Item 6. Selected Financial Data

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Item 6. Selected Financial Data

The following selected historical financial data should be read in conjunction with, and are qualified by reference to, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto included elsewhere in this annual report on Form 10-K. The consolidated statement of operations data for the years ended December 31, 2017, 2016, and 2015 and the consolidated balance sheet data as of December 31, 2017 and 2016 are derived from the audited consolidated financial statements included elsewhere in this annual report on Form 10-K. The consolidated statement of operations data for the years ended December 31, 2014 and 2013 and the consolidated balance sheet data as of December 31, 2015, 2014, and 2013 are derived from consolidated financial statements that are not included in this annual report on Form 10-K. Results for the year ended December 31, 2017 are not necessarily indicative of results that may be expected in any other future period.

Between January 1, 2013 and December 31, 2017, we acquired 22 businesses (most notably Wood Mackenzie on May 19, 2015), which may affect the comparability of our consolidated financial statements. Our consolidated financial statements have been retroactively adjusted in all periods presented to give recognition to the discontinued operations of our heathcare business and mortgage services business. The following table sets forth our statement of operations for the years ended December 31:



	2017			2016			2015			2014			2013

	(In millions, except for share and per share data)
Revenues:
Decision Analytics	$	1,374.9		$	1,270.9		$	1,072.5		$	780.5		$	705.9
Risk Assessment		770.3			724.3			688.2			650.6			618.3
Revenues		2,145.2			1,995.2			1,760.7			1,431.1			1,324.2
Expenses:
Cost of revenues (exclusive of items shown separately below)		783.8			714.4			612.0			516.0			472.5
Selling, general and administrative		322.8			301.6			278.3			187.3			186.8
Depreciation and amortization of fixed assets		135.6			119.1			96.6			65.4			49.2
Amortization of intangible assets		101.8			92.5			70.4			30.1			36.2
Total expenses		1,344.0			1,227.6			1,057.3			798.8			744.7
Operating income		801.2			767.6			703.4			632.3			579.5
Other income (expense):
Investment income and others, net		9.2			6.1			16.9			0.2			0.3
Gain on derivative instruments		—			—			85.2			—			—
Interest expense		(119.4	)		(120.0	)		(121.4	)		(70.0	)		(76.1	)
Total other expense, net		(110.2	)		(113.9	)		(19.3	)		(69.8	)		(75.8	)
Income before income taxes from continuing operations		691.0			653.7			684.1			562.5			503.7
Provision for income taxes		(135.9	)		(202.2	)		(196.6	)		(208.5	)		(184.8	)
Income from continuing operations		555.1			451.5			487.5			354.0			318.9
Income from discontinued operations, net of tax (1)		—			139.7			20.1			46.0			29.5
Net income	$	555.1		$	591.2		$	507.6		$	400.0		$	348.4
Basic net income per share
Income from continuing operations	$	3.36		$	2.68		$	2.95		$	2.14		$	1.90
Income from discontinued operations		—			0.83			0.12			0.27			0.17
Basic net income per share	$	3.36		$	3.51		$	3.07		$	2.41		$	2.07
Diluted net income per share
Income from continuing operations	$	3.29		$	2.64		$	2.89		$	2.10		$	1.85
Income from discontinued operations		—			0.81			0.12			0.27			0.17
Diluted net income per share	$	3.29		$	3.45		$	3.01		$	2.37		$	2.02
Weighted average shares outstanding:
Basic		165,168,224			168,248,304			165,090,380			165,823,803			168,031,412
Diluted		168,688,868			171,171,572			168,451,343			169,132,423			172,276,360

The financial operating data below sets forth the information we believe is useful for investors in evaluating our overall financial performance for the years ended December 31:



	2017		2016		2015		2014		2013

	(In millions)
Other data:
EBITDA (2):
Decision Analytics EBITDA	$	589.1	$	835.8	$	647.7	$	489.8	$	413.4
Risk Assessment EBITDA		458.7		415.5		406.5		368.8		346.9
EBITDA	$	1,047.8	$	1,251.3	$	1,054.2	$	858.6	$	760.3
The following is a reconciliation of net income to EBITDA:
Net income	$	555.1	$	591.2	$	507.6	$	400.0	$	348.4
Depreciation and amortization of fixed and intangible assets from continuing operations		237.4		211.6		167.0		95.5		85.4
Interest expense from continuing operations		119.4		120.0		121.4		70.0		76.1
Provision for income taxes from continuing operations		135.9		202.2		196.6		208.5		184.8
Depreciation, amortization, interest and provision for income taxes from discontinued operations		—		126.3		61.6		84.6		65.6
EBITDA	$	1,047.8	$	1,251.3	$	1,054.2	$	858.6	$	760.3

The following table sets forth our consolidated balance sheet data as of the years ended December 31:



	2017		2016		2015		2014		2013

	(In millions)
Balance Sheet Data:
Cash and cash equivalents	$	142.3	$	135.1	$	138.3	$	39.3	$	165.8
Total assets	$	6,020.3	$	4,631.2	$	5,593.7	$	2,335.1	$	2,492.8
Total debt (3)	$	3,008.8	$	2,387.0	$	3,145.7	$	1,426.7	$	1,264.2
Stockholders’ equity	$	1,925.4	$	1,332.4	$	1,372.0	$	211.0	$	547.6


(1)	On June 1, 2016 and March 11, 2014, we sold our healthcare business and mortgage services business, respectively. Results of operations for the healthcare and mortgage services businesses are reported as discontinued operations for the year ended December 31, 2016 and for all prior periods presented. As necessary, the amounts have been retroactively adjusted in all periods presented to give recognition to the discontinued operations. See Note 9 of our consolidated financial statements included in this annual report on Form 10-K.

(1)

On June 1, 2016 and March 11, 2014, we sold our healthcare business and mortgage services business, respectively. Results of operations for the healthcare and mortgage services businesses are reported as discontinued operations for the year ended December 31, 2016 and for all prior periods presented. As necessary, the amounts have been retroactively adjusted in all periods presented to give recognition to the discontinued operations. See Note 9 of our consolidated financial statements included in this annual report on Form 10-K.


(2)	EBITDA is the financial measure that management uses to evaluate the performance of our segments. “EBITDA” is defined as net income before interest expense, provision for income taxes, and depreciation and amortization of fixed and intangible assets. Because EBITDA is calculated from net income, this presentation includes EBITDA from discontinued operations of our healthcare business and mortgage services business. In addition, references to EBITDA margin, which is computed as EBITDA divided by revenues from continuing and discontinued operations. See Note 17 of our consolidated financial statements included in this annual report on Form 10-K.

(2)

EBITDA is the financial measure that management uses to evaluate the performance of our segments. “EBITDA” is defined as net income before interest expense, provision for income taxes, and depreciation and amortization of fixed and intangible assets. Because EBITDA is calculated from net income, this presentation includes EBITDA from discontinued operations of our healthcare business and mortgage services business. In addition, references to EBITDA margin, which is computed as EBITDA divided by revenues from continuing and discontinued operations. See Note 17 of our consolidated financial statements included in this annual report on Form 10-K.

Although EBITDA is a non-GAAP financial measure, EBITDA is frequently used by securities analysts, lenders and others in their evaluation of companies, EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for an analysis of our results of operations or cash flow from operating activities reported under GAAP. Management uses EBITDA in conjunction with traditional GAAP operating performance measures as part of its overall assessment of company performance. Some of these limitations are:


•	EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments.


▪	EBITDA does not reflect changes in, or cash requirements for, our working capital needs.


▪	Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future and EBITDA does not reflect any cash requirements for such replacements.


▪	Other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.


(3)	Includes capital lease obligations.

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