Good day, ladies and gentlemen, and welcome to the IHS Markit Second Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Eric Boyer. Sir, you may begin.

Good morning and thank you for joining us for the IHS Markit Q2 2017 Earnings Conference Call. Earlier this morning, we issued our Q2 earnings press release and posted supplemental materials to the IHS Markit Investor Relations Web-site. Some of our comments and discussions on the quarter are based on non-GAAP measures. Our non-GAAP or adjusted numbers exclude stock-based compensation, amortization of acquired intangibles, and other items. The non-GAAP results are a supplement to the GAAP financial statements. IHS Markit believes this non-GAAP presentation and the exclusion of these items is useful in order to focus on what we deem to be a more reliable indicator of ongoing operating performance. As a reminder, this conference call is being recorded and Webcast and is a copyrighted property of IHS Markit. Any rebroadcast of this information in whole or in part without the prior written consent of IHS Markit is prohibited. Please keep in mind that this conference call, especially the discussion of our outlook, may contain statements about expected future events that are forward-looking and subject to risks and uncertainties. Factors that could cause actual results to differ and vary materially from expectations can be found on IHS Markit's filings with the SEC and the IHS Markit Web-site. After our prepared remarks, Jerre Stead, Chairman and CEO; Lance Uggla, President; and Todd Hyatt, EVP and Chief Financial Officer, will be available to take your questions. With that, it is my pleasure to turn the call over to Jerre Stead. Jerre?

Thank you, Eric, and our thanks to all of you for joining the IHS Markit Q2 Earnings Call. We will review our Q2 results, provide you with an update on our integration work, and discuss some of the other highlights from the quarter. We were very pleased with all that we accomplished in Q2 as we produced solid financial performance, continued to make progress with our integration, and hosted our first Investor Day as IHS Markit. It was great to see many of you at our Investor Day. The team did an outstanding job of laying out why we feel so confident in the long-term outlook for IHS Markit. As Lance described so well, the combination of our unique information assets and industry expertise puts us in an unparalleled position to benefit from our customers' increasing need for actionable intelligence in the years to come. We will best position ourselves to take advantage of this opportunity through the incremental investments we discussed at our Investor day. These investments are made possible by the ongoing efforts of our team delivering the merger synergies. We look forward to updating you on these investments over time. Now let's move to the high-level financial results in Q2 and then Lance will provide the industry highlights and integration update. Revenue was $906 million, up 3% year-over-year, on an organic basis. Adjusted EBITDA was $353 million, in margins of 38.9%, representing an expansion of 480 basis points on a reported basis. Adjusted EPS was $0.52, up 16% over the prior year. This quarter's results included good contribution from synergies and we continue to have strong additional opportunities. With that, I'll turn the call over to Lance.

Thanks, Jerre. I'll begin with a short update on each of our core industry verticals. And so let's start with Transportation. Transportation produced very strong organic growth of 8% for the quarter, with the growth once again being led by the strong performance of our Auto's team. We remain confident in the growth trends within the used car portion of our Auto business, including continued penetration of the vehicle history report market as well as our new products such as the used car listing and valuation services. Within the new car portion of our Auto business, we continue to benefit from auto industry trends, including the proliferation of new automotive technologies, global regulatory pressure to curb fuel consumption and emissions, and the increasing use of digital marketing and recall activity. In Resources, our Energy business experienced a slight increase in our annual contract value for the first time in 10 quarters as we see signs of the upstream market beginning to stabilize. Our Chemicals and OPIS businesses continued to perform well. We are especially pleased with OPIS' strong retail performance, including automakers using our retail fuel data for in-car applications that they are developing to enhance driver experience when shopping for fuel. Our CERAWeek Conference was in our second quarter this year and reported record revenues. There were many successes from this year's conference that we spoke to in our first quarter call. With that said, I walked away from my first CERAWeek, thoroughly impressed by this marquee event and foresee future revenue synergies with our global Financial Services customers, especially those with strong energy franchises. CMS total organic revenue was down 1% year-over-year, but we do expect improved performance in the second half of the year. Finally, Financial Services had a very good quarter with organic growth of 8%…

Thank you, Lance. Before we get started with the results, I want to remind you that while our Q2 and year-to-date results include IHS and Markit, prior year Q2 and year-to-date results only include legacy IHS. We have included Markit's year-over-year organic revenue growth and FX revenue impact in our revenue growth rates and have included the remainder of Markit revenue as acquisitive revenue growth. Our Q2 absolute and organic revenue growth rates have also been normalized to take account of movement of CERAWeek from Q1 2016 to Q2 2017 and movement of our annual maritime event from Q2 2016 to Q1 2017. Now for the [Q1] [ph] results. Revenue was $906 million, an increase of 54%. Adjusted EBITDA was $353 million, an increase of 76%, with margin of 38.9% and margin expansion of 480 basis points. Adjusted EPS was $0.52, an increase of 16%. Relative to revenue, we were pleased with the quarter as we continue to see strong growth in our Transportation and Financial Services segments and stabilization in our Resources annual contract value or ACV which represents the annualized value of recurring revenue contracts. Total Q2 reported revenue growth was 54%, organic revenue growth was 3%, acquisitions contributed 51%, and FX was a negative 2% headwind. Recurring organic growth was 3% and nonrecurring organic was 12%. Looking at segment performance, Transportation normalized growth was 7%, which included 8% organic and negative 1% FX. Organic revenue growth was comprised of 9% recurring growth and 6% nonrecurring growth. We continue to expect all-in and recurring Transportation organic growth in the high single-digits but also expect some slowing of our nonrecurring growth due to difficult year-over-year comparisons in our Auto's recall business. Moving on to Resources, revenue declined 5%, including 4% organic decline and negative 1% FX. The organic revenue…

Thanks Todd. Our many thanks to our colleagues who continue to deliver excellent efforts, resulting in another strong financial quarter. I am feeling very good at where we are as an organization and how far we have come in less than a year of becoming IHS Markit. Moving forward, we will stay very focused on investing for profitable top line growth of our business to provide continued shareholder value creation. With that, Lance, Todd and I are ready to answer questions.

[Operator Instructions] Our first question comes from the line of Peter Appert with Piper Jaffray. Your line is open.

The performance in the Financial Services segment is particularly impressive. I wonder if you could give us some more granularity in terms of the drivers of the revenue growth and the margin performance, and then why are you anticipating some moderation in growth in the second half?

Thanks Peter. Lance will be happy to do that.

Sure. Thanks Jerre. So I guess it was a very well diversified set of numbers, as Todd and I mentioned, covering pricing, indices, valuation services, a real strong performance. Performance being led by loans and mixed across derivatives proved to be very strong. But as we look forward, year-over-year comparisons, general processing volumes in the marketplace you know is always an uncertainty. We just want you to be thinking about our long-term objectives and guidance for the division. That's what we're confident of delivering. And therefore, we want to make sure that you've got a good conservative outlook for the Group. But a great quarter, we expect continued good performance, and our long term objectives are what we'd like you to focus on.

Thanks Lance. Next question please.

Our next question comes from the line of Bill Warmington with Wells Fargo. Your line is open.

Just wanted to add my, just wanted to mention my congratulations on the [ASV] [ph] growth turning positive. So my question actually is on the Transportation piece. The recurring revenue was stable there at 9%, nonrecurring ticked down a little bit. Todd mentioned the tough recall comps. So we're getting more questions from investors around the moderating new car production. So, I wanted to know if you could talk a little bit about the growth initiatives that give you confidence in sustaining that upper single digit type growth through the second half of the year.

Thanks Bill. Todd will comment on it. Just to give you a good view, as Lance said earlier, lot of new products coming. The balance in total in Transportation, particularly in Automotive, is very strong with new products being introduced, and then remember the balance between used and new cars. So, Todd?

Yes, I think the first point, Bill, is the Automotive portfolio has a good level of diversification. So, we sell into OEMs, we also sell into the supply chain, and we sell into dealers as well. So we have some diversification. We have diversification between new cars and used cars, and there tends to be some counter-cyclicality in used cars. I think focusing on the new car part of the business, you know the growth drivers there continue to be things like the vehicle emissions product, things like digital marketing, and really from a strategic perspective what we've done is we built good long-term relationships with the OEMs so that we have a level of predictable revenue, and then it's about delivering new products and services to those important customers. And in a tightening market, what happens is that it becomes very important to identify opportunities for market share, and our data has a full view of the entire market. So while OEMs certainly understand what's happening in their business, it's important that they understand what's happening across the entire market landscape, and we have that complete picture and can provide that information. So, even in a flattening market, that conquest becomes even more important and we provide that information that allows the OEMs to effectively compete in their market.

Thanks Bill. Next question.

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

I wanted to ask about the Energy business, and I guess a two-parter. First, given the declines we've seen in oil in the last few months and it sounds like you're calling for a little lower price now, how does that flow through to your business, particularly outside of U.S. shale where investment has come charging back this year? And as part of that, just any color on the ACV improvement, was that just adding OPIS into the mix or was there real improvement in the legacy business as well?

Gary, we'll have Todd pick up the last part and then Lance and I will pick up the first part.

Yes, we have excluded OPIS from that ACV number. So we provided a consistent ACV calculation, really going back to the downturn. So we didn't include OPIS. If we had included OPIS in that ACV number, then obviously there would've been a higher level of growth, but we want consistency in how we provided and track that number. And I think I talked about that point a quarter ago. I think as far as the market itself, certainly it's obviously more stable than it was a couple of years ago. For us, what's important is line of sight into our customers and understanding what's happening with our customer account. So, the market stability, the price, certainly helps, the capital spending being at a more stable level helps, but we've also cycled through accounts multiple times. And so, a lot of the impacts that we saw were customers making significant strategic changes to their exploration and development activities. And I think so long as we don't have another substantial downturn in the market, we feel pretty well-positioned to be able to maintain and grow the sub base.

I'd add just a couple of things because I'd like Lance to pick up on it. We actually talked about it at our weekly meeting last week in our executive ops meeting. We've got the beginnings now of the movement of our Energy products into the Finance community, and Lance, give him a few examples because I think, you and I both feel very excited about what that's going to do for us on upstream.

Yes, I think it's just, over the last few months we've been doing deep dives into each of our businesses. So, everything that Todd said, I'd just say that there is a fairly diversified set of results coming in from Energy, right from OPIS through Chemicals, great performance, and the upstream getting a stabilizing position. But some of the new things around Financial Services really kicked off around CERAWeek with Financial Services participants being invited to join in. We have seen good activity globally on the software products, that Vantage Performance Evaluator, really good products that are built, ready, on the shelf, and the introductions of the account management team across financial markets into the big banks and the big energy market participants on the buy side has shown to produce some early wins. Additionally, we've had our first sale, as we mentioned, on Investor Day, I gave some note of it here in the call this morning, where we've taken data management software. Imagine the complexity of the data across energy markets, with all the different contracts, expirations, different types of products, power, gas, oil. The data management software that IHS Markit has is a leading product in financial markets. We have done the first adaption in sale of that product in the Resources with an early success. And so, we see the financial markets as an additional diversification across the resources that give us some confidence as we look forward into the rest of the year that our 4% to 6% longer-term growth targets are ones that we can achieve, live by, and deliver to you, and with the investments we make, we hope we can accelerate to a higher end of that.

Great. Thanks Lance. Thanks Gary. Next question.

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

I just wanted to go back to the Resources segment. Lance, I think in your prepared remarks, you said something that you expect that the upstream market is, now you're starting to see signs that it's beginning to stabilize. Can you share with us some examples of what you're seeing?

Sure, that's a great question. Lance, pick it up, particularly what you were just giving is examples into the Financial Services community.

Yes, so I think one of the best pieces of the merger is the customer base of legacy Markit joining with IHS, including across Transportation, across Economic & Country Risk, and across Resources we're starting to see some of the early wins of the revenue synergies that we put forward. And so, we definitely have confidence in our three-year revenue synergies and we're starting to see some of those come through, and the best of those in Energy will happen in that upstream segment. And so, not specific customer by customer, but as we've said, Vantage and Performance Evaluator sold into financial market participants. That pipeline has grown and we're executing against that. We also have seen the use of our Energy derivatives data to be used within one of the largest energy companies to price their credit exposures across their customer base, and that's a completely new-found synergy where we see opportunity to take that across the marketplace. So, I think that coupled with what feels like a base in the 40s, low 50s, in the energy market, we feel that from that base, with the synergies, with the diversification, we feel confidence in our forward-look on the Resources segment.

Thanks Lance. Next question.

Our next question comes from the line of Jeff Meuler with Robert W. Baird. Your line is open.

You got Nick Nikitas on for Jeff. Just shifting to CMS, rev growth there continue to show some signs of improvement but overall it's been slightly weak, and I realize you've got BPVC in Q3, but can you guys just talk more about second half expectations from an underlying perspective? And then, I guess longer-term from a product portfolio perspective, do you feel like that's in a good spot now or could it be something that going forward you maybe continue to right-size the model a little bit?

Good questions. Todd, you pick up on the first part of the question please.

I think when we look at the CMS and the level of performance, we see a low single-digit grower in our legacy specs and standards business, and we do see a path to elevate that with the Engineering Workbench. We also do see in the second half of the year that we'll see improving growth on the non-subs driven by the Engineering Workbench. I think the other – so, the engineering part of our business and that customer set, very important customer set, and I think a customer set that longer term is certainly an attractive area for us in terms of other opportunities to sell other products. When we look at TMT, TMT has really been transformed and we went from a one-off report selling business to building larger subscription-based product offerings. I mean that certainly had a drag from a non-subs in the revenue impact, but Lance and I did a deep dive with the TMT guys a week ago and I think there is some good assets and good market position in that area, and we do think that that scenario that we can elevate the growth. So, I'll let you give your thoughts on it.

Before he does, quick comment on ECR though too, Todd, if you would, and then Lance?

Yes, I mean ECR has been not growing at the level that we would like it to grow at, but we actually see with ECR and Financial Services some really substantial opportunities for cross-sell between those two groups. And Adam Kansler, who runs the Financial Service part of the business, is also managing ECR because of our view of the opportunity that we have between those products. So longer-term, we feel we have a good position in macroeconomic risk and forecasting and we can build on that position.

Great. Thanks Todd. Lance, pick up.

I would just say that it's nice that we get a CMS call first off, so thank you for that, because we get a lot of focus across the firm on our other divisions, and so it's good that we get to give a shout-out to the team. But I have to say when, and it really is just the deep dives around CMS are just starting for me personally, but the first ones, as Todd referenced, a few weeks back we dove in with the TMT guys in London. And I have to say that the market intelligence piece of that business, which competes against the likes of Gartners and others, this is a good segment to be in, and the team really has 12 industry areas they are covering, six B2B, six consumer based businesses, all areas of good economic activity in that technology sector. So, under Ian Weightman's leadership, who runs that business, he's got two great individuals in Tom and Francis that lead the B2B and consumer segments, I think they've got a reasonable upside to predict in the second half in terms of making that business a bit brighter. On the product design side, I have to say, the Workbench 2.0 release to us is a very important piece of that release. This is a Workbench that's consolidating global specs and standards, it's competitively strong, and they are already working on Workbench 3.0. So, I think the combination of that, we look forward, we think a low single-digit expectation for now is a good one for you to put into your models, and we'll update you as we develop from there. But it is an important piece of our portfolio and glad you asked a question about it.

Last quick comment on that, if you look as a percentage of improvement on the margins, last year was the highest total improvement, it's the lowest margins, but that's upside in 2017 and 2018 too. Thanks. Next question please.

Our next question comes from the line of Andrew Steinerman with J.P. Morgan. Your line is open.

It's Andrew. Lance, could you make a quick comment on MiFID II as you look at the Financial Services segment, what are headwinds, what are tailwinds, is this a needle-mover?

I didn't want to get anybody adding extra stuff in their model on MiFID II. But I have to say, I don't know if anybody has read the recent McKinsey report, they've put out a great report on MiFID II, and I actually think if you really look at it, independent research providers are winners under MiFID II. And we have strong research capability. I don't know if I want to say over 1,000 researchers in our firm, I'm sure it's many, it's actually, I don't have the number but I'm sure it's many more than that. We can come back to you on that. But we have a large number of people that are writing independent research across Aerospace & Defense, Maritime & Trade, Resources, upstream, Chemicals, OPIS. We have people writing research on over 200 countries in Economics & Country Risk. And the TMT group leading research in 12 industry segments. So, I think it is an important area for us to get well organized around in terms of how are we going to sell IHS Markit research into the tens of thousands of buy side that are going to be adjusting their models going into MiFID II. So I think we are well-positioned. We haven't put that into our revenue synergies in our original thought. We've always thought financial markets would be a good place for research. MiFID II is the tailwind for our researchers.

Great answer. Thank you, Andrew. Good question. Next.

Our next question comes from the line of Manav Patnaik with Barclays. Your line is open.

I just wanted to follow up on the MiFID I as well. So, that great McKinsey report also talked about the decline in the spend on research, and obviously that means a lot of headcount pressures, at least on our side of the world. And so, I was just hoping, how you think your exposure to the headcount there potentially is an impact? And then beyond just research from the legacy Markit businesses, do you see any puts and takes there in terms of how MiFID could help or hurt?

Yes, definitely. Well, we do have broker voting, commission management, several research tools, transaction cost analysis. So we are well-positioned form a financial market perspective as one of the participants playing into the new MiFID regulations. But going back to research, I actually think – see, our research base today across IHS Markit has been mainly subscriptions taking up from corporates and governments and more traditional corporate participants, and the amount of revenue that we have associated to financial markets from the research products of legacy IHS is negligible. So, to me it's all upside for us. But we have to get the model right of how we are going to sell into that marketplace. You have to remember, we have subject matter experts and industry experts that financial market participants want access to. So coupling that with subscription-based research and finding a way to sharing that commission sharing arrangements or pure subscriptions is going to be an important model adjustment for us and we're going to get it right. It's work in progress but we do see it as the tailwind, as Andrew asked previously.

Thank you. Next question.

Our next question comes from the line of Kevin McVeigh with Deutsche Bank. Your line is open.

Is there any way to quantify how much new products, either by segment or just across the enterprise, contribute to organic revenue growth in any given year?

So that's a great question, thanks. I'll start and both Lance and Todd will pick up on it. That's a question that's come up. We will end up making sure as we go into 2018 we give you the way we are measuring that, and then we'll measure and report on it on a quarterly basis. I would say, that's why I'm keen for Lance to make comment, is he's doing the deep dives, we are [indiscernible] in a sea of opportunity for new products. The big question for us is to set the priorities that will give us the best return. Lance?

I think at the Investor Day that question came up and it is, we've got existing products that are adding new features and new bells and whistles, and adjusting to market opportunities. So we need to measure that. We also have pure outright new product development. We need to measure that. That's easier. We do small bolt-on acquisitions, and those together create new opportunities for product. What we haven't done really well, and we think it would be a competitive advantage for us to do so, is to actually do what Jerre said, describe it and report it, and that's something that we hope in our future we can give you better transparency as to our new product development and what percent of our revenues comes in each three to five-year period from new products.

Quick, Todd.

Yes, I mean we don't separately report it, but I do think as we look ahead and we look at the strategy, I mean the foundation of the strategy is really taking existing data sets that we have and information assets and building new solutions for customers with that core asset base. A number of examples where we've had good success across both companies, when we talk about the used car listing valuation in CARFAX or we talk about the VPaC, lot of the digital marketing in Autos, Vantage Performance Evaluator in Financial Services. I think the Financial Services, a lot of the foundation of that has been on building the bond pricing. You have bond pricing valuation services built internally. So I think both companies have had a good level of success, but it's a very good point, this notion of tracking and reporting the vitality and that I think is something we've talked about and certainly will make it happen.

Thank you. Next.

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

Appreciate you taking the question, lots of ebb and flow here this morning. Lance, I want to dig in a little bit on Financial Services further. That is, can you talk a little bit about either customer churn trends or revenue churn trends, depending on how you measure those internally and how they have tracked? I know churn may have picked up a little bit last year, it seems like you are lapping some of that. So, maybe an update there would be helpful.

I don't really see our customers, it's about adding new customers in financial markets, and we have a well-developed account management program that retains and manages our largest relationships globally. So that's very focused on retention and growing the book of business. But we also have a lot of new product, new account development where we go after a large number of accounts that only buy one product from us, whereas on average we might get five to seven, and with our biggest accounts they could be buying 20-plus products from us. So, a lot of growth in some of the single-touch customers that we have globally, and then there's the complete new customer that we go after, you know chasing down new leads. So, our goal every year is to expand our customer base, and I don't think across either firm, the entire customer base actually declines. It's always growing, it's alive, we're trying to retain business and build new business. So, I feel pretty good about that. I think one of the measurements that we do is we look at how robust our pipeline is, does it support our longer-term objectives and growth assumptions, and that pipeline has been stable and it's very supportive of how we look at our long-term objectives for Financial Services and supports the numbers that we want you to model to.

Thank you. Good question. Next.

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

This is Nick on for Anj. Just a question on Resources margins. Excluding the high margin CERAWeek impact this quarter, are you still seeing margin expansion in the Resources business, and any updated thoughts on the margin expansion at that segment as Resources ACV returns to growth?

I'll start, Todd will pick up. If you look at the addendums that we gave out, you'll see that it was a great quarter, actually the highest, for Resources at I think 44.9%. The most exciting thing to me and Lance and Todd is that three of our biggest businesses all were in the 40s, which is a great step forward, lots to do. As we said, CMS as a percent of improvement continues to be good. Todd, pick up though because the impact of CERAWeek is minor compared to the total business.

Yes, I mean we called out CERAWeek last quarter because it had an impact on margin in the other direction. So you need to look at Q1 and Q2 together for Resources to get a good view of [margins] [ph]. All the segments are getting some lift from cost reductions in corporate shared services facilities that are being allocated across all the segments. What I would say about Resources is, we've done or the team has done a good job of maintaining margin in a challenged environment, and certainly as revenue turns, Resources has a substantial level of operating leverage and there will be opportunity to drive much of any incremental revenue growth through to the margin line. So, I think we feel good about the margin that we've been able to maintain and actually grow over the last couple of years, and as we see improvement in the end market, we'll have the ability to further expand the margin in Resources.

Thanks Todd. Next question please.

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

Just wanted to come back to the Financials segment, and I think this is for Todd or for Lance, the one thing that stood out to me was really the strength in the Information part, and I assume part of that was recurring variable. So maybe you can flesh this out a little bit. I assume AUM and index, maybe some bond pricing positions, et cetera, the question I'm really asking is, like that should be sustainable at these levels, so why would there be a falloff again considering that that business is going to build on itself going forward?

Todd?

Well, I don't think – 8% as far as Information on a long-term sustainable basis is not something that Lance and company talked about historically. I mean we've always looked at Information as a very stable 4% to 6%, 5% to 7% type grower. A lot of good things happened in the quarter. To your point, there was a bit of a lift in some of the volume based revenues. I think there's always a point or so just when we look at things like timing that can move around. So, a lot of good things fell into place to get us to 8%, but we don't expect long-term, 8% is not what we've talked about, I think that's 5% to 7% that Markit talked about historically as a reasonable range to put around Information.

I think that's right, Alex. If you go back in time, we now have a total of seven periods where we talked about 5% to 7% over time, and if I look at twice being around 4% to 5%, twice being in 5% to 7%, and now this is the third time we've been above 7%. And I think the way we want to look at it is, our business is well-organized, well diversified, has a good customer set, and a strong set of steady opportunities to deliver 5% to 7%. But we don't want to be shy and upset at 4% and we don't want to brag at 8%. And so, that's kind of in the callout on that. So once again, we are supportive long-term of our Information assets in that 5% to 7% range and we're fortunate this quarter to be able to give you a number above that.

Well said, Lance. Thanks. Next question.

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

Jerre, CERAWeek had a really good mood over there when I was over there. There was a lot of talk about taking costs out of the base for a lot of the clients. It was also time when oil prices were around $54 a share. I know you guys have done this analysis in just referencing a comment that Todd made about companies changing their strategic plans and capital investments. At this point in time with the changes that your customers have made, what type or what level of oil pricing do they need to think about on a sustainable basis for them to start retracting on some of their capital spending plans or making changes strategically, because that's clearly something that we have to look at with the volatility in oil prices right now?

Good question. I'll start, Todd will pick up on it for sure, but where we are today and where our experts are is that we would expect somewhere between $48 to $50 a barrel in 2018 at the Brent level, and that will – it shifted a lot. You're right, at CERAWeek, a lot of optimism, but the cost and productivity is significantly improves, especially in North America, continues to be. And so, I think our analysis would say, capital spending in North America is solid and will continue to be. We expect actually do see in 2018, 1 million to 1.5 million barrels per day more U.S. growth in oil output. So that feels good between December 2016 and December 2018. And I think in general, we're seeing the same thing across the world as productivity becomes a massive change from where they were before. Todd?

I think I said on the call high 40s to low 50s for 2017 and 2018. Within that, our experts would say that there can be some variability. So, we can see prices go into the low 40s, we can see prices potentially move up to the high 50s within that range. I think that range, operating in that range provides a level of confidence that we'll be able to drive stability and increasing sub base as we look ahead over the next couple of years.

The other thing I'd add to that, and you heard Lance talk about it a few minutes ago, if you think about our total Resources business, certainly OPIS downstream and our Chemicals business is very strong and continues to be, and we expect that for the foreseeable future. The big upside we have today that the merger will now prove to be a great help for us is in the upstream, as you heard Lance talk about the new products coming across both ways. So, if you think about it into the future, our impact, if you remember in 2008 and 2009 where historic IHS was actually 50%-plus of oil and gas, today if you look at upstream, because we really weren't in downstream, then if you look at upstream, all-in it's a little under 20% with big upside. And Lance, you might want to just give one or two more examples.

On yesterday's executive call that you lead, Jerre, Shane who runs our Account Management out in Asia, when we were talking about synergies, and one of the things he said that always resonates now to me when I'm with financial market participants is there is, it's a long way to second place in terms of energy advisory and leadership. We have the thought leaders in the industry. Financial market participants want to hear them. MiFID II plays well into them. And having the likes of Carlos Pascual, Atul Arya, Dan Yergin, Jim on the oil strategy side, like we really have industry thought leadership. And in this challenged marketplace, whether you're in the Middle East, you're in China, you're in the Permian, thought leadership and expertise is highly valued, and I think that's going to play well into our strategy. MiFID II is a bit of a tailwind, getting organized for that, we're just getting started. So, I do think that that gives that upstream a better solid base to build from, and although it may be a bit volatile, the underlying oil price, we've got the thought leadership around that to take our market share.

Just while we were having this meeting, I got a photo from Shane meeting with one of the largest CEO in China, and they are talking about not only our economic forecasting but some of the new financial product offering. I'd show you the photo if I could, but it's a good one and it's a great example of what Lance just talked about. Thank you. Next question.

Our next question comes from the line of David Chu with Bank of America. Your line is open.

So I believe you started to raise pricing for the Information business in Financial Services. Can you just let us know how much of a contributor that was to growth in the second quarter and expectations for the year?

I think we've always said that that's sub 1% impact, because a lot of contracts, three-year contracts, not every product is open for price. So if you're modeling sub 1%, I think that's the right number.

Great, thanks. Next question.

Our next question comes from the line of Hamzah Mazari with Macquarie. Your line is open.

This is [indiscernible] calling in for Hamzah. Can you give us a sense of where you are in the process of moving customers to being serviced by inside sales versus field sales reps?

A great question. Lance, you pick it up and I'll finish with it because that's a good broad --.

Yes, a nice one. Again, I think one of the great things in the merger was the better developed or deeper developed inside sales expertise that has been set up in legacy IHS, from Englewood to Bracknell to Penang, and other centers, we really have developed both a strategy, a leadership and a best cost location for inside sales. It's an area that we need to invest in and grow, and as we look forward, we see inside sales especially with the investment in technology to allow us to both mine digital information for lead generation but then also using our salesforce.com global platform that we're rolling out to manage those leads through the lifecycle and expect that our inside sales team will be able to get to a farther reach and a more efficient way to expand our customer base. So, it's not a huge bit now, but IHS had set up a well-organized process – or team, sorry – and we're going to build on that.

Last quick comment on that, Lance just said about salesforce.com, I met with the sales op team leading that last week. That upside when we exit 2017, into 2018, will do exactly what Lance said and enable us to do things we've never done before. Thank you. Next question.

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

This is [Mike Greene] [ph] on for Joe. I was wondering if you could just go into maybe a little bit more detail on the good momentum in the fixed income indexing business, inflows globally to the fixed income ETFs and the progress on ALBI?

Okay, ALBI. For those of you that don't know the ALBI is the HSBC indices across Asia and the Middle East that we acquired. So I'll just pick that one off. Delivered what we – if we did say anything about numbers and what we're going to deliver, I can't remember, but I can tell you internally what we said we were going to do, we've done that and exceeded it. It's small, it's not material in our overall numbers, but the team did an excellent job of moving that customer base from HSBC into IHS Markit. So, a great job. I think indices, I have to say, we're very fortunate as a company to have a world-class index franchise, and the fixed income franchises are really limited to the internal products of the banks. So there are some smaller ones that were the – both Maryland City had franchises, both now have been sold to LSE and to ICE. The bigger franchise was with Barclays that we competed head on, and that went to Bloomberg and ourselves. And so, we have the as an independent provider second-largest franchise in the world, 140 billion of ETFs of AUM against our indices. It's a double-digit grower. We do the underlying pricing, so there's great synergies, and I think we're very, very well situated. And I'll just shift it because nobody is asking questions about Yaacov and Digital. So I'd like to give that team a bit of a shout-out here, and it ties into the index franchise. So, one of the things that we've been able to do, and you really have to think about appointing a Chief Data Scientist, it's not just marketing, this is about us building relationships and expanding the use of our data and the creation of new products. It's happening across the firm but in indices specifically, the team has been able to really crack advanced analytics and index production where we're going to move fixed income indices to the next phase as we look forward, and Yaacov and his team is proving that having that team focused proof of concepts rolling back into real production is going to be a win across all our industry sectors. So, I know we didn't get a question but we'd like to make sure Yaacov is out front and center.

Last question. Thanks Lance.

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

Sort of a broad strategic question for you, long-term how are you thinking about the impact of autonomous driving and growth in shared transportation on the Transportation business?

It's a great question. Lance, you're deep into that.

Yes, as a leading firm in the Transportation segment, clearly autonomous vehicles are an important part of the R&D and therefore going to impact vehicle numbers as we look forward into 2020 and beyond. So, we've got a great team, we did produce, we're about to complete a piece of research that's quite important that was led across our Energy and our Automotive teams called Reinventing the Wheel, and that's a substantive effort of market participants led by IHS Markit. So we'll make sure we get you a copy of that. But it's an important part of the evolving transportation business and we have to be at the leading edge of that.

Thank you, and over to you, Eric. Thank you all very much.

And we thank you for your interest in IHS Markit. This call can be accessed via replay at 855-859-2056 or international dial-in 404-537-3406, conference ID 36312699, beginning in about two hours and running through July 4. In addition, the Webcast will be archived for one year on our Web-site, www.ihsmarkit.com. Thank you and we appreciate your interest and time.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a wonderful day.