IHS Annual Report 2012

IHS Annual Report 2012 Letter to Shareowners Notice of 2013 Annual Stockholder Meeting Proxy Statement 2012 Form 10-K Annual Report Advancing Decisions that Advance the World® Connecting customers to IHS solutions continues to drive growth and value A Three-Year Trend (1) 2010 Revenue and Adjusted EBITDA figures have been recast for discontinued operations. “Adjusted Free Cash Flow” and “Adjusted EBITDA” are non-GAAP financial measures intended to supplement our financial statements that are based on U.S. generally accepted accounting principles (GAAP). Definitions of our non-GAAP measures as well as reconciliations of comparable GAAP measures to non-GAAP measures are provided with the schedules to our quarterly earnings releases. Our most recent non-GAAP reconciliations were furnished as an exhibit to a Form 8-K on January 8, 2013, and are available at our website (www.ihs.com). *CAGR - Compound Annual Growth Rate Letter to Shareowners Dear Fellow Shareowner, 2012 was a milestone year for IHS; one in which we delivered against our goals, while continuing to invest heavily in our future. Since 2008, each of my annual letters to you has been written against a backdrop of ‘challenging economic times’, ‘a worsening macro-environment’, ‘volatility’ and ‘uncertainty’. I have spoken about the impact of the global economy on both our business and our customers’ businesses. In many ways, operating in this complex and changing global economy has become the new normal and has afforded us the opportunity to innovate and find methods of operating our company in a different and more efficient manner. IHS has pushed successfully ahead, guided by our vision and our values, adjusting and re-prioritizing as necessary, to ensure that we deliver sustainable, long-term, profitable growth for our colleagues, our customers and you, our shareowners. To evaluate the future potential of a company, it is critical to consider the “four P’s”: does the company have the right people, platforms, processes and products? Since 2008, I have updated you annually on our progress as we have invested significantly in the core foundation of IHS — in our people, platforms, processes and products. This time period has witnessed the largest transformation and value-creation exercise in our company’s history. This past year, 2012, was notable as it marked the highest level of investment and greatest progress achieved in these critical areas. If I can leave you with one thought to take away, it is this: I have never had more confidence about our ability to execute and deliver sustainable, long-term, profitable growth than I do today because we now have the right people, platforms, processes and products. And although this year will be another year of significant investment amid challenging economic conditions, we are in a better position to succeed than at any other point in our company’s history. I could not be prouder of my colleagues. Performance against our Five Company Objectives During 2012, we made great progress against our five company objectives: • Colleague success; • Customer Delight; • Profitable top- and bottom-line growth; • Shareowner success relative to our peer group; and • Corporate Sustainability. These objectives are interdependent; one drives another and achieving all five is critical. All important decisions are made with a focus on these goals as they are how we measure our success. To ensure that our senior leaders are universally focused, we tie their incentive compensation to the achievement of these objectives and this compensation is significantly “at risk” if the objectives are not achieved. Colleague Success We are creating something significant and new at IHS together. This is measured in part by the professional opportunity and experience we create for every colleague and the impact that these efforts have on our global workforce. We achieved a record level of Colleague Engagement with a 14 percent improvement from 2011. We had high participation with over 95 percent of our colleagues taking the survey and 85 percent of our colleagues in the highest levels of engagement. Customer Delight Placing our Customers First each day is fundamental to who we are at IHS. We have a strong passion for and commitment to enabling our customers’ success, and we have made tremendous progress in delighting our customers as measured by our Customer First surveys. The hard work of our colleagues has allowed us to set a record here at IHS with a Customer Delight score of 66 percent for 2012! Since 2008, we have improved Customer Delight for our customers by 37 percent. This year, most global companies’ scores are flat or down in their customer surveys. In fact, for the top 10 percent of companies — known as “Best-In-Class” — scores on average dropped from 81 percent to 76 percent, which makes our performance all the more notable. We improved in all regions and across all of our workflows. We continue to be externally focused on our customers as we pursue our goal of becoming a global “Best-in-Class” company by putting the right investments and actions into place. Profitable Top- and Bottom-Line Growth This past year was a record year for IHS in terms of revenue, adjusted EBITDA, adjusted EBITDA margin and adjusted free cash flow. Our revenue grew over 15 percent in 2012 on the strength of five percent organic growth and nine strategic acquisitions. We also continued to expand our profit margin (as measured by adjusted EBITDA divided by revenue), increasing it by 150 basis points in 2012 alone and 1350 basis points since our initial public offering in 2005. Importantly, we generated more than $300 million of adjusted free cash flow in 2012. All of this growth occurred despite the fact we continued to invest millions of dollars in internal infrastructure and acquisitions, to ensure the future long-term success of IHS. Shareowner Success Relative to Our Peer Group Our financial results are directly connected to our overall performance and highlight the shareowner value we create in connecting colleague and customer metrics to shareowner returns with our equity-based incentives. We continue to drive substantial value for shareowners, delivering a compounded annual return of 28 percent since our initial public offering, well above that of our peers and the overall market. Corporate Sustainability Beginning in 2012, we added a fifth corporate objective, Corporate Sustainability. At IHS, Corporate Sustainability is core to the way we do business and is a characteristic which is integrated into our values and our culture. Our Sustainability mission starts with long-term, profitable growth. By incorporating sustainable thinking into every decision that we make, we will gain competitive advantage while simultaneously improving the social and economic conditions of the communities in which we operate. We have reason to be very proud of the progress we’ve made in just one year — progress that has been largely driven by our global network of Site Sustainability Champions. This network is comprised of IHS colleagues in each of our offices around the world — colleagues with a passion for all of the tenets of corporate sustainability and with a belief that we CAN make the world a better place. One of the ways we measure our success in Corporate Sustainability is through the Sustainable Asset Management (SAM) corporate assessment. We not only achieved our corporate objective measure for 2012, we reached our stretch target of 55, improving seven points over our 2011 score of 48. Some of the notable highlights in this year’s results were: • For ‘Customer Relationship Management’ — our score improved by 24 points and we are now ranked in the 100th percentile; • For ‘Brand Management’ — our score improved by 24 points and we are now ranked in the 93rd percentile; and • For ‘Citizenship & Philanthropy’ — our score improved by 50 points and we now rank in the 83rd percentile. In addition, IHS was named to three different MSCI flagship sustainability indices, further evidence of our progress. Finally, at the beginning of our 2013 fiscal year, we announced to our colleagues the addition of a ‘Volunteer Paid Time-Off Benefit’. This benefit gives every colleague a paid day off to volunteer in their community. Collectively, IHS colleagues possess a wealth of expertise, skill and passion. We are very excited to leverage those attributes to make our communities better places to live and work. 2013 Priorities Looking ahead, to help ensure we achieve our 2013 goals and delight our customers we will focus on four priorities that support our externally benchmarked objectives: • Accelerate organic growth targeting high potential accounts and enhanced lead generation and conversion at all levels; • Create and deliver new products and common platforms that converge all IHS capabilities; • Complete the global transformation of IHS infrastructure and management systems; and • Align capacity to our highest-growth opportunities across all operational, functional and support areas to create new efficiencies and growth investment. We have teams aligned around strategies and tactics that will help us successfully achieve these priorities and I am confident that we will be able to provide a very positive progress update in a year’s time. 2012 was certainly not an easy year. But IHS is a terrific company with a strong vision, foundational values and with talented, collaborative and passionate colleagues. We understand that we will only achieve sustainable, long-term, profitable growth by enabling and ensuring the success of our customers and shareowners. So, let me close by saying thanks to you, our shareowners, for your trust in us and for your continued interest, commitment and support. With great appreciation, Jerre Stead Chairman and CEO, IHS Inc. IHS INC. 15 Inverness Way East Englewood, Colorado 80112 www.ihs.com February 22, 2013 Dear IHS Stockholder: We are pleased to invite you to attend our 2013 Annual Meeting of Stockholders.

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