Good day. And thank you for standing by. Welcome to the IHS Markit Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Operator instructions were provided. Please be advised that today's conference is being recorded. Operator instructions were provided. I would now like to hand the conference over to your speaker today, Eric Boyer, Head of Investor Relations. Please go ahead.

Good morning and thank you for joining us for the IHS Markit Q3 2021 earnings conference call. Earlier this morning, we issued our Q3 earnings press release and posted supplemental materials to the IHS Markit Investor Relations website. Our discussion in the quarter is based on non-GAAP measures or adjusted numbers, which exclude stock-based compensation, amortization of acquired intangibles and other items. IHS Markit believes non-GAAP results are useful in order to enhance understanding of our on-going operating performance, but they are a supplement to and should not be considered in isolation from or as a substitute for GAAP financial information. As a reminder, this conference call is being recorded and webcast and is a copyrighted property of IHS Markit. Any rebroadcast of this information in whole or in part without the prior written consent of IHS Markit is prohibited. This conference call, especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ materially from expectations can be found in IHS Markit's filings with the SEC and on the IHS Markit website. After our prepared remarks, Lance Uggla, Chairman and CEO; and Jonathan Gear, EVP and Chief Financial Officer, will be available to take your questions. With that, it is my pleasure to turn the call over to Lance.

Thank you, Eric. And thank you for joining us for the IHS Markit Q3 earnings call. We had another very strong quarter. Q3 revenue was $1.18 billion, with organic growth of 9%. Adjusted EBITDA of $516 million with margin of 43.7% puts us on track for the full year margin expansion of 100 basis points, excluding FX. Adjusted EPS of $0.85 will be up 10% over the prior year. Overall, we are very happy with our Q3 and year-to-date results, and we are raising our full year underlying revenue and adjusted EPS guidance. In terms of industry verticals, let me first start with our Financial Services segment, which had another strong quarter with 8% organic growth in Q3. Within Financial Services, Information performed well with organic growth of 6% and the main contributors of this included pricing, valuations, equities, regulatory reporting and trading analytics platforms and our issuer solutions products due to strong IPO markets, and the momentum in ESG initiatives. Solutions also had a strong quarter with 9% organic growth and similar trends which we saw in Q2 due to the strong market activity in equities and loans as well as the continued broad based rebound of the investments being made by our customers in solutions. This strength was accelerated by our new offerings and enhancements across the solutions portfolio. Finally, our processing business grew 12% organically with strengths in loans and derivatives performance as expected. For the full year, we still expect Financial Services to be in the 7% to 8% organic growth range. Let's move on to Transportation, which had organic revenue growth of 15% in Q3. You'll recall that the basis for comparison, the third quarter of 2020, was depressed by significant pricing concessions that we granted our customers at the height of the COVID-related lockdowns. But like Q2, this quarter's performance also reflected strong underlying growth across the transportation businesses. Our renewal performance was strong across the board, demonstrating the must-have nature of our products in the current challenging market environment. For example, CARFAX for Life has now established itself as a critical and innovative service loyalty solution for dealers at a time when driving higher levels of service lane activity is key to offsetting the lower levels of new car sales. Another example is the strong performance of our forecasting solutions, as the industry grapples with the largest supply chain shock it has ever experienced. However, over the past two months, we have also seen the escalating supply chain crisis lead to further production cuts. And as a result of shortage of cars on dealer lots, we are seeing a temporary slowdown in sales of products that support OEM and dealer sales and marketing. We remain very confident in the outlook for these products as inventory levels begin to recover. But overall, another great quarter for our auto businesses, which demonstrates the importance of our services to the industries. Our maritime and trade business continued to perform well, driven by momentum of our innovative risk and compliance solutions and by our growing footprint in the financial sector. I'm very pleased to see our new product investments over the past several years continuing to pay off. For the full year, we expect transportation organic growth to be in the 14% to 16% range. This represents a healthy underlying high-single-digit growth rate, excluding the favorable year-over-year comparisons due to the pandemic. Let's move on to Resources, where organic decline was a modest 1% in Q3 and as expected. Recurring revenue improved sequentially across our businesses and non-recurring revenue benefited from increased demand for consulting services and our software businesses. As expected, our ACV experience continued positive growth in Q3, which we believe should continue in Q4, providing a strong foundation for our 2022 recurring revenue. Our downstream organic revenue growth was very strong in the quarter, and we expect this to continue into Q4 as we help our customers navigate global supply chain disruptions in many markets. In 2021, we continued to expect organic revenue results within Resources to improve compared to 2020 and to be down year-over-year in the low-single digits as the upstream improves and strong growth in downstream continues. Finally, CMS organic revenue growth was strong at 11% and 5%, normalized for the BPVC. And particularly, ECR was very strong and is benefiting from increased consulting services as a result of uncertainty due to global supply chain disruptions. For the full year, we still expect CMS to deliver mid-single-digit organic growth. There were two strategic initiatives announced in the quarter. We completed the formation of the OSTTRA joint venture, which includes our MarkitSERV and CME's optimization businesses. We also signed a purchase agreement for the divestiture of Opus commensurate with the close of the merger with S&P Global. And now I'll turn the call over to Jonathan.

Great, thank you Lance. Q3 highlights included revenue organic growth of 9%, which is 8% normalized to BPVC, adjusted EBITDA growth of 6%, GAAP net income declined 2%, EPS declined 2%, while adjusted EPS had growth of 10% year-over-year. Regarding revenue, our Q3 revenue was $1.18 billion, with total growth of 10%. Organic growth in the quarter was 9%, which included recurring organic growth of 7% and non-recurring organic growth of 20%. Normalized for BPVC, total company organic growth is 8% and non-recurring is 14%. This increase was driven by continued strong underlying growth in Financial Services and Transportation, as well as benefiting from favorable year-over-year comparisons due to the impact of COVID, primarily in our dealer-facing transportation businesses. Moving on to segment performance, our Financial Services segment drove organic growth of 8%, including 7% recurring in the quarter. Overall strength was anchored by strong market activities in equities, loans, and the continued rebound of investment by our customers. Solutions had strong organic growth performance delivering 9%, Information grew 6% and Processing grew 12%. Our Transportation segment delivered organic growth of 15% in the quarter. This included growth of 17% recurring as Q3 continued to have strong growth within our CARFAX and Automotive Mastermind businesses and accelerating growth within our Maritime and Trade business. Non-recurring revenue increased by 8% primarily driven by strong performance in CARFAX consumer and dealer transactions and within our core automotive insights. Our Resources segment declined by 1%, which is comprised of a 4% recurring decline and 30% non-recurring increase. Q3 organic ACV increased by $7 million in the quarter and our trailing 12-month organic ACV is down 3%. However, we are seeing strong underlying trends in our upstream pipeline, especially in North America; we expect CapEx spend to begin to rebound in 2022. We continue to see strong demand in our downstream businesses, particularly in our products and services that support energy transition and energy market supply chains. Our CMS segment had 11% organic growth, including 5% recurring and an increase of 76% non-recurring. Normalized for the BPVC, total CMS organic growth is 5% which includes non-recurring organic growth of 14%. Moving now to profits and margins, adjusted EBITDA was $516 million, up $29 million versus prior year. Adjusted EBITDA grew 6% with a margin of 43.7%, down 150 basis points and down 110 basis points FX adjusted. As a reminder, the margin percentages for the full company and segments were impacted because 2020 margins benefited significantly due to temporary COVID-related cost actions. Moving to our segments, Financial Services adjusted EBITDA margin of 49.2% is down 90 basis points FX adjusted, Transportation's adjusted EBITDA margin was 48.1%, down 280 basis points FX adjusted. Resources adjusted EBITDA margin was 40.2%, a decrease of 100 basis points FX adjusted and CMS adjusted EBITDA margin of 27.7% was up 240 basis points FX adjusted. Moving now to net income and EPS, net income was $161 million and GAAP EPS was $0.40. Adjusted EPS was $0.85, an increase of 10% over prior year. Our GAAP tax rate was 30% and our adjusted tax rate was 16%. Q3 free cash flow was $344 million, and our trailing 12-month free cash flow conversion is 56%. Turning to the balance sheet, our Q3 ending debt balance was $4.9 billion and represented a gross leverage ratio of approximately 2.5 times on a bank covenant basis, and 2.3 times net of cash. We closed the quarter with $338 million of cash and our Q3 undrawn revolver balance was approximately $1 billion. Our Q3 weighted average diluted share count was 401.3 million shares. As we mentioned, in Q4, the merger agreement with S&P Global restricts our ability to purchase our shares and therefore our share repurchase program is currently suspended other than for the repurchase of shares associated with tax withholding requirements for share-based compensation. Moving on to guidance, based on our performance through the first three quarters of the year, we are positioned to deliver strong full year results and are providing the following improvements to revenue and EPS guidance for FY 2021. On revenue, we are providing three updates to our guidance. First, based on this strong performance and the core review of our business, we are raising the operational outlook for revenue by $20 million at the midpoint. Second, we are adjusting our revenue for the year due to the accounting treatments of the MarkitSERV joint venture. Under this 50:50 joint venture, we will no longer consolidate revenue. This will remove $45 million from our Q4 revenue guidance. It should be noted that we will receive 50% of the JV's earnings in our reported earnings, and thus there will be no impact of the structure to either EBITDA or EPS. Finally, we are lowering revenue for the year by $10 million due to the FX impact in the second half. The net of these adjustments is our new range of $4.61 billion to $4.63 billion, which represents a 7% to 8% organic growth rate. Adjusted EBITDA is being maintained at $2.02 billion to $2.03 billion with adjusted EBITDA margin expansion of approximately 100 basis points adjusted for FX, and adjusted EPS is being increased by $0.03 to $3.18 to $3.20 per share. We do expect cash conversion in the upper 50s due primarily to the one-time impact of the MarkitSERV joint venture and also with S&P Global deal-related merger cost. And with that, I'll turn the call back over to Lance.

Okay, thanks Jonathan. We had another strong quarter. And our results today set us up to have a great year due to improving end markets and very strong execution by our teams. As this may be our last earnings call as IHS Markit, I want to thank our many investors over the years for their support and say that I'm very excited to be a future shareholder of S&P Global, as they integrate IHS Markit to create even greater value in the years to come. Operator, we're now ready to open the lines for Q&A.

Thank you. Operator instructions were provided. Our first question comes from Kevin McVeigh with Credit Suisse. Your line is open.

Thank you and congratulations to all of you folks, if this is the last call, you've been an amazing management team, and it's been a pleasure to work with you folks. So hey, Lance, you talked about kind of supply chain disruption a lot, and obviously the business is thriving within the context of that. How much of that is obviously — there's a lot of shock in the system. But just trying to understand how much of that is maybe just reshoring structural changes in businesses post-COVID? So, I guess, is there any kind of nuance between just structural reshoring as opposed to near-term, just supply shock?

Yes, I think most all of our supply chain disruption is short-term related. I think some of it with respect to China and longer-term geopolitics will bode well for us. We saw very positive supply chain impacts in terms of upward revenue in our chemicals pricing businesses, our economic and country risk services that have a supply chain product built into them and our consulting services as well. So, I think in an information business, volatility always bodes well across the whole portfolio, and there are pluses and minuses as our automotive business is experiencing. As car sales wane through the supply chain shortages that are unprecedented, coupled with less used cars available, those can have temporary negative impacts, but net-net when we look across the whole firm, and we look at our revenue for the year, and our expectations as we start next year, it's a short-term set of pluses and minuses that provide the same guidance as we expected at the beginning of the year. Next question?

Our next question comes from Gary Bisbee with Bank of America Securities. Your line is open.

Hey, guys, good morning, and my congratulations on a terrific run. I guess, I just wanted to ask about the impact of the MarkitSERV joint venture. On a full year basis for the business does it make sense to effectively quadruple that Q4 revenue hit? And are there other things we should think about? How it impacts margins, pulling that business out and any other color would be helpful. Thank you.

Okay. Thanks Gary, and thanks Kevin, as well for the compliments. I appreciate that. Why don’t I pass that over to Jonathan, and if he wants to add Adam to that, on the OSTTRA impacts they can do so Jonathan?

Sure, we'll do it. Gary, I would take this as very simple math. I would take the $45 million we just spoke about for Q4; roughly four times that would be a full year impact of removing the MarkitSERV revenue from our reported results. As I mentioned in my comments earlier, we will still report profit through earnings and so there will be no impact on EBITDA and EPS in an absolute basis. Of course, when you take out the revenues, you've taken out the earnings, there will be a lift on a margin percentage. Adam, anything you want to add to that?

So sorry, I have nothing to add, obviously. We are excited about the benefits of the JV commercially for our customers.

Our next question comes from Jeff Meuler with Baird. Your line is open.

Yes, thanks. I'm hoping you can provide some more detail on the auto comments. So, I think you said it impacts the solutions that support OEM and dealer sales and marketing. So, is this Automotive Mastermind, digital marketing and maybe CARFAX used car listings? Because I think you said Automotive Mastermind was strong in Q3. So, trying to understand to what extent something like digital marketing is already impacting non-recurring revenue or if you're saying like Automotive Mastermind bookings are softening and we should expect deceleration in coming quarters in recurring, and cheers and best wishes from me. Thanks, guys.

Edouard, do you want to go a bit deeper on that?

Yes, sure. Thank you, Lance. And thanks, Jeff, for the question. So as Lance said, all of this disruption creates multiple impacts across our business; some are headwinds, some are tailwinds. At the upper end of the supply chain, when there's disruption, we do more business with suppliers. And actually, we've never had closer relationships with many of our supply customers than today. On the new car sales, right now, we're seeing a temporary softening of bookings in a couple of areas — you name them, Automotive Mastermind and digital marketing. And we expect these to be a bit softer than they usually are until inventory starts to recover. On the used car side, we're not seeing that. If you think about the used car market and the service market, actually, the combination of low inventory and high prices means that market is pretty robust, and that impact is neutral to positive in our business. So all-in-all, I would say the impact is not material in the grand scheme of things. It does not change our outlook for the business, but we do want to flag it because we recently revised our forecast downwards for the industry across the board, and you'll see quite a few suppliers and car makers referring to these new forecasts in the coming weeks as they talk about their Q3 earnings.

Thanks, Edouard. Next question.

Our next question comes from Alex Kramm with UBS. Your line is open.

Yes. Hey, everyone, just on the energy side, hoping now that the fiscal year is over, can you just give us a reminder of all the multiyear contracts you locked in? I guess what I'm asking is, you made this comment that CapEx is expected to be up next year. But, if it doesn't, I guess how much roll is built in because of some of those multiyear contracts and those pricing escalators? It would be great to just get a reminder where we stand on those. Thanks.

Okay, I'll start and then I'll pass it to Brian for some more detail. So we expect, as we said before, our recovery on revenue to be mid-single digits for energy next year for Resources coming from that recovery. Those contracts rolling through and continued strength in all the downstream products. We've stated that earlier, as we did those price cuts, and I think Brian may want to add some color on exactly how those numbers will unfold. Brian?

Yes. So yes, we basically did multiyear agreements with price cuts on 50% of the upstream business. We're starting to see those come in now which is nice. And when you couple that with $70 crude, you mentioned CapEx. We think CapEx is going to be pretty strong next year. So, definitely the energy horizon turned around and we're feeling pretty good about the next few quarters.

Thanks, Brian. Next question?

Our next question comes from Hamzah Mazari with Jefferies. Your line is open.

Good morning. Thank you. My question is just around the upcoming merger with S&P. Maybe if you could just talk about timing-wise, next steps, seems like, closing Q4, but anything you can share on pre-planning, integration work you're doing that gives you sort of confidence on the revenue synergies highlighted? And again, congrats on building a great company and all the work you've done here. Thank you.

Okay, thank you very much. Well, the work on the merger by the teams at S&P and our teams has been substantive given that we originally expected a July close; we've had several extra months through the summer and into the fall to really ready ourselves for the opportunity set of this merger, both on the revenue, cost take-out organization, and of course building the integration plans. Pausing the share buybacks in both companies has provided for that opportunity set to be launched as we look forward. On timing, we've said our expectation was calendar Q4, which we're rapidly approaching as we approach October 1. We haven't changed our forecasts on that. But I'd say to my team and to investors that if it rolled into the new year into January, it wouldn't surprise me. So, we're on track, everything, the teams are doing a great job. They're doing all the work that's needed to get the deal closed, and we're rapidly approaching the end of the year. I hope we can complete on that schedule, but it wouldn't surprise me if it were 30 days later. I don't have that information to share. Next question?

Our next question comes from George Tong with Goldman Sachs. Your line is open.

Hi, thanks. Good morning. I'd also like to say congrats, and thanks for the partnership over the years. You're raising your operating outlook for revenue by $20 million for the full year. Can you elaborate on where the upside is coming from?

It really, I have to say, is coming from all across the firm, George. I'm pleased—I'd love to highlight a bit about all the work that the CMS team has done. Since the merger of IHS with Markit, we've rebuilt the platforms and built out a whole digital product suite. I'm really pleased to show that mid-single digit ex-BPVC revenue, and congratulations to the CMS team for a real good job. ECR has been a slow low-single-digit grower; they built out these new supply chain products, and the world and geopolitics is driving demand into their product base. Net-net, the teams there have been additive to the overall growth. Automotive has a strong recovery expected to continue. The underlying core of automotive in high single digits is where we've always talked about being and we don't see that changing. Hats off to the Mastermind team; that acquisition has turned out to be a very important forward component. I know many shareholders challenged us on that acquisition not being as accretive early on. The teams stuck with it in terms of the build-out of the enterprise Mastermind products; those have been rolled out to two major dealers, and there are lots more to come. New products in CARFAX for Life have taken hold. Dick and the team have executed excellently. In Financial Services, the Ipreo acquisition and our recent acquisitions have shown fruits; the private markets around IPOs are building a recovery of investments in Solutions, turning into strong organic growth now. And then in energy, who would have thought we'd see $70 oil heading toward $100. It's a CapEx recovery, and that helps. That mid-single-digit view across Resources next year, coupled with recovered CMS and strong Financial Services and automotive, puts us at the top end of our long-term 5% to 7% guidance. That bodes well for the firm. We're looking to achieve the 100 basis points of margin expansion as expected with the rest going into investing in new products and new opportunity sets. So great job—it's probably my last chance publicly to congratulate the teams. The follow-through to earnings has been excellent. I don't expect that to change. With S&P Global, there's a whole new set of revenue opportunities and substantive cost synergies and share buybacks ahead. Lots to look forward to; it's been a real exciting journey. The excitement doesn't stop here. Next question?

Our last question comes from Toni Kaplan with Morgan Stanley. Your line is open.

Terrific. Thank you. Lance and Jonathan, always a pleasure speaking with you. One topic that has been coming up a lot with investors recently has been the area of fixed income indices as it relates to the deal with S&P. I was hoping you could talk a little bit more about what areas of synergies you would generate within the combined entity. I'd imagine the main areas are creating products in multi-asset class and ESG. But if there's any others, or if you're able to expand on what you're most excited about there with the combined products, that will be really helpful, thanks.

Okay. Thanks, Toni. And thanks for your support. I think the most exciting thing about the fixed income indices is the combination with S&P Global, but not so much from product creation alone. Both groups are highly product-oriented and innovative. In earlier days, you really needed bank partnerships to build strong fixed income indices because you needed to align underlying prices with the OTC marketplaces. That's shifted over time. Today, the combination is really about the huge footprint and marketing platform that S&P Global has for their index franchise and getting to overlay that across the fixed income franchises; that is going to be a great uplift in terms of sales and opportunity. The second thing, of course, is opportunities to create new indices. I'll let Adam talk a little bit about some of the synergistic revenues that we expect to get out of the combination. Adam?

Yes, great, thank you. Very excited about that combination. We're proud of what we built in fixed income indices, and I know with the scale that S&P Indices will bring, all the things Lance highlighted will give that franchise a much broader reach than it's ever had. Key areas to think about in the combined businesses include multi-asset classes, private markets, and ESG, bringing the fixed income indices into those arenas. I think those are areas of new products where we'll continue to see substantial growth. Combined with the kinds of data sets that S&P and IHS Markit together will have, there's the possibility for new indices whether it's in carbon, crypto, ESG, all across the fixed income world globally. I think the opportunity set is pretty robust.

Thanks, Adam. With that, we'll complete the questions and we'll turn it back to Eric.

Thanks, operator. Thanks, Lance. We thank you for your interest in IHS Markit. This call can be accessed via replay at 855-859-2056 or international at 404-537-3406, conference ID 4464694 beginning in about two hours and running through October 5, 2021. In addition, the webcast will be archived for one year on our website. Thank you and we appreciate your interest and time.

This concludes today's conference call. Thank you for participating. You may now disconnect.