004 directors stock plan subplan ltip provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors stockholders authorized maximum 1475 million shares november 30 2011 number shares available future grant 47 million total unrecognized compensation expense related nonvested awards 1086 million november 30 2011 weightedaverage recognition period approximately 10 years restricted stock units rsus typically vest one three years generally subject either cliff vesting graded vesting rsus nonforfeitable rights dividends dividend equivalents fair value rsus based fair value common stock date grant amortize value awards expense vesting period straightline basis performancebased rsus evaluation made quarter likelihood performance criteria met number performancebased rsus expected vest increases decreases compensation expense also adjusted reflect number rsus expected vest cumulative vesting period met date rsus estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors following table summarizes rsu activity year ended november 30 2011 total fair value rsus vested year ended november 30 2011 983 million based weightedaverage fair value vesting date stock options option awards generally granted exercise price equal fair market value stock date grant outstanding options fully vested november 30 2011 8year contractual terms options granted years ended november 30 2011 2010 2009 following table summarizes changes outstanding stock options years ended november 30 2011 2010 2009 well options vested expected vest stock options exercisable november 30 2011 2010 aggregate intrinsic value amounts table represent difference closing prices common stock november 30 2010 2011 7232 8838 respectively exercise price multiplied number inthemoney stock options date represents amounts would received stock option holders exercised stock options respective yearend date future periods intrinsic value change depending fluctuations stock price total intrinsic value stock options exercised year ended november 30 2011 29 million stockbased compensation expense years ended november 30 2011 2010 2009 respectively follows thousands total income tax benefits recognized stockbased compensation arrangements follows thousands stockbased compensation cost capitalized years ended november 30 2011 2010 2009 15 commitments contingencies commitments rental charges 2011 2010 2009 approximated 311 million 275 million 293 million respectively minimum rental commitments noncancelable operating leases effect november 30 2011 follows thousands also outstanding letters credit bank guarantees aggregate amount approximately 17 million 21 million november 30 2011 2010 respectively indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable litigation time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition 16 common stock earnings per share basic eps computed basis weighted average number common shares outstanding period diluted eps reflects potential dilution could occur securities contracts issue common stock exercised converted common shares weighted average common shares outstanding years ended november 30 2011 2010 2009 respectively calculated follows thousands share buyback programs 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal minimum statutory tax liability pay statutory tax behalf employee year ended november 30 2011 accepted 403724 shares surrendered employees tax withholding program approximately 322 million 7989 per share march 2011 fully offset dilutive effect employee equity programs board directors approved plan authorizing us buy back one million shares per year open market may execute program discretion balancing dilution offset investment opportunities business including acquisitions plan expiration date shares repurchased plan 2011 17 comprehensive income loss 18 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 2011 2010 2009 respectively thousands cash equivalents amounting approximately 2347 million 2007 million reflected consolidated balance sheets november 30 2011 2010 respectively maintained primarily us dollars canadian dollars british pounds euros subject fluctuations currency exchange rate 19 segment information prepare financial reports analyze business results within three reportable geographic segments americas emea apac evaluate segment performance primarily revenue operating profit level three segments also evaluate revenues transaction type information domain apac operations evolved management structure region also evolved includes responsibility overseeing india accordingly included indias 2011 results apac geographic segment reclassified indias 2010 2009 results emea apac information operations three segments set forth chairman chief executive officer chief operating decision maker evaluates segment performance based primarily revenue operating profit three segments addition reviews revenue transaction type domain accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 total revenue years ended november 30 2011 2010 2009 material intersegment revenues period presented certain corporate transactions allocated reportable segments including items stockbased compensation expense net periodic pension postretirement expense corporatelevel impairments gain loss sale corporate assets table provides information revenue longlived assets us individual material foreign countries 2011 2010 2009 revenue geographic area generally based ship location longlived assets include net property equipment net intangible assets net goodwill revenue transaction type follows revenue information domain follows activity goodwill account follows adjustment purchase price 2011 related primarily deferred tax trueups finalized 2010 acquisitions 20 quarterly results operations unaudited following table summarizes certain quarterly results operations thousands discussed notes 2 11 adjusted prior period amounts including quarterly results operations reflect change pension postretirement benefit accounting well reflect impact discontinued operations periods item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm management’s report internal control financial reporting report independent registered public accounting firm internal control financial reporting consolidated financial statements consolidated balance sheets november 30 2006 2005 consolidated statements operations years ended november 30 2006 2005 consolidated statement changes stockholders’ equity years ended november 30 2006 2005 2004 consolidated statements cash flows years ended november 30 2006 2005 notes consolidated financial statements years ended november 30 2006 2005 2004 report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc november 30 2006 2005 related consolidated statements operations stockholders’ equity cash flows three years period ended november 30 2006 consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2006 2005 consolidated results operations cash flows three years period ended november 30 2006 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states effectiveness ihs inc’s internal control financial reporting november 30 2006 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission report dated january 19 2007 expressed unqualified opinion thereon ernst young llp denver colorado january 19 2007 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2006 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission coso based evaluation management concluded internal control financial reporting effective november 30 2006 inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation management’s assessment effectiveness internal control financial reporting november 30 2006 audited ernst young llp independent registered public accounting firm stated report included elsewhere herein date january 19 jerre l stead jerre l stead chairman chief executive officer michael j sullivan michael j sullivan executive vice president chief financial officer report independent registered public accounting firm internal control financial reporting board directors stockholders ihs inc audited management’s assessment included section entitled management’s report internal control financial reporting ihs inc maintained effective internal control financial reporting november 30 2006 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission coso criteria ihs inc’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting responsibility express opinion management’s assessment opinion effectiveness company’s internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting evaluating management’s assessment testing evaluating design operating effectiveness internal control performing procedures considered necessary circumstances believe audit provides reasonable basis opinion company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion management’s assessment ihs inc maintained effective internal control financial reporting november 30 2006 fairly stated material respects based coso criteria also opinion ihs inc maintained material respects effective internal control financial reporting november 30 2006 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2006 2005 related consolidated statements operations stockholders’ equity cash flows three years period ended november 30 2006 report dated january 19 2007 expressed unqualified opinion thereon ernst young llp denver colorado january 19 2007 ihs inc consolidated balance sheets see accompanying notes ihs inc consolidated statements operations see accompanying notes ihs inc consolidated statement changes stockholders’ equity see accompanying notes ihs inc consolidated statements cash flows see accompanying notes ihs inc notes consolidated financial statements 1 nature business organization description business ihs inc ihs company us publicly traded delaware corporation one leading global providers critical technical information decisionsupport tools services customers energy defense aerospace construction electronics automotive industries manage business two reportable segments energy engineering energy segment develops delivers critical oil gas industry data exploration development production transportation activities major global energy producers national independent oil companies energy segment also provides decisionsupport tools operational research strategic advisory services customers well utilities transportation petrochemical coal power companies engineering segment provides offerings two broad categories products technical standards parts information products include broad range technical specifications standards regulations parts data design guides information customers targeted industries also expertise developing decisionsupport tools enhance accessibility usability information offer targeted advisory services designed maximize utilization integration information within customers’ business processes maintain international sales service network subsidiaries distributors ownership structure secondary offering related parties voting investment decisions respect shares company historically made tbg holdings nv tbg netherlandsantilles company shares holds directly indirect sole ownership principal stockholder urvanos investments limited urvanos cyprus limited liability company tbg historically held shares directly instead held indirect sole ownership urvanos urpasis investments limited urpasis cyprus limited liability company september 1 2006 urpasis dividended shares held company tbg whollyowned indirectly thyssenbornemisza continuity trust bermuda trust controlled bermudan trustee thybo trustees limited another oversight entity tornabuoni limited guernsey company october 30 2006 tbg sold portion ownership interests secondary public offering ihs receive proceeds sale company’s common stock tbg consequently expensed related offering costs jerre l stead chief executive officer chairman board directors also member board directors tbg michael v staudt member board directors also executive vice president tbg addition c michael armstrong roger holtback michael klein members board directors members board directors advisory committee tbg prior initial public offering discussed initial public offering concurrent private placement november 16 2005 shareholders time urpasis urvanos sold portion ownership interests initial public offering ihs receive proceeds sale company’s common stock urpasis urvanos consequently expensed related offering costs simultaneous closing initial public offering urpasis urvanos sold private ihs inc notes consolidated financial statements continued placement aggregate amount 75 million shares class common stock initial offering price investment entities affiliated general atlantic llc appointed steven denning chairman managing director general atlantic board directors april 2005 reorganization recapitalization november 9 2004 holland america investment corporation haic us delaware corporation whollyowned subsidiary nv haic us owned outstanding stock effective november 9 2004 haic us became whollyowned subsidiary urpasis urvanos november 10 2004 changed capitalization 80000 shares class common stock 13750 shares class b common stock 1000 shares class c common stock november 12 2004 haic us contributed substantially assets us exchange new common stock subsequently haic us liquidated distributing assets comprised principally new common stock urpasis urvanos november 19 2004 changed capitalization 80000000 shares class common stock 13750000 shares class b common stock 1000 shares class c common stock class c common stock longer authorized initial public offering december 13 2004 changed name ihs group inc ihs inc 2 significant accounting policies fiscal year end fiscal years end november 30 year references herein individual years mean year ended november 30 example 2006 means year ended november 30 2006 consolidation policy consolidated financial statements include accounts wholly owned majorityowned subsidiaries significant intercompany accounts transactions eliminated use estimates preparation financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition useful lives fixed intangible assets allocation purchase price acquired assets liabilities recoverability intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents investments foreign currency derivatives trade receivables don’t believe cash equivalents investments foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk ihs inc notes consolidated financial statements continued respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses fair value financial instruments carrying value financial instruments including cash accounts receivable accounts payable longterm debt approximates fair value revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured revenue recognition policies based guidance staff accounting bulletin sab 104 revenue recognition statement position sop 972 software revenue recognition sales critical information decisionsupport tools majority revenue derived sale subscriptions critical information recognized ratably delivered subscription period defer revenue limited number sales subscriptions continuing responsibility maintain update underlying database recognize revenue upon sale subscriptions delivery information tools limited number offerings serve sales agent third parties recognize revenue sales accordance emerging issues task force 9919 report revenue gross principal versus net agent revenue recognized upon delivery nonsubscriptionbased sales certain locations use dealers distribute critical information decisionsupport tools revenue products sold dealers recognized follows · subscriptionbased services revenue recognized ratably delivered end user subscription period · nonsubscriptionbased products revenue recognized upon delivery dealer services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standardprice book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed time materialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation terms contract see discussion “multipleelement arrangements” ihs inc notes consolidated financial statements continued contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis generally sufficient vendorspecific objective evidence fair value element arrangement exists based standalone sales products services elements contract unbundled recognized follows · subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery · nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period · instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained infrequent instances multipleelement arrangement includes offerings vendorspecific objective evidence available consider substance whole arrangement subscription thus revenue recognized ratably service period cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties commissions associated customer subscriptions costs deferred amortized expense period subscriptions generally subscription periods 12 months duration property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows ihs inc notes consolidated financial statements continued leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired identifiable intangible assets finite lives amortized straightline basis respective lives review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable assess impairment comparing fair value identifiable intangible asset goodwill carrying value impairments expensed incurred minority interest recognize minority interests’ share net income amount equal minority interests’ allocable portion common equity certain consolidated subsidiaries located germany switzerland included engineering segment income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally goodwill property equipment deferred subscription revenue pension assets accruals valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates treasury stock ihs stock retention buyback programs transactions utilize cost method accounting regarding inventory costing method treasury stock transactions employ weightedaverage cost method ihs inc notes consolidated financial statements continued earnings per share earnings per common share eps computed accordance sfas 128 earnings per share sfas 128 basic eps computed dividing net income weighted average number common shares outstanding period diluted eps computed using weighted average number common shares dilutive potential common shares outstanding period diluted eps reflects potential dilution could occur securities exercised converted common shares use twoclass method computing basic diluted eps amounts foreign currency absent circumstances contrary functional currency foreign subsidiaries subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included foreign currency translation adjustment account stockholders’ equity transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreign exchange transaction gains losses included results operations time utilize forward contract instruments manage market risks associated fluctuations certain foreign currency exchange rates relate specific balances accounts receivable denominated foreign currencies end reporting period foreign currency denominated receivable cash balances remeasured functional currency reporting entities current market rates change value remeasurement reported foreign exchange gain loss period income expense accompanying consolidated statements income resulting gains losses forward foreign currency contracts described also included income expense mitigate exchange rate risk associated assets research development costs research development included cost revenue expensed incurred amounted approximately 31 million 82 million 131 million 2006 2005 2004 respectively impairment longlived assets account longlived assets accordance sfas 144 accounting impairment disposal longlived assets periodically review carrying amounts longlived assets determine whether current events circumstances warrant adjustment carrying amounts impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stockbased compensation adopted sfas 123 revised 2004 share based payment effective december 1 2005 first day 2006 fiscal year sfas 123r revision sfas 123 sfas 123r supersedes apb ihs inc notes consolidated financial statements continued opinion 25 accounting stock issued employees amends sfas 95 statement cash flows generally approach sfas 123r similar approach described sfas 123 however sfas 123r requires sharebased payments employees including grants employee stock options recognized income statement based fair values pro forma disclosure longer alternative march 2005 securities exchange commission issued staff accounting bulletin 107 sharebased payment sab 107 related sfas 123r applied provisions sab 107 adoption sfas 123r adopted sfas 123r using modified prospective transition method consequently applies outstanding nonvested sharebased payment awards december 1 2005 prospective awards accordingly consolidated financial statement amounts prior periods restated december 1 2005 stock options issued outstanding restricted stock deferred stock units prior adopting sfas 123r december 1 2005 fair value nonvested awards restricted stock deferred stock units recorded additional paidin capital offsetting entry posted unearned compensation also equity account unearned compensation amortized compensation expense related equity awards vesting period using straightline method adoption sfas 123r december 1 2005 reclassified 248 million unearned compensation additional paidin capital prior december 1 2005 also limited number stock options outstanding granted one subsidiaries discussed note 16 costs associated settling options accrued november 30 2004 subsidiary elected follow guidance apb 25 related interpretation accounted employee stock options using intrinsic value method result compensation expense related stock options recognizedaside costs accrued november 30 2004 associated settling outstanding options granted subsidiaryfor years ended november 30 2005 2004 exercise prices subsidiary’s stock options equal greater estimated fair market value underlying stock date grant sfas 123r requires forfeitures estimated grant date accordingly compensation cost recognized based number awards expected vest may adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value nonvested share awards expense vesting period straightline basis awards performance conditions evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date stock options estimate fair value awards date grant using blackscholes pricing model amortize value stock options expense vesting period straightline basis new accounting pronouncements july 2006 financial accounting standards board fasb issued fasb interpretation 48 accounting uncertainty income taxesan interpretation fasb statement 109 fin 48 provides clarification related process associated accounting uncertain tax positions recognized consolidated financial statements fin 48 prescribes morelikelythannot threshold financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance related among things classification accounting interest ihs inc notes consolidated financial statements continued penalties associated tax positions disclosure requirements required adopt fin 48 december 1 2007 first day 2008 fiscal year although early adoption permitted currently evaluating impact adopting fin 48 consolidated financial statements september 2006 fasb issued sfas 157 fair value measurements sfas 157 among requirements sfas 157 defines fair value establishes framework measuring fair value also expands disclosure use fair value measure assets liabilities sfas 157 effective beginning first fiscal year begins november 15 2007 required adopt sfas 157 december 1 2007 although earlier adoption permitted september 2006 fasb issued sfas 158 employer’s accounting defined benefit pension postretirement plansan amendment fasb statements 87 88 106 132r sfas 158 sfas 158 requires employer business entity sponsors one single employer benefit plans 1 recognize funded status benefit statement financial position 2 recognize component comprehensive income net tax gains losses prior service costs credits arise period recognized components net periodic benefit cost 3 measure defined benefit plan assets obligations date employer’s fiscal year end statement financial position 4 disclose notes financial statements additional information certain effects net periodic benefit cost next fiscal year arise delayed recognition gains losses prior service costs credits transition asset obligations plan adopt sfas 158 effective end company’s fiscal year ending november 30 2007 sfas 158 effective november 30 2006 total assets would approximately 22 million lower total liabilities would approximately 5 million lower shareholders’ equity would approximately 17 million lower net pension liabilities dependent upon future events circumstances impact time adoption sfas no158 may differ amounts adoption sfas 158 expected effect company’s compliance debt covenants 3 business combinations acquisitions accounted using purchase method accounting consolidated financial statements include assets liabilities acquired results operations respective dates acquisition pro forma results acquired businesses presented material impact results operations notable transactions three years ending november 30 2006 discussed acquisitions canadian hydrodynamics ltd chd july 2006 acquired assets calgary canadabased chd approximately 35 million using existing cash hand chd leading provider comprehensive drillstem test information western canadian sedimentary basin chd database available exclusively ihs accumap one energy product offerings partner dataset since 1995 ihs inc notes consolidated financial statements continued geoplus june 2006 acquired assets geoplus tulsa okla approximately 421 million using existing cash hand geoplus pcbased software family petra® popular platform used oil gas companies analyze subsurface data existing oil gas wells construction research communications limited crc within engineering segment acquired crc limited london uk june 2006 approximately 58 million net acquired cash using existing cash hand crc created building research establishment bre emap construct deliver wide range bre products relating construction industry ranging environmental issues fire safety cds december 1 2005 acquired assets contentanddataservices business approximately 330 million serves several industries targeted engineering segment cds core product business extensive database includes technical attributes alternatives obsolescence environmental data electronic component parts purchase prices 2006 acquisitions excluding acquired cash initially allocated follows thousands made three acquisitions 2005 aggregate purchase price approximately 35 million usa september 20 2004 acquired outstanding capital stock usa information systems inc usa total purchase price approximately 194 million net acquired cash usa provides decision support tools critical information governments government contractors intermat september 16 2004 acquired assets intermat inc total purchase price approximately 53 million cash intermat provider decision support tools parts management parts cleansing predictive obsolescence projects ihs inc notes consolidated financial statements continued cera september 1 2004 acquired outstanding capital stock cambridge energy research associates cera total purchase price approximately 291 million net cash acquired cera provides syndicated research strategic advisory services energy companies ipl december 9 2003 acquired assets international petrodata limited ipl total purchase price approximately 161 million cash ipl based calgary canada provides critical information oil gas exploration production markets canada purchase prices 2004 acquisitions allocated follows divestitures investments affiliates 2004 divested preferred stock investments two related parties tbg held common stock september 17 2004 sold preferred stock one related party tripoint global communications inc 942 million recorded 266 million gain sale october 18 2004 distributed tbg form 43 million dividend preferred stock owned second related party extruded metals inc 4 restructuring offering charges summary restructuring offering charges follows thousands 2006 restructuring fourth quarter 2006 executed restructuring initiative principally affecting engineering segment initiative undertaken facilitate continued growth focus narrower group products services exit noncore legacy applications improve operational effectiveness course restructuring reduced aggregate workforce approximately 40 employees restructuring charge incurred entirety fourth quarter 2006 approximately 19 million charge related engineering segment 04 million pertained energy segment ihs inc notes consolidated financial statements continued 01 million related unallocated corporate costs restructuring charge comprised entirely employee severance termination benefits costs reconciliation related accrued restructuring liability november 30 2006 follows 2005 restructuring third quarter 2005 executed restructuring initiative affecting engineering segment certain unallocated corporate costs initiative undertaken reduce costs integration operations previous acquisitions streamline data delivery processes realign marketing function support core product initiatives course restructuring reduced aggregate workforce 100 employees closed certain offices restructuring charge incurred entirety third quarter 2005 approximately 44 million 38 million restructuring charge related engineering segment certain unallocated corporate costs respectively energy segment restructuring charge restructuring charge comprised following thousands reconciliation related accrued restructuring liabilitywhich exclusive charge related restricted shares paid primarily fiscal 2005as november 30 2005 follows ihs inc notes consolidated financial statements continued 5 discontinued operations third quarter 2005 business energy segment classified held sale business held sale manufacturing operation part core operations continually evaluate opportunities align business activities within core operations first quarter 2006 revised estimate wrote value assets discontinued operation 10 million based experienced date sales process third quarter 2006 sold business unrelated third party approximately 03 million recognized loss less 01 million sale business loss sale discontinued operations included loss discontinued operations net line item consolidated statement operations periods presented related results operations shown discontinued operation net tax consolidated statements operations cash flows carrying amounts major classes related assets liabilities follows operating results discontinued operations years ended november 30 2006 2005 2004 follows 6 dissolution joint venture january 1 2004 dissolved joint venture british standards institution bsi favor distribution agreement relating certain products incorporate bsi standards previously sold owned joint venture recorded 44 million gain connection dissolution joint venture included gain sales assets net consolidated statement operations gain resulted fact cash distribution received connection dissolution exceeded balance investment joint venture 45 million deferred revenue balance also recorded 2004 time dissolution amount represented ihs inc notes consolidated financial statements continued estimated fair value fulfillment obligation assumed relative subscription products whose ownership reverted back us time dissolution 7 impairment assets impairment charges recorded 2006 2005 assets used continuing operations 20 million impairment charge recorded 2004 relating decision support tools within energy segment impairment charge occurred result decision management discontinue development efforts product 8 marketable securities november 30 2006 owned following shortterm investments classified availableforsale securities reported fair value november 30 2005 owned following shortterm investments classified availableforsale securities reported fair value use specific identification method account gains losses securities realized gains sales marketable securities included within income expense immaterial years ended november 30 2006 2005 review marketable securities determine decline value temporary concluded decline value november 30 2005 temporary 9 accounts receivable accounts receivable balance consists following november 30 ihs inc notes consolidated financial statements continued activity accounts receivable allowance consists following november 30 10 property equipment property equipment consists following november 30 depreciation expense approximately 69 million 72 million 80 million 2006 2005 2004 respectively 11 goodwill intangible assets following table presents details intangible assets goodwill november 30 2006 ihs inc notes consolidated financial statements continued following table presents details intangible assets goodwill november 30 2005 estimated future amortization expense intangible assets follows amortization expense intangible assets 87 million 44 million 17 million years ended november 30 2006 2005 2004 respectively changes goodwill november 30 2005 november 30 2006 november 30 2004 november 30 2005 result acquisitions see note 3 foreign currency exchangerate fluctuations 12 debt party 125 million unsecured revolving credit agreement revolver feature allowing us increase facility maximum 250 million agreement expires january 2010 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 75 basis points 160 basis points agent bank’s base rate facility fee payable periodically 15 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations capital lease obligations maximum leverage ratio maintenance fixed charge coverage ratio defined revolver ihs inc notes consolidated financial statements continued november 30 2006 compliance covenants agreement outstanding borrowings however outstanding letters credit totaling approximately 16 million november 30 2006 13 indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable 14 taxes income amounts income continuing operations income taxes minority interests us foreign jurisdictions follow years ended november 30 ihs inc notes consolidated financial statements continued provision income tax expense benefit continuing operations years ended november 30 follows provision income taxes continuing operations recorded within consolidated statements operations differs provision determined applying us statutory tax rate pretax earnings result following years ended november 30 undistributed earnings foreign subsidiaries approximately 35 million november 30 2006 earnings considered indefinitely reinvested accordingly provision us federal state income taxes provided thereon upon repatriation earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexities associated hypothetical calculation withholding taxes approximately 30 million would payable upon remittance previously unremitted earnings november 30 2006 ihs inc notes consolidated financial statements continued significant components deferred tax assets liabilities november 30 november 30 2006 net operating loss carryforwards totaling approximately 115 million comprised 12 million us loss carryforwards 103 million foreign loss carryforwards tax purposes available offset future taxable income used us tax carryforwards expire 2024 foreign tax loss carryforwards generally may carried forward indefinitely believe realization substantially entire deferred tax asset related foreign net operating losses likely occur accordingly placed valuation allowance asset november 30 2006 foreign tax credit ftc carryforwards approximately 294 million research development rd credit carryforwards approximately 32 million alternative minimum tax amt credit carryforwards approximately 31 million available offset future us tax liabilities used ftc carryforwards expire 2011 2016 rd credit carryforwards expire 2007 2026 amt credit carryforwards may carried forward indefinitely believe likely realize amt tax credit assets believe portion ftc expire unused result 2006 placed valuation allowance 12 million deferred tax asset believe portion rd tax credits expire unused 2005 placed valuation allowance 05 million deferred tax asset valuation allowance deferred tax assets increased 23 million 2006 increase allowance primarily due increase allowance ftc carryforwards increase allowance foreign subsidiary deferred tax assets ihs inc notes consolidated financial statements continued provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes 15 comprehensive income loss ihs inc notes consolidated financial statements continued 16 stockbased compensation november 30 2006 one share based compensation plan amended restated ihs inc 2004 longterm incentive plan described prior creation plan wholly owned subsidiary ihs group inc issued stock options 1998 2002 nonqualified stock option plans discussed ihs group inc offered exchange outstanding stock options 1998 2002 plans offer individuals received offer accepted related costs accrued november 30 2004 stockbased compensation expense three years ended november 30 follows total income tax benefit recognized income statement sharebased compensation arrangements three years ended november 30 follows compensation cost capitalized years ended november 30 2006 2005 2004 amended restated 2004 longterm incentive plan amended restated 2004 longterm incentive plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards 2004 directors stock plan subplan amended restated 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors shareholders authorized maximum 7 million shares minus number shares relating award granted outstanding subsequent effective date equity compensation plans unless shares used satisfy award shares repurchased open market total compensation expense related nonvested awards share awards stock options yet recognized 259 million november 30 2006 weightedaverage recognition period approximately two years nonvested stock share awards vest six months five years share awards generally subject graded vesting limited number share awards subject cliff vesting fair value nonvested stock based fair value common stock date grant amortize value share awards expense vesting period straightline basis awards performance conditions evaluation made quarter likelihood performance ihs inc notes consolidated financial statements continued criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date summary status nonvested shares november 30 2006 changes year ended november 30 2006 follows total fair value nonvested stock vested year ended november 30 2006 671 million based weightedaverage fair value vesting date 249 million based weightedaverage fair value date grant stock options option awards generally granted exercise price equal fair market value stock date grant options outstanding november 30 2006 cliff vest 4 years continuous service 8year contractual terms certain option share awards provide accelerated vesting change control defined plan fair value option award estimated date grant using blackscholes pricing model uses assumptions noted following table dividend yield 00 since history paying dividends currently plan expected volatility determined annually using basket peer company historical volatility rates time stock history equal contractual terms riskfree interest rate treasurybill rate period equal expected term based treasury note strip principal rates reported wellknown widely used financial sources expected term average contractual term option vesting period ie “shortcut method” ihs inc notes consolidated financial statements continued following table summarizes changes outstanding stock options year ended november 30 2006 well options vested expected vest stock options exercisable november 30 2006 aggregate intrinsic value amounts table represent difference closing price common stock november 30 2006 3705 exercise price multiplied number inthemoney stock options date represents amount would received stock option holders exercised stock options november 30 2006 future periods amount change depending fluctuations stock price total intrinsic value stock options exercised year ended november 30 2006 0 ihs group inc 1998 2002 nonqualified stock option plans ihs group inc whollyowned subsidiary ihs inc maintained stock option plan “old plan” provided granting nonqualified stock options certain employees purchase shares common stock november 22 2004 ihs group inc offered exchange outstanding stock options 1998 2002 nonqualified stock option plans individuals received offer accepted 2004 ihs group inc authorized additional 12 million shares bringing total shares reserved issuance pursuant old plan 87 million options granted exercise price less equal estimated fair market value ihs group inc shares date grant options granted old plan generally vested 100 third anniversary grant date maximum life options granted seven years december 2002 ihs group inc adopted certain revisions plan provided among things ihs group inc right obligation acquire shares common stock pursuant issuance stock options estimated fair market value date acquisition ihs inc notes consolidated financial statements continued following table summarizes ihs group inc’s stock option activity two years ended november 30 2005 march 2004 stock options ihs group inc issued exercise price 900 per share estimated price per share determined valuation committee board committee utilized discounted net cash flow analysis prepared company’s chief financial officer set value analysis supported estimated fair market value ihs group inc 875 925 per share fully diluted basis means validating discounted net cash flow analysis committee reviewed internally prepared comparable company valuation analysis provided committee market confirmation values derived discounted net cash flow analysis reasonable comparable company analysis yielded range values 875 965 per share light comparability results procedures committee determined fair value ihs group inc shares range 875 925 per share fully diluted basis consistent discounted cash flow analysis referenced order select specific per share amount committee opted set fair market value ihs group inc common stock midpoint range 900 per share certain ihs group inc’s stock options originally granted former chief executive officer feature guaranteed option would minimum value 300 per option feature required ihs group inc record compensation expense amount equal difference fair value ihs group inc’s stock exercise price subject 300 minimum value threeyear vesting period ihs group inc issued 1000000 options guarantee 2001 250000 options 2002 ihs group inc required issue additional 250000 options guarantee next two years 2002 options cancelled exchange deferred cash award equal minimum value commitment issue similar number new options 2003 2004 ihs group inc recorded selling general administrative expenses approximately 08 million compensation expense associated deferred cash award 2004 ihs inc notes consolidated financial statements continued settled options 942 november 30 2004 see options granted employees recorded accordance apb opinion 25 accounting stock issued employees apb 25 therefore since exercise price employee stock options equaled fair value underlying stock date grant compensation expense recognized additional information regarding equitybased grants year ended november 30 2004 follows net sameyear forfeitures 106500 shares b fair value determined contemporaneously company’s valuation committee subcommittee board directors comparable disclosures following table illustrates effect net income earnings per share years ended november 30 2005 2004 applied fair value recognition provisions sfas 123r sharebased compensation using blackscholes valuation model fair value option grant estimated date grant following weightedaverage assumptions riskfree interest rate 30 2004 respectively expected life five years expected dividends 0 ihs inc notes consolidated financial statements continued weightedaverage fair value options granted 2004 fair market value 127 per option options granted excess fair market value 2004 value purposes pro forma disclosures estimated fair value options amortized expense options’ vesting period pro forma net income ihs group inc used fair value accounting provisions sfas 123r shown years ended november 30 ihs inc notes consolidated financial statements continued result ultimate 94 million cash settlement outstanding options vested unvested year ended november 30 2004 accelerated vesting unvested options resulted 15 million compensation cost sfas 123 cash settlement vested unvested options result additional compensation cash paid options exceed fair market value settlement date offer exchange options shares offer november 22 2004 ihs group inc offered exchange outstanding stock options purchase shares class nonvoting common stock granted senior executives directors certain employees senior executives ihs group inc’s 1998 2002 nonqualified stock option plans ihs group inc shares previously acquired upon exercise options see information concerning ihs group inc’s 1998 2002 nonqualified stock options plans senior executives employees directors accepted offer received · cash amount equal excess estimated fair value date offer 942 per share exercise price option every ihs group inc share underlying outstanding option vested unvested exercise price lower 942 per share 942 estimated fair value per share determined valuation committee board committee utilized discounted cash flow analysis prepared company’s chief financial officer establish fair value per share validated results analysis internally prepared comparable company analysis discounted cash flow analysis provided estimated range values 913 977 per share comparable company analysis supported range values 925 980 per share based comparability value ranges committee opted set price middle range 942 per share · 942 cash every ihs group inc share previously acquired upon exercise option currently owns amount extent applicable first applied repayment principal price loan connection prior option exercise · additional 042 cash every ihs group inc share previously acquired surrendered order satisfy payroll tax withholding connection prior exercise option · senior executives one restricted share class common stock every three ihs group inc shares underlying outstanding options previously acquired upon exercise option regardless whether options vested unvested regardless exercise price employees senior executives received one deferred stock unit representing one share class common stock every three ihs group inc shares underlying outstanding options previously acquired upon exercise option regardless whether options vested unvested regardless exercise price senior executives directors certain employees received offer accepted prior december 23 2004 expiration offer ihs inc notes consolidated financial statements continued vesting shares senior executives’ restricted shares vest accordance following schedule · onethird total number restricted shares received vested 211th day following initial public offering · onethird total number restricted shares received vested november 16 2006 first anniversary initial public offering · remaining number restricted shares received vest october 1 2007 deferred stock units shares participants received deferred stock units applicable cash soon reasonably practicable expiration offer shares underlying deferred stock units delivered participants december 15 2005 former chief executive officer’s deferred stock units pursuant amendment termination agreement former chief executive officer tendered options ihs group inc previously issued 1040000 cash 583333 deferred stock units representing right receive one share class common stock shares underlying deferred stock units delivered former chief executive officer june 1 2006 accounting treatment november 22 2004 offer extended senior executives directors certain employees senior executives although corresponding awards granted december 23 2004 management believed november 30 2004 likelihood offer would accepted received probable related cost could reasonably estimated consequently accrued 218 million november 30 2004 218 million charge 44 million relates cost revenue 174 million relates selling general administrative expenses accrual offer november 30 2004 includes 99 million cash paid settle options ihs group inc’s 1998 2002 nonqualified stock option plans ihs shares previously acquired upon exercise options b 119 million deferred stock units shares cost associated restricted shares granted senior executives recorded vesting period 17 employee retirement benefits sponsor noncontributory definedbenefit retirement plan us employees least one year service also definedbenefit pension plan covers certain employees subsidiary engineering segment based united kingdom uk benefits plans generally based years service average base compensation plan funding strategies influenced employee benefit laws tax laws uk plan includes provision employee contributions inflationbased benefit increases retirees us uk plan assets consist primarily equity securities smaller holdings bonds alternative assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us plan’s established investment policy seeks balance need maintain viable productive capital base yet achieve investment results superior actuarial rate consistent funds’ investment objectives uk plan’s established investment policy match liabilities ihs inc notes consolidated financial statements continued active deferred members equity investments match liabilities pensioner members fixedincome investments uk plan’s current asset allocation consists approximately 60 investment equities 40 investment fixed income securities asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following compares target asset allocation percentages beginning 2006 actual asset allocations end 2006 11 comprised alternatives 4 comprised cash investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis expect required contributions us plan 2007 however expect contribute approximately 2 million uk plan 2007 following table provides expected benefit payments trustees pension plans ihs inc notes consolidated financial statements continued recognized approximately 33 million 65 million 105 million net periodic pension benefit income 2006 2005 2004 respectively net periodic pension benefit income based upon actuarial estimates net periodic pension benefit income 2004 includes results multiemployer plan ihs’s us retirement plan spun effective november 30 2004 following table provides components net periodic pension benefit income years ended november 30 ihs inc notes consolidated financial statements continued changes projected benefit obligation fair value plan assets follows years ended november 30 funded status follows years ended november 30 1 amended plan 2006 previously engineering segment employees entitled participate plan may 2006 usbased employees became eligible participate plan nearly doubling active participants plan increasing service cost time future benefit earned plan changed resulting simplified calculation reduced future benefit compared prior calculation grandfathered employees change created negative prior service cost amortized income period time ihs inc notes consolidated financial statements continued amounts recognized balance sheet consist following november 30 pension income actuarially calculated annually based data available beginning year assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 employees certain subsidiaries energy engineering segments may participate defined contribution plans benefit expense relating plans approximately 30 million 27 million 24 million 2006 2005 2004 respectively supplemental income plan sip nonqualified pension plan certain company executives benefit expense recognized plan approximately 17 million 07 million 07 million 2006 2005 2004 respectively additionally november 30 2006 related accrued liability 50 million related unrecognized net loss 21 million related accumulated comprehensive loss 17 million benefit expense 2005 excludes 04 million sip expense recorded restructuring charge related obligation included sip accrued liability november 30 2005 related accrued liability 35 million related unrecognized net loss 17 million related accumulated comprehensive loss 09 million 18 postretirement benefits sponsor contributory postretirement medical plan account plan pursuant sfas 106 employers’ accounting postretirement benefits pensions plan grants access group rates retireemedical coverage us employees leave ihs age 55 least 10 years service additionally ihs subsidizes cost coverage retireemedical coverage certain grandfathered employees ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions healthcarecosttrend rates ranging ratably 975 2007 500 2012 effective 2006 ihs provide prescription drug ihs inc notes consolidated financial statements continued coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 575 60 november 30 2006 2005 2004 respectively net periodic postretirement benefit income expense changes related projected benefit obligation follows 1 amended plan 2006 plan amended limit benefits paid future healthcare costs ihs longer subsidizes cost coverage retireemedical coverage certain employees grandfathered ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility change resulted 159 million negative plan amendment amortized period time resulting net periodic postretirement benefit income 2006 2 accordance irs code section 420 cost coverage provided retirees retireemedical plan may paid transfer excess assets us pension plan elected make qualified transfers 2006 2005 employer contributions postretirement benefit plan expected paid year ending november 30 2007 approximately 09 million ihs inc notes consolidated financial statements continued following table provides expected cash flows postretirement benefit plan thousands onepercentagepoint change assumed healthcarecosttrend rates would following effects 19 common stock earnings per share authorized capital stock consists 80000000 shares class common stock 13750000 shares class b common stock classes equal dividend rights liquidation rights however holders class common stock entitled one vote per share holders class b common stock entitled ten votes per share matters voted upon stockholders share class b common stock convertible time option holder one share class common stock automatically convert without action holder upon earlier occurrence specified events november 16 2009 use twoclass method computing basic diluted eps amounts calculated undistributed earnings follows ihs inc notes consolidated financial statements continued weighted average common shares outstanding calculated follows undistributed earnings calculated basic diluted eps amounts calculated follows share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee later 2006 board directors approved additional programa stock buyback programwhereby ihs acquiring ihs inc notes consolidated financial statements continued one million shares per year open market fully offset dilutive effect employee equity programs 20 longterm leases commitments contingencies rental charges 2006 2005 2004 approximated 157 million 145 million 127 million respectively minimum rental commitments noncancelable operating leases effect november 30 2006 follows thousands outstanding letters credit aggregate amount approximately 16 million 19 million november 30 2006 2005 respectively ihs inc notes consolidated financial statements continued time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition 21 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 2004 distributed preferred stock investment fair value approximately 43 million affiliate cash equivalents amounting approximately 1800 million 1324 million reflected consolidated balance sheets november 30 2006 2005 respectively maintained primarily us dollars canadian dollars british pound sterling swiss francs subject fluctuation current exchange rate 22 segment information two reportable segments energy engineering energy segment develops delivers critical oil gas industry data exploration development production transportation activities major global energy producers national independent oil companies energy segment also provides operational research strategic advisory services customers well utilities transportation petrochemical coal power companies engineering segment provides solutions incorporating technical specifications standards regulations parts data design guides information customers targeted industries segments primarily derive revenue subscriptions information operations two segments set forth based nature offerings chairman chief executive officer direct reports represent chief operating decision maker evaluate segment performance based primarily revenue operating profit accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 total revenue 2006 2005 2004 material intersegment revenues period presented ihs inc notes consolidated financial statements continued shown certain corporate transactions allocated reportable segments amounts allocated include limited items corporatelevel restructuring offering charges stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gain loss sales corporate assets following schedule revenue major product service offering following schedule revenue longlived assets geographic location revenue geographic area generally based location subsidiary receives credit sale may correspond either billing address customer shipped ihs inc notes consolidated financial statements continued foreign currency billed longlived assets include property equipment net intangible assets net goodwill 23 quarterly results operations unaudited following summarizes certain quarterly results operations includes impact thirdquarter restructuring charge 83 million writeoff previously capitalized initial public offering costs 41 million item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc company november 30 2015 2014 related consolidated statements operations comprehensive income cash flows changes stockholders equity three years period ended november 30 2015 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2015 2014 consolidated results operations cash flows three years period ended november 30 2015 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs incs internal control financial reporting november 30 2015 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework report dated january 15 2016 expressed unqualified opinion thereon ernst young denver colorado january 15 2016 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2015 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework based evaluation management concluded internal control financial reporting effective november 30 2015 independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 15 2016 jerre l stead jerre l stead chairman chief executive officer todd hyatt todd hyatt executive vice president chief financial officer report independent registered public accounting firm board directors stockholders ihs inc audited ihs incs internal control financial reporting november 30 2015 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 2013 framework coso criteria ihs inc’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion ihs inc maintained material respects effective internal control financial reporting november 30 2015 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2015 2014 related consolidated statements operations comprehensive income cash flows changes stockholders equity three years period ended november 30 2015 ihs inc report dated january 15 2016 expressed unqualified opinion thereon ernst young denver colorado january 15 2016 ihs inc consolidated balance sheets thousands except share pershare amounts see accompanying notes ihs inc consolidated statements operations thousands except pershare amounts see accompanying notes ihs inc consolidated statements comprehensive income thousands see accompanying notes ihs inc consolidated statements cash flows thousands see accompanying notes ihs inc consolidated statements changes stockholders’ equity thousands see accompanying notes ihs inc notes consolidated financial statements 1 nature business leading source information insight analytics critical areas shape todays business landscape businesses governments 140 countries around globe rely comprehensive content expert independent analysis flexible delivery methods aim embed solutions within entire spectrum customers’ organization enabling executive level capital deployment strategies following decisionmaking activities throughout organizations frontline employees tasked managing company’s complex core daily operations business since 1959 became publicly traded company new york stock exchange 2005 segments organized address customer needs industry workflow follows •resources focused primarily energy chemicals industries • transportation focused primarily automotive maritime trade aerospace defense security industries • consolidated markets solutions cms focused primarily product design economics country risk workflows well technology media telecom industry sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscription agreements typically annual noncancellable term subscription may contain provisions minimum monthly payments subscription revenue timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest quarterly levels revenue profit also experience eventdriven seasonality business instance ihs energy ceraweek annual energy executive gathering held second quarter 2015 held first quarter 2016 another example biennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every year recent bpvc release third quarter 2015 2 significant accounting policies fiscal year end fiscal year ends november 30 year references herein individual years mean year ended november 30 example 2015 means year ended november 30 2015 consolidation policy consolidated financial statements include accounts whollyowned subsidiaries significant intercompany accounts transactions eliminated consolidation use estimates preparation financial statements conformity us generally accepted accounting principles gaap requires make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements well reported amounts revenues expenses reporting period significant estimates made areas include valuation longlived intangible assets goodwill income taxes pension postretirement benefits allowance doubtful accounts stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance probable credit losses allowance based upon management’s assessment known credit risks well general industry economic conditions specific accounts receivable written upon notification bankruptcy account significantly past due collection efforts unsuccessful segments periodically reassess identification operating segments result changes organizational structure fourth quarter 2015 determined operating segments changed geographic view industry vertical view chief operating decision maker codm reviews operating results resources transportation cms segment level determining allocate resources assess performance fair value measurements fair value determined based assumptions market participants would use pricing asset liability utilize following fair value hierarchy determining fair values level 1 quoted prices identical assets liabilities active markets level 2 inputs quoted prices within level 1 observable either directly indirectly including quoted prices markets active quoted prices active markets similar assets liabilities observable inputs quoted prices interest rates yield curves level 3 unobservable inputs reflecting view assumptions market participants would use pricing asset liability cash accounts receivable accounts payable shortterm nature therefore carrying value items approximates fair value carrying value debt instruments 5 senior notes due 2022 5 notes approximate fair value variable interest rate associated instruments fair value 5 notes included note 8 measured using observable inputs markets active consequently classified 5 notes within level 2 fair value hierarchy derivatives described note 7 measured fair value recurring basis reference similar transactions active markets observable inputs quoted prices consequently classified financial instruments within level 2 fair value hierarchy pension plan assets described note 13 measured fair value recurring basis reference similar assets active markets therefore also classified within level 2 fair value hierarchy revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured majority revenue derived sale subscriptions subscription agreements typically annual noncancellable may contain provisions minimum monthly payments subscription revenue timing cash flows generally precedes recognition revenue income defer initial payments recognize revenue ratably delivered subscription period revenue recognized upon delivery nonsubscription sales certain locations use dealers distribute product offerings subscription product offerings sold dealers revenue recognized ratably delivered end user subscription period nonsubscription product offerings sold dealers revenue recognized upon delivery dealer defer revenue limited number subscription sales act sales agent third parties continuing responsibility maintain update underlying database recognize revenue net basis upon sale subscriptions delivery information tools services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standard price book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation see discussion “multipleelement arrangements” contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer software addition meeting standard revenue recognition criteria described revenue software arrangements must also meet requirement vendorspecific objective evidence “vsoe” fair value undelivered elements exists significant portion software licenses sold multipleelement arrangements include either maintenance limited circumstances maintenance professional services use residual method determine amount license revenue recognized residual method consideration allocated undelivered elements based upon vsoe fair value elements residual arrangement fee allocated recognized license revenue recognize license revenue upon delivery maintenance revenue recognized ratably maintenance period established vsoe fair value maintenance independent maintenance renewals demonstrate consistent relationship pricing maintenance percentage discounted undiscounted license list price vsoe fair value professional services established based daily rates sold standalone basis multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees subscription offerings decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis using relative selling price method element arrangement allocated based generally standalone sales products services constitutes vsoe selling price use factors inputs assumptions methods determine estimated selling price recognize elements contract follows • subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery • nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period • instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties certain dealer commissions associated customer subscriptions costs deferred amortized expense period subscriptions property equipment property equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated shorter estimated useful life lease maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized also capitalize certain software development costs accordance asc 35040 accounting costs computer software developed obtained internal use asc 98520 software sold leased otherwise marketed review carrying amounts longlived assets property equipment whenever current events circumstances indicate value may impaired longlived asset finite life considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell leases certain circumstances enter leases free rent periods rent escalations term lease cases calculate total payments term lease record ratably rent expense term intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired evaluate intangible assets goodwill impairment least annually well whenever events changes circumstances indicate carrying amounts may recoverable impairments expensed incurred finitelived intangible assets identifiable intangible assets finite lives generally amortized straightline basis respective lives follows indefinitelived intangible assets performing impairment test indefinitelived intangible assets first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value trademarks based relief royalty method using projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment reporting unit level reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment determining fair value reporting unit comparing reporting units carrying value determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values deficiencies reporting unit fair values versus carrying values fiscal years ended november 30 2015 2014 2013 income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred revenue pension postretirement benefits accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates pension postretirement benefits fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent 10 percent greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets treasury stock treasury stock purchases whether stock retention buyback programs transactions recorded actual cost issuances treasury stock recorded using weightedaverage cost method earnings per share basic earnings per share eps computed dividing net income weightedaverage number shares class common stock outstanding period diluted eps computed using weightedaverage number shares class common stock dilutive potential shares class common stock outstanding period diluted eps reflects potential dilution could occur securities exercised converted shares class common stock advertising costs production costs expensed first date advertisements take place advertising expense approximately 447 million 352 million 127 million years ended november 30 2015 2014 2013 respectively primarily comprised advertising carfax foreign currency functional currency foreign subsidiaries typically subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weightedaverage rates exchange prevailing year translation adjustments included comprehensive income transactions executed currencies subsidiarys functional currency result exchange adjustments remeasured spot rates resulting foreignexchangetransaction gains losses included results operations stockbased compensation stockbased awards recognized income statement based grant date fair values addition estimate forfeitures grant date compensation expense recognized based number awards expected vest adjust compensation expense future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value stockbased awards expense vesting period straightline basis awards performance conditions evaluate probability number shares expected vest compensation expense adjusted reflect number shares expected vest cumulative vesting period met date recent accounting pronouncements april 2014 financial accounting standards board fasb issued accounting standards update asu 201408 changes criteria determining disposals presented discontinued operations modifies related disclosure requirements asu intended reduce frequency disposals reported discontinued operations focusing strategic shifts major effect entity’s operations financial results standard effective us first quarter fiscal year 2016 expect adoption asu significant impact consolidated financial statements changing classification criteria related disclosures potential future disposals may 2014 fasb issued asu 201409 establishes comprehensive new revenue recognition model designed depict transfer goods services customer amount reflects consideration entity expects receive exchange goods services asu allows use either full modified retrospective transition method standard effective us first quarter fiscal year 2019 although early adoption permitted currently evaluating impact new standard consolidated financial statements well transition method intend use august 2014 fasb issued asu 201415 requires management evaluate entitys ability continue going concern within one year date financial statements issued disclosure required substantial doubt entitys ability continue going concern standard effective us fourth quarter fiscal year 2017 although early adoption permitted expect adoption asu significant impact consolidated financial statements april 2015 fasb issued asu 201503 requires debt issuance costs related recognized debt liability presented balance sheet direct deduction carrying amount debt liability standard effective us first quarter fiscal 2017 although early adoption permitted expect impact asu financial statements change balance sheet presentation debt issuance costs april 2015 fasb issued asu 201505 provides guidance customers accounting fees paid cloud computing arrangements cloud computing arrangement includes software license customer account software license element consistent acquisition software licenses arrangement contain software license customer account arrangement service contract standard effective us first quarter fiscal year 2017 although early adoption permitted anticipate adopt standard using prospective transition method expect adoption asu significant impact consolidated financial statements september 2015 fasb issued asu 201516 requires acquirer recognize adjustments provisional amounts identified measurement period reporting period adjustment amounts determined standard effective us first quarter fiscal year 2017 although early adoption permitted expect adoption asu significant impact consolidated financial statements november 2015 fasb issued asu 201517 requires deferred tax liabilities assets classified noncurrent classified statement financial position early adopted standard applied requirements retrospectively periods presented adoption standard resulted reclassification 818 million current deferred income tax assets consolidated balance sheet november 30 2014 noncurrent deferred income tax assets 55 million noncurrent deferred income tax liabilities 763 million 3 business combinations year ended november 30 2015 completed following acquisitions none material either individually aggregate joc group inc joc group december 9 2014 acquired joc group global supplier us seaborne trade intelligence acquired joc group support strategy build integrated workflow solutions target critical industry government needs relating global trade infonetics research inc infonetics december 15 2014 acquired infonetics provider communications technology market intelligence acquired infonetics support objective providing customers global endtoend view information communications technology supply chain rushmore associates limited rushmore reviews february 3 2015 acquired rushmore reviews service provider drilling completions solutions oil gas industry acquired rushmore reviews order complement existing set well information assets expand globally dataium march 25 2015 acquired dataium usbased company provides business intelligence analysis automotive industry acquired dataium order enhance automotive offerings dataiums compilation analysis online automotive shopping behavior markets root wireless inc rootmetrics april 17 2015 acquired rootmetrics provider mobile network analytics acquired rootmetrics order strengthen position telecommunications analytics market intelligence particularly related mobile user experience following table summarizes preliminary purchase price allocation net acquired cash acquisitions completed 2015 thousands december 2015 acquired carproof canadabased company offers products services vehicle history appraisal valuation automotive industry approximately 460 million net cash acquired financed acquisition combination cash borrowings revolving credit facility january 2016 announced signed definitive agreement acquire opis internationally referenced pricing reporting agency serves oil natural gas biofuels industries 650 million expect finance transaction additional bank borrowings year ended november 30 2014 completed following acquisitions none material either individually aggregate global trade information services gti august 1 2014 acquired gti leading provider international merchandise trade data acquired gti order support strategy building integrated workflow solutions target industry needs related global trade pci acrylonitrile limited pci acrylonitrile august 28 2014 acquired pci acrylonitrile provider information analysis acrylonitrile propylene derivative product acquired pci acrylonitrile order strengthen position chemical market advisory services displaysearch solarbuzz november 6 2014 acquired displaysearch solarbuzz businesses npd group displaysearch conducts global primary research display technology solarbuzz provides market intelligence research forecasting solar industry acquired two businesses order strengthen supply chain offerings displays help us develop new offerings solar market pacwest consulting partners pacwest november 17 2014 acquired pacwest provider information market intelligence strategic analysis upstream unconventional oil gas industry acquired pacwest order expand presence hydraulic fracturing related unconventional space following table summarizes purchase price allocation net acquired cash acquisitions thousands 2013 completed following acquisitions among others exclusive analysis business dodson data systems december 12 2012 announced completion two strategic acquisitions exclusive analysis specialist intelligence company forecasts political violent risks worldwide business dodson data systems leading provider strategic information companies engaged oil gas operations located gulf mexico united states acquired two businesses order augment existing product portfolio providing customers additional information forecasting analytics energy publishing inc energy publishing december 31 2012 acquired energy publishing leading provider north american australasian coal intelligence acquired energy publishing order strengthen position coal intelligence give us immediate presence deep coverage north american australasian coal markets complementing existing global energy power product offerings fekete associates april 5 2013 acquired fekete associates leading provider integrated reservoir management software services oil gas industry acquired fekete order combine feketes workflow tools existing energy information products create efficiencies customers helping make timely exploration production decisions waterborne energy may 13 2013 acquired waterborne energy company provides global research analysis price information liquefied petroleum gas lpg liquefied natural gas lng sector acquired waterborne order help us provide customers comprehensive complete lpg lng intelligence aid making key business decisions regarding demand supply pricing pfc energy june 19 2013 acquired pfc energy provider upstream downstream energy information research analysis acquired pfc energy product offering set geographical footprint customer relationships complementary ihs bring greater depth breadth key areas ihs energy solution set r l polk co polk july 15 2013 acquired polk recognized leader providing automotive information analytics solutions approximately 14 billion consisting approximately 125 billion cash net cash acquired 1334477 shares common stock value 1315 million issued treasury stock cash portion transaction funded cash hand cash amended existing revolving credit facility new bank term loan acquired polk order establish automotive business strategic partner automotive industry worldwide included revenue expenses attributable polk appropriate geographic segment principally americas date acquisition polk acquisition contributed 1659 million revenue 144 million income continuing operations postacquisition period ended november 30 2013 following unaudited pro forma information prepared polk acquisition consummated december 1 2011 information presented informational purposes necessarily indicative operating results would occurred acquisition consummated date information used predictive measure future financial position results operations liquidity 2013 pro forma net income excludes 264 million onetime change control transaction costs following table summarizes purchase price allocation net acquired cash acquisitions completed 2013 thousands 4 accounts receivable accounts receivable balance consists following november 30 2015 2014 thousands record accounts receivable allowance probable accounts receivable balance collected amounts comprising allowance based upon management’s estimates historical collection trends activity accounts receivable allowance consists following years ended november 30 2015 2014 2013 respectively thousands 5 property equipment property equipment consists following november 30 2015 2014 thousands depreciation expense 850 million 650 million 460 million years ended november 30 2015 2014 2013 respectively 6 intangible assets following table presents details acquired intangible assets goodwill thousands intangible asset amortization expense 1301 million 1163 million 930 million years ended november 30 2015 2014 2013 respectively estimated future amortization expense related intangible assets held november 30 2015 follows thousands changes goodwill gross intangible assets november 30 2014 november 30 2015 primarily result recent acquisition activities partially offset writeoff fully amortized intangible assets longer service well reclassification assets held sale change net intangible assets primarily due current year amortization partially offset addition intangible assets associated acquisitions described note 3 business combinations goodwill gross intangible assets net intangible assets subject foreign currency translation effects 7 derivatives business exposed various market risks including interest rate foreign currency risks utilize derivative instruments help us manage risks hold issue derivatives speculative purposes interest rate swaps mitigate interest rate exposure outstanding revolving facility debt utilize interest rate derivative contracts effectively swap 400 million floating rate debt 286 percent weightedaverage fixed interest rate plus applicable spread floating rate debt entered swap contracts november 2013 january 2014 contracts expire may november 2020 terms swaps variable rate debt amended extended time coincide expect ineffectiveness designated accounted instruments cash flow hedges changes fair value deferred accumulated comprehensive incomeloss aoci consolidated balance sheets foreign currency forwards mitigate foreign currency exposure utilize following derivative instruments • foreign currency forward contracts hedge foreign currency exposure eurodenominated receipts british pounddenominated expenses critical terms forward contracts forecasted cash flows coincide expect ineffectiveness associated contracts designated accounted derivatives cash flow hedges changes fair value deferred aoci consolidated balance sheets outstanding foreign currency forwards agreements november 30 2015 notional amount outstanding foreign currency forwards agreements november 30 2014 approximately 110 million • shortterm foreign currency forward contracts manage market risks associated fluctuations balances denominated currencies local functional currency account forward contracts fair value recognize associated realized unrealized gains losses expense income net consolidated statements operations since designated contracts hedges accounting purposes following table summarizes notional amounts outstanding foreign currency forward contracts november 30 2015 2014 thousands fair value derivatives since derivative instruments listed exchange evaluated fair value reference similar transactions active markets consequently classified derivative instruments within level 2 fair value measurement hierarchy following table shows classification location fair value derivative instruments november 30 2015 2014 thousands net gain loss foreign currency forwards designated hedging instruments years ended november 30 2015 2014 2013 respectively follows thousands following table provides information cumulative amount unrecognized hedge losses recorded aoci november 30 2015 november 30 2014 well activity cash flow hedging instruments years ended november 30 2015 2014 2013 respectively thousands unrecognized gains relating foreign currency forwards expected reclassified revenue within next 12 months approximately 85 million 243 million unrecognized losses relating interest rate swaps expected reclassified interest expense within next 12 months 8 debt following table summarizes total indebtedness november 30 2015 2014 thousands 2013 term loan october 2014 amended restated 700 million senior unsecured amortizing term loan agreement originally entered third quarter 2013 term loan 2013 term loan maturity date october 2019 interest rates borrowings 2013 term loan applicable libor plus spread 100 percent 175 percent depending upon leverage ratio defined ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda terms defined term loan agreement 2014 revolving facility october 2014 entered 13 billion senior unsecured revolving credit agreement 2014 revolving facility commitments 500 million available borrowing certain foreign subsidiaries 50 million available letters credit subject certain conditions 2014 revolving facility may expanded 500 million aggregate additional commitments borrowings 2014 revolving facility mature october 2019 bear interest rates spreads 2013 term loan commitment fee unused balance payable periodically ranges 013 percent 030 percent based upon leverage ratio approximately 18 million outstanding letters credit 2014 revolving facility november 30 2015 reduces available borrowing 2014 revolving facility equivalent amount 2013 term loan 2014 revolving facility contains certain financial covenants including maximum leverage ratio minimum interest coverage ratio terms defined respective agreements allow leverage 35x ability temporarily increase leverage 375x two quarters 5 notes october 2014 issued 750 million aggregate principal amount senior unsecured notes due 2022 offering subject registration requirements securities act 1933 amended net proceeds 5 notes used repay amounts outstanding 2012 term loan portion amounts borrowed 2014 revolving facility 5 notes bear interest fixed rate 500 mature november 1 2022 interest 5 notes due semiannually may 1 november 1 year commencing may 1 2015 may redeem 5 notes whole part redemption price equal 100 principal amount notes plus applicable premium defined indenture governing 5 notes additionally option holders notes may required purchase portion notes upon occurrence change control triggering event defined indenture price equal 101 percent principal amount thereof plus accrued unpaid interest date purchase indenture contains covenants limit ability among things incur create liens enter sale leaseback transactions addition indenture contains covenant limits ability consolidate merge another entity sell substantially assets another entity indenture contains customary default provisions fair value 5 notes november 30 2015 approximately 776 million year ended november 30 2014 result 5 notes issuance 2014 revolving facility agreement amendment restatement 2013 term loan capitalized approximately 188 million new debt issuance costs recorded 14 million loss debt extinguishment associated portion prior capitalized debt issuance costs november 30 2015 compliance debt covenants discussed note 3 january 2016 announced signed definitive agreement acquire opis upon completion opis acquisition expected occur first quarter 2016 resulting gross leverage would exceed maximum leverage ratio permitted 2014 revolving facility consequently obtained credit facility backstop pursue amendment bank group prior closing opis allow us exceed current 375x limit classified shortterm debt based principal maturities november 30 2015 approximately 710 million outstanding borrowings 2014 revolving facility current annual interest rate 170 percent approximately 665 million outstanding borrowings 2013 term loan current weighted average annual interest rate 332 percent including effect interest rate swaps described note 7 maturities outstanding borrowings 2013 term loan 5 notes november 30 2015 follows thousands 9 restructuring charges 2013 consolidated positions accounting customer care centers excellence coe locations completed successive erp releases well eliminated positions accomplish operational efficiencies also continued consolidation legacy data centers 2013 included certain contract termination costs recorded approximately 117 million restructuring charges activities included movement elimination 245 positions total charge approximately 58 million charge recorded resources segment approximately 16 million recorded transportation segment approximately 43 million recorded cms segment 2014 eliminated 168 positions incurred additional direct incremental costs related identified operational efficiencies continued consolidation positions coe locations consolidation legacy data centers recorded approximately 88 million restructuring charges activities charges approximately 35 million recorded resources segment 25 million recorded transportation segment 28 million recorded cms segment 2015 eliminated 460 positions incurred additional direct incremental costs related identified operational efficiencies including lease abandonments continued consolidation positions coe locations consolidation legacy data centers particularly realigned new segment structure simplified reduced centralized marketing sales support shares services cost structures recorded approximately 394 million restructuring charges activities charges approximately 226 million recorded resources segment 75 million recorded transportation segment 93 million recorded cms segment expect continue incur costs related similar activities future periods resulting additional restructuring charges following table shows restructuring activity provides reconciliation restructuring liability november 30 2015 thousands november 30 2015 approximately 91 million remaining liability resources segment approximately 35 million transportation segment approximately 22 million cms segment approximately 111 million balance expected paid 2016 remaining amount relates lease abandonments paid remaining lease periods 2018 2021 respectively 10 acquisitionrelated costs 2013 incurred approximately 234 million costs associated acquisitions primarily related polk acquisition acquisitionrelated costs 2013 included investment adviser fees severance lease abandonment legal professional fees certain costs incurred transaction chose consummate approximately 11 million costs incurred resources segment 187 million costs incurred transportation segment 21 million costs incurred cms segment 15 million costs allocated shared services 2014 incurred approximately 19 million costs associated acquisitions including severance lease abandonments professional fees approximately 08 million costs incurred resources segment 06 million costs incurred transportation segment 05 million costs incurred cms segment 2015 incurred approximately 15 million costs associated acquisitions including severance lease abandonments professional fees certain costs incurred transaction chose consummate approximately 09 million total charge recorded resources segment 06 million allocated shared services following table provides reconciliation acquisitionrelated costs accrued liability november 30 2015 thousands november 30 2015 04 million remaining liability primarily transportation segment expect substantially paid 2016 11 discontinued operations operating results discontinued operations years ended november 30 2015 2014 2013 respectively follows thousands october 2015 announced intent divest oerm globalspec product groups components cms segment due recent portfolio evaluation determined product groups longer aligned strategic goals oerm also one reporting units launched sales process product groups november 2015 anticipate completion divestitures within next 12 months part fair value analysis discontinued operations determined impairment related globalspec based expected selling price globalspec consequently recorded impairment loss approximately 34 million income discontinued operations net caption consolidated statements operations tax benefit includes recognition 424 million deferred tax asset difference book value stock tax value stock following table provides components assets liabilities held sale november 30 2015 thousands 12 income taxes amounts income continuing operations income taxes us foreign jurisdictions years ended november 30 2015 2014 2013 respectively follows thousands provision income taxes continuing operations years ended november 30 2015 2014 2013 respectively follows thousands following table presents reconciliation provision income taxes us statutory tax rate years ended november 30 2015 2014 2013 respectively thousands tax rate change reflects impact legislative changes statutory rates well impact acquisitions global footprint related measurement deferred taxes undistributed earnings foreign subsidiaries approximately 7475 million november 30 2015 earnings considered indefinitely reinvested include earnings certain subsidiaries considered distributed accordingly provision us federal state income taxes provided earnings repatriate earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexity associated hypothetical calculation significant components deferred tax assets liabilities november 30 2015 2014 follows thousands november 30 2015 loss carryforwards tax purposes totaling approximately 3400 million comprised 722 million us net operating loss carryforwards 2678 million foreign loss carryforwards available offset future taxable income used us net operating loss carryforwards begin expire 2018 foreign tax loss carryforwards generally may carried forward indefinitely analyzed net operating losses placed valuation allowances determined realization likely occur november 30 2015 approximately 163 million foreign tax credit ftc carryforwards approximately 44 million research development rd credit carryforwards available offset future us tax liabilities used ftc carryforwards expire 2023 2025 rd credit carryforwards expire 2032 2034 believe likely realize ftc rd tax credit assets valuation allowance deferred tax assets increased 126 million 2015 increase primarily attributable foreign net operating losses incurred acquired objective indication taxable income foreign entity generated future expect capital loss sale globalspec utilized capital gain sale oerm provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes summary activities associated reserve unrecognized tax benefits interest penalties follows thousands november 30 2015 total amount unrecognized tax benefits 21 million 04 million related interest penalties include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes entire amount unrecognized benefits november 30 2015 may affect annual effective tax rate benefits eventually recognized reasonably possible experience 05 million decrease reserve unrecognized tax benefits within next 12 months would experience decrease relation uncertainties associated expiration applicable statutes limitation subsidiaries file federal state local income tax returns multiple jurisdictions around world exceptions longer subject income tax examinations tax authorities years 2011 13 pensions postretirement benefits defined benefit plans sponsor following defined benefit plans •a frozen noncontributory definedbenefit retirement plan us rip certain us employees • frozen definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom • frozen unfunded supplemental income plan sip nonqualified pension plan certain us employees earn federally stipulated amount benefits three plans generally based years service either average cumulative base compensation depending plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees expect contribute approximately 3 million pension postretirement benefit plans 2016 following table provides expected benefit payments pension plans thousands net periodic pension expense pension plans consisted following thousands changes projected benefit obligation plan assets funded status pension plans follows thousands net underfunded status plans recorded accrued pension postretirement liability consolidated balance sheets future reclassification actuarial loss aoci income would recognized cumulative actuarial loss exceeds corridor reclassification would recognized fourth quarter marktomarket adjustment pension expense actuarially calculated annually based data available beginning year determine expected return plan assets multiplying expected longterm rate return assets marketrelated value plan assets marketrelated value plan assets fair value plan assets assumptions used actuarial calculation include discount rate selected disclosed end previous year well expected rate return assets detailed table years ended november 30 2015 2014 discontinued future accruals us rip result plan freeze associated remeasurement used weightedaverage 52 percent expected longterm rate return plan assets weightedaverage 47 percent discount rate us rip 2014 fair value pension assets november 30 2015 us rip plan assets consist primarily fixedincome securities moderate amount equity securities employed similar investment strategy november 30 2014 uk rip plan assets consist primarily equity securities smaller holdings bonds assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rip’s established investment policy seeks align expected rate return discount rate allowing equity variability allow upside market potential would strengthen overall asset position plan uk rip’s established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following table compares target asset allocation percentages actual asset allocations end 2015 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis pension plan assets measured fair value recurring basis reference similar assets active markets therefore classified within level 2 fair value hierarchy plan assets november 30 2015 2014 classified following categories thousands postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees terminate ages 55 64 least 10 years ihs service additionally subsidize cost coverage retireemedical coverage certain grandfathered employees subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 450 percent 420 percent november 30 2015 2014 respectively net periodic postretirement expense changes related projected benefit obligation follows thousands net unfunded status postretirement benefit plan recorded accrued pension liability consolidated balance sheets future reclassifications actuarial loss aoci income would recognized cumulative actuarial loss exceeds corridor would recognized fourth quarter marktomarket adjustment following table provides expected benefit payments plan thousands onepercentagepoint change assumed healthcarecosttrend rates would effect service cost interest cost postretirement benefit obligation november 30 2015 subsidy capped defined contribution plan employees certain subsidiaries may participate defined contribution plans began providing company nonelective contribution certain employees 2012 expanded contribution eligible employees active employees end calendar year benefit expense relating plans approximately 182 million 137 million 119 million years ended november 30 2015 2014 2013 respectively 14 stockbased compensation november 30 2015 one stockbased compensation plan amended restated ihs inc 2004 longterm incentive plan ltip provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards upon vesting award may either issue new shares reissue treasury shares extent reissued shares previously withheld taxes ltip provisions 2004 directors stock plan subplan ltip provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors stockholders authorized maximum 1475 million shares issuance ltip november 30 2015 number shares available future grant 15 million total unrecognized compensation expense related nonvested awards 1207 million november 30 2015 weightedaverage recognition period approximately 14 years restricted stock units rsus typically vest one three years generally subject either cliff vesting performancebased rsus graded vesting timebased rsus nonforfeitable rights dividends dividend equivalents fair value rsus based fair value common stock date grant amortize value awards expense vesting period straightline basis performancebased rsus evaluation made quarter likelihood performance criteria met number performancebased rsus expected vest increases decreases compensation expense also adjusted reflect number expected vest cumulative vesting period met date rsus estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors following table summarizes rsu activity year ended november 30 2015 performancebased rsus 2016 2017 performance periods included table target total fair value rsus vested year ended november 30 2015 1449 million stock options option awards generally granted exercise price equal fair market value stock date grant stock options outstanding november 30 2015 stockbased compensation expense years ended november 30 2015 2014 2013 respectively follows thousands total income tax benefits recognized stockbased compensation arrangements follows thousands stockbased compensation cost capitalized years ended november 30 2015 2014 2013 15 commitments contingencies commitments rental charges 2015 2014 2013 approximated 609 million 589 million 463 million respectively minimum rental commitments noncancelable operating leases effect november 30 2015 follows also outstanding letters credit bank guarantees aggregate amount approximately 52 million 56 million november 30 2015 2014 respectively indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable litigation time involved litigation ordinary course business including claims contingencies may arise related matters occurring prior acquisition businesses matter described present time primarily matters generally early stages give assurance outcome pending litigation currently party unable determine ultimate resolution provide reasonable estimate range possible loss attributable matters effect may us however expect outcome proceedings material adverse effect results operations financial condition continue vigorously defend claims april 23 2013 prior acquisition rl polk co carfax subsidiary carfax served complaint filed us district court southern district new york purportedly behalf certain auto light truck dealers complaint alleges among things violation antitrust laws carfax entered exclusive arrangements regarding sale carfax vehicle history reports certain auto manufacturers owners two websites providing classified listings used autos light trucks complaint seeks three times actual damages jury finds plaintiffs sustained injunctive relief costs attorneys’ fees october 25 2013 plaintiffs served second amended complaint similar allegations purporting name approximately 469 auto dealers plaintiffs counsel plaintiffs indicated may additional claimants significant legal factual issues determined believe however probability outcome litigation material adverse effect results operations financial condition remote 16 common stock earnings per share weighted average shares class common stock outstanding years ended november 30 2015 2014 2013 respectively calculated follows thousands share buyback programs 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal minimum statutory tax liability pay statutory tax behalf employee year ended november 30 2015 accepted 436919 shares surrendered employees tax withholding program approximately 508 million 11622 per share january 2015 board directors authorized us repurchase 100 million class common stock open market purchases privately negotiated transactions compliance rule 10b18 securities exchange act 1934 amended exchange act subject market conditions applicable legal requirements relevant factors previously announced share repurchase programs terminated time completed program june 2015 repurchasing 816205 shares average price approximately 12252 per share june 2015 board directors authorized us repurchase 500 million class common stock open market purchases privately negotiated transactions compliance rule 10b18 exchange act subject market conditions applicable legal requirements relevant factors repurchase program obligate ihs repurchase set dollar amount number shares scheduled expire november 30 2017 may suspended time discretion amount authorized program inclusive share repurchases class common stock surrendered employees amount equal statutory tax liability associated vesting equity awards pay statutory tax behalf employee year ended november 30 2015 repurchased 841842 shares open market program total approximately 1003 million average price approximately 11918 per share 17 accumulated comprehensive income loss accumulated comprehensive income aoci consists foreign currency translation adjustments net pension postretirement liability adjustments net gain loss hedging activities item reported net related income tax effect following table summarizes changes aoci component net tax year ended november 30 2015 thousands amounts reclassified aoci income related net pension opeb liability recorded net periodic pension postretirement expense 18 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 2015 2014 2013 respectively thousands interest paid 2013 2014 2015 increased primarily due increased borrowings associated acquisitions share repurchase programs well higher effective interest rate due increased amount fixed rate debt cash equivalents amounting approximately 2916 million 1532 million reflected consolidated balance sheets november 30 2015 2014 respectively maintained primarily us dollars canadian dollars british pounds euros subject fluctuations currency exchange rate 19 segment information 2015 changed structure internal organization manner caused composition segments change prepare financial reports analyze business results within three operating segments resources transportation cms prior period information restated reflect current year presentation excludes results associated discontinued operations evaluate segment performance primarily revenue operating profit level three segments information operations segments set forth chief executive officer codm evaluates segment performance based primarily revenue operating profit addition codm reviews revenue transaction type geography accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 percent total revenue years ended november 30 2015 2014 2013 material intersegment revenues period presented certain corporate transactions allocated reportable segments including items stockbased compensation expense net periodic pension postretirement expense corporatelevel impairments gain loss sale corporate assets table provides information revenue longlived assets us rest world 2015 2014 2013 material individual foreign countries revenue geographic area generally based ship location longlived assets include net property equipment revenue transaction type follows revenue geography follows activity goodwill account follows adjustments purchase price 2014 2015 related primarily deferred tax trueups finalized 2013 2014 acquisitions respectively reclassification adjustment 2015 related goodwill allocated oerm globalspec product groups classified discontinued operations described note 11 20 quarterly results operations unaudited following table summarizes certain quarterly results operations thousands due discontinued operations discussed note 11 adjusted prior period amounts including quarterly results operations reflect impact discontinued operations periods 21 supplemental guarantor information 5 notes fully unconditionally guaranteed unsecured basis jointly severally following wholly owned subsidiaries ihs inc collectively guarantor subsidiaries •ihs holding inc •ihs global inc •rl polk co •carfax inc guarantees 5 notes guarantor subsidiaries contain customary release provisions provide termination guarantees upon sale disposition including way consolidation merger guarantor subsidiary sale disposition substantially assets guarantor subsidiary case parent company ihs inc another subsidiary company ii defeasance 5 notes iii time guarantor subsidiary ceases guarantor significant indebtedness company following supplemental tables present condensed consolidating financial information parent company guarantor subsidiaries combined basis nonguarantor subsidiaries combined basis condensed consolidating balance sheet november 30 2015 thousands condensed consolidating balance sheet november 30 2014 thousands condensed consolidating statement operations year ended november 30 2015 thousands condensed consolidating statement operations year ended november 30 2014 thousands condensed consolidating statement operations year ended november 30 2013 thousands condensed consolidating statements comprehensive income thousands condensed consolidating statement cash flows year ended november 30 2015 thousands condensed consolidating statement cash flows three months ended november 30 2014 thousands condensed consolidating statement cash flows three months ended november 30 2013 thousands item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc company november 30 2013 2012 related consolidated statements operations comprehensive income cash flows changes stockholders equity three years period ended november 30 2013 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2013 2012 consolidated results operations cash flows three years period ended november 30 2013 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs incs internal control financial reporting november 30 2013 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework report dated january 13 2014 expressed unqualified opinion thereon ernst young denver colorado january 13 2014 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2013 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework based evaluation management concluded internal control financial reporting effective november 30 2013 managements evaluation include assessing effectiveness internal control financial reporting r l polk co polk acquired july 15 2013 polk included consolidated financial statements constituted 1628 billion 1301 billion total net assets respectively november 30 2013 1659 million 144 million revenues net income respectively year ended net income generated polk business includes amortization expense related acquired intangible assets interest expense related borrowings made effect acquisition independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 13 2014 scott key scott key president chief executive officer todd hyatt todd hyatt executive vice president chief financial officer report independent registered public accounting firm board directors stockholders ihs inc audited ihs incs internal control financial reporting november 30 2013 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework coso criteria ihs incs management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate indicated accompanying management’s report internal control financial reporting management’s assessment conclusion effectiveness internal control financial reporting include internal controls r l polk co polk acquired july 15 2013 polk included 2013 consolidated financial statements ihs inc constituted 1628 billion 1301 billion total net assets respectively november 30 2013 1659 million 144 million revenues net income respectively year ended audit internal control financial reporting ihs inc also include evaluation internal control financial reporting polk opinion ihs inc maintained material respects effective internal control financial reporting november 30 2013 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2013 2012 related consolidated statements operations comprehensive income cash flows changes stockholders equity three years period ended november 30 2013 ihs inc report dated january 13 2014 expressed unqualified opinion thereon ernst young denver colorado january 13 2014 ihs inc consolidated balance sheets thousands except share pershare amounts see accompanying notes ihs inc consolidated statements operations thousands except pershare amounts see accompanying notes ihs inc consolidated statements comprehensive income thousands ihs inc consolidated statements cash flows thousands see accompanying notes ihs inc consolidated statement changes stockholders’ equity thousands see accompanying notes ihs inc notes consolidated financial statements 1 nature business leading source information insight analytics critical areas shape todays business landscape businesses governments 165 countries around globe rely comprehensive content expert independent analysis flexible delivery methods aim embed solutions within entire spectrum customers’ organization enabling executive level capital deployment strategies following decisionmaking activities throughout organizations frontline employees tasked managing company’s complex core daily operations business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa committed sustainable profitable growth employ approximately 8000 people 31 countries around world organized business around customers geographies reside americas includes united states canada latin america emea includes europe middle east africa apac asia pacific integrated global organization makes easier customers business us providing cohesive consistent effective salesandmarketing approach local geography sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscription agreements typically noncancellable may contain provisions minimum monthly payments historically seen high renewal rates subscription revenue timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest quarterly levels revenue profit also experience eventdriven seasonality business instance ihs ceraweek annual energy executive gathering held second quarter another example biennial release previously triennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every year bpvc benefit recently occurred third quarter 2013 2 significant accounting policies fiscal year end fiscal year ends november 30 year references herein individual years mean year ended november 30 example 2013 means year ended november 30 2013 consolidation policy consolidated financial statements include accounts whollyowned subsidiaries significant intercompany accounts transactions eliminated consolidation use estimates preparation financial statements conformity us generally accepted accounting principles gaap requires make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements well reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition valuation longlived intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance probable credit losses allowance based upon management’s assessment known credit risks well general industry economic conditions specific accounts receivable written upon notification bankruptcy determined account significantly past due collection efforts unsuccessful fair value measurements fair value determined based assumptions market participants would use pricing asset liability utilize following fair value hierarchy determining fair values level 1 quoted prices identical assets liabilities active markets level 2 inputs quoted prices within level 1 observable either directly indirectly including quoted prices markets active quoted prices active markets similar assets liabilities observable inputs quoted prices interest rates yield curves level 3 unobservable inputs reflecting view assumptions market participants would use pricing asset liability cash accounts receivable accounts payable shortterm nature therefore carrying value items approximates fair value carrying value debt instruments approximate fair value variable interest rate associated instruments derivatives described note 7 measured fair value recurring basis reference similar transactions active markets consequently classified financial instruments within level 2 fair value hierarchy pension plan assets described note 13 measured fair value recurring basis reference similar assets active markets therefore also classified within level 2 fair value hierarchy revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured majority revenue derived sale subscriptions subscription agreements typically noncancellable may contain provisions minimum monthly payments subscription revenue timing cash flows generally precedes recognition revenue income defer initial payments recognize revenue ratably delivered subscription period revenue recognized upon delivery nonsubscription sales certain locations use dealers distribute critical information insight revenue products sold dealers recognized follows • subscription offerings revenue recognized ratably delivered end user subscription period •for nonsubscription offerings revenue recognized upon delivery dealer defer revenue limited number sales subscriptions act sales agent third parties continuing responsibility maintain update underlying database recognize revenue net basis upon sale subscriptions delivery information tools services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standard price book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation proportionally based upon performance progress terms contract see discussion “multipleelement arrangements” contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer software continue increase sales software products maintenance contracts addition meeting standard revenue recognition criteria described software license revenue must also meet requirement vendorspecific objective evidence “vsoe” fair value undelivered elements exists significant portion software licenses sold multipleelement arrangements include either maintenance limited circumstances maintenance professional services use residual method determine amount license revenue recognized residual method consideration allocated undelivered elements based upon vsoe fair value elements residual arrangement fee allocated recognized license revenue recognize license revenue upon delivery maintenance revenue recognized ratably maintenance period established vsoe fair value maintenance independent maintenance renewals demonstrate consistent relationship pricing maintenance percentage discounted undiscounted license list price vsoe fair value professional services established based daily rates sold standalone basis multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees subscription offerings decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis using relative selling price method element arrangement allocated based generally standalone sales products services constitutes vsoe selling price use factors inputs assumptions methods determine estimated selling price recognize elements contract follows • subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery • nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period • instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties certain dealer commissions associated customer subscriptions costs deferred amortized expense period subscriptions property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized also capitalize certain internaluse software development costs accordance applicable accounting principles review carrying amounts longlived assets property equipment determine whether current events circumstances indicate value may impaired longlived asset finite life considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell leases certain circumstances enter leases free rent periods rent escalations term lease cases calculate total payments term lease record ratably rent expense term intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired evaluate intangible assets goodwill impairment least annually well whenever events changes circumstances indicate carrying amounts may recoverable impairments expensed incurred finitelived intangible assets identifiable intangible assets finite lives generally amortized straightline basis respective lives follows indefinitelived intangible assets beginning 2012 performing impairment test indefinitelived intangible assets consist trade names perpetual licenses first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based relief royalty method using projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment reporting unit level reporting unit group businesses discrete financial information available ii similar economic characteristics determined segments also reporting units test goodwill impairment using following twostep approach •we first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values deficiencies reporting unit fair values versus carrying values fiscal years ended november 30 2013 2012 2011 •if necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting unit’s goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss deficiency income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred revenue pension postretirement benefits accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates pension postretirement benefits fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent ten percent greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets treasury stock retention buyback programs transactions utilize cost method accounting employ weightedaverage cost method costing method treasury stock transactions earnings per share basic earnings per share eps computed dividing net income weightedaverage number shares class common stock outstanding period diluted eps computed using weightedaverage number shares class common stock dilutive potential shares class common stock outstanding period diluted eps reflects potential dilution could occur securities exercised converted shares class common stock advertising costs production costs expensed first date advertisements take place advertising expense approximately 127 million 2013 primarily comprised polk carfax advertising expense 2012 2011 insignificant foreign currency functional currency foreign subsidiaries typically subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weightedaverage rates exchange prevailing year translation adjustments included comprehensive income transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreignexchangetransaction gains losses included results operations stockbased compensation stockbased payments employees recognized income statement based fair values addition estimate forfeitures grant date compensation cost recognized based number awards expected vest adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value stockbased awards expense vesting period straightline basis awards performance conditions evaluate probability number shares expected vest compensation expense adjusted reflect number shares expected vest cumulative vesting period met date reclassification certain reclassifications made prior period amounts conform current year presentation recent accounting pronouncements september 2011 financial accounting standards board fasb issued guidance testing goodwill impairment became effective us first quarter 2013 new guidance entity option first assess qualitative factors determine whether existence events circumstances leads determination likely fair value reporting unit less carrying amount entity determines threshold met performing twostep impairment test unnecessary adoption standard impact consolidated financial statements february 2013 fasb issued guidance reporting reclassifications accumulated comprehensive income aoci become effective us first quarter 2014 new guidance entity required report effect significant reclassifications aoci respective line items net income amount reclassified required gaap reclassified entirety net income amounts required gaap reclassified entirety net income reporting period entity required crossreference gaap disclosures provide additional detail amounts expect changes impact consolidated financial statements change disclosures 3 business combinations year ended november 30 2013 completed following acquisitions among others exclusive analysis business dodson data systems december 12 2012 announced completion two strategic acquisitions exclusive analysis specialist intelligence company forecasts political violent risks worldwide business dodson data systems leading provider strategic information companies engaged oil gas operations located gulf mexico united states acquired two businesses order augment existing product portfolio providing customers additional information forecasting analytics energy publishing inc energy publishing december 31 2012 acquired energy publishing leading provider north american australasian coal intelligence acquired energy publishing order strengthen position coal intelligence give us immediate presence deep coverage north american australasian coal markets complementing existing global energy power product offerings fekete associates april 5 2013 acquired fekete associates leading provider integrated reservoir management software services oil gas industry acquired fekete order combine feketes workflow tools existing energy information products create efficiencies customers helping make timely exploration production decisions waterborne energy may 13 2013 acquired waterborne energy company provides global research analysis price information liquefied petroleum gas lpg liquefied natural gas lng sector acquired waterborne order help us provide customers comprehensive complete lpg lng intelligence aid making key business decisions regarding demand supply pricing purchase price allocation acquisition preliminary may change upon completion determination fair value pfc energy june 19 2013 acquired pfc energy provider upstream downstream energy information research analysis acquired pfc energy product offering set geographical footprint customer relationships complementary ihs bring greater depth breadth key areas ihs energy solution set r l polk co polk july 15 2013 acquired polk recognized leader providing automotive information analytics solutions approximately 14 billion consisting approximately 125 billion cash net cash acquired 1334477 shares common stock value 1315 million issued treasury stock cash portion transaction funded cash hand cash amended existing revolver new bank term loan acquired polk order establish automotive business strategic partner automotive industry worldwide included revenue expenses attributable polk appropriate geographic segment principally americas date acquisition polk acquisition contributed 1659 million revenue 144 million income continuing operations postacquisition period ended november 30 2013 following unaudited pro forma information prepared polk acquisition consummated december 1 2011 information presented informational purposes necessarily indicative operating results would occurred acquisition consummated date information used predictive measure future financial position results operations liquidity 2013 pro forma net income excludes 264 million onetime change control transaction costs following table summarizes purchase price allocation net acquired cash acquisitions completed 2013 thousands 2012 completed following acquisitions announced march 5 2012 march 5 2012 announced acquisition displaybank co ltd global authority market research consulting flatpanel display industry computer assisted product selection caps™ electronic components database tools business including caps expert partminer worldwide combined purchase price businesses approximately 40 million acquired displaybank order deepen asia pacific research analysis capabilities acquired caps family products order enhance existing electronic parts information business ims group holdings ltd ims research march 22 2012 acquired ims research leading independent provider market research consultancy global electronics industry approximately 44 million cash net cash acquired ims research order help us expand products services technology media telecommunications value chain bdw automotive gmbh bdw march 29 2012 acquired bdw leader development information planning systems intelligent processing vehicle databases automotive industry approximately 7 million net cash acquired bdw order expand capabilities automotive dealer aftermarket data systems market xēdar corporation xēdar may 11 2012 acquired xēdar approximately 28 million cash net cash acquired xēdar leading developer provider geospatial information products services acquired xēdar primarily use proprietary geographic land information system solutions contribute energy technical information analytical tools cyberregs july 2 2012 acquired cyberregs business citation technologies inc approximately 11 million cash cyberregs business designed help customers make business decisions regulatory compliance enterprise sustainability management acquired cyberregs order help customers reduce system workflow complexity reducing number vendors rely support strategies enterprise sustainability management globalspec inc globalspec july 9 2012 acquired globalspec leading specialized vertical search product information digital media company serving engineering manufacturing related scientific technical market segments warburg pincus llc 136 million net cash acquired globalspec order help us improve product design portfolio create expanded destination products services invention machine july 11 2012 acquired invention machine leader semantic search technology approximately 40 million net cash acquired invention machine order utilize semantic search engine help customers accelerate innovation develop maintain produce superior products services following table summarizes purchase price allocation net acquired cash acquisitions completed 2012 thousands 2011 completed following acquisitions among others odspetrodata holdings ltd odspetrodata april 16 2011 acquired odspetrodata approximately 75 million cash net cash acquired odspetrodata premier provider data information market intelligence offshore energy industry acquired odspetrodata order extend offerings upstream energy sector provision high quality data research across range offshore markets drilling rigs marine seismic vessels field development operations dyadem international ltd dyadem april 26 2011 acquired dyadem approximately 49 million cash net cash acquired dyadem market leader operational risk management quality risk management solutions acquired dyadem order provide customers software solutions help achieve regulatory compliance business continuity chemical market associates inc cmai may 2 2011 acquired cmai approximately 73 million cash net cash acquired cmai leading provider market business advisory services worldwide petrochemical specialty chemicals fertilizer plastics fibers chloralkali industries acquired cmai order add comprehensive information analysis eventdriven supplychain information strategy use cmais price discovery analysis business broaden commodities cost information capabilities seismic microtechnology smt august 10 2011 acquired smt approximately 502 million cash net cash acquired smt global leader windowsbased exploration production software solutions used geoscientists worldwide evaluate potential reservoirs plan field development acquired smt order provide robust valuable integrated solution set information software insight support energy customers worldwide purvin gertz november 10 2011 acquired purvin gertz approximately 29 million cash net cash acquired purvin gertz wellestablished global advisory market research firm provides technical commercial strategic advice international clients petroleum refining natural gas natural gas liquids crude oil petrochemical industries acquired purvin gertz order enhance focused actionable analysis deep industry knowledge product service portfolio critical senior executives key decision makers following table summarizes purchase price allocation net acquired cash acquisitions completed 2011 thousands 4 accounts receivable accounts receivable balance consists following november 30 2013 2012 thousands record accounts receivable allowance probable accounts receivable balance collected amounts comprising allowance based upon management’s estimates historical collection trends activity accounts receivable allowance consists following years ended november 30 2013 2012 2011 respectively thousands 5 property equipment property equipment consists following november 30 2013 2012 thousands depreciation expense approximately 488 million 361 million 238 million years ended november 30 2013 2012 2011 respectively 6 intangible assets following table presents details intangible assets goodwill thousands intangible asset amortization expense 1099 million 821 million 642 million years ended november 30 2013 2012 2011 respectively estimated future amortization expense related intangible assets held november 30 2013 follows changes goodwill gross intangible assets november 30 2012 november 30 2013 primarily result recent acquisition activities goodwill associated polk acquisition primarily recognized americas segment none goodwill associated transaction expected deductible tax purposes change net intangible assets primarily due addition intangible assets associated acquisitions described note 3 business combinations partially offset current year amortization goodwill gross intangible assets net intangible assets subject foreign currency translation effects 7 derivatives business exposed various market risks including interest rate foreign currency risks utilize derivative instruments help us manage risks hold issue derivatives speculative purposes interest rate swaps mitigate interest rate exposure outstanding credit facility debt utilize following types derivative instruments • interest rate derivative contracts effectively swap 100 million floating rate debt 180 percent weightedaverage fixed interest rate plus applicable credit facility spread entered swap contracts 2011 contracts expire july 2015 • forwardstarting interest rate derivative contracts effectively swap 200 million floating rate debt 293 percent weightedaverage fixed interest rate plus applicable credit facility spread entered swap contracts november 2013 contracts take effect november 2015 expiration november 2020 terms swaps variable rate debt coincide expect ineffectiveness designated accounted instruments cash flow hedges changes fair value deferred accumulated comprehensive loss consolidated balance sheets foreign currency forwards mitigate foreign currency exposure utilize following types derivative instruments • foreign currency forward contracts hedge foreign currency exposure eurodenominated receipts us dollar functional entities 2013 implemented rolling 12month hedging program mitigate exposure critical terms forward contracts forecasted cash flows coincide expect ineffectiveness associated contracts designated accounted derivatives cash flow hedges changes fair value deferred accumulated comprehensive loss consolidated balance sheets notional amount outstanding foreign currency forwards agreements november 30 2013 approximately 159 million • shortterm foreign currency forward contracts manage market risks associated fluctuations balances denominated currencies local functional currency account forward contracts fair value recognize associated realized unrealized gains losses expense income net since designated contracts hedges accounting purposes following table summarizes notional amounts outstanding foreign currency forward contracts november 30 2013 2012 thousands fair value derivatives since derivative instruments listed exchange evaluated fair value reference similar transactions active markets consequently classified derivative instruments within level 2 fair value measurement hierarchy following table shows classification location fair value derivative instruments november 30 2013 2012 thousands net gain loss foreign currency forwards designated hedging instruments years ended november 30 2013 2012 2011 respectively follows thousands following table provides information gains losses cash flow hedging instruments years ended november 30 2013 2012 2011 thousands cumulative amount unrecognized hedge losses recorded aoci follows thousands unrecognized losses relating foreign currency forwards expected reclassified revenue within next 12 months approximately 09 million unrecognized losses relating interest rate swaps expected reclassified interest expense within next 12 months 8 debt following table summarizes total indebtedness november 30 2013 2012 thousands credit facility credit facility syndicated bank credit agreement consists amortizing term loans 10 billion revolver borrowings credit facility unsecured term loans revolver included credit facility fiveyear tenor ending january 2016 certain terms credit facility amended third quarter 2013 result increased leverage associated borrowings made fund polk acquisition including interest rate commitment fee leverage ratio defined ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda terms defined credit facility interest rates borrowings credit facility applicable libor plus spread 100 percent 225 percent depending upon leverage ratio commitment fee unused balance payable periodically ranges 015 percent 040 percent based upon leverage ratio credit facility contains certain financial covenants including maximum leverage ratio maximum interest coverage ratio terms defined credit facility november 30 2012 prior third quarter 2013 amendment credit facility interest rates borrowings credit facility applicable libor plus spread 100 percent 175 percent depending upon leverage ratio commitment fee unused balance ranged 015 percent 030 percent based upon leverage ratio 2012 term loan third quarter 2012 entered 250 million interestonly term loan agreement twoandahalf year tenor ending march 2015 borrowings loan unsecured interest borrowing loan well certain financial covenants including maximum leverage ratio maximum interest coverage ratio consistent amendment made existing credit facility term loans third quarter 2013 described 2013 term loan third quarter 2013 entered 700 million amortizing term loan agreement facilitate portion funding polk acquisition term loan fiveyear tenor ending july 2018 borrowings loan unsecured interest borrowing term loan well certain financial covenants including maximum leverage ratio maximum interest coverage ratio consistent previously existing credit facilities described result new amended credit agreements capitalized approximately 131 million debt issuance costs third quarter 2013 november 30 2013 compliance debt covenants credit agreements require systematic reduction leverage ratio quarter first year classified shortterm debt based principal maturities expected cash availability next 12 months november 30 2013 approximately 770 million outstanding borrowings revolver current annual interest rate 243 percent approximately 14 billion aggregate outstanding borrowings term loans current weighted average annual interest rate 255 percent including effect interest rate swaps also approximately 09 million outstanding letters credit facility november 30 2013 reduces available borrowing credit facility equivalent amount maturities outstanding borrowings term loans november 30 2013 follows thousands prime notes november 30 2012 approximately 07 million noninterest bearing notes issued sellers prime publications limited prime company purchased 2008 notes paid december 2012 9 restructuring charges net restructuring charges 135 million 168 million 12 million years ended november 30 2013 2012 2011 respectively restructuring charges described second quarter 2011 recorded 07 million net restructuring costs americas segment represented revision third quarter 2010 estimate cost exit space one facilities partially offset favorable resolution certain employee severance costs fourth quarter 2011 recorded 05 million restructuring charges severance costs associated consolidation positions emea segment accounting customer care centers excellence coe locations 2012 continued consolidate positions coe locations completed successive vanguard releases well eliminating positions accomplish operational efficiencies also began consolidating legacy data centers 2012 included certain contract termination costs recorded approximately 168 million restructuring charges activities included movement elimination 271 positions total charge approximately 134 million charge recorded americas segment approximately 30 million recorded emea segment approximately 04 million recorded apac segment 2013 eliminated 245 positions incurred additional direct incremental costs related identified operational efficiencies continued consolidation positions accounting coe locations consolidation legacy data centers recorded approximately 135 million restructuring charges activities charges approximately 94 million recorded americas segment 35 million recorded emea segment 06 million recorded apac segment expect continue incur costs related similar activities future periods resulting additional restructuring charges following table shows restructuring activity provides reconciliation restructuring liability november 30 2013 thousands november 30 2013 approximately 16 million remaining liability americas segment approximately 11 million emea segment entire 27 million expected paid 2014 10 acquisitionrelated costs 2011 incurred approximately 80 million costs complete acquisitions leverage synergies recent business combinations result activities eliminated approximately 40 positions closed one acquired offices changes affected americas emea segments 2012 incurred approximately 41 million costs associated acquisitions including legal professional fees elimination certain positions facility closure substantially costs incurred within americas segment 2013 incurred approximately 234 million costs associated acquisitions primarily related polk acquisition acquisitionrelated costs 2013 included investment adviser fees severance lease abandonment legal professional fees certain costs incurred transaction chose consummate approximately 196 million costs incurred americas segment 39 million costs incurred emea segment following table provides reconciliation acquisitionrelated costs accrued liability november 30 2013 thousands november 30 2013 approximately 27 million remaining liability americas segment 34 million emea segment expect remaining liability substantially paid 2014 11 discontinued operations effective december 31 2009 sold small noncore south african business approximately 2 million gain loss sale business included building certain intellectual property exchange sale assets received two threeyear notes receivable one secured mortgage building second secured pledge shares south african company december 2010 received full payment note receivable secured mortgage building november 2013 received final payment remaining note receivable fourth quarter 2011 discontinued operations small printandadvertising business focused narrow declining market abandonment business included certain intellectual property also discontinued minor governmentservices business period operating results discontinued operations years ended november 30 2013 2012 2011 respectively follows thousands 12 income taxes amounts income continuing operations income taxes us foreign jurisdictions years ended november 30 2013 2012 2011 respectively follows thousands provision income taxes continuing operations years ended november 30 2013 2012 2011 respectively follows thousands following table presents reconciliation provision income taxes us statutory tax rate years ended november 30 2013 2012 2011 respectively thousands tax rate change reflects impact legislative changes statutory rates well impact acquisitions global footprint related measurement deferred taxes undistributed earnings foreign subsidiaries approximately 4892 million november 30 2013 earnings considered indefinitely reinvested include earnings certain subsidiaries considered distributed accordingly provision us federal state income taxes provided earnings repatriate earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexity associated hypothetical calculation significant components deferred tax assets liabilities november 30 2013 2012 follows thousands november 30 2013 loss carryforwards tax purposes totaling approximately 2611 million comprised 841 million us net operating loss carryforwards 1770 million foreign loss carryforwards available offset future taxable income used us net operating loss carryforwards begin expire 2018 foreign tax loss carryforwards generally may carried forward indefinitely analyzed foreign net operating losses placed valuation allowances determined realization likely occur november 30 2013 approximately 80 million foreign tax credit ftc carryforwards approximately 70 million research development rd credit carryforwards available offset future us tax liabilities used ftc carryforwards expire 2016 2023 rd credit carryforwards expire 2026 2027 believe likely realize ftc rd tax credit assets valuation allowance deferred tax assets increased 453 million 2013 increase primarily attributable foreign net operating losses incurred acquired objective indication taxable income foreign entity generated future provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes summary activities associated reserve unrecognized tax benefits interest penalties follows thousands november 30 2013 total amount unrecognized tax benefits 22 million 05 million related interest penalties include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes entire amount unrecognized benefits november 30 2013 may affect annual effective tax rate benefits eventually recognized reasonably possible experience 07 million decrease reserve unrecognized tax benefits within next twelve months would experience decrease relation uncertainties associated expiration applicable statutes limitation subsidiaries file federal state local income tax returns multiple jurisdictions around world exceptions longer subject income tax examinations tax authorities years 2009 13 pensions postretirement benefits defined benefit plans sponsor noncontributory closed definedbenefit retirement plan us rip us employees least one year service hired acquired january 1 2012 also frozen definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom also unfunded supplemental income plan sip nonqualified pension plan certain us employees earn federally stipulated amount benefits three plans generally based years service either average cumulative base compensation depending plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees 2011 made number changes us rip strategy settled retiree obligations purchasing annuities retiree population thirdparty insurer resulted significant reduction overall plan liability changed pension plan investment strategy better match remaining pension assets remaining pension obligations accelerated plan funding contributing approximately 65 million plan december 2011 first month fiscal 2012 approximately 57 million contribution allowed us bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs first quarter fiscal 2012 also made decision close us rip new participants effective january 1 2012 place us rip benefits colleagues hired january 1 2012 receive company nonelective contribution 401k plan balances active employee end year fiscal 2012 offered lumpsum buyouts former colleagues yet receiving benefits payout associated lumpsum offers accounted settlement december 2012 first month fiscal 2013 contributed approximately 10 million us rip fund estimated 2013 pension costs fiscal year 2014 expect contribute us rip expect contribute 18 million uk rip 08 million sip following table provides expected benefit payments pension plans thousands net periodic pension expense income pension plans comprised following thousands changes projected benefit obligation plan assets funded status pension plans follows thousands net underfunded status plans recorded accrued pension liability consolidated balance sheets pretax amortization amounts expect recognize net periodic pension postretirement expense fiscal 2014 follows thousands pension expense actuarially calculated annually based data available beginning year determine expected return plan assets multiplying expected longterm rate return assets marketrelated value plan assets marketrelated value plan assets fair value plan assets assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 fair value pension assets november 30 2013 us rip plan assets consist primarily fixedincome securities moderate amount equity securities employed similar investment strategy november 30 2012 uk rip plan assets consist primarily equity securities smaller holdings bonds assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rip’s established investment policy seeks align expected rate return discount rate allowing equity variability allow upside market potential would strengthen overall asset position plan uk rip’s established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following table compares target asset allocation percentages actual asset allocations end 2013 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis financial instruments included plan assets carried fair value november 30 2013 2012 measured fair value recurring basis classified follows thousands postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees leave us age 55 least 10 years service additionally subsidize cost coverage retireemedical coverage certain grandfathered employees subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 490 percent 400 percent november 30 2013 2012 respectively net periodic postretirement expense income changes related projected benefit obligation follows thousands net unfunded status postretirement benefit plan recorded accrued pension liability consolidated balance sheets following table provides expected cash outflows plan thousands onepercentagepoint change assumed healthcarecosttrend rates would effect service cost interest cost postretirement benefit obligation november 30 2013 subsidy capped defined contribution plan employees certain subsidiaries may participate defined contribution plans benefit expense relating plans approximately 119 million 106 million 79 million 2013 2012 2011 respectively 14 stockbased compensation november 30 2013 one stockbased compensation plan amended restated ihs inc 2004 longterm incentive plan ltip provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards upon vesting award may either issue new shares reissue treasury shares extent reissued shares previously withheld taxes ltip provisions 2004 directors stock plan subplan ltip provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors stockholders authorized maximum 1475 million shares issuance ltip november 30 2013 number shares available future grant 28 million total unrecognized compensation expense related nonvested awards 1361 million november 30 2013 weightedaverage recognition period approximately 14 years restricted stock units rsus typically vest one three years generally subject either cliff vesting performancebased rsus graded vesting timebased rsus nonforfeitable rights dividends dividend equivalents fair value rsus based fair value common stock date grant amortize value awards expense vesting period straightline basis performancebased rsus evaluation made quarter likelihood performance criteria met number performancebased rsus expected vest increases decreases compensation expense also adjusted reflect number expected vest cumulative vesting period met date rsus estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors following table summarizes rsu activity year ended november 30 2013 total fair value rsus vested year ended november 30 2013 1482 million stock options option awards generally granted exercise price equal fair market value stock date grant stock options outstanding november 30 2013 stockbased compensation expense years ended november 30 2013 2012 2011 respectively follows thousands total income tax benefits recognized stockbased compensation arrangements follows thousands stockbased compensation cost capitalized years ended november 30 2013 2012 2011 15 commitments contingencies commitments rental charges 2013 2012 2011 approximated 463 million 434 million 311 million respectively minimum rental commitments noncancelable operating leases effect november 30 2013 follows also outstanding letters credit bank guarantees aggregate amount approximately 52 million 21 million november 30 2013 2012 respectively indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable litigation time involved litigation ordinary course business including claims contingencies may arise related matters occurring prior acquisition businesses matter described present time primarily matters generally early stages give assurance outcome pending litigation currently party unable determine ultimate resolution provide reasonable estimate range possible loss attributable matters effect may us however expect outcome proceedings material adverse effect results operations financial condition continue vigorously defend claims april 23 2013 prior acquisition rl polk co carfax subsidiary “carfax” served complaint filed us district court southern district new york purportedly behalf certain auto light truck dealers complaint alleges among things violation antitrust laws carfax entered exclusive arrangements regarding sale carfax vehicle history reports certain auto manufacturers owners two websites providing classified listings used autos light trucks complaint seeks three times actual damages jury finds plaintiffs sustained injunctive relief costs attorneys’ fees october 25 2013 plaintiffs served second amended complaint similar allegations purporting name approximately 469 auto dealers plaintiffs proceedings early stage significant legal factual issues determined believe however probability outcome litigation material adverse effect results operations financial condition remote 16 common stock earnings per share weighted average shares class common stock outstanding years ended november 30 2013 2012 2011 respectively calculated follows thousands share buyback programs 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal minimum statutory tax liability pay statutory tax behalf employee year ended november 30 2013 accepted 488455 shares surrendered employees tax withholding program approximately 510 million 10436 per share march 2011 board directors authorized repurchase one million common shares per fiscal year open market march 2011 program may execute program discretion balancing dilution offset investment opportunities business including acquisitions march 2011 program expiration date shares repurchased plan 2011 2012 2013 october 2012 board directors authorized repurchase shares class common stock maximum aggregate value 100 million october 2012 program may repurchase shares class common stock open market purchases privately negotiated transactions compliance exchange act rule 10b18 subject market conditions applicable legal requirements relevant factors october 2012 program obligate us repurchase dollar amount number shares class common stock may suspended time discretion year ended november 30 2013 repurchased 467500 shares approximately 462 million 9880 per share year ended november 30 2012 repurchased 563221 shares approximately 498 million 8840 per share 17 accumulated comprehensive income loss accumulated comprehensive income aoci consists foreign currency translation adjustments net pension postretirement liability adjustments net gain loss hedging activities item reported net related income tax effect following table summarizes components aoci november 30 2013 2012 thousands 18 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 2013 2012 2011 respectively thousands interest paid 2013 increased primarily due increased borrowings associated polk acquisition including amortization bridge financing fees cash equivalents amounting approximately 2584 million 3450 million reflected consolidated balance sheets november 30 2013 2012 respectively maintained primarily us dollars canadian dollars british pounds euros subject fluctuations currency exchange rate 19 segment information prepare financial reports analyze business results within three reportable geographic segments americas emea apac evaluate segment performance primarily revenue operating profit level three segments also evaluate revenues transaction type information operations three segments set forth president chief executive officer chief operating decision maker evaluates segment performance based primarily revenue operating profit three segments addition reviews revenue transaction type accounting policies segments described summary significant accounting policies see note 2 single customer accounted ten percent total revenue years ended november 30 2013 2012 2011 material intersegment revenues period presented certain corporate transactions allocated reportable segments including items stockbased compensation expense net periodic pension postretirement expense corporatelevel impairments gain loss sale corporate assets table provides information revenue longlived assets us individual material foreign countries 2013 2012 2011 revenue geographic area generally based ship location reclassified portion united kingdom revenue 2012 2011 based application updated methodology better reflect allocation revenue country updated methodology impact reported revenue geographic segment financial disclosure form 10k longlived assets include net property equipment net intangible assets net goodwill revenue transaction type follows activity goodwill account follows adjustment purchase price 2012 2013 related primarily deferred tax trueups finalized 2011 2012 acquisitions respectively 20 quarterly results operations unaudited following table summarizes certain quarterly results operations thousands item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm consolidated financial statements consolidated balance sheets november 30 2005 2004 consolidated statements operations years ended november 30 2005 2004 2003 consolidated statement changes stockholders equity years ended november 30 2005 2004 2003 consolidated statements cash flows years ended november 30 2005 2004 2003 notes consolidated financial statements years ended november 30 2005 2004 2003 report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc november 30 2005 2004 related consolidated statements operations stockholders equity cash flows three years period ended november 30 2005 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement engaged perform audit companys internal control financial reporting audit includes consideration internal control financial reporting basis designing audit procedures appropriate circumstances purpose expressing opinion effectiveness companys internal control financial reporting accordingly express opinion audit also includes examining test basis evidence supporting amounts disclosures financial statements assessing accounting principles used significant estimates made management evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2005 2004 consolidated results operations cash flows three years period ended november 30 2005 conformity united states generally accepted accounting principles ernst young llp denver colorado january 17 2006 ihs inc consolidated balance sheets see accompanying notes ihs inc consolidated statements operations see accompanying notes ihs inc consolidated statement changes stockholders equity see accompanying notes ihs inc consolidated statements cash flows see accompanying notes ihs inc notes consolidated financial statements 1 nature business background description business ihs inc ihs company us publicly traded delaware corporation one leading global providers critical technical information decisionsupport tools services customers energy defense aerospace construction electronics automotive industries manage business two reportable segments energy engineering energy segment develops delivers critical oil gas industry data exploration development production transportation activities major global energy producers national independent oil companies energy segment also provides decisionsupport tools operational research strategic advisory services customers well utilities transportation petrochemical coal power companies engineering segment provides offerings two broad categories products technical standards parts information products include broad range technical specifications standards regulations parts data design guides information customers targeted industries also expertise developing decisionsupport tools enhance accessibility usability information offer targeted advisory services designed maximize utilization integration information within customers business processes maintain international sales service network subsidiaries distributors initial public offering concurrent private placement november 16 2005 shareholders urpasis investments limited urpasis urvanos investments limited urvanos cyprus limited liability companies sold portion ownership interests initial public offering ihs receive proceeds sale companys common stock urpasis urvanos consequently expensed related offering costs simultaneous closing initial public offering urpasis urvanos sold private placement aggregate amount 75 million shares class common stock initial offering price investment entities affiliated general atlantic llc appointed steven denning chairman managing director general atlantic board directors april 2005 reorganization recapitalization november 9 2004 holland america investment corporation haic us delaware corporation whollyowned subsidiary nv haic us owned outstanding stock effective november 9 2004 haic us became whollyowned subsidiary urpasis urvanos november 10 2004 changed capitalization 80000 shares class common stock 13750 shares class b common stock 1000 shares class c common stock november 12 2004 haic us contributed substantially assets us exchange new common stock subsequently haic us liquidated distributing assets comprised principally new common stock urpasis urvanos november 19 2004 changed capitalization 80000000 shares class common stock 13750000 shares class b common stock 1000 shares class c common stock class c common stock longer authorized initial public offering december 13 2004 changed name ihs group inc ihs inc 2 significant accounting policies fiscal year end fiscal years end november 30 year references herein individual years mean year ended november 30 example 2005 means year ended november 30 2005 consolidation policy consolidated financial statements include accounts whollyowned majority owned subsidiaries significant intercompany accounts transactions eliminated revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured revenue recognition policies based guidance staff accounting bulletin sab 104 revenue recognition statement position sop 972 software revenue recognition sales critical information decisionsupport tools majority revenue derived sale subscriptions critical information recognized ratably delivered subscription period costs directly related subscription revenue primarily comprised prepaid royalty fees generally deferred amortized cost revenue subscription period defer revenue limited number sales subscriptions continuing responsibility maintain update underlying database recognize revenue upon sale subscriptions delivery information tools limited number offerings serve sales agent third parties recognize revenue sales accordance emerging issues task force 9919 report revenue gross principal versus net agent revenue recognized upon delivery nonsubscriptionbased sales certain locations use dealers distribute critical information decisionsupport tools revenue products sold dealers recognized follows •for subscriptionbased services revenue recognized ratably delivered end user subscription period •for nonsubscriptionbased products revenue recognized upon delivery dealer services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standardprice book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed time materialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation terms contract see discussion multipleelement arrangements contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis generally sufficient vendorspecific objective evidence fair value element arrangement exists based standalone sales products services elements contract unbundled recognized follows •subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery •for nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period •in instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained infrequent instances multipleelement arrangement includes offerings vendorspecific objective evidence available consider substance whole arrangement subscription thus revenue recognized ratably service period cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription charges deferred subscription charges represent royalties commissions associated customer subscriptions charges deferred amortized expense period subscriptions generally subscription periods 12 months duration property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized preferred stock investment related parties investment related parties consisted solely preferred stock companies tbg holding nv tbg indirect controlling stockholder holds common stock stated cost net impairments 2004 liquidated preferred stock investments related parties conjunction disposition equity investments tbg see note 3 identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired identifiable intangible assets finite lives amortized straightline basis respective lives review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable assess impairment comparing fair value identifiable intangible asset goodwill carrying value impairments expensed incurred minority interest recognize minority interests share net income amount equal minority interests allocable portion common equity certain consolidated subsidiaries located germany switzerland included engineering segment income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally goodwill property equipment deferred subscription revenue pension assets accruals pursuant provisions statements financial accounting standards sfas 109 accounting income taxes regularly review adequacy deferred tax asset valuation allowance recognize benefits underlying assessments indicate likely benefits realized judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates earnings per share earnings per common share eps computed accordance sfas 128 earnings per share basic eps computed dividing net income weighted average number common shares outstanding period diluted eps reflects potential dilution could occur securities contracts issue common stock exercised converted common shares authorized capital stock consists 80000000 shares class common stock 13750000 shares class b common stock classes equal dividend rights liquidation rights however holders class common stock entitled one vote per share holders class b common stock entitled ten votes per share matters voted upon stockholders share class b common stock convertible time option holder one share class common stock automatically convert without action holder upon earlier occurrence specified events four years date initial public offering november 16 2005 use twoclass method computing basic diluted eps amounts calculated undistributed earnings follows weighted average common shares outstanding calculated follows undistributed earnings calculated basic diluted eps amounts calculated follows foreign currency functional currency foreign subsidiaries subsidiarys local currency monetary assets liabilities translated yearend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included foreign currency translation adjustment account stockholders equity transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreign exchange transaction gains losses included results operations research development costs research development included cost revenue expensed incurred amounted approximately 70 million 131 million 82 million 2003 2004 2005 respectively software development costs account software research development costs accordance sfas 86 accounting costs computer software sold leased otherwise marketed development process includes requirement make determination regarding technological feasibility upon determination management evaluates nature timing costs capitalized capitalize costs period product generally available sale capitalized amounts net accumulated amortization included intangible assets consolidated balance sheet capitalized amounts amortized expected period benefit exceed five years amortization expense included within cost revenue consolidated statement operations costs capitalized 0 06 million 03 million 2003 2004 2005 respectively amortization expense 03 million 03 million 03 million 2003 2004 2005 impairment longlived assets 2003 adopted sfas 144 accounting impairment disposal longlived assets sfas 144 sfas 144 addresses financial accounting reporting impairment disposal longlived assets supersedes sfas 121 accounting impairment longlived assets longlived assets disposed accounting reporting provisions accounting principles board apb opinion 30 reporting results operation disposal segment business upon adoption evaluated recoverability property equipment longlived assets accordance new standard periodically review carrying amounts longlived assets determine whether current events circumstances warrant adjustment carrying amounts impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stock option accounting discussed note 18 ihs group inc whollyowned subsidiary settled options outstanding november 30 2004 ihs group inc elected follow apb opinion 25 accounting stock issued employees apb 25 related interpretations accounting employee stock options apb 25 exercise prices ihs group incs employee stock options equal greater estimated fair market value underlying stock date grant compensation expense stock options recognized sfas 123 accounting disclosure stockbased compensation sfas 123 establishes alternative method expense recognition stockbased compensation awards employees based fair values sfas 123 subsequently revised sfas 123r sharebased payment see new accounting pronouncement discussion concerning sfas 123r pro forma information regarding net income earnings per share required sfas 123 determined ihs group inc accounted employee stock options fair value method fair value option grant estimated date grant following weightedaverage assumptions riskfree interest rate 28 30 2003 2004 respectively expected life five years expected dividends 0 option valuation models require input highly subjective assumptions including expected stock price characteristics significantly different traded options changes subjective input assumptions materially affect fair value estimate managements opinion existing models necessarily provide reliable single measure fair value employee stock options weightedaverage fair value options granted 2003 fair market value 108 per option granted excess fair market value 064 per option weightedaverage fair value options granted 2004 fair market value 127 per option options granted excess fair market value 2004 value purposes pro forma disclosures estimated fair value options amortized expense options vesting period pro forma net income ihs group inc used fair value accounting provisions sfas 123 shown years ended november 30 result ultimate 94 million cash settlement outstanding options vested unvested year ended november 30 2004 accelerated vesting unvested options resulted 15 million compensation cost sfas 123 cash settlement vested unvested options result additional compensation cash paid options exceed fair market value settlement date derivatives follow provisions sfas 133 accounting derivative instruments hedging activities sfas 133 sfas 133 requires every derivative instrument including certain derivative instruments embedded contracts recorded condensed consolidated balance sheet either asset liability measured fair value changes fair value qualifying hedges recorded comprehensive income sfas 133 requires changes derivatives fair value recognized currently earnings unless specific hedge accounting criteria met accounting qualifying hedges allows derivatives gains losses offset related results hedged item requires us formally document designate assess effectiveness transactions receive hedge accounting treatment based criteria established sfas 133 qualifying hedges consisting foreigncurrency forward contracts deemed effective expect derivative instruments continue meet conditions hedge accounting hedges qualify effective believe forecasted transactions would occur changes fair value derivatives used hedges would reflected earnings believe exposed nominal amount credit risk hedging activities counter party established wellcapitalized financial institution swiss subsidiarys local currency functional currency functional currency used pay labor operating costs also certain operating costs denominated british pound sterling however subsidiary bills collects principally us dollars beginning january 2005 hedge swiss subsidiarys foreigncurrency risk effectively converted portion swiss subsidiarys revenue operating expenses denominated foreign currencies local currency using forward contracts swiss subsidiarys revenue transactions subscription based consequently deferred initially recognized ratably earnings course subscription period generally twelve months accordingly related hedges accounted fashion result expect substantially 30 million unrealized loss foreign currency hedges accumulated comprehensive income november 30 2005 reclassified earnings next year november 30 2005 total notional amount contracts summarized follows thousands year ended november 30 2005 recorded losses 06 million revenue gains 06 million cost revenue accompanying consolidated statements operations settled forwardexchange contracts november 30 2005 derivative current liabilities 27 million current assets 01 million associated foreignexchange contracts consisting fair market value forwardexchange contracts additionally swiss subsidiary effectively convert portion usdollardenominated accounts receivable local currency november 30 2005 notional amount contract 72 million year ended november 30 2005 recorded losses approximately 14 million income expense net settled foreignexchange contracts accounts receivable hedges qualify hedge accounting use estimates preparation financial statements accordance generally accepted accounting principles requires use significant management estimates actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents investments foreign currency derivatives trade receivables dont believe cash equivalents investments foreign currency derivatives present significant credit risks counterparties instruments consist major financial institutions manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses fair value financial instruments carrying value financial instruments including cash accounts receivable accounts payable longterm debt approximates fair value new accounting pronouncement december 16 2004 fasb issued sfas 123 revised 2004 sharebased payment revision sfas 123 sfas 123r supersedes apb opinion 25 accounting stock issued employees amends sfas 95 statement cash flows generally approach sfas 123r similar approach described sfas 123 however sfas 123r requires sharebased payments employees including grants employee stock options recognized income statement based fair values pro forma disclosure longer alternative sfas 123r permits public companies adopt requirements using one two methods 1a modified prospective method compensation cost recognized beginning effective date based requirements sfas 123r sharebased payments granted effective date b based requirements sfas 123 awards granted employees prior effective date sfas 123r remain unvested effective date 2a modified retrospective method includes requirements modified prospective method described also permits entities restate based amounts previously recognized sfas 123 purposes pro forma disclosures either prior periods presented b prior interim periods year adoption use modified prospective method adopt sfas 123r effective december 1 2005 permitted sfas 123 currently account sharebased payments employees using apb opinion 25s intrinsic value method generally recognize compensation cost employee stock options subsequent november 30 2004 cancelled outstanding options consequently adoption sfas 123r impact results operations grant sharebased payments future adopted sfas 123r prior periods impact standard would approximated impact sfas 123 described disclosure pro forma net income appearing 3 acquisitions divestitures acquisitions accounted using purchase method accounting consolidated financial statements include assets liabilities acquired results operations respective dates acquisition pro forma results acquired businesses presented material impact results operations notable 2004 transactions discussed acquisitions december 9 2003 acquired assets international petrodata limited ipl total purchase price approximately 16 million cash ipl based calgary canada provides critical information oil gas exploration production markets canada september 1 2004 acquired outstanding capital stock cambridge energy research associates cera total purchase price approximately 31 million net cash acquired 15 million cera provides syndicated research strategic advisory services energy companies september 16 2004 acquired assets intermat inc total purchase price approximately 5 million cash intermat provider decisionsupport tools parts management parts cleansing predictive obsolescence projects september 20 2004 acquired outstanding capital stock usa information systems inc usa total purchase price approximately 20 million net 05 million acquired cash usa provides decisionsupport tools critical information governments government contractors purchase prices acquisitions allocated follows made three acquisitions 2005 aggregate purchase price approximately 35 million subsequent event december 1 2005 acquired contentanddataservices business approximately 33 million serves industries targeted engineering segment purchase price paid existing cash hand divestitures investments affiliates 2004 divested preferred stock investments two related parties tbg held common stock september 17 2004 sold preferred stock one related party tripoint global communications inc 942 million recorded 266 million gain sale october 18 2004 distributed tbg form 43 million dividend preferred stock owned second related party extruded metals inc 4 restructuring offering charges summary restructuring offering charges follows thousands restructuring third quarter 2005 executed restructuring initiative affecting engineering segment certain unallocated corporate costs initiative undertaken reduce costs integration operations previous acquisitions streamline data delivery processes realign marketing function support core product initiatives course restructuring reduced aggregate workforce 100 employees closed certain offices restructuring charge incurred entirety third quarter 2005 approximately 44 million 38 million restructuring charge related engineering segment certain unallocated corporate costs respectively energy segment restructuring charge restructuring charge comprised following thousands reconciliation related accrued restructuring liabilitywhich exclusive charge related restricted shares expected paid primarily fiscal 2005as november 30 2005 follows aa portion restructuring liability related additional retirement benefits funded supplemental income plan sip accordingly reclassified liability accrued sip liability included current liabilities offering charges comprised 55 million costs associated november 2005 initial public offering see note 1 5 discontinued operations third quarter 2005 business energy segment classified held sale continually evaluate opportunities align business activities within core operations business held sale manufacturing operation part core operations actively seeking buyer business believe probable sold third quarter 2006 periods presented related results operations shown discontinued operation net tax consolidated statements operations cash flows carrying amounts major classes related assets liabilities follows operating results discontinued operations years ended november 30 2003 2004 2005 follows 6 dissolution joint venture january 1 2004 dissolved joint venture british standards institution bsi favor distribution agreement relating certain products incorporate bsi standards previously sold owned joint venture recorded 44 million gain connection dissolution joint venture included gain sales assets net consolidated statement operations gain resulted fact cash distribution received connection dissolution exceeded balance investment joint venture 45 million deferred revenue balance also recorded 2004 time dissolution amount represented estimated fair value fulfillment obligation assumed relative subscription products whose ownership reverted back us time dissolution 7 impairment assets 06 million impairment charge recorded 2003 relating decisionsupport tools within energy segment impairment charge based fair value analysis future cash flows related product 20 million impairment charge recorded 2004 relating decisionsupport tools within energy segment impairment charge occurred result decision management discontinue development efforts product impairment charges recorded 2005 8 marketable securities november 30 2004 investments november 30 2005 owned shortterm investments classified availableforsale securities reported fair value follows use specificidentification method account gains losses securities realized gains sales marketable securities included within income expense immaterial year ended november 30 2005 review marketable securities determine decline value temporary concluded decline value november 30 2005 temporary 9 accounts receivable accounts receivable balance consists following november 30 activity accounts receivable allowance consists following november 30 10 property equipment property equipment consists following november 30 depreciation expense approximately 86 million 80 million 72 million 2003 2004 2005 respectively 11 goodwill intangible assets following table presents details intangible assets goodwill november 30 2005 following table presents details intangible assets goodwill november 30 2004 estimated future amortization expense intangible assets follows amortization expense intangible assets 04 million 17 million 42 million years ended november 30 2003 2004 november 30 2005 respectively changes goodwill november 30 2004 november 30 2005 result 2005 acquisitions see note 3 foreigncurrency exchange rate fluctuations 12 debt january 7 2005 entered 125 million unsecured revolving credit agreement feature allowing us expand facility maximum 250 million origination fees debt costs approximated 05 million amortized life credit agreement credit agreement expires january 2010 credit agreement includes various operating financial covenants example covenants limit capitalized lease obligations borrowings leasing purchasing fixed assets outstanding given time 10 million limit unsecured indebtedness may outstanding given time indebtedness outstanding credit agreement 20 million prohibit us acquiring new businesses amount available credit agreement plus cash equivalents would less 15 million acquisition must also maintain fixed coverage charge ratio generally defined ratio consolidated ebitda plus rent expenses consolidated fixed charges exceeds 110 100 leverage ratio generally defined ratio indebtedness consolidated ebitda may exceed 200 100 november 30 2005 compliance covenants credit agreement borrowings outstanding agreement borrowing capacity credit agreement limited outstanding letters credit 19 million november 30 2005 use support insurance coverage leases certain customer contracts consistent terms credit agreement interest payable periodically ranges libor plus 75 basis points libor plus 1375 basis points facility fee payable periodically ranges 15 basis points 25 basis points 13 guarantees indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge partys claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable 14 deferred stock units restricted shares put rights deferred stock units restricted shares granted offer 2004 longterm incentive directors stock plans see note 17 contained put right part holder call right part company november 30 2004 redemption deferred stock units restricted shares holders considered uncertain contingent upon certain events occurring listing event defined plan included initial public offering change control occurred prior october 1 2007 put right gave holder option sell company cause company purchase fair value shares class common stock company owned holder october 1 2007 similarly listing event change control occurred prior october 1 2007 call right gave company exclusive onetime option purchase participant cause participant sell fair value portion shares held date however due companys november 16 2005 initial public offering put call rights terminated resulting reclassification deferred stock units restricted shares put rights equity 15 taxes income amounts income continuing operations income taxes minority interests us foreign jurisdictions follow years ended november 30 provision income tax expense benefit continuing operations years ended november 30 follows provision income taxes continuing operations recorded within consolidated statements operations differs provision determined applying us statutory tax rate pretax earnings result following years ended november 30 undistributed earnings foreign subsidiaries approximately 34 million november 30 2005 earnings considered indefinitely reinvested accordingly provision us federal state income taxes provided thereon upon repatriation earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexities associated hypothetical calculation withholding taxes approximately 29 million would payable upon remittance previously unremitted earnings november 30 2005 significant components deferred tax assets liabilities november 30 november 30 2005 net operating loss carryforwards totaling approximately 93 million comprised 27 million us loss carryforwards 66 million foreign loss carryforwards tax purposes available offset future taxable income used us tax carryforwards expire 2021 2024 foreign tax loss carryforwards generally may carried forward indefinitely believe realization substantially entire deferred tax asset related foreign net operating losses likely occur accordingly placed valuation allowance asset november 30 2005 foreign tax credit ftc carryforwards approximately 124 million research development rd credit carryforwards approximately 34 million alternative minimum tax amt credit carryforwards approximately 30 million available offset future us tax liabilities used ftc carryforwards expire 2011 2015 rd credit carryforwards expire 2006 2025 amt credit carryforwards may carried forward indefinitely believe likely realize ftc amt tax credit assets believe portion rd tax credits expire unused result placed valuation allowance 05 million deferred tax asset valuation allowance deferred tax assets decreased 03 million 2005 decrease allowance primarily due removal allowance realization capital loss carryforwards remaining allowance ftc carryforwards decreases offset increase rd credit valuation allowance increase allowance foreign subsidiary deferred tax assets provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes 16 comprehensive income loss 17 2004 longterm incentive directors stock plans offer exchange options shares amended restated ihs inc 2004 longterm incentive plan amended restated ihs inc 2004 longterm incentive plan ltip became effective november 30 2004 plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stockbased awards covered employee annual incentive awards see note 14 information concerning certain put call provisions authorized maximum 7000000 shares minus number shares relating award granted outstanding subsequent effective date equity compensation plans subject plan maximum number shares may available grant pursuant incentive stock options 4000000 november 30 2004 awards kind ltip outstanding year ended november 30 2005 equitybased activity ltip follows additional information regarding equitybased grants ltip year ended november 30 2005 follows aincludes nonexecutive employees shares pertained offer discussed related expense recorded 2004 bfair value determined contemporaneously independent appraiser cincludes directors see new hires converted shares amount 1286667 pertained offer see dfair value determined based upon february 2005 conversion certain notes payable related noncompete agreements 2004 acquisition restricted shares eshares issued fair value determined based note conversion discussed ffair value represents midpoint proposed offering price range contained may 9 2005 registration statement less liquidity discount gfair value represents average published opening closing price date grant ihs inc 2004 directors stock plan 2004 directors stock plan became effective december 1 2004 plan subplan 2004 longterm incentive plan awards plan granted accordance 2004 longterm incentive plan constitute nonemployee director awards defined plan nonemployee directors eligible participate plan november 30 2004 awards outstanding december 1 commencing december 1 2005 nonemployee director except messrs klein staudt •who director preceding december 1 receive onetime award consisting restricted stock units whose underlying shares date grant fair market value defined plan equal 80000 •will receive award consisting restricted stock units whose underlying shares date grant fair market value equal 50000 annual cash retainer award equal 40000 cashbased award may converted deferred stock units deferred december 29 2004 nonemployee director except messrs klein staudt •who elected board november 18 2004 received 8000 shares restricted stock •who elected board november 22 2004 november 30 2004 received 5000 shares restricted stock •who nonemployee director december 1 2004 received 4500 shares restricted stock addition shares restricted stock may received plan offer exchange options shares offer november 22 2004 ihs group inc offered exchange outstanding stock options purchase shares class nonvoting common stock granted senior executives directors certain employees senior executives ihs group incs 1998 2002 nonqualified stock option plans ihs group inc shares previously acquired upon exercise options offer see note 18 information concerning ihs group incs 1998 2002 nonqualified stock options plans senior executives employees directors accepted offer received •cash amount equal excess estimated fair value date offer 942 per share exercise price option every ihs group inc share underlying outstanding option vested unvested exercise price lower 942 per share 942 estimated fair value per share determined valuation committee board committee utilized discounted cash flow analysis prepared companys chief financial officer establish fair value per share validated results analysis internally prepared comparable company analysis discounted cash flow analysis provided estimated range values 913977 per share comparable company analysis supported range values 925 980 per share based comparability value ranges committee opted set price middle range 942 per share •942 cash every ihs group inc share previously acquired upon exercise option currently owns amount extent applicable first applied repayment principal price loan connection prior option exercise •an additional 042 cash every ihs group inc share previously acquired surrendered order satisfy payroll tax withholding connection prior exercise option •for senior executives one restricted share class common stock every three ihs group inc shares underlying outstanding options previously acquired upon exercise option regardless whether options vested unvested regardless exercise price employees senior executives received one deferred stock unit representing one share class common stock every three ihs group inc shares underlying outstanding options previously acquired upon exercise option regardless whether options vested unvested regardless exercise price senior executives directors certain employees received offer accepted prior december 23 2004 expiration offer vesting shares senior executives restricted shares vest accordance following schedule •onethird total number restricted shares received vest 211th day following initial public offering •onethird total number restricted shares received vest november 16 2006 first anniversary initial public offering •the remaining number restricted shares received vest november 16 2007 second anniversary initial public offering deferred stock units shares participants received deferred stock units applicable cash soon reasonably practicable expiration offer shares underlying deferred stock units delivered participants december 15 2005 former chief executive officers deferred stock units pursuant amendment termination agreement former chief executive officer tendered options ihs group inc previously issued 1040000 cash 583333 deferred stock units representing right receive one share class common stock shares underlying deferred stock units delivered former ceo june 1 2006 accounting treatment november 22 2004 offer extended senior executives directors certain employees senior executives although corresponding awards granted december 23 2004 management believed november 30 2004 likelihood offer would accepted received probable related cost could reasonably estimated consequently accrued 218 million november 30 2004 218 million charge 44 million relates cost revenue 174 million relates selling general administrative expenses accrual offer november 30 2004 includes 99 million cash paid settle options ihs group incs 1998 2002 nonqualified stock option plans ihs shares previously acquired upon exercise options b 119 million deferred stock units shares cost associated restricted shares granted senior executives recorded vesting period 18 ihs group inc 1998 2002 nonqualified stock option plans ihs group inc whollyowned subsidiary ihs inc maintained stock option plan provided granting nonqualified stock options certain employees purchase shares common stock discussed note 17 november 22 2004 ihs group inc offered exchange outstanding stock options 1998 2002 nonqualified stock option plans individuals received offer accepted 2004 ihs group inc authorized additional 12 million shares bringing total shares reserved issuance pursuant plan 87 million options granted exercise price less equal estimated fair market value ihs group inc shares date grant options granted plan generally vested 100 third anniversary grant date maximum life options granted seven years december 2002 ihs group inc adopted certain revisions plan provided among things ihs group inc right obligation acquire shares common stock pursuant issuance stock options estimated fair market value date acquisition following table summarizes ihs group incs stock option activity three years ended november 30 2005 march 2004 stock options ihs group inc issued exercise price 900 per share estimated price per share determined valuation committee board committee utilized discounted net cash flow analysis prepared companys chief financial officer set value analysis supported estimated fair market value ihs group inc 875 925 per share fully diluted basis means validating discounted net cash flow analysis committee reviewed internally prepared comparable company valuation analysis provided committee market confirmation values derived discounted net cash flow analysis reasonable comparable company analysis yielded range values 875 965 per share light comparability results procedures committee determined fair value ihs group inc shares range 875 925 per share fully diluted basis consistent discounted cash flow analysis referenced order select specific per share amount committee opted set fair market value ihs group inc common stock midpoint range 900 per share certain ihs group incs stock options originally granted former ceo feature guaranteed option would minimum value 300 per option feature required ihs group inc record compensation expense amount equal difference fair value ihs group incs stock exercise price subject 300 minimum value threeyear vesting period ihs group inc issued 1000000 options guarantee 2001 250000 options 2002 ihs group inc required issue additional 250000 options guarantee next two years 2002 options cancelled exchange deferred cash award equal minimum value commitment issue similar number new options 2003 2004 ihs group inc recorded selling general administrative expenses approximately 18 million 08 million compensation expense associated deferred cash award 2003 2004 respectively settled options 942 november 30 2004 see note 17 options granted employees recorded accordance apb 25 therefore since exercise price employee stock options equaled fair value underlying stock date grant compensation expense recognized additional information regarding equitybased grants year ended november 30 2004 follows anet sameyear forfeitures 106500 shares bfair value determined contemporaneously companys valuation committee subcommittee board directors 19 employee retirement benefits sponsor noncontributory definedbenefit retirement plan us salaried employees engineering segment also definedbenefit pension plan covers certain employees subsidiary engineering segment based united kingdom uk account participation plans accordance sfas 87 employers accounting pensions benefits plans generally based years service average base compensation plan funding strategies influenced employee benefit laws tax laws uk plan includes provision employee contributions inflationbased benefit increases retirees november 30 2004 us plan spun previously part singleemployer plan included operating companies consolidate sponsored consolidated subsidiary consequence spinoff plans transfer previously consolidated sponsor subsidiary related party owned tbg net pension asset reduced 254 million value prepaid pension asset attributable nonihs inc plans recorded charge equity decrease pension income 2003 2004 primarily due decline market value plan investments occurred 2000 2002 although pension investment returns significant 2003 2004 impact three previous years returns continued decline interest rates reduced funded positions plans level resulted amortization previously unrecognized actuarial losses addition service cost uk plan us dollars increased due appreciation british pound sterling dollar decrease pension income 2004 2005 primarily due spinoff discussed underfunded position uk plan resulted recognition additional minimum liability 2003 2004 2005 us uk plan assets consist primarily equity securities smaller holdings bonds real estate equity assets diversified international domestic investments additional diversification domestic category allocations largecap smallcap growth value investments us plans established investment policy seeks balance need maintain viable productive capital base yet achieve investment results superior actuarial rate consistent funds investment objectives beginning january 2005 uk plans established investment policy match liabilities active deferred members equity investments match liabilities pensioner members gilts bonds investment policy lends new asset allocation approximately 50 investment equities property 50 investment debt securities asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following compares target asset allocation percentages beginning 2005 actual asset allocations end 2005 aprimarily comprised cash investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis expect required contributions us plan 2006 however expect contribute approximately 08 million uk plan 2006 following table provides expected benefit payments trustees pension plans recognized approximately 128 million 105 million 65 million net periodic pension benefit income 2003 2004 2005 respectively net periodic pension benefit income based upon actuarial estimates net periodic pension benefit income 2003 2004 includes results multiemployer plan ihss retirement plan spun effective november 30 2004 following table provides components net periodic pension benefit income years ended november 30 changes projected benefit obligation fair value plan assets follows years ended november 30 funded status follows years ended november 30 amounts recognized balance sheet consist following november 30 pension expense actuarially calculated annually based data available beginning year assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 employees certain subsidiaries energy engineering segments may participate defined contribution plans benefit expense relating plans approximately 22 million 24 million 27 million 2003 2004 2005 respectively supplemental income plan nonqualified pension plan certain company executives benefit expense recognized plan approximately 02 million 07 million 07 million 2003 2004 2005 respectively additionally november 30 2005 related accrued liability 35 million related unrecognized net loss 17 million related accumulated comprehensive loss 09 million november 30 2004 related accrued liability 26 million related unrecognized net loss 10 million related accumulated comprehensive loss immaterial 20 postretirement benefits sponsor noncontributory definedbenefit postretirement plan provides certain health care benefits us salaried employees engineering segment also participate us pension plan account plan pursuant sfas 106 employers accounting postretirement benefits pensions substantially employees engineering segment may become eligible benefits reach normal retirement age working us recognized approximately 43 million 47 million 24 million net periodic postretirement benefit expense 2003 2004 2005 respectively based upon actuarial estimates net periodic postretirement benefit expense 2003 2004 includes results multiemployer plan ihs postretirement plan spun effective november 30 2004 november 30 2004 us pension plan postretirement benefit plan spun previously part singleemployer plan included operating companies consolidate sponsored consolidated subsidiary consequence spinoff plans prepaid pension asset accrued postretirement benefit liability reduced prepaid pension asset accrued postretirement benefit liability attributable nonihs inc plans recorded 60 million net charge equity expect net periodic pension postretirement benefit income reduced result spinoff future net amount income declining last three years primarily due amortization actuarial losses resulting lower expected asset returns 2000 2002 expect net amount income continue decline foreseeable future obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions health care cost trend rates ranging ratably 975 2006 500 2012 measured impact prescription drug coverage medicare modernization act plans fully insured plans savings dependent upon outside vendors discount rate used determining accumulated postretirement benefit obligation 60 575 november 30 2003 2004 2005 respectively following table provides components net periodic postretirement benefit expense years ended november 30 following table provides components changes projected postretirement benefit plan obligation years ended november 30 following table provides reconciliation funded status years ended november 30 accordance irs code section 420 cost coverage provided retirees retiree medical plan may paid transfer excess assets ihs retirement income plan elected make qualified transfers 2004 2005 employer contributions postretirement benefit plan expected paid year ending november 30 2006 approximately 09 million following table provides expected cash flows postretirement benefit plan thousands assumed healthcare cost trend rates significant effect amounts reported healthcare plans onepercentagepoint change assumed healthcare cost trend rates would following effects 21 longterm leases commitments contingencies rental charges 2003 2004 2005 approximated 108 million 127 million 145 million respectively minimum rental commitments noncancelable operating leases effect november 30 2005 follows thousands certain unconditional purchase obligations internet service telecom services software licenses similar items none obligations november 30 2005 extend three years outstanding letters credit aggregate amount approximately 17 million 19 million november 30 2004 2005 respectively time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition 22 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 2004 distributed preferred stock investment fair value approximately 43 million affiliate cash equivalents amounting approximately 1324 million reflected consolidated balance sheets november 30 2005 maintained primarily us dollars canadian dollars british pound sterling swiss francs subject fluctuation current exchange rate 23 segment information two reportable segments energy engineering energy segment develops delivers critical oil gas industry data exploration development production transportation activities major global energy producers national independent oil companies energy segment also provides operational research strategic advisory services customers well utilities transportation petrochemical coal power companies engineering segment provides solutions incorporating technical specifications standards regulations parts data design guides information customers targeted industries segments primarily derive revenue subscriptions information operations two segments set forth based nature offerings chairman chief executive officer direct reports represent chief operating decision maker evaluate segment performance based primarily revenue operating profit accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 total revenue 2003 2004 2005 intersegment revenues period presented shown certain corporate transactions allocated reportable segments amounts allocated include corporatelevel restructuring offering charges compensation expense related equity awards net periodic pension postretirement benefits income corporatelevel impairments gain sales corporate assets gain sale investment affiliate following schedule revenue major product service following schedule revenue longlived assets geographic location revenue geographic area generally based location subsidiary receives credit sale may correspond either billing address customer shipped foreign currency billed longlived assets include property equipment net intangible assets net goodwill 24 quarterly results operations unaudited following summarizes certain quarterly results operations aincludes impact thirdquarter restructuring charge 83 million writeoff previously capitalized initial public offering costs 41 million item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm managements report internal control financial reporting report independent registered public accounting firm internal control financial reporting consolidated financial statements consolidated balance sheets november 30 2007 2006 consolidated statements operations years ended november 30 2007 2006 2005 consolidated statement changes stockholders equity years ended november 30 2007 2006 2005 consolidated statements cash flows years ended november 30 2007 2006 2005 notes consolidated financial statements years ended november 30 2007 2006 2005 report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc november 30 2007 2006 related consolidated statements operations changes stockholders equity cash flows three years period ended november 30 2007 consolidated financial statements responsibility companys management responsibility express opinion consolidated financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2007 2006 consolidated results operations cash flows three years period ended november 30 2007 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs incs internal control financial reporting november 30 2007 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission report dated january 21 2008 expressed unqualified opinion thereon ernst young llp denver colorado january 21 2008 managements report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2007 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission coso based evaluation management concluded internal control financial reporting effective november 30 2007 managements evaluation include assessing effectiveness internal control financial reporting janes information group janes acquired june 12 2007 janes included consolidated financial statements constituted 239 million 97 million total net assets respectively november 30 2007 35 million 05 million revenues net loss respectively year ended net loss incurred janes business includes amortization expense related acquired intangible assets interest expense related intercompany note payable ihs inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 21 2008 jerre l stead jerre l stead chairman chief executive officer michael j sullivan michael j sullivan executive vice president chief financial officer report independent registered public accounting firm internal control financial reporting board directors stockholders ihs inc audited ihs incs internal control financial reporting november 30 2007 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission coso criteria ihs incs management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate indicated accompanying managements report internal control financial reporting managements assessment conclusion effectiveness internal control financial reporting include internal controls janes information group included 2007 consolidated financial statements ihs inc constituted 239 million 97 million total net assets respectively november 30 2007 35 million 05 million revenues net loss respectively year ended audit internal control financial reporting ihs inc also include evaluation internal control financial reporting janes information group opinion ihs inc maintained material respects effective internal control financial reporting november 30 2007 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2007 2006 related consolidated statements operations changes stockholders equity cash flows three years period ended november 30 2007 report dated january 21 2008 expressed unqualified opinion thereon ernst young llp denver colorado january 21 2008 ihs inc consolidated balance sheets see accompanying notes ihs inc consolidated statements operations see accompanying notes ihs inc consolidated statement changes stockholders equity see accompanying notes ihs inc consolidated statements cash flows see accompanying notes ihs inc notes consolidated financial statements 1 nature business organization description business ihs inc ihs company us publicly traded delaware corporation ihs leading provider comprehensive source critical information insight sizable growing global market customers rely products services facilitate crucial decisionmaking support key processes improve productivity heart products services data obtained public sources third parties proprietary databases transform data critical information insight useful customers available make critical business decisions data becomes critical information combine proprietary thirdparty technology create graphical user interfaces search navigation tools online delivery systems transform information insight products services analysis interpretation teams experts targeted four specific information domainsenergy product lifecycle security environmental since four information domains represent areas customers needs critical information insight use domains set priorities design business objectives continue deliver critical information insight four information domains prepare analyze financial reports include four domains two reportable segments today energy segment includes energy information domain engineering segment includes product lifecycle security environmental information domains however discussed earlier greatest opportunities serve customers occur intersection information domains accordingly may increasing overlap among information domains operating segments expect overlap well ongoing evolution operating model drive changes way manage business changes continue way discuss business report operating segments may change future ownership structure secondary offering related parties voting investment decisions respect shares company historically made tbg holdings nv tbg netherlandsantilles company shares holds directly indirect sole ownership principal stockholder urvanos investments limited urvanos cyprus limited liability company tbg historically held shares directly instead held indirect sole ownership urvanos urpasis investments limited urpasis cyprus limited liability company september 1 2006 urpasis dividended shares held company tbg whollyowned indirectly thyssenbornemisza continuity trust bermuda trust controlled bermudan trustee thybo trustees limited another oversight entity tornabuoni limited guernsey company october 30 2006 tbg sold portion ownership interests secondary public offering ihs receive proceeds sale companys common stock tbg consequently expensed related offering costs jerre l stead chief executive officer chairman board directors also member board directors tbg christoph v grolman member board directors also executive vice president tbg addition c michael armstrong roger holtback ihs inc notes consolidated financial statements continued 1 nature business organization continued michael klein members board directors members board directors advisory committee tbg prior initial public offering discussed initial public offering concurrent private placement november 16 2005 shareholders time urpasis urvanos sold portion ownership interests initial public offering ihs receive proceeds sale companys common stock urpasis urvanosand consequently expensed related offering costs simultaneous closing initial public offering urpasis urvanos sold private placement aggregate amount 75 million shares class common stock initial offering price investment entities affiliated general atlantic llc appointed steven denning chairman managing director general atlantic board directors april 2005 2 significant accounting policies fiscal year end fiscal years end november 30 year references herein individual years mean year ended november 30 example 2007 means year ended november 30 2007 consolidation policy consolidated financial statements include accounts wholly owned majorityowned subsidiaries significant intercompany accounts transactions eliminated reclassifications certain prioryear amounts reclassified conform currentyear presentation use estimates preparation financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition useful lives fixed intangible assets allocation purchase price acquired assets liabilities recoverability intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents investments trade receivables dont believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large ihs inc notes consolidated financial statements continued 2 significant accounting policies continued number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses allowance based upon managements assessment known credit risks well general industry conditions specific accounts receivable written upon notification bankruptcy determined account significantly past due beyond contractual payment terms collection efforts unsuccessful fair value financial instruments carrying value financial instruments including cash accounts receivable accounts payable longterm debt approximates fair value revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured revenue recognition policies based guidance staff accounting bulletin sab 104 revenue recognition applicable statement position sop 972 software revenue recognition sales critical information decisionsupport tools majority revenue derived sale subscriptions critical information recognized ratably delivered subscription period defer revenue limited number sales subscriptions continuing responsibility maintain update underlying database recognize revenue upon sale subscriptions delivery information tools limited number offerings serve sales agent third parties recognize revenue sales accordance emerging issues task force issue 9919 reporting revenue gross principal versus net agent revenue recognized upon delivery nonsubscriptionbased sales certain locations use dealers distribute critical information decisionsupport tools revenue products sold dealers recognized follows •for subscriptionbased services revenue recognized ratably delivered end user subscription period •for nonsubscriptionbased products revenue recognized upon delivery dealer services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standardprice book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying ihs inc notes consolidated financial statements continued 2 significant accounting policies continued effort executing associated deliverable contract revenue related services performed time materialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation terms contract see discussion multipleelement arrangements contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis generally sufficient vendorspecific objective evidence fair value element arrangement exists based standalone sales products services elements contract unbundled recognized follows •subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery •for nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period •in instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained infrequent instances multipleelement arrangement includes offerings vendorspecific objective evidence available consider substance whole arrangement subscription thus revenue recognized ratably service period cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties commissions associated customer subscriptions costs deferred amortized expense period subscriptions generally subscription periods 12 months duration ihs inc notes consolidated financial statements continued 2 significant accounting policies continued property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired identifiable intangible assets finite lives amortized straightline basis respective lives review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable assess impairment comparing fair value identifiable intangible asset goodwill carrying value impairments expensed incurred minority interest recognize minority interests share net income amount equal minority interests allocable portion common equity certain consolidated subsidiaries subsidiary located switzerland included engineering segment income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred subscription revenue pension assets accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust ihs inc notes consolidated financial statements continued 2 significant accounting policies continued income tax provision period becomes probable actual results differ estimates treasury stock ihs stock retention buyback programs transactions utilize cost method accounting regarding inventory costing method treasury stock transactions employ weightedaverage cost method earnings per share earnings per common share eps computed accordance sfas 128 earnings per share sfas 128 basic eps computed dividing net income weighted average number common shares outstanding period diluted eps computed using weighted average number common shares dilutive potential common shares outstanding period diluted eps reflects potential dilution could occur securities exercised converted common shares use twoclass method computing basic diluted eps amounts foreign currency absent circumstances contrary functional currency foreign subsidiaries subsidiarys local currency assets liabilities translated periodend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included comprehensive income transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreignexchangetransaction gains losses included results operations time utilize forwardcontract instruments manage market risks associated fluctuations certain foreigncurrency exchange rates relate specific balances accounts notes receivable denominated foreign currencies end reporting period nonfunctional foreigncurrencydenominated receivable cash balances remeasured functional currency reporting entities current market rates change value remeasurement reported foreign exchange gain loss period income expense accompanying consolidated statements operations resulting gains losses forward foreign currency contracts described also included income expense mitigate exchange rate risk associated assets research development costs research development included cost revenue expensed incurred amounted approximately 50 million 31 million 82 million 2007 2006 2005 respectively impairment longlived assets account longlived assets accordance sfas 144 accounting impairment disposal longlived assets annually review carrying amounts longlived assets determine whether current events circumstances warrant adjustment carrying amounts ihs inc notes consolidated financial statements continued 2 significant accounting policies continued impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stockbased compensation adopted sfas 123 revised 2004 share based payment effective december 1 2005 first day 2006 fiscal year sfas 123r revision sfas 123 sfas 123r supersedes apb opinion 25 accounting stock issued employees amends sfas 95 statement cash flows generally approach sfas 123r similar approach described sfas 123 however sfas 123r requires sharebased payments employees including grants employee stock options recognized income statement based fair values pro forma disclosure longer alternative march 2005 securities exchange commission issued staff accounting bulletin 107 sharebased payment sab 107 related sfas 123r applied provisions sab 107 adoption sfas 123r adopted sfas 123r using modified prospective transition method consequently applies outstanding nonvested sharebased payment awards december 1 2005 prospective awards accordingly consolidated financial statement amounts prior periods restated december 1 2005 stock options issued outstanding restricted stock deferred stock units prior adopting sfas 123r december 1 2005 fair value nonvested awards restricted stock deferred stock units recorded additional paidin capital offsetting entry posted unearned compensation also equity account unearned compensation amortized compensation expense related equity awards vesting period using straightline method adoption sfas 123r december 1 2005 reclassified 248 million unearned compensation additional paidin capital sfas 123r requires forfeitures estimated grant date accordingly compensation cost recognized based number awards expected vest may adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value nonvested share awards expense vesting period straightline basis awards performance conditions evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date stock options estimate fair value awards date grant using blackscholes pricing model amortize value stock options expense vesting period straightline basis new accounting pronouncements july 2006 financial accounting standards board fasb issued fasb interpretation 48 accounting uncertainty income taxesan interpretation fasb statement 109 fin 48 provides clarification related process associated accounting uncertain tax positions recognized consolidated financial statements fin 48 prescribes morelikelythannot threshold financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance related among things classification ihs inc notes consolidated financial statements continued 2 significant accounting policies continued accounting interest penalties associated tax positions disclosure requirements required adopt fin 48 december 1 2007 first day 2008 fiscal year currently evaluating impact adopting fin 48 consolidated financial statements september 2006 fasb issued sfas 157 fair value measurements sfas 157 among requirements sfas 157 defines fair value establishes framework measuring fair value also expands disclosure use fair value measure assets liabilities sfas 157 effective beginning first fiscal year begins november 15 2007 required adopt sfas 157 december 1 2007 subsequent standards issuance fasb issued exposure draft provides oneyear deferral implementation sfas 157 nonfinancial assets liabilities expect adoption sfas 157 material impact financial statements september 2006 fasb issued sfas 158 employers accounting defined benefit pension postretirement plansan amendment fasb statements 87 88 106 132r sfas 158 effective annual fiscal year ending november 30 2007 standard requires employer recognize funded status defined benefit pension andor postretirement benefit plans asset liability statement financial position funded status difference projected benefit obligation market value plan assets defined benefit pension plans difference accumulated benefit obligation market value plan assets post retirement benefit plans sfas 158 also requires employer recognize changes funded status year changes occur comprehensive income result adoption sfas 158 prepaid asset related overfunded us defined benefit pension plan decreased 33 million liabilities related defined benefit pension postretirement plans decreased 21 million accumulated comprehensive income net related deferred income taxes decreased approximately 09 million november 30 2007 portion change accumulated comprehensive income related adoption sfas 158 recognized statement operations component net periodic pension benefit income future periods amount estimated approximately 35 million tax 2008 see notes 15 16 detailed discussion regarding adoption sfas 158 addition statement requires companies measure plan assets obligations date yearend statement financial position limited exceptions measurement date provision effective annual 2008 year end impact companys financial statements currently measure plan assets obligations fiscal yearend ihs inc notes consolidated financial statements continued 2 significant accounting policies continued impact adopting sfas 158 displayed table december 2007 fasb issued sfas 141r business combinations sfas 160 accounting reporting noncontrolling interest consolidated financial statements amendment arb 51 new standards significantly change accounting reporting business combination transactions noncontrolling minority interests consolidated financial statements sfas nos 141r 160 required adopted simultaneously effective first annual reporting period beginning december 15 2008 thus required adopt standards december 1 2009 first day 2010 fiscal year earlier adoption prohibited currently evaluating impact adopting sfas nos 141r 160 consolidated financial statements 3 business combinations acquisitions accounted using purchase method accounting consolidated financial statements include assets liabilities acquired results operations respective dates acquisition pro forma results acquired businesses presented material impact results operations notable transactions three years ending november 30 2007 discussed acquisitions exploration data services eds october 2007 acquired assets livingston txbased eds subsidiary geodigit llc collectively maintain market extensive geological data covering subsurface gulf mexico 63 million using existing cash hand acquired assets include eds catalog interpreted formation tops 25000 offshore wells wwwedsmapscom geodigits mms offshore well data base maps well header data ihs inc notes consolidated financial statements continued 3 business combinations continued environmax october 2007 acquired environmax inc salt lake city utah environmax leading provider environmental management information systems emis solutions sold primarily government defense markets terms purchase included 221 million paid cash hand 65000 shares ihs stock issued oneyear lock valued 38 million total price 254 million net cash acquired pcnalert august 2007 acquired assets pcnalert supplyedge inc pasadena calif 10 million using existing cash hand pcnalert delivers leading component event management solutions including product change notifications endoflife notifications electronic components industry john herold inc herold august 2007 acquired norwalk ctbased john herold independent research firm provides indepth analyses key financial operational data 400 global oil gas companies acquired john herold approximately 472 million net acquired cash using existing cash hand strategic decision group corporations oil gas consulting practice sdg july 2007 acquired assets sdgs oil gas consulting practice sdg provider strategic consulting services leading enterprises global oil gas industry 82 million using 51 million existing cash hand issuing 31 million note payable janes information group janes june 2007 executed agreement woodbridge international holdings sa woodbridge purchase janes leading provider information defense industry governments parties completed transaction date terms transaction included delivery 4399000 shares class common stock valued 1715 million less 01 million cash exchange outstanding equity debt janes woodbridge agreed threeyear lockup agreement restricts ability sell ihs shares geological consulting services gcs june 2007 acquired inventory assets gcs houstona provider formation tops data files electronic media covering south texas east texas north louisiana south arkansas mississippi alabama floridafor 82 million using existing cash hand rapidata march 2007 acquired certain assets including rapidata™ product well known comprehensive well test pressure completions data western canadian sedimentary basin ihs purchased rapidata assets rapid technology corporation calgary alberta canada approximately 63 million using existing cash hand geological data services inc gds january 2007 acquired majority assets gds addison texas provider interpreted subsurface data formationtops covering permian basin us midcontinent rocky mountain regions acquired gds 80 million using existing cash hand ihs inc notes consolidated financial statements continued 3 business combinations continued purchase prices 2007 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands canadian hydrodynamics ltd chd july 2006 acquired assets calgary canadabased chd approximately 35 million using existing cash hand chd leading provider comprehensive drillstem test information western canadian sedimentary basin chd database available exclusively ihs accumap one energy product offerings partner dataset since 1995 geoplus june 2006 acquired assets geoplus tulsa oklahoma approximately 421 million using existing cash hand geoplus pcbased software family petra® popular platform used oil gas companies analyze subsurface data existing oil gas wells construction research communications limited crc june 2006 acquired crc limited london uk approximately 58 million net acquired cash using existing cash hand crc created building research establishment bre emap construct deliver wide range bre products relating construction industry ranging environmental issues fire safety cds december 2005 acquired assets contentanddataservices cds business approximately 330 million serves several industries targeted engineering segment core product business extensive database includes technical attributes alternatives obsolescence environmental data electronic component parts ihs inc notes consolidated financial statements continued 3 business combinations continued purchase prices 2006 acquisitions excluding acquired cash initially allocated follows thousands made three acquisitions 2005 aggregate purchase price approximately 35 million 4 restructuring offering charges credits summary restructuring offering charges credits follows thousands 2006 restructuring fourth quarter 2006 executed restructuring initiative principally affecting engineering segment initiative undertaken facilitate continued growth focus narrower group products services exit noncore legacy applications improve operational effectiveness course restructuring reduced aggregate workforce approximately 40 employees restructuring charge incurred entirety fourth quarter 2006 approximately 19 million charge related engineering segment 04 million pertained energy segment 01 million related unallocated corporate costs restructuring charge comprised entirely employee severance termination benefits costs ihs inc notes consolidated financial statements continued 4 restructuring offering charges credits continued reconciliation related accrued restructuring liability november 30 2007 follows 2005 restructuring third quarter 2005 executed restructuring initiative affecting engineering segment certain unallocated corporate costs initiative undertaken reduce costs integration operations previous acquisitions streamline data delivery processes realign marketing function support core product initiatives course restructuring reduced aggregate workforce 100 employees closed certain offices restructuring charge incurred entirety third quarter 2005 approximately 44 million 38 million restructuring charge related engineering segment certain unallocated corporate costs respectively energy segment restructuring charge restructuring charge comprised following thousands 5 discontinued operations third quarter 2005 business energy segment classified held sale business held sale manufacturing operation part core operations continually evaluate opportunities align business activities within core operations first quarter 2006 revised estimate wrote value assets discontinued operation 10 million based experienced date sales process third quarter 2006 sold business unrelated third party approximately 03 million recognized loss less 01 million sale business loss sale discontinued operations included loss discontinued operations net line item consolidated statement operations ihs inc notes consolidated financial statements continued 5 discontinued operations continued periods presented related results operations shown discontinued operation net tax consolidated statements operations cash flows operating results discontinued operations years ended november 30 2007 2006 2005 follows 6 marketable securities november 30 2007 owned following shortterm investments classified availableforsale securities reported fair value november 30 2006 owned following shortterm investments classified availableforsale securities reported fair value use specific identification method account gains losses securities realized gains sales marketable securities included within income expense immaterial years ended november 30 2007 2006 2005 review marketable securities determine decline value temporary ihs inc notes consolidated financial statements continued 7 accounts receivable accounts receivable balance consists following november 30 activity accounts receivable allowance consists following november 30 8 property equipment property equipment consists following november 30 depreciation expense approximately 114 million 69 million 72 million 2007 2006 2005 respectively ihs inc notes consolidated financial statements continued 9 goodwill intangible assets following table presents details intangible assets goodwill november 30 2007 following table presents details intangible assets goodwill november 30 2006 estimated future amortization expense intangible assets follows ihs inc notes consolidated financial statements continued 9 goodwill intangible assets continued amortization expense intangible assets 141 million 87 million 44 million years ended november 30 2007 2006 2005 respectively changes goodwill november 30 2006 november 30 2007 november 30 2005 november 30 2006 result acquisitions see note 3 foreigncurrency exchangerate fluctuations 10 debt september 7 2007 entered amended restated credit agreement revolver 385 million unsecured revolving credit agreement allows us certain conditions increase facility maximum 500 million agreement expires september 2012 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling four quarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 50 basis points 125 basis points agent banks base rate commitment fee payable periodically ranges 10 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations capital lease obligations maximum leverage interest coverage ratios defined revolver november 30 2007 compliance covenants agreement outstanding borrowings however outstanding letters credit totaling approximately 18 million november 30 2007 served reduce amount available borrowing 3832 million 11 indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge partys claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable ihs inc notes consolidated financial statements continued 12 taxes income amounts income continuing operations income taxes minority interests us foreign jurisdictions follow years ended november 30 provision income tax expense benefit continuing operations years ended november 30 follows ihs inc notes consolidated financial statements continued 12 taxes income continued provision income taxes continuing operations recorded within consolidated statements operations differs provision determined applying us statutory tax rate pretax earnings result following years ended november 30 undistributed earnings foreign subsidiaries approximately 814 million november 30 2007 earnings considered indefinitely reinvested accordingly provision us federal state income taxes provided thereon upon repatriation earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexities associated hypothetical calculation withholding taxes approximately 36 million would payable upon remittance previously unremitted earnings november 30 2007 ihs inc notes consolidated financial statements continued 12 taxes income continued significant components deferred tax assets liabilities november 30 november 30 2007 netoperatingloss carryforwards totaling approximately 169 million comprised 24 million usnetoperatingloss carryforwards 5 million uscapitalloss carryforwards 95 million foreignloss carryforwards tax purposes available offset future taxable income used usnetoperatingloss carryforwards expire 2015 uscapitalloss carryforwards expire 2012 foreigntaxloss carryforwards generally may carried forward indefinitely us capital loss incurred 2007 previously deferred loss stock investment realized believe realization substantially entire deferred tax assets related us capital loss foreign net operating losses likely occur accordingly placed valuation allowance assets november 30 2007 foreign tax credit ftc carryforwards approximately 165 million research development rd credit carryforwards approximately 32 million alternative minimum tax amt credit carryforwards approximately 31 million available offset future us tax liabilities used ftc carryforwards expire 2011 2016 rd credit carryforwards expire 2007 2027 amt credit carryforwards may carried forward indefinitely believe likely realize ftc amt tax credit assets result 2007 released valuation allowance 12 million ftc deferred tax asset believe portion rd tax credits expire unused 2005 placed valuation allowance 05 million deferred tax asset ihs inc notes consolidated financial statements continued 12 taxes income continued valuation allowance deferred tax assets decreased 28 million 2007 decrease allowance primarily due decrease allowance ftc carryforwards 12 million decrease capital loss valuation allowance released result capital gains 08 million decrease allowance foreign subsidiary deferred tax assets 08 million provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes ihs inc notes consolidated financial statements continued 13 comprehensive income loss ihs inc notes consolidated financial statements continued 14 stockbased compensation november 30 2007 one sharebased compensation plan amended restated ihs inc 2004 longterm incentive plan described stockbased compensation expense three years ended november 30 follows total income tax benefit recognized income statement sharebased compensation arrangements three years ended november 30 follows compensation cost capitalized years ended november 30 2007 2006 2005 amended restated 2004 longterm incentive plan amended restated 2004 longterm incentive plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards 2004 directors stock plan subplan amended restated 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors shareholders authorized maximum 7 million shares minus number shares relating award granted outstanding subsequent effective date equity compensation plans unless shares used satisfy award shares repurchased open market total compensation expense related nonvested awards share awards stock options yet recognized 544 million november 30 2007 weightedaverage recognition period approximately one threequarter years nonvested stock share awards vest six months five years share awards generally subject graded vesting limited number share awards subject cliff vesting fair value nonvested stock based fair value common stock date grant amortize value share awards expense vesting period straightline basis awards performance conditions evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date ihs inc notes consolidated financial statements continued 14 stockbased compensation continued summary status nonvested shares november 30 2007 changes year ended november 30 2007 follows total fair value nonvested stock vested year ended november 30 2007 381 million based weightedaverage fair value vesting date 101 million based weightedaverage fair value date grant year ended november 30 2006 granted 08 million nonvested shares weightedaverage grantdate fair value 2819 total fair value nonvested stock vested year ended november 30 2006 671 million based weightedaverage fair value vesting date 249 million based weightedaverage fair value date grant stock options option awards generally granted exercise price equal fair market value stock date grant options outstanding november 30 2007 either cliff vest 4 years continuous service vest graded fashion three years continuous service 8year contractual terms certain option share awards provide accelerated vesting change control defined plan fair value option award estimated date grant using blackscholes pricing model uses assumptions noted following table dividend yield 00 since history paying dividends currently plan expected volatility determined annually using basket peer company historical volatility rates time stock history equal contractual terms riskfree interest rate treasurybill rate period equal expected term based treasury note strip principal rates reported wellknown widely used financial sources expected term average contractual term option vesting period ie shortcut method ihs inc notes consolidated financial statements continued 14 stockbased compensation continued following table summarizes changes outstanding stock options year ended november 30 2007 well options vested expected vest stock options exercisable november 30 2007 aggregate intrinsic value amounts table represent difference closing price common stock november 30 2007 7014 exercise price multiplied number inthemoney stock options date represents amount would received stock option holders exercised stock options november 30 2007 future periods amount change depending fluctuations stock price total intrinsic value stock options exercised year ended november 30 2007 0 year ended november 30 2006 granted 01 million stock options weightedaverage grantdate fair value 1177 15 employee retirement benefits defined benefit plans sponsor noncontributory definedbenefit retirement plan us rip us employees least one year service also definedbenefit pension plan uk rip covers certain employees subsidiary engineering segment based united kingdom also supplemental income plan sip nonqualified pension plan certain company executives benefits three plans generally based years service average base compensation plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees adopted sfas 158 annual fiscal 2007 year ending november 30 2007 standard amendment sfas nos 87 88 106 132r requires employer recognize funded status defined benefit pension andor postretirement benefit plans asset liability statement financial position incremental impact adopting sfas 158 individual line items consolidated balance sheet november 30 2007 shown note 2 additional disclosures required sfas 158 included footnote ihs inc notes consolidated financial statements continued 15 employee retirement benefits continued total definedbenefit pensionplan income expense 13 million 16 million 57 million years ending november 30 2007 2006 2005 respectively aggregate funded position companys plans resulted recognition additional minimum liability comprehensive income years ending november 30 2006 2005 us rip uk rip plan assets consist primarily equity securities smaller holdings bonds alternative assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rips established investment policy seeks balance need maintain viable productive capital base yet achieve investment results superior actuarial rate consistent funds investment objectives uk rips established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following compares target asset allocation percentages beginning 2007 actual asset allocations end 2007 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis expect required contributions us rip 2008 however expect contribute approximately 27 million uk rip 2008 also expect contribute approximately 03 million sip 2008 following table provides expected benefit payments trustees pension plans ihs inc notes consolidated financial statements continued 15 employee retirement benefits continued following represents net periodic pension expense income ihs inc notes consolidated financial statements continued 15 employee retirement benefits continued changes projected benefit obligation plan assets funded status pension plans follows ihs inc notes consolidated financial statements continued 15 employee retirement benefits continued amortization amounts expected recognized net periodic pension income expense fiscal year ending november 30 2008 pretax ihs inc notes consolidated financial statements continued 15 employee retirement benefits continued 1we amended plan 2006 previously engineering segment employees entitled participate plan may 2006 usbased employees became eligible participate plan nearly doubling active participants plan increasing service cost time future benefit earned plan changed resulting simplified calculation reduced future benefit compared prior calculation grandfathered ihs inc notes consolidated financial statements continued 15 employee retirement benefits continued employees change created negative prior service cost amortized income period time pension income actuarially calculated annually based data available beginning year assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 defined contribution plan employees certain subsidiaries energy engineering segments may participate defined contribution plans benefit expense relating plans approximately 40 million 30 million 27 million 2007 2006 2005 respectively 16 postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees leave ihs age 55 least 10 years service additionally ihs subsidizes cost coverage retireemedical coverage certain grandfathered employees ihs subsidy capped different rates per month depending individual retirees medicare eligibility adopted sfas 158 annual fiscal 2007 year ending november 30 2007 standard amendment sfas nos 87 88 106 132r requires employer recognize funded status defined benefit pension andor postretirement benefit plans asset liability statement financial position incremental impact adopting sfas 158 individual line items consolidated balance sheet november 30 2007 shown note 2 additional disclosures required sfas 158 included footnote obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions healthcarecosttrend rates ranging ratably 975 2008 500 2012 effective 2006 ihs provide prescription drug coverage medicare eligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 65 575 november 30 2007 2006 2005 respectively ihs inc notes consolidated financial statements continued 16 postretirement benefits continued net periodic postretirement benefit income expense changes related projected benefit obligation follows ihs inc notes consolidated financial statements continued 16 postretirement benefits continued 1we amended plan 2006 plan amended limit benefits paid future healthcare costs ihs longer subsidizes cost coverage retireemedical coverage certain employees grandfathered ihs subsidy capped different rates per month depending individual retirees medicare eligibility change resulted 159 million negative plan amendment amortized period time resulting net periodic postretirement benefit income 2006 2in accordance irs code section 420 cost coverage provided retirees retireemedical plan may paid transfer excess assets us pension plan elected make qualified transfers 2007 2006 employer contributions postretirement benefit plan expected paid year ending november 30 2008 approximately 09 million following table provides expected cash outflows postretirement benefit plan thousands ihs inc notes consolidated financial statements continued 16 postretirement benefits continued onepercentagepoint change assumed healthcarecosttrend rates would following effects 17 common stock earnings per share authorized capital stock consists 80000000 shares class common stock 13750000 shares class b common stock classes equal dividend rights liquidation rights however holders class common stock entitled one vote per share holders class b common stock entitled ten votes per share matters voted upon stockholders share class b common stock convertible time option holder one share class common stock automatically convert without action holder upon earlier occurrence specified events november 16 2009 use twoclass method computing basic diluted eps amounts calculated undistributed earnings follows weighted average common shares outstanding calculated follows ihs inc notes consolidated financial statements continued 17 common stock earnings per share continued undistributed earnings calculated basic diluted eps amounts calculated follows share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee later 2006 board directors approved additional programa stock buyback programwhereby ihs acquires one million shares per year open market fully offset dilutive effect employee equity programs program renewed board directors late 2007 repurchased 689962 shares class common stock approximately 292 million 4229 per share pursuant stock buyback program 159251 shares approximately 93 million 5851 per share related shares withheld taxes ihs inc notes consolidated financial statements continued 18 longterm leases commitments contingencies rental charges 2007 2006 2005 approximated 180 million 157 million 145 million respectively minimum rental commitments noncancelable operating leases effect november 30 2007 follows thousands outstanding letters credit aggregate amount approximately 18 million 16 million november 30 2007 2006 respectively time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition 19 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 cash equivalents amounting approximately 1485 million 1800 million reflected consolidated balance sheets november 30 2007 2006 respectively maintained primarily us dollars canadian dollars british pound sterling swiss francs subject fluctuation current exchange rate 20 segment information two reportable segments energy engineering energy segment serves energy information domain develops delivers critical oil gas industry data exploration development production transportation activities major global energy producers national independent oil companies energy segment also provides operational research strategic advisory services customers well utilities transportation petrochemical coal power companies engineering segment focused primarily product lifecycle security environmental information domains provides solutions incorporating technical specifications standards regulations parts data design guides security environmental information customers targeted industries segments primarily derive revenue subscriptions ihs inc notes consolidated financial statements continued 20 segment information continued information operations two segments set forth based nature offerings chairman chief executive officer direct reports represent chief operating decision maker evaluate segment performance based primarily revenue operating profit accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 total revenue 2007 2006 2005 material intersegment revenues period presented process consolidating backoffice functions moving sharedservices model consequently changing internal structure causing composition internal segments change previously allocated certain shared costs general administrative expenses depreciation amortization expense two segments starting first quarter 2007 longer allocate shared costs two segments accordingly following prioryear amounts reclassified conform currentyear presentation shown certain corporate transactions allocated reportable segments amounts allocated include limited items corporatelevel restructuring offering charges stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gain loss sales corporate assets ihs inc notes consolidated financial statements continued 20 segment information continued following schedule revenue major product service offering following schedule revenue longlived assets geographic location revenue geographic area generally based location subsidiary receives credit sale may correspond either billing address customer shipped foreign currency billed longlived assets include property equipment net intangible assets net goodwill ihs inc notes consolidated financial statements continued 21 quarterly results operations unaudited following summarizes certain quarterly results operations item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc company november 30 2014 2013 related consolidated statements operations comprehensive income cash flows changes stockholders equity three years period ended november 30 2014 financial statements responsibility companys management responsibility express opinion financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2014 2013 consolidated results operations cash flows three years period ended november 30 2014 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs incs internal control financial reporting november 30 2014 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework report dated january 16 2015 expressed unqualified opinion thereon ernst young denver colorado january 16 2015 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2014 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework based evaluation management concluded internal control financial reporting effective november 30 2014 independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 16 2015 scott key scott key president chief executive officer todd hyatt todd hyatt executive vice president chief financial officer report independent registered public accounting firm board directors stockholders ihs inc audited ihs incs internal control financial reporting november 30 2014 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission 1992 framework coso criteria ihs incs management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion ihs inc maintained material respects effective internal control financial reporting november 30 2014 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2014 2013 related consolidated statements operations comprehensive income cash flows changes stockholders equity three years period ended november 30 2014 ihs inc report dated january 16 2015 expressed unqualified opinion thereon ernst young denver colorado january 16 2015 ihs inc consolidated balance sheets thousands except share pershare amounts see accompanying notes ihs inc consolidated statements operations thousands except pershare amounts see accompanying notes ihs inc consolidated statements comprehensive income thousands see accompanying notes ihs inc consolidated statements cash flows thousands see accompanying notes ihs inc consolidated statements changes stockholders’ equity thousands see accompanying notes ihs inc notes consolidated financial statements 1 nature business leading source information insight analytics critical areas shape todays business landscape businesses governments 150 countries around globe rely comprehensive content expert independent analysis flexible delivery methods aim embed solutions within entire spectrum customers’ organization enabling executive level capital deployment strategies following decisionmaking activities throughout organizations frontline employees tasked managing company’s complex core daily operations business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa committed sustainable profitable growth employ approximately 8800 people 32 countries around world best serve customers close possible organized geographies three business segments americas includes united states canada latin america emea includes europe middle east africa apac asia pacific integrated global organization designed make easier customers business us providing cohesive consistent effective salesandmarketing approach local region sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscription agreements typically annual noncancellable term subscription may contain provisions minimum monthly payments subscription revenue timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest quarterly levels revenue profit also experience eventdriven seasonality business instance ihs energy ceraweek annual energy executive gathering held second quarter another example biennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every year recently recognized benefit connection bpvc release third quarter 2013 2 significant accounting policies fiscal year end fiscal year ends november 30 year references herein individual years mean year ended november 30 example 2014 means year ended november 30 2014 consolidation policy consolidated financial statements include accounts whollyowned subsidiaries significant intercompany accounts transactions eliminated consolidation use estimates preparation financial statements conformity us generally accepted accounting principles gaap requires make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements well reported amounts revenues expenses reporting period significant estimates made areas include valuation longlived intangible assets goodwill income taxes pension postretirement benefits allowance doubtful accounts stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance probable credit losses allowance based upon management’s assessment known credit risks well general industry economic conditions specific accounts receivable written upon notification bankruptcy account significantly past due collection efforts unsuccessful fair value measurements fair value determined based assumptions market participants would use pricing asset liability utilize following fair value hierarchy determining fair values level 1 quoted prices identical assets liabilities active markets level 2 inputs quoted prices within level 1 observable either directly indirectly including quoted prices markets active quoted prices active markets similar assets liabilities observable inputs quoted prices interest rates yield curves level 3 unobservable inputs reflecting view assumptions market participants would use pricing asset liability cash accounts receivable accounts payable shortterm nature therefore carrying value items approximates fair value carrying value debt instruments 5 senior notes due 2022 5 notes approximate fair value variable interest rate associated instruments fair value 5 notes included note 8 measured using observable inputs markets active consequently classified 5 notes within level 2 fair value hierarchy derivatives described note 7 measured fair value recurring basis reference similar transactions active markets observable inputs quoted prices consequently classified financial instruments within level 2 fair value hierarchy pension plan assets described note 13 measured fair value recurring basis reference similar assets active markets therefore also classified within level 2 fair value hierarchy revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured majority revenue derived sale subscriptions subscription agreements typically annual noncancellable may contain provisions minimum monthly payments subscription revenue timing cash flows generally precedes recognition revenue income defer initial payments recognize revenue ratably delivered subscription period revenue recognized upon delivery nonsubscription sales certain locations use dealers distribute product offerings subscription product offerings sold dealers revenue recognized ratably delivered end user subscription period nonsubscription product offerings sold dealers revenue recognized upon delivery dealer defer revenue limited number subscription sales act sales agent third parties continuing responsibility maintain update underlying database recognize revenue net basis upon sale subscriptions delivery information tools services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standard price book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation see discussion “multipleelement arrangements” contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer software addition meeting standard revenue recognition criteria described revenue software arrangements must also meet requirement vendorspecific objective evidence “vsoe” fair value undelivered elements exists significant portion software licenses sold multipleelement arrangements include either maintenance limited circumstances maintenance professional services use residual method determine amount license revenue recognized residual method consideration allocated undelivered elements based upon vsoe fair value elements residual arrangement fee allocated recognized license revenue recognize license revenue upon delivery maintenance revenue recognized ratably maintenance period established vsoe fair value maintenance independent maintenance renewals demonstrate consistent relationship pricing maintenance percentage discounted undiscounted license list price vsoe fair value professional services established based daily rates sold standalone basis multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees subscription offerings decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis using relative selling price method element arrangement allocated based generally standalone sales products services constitutes vsoe selling price use factors inputs assumptions methods determine estimated selling price recognize elements contract follows • subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery • nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period • instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties certain dealer commissions associated customer subscriptions costs deferred amortized expense period subscriptions property equipment property equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated shorter estimated useful life lease maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized also capitalize certain internaluse software development costs accordance applicable accounting principles review carrying amounts longlived assets property equipment whenever current events circumstances indicate value may impaired longlived asset finite life considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell leases certain circumstances enter leases free rent periods rent escalations term lease cases calculate total payments term lease record ratably rent expense term intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired evaluate intangible assets goodwill impairment least annually well whenever events changes circumstances indicate carrying amounts may recoverable impairments expensed incurred finitelived intangible assets identifiable intangible assets finite lives generally amortized straightline basis respective lives follows indefinitelived intangible assets performing impairment test indefinitelived intangible assets consist trade names perpetual licenses first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based relief royalty method using projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment reporting unit level reporting unit group businesses discrete financial information available ii similar economic characteristics determined reporting units americas emea apac carfax test goodwill impairment determining fair value reporting unit comparing reporting units carrying value determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values deficiencies reporting unit fair values versus carrying values fiscal years ended november 30 2014 2013 2012 income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred revenue pension postretirement benefits accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates pension postretirement benefits fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent 10 percent greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets treasury stock retention buyback programs transactions utilize cost method accounting employ weightedaverage cost method costing method treasury stock issuances treasury stock purchases recorded actual cost earnings per share basic earnings per share eps computed dividing net income weightedaverage number shares class common stock outstanding period diluted eps computed using weightedaverage number shares class common stock dilutive potential shares class common stock outstanding period diluted eps reflects potential dilution could occur securities exercised converted shares class common stock advertising costs production costs expensed first date advertisements take place advertising expense approximately 352 million 2014 127 million 2013 primarily comprised polk carfax advertising expense 2012 insignificant foreign currency functional currency foreign subsidiaries typically subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weightedaverage rates exchange prevailing year translation adjustments included comprehensive income transactions executed currencies subsidiarys functional currency result exchange adjustments remeasured spot rates resulting foreignexchangetransaction gains losses included results operations stockbased compensation stockbased awards recognized income statement based grant date fair values addition estimate forfeitures grant date compensation expense recognized based number awards expected vest adjust compensation expense future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value stockbased awards expense vesting period straightline basis awards performance conditions evaluate probability number shares expected vest compensation expense adjusted reflect number shares expected vest cumulative vesting period met date recent accounting pronouncements april 2014 fasb issued asu 201408 changes criteria determining disposals presented discontinued operations modifies related disclosure requirements asu intended reduce frequency disposals reported discontinued operations focusing strategic shifts major effect entity’s operations financial results standard effective us first quarter fiscal year 2016 although early adoption permitted expect adoption asu significant impact consolidated financial statements changing classification criteria related disclosures potential future disposals may 2014 fasb issued asu 201409 establishes comprehensive new revenue recognition model designed depict transfer goods services customer amount reflects consideration entity expects receive exchange goods services asu allows use either full modified retrospective transition method standard effective us first quarter fiscal year 2018 early adoption permitted currently evaluating impact new standard consolidated financial statements well transition method intend use august 2014 fasb issued asu 201415 requires management evaluate entitys ability continue going concern within one year date financial statements issued disclosure required substantial doubt entitys ability continue going concern standard effective us fourth quarter fiscal year 2017 although early adoption permitted expect adoption asu significant impact consolidated financial statements 3 business combinations year ended november 30 2014 completed following acquisitions none material either individually aggregate global trade information services gti august 1 2014 acquired gti leading provider international merchandise trade data acquired gti order support strategy building integrated workflow solutions target industry needs related global trade pci acrylonitrile limited pci acrylonitrile august 28 2014 acquired pci acrylonitrile provider information analysis acrylonitrile propylene derivative product acquired pci acrylonitrile order strengthen position chemical market advisory services displaysearch solarbuzz november 6 2014 acquired displaysearch solarbuzz businesses npd group displaysearch conducts global primary research display technology solarbuzz provides market intelligence research forecasting solar industry acquired two businesses order strengthen supply chain offerings displays help us develop new offerings solar market pacwest consulting partners pacwest november 17 2014 acquired pacwest provider information market intelligence strategic analysis upstream unconventional oil gas industry acquired pacwest order expand presence hydraulic fracturing related unconventional space following table summarizes preliminary purchase price allocation net acquired cash acquisitions thousands december 2014 acquired joc group leading global supplier us seaborne trade intelligence infonetics research global leader communications technology market intelligence total purchase price acquisitions approximately 123 million net cash acquired 2013 completed following acquisitions among others exclusive analysis business dodson data systems december 12 2012 announced completion two strategic acquisitions exclusive analysis specialist intelligence company forecasts political violent risks worldwide business dodson data systems leading provider strategic information companies engaged oil gas operations located gulf mexico united states acquired two businesses order augment existing product portfolio providing customers additional information forecasting analytics energy publishing inc energy publishing december 31 2012 acquired energy publishing leading provider north american australasian coal intelligence acquired energy publishing order strengthen position coal intelligence give us immediate presence deep coverage north american australasian coal markets complementing existing global energy power product offerings fekete associates april 5 2013 acquired fekete associates leading provider integrated reservoir management software services oil gas industry acquired fekete order combine feketes workflow tools existing energy information products create efficiencies customers helping make timely exploration production decisions waterborne energy may 13 2013 acquired waterborne energy company provides global research analysis price information liquefied petroleum gas lpg liquefied natural gas lng sector acquired waterborne order help us provide customers comprehensive complete lpg lng intelligence aid making key business decisions regarding demand supply pricing purchase price allocation acquisition preliminary may change upon completion determination fair value pfc energy june 19 2013 acquired pfc energy provider upstream downstream energy information research analysis acquired pfc energy product offering set geographical footprint customer relationships complementary ihs bring greater depth breadth key areas ihs energy solution set r l polk co polk july 15 2013 acquired polk recognized leader providing automotive information analytics solutions approximately 14 billion consisting approximately 125 billion cash net cash acquired 1334477 shares common stock value 1315 million issued treasury stock cash portion transaction funded cash hand cash amended existing revolving credit facility new bank term loan acquired polk order establish automotive business strategic partner automotive industry worldwide included revenue expenses attributable polk appropriate geographic segment principally americas date acquisition polk acquisition contributed 1659 million revenue 144 million income continuing operations postacquisition period ended november 30 2013 following unaudited pro forma information prepared polk acquisition consummated december 1 2011 information presented informational purposes necessarily indicative operating results would occurred acquisition consummated date information used predictive measure future financial position results operations liquidity 2013 pro forma net income excludes 264 million onetime change control transaction costs following table summarizes purchase price allocation net acquired cash acquisitions completed 2013 thousands 2012 completed following acquisitions announced march 5 2012 march 5 2012 announced acquisition displaybank co ltd global authority market research consulting flatpanel display industry computer assisted product selection caps™ electronic components database tools business including caps expert partminer worldwide acquired displaybank order deepen asia pacific research analysis capabilities acquired caps family products order enhance existing electronic parts information business ims group holdings ltd ims research march 22 2012 acquired ims research leading independent provider market research consultancy global electronics industry acquired ims research order help us expand products services technology media telecommunications value chain bdw automotive gmbh bdw march 29 2012 acquired bdw leader development information planning systems intelligent processing vehicle databases automotive industry acquired bdw order expand capabilities automotive dealer aftermarket data systems market xēdar corporation xēdar may 11 2012 acquired xēdar leading developer provider geospatial information products services acquired xēdar primarily use proprietary geographic land information system solutions contribute energy technical information analytical tools cyberregs july 2 2012 acquired cyberregs business citation technologies inc cyberregs business designed help customers make business decisions regulatory compliance enterprise sustainability management acquired cyberregs order help customers reduce system workflow complexity reducing number vendors rely support strategies enterprise sustainability management globalspec inc globalspec july 9 2012 acquired globalspec leading specialized vertical search product information digital media company serving engineering manufacturing related scientific technical market segments acquired globalspec order help us improve product design portfolio create expanded destination products services invention machine july 11 2012 acquired invention machine leader semantic search technology acquired invention machine order utilize semantic search engine help customers accelerate innovation develop maintain produce superior products services following table summarizes purchase price allocation net acquired cash acquisitions completed 2012 thousands 4 accounts receivable accounts receivable balance consists following november 30 2014 2013 thousands record accounts receivable allowance probable accounts receivable balance collected amounts comprising allowance based upon management’s estimates historical collection trends activity accounts receivable allowance consists following years ended november 30 2014 2013 2012 respectively thousands 5 property equipment property equipment consists following november 30 2014 2013 thousands depreciation expense 683 million 488 million 361 million years ended november 30 2014 2013 2012 respectively 6 intangible assets following table presents details acquired intangible assets goodwill thousands intangible asset amortization expense 1338 million 1099 million 821 million years ended november 30 2014 2013 2012 respectively estimated future amortization expense related intangible assets held november 30 2014 follows changes goodwill gross intangible assets november 30 2013 november 30 2014 primarily result recent acquisition activities partially offset writeoff fully amortized intangible assets longer service change net intangible assets primarily due current year amortization partially offset addition intangible assets associated acquisitions described note 3 business combinations goodwill gross intangible assets net intangible assets subject foreign currency translation effects 7 derivatives business exposed various market risks including interest rate foreign currency risks utilize derivative instruments help us manage risks hold issue derivatives speculative purposes interest rate swaps mitigate interest rate exposure outstanding revolving facility debt utilize following types derivative instruments • interest rate derivative contracts effectively swap 100 million floating rate debt 180 percent weightedaverage fixed interest rate plus applicable revolving facility spread entered swap contracts 2011 contracts expire july 2015 • forwardstarting interest rate derivative contracts effectively swap 400 million floating rate debt 286 percent weightedaverage fixed interest rate plus applicable revolving facility spread entered swap contracts november 2013 january 2014 contracts take effect may 2015 november 2015 respective expiration dates may 2020 november 2020 terms swaps variable rate debt amended extended time coincide expect ineffectiveness designated accounted instruments cash flow hedges changes fair value deferred accumulated comprehensive incomeloss aoci consolidated balance sheets foreign currency forwards mitigate foreign currency exposure utilize following derivative instruments • foreign currency forward contracts hedge foreign currency exposure eurodenominated receipts us dollar functional entities utilize rolling hedging program mitigate portion exposure critical terms forward contracts forecasted cash flows coincide expect ineffectiveness associated contracts designated accounted derivatives cash flow hedges changes fair value deferred aoci consolidated balance sheets notional amount outstanding foreign currency forwards agreements approximately 110 million 159 million november 30 2014 2013 respectively • shortterm foreign currency forward contracts manage market risks associated fluctuations balances denominated currencies local functional currency account forward contracts fair value recognize associated realized unrealized gains losses expense income net since designated contracts hedges accounting purposes following table summarizes notional amounts outstanding foreign currency forward contracts november 30 2014 2013 thousands fair value derivatives since derivative instruments listed exchange evaluated fair value reference similar transactions active markets consequently classified derivative instruments within level 2 fair value measurement hierarchy following table shows classification location fair value derivative instruments november 30 2014 2013 thousands net gain loss foreign currency forwards designated hedging instruments years ended november 30 2014 2013 2012 respectively follows thousands following table provides information cumulative amount unrecognized hedge losses recorded aoci november 30 2014 november 30 2013 well activity cash flow hedging instruments years ended november 30 2014 2013 2012 respectively thousands unrecognized gains relating foreign currency forwards expected reclassified revenue within next 12 months approximately 29 million 167 million unrecognized losses relating interest rate swaps expected reclassified interest expense within next 12 months 8 debt following table summarizes total indebtedness november 30 2014 2013 thousands 2011 credit facility 2011 credit facility syndicated bank credit agreement consisted amortizing term loans 10 billion revolver borrowings credit facility unsecured term loans revolver included credit facility fiveyear tenor ending january 2016 interest rates borrowings credit facility applicable libor plus spread 100 percent 225 percent depending upon leverage ratio defined ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda terms defined credit facility commitment fee unused balance payable periodically ranged 015 percent 040 percent based upon leverage ratio credit facility contained certain financial covenants including maximum leverage ratio minimum interest coverage ratio terms defined credit facility october 2014 repaid amounts cancelled commitments outstanding 2011 credit facility 2012 term loan third quarter 2012 entered 250 million interestonly term loan agreement twoandahalf year tenor ending march 2015 borrowings loan unsecured interest borrowing loan well certain financial covenants including maximum leverage ratio minimum interest coverage ratio consistent amendment made existing 2011 credit facility term loans third quarter 2013 described october 2014 repaid amounts outstanding 2012 term loan 2013 term loan third quarter 2013 entered 700 million amortizing term loan agreement facilitate portion funding polk acquisition term loan fiveyear tenor ending july 2018 borrowings loan unsecured interest borrowing term loan well certain financial covenants including maximum leverage ratio minimum interest coverage ratio consistent 2011 credit facility described october 2014 entered amendment restatement refinancing 2013 term loan pursuant borrowed 25 million replace previously amortized principal extended maturity loan october 2019 interest rates borrowings 2013 term loan applicable libor plus spread 100 percent 175 percent depending upon leverage ratio 2014 revolving facility october 2014 entered new 13 billion senior unsecured revolving credit agreement 2014 revolving facility commitments 500 million available borrowing certain foreign subsidiaries 50 million available letters credit subject certain conditions 2014 revolving facility may expanded 500 million aggregate additional commitments borrowings 2014 revolving facility mature october 2019 bear interest rates spreads 2013 term loan commitment fee unused balance payable periodically ranges 013 percent 030 percent based upon leverage ratio 2014 revolving facility contains certain financial covenants including maximum leverage ratio minimum interest coverage ratio terms defined 2014 revolving facility leverage ratio november 30 2014 approximately 26x credit agreements allow leverage 35x ability temporarily increase leverage 375x two quarters amounts borrowed 2014 revolving facility used repay amounts borrowed 2011 credit facility 5 notes october 2014 issued 750 million aggregate principal amount senior unsecured notes due 2022 offering subject registration requirements securities act 1933 amended net proceeds 5 notes used repay amounts outstanding 2012 term loan portion amounts borrowed 2014 revolving facility 5 notes bear interest fixed rate 500 mature november 1 2022 interest 5 notes due semiannually may 1 november 1 year commencing may 1 2015 may redeem 5 notes whole part redemption price equal 100 principal amount notes plus applicable premium defined indenture governing 5 notes additionally option holders notes may required purchase portion notes upon occurrence change control triggering event defined indenture price equal 101 percent principal amount thereof plus accrued unpaid interest date purchase indenture contains covenants limit ability among things incur create liens enter sale leaseback transactions addition indenture contains covenant limits ability consolidate merge another entity sell substantially assets another entity indenture contains customary default provisions required register notes within 365 days issuance fair value 5 notes november 30 2014 approximately 765 million result 5 notes issuance 2014 revolving facility agreement amendment restatement 2013 term loan capitalized approximately 188 million new debt issuance costs recorded 14 million loss debt extinguishment associated portion prior capitalized debt issuance costs capitalized approximately 131 million debt issuance costs 2013 november 30 2014 compliance debt covenants classified shortterm debt based principal maturities expected cash availability next 12 months november 30 2014 approximately 385 million outstanding borrowings 2014 revolving facility current annual interest rate 165 percent approximately 700 million outstanding borrowings 2013 term loan current weighted average annual interest rate 192 percent including effect interest rate swaps also approximately 19 million outstanding letters credit 2014 revolving facility november 30 2014 reduces available borrowing 2014 revolving facility equivalent amount maturities outstanding borrowings 2013 term loan 5 notes november 30 2014 follows thousands 9 restructuring charges 2012 consolidated positions accounting customer care centers excellence coe locations completed successive erp releases well eliminated positions accomplish operational efficiencies also began consolidating legacy data centers 2012 included certain contract termination costs recorded approximately 168 million restructuring charges activities included movement elimination 271 positions total charge approximately 134 million charge recorded americas segment approximately 30 million recorded emea segment approximately 04 million recorded apac segment 2013 eliminated 245 positions incurred additional direct incremental costs related identified operational efficiencies continued consolidation positions coe locations consolidation legacy data centers recorded approximately 135 million restructuring charges activities charges approximately 94 million recorded americas segment 35 million recorded emea segment 06 million recorded apac segment 2014 eliminated 168 positions incurred additional direct incremental costs related identified operational efficiencies including lease abandonments continued consolidation positions coe locations consolidation legacy data centers recorded approximately 93 million restructuring charges activities charges approximately 58 million recorded americas segment 31 million recorded emea segment 04 million recorded apac segment expect continue incur costs related similar activities future periods resulting additional restructuring charges following table shows restructuring activity provides reconciliation restructuring liability november 30 2014 thousands november 30 2014 approximately 23 million remaining liability americas segment approximately 08 million emea segment entire 31 million expected paid 2015 10 acquisitionrelated costs 2012 incurred approximately 41 million costs associated acquisitions including legal professional fees elimination certain positions facility closure substantially costs incurred within americas segment 2013 incurred approximately 234 million costs associated acquisitions primarily related polk acquisition acquisitionrelated costs 2013 included investment adviser fees severance lease abandonment legal professional fees certain costs incurred transaction chose consummate approximately 196 million costs incurred americas segment 39 million costs incurred emea segment 2014 incurred approximately 19 million costs associated acquisitions including severance lease abandonments professional fees approximately 15 million total charge recorded americas segment 04 million recorded emea segment following table provides reconciliation acquisitionrelated costs accrued liability november 30 2014 thousands november 30 2014 11 million remaining liability americas segment expect substantially paid 2015 11 discontinued operations effective december 31 2009 sold small noncore south african business approximately 2 million gain loss sale business included building certain intellectual property exchange sale assets received two threeyear notes receivable one secured mortgage building second secured pledge shares south african company december 2010 received full payment note receivable secured mortgage building november 2013 received final payment remaining note receivable operating results discontinued operations years ended november 30 2014 2013 2012 respectively follows thousands 12 income taxes amounts income continuing operations income taxes us foreign jurisdictions years ended november 30 2014 2013 2012 respectively follows thousands provision income taxes continuing operations years ended november 30 2014 2013 2012 respectively follows thousands following table presents reconciliation provision income taxes us statutory tax rate years ended november 30 2014 2013 2012 respectively thousands tax rate change reflects impact legislative changes statutory rates well impact acquisitions global footprint related measurement deferred taxes undistributed earnings foreign subsidiaries approximately 6363 million november 30 2014 earnings considered indefinitely reinvested include earnings certain subsidiaries considered distributed accordingly provision us federal state income taxes provided earnings repatriate earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexity associated hypothetical calculation significant components deferred tax assets liabilities november 30 2014 2013 follows thousands november 30 2014 loss carryforwards tax purposes totaling approximately 2820 million comprised 425 million us net operating loss carryforwards 2395 million foreign loss carryforwards available offset future taxable income used us net operating loss carryforwards begin expire 2018 foreign tax loss carryforwards generally may carried forward indefinitely analyzed foreign net operating losses placed valuation allowances determined realization likely occur november 30 2014 approximately 120 million foreign tax credit ftc carryforwards available offset future us tax liabilities used ftc carryforwards expire 2016 2023 believe likely realize ftc valuation allowance deferred tax assets increased 196 million 2014 increase primarily attributable foreign net operating losses incurred acquired objective indication taxable income foreign entity generated future provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes summary activities associated reserve unrecognized tax benefits interest penalties follows thousands november 30 2014 total amount unrecognized tax benefits 22 million 06 million related interest penalties include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes entire amount unrecognized benefits november 30 2014 may affect annual effective tax rate benefits eventually recognized reasonably possible experience 08 million decrease reserve unrecognized tax benefits within next 12 months would experience decrease relation uncertainties associated expiration applicable statutes limitation subsidiaries file federal state local income tax returns multiple jurisdictions around world exceptions longer subject income tax examinations tax authorities years 2010 13 pensions postretirement benefits defined benefit plans sponsor noncontributory frozen definedbenefit retirement plan us rip certain us employees also frozen definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom also frozen unfunded supplemental income plan sip nonqualified pension plan certain us employees earn federally stipulated amount benefits three plans generally based years service either average cumulative base compensation depending plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees 2012 contributed approximately 65 million us rip approximately 57 million contribution used bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs 2013 contributed approximately 10 million us rip fund estimated 2013 pension costs 2014 also contributed 10 million us rip used fund estimated 2014 pension costs first quarter fiscal 2012 made decision close us rip new participants effective january 1 2012 place us rip benefits colleagues hired january 1 2012 receive company nonelective contribution 401k plan balances active employee end year third quarter 2014 discontinued future accruals us rip sip necessitated remeasurement plan obligations resulted curtailment gain lieu future accruals us rip sip provide annual company nonelective contribution 401k accounts affected eligible employees active employees end calendar year fiscal 2012 offered lumpsum buyouts former colleagues yet receiving benefits payout associated lumpsum offers accounted settlement expect contribute approximately 3 million pension postretirement benefit plans 2015 following table provides expected benefit payments pension plans thousands net periodic pension expense pension plans comprised following thousands changes projected benefit obligation plan assets funded status pension plans follows thousands net underfunded status plans recorded accrued pension liability consolidated balance sheets future reclassification actuarial loss aoci income would recognized cumulative actuarial loss exceeds corridor reclassification would recognized fourth quarter marktomarket adjustment pension expense actuarially calculated annually based data available beginning year determine expected return plan assets multiplying expected longterm rate return assets marketrelated value plan assets marketrelated value plan assets fair value plan assets assumptions used actuarial calculation include discount rate selected disclosed end previous year well expected rate return assets detailed table years ended november 30 2014 2013 2014 result us rip plan freeze associated remeasurement used weightedaverage 52 percent expected longterm rate return plan assets weightedaverage 47 percent discount rate us rip fair value pension assets november 30 2014 us rip plan assets consist primarily fixedincome securities moderate amount equity securities employed similar investment strategy november 30 2013 uk rip plan assets consist primarily equity securities smaller holdings bonds assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rip’s established investment policy seeks align expected rate return discount rate allowing equity variability allow upside market potential would strengthen overall asset position plan uk rip’s established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following table compares target asset allocation percentages actual asset allocations end 2014 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis pension plan assets measured fair value recurring basis reference similar assets active markets therefore classified within level 2 fair value hierarchy plan assets november 30 2014 2013 classified following categories thousands postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees terminate ages 55 64 least 10 years ihs service additionally subsidize cost coverage retireemedical coverage certain grandfathered employees subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 420 percent 490 percent november 30 2014 2013 respectively net periodic postretirement expense income changes related projected benefit obligation follows thousands net unfunded status postretirement benefit plan recorded accrued pension liability consolidated balance sheets future reclassifications actuarial loss aoci income would recognized cumulative actuarial loss exceeds corridor would recognized fourth quarter marktomarket adjustment following table provides expected benefit payments plan thousands onepercentagepoint change assumed healthcarecosttrend rates would effect service cost interest cost postretirement benefit obligation november 30 2014 subsidy capped defined contribution plan employees certain subsidiaries may participate defined contribution plans benefit expense relating plans approximately 137 million 119 million 106 million years ended november 30 2014 2013 2012 respectively 14 stockbased compensation november 30 2014 one stockbased compensation plan amended restated ihs inc 2004 longterm incentive plan ltip provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards upon vesting award may either issue new shares reissue treasury shares extent reissued shares previously withheld taxes ltip provisions 2004 directors stock plan subplan ltip provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors stockholders authorized maximum 1475 million shares issuance ltip november 30 2014 number shares available future grant 22 million total unrecognized compensation expense related nonvested awards 1270 million november 30 2014 weightedaverage recognition period approximately 14 years restricted stock units rsus typically vest one three years generally subject either cliff vesting performancebased rsus graded vesting timebased rsus nonforfeitable rights dividends dividend equivalents fair value rsus based fair value common stock date grant amortize value awards expense vesting period straightline basis performancebased rsus evaluation made quarter likelihood performance criteria met number performancebased rsus expected vest increases decreases compensation expense also adjusted reflect number expected vest cumulative vesting period met date rsus estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors following table summarizes rsu activity year ended november 30 2014 total fair value rsus vested year ended november 30 2014 1814 million stock options option awards generally granted exercise price equal fair market value stock date grant stock options outstanding november 30 2014 stockbased compensation expense years ended november 30 2014 2013 2012 respectively follows thousands total income tax benefits recognized stockbased compensation arrangements follows thousands stockbased compensation cost capitalized years ended november 30 2014 2013 2012 15 commitments contingencies commitments rental charges 2014 2013 2012 approximated 589 million 463 million 434 million respectively minimum rental commitments noncancelable operating leases effect november 30 2014 follows also outstanding letters credit bank guarantees aggregate amount approximately 56 million 52 million november 30 2014 2013 respectively indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable litigation time involved litigation ordinary course business including claims contingencies may arise related matters occurring prior acquisition businesses matter described present time primarily matters generally early stages give assurance outcome pending litigation currently party unable determine ultimate resolution provide reasonable estimate range possible loss attributable matters effect may us however expect outcome proceedings material adverse effect results operations financial condition continue vigorously defend claims april 23 2013 prior acquisition rl polk co carfax subsidiary “carfax” served complaint filed us district court southern district new york purportedly behalf certain auto light truck dealers complaint alleges among things violation antitrust laws carfax entered exclusive arrangements regarding sale carfax vehicle history reports certain auto manufacturers owners two websites providing classified listings used autos light trucks complaint seeks three times actual damages jury finds plaintiffs sustained injunctive relief costs attorneys’ fees october 25 2013 plaintiffs served second amended complaint similar allegations purporting name approximately 469 auto dealers plaintiffs proceedings early stage significant legal factual issues determined believe however probability outcome litigation material adverse effect results operations financial condition remote 16 common stock earnings per share weighted average shares class common stock outstanding years ended november 30 2014 2013 2012 respectively calculated follows thousands share buyback programs 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal minimum statutory tax liability pay statutory tax behalf employee year ended november 30 2014 accepted 527497 shares surrendered employees tax withholding program approximately 629 million 11933 per share march 2011 board directors authorized repurchase one million common shares per fiscal year open market march 2011 program may execute program discretion balancing dilution offset investment opportunities business including acquisitions march 2011 program expiration date shares repurchased plan 2012 2013 2014 october 2012 board directors authorized repurchase shares class common stock maximum aggregate value 100 million october 2012 program may repurchase shares class common stock open market purchases privately negotiated transactions compliance exchange act rule 10b18 subject market conditions applicable legal requirements relevant factors october 2012 program obligate us repurchase dollar amount number shares class common stock may suspended time discretion year ended november 30 2013 repurchased 467500 shares approximately 462 million 9880 per share year ended november 30 2012 repurchased 563221 shares approximately 498 million 8840 per share 17 accumulated comprehensive income loss accumulated comprehensive income aoci consists foreign currency translation adjustments net pension postretirement liability adjustments net gain loss hedging activities item reported net related income tax effect following table summarizes changes aoci component net tax year ended november 30 2014 thousands amounts reclassified aoci income related net pension opeb liability recorded net periodic pension postretirement expense 18 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 2014 2013 2012 respectively thousands interest paid 2013 2014 increased primarily due increased borrowings associated polk acquisition including amortization bridge financing fees 2013 cash equivalents amounting approximately 1532 million 2584 million reflected consolidated balance sheets november 30 2014 2013 respectively maintained primarily us dollars canadian dollars british pounds euros subject fluctuations currency exchange rate 19 segment information prepare financial reports analyze business results within three reportable geographic segments americas emea apac evaluate segment performance primarily revenue operating profit level three segments also evaluate revenues transaction type product category information operations three segments set forth chief executive officer chief financial officer constitute role chief operating decision maker evaluate segment performance based primarily revenue operating profit three segments addition review revenue transaction type product category accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 percent total revenue years ended november 30 2014 2013 2012 material intersegment revenues period presented certain corporate transactions allocated reportable segments including items stockbased compensation expense net periodic pension postretirement expense corporatelevel impairments gain loss sale corporate assets table provides information revenue longlived assets us individual material foreign countries 2014 2013 2012 revenue geographic area generally based ship location longlived assets include net property equipment net intangible assets net goodwill revenue transaction type follows revenue product category follows activity goodwill account follows adjustments purchase price 2013 2014 related primarily deferred tax trueups finalized 2012 2013 acquisitions respectively 20 quarterly results operations unaudited following table summarizes certain quarterly results operations thousands item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm managements report internal control financial reporting report independent registered public accounting firm internal control financial reporting consolidated financial statements consolidated balance sheets november 30 2008 2007 consolidated statements operations years ended november 30 2008 2007 consolidated statement changes stockholders equity years ended november 30 2008 2007 2006 consolidated statements cash flows years ended november 30 2008 2007 notes consolidated financial statements years ended november 30 2008 2007 report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc november 30 2008 2007 related consolidated statements operations changes stockholders equity cash flows three years period ended november 30 2008 consolidated financial statements responsibility companys management responsibility express opinion consolidated financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2008 2007 consolidated results operations cash flows three years period ended november 30 2008 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs incs internal control financial reporting november 30 2008 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission report dated january 20 2009 expressed unqualified opinion thereon ernst young llp denver colorado january 20 2009 managements report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2008 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission coso based evaluation management concluded internal control financial reporting effective november 30 2008 managements evaluation include assessing effectiveness internal control financial reporting ihs global insight inc ihs global insight acquired october 18 2008 ihs global insight included consolidated financial statements constituted 2417 million 1685 million total net assets respectively november 30 2008 185 million 01 million revenues net loss respectively year ended net loss incurred ihs global insight business includes amortization expense related acquired intangible assets independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 20 2009 jerre l stead jerre l stead chairman chief executive officer michael j sullivan michael j sullivan executive vice president chief financial officer report independent registered public accounting firm internal control financial reporting board directors stockholders ihs inc audited ihs incs internal control financial reporting november 30 2008 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission coso criteria ihs incs management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate indicated accompanying managements report internal control financial reporting managements assessment conclusion effectiveness internal control financial reporting include internal controls ihs global insight acquired october 13 2008 included 2008 consolidated financial statements ihs inc constituted 2417 million 1685 million total net assets respectively november 30 2008 185 million 01 million revenues net loss respectively year ended audit internal control financial reporting ihs inc also include evaluation internal control financial reporting ihs global insight opinion ihs inc maintained material respects effective internal control financial reporting november 30 2008 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2008 2007 related consolidated statements operations changes stockholders equity cash flows three years period ended november 30 2008 report dated january 20 2009 expressed unqualified opinion thereon ernst young llp denver colorado january 20 2009 ihs inc consolidated balance sheets see accompanying notes ihs inc consolidated statements operations see accompanying notes ihs inc consolidated statement changes stockholders equity see accompanying notes ihs inc consolidated statements cash flows see accompanying notes ihs inc notes consolidated financial statements 1 nature business ihs inc ihs company us publicly traded delaware corporation ihs leading provider comprehensive source critical information insight sizable growing global market customers rely products services facilitate crucial decisionmaking support key processes improve productivity heart products services data obtained public sources third parties proprietary databases transform data critical information insight useful customers available make critical business decisions data becomes critical information combine proprietary thirdparty technology create graphical user interfaces search navigation tools online delivery systems deliver individual documents transform information insight products services analysis interpretation teams experts serve worlds largest corporations across multiple industries well governments organizations 100 countries primary operations outside united states united kingdom canada switzerland structured business around customers geographies reside americas includes united states canada latin america emea europe middle east africa india also included region apac asia pacific region includes many countries china japan south korea malaysia australia allows us tailor expand solutions offer meet unique needs customers globally local markets addition structuring business around regions targeted four specific information domainsenergy product lifecycle security environment since four information domains represent areas customers needs critical information insight use domains set priorities design business objectives information customers need address complex business issues continues converge intersection information domains serve continue deliver critical information insight four information domains prepare financial reports analyze business across three geographic reportable segments americas emea apac 2 significant accounting policies fiscal year end fiscal years end november 30 year references herein individual years mean year ended november 30 example 2008 means year ended november 30 2008 consolidation policy consolidated financial statements include accounts whollyowned majorityowned subsidiaries significant intercompany accounts transactions eliminated investments unconsolidated affiliated companies accounted equity method included equity investments accompanying consolidated balance sheets proportionate share income unconsolidated affiliates included income equity investment accompanying consolidated statements operations generally utilize equity method accounting noncontrolling ownership interest 20 50 entity provided able exercise significant influence investees operations ihs inc notes consolidated financial statements continued 2 significant accounting policies continued reclassifications certain prioryear amounts reclassified conform currentyear presentation use estimates preparation financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition useful lives fixed intangible assets allocation purchase price acquired assets liabilities recoverability intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents investments trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses allowance based upon managements assessment known credit risks well general industry economic conditions specific accounts receivable written upon notification bankruptcy determined account significantly past due beyond contractual payment terms collection efforts unsuccessful fair value financial instruments carrying value financial instruments including cash accounts receivable accounts payable shortterm longterm debt approximates fair value revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectability reasonably assured revenue recognition policies based guidance staff accounting bulletin sab 104 revenue recognition applicable statement position sop 972 software revenue recognition sales critical information insight majority revenue derived sale subscriptions critical information initially deferred recognized ratably delivered subscription period ihs inc notes consolidated financial statements continued 2 significant accounting policies continued revenue recognized upon delivery nonsubscriptionbased sales certain locations use dealers distribute critical information insight revenue products sold dealers recognized follows •for subscriptionbased services revenue recognized ratably delivered end user subscription period •for nonsubscriptionbased products revenue recognized upon delivery dealer defer revenue limited number sales subscriptions act sales agent third parties continuing responsibility maintain update underlying database recognize revenue upon sale subscriptions delivery information tools accordance emerging issues task force issue 9919 reporting revenue gross principal versus net agent services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standardprice book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation proportionally based upon performance progress terms contract see discussion multipleelement arrangements contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis generally sufficient vendorspecific objective evidence fair value element arrangement exists based standalone sales products services elements contract unbundled recognized follows •subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery •for nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period ihs inc notes consolidated financial statements continued 2 significant accounting policies continued •in instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained infrequent instances multipleelement arrangement includes offerings vendorspecific objective evidence available consider substance whole arrangement subscription thus revenue recognized ratably service period cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties commissions associated customer subscriptions costs deferred amortized expense period subscriptions generally subscription periods 12 months duration property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired identifiable intangible assets finite lives amortized straightline basis respective lives methods accurately portray proportional value review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable assess impairment comparing fair value indefinitelived identifiable intangible asset goodwill carrying value impairments expensed incurred ihs inc notes consolidated financial statements continued 2 significant accounting policies continued indefinitelived intangible assets accordance sfas 142 goodwill intangible assets perform impairment test indefinitelived intangible assets comparing assets fair value carrying value impairment charge recognized assets estimated fair value less carrying value estimate fair value based projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill accordance sfas 142 test goodwill impairment reporting unit level defined reference sfas 131 disclosures segments enterprise related information least annual basis reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach •we first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values impairments fiscal years ended november 30 2008 2007 2006 •if necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting units goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred subscription revenue pension assets accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made ihs inc notes consolidated financial statements continued 2 significant accounting policies continued judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates december 1 2007 adopted fasb interpretation 48 accounting income taxes fin 48 prescribes recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance derecognition classification interest penalties accounting interim periods disclosure transition upon adoption fin 48 recorded cumulative effect adjustment 14 million increase beginning retained earnings following adoption fin 48 include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes previously included interest penalties interest income expense income expense respectively treasury stock ihs stock retention buyback programs transactions utilize cost method accounting regarding inventory costing method treasury stock transactions employ weightedaverage cost method earnings per share earnings per common share eps computed accordance sfas 128 earnings per share sfas 128 basic eps computed dividing net income weighted average number common shares outstanding period diluted eps computed using weighted average number common shares dilutive potential common shares outstanding period diluted eps reflects potential dilution could occur securities exercised converted common shares prior september 2008 used twoclass method computing basic diluted eps amounts class b common stock outstanding september 18 2008 class b stockholders converted shares class common stock oneforone basis foreign currency absent circumstances contrary functional currency foreign subsidiaries subsidiarys local currency assets liabilities translated periodend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included comprehensive income transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreignexchangetransaction gains losses included results operations time utilize forwardcontract instruments manage market risks associated fluctuations certain foreigncurrency exchange rates relate specific balances accounts notes receivable payable denominated foreign currencies end reporting ihs inc notes consolidated financial statements continued 2 significant accounting policies continued period nonfunctional foreigncurrencydenominated receivable cash balances remeasured functional currency reporting entities current market rates change value remeasurement reported foreign exchange gain loss period income expense accompanying consolidated statements operations resulting gains losses forward foreign currency contracts described also included income expense mitigate exchange rate risk associated assets research development costs research development included cost revenue expensed incurred amounted approximately 43 million 50 million 31 million 2008 2007 2006 respectively impairment longlived assets account longlived assets including finitelived intangibles accordance statement financial accounting standard sfas 144 accounting impairment disposal longlived assets annually review carrying amounts longlived assets determine whether current events circumstances warrant adjustment carrying amounts longlived asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stockbased compensation account stockbased compensation sfas 123 revised 2004 sharebased payment sfas 123r related sec staff accounting bulletin 107 sharebased payments sfas 123r requires sharebased payments employees including grants employee stock options recognized income statement based fair values sfas 123r also requires forfeitures estimated grant date accordingly compensation cost recognized based number awards expected vest may adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value nonvested share awards expense vesting period straightline basis awards performance conditions evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date stock options estimate fair value awards date grant using blackscholes pricing model amortize value stock options expense vesting period straightline basis ihs inc notes consolidated financial statements continued 2 significant accounting policies continued new accounting pronouncements september 2006 fasb issued sfas 157 fair value measurements defines fair value establishes framework measuring fair value expands disclosures fair value measurements adoption provisions sfas 157 related nonfinancial assets liabilities delayed fiscal years begin november 15 2008 provisions sfas 157 relating financial assets liabilities effective financial statements issued fiscal years beginning november 15 2007 adopted provisions relating financial assets liabilities december 1 2007 material impact consolidated financial statements currently evaluating impact adopting provisions within sfas 157 related nonfinancial assets liabilities consolidated financial statements december 2007 fasb issued sfas 141r business combinations sfas 141r sfas 160 accounting reporting noncontrolling interest consolidated financial statements amendment arb 51 sfas 160 new standards significantly change accounting reporting business combination transactions noncontrolling minority interests consolidated financial statements sfas nos 141r 160 required adopted simultaneously effective first annual reporting period beginning december 15 2008 thus required adopt standards december 1 2009 first day 2010 fiscal year earlier adoption prohibited currently evaluating impact adopting sfas nos 141r 160 consolidated financial statements march 2008 fasb issued sfas 161 disclosures derivative instruments hedging activities sfas 161 sfas 161 requires additional disclosures related use derivative instruments accounting derivatives impact financial statements sfas 161 effective fiscal years interim periods beginning november 15 2008 thus required adopt standard december 1 2008 first day 2009 fiscal year adoption sfas 161 material impact consolidated financial statements may 2008 fasb issued sfas 162 hierarchy general accepted accounting principles sfas 162 statement documents hierarchy various sources accounting principles framework selecting principles used preparing financial statements statement shall effective 60 days following securities exchange commissions approval public company accounting oversight board amendments au section 411 meaning present fairly conformity generally accepted accounting principles sfas 162 material impact consolidated financial statements 3 acquisitions 2008 made following acquisitions global insight inc global insight october 2008 completed acquisition global insight inc based lexington massachusetts known ihs global insight acquisition closed 1172 million cash approximately 13 million shares ihs common stock valued 443 million based closing price ihs oct 10 2008 terms transaction include lockup agreement restricting salability ihs shares 10 percent shares restricted one year 50 percent two years 40 percent three years ihs inc notes consolidated financial statements continued 3 acquisitions continued november 30 2008 begun first phase implementation plan streamline operations global insight eliminate redundancies result acquisition plan contemplates certain reductions personnel well certain facility consolidations related acquisition accordance plan initial implementation recorded severance cost approximately 8 million facility consolidation costs approximately 5 million preliminary purchase accounting assumed liabilities november 30 2008 cash payments incurred various times first nine months 2009 divestco usa inc divestco september 2008 acquired us product portfolio divestco strategic provider comprehensive data analytical tools oil gas industry approximately 30 million cash documental solutions llc documental solutions september 2008 acquired documental solutions llc falls church virginia approximately 222 million cash documental solutions leading provider market intelligence analysis tools defense aerospace industry jfa international jfa march 2008 acquired assets jfa london england based provider strategic analysis energy industrys exploration production sectors jfa acquired £20 million approximately 39 million based exchange rate date acquisition environmental software providers esp march 2008 acquired environmental software providers business name electric software products inc based mountain view california approximately 187 million cash esp provider enterprise information solutions used companies assist managing environmental sustainability programs dolphin software inc dolphin march 2008 acquired dolphin lake oswego oregon approximately 237 million cash dolphin leader developing using chemical data information software used companies record track chemicals stored used facilities prime publications limited prime march 2008 acquired prime owns 50 interest lloyds registerfairplay limited lrf joint venture leading source global maritime information lrf preeminent brand name maritime information industry organization provides comprehensive details current world merchant fleet tankers cargo carrier passenger ships complete range products services assist worlds maritime community investment lrf primary asset prime lloyds register london england joint venture partner owning 50 ihs accounts joint venture equity method accounting ihs acquired 100 percent stock prime approximately £380 million approximately 761 million based exchange rate date acquisition included £107 million noninterest bearing seller notes valued 160 million november 30 2008 remainder paid cash mccloskey group limited mccloskey december 2007 acquired mccloskey leading provider news critical information insight international coal markets located near london england acquired mccloskey £139 million approximately 282 million based exchange rate date acquisition using cash hand ihs inc notes consolidated financial statements continued 3 acquisitions continued purchase prices 2008 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands 1pending final purchase price allocation 2007 made following acquisitions exploration data services eds october 2007 acquired assets livingston txbased eds subsidiary geodigit llc collectively maintain market extensive geological data covering subsurface gulf mexico 63 million using existing cash hand acquired assets include eds catalog interpreted formation tops 25000 offshore wells wwwedsmapscom geodigits mms offshore well data base maps well header data environmax october 2007 acquired environmax inc salt lake city utah environmax leading provider environmental management information systems emis solutions sold primarily government defense markets terms purchase included 221 million paid cash hand 65000 shares ihs stock issued oneyear lock valued 38 million total price 254 million net cash acquired pcnalert august 2007 acquired assets pcnalert supplyedge inc pasadena calif 10 million using existing cash hand pcnalert delivers leading component event management solutions including product change notifications endoflife notifications electronic components industry john herold inc herold august 2007 acquired norwalk ctbased herold independent research firm provides indepth analyses key financial operational data 400 global oil gas companies acquired herold approximately 472 million net acquired cash using existing cash hand ihs inc notes consolidated financial statements continued 3 acquisitions continued strategic decision group corporations oil gas consulting practice sdg july 2007 acquired assets sdgs oil gas consulting practice sdg provider strategic consulting services leading enterprises global oil gas industry 82 million using 51 million existing cash hand issuing 31 million note payable janes information group janes june 2007 executed agreement woodbridge international holdings sa woodbridge purchase janes leading provider information defense industry governments parties completed transaction date terms transaction included delivery 4399000 shares class common stock valued 1715 million less 01 million cash exchange outstanding equity debt janes woodbridge agreed threeyear lockup agreement restricts ability sell ihs shares geological consulting services gcs june 2007 acquired inventory assets gcs houstona provider formation tops data files electronic media covering south texas east texas north louisiana south arkansas mississippi alabama floridafor 82 million using existing cash hand rapidata march 2007 acquired certain assets including rapidata™ product well known comprehensive well test pressure completions data western canadian sedimentary basin ihs purchased rapidata assets rapid technology corporation calgary alberta canada approximately 63 million using existing cash hand geological data services inc gds january 2007 acquired majority assets gds addison texas provider interpreted subsurface data formationtops covering permian basin us midcontinent rocky mountain regions acquired gds 80 million using existing cash hand purchase prices 2007 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands ihs inc notes consolidated financial statements continued 3 acquisitions continued 2006 made following acquisitions canadian hydrodynamics ltd chd july 2006 acquired assets calgary canadabased chd approximately 35 million using existing cash hand chd leading provider comprehensive drillstem test information western canadian sedimentary basin chd database available exclusively ihs accumap one energy product offerings partner dataset since 1995 geoplus june 2006 acquired assets geoplus tulsa oklahoma approximately 421 million using existing cash hand geoplus pcbased software family petra® popular platform used oil gas companies analyze subsurface data existing oil gas wells construction research communications limited crc june 2006 acquired crc limited london uk approximately 58 million net acquired cash using existing cash hand crc created building research establishment bre emap construct deliver wide range bre products relating construction industry ranging environmental issues fire safety cds december 2005 acquired assets contentanddataservices cds business approximately 330 million serves several industries targeted product lifecycle domain core product business extensive database includes technical attributes alternatives obsolescence environmental data electronic component parts purchase prices 2006 acquisitions excluding acquired cash initially allocated follows thousands ihs inc notes consolidated financial statements continued 4 restructuring offering charges credits summary restructuring offering charges credits follows thousands 2008 restructuring third quarter 2008 executed restructuring initiative primarily affected americas emea segments onetime involuntary benefit arrangements exit costs accounted provisions sfas 146 accounting costs associated exit disposal activities costs arising defined benefit pension plans providing enhanced benefits accounted provisions sfas 88 employers accounting settlements curtailments defined benefit pension plans termination benefits restructuring related expenses consist direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closure including noncash expenses related fixed asset leasehold improvement writeoffs expenses include legal expenses associated employee terminations incurred third quarter 2008 initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality critical information insight deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices restructuring charge incurred entirety third quarter 2008 approximately 58 million charge related americas segment 63 million pertained emea segment 04 million related shared services restructuring charge comprised following thousands ihs inc notes consolidated financial statements continued 4 restructuring offering charges credits continued reconciliation related accrued restructuring liability november 30 2008 follows 2006 restructuring fourth quarter 2006 executed restructuring initiative facilitate continued growth focus narrower group products services exit noncore legacy applications improve operational effectiveness course restructuring reduced aggregate workforce approximately 40 employees restructuring charge incurred entirety fourth quarter 2006 restructuring charge comprised entirely employee severance termination benefits costs reconciliation related accrued restructuring liability november 30 2007 follows ihs inc notes consolidated financial statements continued 5 discontinued operations 2006 sold business unrelated third party approximately 03 million recognized loss less 01 million sale business loss sale discontinued operations included loss discontinued operations net line item consolidated statement operations periods presented related results operations shown discontinued operation net tax consolidated statements operations cash flows operating results discontinued operations years ended november 30 2008 2007 2006 follows 6 marketable securities november 30 2008 shortterm investments november 30 2007 owned following shortterm investments classified availableforsale securities reported fair value use specific identification method account gains losses securities realized gains sales marketable securities included within income expense immaterial years ended november 30 2008 2007 2006 7 accounts receivable accounts receivable balance consists following november 30 ihs inc notes consolidated financial statements continued 7 accounts receivable continued activity accounts receivable allowance consists following november 30 8 property equipment property equipment consists following november 30 depreciation expense approximately 136 million 114 million 69 million 2008 2007 2006 respectively 9 equity investment march 2008 acquired prime owns 50 interest lloyds registerfairplay limited lrf joint venture leading source global maritime information lrf preeminent brand name maritime information industry organization provides comprehensive details current world merchant fleet tankers cargo carrier passenger ships complete range products services assist worlds maritime community investment lrf primary asset prime lloyds register london england joint venture partner owning 50 ihs accounts joint venture equity method accounting decrease investment balance date acquisition november 30 2008 primarily due foreign currency exchange rate fluctuations following table presents summary balance sheet information lrf november 30 2008 thousands ihs inc notes consolidated financial statements continued 9 equity investment continued following table presents summary statement operations lrf period march 1 2008 november 30 2008 thousands 10 goodwill intangible assets following table presents details intangible assets goodwill november 30 2008 ihs inc notes consolidated financial statements continued 10 goodwill intangible assets continued following table presents details intangible assets goodwill november 30 2007 estimated future amortization expense intangible assets follows amortization expense intangible assets 258 million 141 million 87 million years ended november 30 2008 2007 2006 respectively changes goodwill november 30 2007 november 30 2008 november 30 2006 november 30 2007 result acquisitions see note 3 foreign currency exchange rate fluctuations 11 debt september 7 2007 entered amended restated credit agreement revolver 385 million unsecured revolving credit agreement allows us certain conditions increase facility maximum 500 million agreement expires september 2012 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling four quarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 50 basis points 125 basis points agent banks base rate commitment fee payable periodically ranges 10 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations ihs inc notes consolidated financial statements continued 11 debt continued capital lease obligations maximum leverage interest coverage ratios defined revolver november 30 2008 compliance covenants agreement 800 million outstanding borrowings annual interest rate 338 addition outstanding letters credit totaling approximately 12 million november 30 2008 november 30 2008 also 160 million noninterest bearing notes issued sellers prime notes due upon demand therefore recorded shortterm debt accompanying consolidated balance sheets 12 indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge partys claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable 13 taxes income amounts income continuing operations income taxes minority interests us foreign jurisdictions follow years ended november 30 ihs inc notes consolidated financial statements continued 13 taxes income continued provision income tax expense benefit continuing operations years ended november 30 follows provision income taxes continuing operations recorded within consolidated statements operations differs provision determined applying us statutory tax rate pretax earnings result following years ended november 30 undistributed earnings foreign subsidiaries approximately 1010 million november 30 2008 earnings considered indefinitely reinvested accordingly provision us federal state income taxes provided thereon upon repatriation earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexities associated hypothetical calculation withholding taxes ihs inc notes consolidated financial statements continued 13 taxes income continued approximately 24 million would payable upon remittance previously unremitted earnings november 30 2008 significant components deferred tax assets liabilities november 30 november 30 2008 loss carryforwards totaling approximately 244 million comprised 138 million us net operating loss carryforwards 53 million us capitalloss carryforwards 53 million foreign loss carryforwards tax purposes available offset future taxable income used us net operating loss carryforwards begin expire 2009 us capital loss carryforwards expire 2012 foreign tax loss carryforwards generally may carried forward indefinitely us net operating loss carryforwards increased result ihs global insight acquisition losses begin expire 2009 subject prior section 382 limits losses deemed likely realizable recorded us capital loss incurred 2007 previously deferred loss stock investment realized believe realization substantially entire deferred tax assets related us capital loss foreign net operating losses likely occur accordingly placed valuation allowance assets additionally ihs global insight existing foreign net operating losses still analyzed determine recoverability november 30 2008 foreign tax credit ftc carryforwards approximately 92 million research development rd credit carryforwards approximately 27 million alternative minimum tax amt credit carryforwards approximately 31 million available offset future us tax liabilities used ftc carryforwards expire ihs inc notes consolidated financial statements continued 13 taxes income continued 2016 rd credit carryforwards expire 2008 2027 amt credit carryforwards may carried forward indefinitely believe likely realize ftc amt tax credit assets result 2007 released valuation allowance 12 million ftc deferred tax asset believe portion rd tax credits expire unused valuation allowance deferred tax assets decreased 13 million 2008 decrease allowance primarily due decrease allowance foreign subsidiary deferred tax assets 13 million provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes december 1 2007 adopted fasb interpretation 48 accounting income taxes fin 48 prescribes recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return fin 48 also provides guidance derecognition classification interest penalties accounting interim periods disclosure transition upon adoption fin 48 recorded cumulative effect adjustment 14 million increase beginning retained earnings following adoption fin 48 include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes previously included interest penalties interest income expense income expense respectively summary activities associated fin 48 reserve unrecognized tax benefits interest penalties follows november 30 2008 total amount unrecognized tax benefits 17 million 01 million related interest changes reserve unrecognized tax benefits associated current year tax positions primarily related uncertain tax filing requirements associated acquisition ihs inc notes consolidated financial statements continued 13 taxes income continued global insight changes reserve unrecognized tax benefits associated prior year tax positions primarily related closing foreign audit change changes related settlements related payment foreign audit reasonably possible experience 01 million decrease reserve unrecognized tax benefits within next twelve months would experience decrease relation uncertainties associated closing statutes ihs subsidiaries file income tax returns us federal jurisdiction various state foreign jurisdictions tax years ihs significant subsidiaries remain subject examination follows ihs inc notes consolidated financial statements continued 14 comprehensive income loss 15 stockbased compensation november 30 2008 one sharebased compensation plan amended restated ihs inc 2004 longterm incentive plan described stockbased compensation expense three years ended november 30 follows ihs inc notes consolidated financial statements continued 15 stockbased compensation continued total income tax benefit recognized income statement sharebased compensation arrangements three years ended november 30 follows compensation cost capitalized years ended november 30 2008 2007 2006 amended restated 2004 longterm incentive plan amended restated 2004 longterm incentive plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards 2004 directors stock plan subplan amended restated 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors shareholders authorized maximum 1125 million shares total compensation expense related nonvested awards share awards stock options yet recognized 564 million november 30 2008 weightedaverage recognition period approximately one half years nonvested stock share awards vest one four years share awards generally subject either cliff vesting graded vesting fair value nonvested stock based fair value common stock date grant amortize value share awards expense vesting period straightline basis approximately half outstanding awards performance based awards evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date additionally estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors summary status nonvested shares november 30 2008 changes year ended follows ihs inc notes consolidated financial statements continued 15 stockbased compensation continued total fair value nonvested stock vested year ended november 30 2008 559 million based weightedaverage fair value vesting date 250 million based weightedaverage fair value date grant stock options option awards generally granted exercise price equal fair market value stock date grant options outstanding november 30 2008 either cliff vest 4 years continuous service vest graded fashion three years continuous service 8year contractual terms certain option share awards provide accelerated vesting change control defined plan options granted year ended november 30 2008 fair value option award estimated date grant using blackscholes pricing model uses assumptions noted following table dividend yield 00 since history paying dividends currently plan expected volatility determined annually using basket peer company historical volatility rates time stock history equal contractual terms riskfree interest rate treasurybill rate period equal expected term based treasury note strip principal rates reported wellknown widely used financial sources expected term average contractual term option vesting period ie shortcut method following table summarizes changes outstanding stock options year ended november 30 2008 well options vested expected vest stock options exercisable november 30 2008 ihs inc notes consolidated financial statements continued 15 stockbased compensation continued aggregate intrinsic value amounts table represent difference closing price common stock november 30 2008 3629 exercise price multiplied number inthemoney stock options date represents amount would received stock option holders exercised stock options november 30 2008 future periods amount change depending fluctuations stock price total intrinsic value stock options exercised year ended november 30 2008 03 million years ended november 30 2007 2006 granted 02 million options 01 million options weighted average grantdate fair value 1357 1177 respectively 16 employee retirement benefits defined benefit plans sponsor noncontributory definedbenefit retirement plan us rip us employees least one year service also definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom also unfunded supplemental income plan sip nonqualified pension plan certain company personnel benefits three plans generally based years service average base compensation plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees adopted sfas 158 year ending november 30 2007 standard amendment sfas nos 87 88 106 132r requires employer recognize funded status defined benefit pension andor postretirement benefit plans asset liability statement financial position total definedbenefit pensionplan income expense 17 million 13 million 16 million years ending november 30 2008 2007 2006 respectively us rip uk rip plan assets consist primarily equity securities smaller holdings bonds alternative assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rips established investment policy seeks balance need maintain viable productive capital base yet achieve investment results superior actuarial rate consistent funds investment objectives uk rips established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc ihs inc notes consolidated financial statements continued 16 employee retirement benefits continued following compares target asset allocation percentages beginning 2008 actual asset allocations end 2008 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis expect required contributions us rip 2009 however expect contribute approximately 21 million uk rip 2009 also expect contribute approximately 05 million sip 2009 following table provides expected benefit payments trustees pension plans following represents net periodic pension income expense ihs inc notes consolidated financial statements continued 16 employee retirement benefits continued costs arising defined benefit pension plans providing enhanced benefits related restructuring activities accounted provisions sfas 88 employers accounting settlements curtailments defined benefit pension plans termination benefits ihs inc notes consolidated financial statements continued 16 employee retirement benefits continued changes projected benefit obligation plan assets funded status pension plans follows ihs inc notes consolidated financial statements continued 16 employee retirement benefits continued ihs global insight funded defined benefit pension plan certain employees located uk according recently available actuarial report plan average annual pension amounts less 01 million plan closed new entrants future accruals ihs inc notes consolidated financial statements continued 16 employee retirement benefits continued result plan 05 million recorded pension liability preliminary purchase price allocation time acquisition using recent information available actuarial report july 1 2008 amortization amounts expected recognized net periodic pension income expense fiscal year ending november 30 2009 pretax pension income actuarially calculated annually based data available beginning year assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 defined contribution plan employees certain subsidiaries may participate defined contribution plans benefit expense relating plans approximately 51 million 40 million 30 million 2008 2007 2006 respectively 17 postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees leave ihs age 55 least 10 years service additionally ihs subsidizes cost coverage retireemedical coverage certain grandfathered employees ihs subsidy capped different rates per month depending individual retirees medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 ihs provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 75 65 575 november 30 2008 2007 2006 respectively ihs inc notes consolidated financial statements continued 17 postretirement benefits continued net periodic postretirement benefit income expense changes related projected benefit obligation follows 1we amended plan 2006 plan amended limit benefits paid future healthcare costs ihs longer subsidizes cost coverage retireemedical coverage certain employees grandfathered ihs subsidy capped different rates per month ihs inc notes consolidated financial statements continued 17 postretirement benefits continued depending individual retirees medicare eligibility change resulted 159 million negative plan amendment amortized period time resulting net periodic postretirement benefit income 2006 2010 2in accordance irs code section 420 cost coverage provided retirees retireemedical plan may paid transfer excess assets us pension plan elected make qualified transfer 2007 employer contributions postretirement benefit plan expected paid year ending november 30 2009 approximately 08 million following table provides expected cash outflows postretirement benefit plan thousands onepercentagepoint change assumed healthcarecosttrend rates would following effects 18 common stock earnings per share november 30 2008 authorized capital stock consisted 80000000 shares class common stock prior september 18 2008 authorized capital stock consisted 80000000 shares class common stock 13750000 shares class b common stock classes equal dividend rights liquidation rights however holders class common stock entitled one vote per share holders class b common stock entitled ten votes per share matters voted upon stockholders share class b common stock convertible time option holder one share class common stock september 18 2008 holders 13750000 class b common stock converted shares 13750000 class common shares exchange conversion number allowable demand registrations available shareholder increased two four ihs inc notes consolidated financial statements continued 18 common stock earnings per share continued 2006 2007 used twoclass method computing basic diluted eps amounts 2008 single class stock purposes calculating eps weighted average common shares outstanding calculated follows share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee later 2006 board directors approved additional programa stock buyback programwhereby ihs authorized acquire one million shares per year open market fully offset dilutive effect employee equity programs program renewed board directors late 2007 fiscal year 2008 later 2008 board directors approved expansion repurchase program remainder fiscal year 2008 could invest 250 million repurchase additional shares year ended november 30 2008 repurchased 1199595 shares class common stock approximately 655 million 5464 per share pursuant stock buyback program 316581 shares approximately 188 million 5943 per share related shares withheld taxes 19 longterm leases commitments contingencies rental charges 2008 2007 2006 approximated 212 million 180 million 157 million respectively minimum rental commitments noncancelable operating leases effect november 30 2008 follows thousands ihs inc notes consolidated financial statements continued 19 longterm leases commitments contingencies continued outstanding letters credit aggregate amount approximately 12 million 18 million november 30 2008 2007 respectively time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition 20 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 cash equivalents amounting approximately 310 million 1485 million reflected consolidated balance sheets november 30 2008 2007 respectively maintained primarily us dollars canadian dollars british pound sterling euros subject fluctuation current exchange rate 21 segment information prepare financial reports analyze business results within three reportable geographic segments americas emea apac prior third quarter 2008 reported two segments energy engineering however 2008 reorganized management structure geographic focus point contact customers new integrated global organization make easier customers business us providing cohesive consistent effective sales marketing approach region structuring business around geographic segments able tailor expand solutions offer meet unique needs customers globally local markets also able manage activities according best practices new structure provides solid foundation growth market capabilities allows us efficient method bringing new products services customers supports growth existing accounts new customers markets information operations three segments set forth based nature offerings chairman chief executive officer represents chief operating decision maker evaluates segment performance based primarily revenue operating profit three segments addition also reviews revenue domains critical information insight offerings accounting policies segments described summary significant accounting policies see note 2 prior year information restated conform current year presentation single customer accounted 10 total revenue year ended november 30 2008 material intersegment revenues period presented ihs inc notes consolidated financial statements continued 21 segment information continued shown certain corporate transactions allocated reportable segments amounts allocated include limited items stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gain loss sales corporate assets revenue information domain follows ihs inc notes consolidated financial statements continued 21 segment information continued revenue product category follows 22 quarterly results operations unaudited following summarizes certain quarterly results operations item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm management’s report internal control financial reporting report independent registered public accounting firm internal control financial reporting consolidated financial statements consolidated balance sheets november 30 2009 2008 consolidated statements operations years ended november 30 2009 2008 consolidated statement changes stockholders’ equity years ended november 30 2009 2008 2007 consolidated statements cash flows years ended november 30 2009 2008 notes consolidated financial statements years ended november 30 2009 2008 2007 report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc november 30 2009 2008 related consolidated statements operations changes stockholders’ equity cash flows three years period ended november 30 2009 consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audits obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2009 2008 consolidated results operations cash flows three years period ended november 30 2009 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs inc’s internal control financial reporting november 30 2009 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission report dated january 15 2010 expressed unqualified opinion thereon ernst young llp denver colorado january 15 2010 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2009 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission coso based evaluation management concluded internal control financial reporting effective november 30 2009 independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 15 2010 jerre l stead jerre l stead chairman chief executive officer michael j sullivan michael j sullivan executive vice president chief financial officer report independent registered public accounting firm internal control financial reporting board directors stockholders ihs inc audited ihs inc’s internal control financial reporting november 30 2009 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission coso criteria ihs inc’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion ihs inc maintained material respects effective internal control financial reporting november 30 2009 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2009 2008 related consolidated statements operations changes stockholders’ equity cash flows three years period ended november 30 2009 report dated january 15 2010 expressed unqualified opinion thereon ernst young llp denver colorado january 15 2010 ihs inc consolidated balance sheets see accompanying notes ihs inc consolidated statements operations note september 2008 holder class b common stock elected convert shares oneforone class common stock shares class b common stock outstanding see accompanying notes ihs inc consolidated statement changes stockholders’ equity see accompanying notes ihs inc consolidated statements cash flows see accompanying notes ihs inc notes consolidated financial statements 1 nature business ihs leading source critical information insight pivotal areas shape today’s global business landscape energy product lifecycle security environment supported extensive expert analysis macroeconomic forecasting businesses governments rely comprehensive information expert analysis ihs make highimpact decisions develop strategies speed confidence ihs employs 4100 colleagues 28 countries vision source critical information insight powers growth value customers intend source customers trust rely upon come first need better understand present anticipate future best serve customers close possible organized geographies also prepare financial reports analyze business according geographic organization three reportable geographic segments americas includes united states canada latin america emea includes europe middle east africa apac asia pacific integrated global organization makes easier customers business us providing cohesive consistent effective salesandmarketing approach geography structuring business around customers regions reside better able serve unique needs customers local markets globally regional structure provides solid foundation profitable growth provides efficient method bringing new products services customers supports growth existing accounts new customers markets 2 significant accounting policies fiscal year end fiscal years end november 30 year references herein individual years mean year ended november 30 example 2009 means year ended november 30 2009 consolidation policy consolidated financial statements include accounts whollyowned majorityowned subsidiaries significant intercompany accounts transactions eliminated investments unconsolidated affiliated companies accounted equity method included “equity investments” accompanying consolidated balance sheets proportionate share income unconsolidated affiliates included “income equity investment” accompanying consolidated statements operations generally utilize equity method accounting noncontrolling ownership interest 20 50 entity provided able exercise significant influence investee’s operations reclassifications certain prioryear amounts reclassified conform currentyear presentation use estimates preparation financial statements conformity generally accepted accounting principles requires management make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition useful lives fixed intangible assets allocation purchase price acquired assets liabilities recoverability intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates ihs inc notes consolidated financial statementscontinued concentration credit risk exposed credit risk associated cash equivalents trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance potential credit losses allowance based upon management’s assessment known credit risks well general industry economic conditions specific accounts receivable writtenoff upon notification bankruptcy determined account significantly past due beyond contractual payment terms collection efforts unsuccessful fair value financial instruments carrying values financial instruments including cash accounts receivable accounts payable shortterm longterm debt approximate fair value revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectability reasonably assured majority revenue derived sale subscriptions critical information initially deferred recognized ratably delivered subscription period generally 12 months revenue recognized upon delivery nonsubscriptionbased sales certain locations use dealers distribute critical information insight revenue products sold dealers recognized follows • subscriptionbased services revenue recognized ratably delivered end user subscription period • nonsubscriptionbased products revenue recognized upon delivery dealer defer revenue limited number sales subscriptions act sales agent third parties continuing responsibility maintain update underlying database recognize revenue net basis upon sale subscriptions delivery information tools services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standardprice book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation proportionally based upon performance progress terms contract see discussion “multipleelement arrangements” contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer ihs inc notes consolidated financial statementscontinued multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis generally sufficient vendorspecific objective evidence fair value element arrangement exists based standalone sales products services elements contract unbundled recognized follows • subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery • nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period • instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained infrequent instances multipleelement arrangement includes offerings vendorspecific objective evidence available consider substance whole arrangement subscription thus revenue recognized ratably service period cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties commissions associated customer subscriptions costs deferred amortized expense period subscriptions generally subscription periods 12 months duration property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized leases certain circumstances enter leases free rent periods rent escalations term lease cases calculate total payments term lease record ratably rent expense term identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired finitelived intangible assets identifiable intangible assets finite lives generally amortized straightline basis respective lives ihs inc notes consolidated financial statementscontinued review carrying values identifiable intangible assets indefinite lives goodwill least annually assess impairment assets amortized additionally review carrying value intangible asset goodwill whenever events changes circumstances indicate carrying amount may recoverable assess impairment comparing fair value indefinitelived identifiable intangible asset goodwill carrying value impairments expensed incurred indefinitelived intangible assets perform impairment test indefinitelived intangible assets consist entirely trade names comparing asset’s fair value carrying value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based relief royalty method using projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment reporting unit level least annual basis reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach • first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values deficiencies reporting unit fair values versus carrying values fiscal years ended november 30 2009 2008 2007 • necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting unit’s goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred subscription revenue pension assets accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates december 1 2007 adopted new guidance prescribed recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return guidance also provides guidance derecognition classification interest penalties accounting interim periods disclosure transition upon adoption guidance recorded cumulative effect adjustment 14 million increase beginning retained earnings ihs inc notes consolidated financial statementscontinued subsequent adoption include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes previously included interest penalties interest income expense income expense respectively treasury stock ihs stock retention buyback programs transactions utilize cost method accounting regarding inventory costing method treasury stock transactions employ weightedaverage cost method earnings per share basic eps computed dividing net income weighted average number common shares outstanding period diluted eps computed using weighted average number common shares dilutive potential common shares outstanding period diluted eps reflects potential dilution could occur securities exercised converted common shares prior september 2008 used twoclass method computing basic diluted eps amounts class b common stock outstanding september 18 2008 class b stockholder converted shares class common stock oneforone basis foreign currency absent circumstances contrary functional currency foreign subsidiaries subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included comprehensive income transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreignexchangetransaction gains losses included results operations time utilize forwardcontract instruments manage market risks associated fluctuations certain foreigncurrency exchange rates relate specific balances accounts notes receivable payable denominated foreign currencies end reporting period nonfunctional foreigncurrencydenominated receivable cash balances remeasured functional currency reporting entities current market rates change value remeasurement reported foreign exchange gain loss period income expense accompanying consolidated statements operations resulting gains losses forward foreign currency contracts described also included income expense mitigate exchange rate risk associated assets research development costs research development included cost revenue expensed incurred amounted approximately 27 million 43 million 50 million 2009 2008 2007 respectively impairment longlived assets review carrying amounts longlived assets determine whether current events circumstances warrant adjustment carrying amounts annually longlived asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stockbased compensation sharebased payments employees including grants employee stock options recognized income statement based fair values addition estimate forfeitures grant date compensation cost recognized based number awards expected vest may adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value nonvested share awards expense vesting period straightline basis awards performance ihs inc notes consolidated financial statementscontinued conditions evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date stock options estimate fair value awards date grant using blackscholes pricing model amortize value stock options expense vesting period straightline basis evaluation subsequent events evaluated subsequent events january 15 2010 date financial statements issued new accounting pronouncements december 2007 financial accounting standards board fasb revised guidance business combinations accounting noncontrolling interests revisions significantly change accounting reporting business combination transactions noncontrolling minority interests consolidated financial statements new guidance acquisition related costs required expensed incurred addition assets acquired liabilities assumed business combination arise contingencies recognized fair value acquisition date fair value determined measurement period fair value cannot determined companies typically account acquired contingencies using existing guidance revisions required adopted simultaneously effective first annual reporting period beginning december 15 2008 thus required adopt standards december 1 2009 first day 2010 fiscal year earlier adoption prohibited adopt new provisions first quarter fiscal 2010 expect adoption noncontrolling interest guidance material effect consolidated financial position results operations new guidance business combinations expect material impact accounting future acquisitions october 2009 fasb’s emerging issues task force revised guidance revenue recognition multipledeliverable revenue arrangements amendments update enable companies separately account multiple revenuegenerating activities deliverables perform customers existing us gaap requires company use vendorspecific objective evidence “vsoe” third party evidence selling price separate deliverables multipledeliverable arrangement update allow use estimated selling price neither vsoe thirdparty evidence available update require additional disclosures information entity’s multipledeliverable arrangements requirements update may applied prospectively revenue arrangements entered materially modified fiscal years beginning june 15 2010 although early adoption permitted company currently evaluating impact update financial position results operations plan early retroactively adopt new guidance 3 business combinations 2009 made following acquisitions prime publications limited prime lloyd’s registerfairplay limited fairplay march 3 2008 acquired prime publications limited prime owned 50 interest lloyd’s registerfairplay limited fairplay joint venture leading source global maritime information fairplay preeminent brand name maritime information industry organization provides comprehensive details current world merchant fleet tankers cargo carrier passenger ships complete range products services assist world’s maritime community investment fairplay primary asset prime ihs accounted joint venture equity method accounting march 2008 november 30 2008 december 1 2008 obtained additional 01 ownership interest majority position venture’s governing board giving us 501 controlling interest joint venture accordingly began consolidating fairplay within results june 17 2009 acquired remaining 499 fairplay lloyd’s register giving us 100 ownership fairplay remaining 499 interest acquired approximately 64 million ihs inc notes consolidated financial statementscontinued logtech canada ltd logtech september 2 2009 acquired logtech leader development pragmatic costeffective software solutions services digital log data petroleum industry acquired logtech 3 million net cash acquired environmental support solutions inc ess september 17 2009 acquired ess leading provider environmental health safety crisis management software enterprise sustainability approximately 59 million net cash acquired purchase prices 2009 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands 1 includes cumulative purchase price 50 interest acquired 2008 remaining 50 interest acquired 2009 individual purchase prices impacted foreign currency fluctuation 2008 made following acquisitions global insight inc global insight october 2008 completed acquisition global insight inc based lexington massachusetts known ihs global insight acquisition closed 1172 million cash approximately 13 million shares ihs common stock valued 443 million based closing price ihs oct 10 2008 terms transaction included lockup agreement restricting transferability salability ihs shares 10 percent shares restricted one year 50 percent two years 40 percent three years related acquisition global insight october 2008 established plan streamline operations global insight eliminate redundancies result acquisition plan contemplated certain reductions personnel well certain facility consolidations related acquisition initially established 130 million liability restructuring costs opening balance sheet initial amount 82 million employee severance termination benefits 48 million related facility closure costs 2009 management refined restructuring plan resulted revised estimated liability 90 million consisting 51 million employee severance 39 million facility closures 40 million reduction liability recorded reduction goodwill november 30 2009 paid 49 million employee severance termination benefits 25 million facility closure costs resulting remaining liability balance 16 million november 30 2009 divestco usa inc divestco september 2008 acquired us product portfolio divestco strategic provider comprehensive data analytical tools oil gas industry approximately 30 million cash documental solutions llc documental solutions september 2008 acquired documental solutions llc falls church virginia approximately 222 million cash documental solutions leading provider market intelligence analysis tools defense aerospace industry jfa international jfa march 2008 acquired assets jfa london england based provider strategic analysis energy industry’s exploration production sectors jfa acquired £20 million approximately 39 million based exchange rate date acquisition ihs inc notes consolidated financial statementscontinued environmental software providers esp march 2008 acquired environmental software providers business name electric software products inc based mountain view california approximately 187 million cash esp provider enterprise information solutions used companies assist managing environmental sustainability programs dolphin software inc dolphin march 2008 acquired dolphin lake oswego oregon approximately 237 million cash dolphin leader developing using chemical data information software used companies record track chemicals stored used facilities prime publications limited prime march 2008 acquired prime owned 50 interest fairplay joint venture investment fairplay primary asset prime lloyd’s register london england joint venture partner owning 50 ihs accounted joint venture equity method accounting december 1 2008 ihs acquired 100 percent stock prime approximately 761 million based exchange rate date acquisition included 160 million noninterest bearing seller notes remainder paid cash mccloskey group limited mccloskey december 2007 acquired mccloskey leading provider news critical information insight international coal markets located near london england acquired mccloskey £139 million approximately 282 million based exchange rate date acquisition using cash hand purchase prices 2008 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands 2007 made following acquisitions exploration data services eds october 2007 acquired assets livingston txbased eds subsidiary geodigit llc collectively maintain market extensive geological data covering subsurface gulf mexico 63 million using existing cash hand acquired assets include eds’ catalog interpreted formation tops 25000 offshore wells wwwedsmapscom geodigit’s mms offshore well data base maps well header data environmax october 2007 acquired environmax inc salt lake city utah environmax leading provider environmental management information systems emis solutions sold primarily government defense markets terms purchase included 221 million paid cash hand 65000 shares ihs stock issued oneyear lock valued 38 million total price 254 million net cash acquired pcnalert august 2007 acquired assets pcnalert supplyedge inc pasadena calif 10 million using existing cash hand pcnalert delivers leading component event management solutions including product change notifications endoflife notifications electronic components industry ihs inc notes consolidated financial statementscontinued john herold inc herold august 2007 acquired norwalk ctbased herold independent research firm provides indepth analyses key financial operational data 400 global oil gas companies acquired herold approximately 472 million net acquired cash using existing cash hand strategic decision group corporation’s oil gas consulting practice sdg july 2007 acquired assets sdg’s oil gas consulting practice “sdg” provider strategic consulting services leading enterprises global oil gas industry 82 million using 51 million existing cash hand issuing 31 million note payable jane’s information group jane’s june 2007 executed agreement woodbridge international holdings sa woodbridge purchase jane’s leading provider information defense industry governments parties completed transaction date terms transaction included delivery 4399000 shares class common stock valued 1715 million less 01 million cash exchange outstanding equity debt jane’s woodbridge agreed threeyear lockup agreement restricts ability transfer sell ihs shares geological consulting services gcs june 2007 acquired inventory assets gcs houstona provider formation tops data files electronic media covering south texas east texas north louisiana south arkansas mississippi alabama floridafor 82 million using existing cash hand rapidata march 2007 acquired certain assets including rapidata™ product well known comprehensive well test pressure completions data western canadian sedimentary basin ihs purchased rapidata assets rapid technology corporation calgary alberta canada approximately 63 million using existing cash hand geological data services inc gds january 2007 acquired majority assets gds addison texas provider interpreted subsurface data “formationtops” covering permian basin us midcontinent rocky mountain regions acquired gds 80 million using existing cash hand purchase prices 2007 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands 4 net restructuring charges credits net restructuring charges credits 07 million 121 million 02 million years ended november 30 2009 2008 2007 respectively third quarter 2008 executed restructuring initiative primarily affected americas emea segments restructuring related expenses consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closure including noncash expenses related fixed asset leasehold improvement writeoffs legal expenses associated employee terminations incurred third quarter 2008 ihs inc notes consolidated financial statementscontinued initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality critical information insight deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices restructuring charge incurred entirety third quarter 2008 approximately 58 million charge related americas segment 59 million pertained emea segment 04 million related shared services majority liability paid 2008 remaining liability november 30 2008 10 million remaining balance substantially paid november 30 2009 overaccrual 07 million reversed 2009 global insight restructuring related acquisition global insight october 2008 established plan streamline operations global insight eliminate redundancies result acquisition plan contemplated certain reductions personnel well certain facility consolidations related acquisition initially established 130 million liability restructuring costs opening balance sheet initial amount 82 million employee severance termination benefits 48 million related facility closure costs 2009 management refined restructuring plan resulted revised estimated liability 90 million consisting 51 million employee severance 39 million facility closures 40 million reduction liability recorded reduction goodwill november 30 2009 paid 49 million employee severance termination benefits 25 million facility closure costs resulting remaining liability balance 16 million november 30 2009 5 accounts receivable accounts receivable balance consists following november 30 activity accounts receivable allowance consists following november 30 record allowances doubtful accounts probable accounts receivable balance collected amounts based upon management’s estimates historical collection trends ihs inc notes consolidated financial statementscontinued 6 property equipment property equipment consists following november 30 depreciation expense approximately 151 million 136 million 114 million 2009 2008 2007 respectively 7 goodwill intangible assets following table presents details intangible assets goodwill november 30 2009 ihs inc notes consolidated financial statementscontinued following table presents details intangible assets goodwill november 30 2008 estimated future amortization expense intangible assets follows amortization expense intangible assets 340 million 258 million 141 million years ended november 30 2009 2008 2007 respectively changes intangible assets november 30 2008 november 30 2009 november 30 2007 november 30 2008 result acquisitions see note 3 foreign currency exchange rate fluctuations 8 debt september 7 2007 entered amended restated credit agreement revolver 385 million revolver allows us certain conditions increase facility maximum 500 million agreement expires september 2012 interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling four quarter consolidated earnings interest expense taxes depreciation amortization ebitda defined revolver rate ranges applicable libor plus 50 basis points 125 basis points agent bank’s base rate commitment fee payable periodically ranges 10 25 basis points based upon leverage ratio revolver contains certain financial covenants including limitations capital lease obligations maximum leverage interest coverage ratios defined revolver november 30 2009 compliance covenants agreement 850 million outstanding borrowings annual interest rate 075 addition outstanding letters credit totaling approximately 11 million november 30 2009 november 30 2009 also 74 million noninterest bearing notes issued sellers prime notes due upon demand therefore recorded “shortterm debt” accompanying consolidated balance sheets ihs inc notes consolidated financial statementscontinued 9 indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable 10 taxes income amounts income continuing operations income taxes minority interests us foreign jurisdictions follow years ended november 30 provision income tax expense benefit continuing operations years ended november 30 follows ihs inc notes consolidated financial statementscontinued provision income taxes continuing operations recorded within consolidated statements operations differs provision determined applying us statutory tax rate pretax earnings result following years ended november 30 undistributed earnings foreign subsidiaries approximately 1218 million november 30 2009 earnings considered indefinitely reinvested include earnings certain subsidiaries considered distributed accordingly provision us federal state income taxes provided undistributed earnings upon repatriation earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexities associated hypothetical calculation withholding taxes approximately 03 million would payable upon remittance previously unremitted earnings november 30 2009 significant components deferred tax assets liabilities november 30 november 30 2009 loss carryforwards totaling approximately 474 million comprised 182 million us net operating loss carryforwards 53 million us capitalloss carryforwards 239 million foreign loss carryforwards tax purposes available offset future taxable income used us net operating loss carryforwards begin expire 2010 us capital loss carryforwards expire 2012 foreign tax loss carryforwards generally may carried forward indefinitely us net operating loss carryforwards increased result ess acquisition updates acquired ihs global insight losses begin expire 2010 subject prior section 382 limits losses ihs inc notes consolidated financial statementscontinued deemed likely realizable recorded us capital loss incurred 2007 previously deferred loss stock investment realized believe realization deferred tax asset related us capital loss likely occur accordingly placed valuation allowance asset analyzed foreign net operating losses placed valuation allowances determined realization likely occur global insight foreign net operating losses acquisition date 267 million recorded purchase accounting 2009 november 30 2009 foreign tax credit ftc carryforwards approximately 44 million research development rd credit carryforwards approximately 24 million alternative minimum tax amt credit carryforwards approximately 28 million available offset future us tax liabilities used ftc carryforwards expire 2013 2016 rd credit carryforwards expire 2009 2027 amt credit carryforwards may carried forward indefinitely believe likely realize ftc amt tax credit assets believe portion rd tax credits expire unused valuation allowance deferred tax assets decreased 06 million 2009 decrease allowance primarily due decrease allowance foreign subsidiary deferred tax assets 15 million partially offset increase establishment allowance ihs global insight foreign net operating losses 07 million provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes december 1 2007 adopted fasb guidance income taxes prescribes recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return pronouncement also provides guidance derecognition classification interest penalties accounting interim periods disclosure transition upon adoption recorded cumulative effect adjustment 14 million increase beginning retained earnings subsequent adoption include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes previously included interest penalties interest income expense income expense respectively summary activities associated reserve unrecognized tax benefits interest penalties follows november 30 2009 total amount unrecognized tax benefits 15 million 01 million related interest changes reserve unrecognized tax benefits associated current year tax positions primarily related uncertain tax filing requirements associated acquisition ihs global insight changes reserve unrecognized tax benefits associated prior year tax positions primarily related closing statutes reasonably possible experience 02 million decrease reserve unrecognized tax benefits within next twelve months would experience decrease relation uncertainties associated closing statutes ihs inc notes consolidated financial statementscontinued ihs subsidiaries file income tax returns us federal jurisdiction various state foreign jurisdictions tax years ihs significant subsidiaries remain subject examination follows 11 comprehensive income loss 12 stockbased compensation november 30 2009 one sharebased compensation plan amended restated ihs inc 2004 longterm incentive plan described stockbased compensation expense three years ended november 30 follows ihs inc notes consolidated financial statementscontinued total income tax benefit recognized income statement sharebased compensation arrangements three years ended november 30 follows stockbased compensation cost capitalized years ended november 30 2009 2008 2007 amended restated 2004 longterm incentive plan amended restated 2004 longterm incentive plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards 2004 directors stock plan subplan amended restated 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors shareholders authorized maximum 1125 million shares november 30 2009 number shares available future grant 34 million total compensation expense related nonvested awards share awards stock options yet recognized 556 million november 30 2009 weightedaverage recognition period approximately one year nonvested stock share awards vest six months four years share awards generally subject either cliff vesting graded vesting fair value nonvested stock based fair value common stock date grant amortize value share awards expense vesting period straightline basis approximately half outstanding awards performance based awards evaluation made quarter likelihood performance criteria met number shares expected vest increases decreases compensation expense adjusted reflect number shares expected vest cumulative vesting period met date additionally estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors summary status nonvested shares november 30 2009 changes year ended follows total fair value nonvested stock vested year ended november 30 2009 332 million based weightedaverage fair value vesting date 287 million based weightedaverage fair value date grant stock options option awards generally granted exercise price equal fair market value stock date grant options outstanding november 30 2009 either cliff vest 4 years continuous service vest graded fashion three years continuous service 8year contractual terms certain option share awards provide accelerated vesting change control defined plan options granted year ended november 30 2009 2008 ihs inc notes consolidated financial statementscontinued fair value option award granted 2007 estimated date grant using blackscholes pricing model used assumptions noted following table dividend yield 00 since history paying dividends currently plan expected volatility determined annually using basket peer company historical volatility rates time stock history equal contractual terms riskfree interest rate treasurybill rate period equal expected term based treasury note strip principal rates reported wellknown widely used financial sources expected term average contractual term option vesting period ie “shortcut method” following table summarizes changes outstanding stock options years ended november 30 2009 2008 well options vested expected vest stock options exercisable november 30 2009 2008 aggregate intrinsic value amounts table represent difference closing price common stock november 30 2009 5028 exercise price multiplied number inthemoney stock options date represents amount would received stock option holders exercised stock options november 30 2009 future periods amount change depending fluctuations stock price total intrinsic value stock options exercised year ended november 30 2009 07 million year ended november 30 2007 granted 02 million options weighted average grantdate fair value 1357 ihs inc notes consolidated financial statementscontinued 13 employee retirement benefits defined benefit plans sponsor noncontributory definedbenefit retirement plan us rip us employees least one year service also definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom also unfunded supplemental income plan sip nonqualified pension plan certain company personnel benefits three plans generally based years service average base compensation plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees accounting guidance requires employer recognize funded status defined benefit pension andor postretirement benefit plans asset liability statement financial position total definedbenefit pensionplan income expense 05 million 17 million 13 million years ending november 30 2009 2008 2007 respectively us rip uk rip plan assets consist primarily equity securities smaller holdings bonds alternative assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rip’s established investment policy seeks balance need maintain viable productive capital base yet achieve investment results superior actuarial rate consistent funds’ investment objectives uk rip’s established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following compares target asset allocation percentages beginning 2009 actual asset allocations end 2009 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis expect contribute approximately 22 million uk rip approximately 07 million sip 2010 expect make contributions us rip 2010 following table actuaries provides expected benefit payments pension plans ihs inc notes consolidated financial statementscontinued following represents net periodic pension income expense ihs inc notes consolidated financial statementscontinued changes projected benefit obligation plan assets funded status pension plans follows ihs inc notes consolidated financial statementscontinued ihs global insight funded defined benefit pension plan certain former employees located uk according recently available actuarial report plan average annual pension amounts less 01 million plan closed new entrants future accruals result plan 15 million recorded pension liability final purchase price allocation amortization amounts expected recognized net periodic pension postretirement benefit income expense fiscal year ending november 30 2010 pretax ihs inc notes consolidated financial statementscontinued pension expense income actuarially calculated annually based data available beginning year assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 defined contribution plan employees certain subsidiaries may participate defined contribution plans benefit expense relating plans approximately 54 million 51 million 40 million 2009 2008 2007 respectively 14 postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees leave ihs age 55 least 10 years service additionally ihs subsidizes cost coverage retireemedical coverage certain grandfathered employees ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 ihs provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 59 75 65 november 30 2009 2008 2007 respectively net periodic postretirement benefit income expense changes related projected benefit obligation follows 1 amended plan 2006 plan amended limit benefits paid future healthcare costs ihs longer subsidizes cost coverage retireemedical coverage certain employees grandfathered ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility change resulted 159 million negative plan amendment amortized period time resulting net periodic postretirement benefit income 2006 2011 ihs inc notes consolidated financial statementscontinued employer contributions postretirement benefit plan expected paid year ending november 30 2010 approximately 09 million following table provides expected cash outflows postretirement benefit plan thousands onepercentagepoint change assumed healthcarecosttrend rates would following effects 15 common stock earnings per share november 30 2009 authorized capital stock consisted 80000000 shares class common stock prior september 18 2008 authorized capital stock consisted 80000000 shares class common stock 13750000 shares class b common stock classes equal dividend rights liquidation rights however holders class common stock entitled one vote per share holder class b common stock entitled ten votes per share matters voted upon stockholders share class b common stock convertible time option holder one share class common stock september 18 2008 holder 13750000 shares class b common stock converted shares 13750000 class common shares exchange conversion number allowable demand registrations available shareholder increased two four ihs inc notes consolidated financial statementscontinued 2007 used twoclass method computing basic diluted eps amounts 2008 2009 single class stock purposes calculating eps weighted average common shares outstanding calculated follows share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee additionally board directors periodically approves additional buyback programs whereby ihs acquires shares open market fully offset dilutive effect employee equity programs year ended november 30 2009 accepted 229060 shares surrendered employees tax withholding program approximately 105 million 4575 per share shares repurchased 2009 pursuant share buyback program since inception programs withheld tax 928454 shares class common stock approximately 462 million 4972 per share repurchased 1889557 shares approximately 947 million 5013 per share pursuant stock buyback program 16 longterm leases commitments contingencies rental charges 2009 2008 2007 approximated 293 million 212 million 180 million respectively minimum rental commitments noncancelable operating leases effect november 30 2009 follows thousands outstanding letters credit aggregate amount approximately 13 million 12 million november 30 2009 2008 respectively time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition ihs inc notes consolidated financial statementscontinued 17 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 cash equivalents amounting approximately 1242 million 310 million reflected consolidated balance sheets november 30 2009 2008 respectively maintained primarily us dollars canadian dollars british pound sterling euros subject fluctuations current exchange rate 18 segment information prepare financial reports analyze business results within three reportable geographic segments americas emea apac prior 2008 reported two segments energy engineering however 2008 reorganized management structure geographic focus point contact customers new integrated global organization makes easier customers business us providing cohesive consistent effective sales marketing approach region structuring business around geographic segments able tailor expand solutions offer meet unique needs customers globally local markets also able manage activities according best practices structure provides solid foundation growth market capabilities allows us efficient method bringing new products services customers supports growth existing accounts new customers markets information operations three segments set forth based nature offerings chairman chief executive officer represents chief operating decision maker evaluates segment performance based primarily revenue operating profit three segments addition also reviews revenue domains transaction types accounting policies segments described summary significant accounting policies see note 2 2007 information restated conform 2009 2008 presentation single customer accounted 10 total revenue year ended november 30 2009 material intersegment revenues period presented shown certain corporate transactions allocated reportable segments amounts allocated include limited items stockbased compensation expense net periodic pension postretirement benefits income corporatelevel impairments gain loss sales corporate assets ihs inc notes consolidated financial statementscontinued goodwill rollforward follows revenue transaction type follows revenue information domain follows ihs inc notes consolidated financial statementscontinued 19 quarterly results operations unaudited following summarizes certain quarterly results operations item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm board directors shareholders ihs inc audited accompanying consolidated balance sheets ihs inc november 30 2010 2009 related consolidated statements operations changes shareholders’ equity cash flows three years period ended november 30 2010 consolidated financial statements responsibility company’s management responsibility express opinion consolidated financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2010 2009 consolidated results operations cash flows three years period ended november 30 2010 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs inc’s internal control financial reporting november 30 2010 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission report dated january 14 2011 expressed unqualified opinion thereon ernst young llp denver colorado january 14 2011 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2010 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission coso based evaluation management concluded internal control financial reporting effective november 30 2010 independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 14 2011 jerre l stead jerre l stead chairman chief executive officer michael j sullivan michael j sullivan executive vice president chief financial officer report independent registered public accounting firm internal control financial reporting board directors shareholders ihs inc audited ihs inc’s internal control financial reporting november 30 2010 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission coso criteria ihs inc’s management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying management’s report internal control financial reporting responsibility express opinion company’s internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion company’s internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles company’s internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition company’s assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion ihs inc maintained material respects effective internal control financial reporting november 30 2010 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2010 2009 related consolidated statements operations changes shareholders’ equity cash flows three years period ended november 30 2010 report dated january 14 2011 expressed unqualified opinion thereon ernst young llp denver colorado january 14 2011 ihs inc consolidated balance sheets see accompanying notes ihs inc consolidated statements operations 1 amounts may sum due rounding see accompanying notes ihs inc consolidated statement changes shareholders’ equity see accompanying notes ihs inc consolidated statements cash flows see accompanying notes ihs inc notes consolidated financial statements 1 nature business leading source information insight pivotal areas shape today’s business landscape energy economics geopolitical risk sustainability supply chain management businesses governments around globe rely comprehensive content expert independent analysis flexible delivery methods make highimpact decisions develop strategies business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa employ 4400 people 30 countries around world source raw data transform information series transformational steps reduce uncertainty inherent unrefined data enhances usefulness organized business around customers geographies reside americas emea apac structure allows us tailor expand solutions offer meet unique needs customers globally local markets sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscriptions usually oneyear periods historically seen high renewal rates subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income 2 significant accounting policies fiscal year end fiscal years end november 30 year references herein individual years mean year ended november 30 example 2010 means year ended november 30 2010 consolidation policy consolidated financial statements include accounts whollyowned majorityowned subsidiaries significant intercompany accounts transactions eliminated investments unconsolidated affiliated companies accounted equity method proportionate share income unconsolidated affiliates included “income equity investment” accompanying consolidated statements operations generally utilize equity method accounting noncontrolling ownership interest 20 50 entity provided able exercise significant influence investee’s operations reclassifications certain prioryear balances reclassified conform currentyear presentation december 2007 financial accounting standards board fasb issued new guidance related noncontrolling interests consolidated financial statements modifies reporting noncontrolling interests formerly minority interests consolidated financial statements required adopted new guidance effective december 1 2009 beginning 2010 fiscal year upon adoption revised prior period financial statements comply retrospective application guidance presentation noncontrolling interests impact retrospective application guidance follows consolidated statements operationsreclassifies minority interests net income attributable noncontrolling interests consolidated statements cash flowsreclassifies distributions cumulative income minoritynoncontrolling interests operating activities financing activities reclassifies purchases minoritynoncontrolling interests investing activities financing activities additionally reclassifies minority interests net income notes consolidated financial statementsadjusts references noncontrolling interests reflect new changes use estimates preparation financial statements conformity generally accepted accounting principles requires make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements well reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition valuation longlived intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance probable credit losses allowance based upon management’s assessment known credit risks well general industry economic conditions specific accounts receivable writtenoff upon notification bankruptcy determined account significantly past due collection efforts unsuccessful fair value financial instruments carrying values financial instruments including cash accounts receivable accounts payable shortterm longterm debt approximate fair value revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured majority revenue derived sale subscriptions critical information initially deferred recognized ratably delivered subscription period generally 12 months revenue recognized upon delivery nonsubscriptionbased sales certain locations use dealers distribute critical information insight revenue products sold dealers recognized follows subscriptionbased services revenue recognized ratably delivered end user subscription period nonsubscriptionbased products revenue recognized upon delivery dealer defer revenue limited number sales subscriptions act sales agent third parties continuing responsibility maintain update underlying database recognize revenue net basis upon sale subscriptions delivery information tools services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standardprice book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation proportionally based upon performance progress terms contract see discussion “multipleelement arrangements” contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis generally sufficient vendorspecific objective evidence fair value element arrangement exists based standalone sales products services elements contract unbundled recognized follows subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained infrequent instances multipleelement arrangement includes offerings vendorspecific objective evidence available consider substance whole arrangement subscription thus revenue recognized ratably service period see “recent accounting pronouncements” discussion impact recently issued multipleelement arrangement accounting guidance cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties commissions associated customer subscriptions costs deferred amortized expense period subscriptions generally subscription periods 12 months duration property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized leases certain circumstances enter leases free rent periods rent escalations term lease cases calculate total payments term lease record ratably rent expense term identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired evaluate intangible assets goodwill impairment least annually well whenever events changes circumstances indicate carrying amounts may recoverable impairments expensed incurred finitelived intangible assets identifiable intangible assets finite lives generally amortized straightline basis respective lives follows indefinitelived intangible assets perform impairment test indefinitelived intangible assets consist trade names perpetual licenses comparing asset’s fair value carrying value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based relief royalty method using projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment reporting unit level reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values deficiencies reporting unit fair values versus carrying values fiscal years ended november 30 2010 2009 2008 necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting unit’s goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss excess income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred subscription revenue pension assets accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates december 1 2007 adopted new guidance prescribed recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return guidance also provides guidance derecognition classification interest penalties accounting interim periods disclosure transition upon adoption guidance recorded cumulative effect adjustment 14 million increase beginning retained earnings subsequent adoption include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes previously included interest penalties interest income expense income expense respectively treasury stock ihs stock retention buyback programs transactions utilize cost method accounting regarding inventory costing method treasury stock transactions employ weightedaverage cost method earnings per share basic eps computed dividing net income weighted average number common shares outstanding period diluted eps computed using weighted average number common shares dilutive potential common shares outstanding period diluted eps reflects potential dilution could occur securities exercised converted common shares foreign currency absent circumstances contrary functional currency foreign subsidiaries subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included comprehensive income transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreignexchangetransaction gains losses included results operations time utilize forwardcontract instruments manage market risks associated fluctuations certain foreigncurrency exchange rates relate specific balances accounts notes receivable payable denominated foreign currencies end reporting period nonfunctional foreigncurrencydenominated receivable cash balances remeasured functional currency reporting entities current market rates change value remeasurement reported foreign exchange gain loss period income expense accompanying consolidated statements operations resulting gains losses forward foreign currency contracts described also included income expense mitigate exchange rate risk associated assets research development costs research development included cost revenue expensed incurred amounted approximately 06 million 27 million 43 million 2010 2009 2008 respectively impairment longlived assets review carrying amounts longlived assets determine whether current events circumstances warrant adjustment carrying amounts annually longlived asset considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stockbased compensation sharebased payments employees including grants employee stock options recognized income statement based fair values addition estimate forfeitures grant date compensation cost recognized based number awards expected vest may adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value nonvested share awards expense vesting period straightline basis awards performance conditions evaluation made quarter likelihood performance criteria met compensation expense adjusted reflect number shares expected vest cumulative vesting period met date stock options estimate fair value awards date grant using blackscholes pricing model amortize value stock options expense vesting period straightline basis recent accounting pronouncements october 2009 fasb issued guidance revenue recognition become effective us beginning december 1 2010 new guidance vendor specific objective evidence vsoe third party evidence deliverables arrangement cannot determined best estimate selling price required separate deliverables allocate arrangement consideration using relative selling price method new guidance includes new disclosure requirements application relative selling price method affects timing amount revenue recognition adoption update material impact financial position results operations 3 business combinations 2010 made following acquisitions emerging energy research llc eer february 10 2010 acquired eer approximately 18 million net cash acquired eer leading advisory firm whose mission help clients understand leverage exploit technological regulatory competitive trends global emerging energy sector csm worldwide inc csm march 17 2010 acquired csm approximately 25 million net cash acquired csm leading automotive market forecasting firm dedicated providing automotive suppliers market information production power train sales forecasting trusted automotive market forecasting services strategic advisory solutions world’s top automotive manufacturers suppliers financial organizations quantitative micro software llc qms may 5 2010 acquired qms approximately 40 million net cash acquired qms worldwide leader windowsbased econometric forecasting software applications access intelligence september 7 2010 acquired certain chemical energy portfolio business assets access intelligence approximately 79 million net cash acquired purchased businesses order extend breadth information available current ihs energy customers support development additional products services broad range industries along supply chain atrion international inc atrion september 22 2010 acquired atrion approximately 56 million net cash acquired atrion company combines regulatory expertise industryleading technology streamline generation management distribution hazardous materials communication documents reports syntex management systems inc syntex september 22 2010 acquired syntex approximately 23 million net cash acquired syntex leading provider operational risk management software services help companies ensure health safety workers protecting environment managing costs isuppli inc isuppli november 19 2010 acquired isuppli approximately 94 million net cash acquired isuppli global leader technology value chain research advisory services transaction also included screen digest limited leading digital media technology research company recently acquired isuppli purchase prices 2010 acquisitions excluding acquired cash initially allocated follows thousands 2009 made following acquisitions prime publications limited prime lloyd’s registerfairplay limited fairplay march 3 2008 acquired prime publications limited prime owned 50 interest lloyd’s registerfairplay limited fairplay joint venture leading source global maritime information fairplay preeminent brand name maritime information industry organization provides comprehensive details current world merchant fleet tankers cargo carrier passenger ships complete range products services assist world’s maritime community investment fairplay primary asset prime ihs accounted joint venture equity method accounting march 2008 november 30 2008 december 1 2008 obtained additional 01 ownership interest majority position venture’s governing board giving us 501 controlling interest joint venture accordingly began consolidating fairplay within results june 17 2009 acquired remaining 499 fairplay lloyd’s register giving us 100 ownership fairplay remaining 499 interest acquired approximately 64 million logtech canada ltd logtech september 2 2009 acquired logtech leader development pragmatic costeffective software solutions services digital log data petroleum industry acquired logtech 3 million net cash acquired environmental support solutions inc ess september 17 2009 acquired ess leading provider environmental health safety crisis management software enterprise sustainability approximately 59 million net cash acquired purchase prices 2009 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands 1 includes cumulative purchase price 50 interest acquired 2008 remaining 50 interest acquired 2009 individual purchase prices impacted foreign currency fluctuation 2008 made following acquisitions global insight inc global insight october 2008 completed acquisition global insight inc based lexington massachusetts known ihs global insight acquisition closed 1172 million cash approximately 13 million shares ihs common stock valued 443 million based closing price ihs oct 10 2008 terms transaction included lockup agreement restricting transferability salability ihs shares 10 percent shares restricted one year 50 percent two years 40 percent three years divestco usa inc divestco september 2008 acquired us product portfolio divestco strategic provider comprehensive data analytical tools oil gas industry approximately 30 million cash documental solutions llc documental solutions september 2008 acquired documental solutions llc falls church virginia approximately 222 million cash documental solutions leading provider market intelligence analysis tools defense aerospace industry jfa international jfa march 2008 acquired assets jfa london england based provider strategic analysis energy industry’s exploration production sectors jfa acquired £20 million approximately 39 million based exchange rate date acquisition environmental software providers esp march 2008 acquired environmental software providers business name electric software products inc based mountain view california approximately 187 million cash esp provider enterprise information solutions used companies assist managing environmental sustainability programs dolphin software inc dolphin march 2008 acquired dolphin lake oswego oregon approximately 237 million cash dolphin leader developing using chemical data information software used companies record track chemicals stored used facilities prime publications limited prime described acquired prime march 2008 approximately 761 million based exchange rate date acquisition included 160 million noninterest bearing seller notes remainder paid cash mccloskey group limited mccloskey december 2007 acquired mccloskey leading provider news critical information insight international coal markets located near london england acquired mccloskey £139 million approximately 282 million based exchange rate date acquisition using cash hand purchase prices 2008 acquisitions excluding acquired cash including acquisitionrelated costs initially allocated follows thousands 4 net restructuring charges credits net restructuring charges credits 90 million 07 million 121 million years ended november 30 2010 2009 2008 respectively 2010 restructuring third quarter 2010 announced various plans streamline operations merge functions result reduced aggregate workforce approximately 3 consolidated several locations changes primarily affected americas emea segments restructuring charge recorded consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closures relocations legal expenses associated employee terminations incurred quarter entire 91 million restructuring charge recorded third quarter 2010 approximately 77 million charge related americas segment 13 million pertained emea segment remainder apac restructuring charge comprised following thousands reconciliation related accrued restructuring liability november 30 2010 follows also recorded 01 million restructuring credit second quarter 2010 2008 restructuring third quarter 2008 executed restructuring initiative primarily affected americas emea segments restructuring related expenses consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closure including noncash expenses related fixed asset leasehold improvement writeoffs legal expenses associated employee terminations incurred third quarter 2008 initiative undertaken realignment resources around regional organizational structure transform knowledgebased data accumulation operations ensure continuous improvement quality critical information insight deliver customers course restructuring reduced aggregate workforce approximately 7 eliminated certain contractor positions closed certain offices restructuring charge incurred entirety third quarter 2008 approximately 58 million charge related americas segment 59 million pertained emea segment 04 million related shared services majority liability paid 2008 remaining liability november 30 2008 10 million overaccrual 07 million reversed 2009 remaining balance substantially paid november 30 2009 5 accounts receivable accounts receivable balance consists following november 30 activity accounts receivable allowance consists following november 30 record allowances doubtful accounts probable accounts receivable balance collected amounts based upon management’s estimates historical collection trends 6 property equipment property equipment consists following november 30 depreciation expense approximately 187 million 151 million 136 million 2010 2009 2008 respectively 7 goodwill intangible assets following table presents details intangible assets goodwill november 30 estimated future amortization expense intangible assets follows amortization expense intangible assets 407 million 340 million 258 million years ended november 30 2010 2009 2008 respectively changes intangible assets 2009 2010 result acquisitions see note 3 foreign currency exchange rate fluctuations 8 debt january 5 2011 entered 1 billion syndicated bank credit facility consisting 300 million term loan 700 million revolver collectively credit facility borrowing credit facility unsecured loan revolver included credit facility fiveyear term ending january 2016 interest rates borrowing credit facility applicable libor plus 125 200 depending upon leverage ratio defined ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda defined credit facility commitment fee unused balance payable periodically ranges 020 035 based upon leverage ratio credit facility contains certain financial covenants including maximum leverage ratio maximum interest coverage ratio defined credit facility old revolving credit agreement retired immediately upon consummation new financing november 30 2010 still operating 2007 amended restated credit agreement revolver 385 million revolver allowed us certain conditions increase facility maximum 500 million agreement set expire september 2012 result new credit facility reclassified 275 million revolver debt november 30 2010 longterm debt 2010 balance sheet interest rates borrowing revolver based upon leverage ratio consolidated funded indebtedness rolling fourquarter consolidated ebitda defined revolver rate ranged applicable libor plus 050 125 agent bank’s base rate commitment fee payable periodically ranged 010 025 based upon leverage ratio revolver contained certain financial covenants including limitations capital lease obligations maximum leverage interest coverage ratios defined revolver november 30 2010 compliance covenants revolver 290 million outstanding borrowings annual interest rate 081 addition outstanding letters credit revolver totaling approximately 04 million november 30 2010 november 30 2010 also 39 million noninterest bearing notes issued sellers prime notes due upon demand therefore recorded shortterm debt 2010 2009 balance sheets 9 indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable 10 income taxes amounts income continuing operations income taxes noncontrolling interests us foreign jurisdictions follows years ended november 30 provision income tax expense benefit continuing operations years ended november 30 follows provision income taxes continuing operations recorded within consolidated statements operations differs provision determined applying us statutory tax rate pretax earnings result following years ended november 30 undistributed earnings foreign subsidiaries approximately 190 million november 30 2010 earnings considered indefinitely reinvested include earnings certain subsidiaries considered distributed accordingly provision us federal state income taxes provided undistributed earnings upon repatriation earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexities associated hypothetical calculation withholding taxes approximately 05 million would payable upon remittance previously unremitted earnings november 30 2010 significant components deferred tax assets liabilities november 30 november 30 2010 loss carryforwards totaling approximately 657 million comprised 468 million us net operating loss carryforwards 48 million us capitalloss carryforwards 141 million foreign loss carryforwards tax purposes available offset future taxable income used us net operating loss carryforwards begin expire 2013 us capital loss carryforwards expire 2012 foreign tax loss carryforwards generally may carried forward indefinitely us net operating loss carryforwards increased result isuppli acquisition losses begin expire 2018 subject prior section 382 limits well 382 limits result ihs acquisition losses deemed likely realizable recorded us capital loss incurred 2007 previously deferred loss stock investment realized believe realization deferred tax asset related us capital loss likely occur accordingly placed valuation allowance asset analyzed foreign net operating losses placed valuation allowances determined realization likely occur global insight foreign net operating losses acquisition date 267 million recorded purchase accounting 2009 november 30 2010 foreign tax credit ftc carryforwards approximately 15 million research development rd credit carryforwards approximately 01 million alternative minimum tax amt credit carryforwards approximately 31 million available offset future us tax liabilities used ftc carryforwards expire 2016 rd credit carryforwards expire 2026 2027 amt credit carryforwards may carried forward indefinitely believe likely realize rd ftc amt tax credit assets valuation allowance deferred tax assets decreased 06 million 2010 decrease allowance primarily due decrease allowance rd credits 04 million credits set expire utilized 2009 decrease us capital loss allowance 02 million portion capital loss used offset capital gains 2009 provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes december 1 2007 adopted fasb guidance income taxes prescribes recognition threshold measurement attribute financial statement recognition measurement tax position taken expected taken tax return pronouncement also provides guidance derecognition classification interest penalties accounting interim periods disclosure transition upon adoption recorded cumulative effect adjustment 14 million increase beginning retained earnings subsequent adoption include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes previously included interest penalties interest income expense income expense respectively summary activities associated reserve unrecognized tax benefits interest penalties follows november 30 2010 total amount unrecognized tax benefits 17 million 02 million related interest changes reserve unrecognized tax benefits associated current year tax positions primarily related uncertain tax filing requirements associated acquisition ihs global insight reasonably possible experience 02 million decrease reserve unrecognized tax benefits within next twelve months would experience decrease relation uncertainties associated closing statutes ihs subsidiaries file income tax returns us federal jurisdiction various state foreign jurisdictions tax years ihs significant subsidiaries remain subject examination follows 2004 2005 us tax returns amended november 2010 carry back portion capital loss tax years open examination items changed 11 comprehensive income loss 12 discontinued operations effective december 31 2009 sold small noncore south african business approximately 2 million gain loss sale business included building certain intellectual property exchange sale assets received two threeyear notes receivable one secured mortgage building secured pledge shares south african company december 2010 received payment full note secured mortgage building operating results discontinued operations three years ended november 30 follows 13 stockbased compensation november 30 2010 one sharebased compensation plan amended restated ihs inc 2004 longterm incentive plan described stockbased compensation expense three years ended november 30 follows total income tax benefit recognized income statement sharebased compensation arrangements three years ended november 30 follows stockbased compensation cost capitalized years ended november 30 2010 2009 2008 amended restated 2004 longterm incentive plan amended restated 2004 longterm incentive plan provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards 2004 directors stock plan subplan amended restated 2004 longterm incentive plan provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors shareholders authorized maximum 1125 million shares november 30 2010 number shares available future grant 22 million total compensation expense related nonvested awards share awards stock options yet recognized 787 million november 30 2010 weightedaverage recognition period approximately 12 years nonvested stock share awards typically vest six months four years share awards generally subject either cliff vesting graded vesting fair value nonvested stock based fair value common stock date grant amortize value share awards expense vesting period straightline basis 35 outstanding awards performancebased vesting provisions awards evaluation made quarter likelihood performance criteria met number shares expected vest increases decreases compensation expense adjusted reflect number shares expected vest cumulative vesting period met date additionally estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors summary status nonvested shares november 30 2010 changes year ended follows total fair value nonvested stock vested year ended november 30 2010 780 million based weightedaverage fair value vesting date 642 million based weightedaverage fair value grant date stock options option awards generally granted exercise price equal fair market value stock date grant outstanding options fully vested november 30 2010 8year contractual terms options granted years ended november 30 2010 2009 2008 following table summarizes changes outstanding stock options years ended november 30 2010 2009 2008 well options vested expected vest stock options exercisable november 30 2010 2009 aggregate intrinsic value amounts table represent difference closing prices common stock november 30 2009 2010 5028 7232 respectively exercise price multiplied number inthemoney stock options date represents amounts would received stock option holders exercised stock options respective yearend date future periods intrinsic value change depending fluctuations stock price total intrinsic value stock options exercised year ended november 30 2010 11 million 14 employee retirement benefits defined benefit plans sponsor noncontributory definedbenefit retirement plan us rip us employees least one year service also definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom also unfunded supplemental income plan sip nonqualified pension plan certain company personnel benefits three plans generally based years service either average cumulative base compensation plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees 2010 company approved plan design change us rip effective march 1 2011 change considered prospective plan amendment pursuant existing pension accounting guidance accordingly reflected modification us rip within november 30 2010 balance sheet resulted 53 million reduction liability amortized remaining average future working lifetime employee group approximately six years 2010 also made decision discontinue future benefit accruals uk rip resulted 08 million reduction liability curtailment total definedbenefit pensionplan income expense 67 million 05 million 17 million years ending november 30 2010 2009 2008 respectively us rip uk rip plan assets consist primarily equity securities smaller holdings bonds alternative assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rip’s established investment policy seeks balance need maintain viable productive capital base yet achieve investment results superior actuarial rate consistent funds’ investment objectives uk rip’s established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following compares target asset allocation percentages beginning 2010 actual asset allocations end 2010 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis expect contribute approximately 17 million uk rip approximately 07 million sip 2011 expect make contributions us rip 2011 following table provides expected benefit payments pension plans following represents net periodic pension income expense changes projected benefit obligation plan assets funded status pension plans follows ihs global insight funded defined benefit pension plan certain former employees located uk according recently available actuarial report plan average annual pension amounts less 01 million plan closed new entrants future accruals result plan 15 million recorded pension liability final purchase price allocation amortization amounts expected recognized net periodic pension postretirement expense income fiscal year ending november 30 2011 pretax pension expense income actuarially calculated annually based data available beginning year determine expected return plan assets multiplying expected longterm rate return assets marketrelated value plan assets marketrelated value plan assets calculated value recognizes investment gains losses fair value five years assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 fair value measurements financial instruments included plan assets carried fair value november 30 2010 measured fair value recurring basis classified follows level 1 inputsquoted prices unadjusted identical assets liabilities active markets accessible measurement date level 1 consists equity securities fixed income securities 1358 million level 2 inputsinputs quoted prices within level 1 observable either directly indirectly including limited quoted prices markets active quoted prices active markets similar assets liabilities observable inputs quoted prices interest rates yield curves level 2 consists collective trust funds holding equity securities fixed income securities 962 million level 3 inputsunobservable inputs reflecting assumptions market participants would use pricing asset liability including assumptions risk level 3 consists investment real estate fund 101 million defined contribution plan employees certain subsidiaries may participate defined contribution plans benefit expense relating plans approximately 69 million 54 million 51 million 2010 2009 2008 respectively 15 postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees leave ihs age 55 least 10 years service additionally ihs subsidizes cost coverage retireemedical coverage certain grandfathered employees ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 ihs provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 55 59 75 november 30 2010 2009 2008 respectively net periodic postretirement expense income changes related projected benefit obligation follows 1 amended plan 2006 plan amended limit benefits paid future healthcare costs ihs longer subsidizes cost coverage retireemedical coverage certain employees grandfathered ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility change resulted 159 million negative plan amendment amortized period time resulting net periodic postretirement benefit income 2006 2011 employer contributions postretirement benefit plan expected paid year ending november 30 2011 approximately 09 million following table provides expected cash outflows postretirement benefit plan thousands onepercentagepoint change assumed healthcarecosttrend rates would effect service cost interest cost postretirement benefit obligation november 30 2010 ihs subsidy capped 16 common stock earnings per share november 30 2010 authorized capital stock consisted 160000000 shares class common stock increased number authorized shares 80000000 shares 160000000 shares may 6 2010 result shareholder approval increase prior september 18 2008 authorized capital stock consisted 80000000 shares class common stock 13750000 shares class b common stock classes equal dividend rights liquidation rights however holders class common stock entitled one vote per share holder class b common stock entitled ten votes per share matters voted upon shareholders share class b common stock convertible time option holder one share class common stock september 18 2008 holder 13750000 shares class b common stock converted shares 13750000 class common shares exchange conversion number allowable demand registrations available shareholder increased two four weighted average common shares outstanding calculated follows share buyback program 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal statutory tax liability ihs pays statutory tax behalf employee additionally board directors periodically approves additional buyback programs whereby ihs acquires shares open market fully offset dilutive effect employee equity programs year ended november 30 2010 accepted 484648 shares surrendered employees tax withholding program approximately 264 million 5457 per share shares repurchased 2010 2009 pursuant share buyback program 17 longterm leases commitments contingencies rental charges 2010 2009 2008 approximated 275 million 293 million 212 million respectively minimum rental commitments noncancelable operating leases effect november 30 2010 follows thousands outstanding letters credit bank guarantees aggregate amount approximately 21 million 24 million november 30 2010 2009 respectively time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition 18 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 cash equivalents amounting approximately 2007 million 1242 million reflected consolidated balance sheets november 30 2010 2009 respectively maintained primarily us dollars canadian dollars british pounds euros subject fluctuations current exchange rate 19 segment information prepare financial reports analyze business results within three reportable geographic segments americas emea apac 2008 reorganized management structure geographic focus point contact customers new integrated global organization makes easier customers business us providing cohesive consistent effective sales marketing approach region structuring business around geographic segments able tailor expand solutions offer meet unique needs customers globally local markets also able manage activities according best practices structure provides solid foundation growth market capabilities allows us efficient method bringing new products services customers supports growth existing accounts new customers markets apac operations evolved management structure region also evolved going forward include responsibility overseeing india accordingly 2011 india moved emea region apac region information operations three segments set forth based nature offerings chairman chief executive officer represents chief operating decision maker evaluates segment performance based primarily revenue operating profit three segments addition also reviews revenue domains transaction types accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 total revenue year ended november 30 2010 material intersegment revenues period presented shown certain corporate transactions allocated reportable segments amounts allocated include limited items stockbased compensation expense net periodic pension postretirement benefits expense corporatelevel impairments gain loss sales corporate assets goodwill rollforward follows revenue transaction type follows revenue information domain follows 20 quarterly results operations unaudited following summarizes certain quarterly results operations item 9 item 8 financial statements supplementary data index consolidated financial statements report independent registered public accounting firm board directors stockholders ihs inc audited accompanying consolidated balance sheets ihs inc company november 30 2012 2011 related consolidated statements operations comprehensive income changes stockholders equity cash flows three years period ended november 30 2012 consolidated financial statements responsibility companys management responsibility express opinion consolidated financial statements based audits conducted audits accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether financial statements free material misstatement audit includes examining test basis evidence supporting amounts disclosures financial statements audit also includes assessing accounting principles used significant estimates made management well evaluating overall financial statement presentation believe audits provide reasonable basis opinion financial statements referred present fairly material respects consolidated financial position ihs inc november 30 2012 2011 consolidated results operations cash flows three years period ended november 30 2012 conformity us generally accepted accounting principles also audited accordance standards public company accounting oversight board united states ihs incs internal control financial reporting november 30 2012 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission report dated january 18 2013 expressed unqualified opinion thereon ernst young denver colorado january 18 2013 management’s report internal control financial reporting management responsible establishing maintaining adequate internal control financial reporting term defined exchange act rules 13a15f 15d15f supervision participation management including chief executive officer chief financial officer conducted evaluation effectiveness internal control financial reporting november 30 2012 based framework internal controlintegrated framework issued committee sponsoring organizations treadway commission coso based evaluation management concluded internal control financial reporting effective november 30 2012 independent registered public accounting firm issued audit report internal control financial reporting report appears following page inherent limitations internal control financial reporting may prevent detect misstatements therefore even systems determined effective provide reasonable assurance respect financial statement preparation presentation date january 18 2013 jerre l stead jerre l stead chairman chief executive officer todd hyatt todd hyatt senior vice president chief financial officer report independent registered public accounting firm internal control financial reporting board directors stockholders ihs inc audited ihs incs internal control financial reporting november 30 2012 based criteria established internal controlintegrated framework issued committee sponsoring organizations treadway commission coso criteria ihs incs management responsible maintaining effective internal control financial reporting assessment effectiveness internal control financial reporting included accompanying managements report internal control financial reporting responsibility express opinion companys internal control financial reporting based audit conducted audit accordance standards public company accounting oversight board united states standards require plan perform audit obtain reasonable assurance whether effective internal control financial reporting maintained material respects audit included obtaining understanding internal control financial reporting assessing risk material weakness exists testing evaluating design operating effectiveness internal control based assessed risk performing procedures considered necessary circumstances believe audit provides reasonable basis opinion companys internal control financial reporting process designed provide reasonable assurance regarding reliability financial reporting preparation financial statements external purposes accordance generally accepted accounting principles companys internal control financial reporting includes policies procedures 1 pertain maintenance records reasonable detail accurately fairly reflect transactions dispositions assets company 2 provide reasonable assurance transactions recorded necessary permit preparation financial statements accordance generally accepted accounting principles receipts expenditures company made accordance authorizations management directors company 3 provide reasonable assurance regarding prevention timely detection unauthorized acquisition use disposition companys assets could material effect financial statements inherent limitations internal control financial reporting may prevent detect misstatements also projections evaluation effectiveness future periods subject risk controls may become inadequate changes conditions degree compliance policies procedures may deteriorate opinion ihs inc maintained material respects effective internal control financial reporting november 30 2012 based coso criteria also audited accordance standards public company accounting oversight board united states consolidated balance sheets ihs inc november 30 2012 2011 related consolidated statements operations comprehensive income changes stockholders equity cash flows three years period ended november 30 2012 report dated january 18 2013 expressed unqualified opinion thereon ernst young denver colorado january 18 2013 ihs inc consolidated balance sheets thousands except share pershare amounts see accompanying notes ihs inc consolidated statements operations thousands except pershare amounts see accompanying notes ihs inc consolidated statements comprehensive income thousands ihs inc consolidated statements cash flows thousands see accompanying notes ihs inc consolidated statement changes stockholders’ equity thousands see accompanying notes ihs inc notes consolidated financial statements 1 nature business leading source information insight analytics critical areas shape todays business landscape businesses governments 165 countries around globe rely comprehensive content expert independent analysis flexible delivery methods make highimpact decisions develop strategies speed confidence business since 1959 became publicly traded company new york stock exchange 2005 headquartered englewood colorado usa committed sustainable profitable growth employ 6000 people 31 countries around world organized business around customers geographies reside americas emea apac integrated global organization makes easier customers business us providing cohesive consistent effective salesandmarketing approach local geography sell offerings primarily subscriptions tend generate recurring revenue cash flow us subscriptions usually oneyear periods historically seen high renewal rates subscriptions generally paid full within one two months subscription period commences result timing cash flows generally precedes recognition revenue income business seasonal aspects fourth quarter typically generates highest quarterly levels revenue profit conversely first quarter generally lowest levels revenue profit also experience eventdriven seasonality business instance ihs ceraweek annual energy executive gathering held second quarter another example triennial release boiler pressure vessel code bpvc engineering standard generates revenue us predominantly third quarter every third year bpvc benefit recently occurred third quarter 2010 2 significant accounting policies fiscal year end fiscal year ends november 30 year references herein individual years mean year ended november 30 example 2012 means year ended november 30 2012 consolidation policy consolidated financial statements include accounts whollyowned subsidiaries significant intercompany accounts transactions eliminated consolidation use estimates preparation financial statements conformity us generally accepted accounting principles requires make estimates assumptions affect reported amounts assets liabilities disclosure contingent assets liabilities date financial statements well reported amounts revenues expenses reporting period significant estimates made areas include revenue recognition valuation longlived intangible assets goodwill income taxes pension postretirement benefits stockbased compensation actual results could differ estimates concentration credit risk exposed credit risk associated cash equivalents foreign currency interest rate derivatives trade receivables believe cash equivalents investments present significant credit risks counterparties instruments consist major financial institutions financially sound capitalized us government manage notional amount contracts entered counterparty substantially trade receivable balances unsecured concentration credit risk respect trade receivables limited large number customers customer base dispersion across various industries geographic areas perform ongoing credit evaluations customers maintain allowance probable credit losses allowance based upon management’s assessment known credit risks well general industry economic conditions specific accounts receivable written upon notification bankruptcy determined account significantly past due collection efforts unsuccessful fair value financial instruments carrying values financial instruments including cash accounts receivable accounts payable shortterm longterm debt approximate fair value financial instruments included pension plan assets stated fair value categorized following fair value hierarchy level 1 quoted prices unadjusted identical assets liabilities active markets accessible measurement date level 2 inputs quoted prices within level 1 observable either directly indirectly including limited quoted prices markets active quoted prices active markets similar assets liabilities observable inputs quoted prices interest rates yield curves level 3 unobservable inputs reflecting assumptions market participants would use pricing asset liability including assumptions risk revenue recognition revenue recognized following criteria met persuasive evidence arrangement exists b delivery occurred services rendered c price customer fixed determinable collectibility reasonably assured majority revenue derived sale subscriptions initially deferred recognized ratably delivered subscription period generally 12 months revenue recognized upon delivery nonsubscription sales certain locations use dealers distribute critical information insight revenue products sold dealers recognized follows • subscription offerings revenue recognized ratably delivered end user subscription period •for nonsubscription offerings revenue recognized upon delivery dealer defer revenue limited number sales subscriptions act sales agent third parties continuing responsibility maintain update underlying database recognize revenue net basis upon sale subscriptions delivery information tools services provide customers service offerings primarily sold standalone basis significantly limited basis part multipleelement arrangement service offerings generally separately priced standard price book services standard price book price varies based nature complexity service offering pricing based estimated amount time incurred standard billing rates estimated underlying effort executing associated deliverable contract revenue related services performed timeandmaterialbased contracts recognized period performed standard billing rates revenue associated fixedprice contracts recognized upon completion specified performance obligation proportionally based upon performance progress terms contract see discussion “multipleelement arrangements” contract includes acceptance contingencies revenue recognized period receive documentation acceptance customer software continue increase sales software products maintenance contracts addition meeting standard revenue recognition criteria described software license revenue must also meet requirement vendorspecific objective evidence “vsoe” fair value undelivered elements exists significant portion software licenses sold multipleelement arrangements include either maintenance limited circumstances maintenance professional services use residual method determine amount license revenue recognized residual method consideration allocated undelivered elements based upon vsoe fair value elements residual arrangement fee allocated recognized license revenue recognize license revenue upon delivery maintenance revenue recognized ratably maintenance period established vsoe fair value maintenance independent maintenance renewals demonstrate consistent relationship pricing maintenance percentage discounted undiscounted license list price vsoe fair value professional services established based daily rates sold standalone basis multipleelement arrangements occasionally may execute contracts customers contain multiple offerings business multipleelement arrangements refer contracts separate fees subscription offerings decisionsupport tools maintenance andor related services established separate units accounting offering primarily sold standalone basis using relative selling price method element arrangement allocated based generally standalone sales products services constitutes vsoe selling price use factors inputs assumptions methods determine estimated selling price recognize elements contract follows • subscription offerings license fees recognized ratably license period long associated licensing period future obligation otherwise revenue recognized upon delivery • nonsubscription offerings multipleelement arrangement revenue generally recognized element period delivery product customer occurs completion services occurs postcontract support ratably term maintenance period • instances customer acceptance required consulting services rendered transactions service revenue component arrangement recognized period customer acceptance obtained cash equivalents consider highly liquid investments purchased original maturity three months less cash equivalents cash equivalents carried cost approximates fair value deferred subscription costs deferred subscription costs represent royalties commissions associated customer subscriptions costs deferred amortized expense period subscriptions property equipment land buildings improvements machinery equipment stated cost depreciation recorded using straightline method estimated useful lives assets follows leasehold improvements depreciated estimated useful life lease whichever shorter maintenance repairs renewals minor nature expensed incurred betterments major renewals extend useful lives buildings improvements equipment capitalized also capitalize certain internaluse software development costs accordance applicable accounting principles leases certain circumstances enter leases free rent periods rent escalations term lease cases calculate total payments term lease record ratably rent expense term identifiable intangible assets goodwill account business acquisitions using purchase method accounting allocate total cost acquisition underlying net assets based respective estimated fair values part allocation process must identify attribute values estimated lives intangible assets acquired evaluate intangible assets goodwill impairment least annually well whenever events changes circumstances indicate carrying amounts may recoverable impairments expensed incurred finitelived intangible assets identifiable intangible assets finite lives generally amortized straightline basis respective lives follows indefinitelived intangible assets beginning 2012 performing impairment test indefinitelived intangible assets consist trade names perpetual licenses first conduct qualitative analysis determine whether believe likely asset impaired believe impairment occurred evaluate impairment comparing amount carrying value asset exceeds fair value impairment charge recognized asset’s estimated fair value less carrying value estimate fair value based relief royalty method using projected discounted future cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values use different estimates assumptions within discounted cash flow model determining fair value indefinitelived intangible assets using methodology discounted cash flow model could result different values indefinitelived intangible assets could result impairment charge goodwill test goodwill impairment reporting unit level reporting unit group businesses discrete financial information available ii similar economic characteristics test goodwill impairment using following twostep approach •we first determine fair value reporting unit fair value reporting unit less carrying value indicator goodwill assigned reporting unit might impaired requires performance second step determine fair value reporting units based projected future discounted cash flows turn based views uncertain variables growth rates anticipated future economic conditions appropriate discount rates relative risk estimates residual values deficiencies reporting unit fair values versus carrying values fiscal years ended november 30 2012 2011 2010 •if necessary second step allocate fair value reporting unit assets liabilities reporting unit acquired business combination purchase price equivalent fair value reporting unit excess fair value reporting unit amounts assigned assets liabilities referred implied fair value goodwill compare implied fair value reporting unit’s goodwill carrying value goodwill implied fair value less carrying value recognize impairment loss deficiency income taxes deferred income taxes provided using tax rates enacted periods expected reversal temporary differences temporary differences relate differences book tax basis assets liabilities principally intangible assets property equipment deferred revenue pension postretirement benefits accruals stockbased compensation valuation allowances established reduce deferred tax assets amount likely realized extent determination made establish adjust valuation allowance expense benefit recorded period determination made judgment required determining worldwide provision income taxes additionally income tax provision based calculations assumptions subject examination many different tax authorities changes tax law rates many jurisdictions adjust income tax provision period becomes probable actual results differ estimates pension postretirement benefits fourth quarter fiscal year upon remeasurement date immediately recognize net actuarial gains losses excess corridor operating results corridor amount equivalent 10 greater marketrelated value plan assets plans benefit obligation beginning year use actual fair value plan assets measurement date measure marketrelated value plan assets treasury stock ihs stock retention buyback programs transactions utilize cost method accounting employ weightedaverage cost method inventory costing method treasury stock transactions earnings per share basic eps computed dividing net income weighted average number common shares outstanding period diluted eps computed using weighted average number common shares dilutive potential common shares outstanding period diluted eps reflects potential dilution could occur securities exercised converted common shares foreign currency functional currency foreign subsidiaries typically subsidiary’s local currency assets liabilities translated periodend exchange rates income expense items translated weighted average rates exchange prevailing year translation adjustments included comprehensive income transactions executed different currencies resulting exchange adjustments translated spot rates resulting foreignexchangetransaction gains losses included results operations utilize forwardcontract instruments manage market risks associated fluctuations certain foreigncurrency exchange rates relate specific balances accounts notes receivable payable denominated foreign currencies end reporting period nonfunctional foreigncurrencydenominated receivable cash balances remeasured functional currency reporting entities current market rates change value remeasurement reported foreign exchange gain loss period income accompanying consolidated statements operations resulting gains losses forward foreign currency contracts described also included income mitigate exchange rate risk associated assets impairment longlived assets review carrying amounts longlived assets determine whether current events circumstances indicate value may impaired longlived asset finite life considered impaired carrying value exceeds estimated future undiscounted cash flows derived impairment measured amount carrying value assets exceeds fair value primarily based estimated discounted cash flows considerable management judgment necessary estimate fair value assets disposed carried lower financial statement carrying amount fair value less cost sell stockbased compensation stockbased payments employees recognized income statement based fair values addition estimate forfeitures grant date compensation cost recognized based number awards expected vest adjustments future periods actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors amortize value stockbased awards expense vesting period straightline basis awards performance conditions evaluate probability number shares expected vest compensation expense adjusted reflect number shares expected vest cumulative vesting period met date recent accounting pronouncements june 2011 fasb issued guidance presentation comprehensive income effective us first quarter 2013 however early adoption permitted new guidance entity option present total comprehensive income components net income components comprehensive income either single continuous statement comprehensive income two separate consecutive statements guidance change components must reported comprehensive income item comprehensive income must reclassified net income elected adopt new guidance fourth quarter 2012 chosen use two separate consecutive statements approach presentation comprehensive income september 2011 fasb issued guidance testing goodwill impairment become effective us first quarter 2013 however early adoption permitted new guidance entity option first assess qualitative factors determine whether existence events circumstances leads determination likely fair value reporting unit less carrying amount entity determines threshold met performing twostep impairment test unnecessary currently evaluating whether elect use new qualitative approach impairment testing july 2012 fasb issued guidance testing indefinitelived intangible assets impairment effective us first quarter 2013 however early adoption permitted new guidance permits entity first assess qualitative factors determine whether likely indefinitelived intangible asset impaired basis determining whether necessary perform quantitative impairment test elected adopt new qualitative approach impairment testing fourth quarter 2012 applying annual impairment test 2012 adoption standard impact consolidated financial statements 3 business combinations year ended november 30 2012 completed following acquisitions announced march 5 2012 march 5 2012 announced acquisition displaybank co ltd global authority market research consulting flatpanel display industry computer assisted product selection caps™ electronic components database tools business including caps expert partminer worldwide combined purchase price businesses approximately 40 million expect displaybank deepen asia pacific research analysis capabilities caps family products significantly enhance existing electronic parts information business ims group holdings ltd ims research march 22 2012 acquired ims research leading independent provider market research consultancy global electronics industry approximately 44 million cash net cash acquired acquisition ims research help us expand products services technology media telecommunications value chain expect better position us deliver robust product offering customers global technology marketplace bdw automotive gmbh bdw march 29 2012 acquired bdw leader development information planning systems intelligent processing vehicle databases automotive industry approximately 7 million net cash acquired expect acquisition significantly expand capabilities automotive dealer aftermarket data systems market xēdar corporation xēdar may 11 2012 acquired xēdar approximately 28 million cash net cash acquired xēdar leading developer provider geospatial information products services expect xēdar’s proprietary geographic land information system solutions provide valuable contribution energy technical information analytical tools cyberregs july 2 2012 acquired cyberregs business citation technologies inc approximately 11 million cash cyberregs business designed help customers make business decisions regulatory compliance enterprise sustainability management expect acquisition allow customers reduce system workflow complexity reducing number vendors rely support strategies enterprise sustainability management globalspec inc globalspec july 9 2012 acquired globalspec leading specialized vertical search product information digital media company serving engineering manufacturing related scientific technical market segments warburg pincus llc 136 million net cash acquired believe acquisition globalspec inc allow us improve product design portfolio create expanded destination products services invention machine july 11 2012 acquired invention machine leader semantic search technology uncovers relevant insights held within wealth internal external knowledge sources approximately 40 million net cash acquired expect use invention machines semantic search engine help customers accelerate innovation develop maintain produce superior products services following table summarizes purchase price allocation net acquired cash acquisitions completed 2012 thousands 2011 completed following acquisitions among others odspetrodata holdings ltd odspetrodata april 16 2011 acquired odspetrodata approximately 75 million cash net cash acquired odspetrodata premier provider data information market intelligence offshore energy industry expect odspetrodata products services extend offerings upstream energy sector provision high quality data research across range critical highvalue offshore markets drilling rigs marine seismic vessels field development operations dyadem international ltd dyadem april 26 2011 acquired dyadem approximately 49 million cash net cash acquired dyadem market leader operational risk management quality risk management solutions expect acquisition dyadem provide customers software solutions help achieve regulatory compliance business continuity chemical market associates inc cmai may 2 2011 acquired cmai approximately 73 million cash net cash acquired cmai leading provider market business advisory services worldwide petrochemical specialty chemicals fertilizer plastics fibers chloralkali industries expect cmai’s comprehensive information analysis add eventdriven supplychain information strategy cmais price discovery analysis business broaden commodities cost information capabilities seismic microtechnology smt august 10 2011 acquired smt approximately 502 million cash net cash acquired smt global leader windowsbased exploration production software solutions used geoscientists worldwide evaluate potential reservoirs plan field development result acquisition expect provide robust valuable integrated solution set information software insight support energy customers worldwide purvin gertz november 10 2011 acquired purvin gertz approximately 29 million cash net cash acquired purvin gertz wellestablished global advisory market research firm provides technical commercial strategic advice international clients petroleum refining natural gas natural gas liquids crude oil petrochemical industries expect acquisition enhance focused actionable analysis deep industry knowledge product service portfolio critical senior executives key decision makers following table summarizes purchase price allocation net acquired cash acquisitions completed 2011 thousands 2010 completed following acquisitions emerging energy research llc eer february 10 2010 acquired eer approximately 18 million net cash acquired eer leading advisory firm whose mission help clients understand leverage exploit technological regulatory competitive trends global emerging energy sector csm worldwide inc csm march 17 2010 acquired csm approximately 25 million net cash acquired csm leading automotive market forecasting firm dedicated providing automotive suppliers market information production power train sales forecasting trusted automotive market forecasting services strategic advisory solutions world’s top automotive manufacturers suppliers financial organizations quantitative micro software llc qms may 5 2010 acquired qms approximately 40 million net cash acquired qms worldwide leader windowsbased econometric forecasting software applications access intelligence september 7 2010 acquired certain chemical energy portfolio business assets access intelligence approximately 79 million net cash acquired purchased businesses order extend breadth information available current ihs energy customers support development additional products services broad range industries along supply chain atrion international inc atrion september 22 2010 acquired atrion approximately 56 million net cash acquired atrion company combines regulatory expertise industryleading technology streamline generation management distribution hazardous materials communication documents reports syntex management systems inc syntex september 22 2010 acquired syntex approximately 23 million net cash acquired syntex leading provider operational risk management software services help companies ensure health safety workers protecting environment managing costs isuppli inc isuppli november 19 2010 acquired isuppli approximately 94 million net cash acquired isuppli global leader technology value chain research advisory services transaction also included screen digest limited leading digital media technology research company recently acquired isuppli following table summarizes purchase price allocation net acquired cash acquisitions completed 2010 thousands 4 accounts receivable accounts receivable balance consists following november 30 2012 2011 thousands record accounts receivable allowance probable accounts receivable balance collected amounts comprising allowance based upon management’s estimates historical collection trends activity accounts receivable allowance consists following years ended november 30 2012 2011 2010 respectively thousands 5 property equipment property equipment consists following november 30 2012 2011 thousands depreciation expense approximately 361 million 238 million 187 million years ended november 30 2012 2011 2010 respectively 6 intangible assets following table presents details intangible assets goodwill thousands intangible asset amortization expense 821 million 642 million 407 million years ended november 30 2012 2011 2010 respectively estimated future amortization expense related intangible assets held november 30 2012 follows changes intangible assets 2012 2011 primarily result acquisitions see note 3 lesser extent foreign currency exchange rate fluctuations 7 derivatives april june 2011 mitigate interest rate exposure outstanding credit facility debt entered two interest rate derivative contracts effectively swap 100 million floating rate debt fixed rate debt 330 weighted average interest rate includes current credit facility spread interest rate swaps expire july 2015 terms swaps variable rate debt coincide expect ineffectiveness designated accounted instruments cash flow hedges changes fair value deferred accumulated comprehensive loss consolidated balance sheets since swaps listed exchange evaluated fair value reference similar transactions active markets consequently classified swaps within level 2 fair value measurement hierarchy november 30 2012 fair market value swaps liability 36 million current marktomarket loss position recorded liabilities consolidated balance sheets 8 debt august 29 2012 exercised expansion feature syndicated bank credit agreement credit facility increase borrowing capacity revolver 10 billion also increased term loan borrowings credit facility 513 million borrowings credit facility unsecured loan revolver included credit facility fiveyear term ending january 2016 interest rates borrowings credit facility applicable libor plus 100 175 depending upon leverage ratio defined ratio consolidated funded indebtedness rolling fourquarter consolidated earnings interest expense taxes depreciation amortization ebitda defined credit facility commitment fee unused balance payable periodically ranges 015 030 based upon leverage ratio credit facility contains certain financial covenants including maximum leverage ratio maximum interest coverage ratio defined credit facility august 29 2012 also entered new 250 million interestonly term loan agreement loan twoandahalf year term ending march 2015 borrowings loan unsecured interest borrowing term loan well certain financial covenants including maximum leverage ratio maximum interest coverage ratio identical existing credit facility term loan november 30 2012 compliance covenants credit facility approximately 310 million outstanding borrowings revolver current annual interest rate 175 approximately 749 million outstanding borrowings term loans current weighted average annual interest rate 177 classified 193 million revolver borrowings longterm 117 million shortterm based upon current estimate expected repayments next twelve months shortterm debt also includes 53 million scheduled term loan principal repayments next twelve months approximately 05 million outstanding letters credit facility november 30 2012 maturities outstanding borrowings term loans november 30 2012 follows thousands debt november 30 2012 also included approximately 1 million noninterest bearing notes issued sellers prime publications limited prime company purchased 2008 notes due upon demand therefore recorded shortterm debt consolidated balance sheets november 30 2011 operating credit facility november 30 2012 albeit lower total capacity also approximately 2 million noninterest bearing notes associated prime acquisition date 9 restructuring charges net restructuring charges 168 million 12 million 90 million years ended november 30 2012 2011 2010 respectively restructuring charges described third quarter 2010 announced various plans streamline operations merge functions result reduced aggregate workforce approximately 3 consolidated several locations changes primarily affected americas emea segments restructuring charge recorded 2010 consisted direct incremental costs associated restructuring related activities including severance outplacement employee related benefits facility closures relocations legal expenses associated employee terminations incurred quarter entire 91 million restructuring charge recorded third quarter 2010 offset 01 million restructuring credit second quarter 2010 approximately 77 million charge related americas segment 13 million pertained emea segment remainder apac second quarter 2011 recorded additional 07 million net restructuring costs americas segment represented revision third quarter 2010 estimate cost exit space one facilities partially offset favorable resolution employee severance costs fourth quarter 2011 recorded 05 million restructuring charges severance costs associated consolidation positions emea segment recently established accounting customer care centers excellence locations 2012 continued consolidate positions centers excellence locations complete successive vanguard releases well eliminating positions accomplish operational efficiencies also began consolidating legacy data centers 2012 including certain contract termination costs recorded approximately 168 million restructuring charges direct incremental costs associated activities included movement elimination approximately 271 positions total charge approximately 134 million charge recorded americas segment approximately 30 million recorded emea segment approximately 04 million recorded apac segment expect continue incur costs related similar activities future periods resulting additional restructuring charges following table shows restructuring activity provides reconciliation restructuring liability november 30 2012 thousands excludes 01 million restructuring credit discussed november 30 2012 approximately 36 million remaining liability americas segment approximately 10 million emea segment approximately 01 million apac segment entire 47 million expected paid 2013 10 acquisitionrelated costs year ended november 30 2011 incurred approximately 80 million costs complete acquisitions leverage synergies recent business combinations result activities eliminated approximately 40 positions closed one acquired offices changes affected americas emea segments year ended november 30 2012 incurred approximately 41 million direct incremental costs associated recent acquisitions including legal professional fees elimination certain positions facility closure substantially costs incurred within americas segment following table provides reconciliation acquisitionrelated costs accrued liability november 30 2012 thousands november 30 2012 remaining 07 million liability americas segment expected paid 2013 11 discontinued operations effective december 31 2009 sold small noncore south african business approximately 2 million gain loss sale business included building certain intellectual property exchange sale assets received two threeyear notes receivable one secured mortgage building second secured pledge shares south african company december 2010 received full payment note receivable secured mortgage building fourth quarter 2011 discontinued operations small printandadvertising business focused narrow declining market abandonment business included certain intellectual property also discontinued minor governmentservices business period operating results discontinued operations years ended november 30 2012 2011 2010 respectively follows thousands 12 income taxes amounts income continuing operations income taxes us foreign jurisdictions years ended november 30 2012 2011 2010 respectively follows thousands provision income tax expense benefit continuing operations years ended november 30 2012 2011 2010 respectively follows thousands following table presents reconciliation provision income taxes us statutory tax rate years ended november 30 2012 2011 2010 respectively thousands undistributed earnings foreign subsidiaries approximately 3713 million november 30 2012 earnings considered indefinitely reinvested include earnings certain subsidiaries considered distributed accordingly provision us federal state income taxes provided earnings repatriate earnings form dividends otherwise would subject us income taxes subject adjustment foreign tax credits withholding taxes payable various foreign countries determination amount unrecognized deferred us income tax liability practicable due complexity associated hypothetical calculation significant components deferred tax assets liabilities november 30 2012 2011 follows thousands november 30 2012 loss carryforwards tax purposes totaling approximately 1154 million comprised 1017 million us net operating loss carryforwards 137 million foreign loss carryforwards available offset future taxable income used us net operating loss carryforwards begin expire 2018 foreign tax loss carryforwards generally may carried forward indefinitely us net operating loss carryforwards increased result acquisitions analyzed foreign net operating losses placed valuation allowances determined realization likely occur november 30 2012 approximately 28 million foreign tax credit ftc carryforwards approximately 06 million research development rd credit carryforwards available offset future us tax liabilities used ftc carryforwards expire 2016 2022 rd credit carryforwards expire 2026 2027 believe likely realize ftc rd tax credit assets valuation allowance deferred tax assets decreased 14 million 2012 decrease primarily attributable realization deferred tax asset related us capital loss carryforward provided believe appropriate amount tax items involve interpretation tax law however events may occur future cause us reevaluate current reserves may result adjustment reserve taxes summary activities associated reserve unrecognized tax benefits interest penalties follows thousands november 30 2012 total amount unrecognized tax benefits 28 million 06 million related interest penalties include accrued interest accrued penalties related amounts accrued unrecognized tax benefits provision income taxes entire amount unrecognized benefits november 30 2012 may affect annual effective tax rate benefits eventually recognized reasonably possible experience 11 million decrease reserve unrecognized tax benefits within next twelve months would experience decrease relation uncertainties associated closing statutes subsidiaries file federal state local income tax returns multiple jurisdictions around world exceptions longer subject income tax examinations tax authorities years 2008 13 pensions postretirement benefits defined benefit plans sponsor noncontributory closed definedbenefit retirement plan us rip us employees least one year service also frozen definedbenefit pension plan uk rip covers certain employees subsidiary based united kingdom also unfunded supplemental income plan sip nonqualified pension plan certain us employees earn federally stipulated amount benefits three plans generally based years service either average cumulative base compensation plan funding strategies influenced employee benefit laws tax laws uk rip includes provision employee contributions inflationbased benefit increases retirees 2010 approved plan design change us rip effective march 1 2011 change considered prospective plan amendment pursuant existing pension accounting guidance accordingly reflected modification us rip within november 30 2010 balance sheet resulted 53 million reduction liability amortized remaining average future working lifetime employee group approximately six years 2010 also made decision discontinue future benefit accruals uk rip resulted 08 million reduction liability curtailment 2011 made number changes us rip strategy settled retiree obligations purchasing annuities retiree population thirdparty insurer resulted significant reduction overall plan liability changed pension plan investment strategy better match remaining pension assets remaining pension obligations accelerated plan funding contributing approximately 65 million plan december 2011 first month fiscal 2012 approximately 57 million contribution allowed us bring deficit funding current november 30 2011 pay fees expenses associated thirdparty annuity contracts remaining 8 million used fund estimated 2012 pension costs first quarter fiscal 2012 also made decision close us rip new participants effective january 1 2012 place us rip benefits colleagues hired january 1 2012 receive company nonelective contribution 401k plan balances active employee end year fiscal 2012 offered lumpsum buyouts former colleagues yet receiving benefits payout associated lumpsum offers accounted settlement december 2012 first month fiscal 2013 contributed approximately 10 million us rip fund estimated 2013 pension costs november 30 2012 us rip plan assets consist primarily fixedincome securities moderate amount equity securities employed similar investment strategy november 30 2011 uk rip plan assets consist primarily equity securities smaller holdings bonds assets equity assets diversified international domestic investments additional diversification domestic category allocations largecap midcap growth value investments us rip’s established investment policy seeks align expected rate return discount rate allowing equity variability allow upside market potential would strengthen overall asset position plan uk rip’s established investment policy match liabilities active deferred members equity investments match liabilities pensioner members fixedincome investments asset allocations subject ongoing analysis possible modification basic capital market conditions change time interest rates inflation etc following table compares target asset allocation percentages actual asset allocations end 2012 investment return assumptions plans determined obtaining independent estimates expected longterm rates return asset class applying returns assets weightedaverage basis discussed contributed approximately 100 million us rip early fiscal 2013 expect contribute 18 million uk rip 07 million sip 2013 following table provides expected benefit payments pension plans thousands net periodic pension expense income pension plans comprised following thousands changes projected benefit obligation plan assets funded status pension plans follows thousands pretax amortization amounts expect recognize net periodic pension postretirement expense fiscal 2013 follows thousands pension expense actuarially calculated annually based data available beginning year determine expected return plan assets multiplying expected longterm rate return assets marketrelated value plan assets marketrelated value plan assets fair value plan assets assumptions used actuarial calculation include discount rate selected disclosed end previous year well assumptions detailed table years ended november 30 decrease expected longterm rate return assets us rip 2012 primarily due change asset mix made end 2011 create better match pension assets pension obligations fair value measurements financial instruments included plan assets carried fair value november 30 2011 2010 measured fair value recurring basis classified follows thousands postretirement benefits sponsor contributory postretirement medical plan grants access group rates retireemedical coverage us employees leave ihs age 55 least 10 years service additionally ihs subsidizes cost coverage retireemedical coverage certain grandfathered employees ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility obligation plan determined application terms medical life insurance plans together relevant actuarial assumptions effective 2006 ihs provide prescription drug coverage medicareeligible retirees except medicare advantage fully insured option therefore liability reflect impact medicare modernization act part subsidy discount rate used determining accumulated postretirement benefit obligation 400 530 november 30 2012 2011 respectively net periodic postretirement expense income changes related projected benefit obligation follows thousands 1 amended plan 2006 plan amended limit benefits paid future healthcare costs ihs longer subsidizes cost coverage retireemedical coverage certain employees grandfathered ihs subsidy capped different rates per month depending individual retirees’ medicare eligibility change resulted 159 million negative plan amendment amortized period time resulting net periodic postretirement benefit income 2006 2010 following table provides expected cash outflows postretirement benefit plan thousands onepercentagepoint change assumed healthcarecosttrend rates would effect service cost interest cost postretirement benefit obligation november 30 2012 ihs subsidy capped defined contribution plan employees certain subsidiaries may participate defined contribution plans benefit expense relating plans approximately 106 million 79 million 69 million 2012 2011 2010 respectively 14 stockbased compensation november 30 2012 one stockbased compensation plan amended restated ihs inc 2004 longterm incentive plan ltip provides grant nonqualified stock options incentive stock options stock appreciation rights restricted stock restricted stock units performance units performance shares cashbased awards stock based awards covered employee annual incentive awards upon vesting award may either issue new shares reissue treasury shares extent reissued shares previously withheld taxes ltip provisions 2004 directors stock plan subplan ltip provides grant restricted stock restricted stock units nonemployee directors defined plan believe awards better align interests employees nonemployee directors stockholders authorized maximum 1475 million shares november 30 2012 number shares available future grant 38 million total unrecognized compensation expense related nonvested awards 1213 million november 30 2012 weightedaverage recognition period approximately 11 years restricted stock units rsus typically vest one three years generally subject either cliff vesting graded vesting rsus nonforfeitable rights dividends dividend equivalents fair value rsus based fair value common stock date grant amortize value awards expense vesting period straightline basis performancebased rsus evaluation made quarter likelihood performance criteria met number performancebased rsus expected vest increases decreases compensation expense also adjusted reflect number rsus expected vest cumulative vesting period met date rsus estimate forfeitures grant date recognize compensation cost based number awards expected vest may adjustments future periods likelihood meeting performance criteria changes actual forfeitures differ estimates forfeiture rate based upon historical experience well anticipated employee turnover considering certain qualitative factors following table summarizes rsu activity year ended november 30 2012 total fair value rsus vested year ended november 30 2012 1284 million based weightedaverage fair value vesting date stock options option awards generally granted exercise price equal fair market value stock date grant outstanding options fully vested november 30 2012 8year contractual terms options granted years ended november 30 2012 2011 2010 following table summarizes changes outstanding stock options years ended november 30 2012 2011 2010 well options vested expected vest stock options exercisable november 30 2012 2011 aggregate intrinsic value amounts table represent difference closing prices common stock november 30 2011 2012 8838 9214 respectively exercise price multiplied number inthemoney stock options date represents amounts would received stock option holders exercised stock options respective yearend date future periods intrinsic value change depending fluctuations stock price total intrinsic value stock options exercised year ended november 30 2012 60 million stockbased compensation expense years ended november 30 2012 2011 2010 respectively follows thousands total income tax benefits recognized stockbased compensation arrangements follows thousands stockbased compensation cost capitalized years ended november 30 2012 2011 2010 15 commitments contingencies commitments rental charges 2012 2011 2010 approximated 434 million 311 million 275 million respectively minimum rental commitments noncancelable operating leases effect november 30 2012 follows also outstanding letters credit bank guarantees aggregate amount approximately 21 million 17 million november 30 2012 2011 respectively indemnifications normal course business party variety agreements may obligated indemnify party certain matters obligations typically arise contracts customarily agree hold party harmless losses arising breach representations covenants certain matters title assets intellectual property rights associated sale products also indemnification obligations officers directors duration indemnifications varies certain cases indefinite circumstances payment us depends upon party making adverse claim according procedures outlined particular agreement procedures generally allow us challenge party’s claims certain instances may recourse third parties payments make unable reasonably estimate maximum potential amount future payments similar agreements due unique facts circumstances agreement fact certain indemnifications provide limitation maximum potential future payments indemnification recorded liability indemnifications accompanying consolidated balance sheets however accrue losses known contingent liability including may arise indemnification provisions obligation probable reasonably estimable litigation time involved litigation incidental business opinion litigation currently party likely material adverse effect results operations financial condition 16 common stock earnings per share basic eps computed basis weighted average number common shares outstanding period diluted eps reflects potential dilution could occur securities contracts issue common stock exercised converted common shares weighted average common shares outstanding years ended november 30 2012 2011 2010 respectively calculated follows thousands share buyback programs 2006 board directors approved program reduce dilutive effects employee equity grants allowing employees surrender shares back company value equal minimum statutory tax liability pay statutory tax behalf employee year ended november 30 2012 accepted 466103 shares surrendered employees tax withholding program approximately 430 million 9233 per share march 2011 board directors authorized repurchase one million common shares per fiscal year open market march 2011 program may execute program discretion balancing dilution offset investment opportunities business including acquisitions march 2011 program expiration date shares repurchased plan 2011 2012 october 2012 board directors authorized repurchase common shares maximum aggregate value 100 million october 2012 program may repurchase common shares open market purchases privately negotiated transactions compliance exchange act rule 10b18 subject market conditions applicable legal requirements relevant factors october 2012 program obligate us repurchase dollar amount number common shares may suspended time discretion year ended november 30 2012 repurchased 563221 shares approximately 498 million 8840 per share 17 comprehensive income loss 18 supplemental cash flow information net cash provided operating activities reflects cash payments interest income taxes shown years ended november 30 2012 2011 2010 respectively thousands cash equivalents amounting approximately 3450 million 2347 million reflected consolidated balance sheets november 30 2012 2011 respectively maintained primarily us dollars canadian dollars british pounds euros subject fluctuations currency exchange rate 19 segment information prepare financial reports analyze business results within three reportable geographic segments americas emea apac evaluate segment performance primarily revenue operating profit level three segments also evaluate revenues transaction type information operations three segments set forth chairman chief executive officer chief operating decision maker evaluates segment performance based primarily revenue operating profit three segments addition reviews revenue transaction type accounting policies segments described summary significant accounting policies see note 2 single customer accounted 10 total revenue years ended november 30 2012 2011 2010 material intersegment revenues period presented certain corporate transactions allocated reportable segments including items stockbased compensation expense net periodic pension postretirement expense corporatelevel impairments gain loss sale corporate assets table provides information revenue longlived assets us individual material foreign countries 2012 2011 2010 revenue geographic area generally based ship location longlived assets include net property equipment net intangible assets net goodwill revenue transaction type follows activity goodwill account follows adjustment purchase price 2011 2012 related primarily deferred tax trueups finalized respective 2010 2011 acquisitions 20 quarterly results operations unaudited following table summarizes certain quarterly results operations thousands item 9 item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report filed electronically herewith previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended august 31 2011 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10k period ended november 30 2010 incorporated herein reference previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference previously filed securities exchange commission exhibit registrants annual report form 10k period ended november 30 2008 incorporated herein reference previously filed securities exchange commission exhibit registrants annual report form 10k period ended november 30 2006 incorporated herein reference † previously filed securities exchange commission exhibit registrants annual report form 10k period ended november 30 2009 incorporated herein reference †† previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended february 28 2011 incorporated herein reference ††† previously filed securities exchange commission exhibit registrants periodic report form 8k dated december 10 2010 incorporated herein reference ‡ previously filed securities exchange commission exhibit registrants periodic report form 8k dated january 6 2011 incorporated herein reference ‡‡ previously filed securities exchange commission exhibit registrants periodic report form 8k dated october 13 2011 incorporated herein reference ‡‡‡ previously filed securities exchange commission exhibit registrants registration statement form s8 333151082 incorporated herein reference ‡‡‡‡ xbrl extensible business reporting language information furnished filed herewith part registration statement prospectus purposes sections 11 12 securities act 1933 deemed filed purposes section 18 securities exchange act 1934 otherwise subject liability sections c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 amended report signed following persons behalf registrant capacities indicated january 23 2012 signature title jerre l stead chairman chief executive officer jerre l stead principal executive officer richard walker executive vice president chief financial officer richard walker principal financial officer heather matzkehamlin senior vice president chief accounting officer heather matzkehamlin principal accounting officer director c michael armstrong director ruann f ernst director brian h hall director roger holtback director balakrishnan iyer director michael klein director richard w roedel director christoph v grolman stephen green stephen green attorneyinfact item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference previously filed securities exchange commission exhibit registration statement form s1 333137671 registrant incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended february 28 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended august 31 2006 incorporated herein reference  filed electronically herewith 1 confidential information appearing document omitted pursuant request confidential treatment filed separately securities exchange commission accordance securities exchange act 1934 amended rule 24b2 promulgated thereunder omitted information replaced asterisks c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized january 23 2007 pursuant requirements securities act 1933 amended report signed following persons behalf registrant capacities indicated 23rd day january 2007 exhibit index 1018 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipoallemployee award 1019 ihs inc employee stock purchase plan 1020 ihs supplemental income plan 1021 summary nonemployee director compensation 1022 form indemnification agreement company directors 1023 ihs executive relocation policy 2004 1024 letter charles picasso regarding ihs’ cherry creek country club membership dated february 16 2005 1025 indemnification agreement tbg holdings nv ihs inc dated march 8 1026 amendment 1 dated may 17 2005 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1027 contribution agreement holland america investment corporation haic inc dated november 10 2004 1028 employment agreement ihs inc jeffrey r tarr dated december 1 2004 1029 employment agreement ihs inc rohinton mobed dated november 1 2004 1030 employment agreement ihs energy group inc daniel h yergin dated september 1 20041 1031 noncompetition agreement ihs energy group inc daniel h yergin dated september 1 2004 1032 ihs inc 2004 longterm incentive plan form 2007 stock option awardsenior executive level 1033 ihs inc 2004 longterm incentive plan form 2007 stock option awardexecutive level 1034 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardsenior executive level 1035 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardtimebased 1036 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardperformancebased 1037 retirement agreement ihs inc charles picasso dated september 20 2006 21 list subsidiaries registrant 231 consent ernst young llp 24 power attorney 311 certification chief executive officer pursuant rules 13a14a 15d14a securities exchange act 312 certification chief financial officer pursuant rules 13a14a 15d14a securities exchange act 321 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference previously filed securities exchange commission exhibit registration statement form s1 333137671 registrant incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended february 28 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended august 31 2006 incorporated herein reference  filed electronically herewith 1 confidential information appearing document omitted pursuant request confidential treatment filed separately securities exchange commission accordance securities exchange act 1934 amended rule 24b2 promulgated thereunder omitted information replaced asterisks item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report 1031 release agreement ihs inc brian sweeney dated september 25 2015 25 1032 registration rights agreement dated october 28 2014 among company guarantors jp morgan securities llc representative initial purchasers named therein 20 1033 credit agreement among ihs inc certain subsidiaries bank america na bank america na canada branch jpmorgan chase bank na jpmorgan chase bank na toronto branch royal bank canada wells fargo bank na compass bank td bank na citizens bank na pnc bank national association us bank national association goldman sachs bank usa hsbc bank usa na sumitomo mitsui banking corporation bnp paribas bank west suntrust bank morgan stanley bank na bank tokyomitsubishi ufj ltd dated october 17 2014 22 1034 first amendment credit agreement among ihs inc certain subsidiaries bank america na bank america na canada branch jpmorgan chase bank na jpmorgan chase bank na toronto branch royal bank canada wells fargo bank na compass bank td bank na citizens bank na pnc bank national association us bank national association goldman sachs bank usa hsbc bank usa na sumitomo mitsui banking corporation bnp paribas bank west suntrust bank morgan stanley bank na bank tokyomitsubishi ufj ltd dated november 5 2015 1035 credit agreement among ihs inc ihs global inc jpmorgan chase bank na bank america na rbs citizens na wells fargo bank na bbva compass hsbc bank usa na royal bank canada pnc bank national association us bank national association td bank na goldman sachs bank usa bank tokyomitsubishi ufj ltd hua nan commercial ltd new york agency sumitomo mitsui banking corporation commercial bank dated july 15 2013 16 1036 first amendment credit agreement among ihs inc ihs global inc jpmorgan chase bank na bank america na rbs citizens na wells fargo bank na bbva compass hsbc bank usa na royal bank canada pnc bank national association us bank national association td bank na goldman sachs bank usa bank tokyomitsubishi ufj ltd hua nan commercial ltd new york agency sumitomo mitsui banking corporation commercial bank dated june 30 2014 18 1037 credit agreement amending restating credit agreement dated july 15 2013 amended among ihs inc ihs global inc bank america na jpmorgan chase bank na royal bank canada wells fargo bank na compass bank td bank na sumitomo mitsui banking corporation citizens bank na bank tokyomitsubishi ufj ltd pnc bank national association us bank national association goldman sachs bank usa hsbc bank usa na bnp paribas bank west suntrust bank dated october 17 2014 22 1038 first amendment credit agreement among ihs inc ihs global inc bank america na jpmorgan chase bank na royal bank canada wells fargo bank na compass bank td bank na sumitomo mitsui banking corporation citizens bank na bank tokyomitsubishi ufj ltd pnc bank national association us bank national association goldman sachs bank usa hsbc bank usa na bnp paribas bank west suntrust bank dated november 5 2015 1039 credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na bank america na canada branch wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association citibank na hsbc bank plc compass bank dated january 5 2011 10 1040 first amendment credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na bank america na canada branch wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association citibank na hsbc bank plc compass bank dated october 11 2011 11 1041 second amendment credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association goldman sachs bank usa morgan stanley bank na union bank na royal bank canada hua nan commercial bank ltd new york compass bank dated july 15 2013 16 1042 third amendment credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association goldman sachs bank usa morgan stanley bank na union bank na royal bank canada hua nan commercial bank ltd new york compass bank dated june 30 2014 18 c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 amended report signed following persons behalf registrant capacities indicated january 15 2016 signature title jerre l stead chairman chief executive officer jerre l stead principal executive officer todd hyatt executive vice president chief financial officer todd hyatt principal financial officer heather matzkehamlin senior vice president chief accounting officer heather matzkehamlin principal accounting officer director ruann f ernst director brian h hall director roger holtback director balakrishnan iyer director deborah doyle mcwhinney director jeanpaul l montupet director richard w roedel director christoph v grolman stephen green stephen green attorneyinfact item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 amended report signed following persons behalf registrant capacities indicated january 13 2014 signature title scott key director president chief executive officer scott key principal executive officer todd hyatt executive vice president chief financial officer todd hyatt principal financial officer heather matzkehamlin senior vice president chief accounting officer heather matzkehamlin principal accounting officer director c michael armstrong director ruann f ernst director brian h hall director roger holtback director balakrishnan iyer director jeanpaul l montupet director richard w roedel jerre l stead director executive chairman jerre l stead director christoph v grolman stephen green stephen green attorneyinfact item 15 exhibits financial statement schedules aindex financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data bindex exhibits following exhibits filed part report exhibit number description 31 form amended restated certificate incorporation 32 form amended restated bylaws 41 form class common stock certificate 42 form registration rights agreement among ihs inc urvanos investments limited urpasis investments limited 43 form rights agreement ihs inc computershare trust company inc rights agent 101 amended restated credit agreement among ihs inc information handling services group inc information handling services inc ihs energy group inc ihs engineering group uk ltd petroconsultants sa keybank national association us bank national association wells fargo bank national association lenders party thereto dated january 7 2005 102 amended restated stock purchase agreement among urpasis investments limited urvanos investments limited ihs inc general atlantic partners 82 lp gap coinvestments iii llc gap coinvestments iv llc dated october 6 2005 103 employment agreement ihs inc charles picasso dated october 15 2004 104 employment agreement ihs inc stephen green dated november 1 2004 105 employment agreement ihs inc michael j sullivan dated november 1 2004 106 employment agreement ihs inc h john oechsle dated november 1 2004 107 termination agreement robert r carpenter information handling services group inc dated august 4 2004 108 amendment termination agreement robert r carpenter information handling services group inc dated november 29 2004 109 termination agreement general release waiver claims randolph weil information handling services group inc dated november 5 2004 1010 amended restated ihs inc 2004 longterm incentive plan 1011 ihs inc 2004 directors stock plan 1012 ihs inc 2004 longterm incentive plan form 2004 restricted stock award 1013 ihs inc 2004 longterm incentive plan 2004 restricted stock award charles picasso dated december 23 2004 1014 ihs inc 2004 longterm incentive plan 2004 restricted stock award jerre l stead dated december 23 2004 1015 ihs inc 2004 longterm incentive plan 2004 restricted stock award h john oechsle dated december 23 2004 1016 ihs inc 2004 longterm incentive plan form 2005 performance share awardiposenior executive 1017 ihs inc 2004 longterm incentive plan form 2005 performance share awardipovice president senior vice president groups 1018 ihs inc 2004 longterm incentive plan form 2005 performance unit awardipovice president senior vice president groups 1019 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipovice president senior vice president groups 1020 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipovice president senior vice president groups 1021 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardiposenior director groups 1022 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardiposenior director groups 1023 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipoallemployee award 1024 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipoallemployee award 1025 offer nonqualified stock option plan effective december 1 1998 2002 nonqualified stock option plan ihs group inc dated november 22 2004 senior executives 1026 offer nonqualified stock option plan effective december 1 1998 2002 nonqualified stock option plan ihs group inc dated november 22 2004 directors employees 1027 ihs inc employee stock purchase plan 1028 ihs supplemental income plan 1029 summary sheet nonemployee director compensation 1030 form indemnification agreement company directors 1031 ihs executive relocation policy 2004 1032 letter charles picasso regarding ihs cherry creek country club membership dated february 16 2005 1033 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1034 amendment 1 dated may 17 2005 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1035 contribution agreement holland america investment corporation haic inc dated november 10 2004 21 list subsidiaries registrant 231 consent ernst young llp 24 power attorney 311 certification chief executive officer pursuant rules 13a14a 15d14a securities exchange act 312 certification chief financial officer pursuant rules 13a14a 15d14a securities exchange act 321 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference filed electronically herewith cfinancial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized january 20 2006 pursuant requirements securities act 1933 amended report signed following persons behalf registrant capacities indicated 20th day january 2006 signature title charles picasso charles picasso president chief executive officer principal executive officer director michael j sullivan michael j sullivan senior vice president chief financial officer principal financial officer heather matzkehamlin heather matzkehamlin senior vice president chief accounting officer principal accounting officer jerre l stead chairman board c michael armstrong director steven denning director roger holtback director balakrishnan iyer director michael klein director richard w roedel director michael v staudt director stephen green stephen green attorneyinfact exhibit index exhibit number description 31 form amended restated certificate incorporation 32 form amended restated bylaws 41 form class common stock certificate 42 form registration rights agreement among ihs inc urvanos investments limited urpasis investments limited 43 form rights agreement ihs inc computershare trust company inc rights agent 101 amended restated credit agreement among ihs inc information handling services group inc information handling services inc ihs energy group inc ihs engineering group uk ltd petroconsultants sa keybank national association us bank national association wells fargo bank national association lenders party thereto dated january 7 2005 102 amended restated stock purchase agreement among urpasis investments limited urvanos investments limited ihs inc general atlantic partners 82 lp gap coinvestments iii llc gap coinvestments iv llc dated october 6 2005 103 employment agreement ihs inc charles picasso dated october 15 2004 104 employment agreement ihs inc stephen green dated november 1 2004 105 employment agreement ihs inc michael j sullivan dated november 1 2004 106 employment agreement ihs inc h john oechsle dated november 1 2004 107 termination agreement robert r carpenter information handling services group inc dated august 4 2004 108 amendment termination agreement robert r carpenter information handling services group inc dated november 29 2004 109 termination agreement general release waiver claims randolph weil information handling services group inc dated november 5 2004 1010 amended restated ihs inc 2004 longterm incentive plan 1011 ihs inc 2004 directors stock plan 1012 ihs inc 2004 longterm incentive plan form 2004 restricted stock award 1013 ihs inc 2004 longterm incentive plan 2004 restricted stock award charles picasso dated december 23 2004 1014 ihs inc 2004 longterm incentive plan 2004 restricted stock award jerre l stead dated december 23 2004 1015 ihs inc 2004 longterm incentive plan 2004 restricted stock award h john oechsle dated december 23 2004 1016 ihs inc 2004 longterm incentive plan form 2005 performance share awardiposenior executive 1017 ihs inc 2004 longterm incentive plan form 2005 performance share awardipovice president senior vice president groups 1018 ihs inc 2004 longterm incentive plan form 2005 performance unit awardipovice president senior vice president groups 1019 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipovice president senior vice president groups 1020 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipovice president senior vice president groups 1021 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardiposenior director groups 1022 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardiposenior director groups 1023 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipoallemployee award 1024 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipoallemployee award 1025 offer nonqualified stock option plan effective december 1 1998 2002 nonqualified stock option plan ihs group inc dated november 22 2004 senior executives 1026 offer nonqualified stock option plan effective december 1 1998 2002 nonqualified stock option plan ihs group inc dated november 22 2004 directors employees 1027 ihs inc employee stock purchase plan 1028 ihs supplemental income plan 1029 summary sheet nonemployee director compensation 1030 form indemnification agreement company directors 1031 ihs executive relocation policy 2004 1032 letter charles picasso regarding ihs cherry creek country club membership dated february 16 2005 1033 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1034 amendment 1 dated may 17 2005 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1035 contribution agreement holland america investment corporation haic inc dated november 10 2004 list subsidiaries registrant 231  consent ernst young llp  power attorney 311  certification chief executive officer pursuant rules 13a14a 15d14a securities exchange act 312  certification chief financial officer pursuant rules 13a14a 15d14a securities exchange act 321  certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference filed electronically herewith item 15 exhibits financial statement schedules aindex financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data bindex exhibits following exhibits filed part report exhibit number description 31 form amended restated certificate incorporation 32 form amended restated bylaws 41 form class common stock certificate 42 form registration rights agreement among ihs inc urvanos investments limited urpasis investments limited 43 form rights agreement ihs inc computershare trust company inc rights agent 101 amended restated credit agreement among ihs inc information handling services group inc information handling services inc ihs energy group inc ihs engineering group uk ltd petroconsultants sa keybank national association us bank national association wells fargo bank national association lenders party thereto dated january 7 2005 102 amended restated stock purchase agreement among urpasis investments limited urvanos investments limited ihs inc general atlantic partners 82 lp gap coinvestments iii llc gap coinvestments iv llc dated october 6 2005 103 employment agreement ihs inc michael j sullivan dated november 1 2004 104 amended restated ihs inc 2004 longterm incentive plan 105 amended restated ihs inc 2004 directors stock plan 106 ihs inc 2004 longterm incentive plan form 2004 restricted stock award 107 ihs inc 2004 longterm incentive plan 2004 restricted stock award charles picasso dated december 23 2004 108 ihs inc 2004 longterm incentive plan 2004 restricted stock award jerre l stead dated december 23 2004 109 ihs inc 2004 longterm incentive plan 2004 restricted stock award h john oechsle dated december 23 2004 1010 ihs inc 2004 longterm incentive plan form 2005 performance share awardiposenior executive 1011 ihs inc 2004 longterm incentive plan form 2005 performance share awardipovice president senior vice president groups 1012 ihs inc 2004 longterm incentive plan form 2005 performance unit awardipovice president senior vice president groups 1013 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipovice president senior vice president groups 1014 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipovice president senior vice president groups 1015 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardiposenior director groups 1016 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardiposenior director groups 1017 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipoallemployee award 1018 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipoallemployee award 1019 ihs inc employee stock purchase plan 1020 ihs supplemental income plan 1021 summary nonemployee director compensation 1022 form indemnification agreement company directors 1023 ihs executive relocation policy 2004 1024 letter charles picasso regarding ihs cherry creek country club membership dated february 16 2005 1025 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1026 amendment 1 dated may 17 2005 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1027 contribution agreement holland america investment corporation haic inc dated november 10 2004 1028 employment agreement ihs inc jeffrey r tarr dated december 1 2004 1029 employment agreement ihs inc rohinton mobed dated november 1 2004 1030 employment agreement ihs energy group inc daniel h yergin dated september 1 2004 1031 noncompetition agreement ihs energy group inc daniel h yergin dated september 1 2004 1032 ihs inc 2004 longterm incentive plan form 2007 stock option awardsenior executive level 1033 ihs inc 2004 longterm incentive plan form 2007 stock option awardexecutive level 1034 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardsenior executive level 1035 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardtimebased 1036 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardperformancebased 1037 retirement agreement ihs inc charles picasso dated september 20 2006 21 list subsidiaries registrant 231 consent ernst young llp 24 power attorney 311 certification chief executive officer pursuant rules 13a14a 15d14a securities exchange act 1934 adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rules 13a14a 15d14a securities exchange act 1934 adopted pursuant section 302 sarbanesoxley act 2002 321 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference previously filed securities exchange commission exhibit registrants annual report form 10k period ended november 30 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended february 28 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended august 31 2006 incorporated herein reference filed electronically herewith cfinancial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized january 23 2008 ihs inc stephen green name stephen green title senior vice president general counsel pursuant requirements securities act 1933 amended report signed following persons behalf registrant capacities indicated 23rd day january 2008 signature title jerre l stead jerre l stead chairman chief executive officer principal executive officer michael j sullivan michael j sullivan executive vice president chief financial officer principal financial officer heather matzkehamlin heather matzkehamlin senior vice president chief accounting officer principal accounting officer c michael armstrong director steven denning director ruann f ernst director roger holtback director balakrishnan iyer director michael klein director richard w roedel director christoph v grolman director stephen green stephen green attorneyinfact exhibit index exhibit number description 31 form amended restated certificate incorporation 32 form amended restated bylaws 41 form class common stock certificate 42 form registration rights agreement among ihs inc urvanos investments limited urpasis investments limited 43 form rights agreement ihs inc computershare trust company inc rights agent 101 amended restated credit agreement among ihs inc information handling services group inc information handling services inc ihs energy group inc ihs engineering group uk ltd petroconsultants sa keybank national association us bank national association wells fargo bank national association lenders party thereto dated january 7 2005 102 amended restated stock purchase agreement among urpasis investments limited urvanos investments limited ihs inc general atlantic partners 82 lp gap coinvestments iii llc gap coinvestments iv llc dated october 6 2005 103 employment agreement ihs inc michael j sullivan dated november 1 2004 104 amended restated ihs inc 2004 longterm incentive plan 105 amended restated ihs inc 2004 directors stock plan 106 ihs inc 2004 longterm incentive plan form 2004 restricted stock award 107 ihs inc 2004 longterm incentive plan 2004 restricted stock award charles picasso dated december 23 2004 108 ihs inc 2004 longterm incentive plan 2004 restricted stock award jerre l stead dated december 23 2004 109 ihs inc 2004 longterm incentive plan 2004 restricted stock award h john oechsle dated december 23 2004 1010 ihs inc 2004 longterm incentive plan form 2005 performance share awardiposenior executive 1011 ihs inc 2004 longterm incentive plan form 2005 performance share awardipovice president senior vice president groups 1012 ihs inc 2004 longterm incentive plan form 2005 performance unit awardipovice president senior vice president groups 1013 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipovice president senior vice president groups 1014 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipovice president senior vice president groups 1015 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardiposenior director groups 1016 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardiposenior director groups 1017 ihs inc 2004 longterm incentive plan form 2005 restricted stock awardipoallemployee award 1018 ihs inc 2004 longterm incentive plan form 2005 restricted stock unit awardipoallemployee award 1019 ihs inc employee stock purchase plan 1020 ihs supplemental income plan 1021 summary nonemployee director compensation 1022 form indemnification agreement company directors 1023 ihs executive relocation policy 2004 1024 letter charles picasso regarding ihs cherry creek country club membership dated february 16 2005 1025 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1026 amendment 1 dated may 17 2005 indemnification agreement tbg holdings nv ihs inc dated march 8 2005 1027 contribution agreement holland america investment corporation haic inc dated november 10 2004 1028 employment agreement ihs inc jeffrey r tarr dated december 1 2004 1029 employment agreement ihs inc rohinton mobed dated november 1 2004 1030 employment agreement ihs energy group inc daniel h yergin dated september 1 2004 1031 noncompetition agreement ihs energy group inc daniel h yergin dated september 1 2004 1032 ihs inc 2004 longterm incentive plan form 2007 stock option awardsenior executive level 1033 ihs inc 2004 longterm incentive plan form 2007 stock option awardexecutive level 1034 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardsenior executive level 1035 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardtimebased 1036 ihs inc 2004 longterm incentive plan form 2007 restricted stock unit awardperformancebased 1037 retirement agreement ihs inc charles picasso dated september 20 2006 21 list subsidiaries registrant 231 consent ernst young llp 24 power attorney 311 certification chief executive officer pursuant rules 13a14a 15d14a securities exchange act 1934 adopted pursuant section 302 sarbanesoxley act 2002 312 certification chief financial officer pursuant rules 13a14a 15d14a securities exchange act 1934 adopted pursuant section 302 sarbanesoxley act 2002 321 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference previously filed securities exchange commission exhibit registrants annual report form 10k period ended november 30 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended february 28 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended august 31 2006 incorporated herein reference filed electronically herewith item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report 1036 credit agreement among ihs inc ihs global inc jpmorgan chase bank na bank america na rbs citizens na wells fargo bank na bbva compass hsbc bank usa na royal bank canada pnc bank national association us bank national association td bank na goldman sachs bank usa bank tokyomitsubishi ufj ltd hua nan commercial ltd new york agency sumitomo mitsui banking corporation commercial bank dated july 15 2013 16 1037 first amendment credit agreement among ihs inc ihs global inc jpmorgan chase bank na bank america na rbs citizens na wells fargo bank na bbva compass hsbc bank usa na royal bank canada pnc bank national association us bank national association td bank na goldman sachs bank usa bank tokyomitsubishi ufj ltd hua nan commercial ltd new york agency sumitomo mitsui banking corporation commercial bank dated june 30 2014 18 1038 credit agreement amending restating credit agreement dated july 15 2013 amended among ihs inc ihs global inc bank america na jpmorgan chase bank na royal bank canada wells fargo bank na compass bank td bank na sumitomo mitsui banking corporation citizens bank na bank tokyomitsubishi ufj ltd pnc bank national association us bank national association goldman sachs bank usa hsbc bank usa na bnp paribas bank west suntrust bank dated october 17 2014 1039 credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na bank america na canada branch wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association citibank na hsbc bank plc compass bank dated january 5 2011 10 1040 first amendment credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na bank america na canada branch wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association citibank na hsbc bank plc compass bank dated october 11 2011 11 1041 second amendment credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association goldman sachs bank usa morgan stanley bank na union bank na royal bank canada hua nan commercial bank ltd new york compass bank dated july 15 2013 16 1042 third amendment credit agreement among ihs inc certain subsidiaries jp morgan chase bank national association bank america na rbs citizens na wells fargo bank national association hsbc bank usa national association us bank national association td bank na barclays bank plc pnc bank national association goldman sachs bank usa morgan stanley bank na union bank na royal bank canada hua nan commercial bank ltd new york compass bank dated june 30 2014 18 1043 credit agreement among ihs inc ihs global inc royal bank canada bank america na dated august 29 2012 12 1044 first amendment credit agreement among ihs inc ihs global inc royal bank canada bank america na dated july 15 2013 16 1045 second amendment credit agreement among ihs inc ihs global inc royal bank canada bank america na dated june 30 2014 18 21 list subsidiaries registrant 23 consent ernst young llp 24 power attorney 311 certification chief executive officer pursuant rules 13a14a 15d14a securities exchange act 312 certification chief financial officer pursuant rules 13a14a 15d14a securities exchange act 32 certification chief executive officer chief financial officer pursuant 18 usc section 1350 adopted pursuant section 906 sarbanesoxley act 2002 101ins xbrl instance document 101sch xbrl taxonomy extension schema document 101cal xbrl taxonomy extension calculation linkbase document 101def xbrl taxonomy extension definition linkbase document c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 amended report signed following persons behalf registrant capacities indicated january 16 2015 signature title scott key director president chief executive officer scott key principal executive officer todd hyatt executive vice president chief financial officer todd hyatt principal financial officer heather matzkehamlin senior vice president chief accounting officer heather matzkehamlin principal accounting officer director ruann f ernst director brian h hall director roger holtback director balakrishnan iyer director jeanpaul l montupet director richard w roedel director jerre l stead director christoph v grolman stephen green stephen green attorneyinfact item 15 exhibits financial statement schedules aindex financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data bindex exhibits following exhibits filed part report exhibit index previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference previously filed securities exchange commission exhibit registrants annual report form 10k period ended november 30 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended february 28 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended august 31 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants registration statement form s8 333151082 incorporated herein reference filed electronically herewith cfinancial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized january 23 2009 ihs inc stephen green name stephen green title senior vice president general counsel pursuant requirements securities act 1933 amended report signed following persons behalf registrant capacities indicated january 23 2009 signature title jerre l stead jerre l stead chairman chief executive officer principal executive officer michael j sullivan michael j sullivan executive vice president chief financial officer principal financial officer heather matzkehamlin heather matzke hamlin senior vice president chief accounting officer principal accounting officer c michael armstrong director steven denning director ruann f ernst director brian h hall director roger holtback director balakrishnan iyer director michael klein director richard w roedel director christoph v grolman director stephen green stephen green attorneyinfact exhibit index previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference previously filed securities exchange commission exhibit registrants annual report form 10k period ended november 30 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended february 28 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants quarterly report form 10q period ended august 31 2006 incorporated herein reference previously filed securities exchange commission exhibit registrants registration statement form s8 333151082 incorporated herein reference filed electronically herewith item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report exhibit index previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended june 30 2009 incorporated herein reference previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2008 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s registration statement form s8 333151082 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended february 28 2006 incorporated herein reference  filed electronically herewith c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized january 15 2010 pursuant requirements securities exchange act 1934 amended report signed following persons behalf registrant capacities indicated 15th day january 2010 stephen green stephen green attorneyinfact exhibit index previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended june 30 2009 incorporated herein reference previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2008 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s registration statement form s8 333151082 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended february 28 2006 incorporated herein reference  filed electronically herewith item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report exhibit index filed electronically herewith previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended june 30 2009 incorporated herein reference previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference xbrl extensible business reporting language information furnished filed herewith part registration statement prospectus purposes sections 11 12 securities act 1933 deemed filed purposes section 18 securities exchange act 1934 otherwise subject liability sections  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2008 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s registration statement form s8 333151082 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended february 28 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2009 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s periodic report form 8k dated january 6 2011 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s periodic report form 8k dated january 6 2011 incorporated herein reference c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized january 14 2011 ihs inc stephen green name stephen green title senior vice president general counsel pursuant requirements securities exchange act 1934 amended report signed following persons behalf registrant capacities indicated 14th day january 2011 stephen green stephen green attorneyinfact exhibit index filed electronically herewith previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended june 30 2009 incorporated herein reference previously filed securities exchange commission exhibit registration statement form s1 333122565 registrant incorporated herein reference xbrl extensible business reporting language information furnished filed herewith part registration statement prospectus purposes sections 11 12 securities act 1933 deemed filed purposes section 18 securities exchange act 1934 otherwise subject liability sections  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2008 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s registration statement form s8 333151082 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s quarterly report form 10q period ended february 28 2006 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s annual report form 10k period ended november 30 2009 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s periodic report form 8k dated january 6 2011 incorporated herein reference  previously filed securities exchange commission exhibit registrant’s periodic report form 8k dated january 6 2011 incorporated herein reference item 15 exhibits financial statement schedules index financial statements financial statements listed index consolidated financial statements filed part report form 10k see part ii item 8 financial statements supplementary data b index exhibits following exhibits filed part report c financial statement schedules registrant omitted since required information present information included financial statements notes thereto signatures pursuant requirements section 13 15d securities exchange act 1934 registrant duly caused report signed behalf undersigned thereunto duly authorized pursuant requirements securities exchange act 1934 amended report signed following persons behalf registrant capacities indicated january 18 2013 signature title jerre l stead chairman chief executive officer jerre l stead principal executive officer todd hyatt senior vice president chief financial officer todd hyatt principal financial officer heather matzkehamlin senior vice president chief accounting officer heather matzkehamlin principal accounting officer director c michael armstrong director ruann f ernst director brian h hall director roger holtback director balakrishnan iyer director michael klein director jeanpaul l montupet director richard w roedel director christoph v grolman stephen green stephen green attorneyinfact