Ladies and gentlemen, thank you for standing by. And welcome to the IHS Fourth Quarter 2019 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Eric Boyer, Head of Investor Relations. Thank you. Please go ahead, sir.

Good morning. And thank you for joining us for the IHS Markit Q4, 2019 earnings conference call. Earlier this morning, we issued our Q4 earnings press release and posted supplemental materials to the IHS Markit Investor Relations website. Our discussion on the quarter are based on non-GAAP measures or adjusted numbers, which excludes 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 ongoing operating performance, but they are a supplement to and should not be considered in isolation from or as a substitute to for GAAP financial information. As a reminder, this conference call is being recorded and webcast and is 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; Todd Hyatt, EVP and Chief Financial Officer; and Jonathan Gear, President, Transportation, Resources and CMS, will be available to take your questions. With that, it’s my pleasure to turn the call over to Lance.

Okay. Thank you, Eric. Happy New Year and thank you for joining us for the IHS Markit Q4 earnings call. Our 2019 was another successful year for IHS Markit. We delivered another year of consistent financial results, we rebalanced our portfolio, updated our capital allocation policy that increased our capital return commitment, including a new quarterly cash dividend, and we continue to increase the pace of innovation across the firm. Overall, we finished the year with a solid Q4 and we are reaffirming our 2020 financial guidance, which is once again within our longer term commitments. Now on to the financial highlights. Organic revenue growth was 6% in both the quarter and the year. Adjusted EBITDA margin expansion, ex-FX was 120 basis points in the quarter and 100 basis points for the year, and adjusted EPS growth was 14% in the quarter and 15% for the year. In terms of core industry verticals, I'll provide Q4 and full year 2019 highlights and then our outlook for 2020. First, Financial Services segment. So Financial Services organic growth was 6% in Q4 and for the full year. During the year within the information, we expanded our pricing and reference data and valuations offerings, successfully launched new regulatory solutions, and launched a number of new indices, including the global Carbon Index, a first of its kind product that has already won its first ETF mandate. Our solutions team continues to innovate to meet the needs of our customers that desire tools that increase efficiency and reduce risk. We made great progress with cross-business integration of capabilities, which included a next-generation regulatory compliance platform. We increased the adoption of our corporate actions managed services, expanded our portfolio and data management solutions into alternative asset classes and into the energy sector. We announced the joint…

Thank you, Lance. We had a strong finish to the year with results ahead of our expectations. Our Q4 financial performance included revenue of $1.12 billion with organic growth of 6% and all-in revenue increase of 5%; GAAP net income of $202 million and GAAP EPS of $0.50; adjusted EBITDA of $453 million, an increase of 9% with margin of 40.4%; and adjusted EPS was $0.65, an increase of $0.08 or 14%. We were pleased with the finish to the year and the solid revenue and profit performance we delivered throughout 2019. Relative to revenue, our Q4 organic revenue growth of 6% included recurring organic growth of 7% and non-recurring organic growth of 1%. Looking at segment performance, Financial Services revenue growth was 5%, including 6% organic and flat FX. Recurring organic was 7% while non-recurring organic declined $4 million or 13%. Our Information business organic was 6% led by strength in our pricing and indices, Processing organic declined 1%. We continue to see growth in derivatives processing offset by lower loan processing revenues. Solutions organic was 1% due in part to difficult comp in our analytics software business, offset by good growth in our enterprise data management and corporate actions businesses. Financial Services revenue included Ipreo revenue of $93 million with organic growth of 19% in the quarter. Transportation continued its strong operational performance with revenue growth of 9%, including 9% organic and flat FX. Organic growth was comprised of 12% recurring and 4% non-recurring. Resources revenue increased 7%, including 3% organic, 3% acquisitive and flat FX. Recurring organic was 5% with growth benefiting by 1 percentage point in the quarter and for the year from the new revenue recognition standard. Non-recurring organic declined $2 million or 7%. Our Q4 ACV increased $2 million and our full year ACV…

Okay. Thanks Todd. We delivered another year of consistent financial results in 2019 and have strong momentum entering 2020. I want to thank our colleagues around the world for their hard work, in delivering for our customers and shareholders. And before we turn the call over for Q&A, I want to personally thank Todd for his partnership, as this will be his last earnings call as we complete the CFO transition on Feb 1, as previously announced. And I have to say personally I couldn't have asked for a better partner. And the last three years of results come through partnership not just Todd and I together, but the whole firm, but the relationship that we've struck up has been first class. So, thank you.

Thank you, Lance.

We're open for questions.

[Operator Instructions] Our first question comes from Gary Bisbee with Bank of America. Your line is open.

Hey good morning. Yeah Todd, I'll add my congratulations to you. It's been a fun ride. You know, the questions around margins, the – a quarter ago, there was some discussion of maybe pulling forward some investment into Q4, but the margin performance was excellent. So, I just wanted to understand, if what the cadence of investment looks like? And then, Todd, if you could give us any color, just there was a lot of moves at the segment level? Anything stand out in terms of explaining some of the positive and negative moves there? Thank you.

You want to…

Well, I could start. I'd just say on the margin, we do focus on returning 100 basis points of margin to our shareholders. It's part of our long-term guidance and something that we feel confident in delivering for the next three to five years. And therefore, it's part of our long-term guidance. What we do look to do is throttle our investments internally against that delivery. And so if I look across the whole year, I think we delivered 100 basis points FX-adjusted margin. We expect to do the same next year. And incrementally, we look to invest in our organic growth pipeline over and above that. You want to add, Todd?

Yeah. What I would say at a segment level, Gary, I actually put together a schedule. I just look at that the year-over-year revenue growth and the year-over-year margin flow through. And when you do that, what you really see is, it was a really consistently strong year for Financial Services. And Ipreo certainly benefited. Ipreo performed very well, but in general, Financial Services was strong throughout the year. Transport, probably a little bit of bumpiness, we talked about recall, lower margin recall, which saw really strong margin in Q4, really strong recurring. So that follows through. Resources had a pretty good year. Q4, not as strong, but I think a little bit of timing in there. And then CMS, a bit of a challenged year with some of the headwinds we've talked about. But yes, when I look at CMS, I'm actually encouraged by what has been good performance in product design over the last couple of quarters. But I think that provides some color on what we've seen within the segments at a margin level.

Thanks, Todd. Next question.

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

Yeah. Thank you. Good morning. I was hoping you could just walk us through some of the moving pieces in Resources. I was just wondering, why non-recurring was down 7%. And then even on the recurring side, I think you had called for mid-single digits, but came in at 3%. So, I was just wondering in the context of, what are you expecting next year. What are those moving pieces?

Right. Okay. No, I think, Resources has shaped up nicely into that 4% to 6% long-term or guidance that we've laid out. And this year, we delivered right into the midpoint of that. And I think we'll do similar as I look forward into next year. But it really is a tale of three parts. You've got an upstream business that has two of those parts, about a third of the division each. The one focused on data was led internationally with offsets domestically in North America, therefore having a slight negative growth on subs. When you get into the analytics and software, and events like CERAWeek you've got high single-digit growth on this – the other third of upstream. And then finally, our mid and downstream chemicals, renewables, OPIS, Agribusiness, you know this whole play of power and energy transition was high single-digits as well. So net-net, I think, resources stand strongly in that 4% to 6% guidance; albeit, the mix is slightly -- vary slightly quarter-to-quarter. But I feel good about next year. One thing about the data assets of our upstream business, it really is our storefront that leads us into all other activities. So if you look at CERAWeek growing at 20% plus. It grows at 20% plus because we've got deep relationships around the world with respect to our solid data assets and the research around them. It would be the same with our analytics and software where that data feeds too, same with our consulting and we are really strong nonrecurring revenue pipeline building up into 2020. And that's primarily coming because of just the challenges that the energy market are seeing and the need for experts like ourselves to help our customers navigate those forward marketplaces. So that's -- Todd, do you want to add to that one? A – Todd Hyatt: The other thing I'd add on the non-recurring specific in the quarter, I mean, I think non-recurring end quarter is always -- there is always some timing there. Non-recurring for the year was 8%. And it was really a good story in Resources. Good software performance, consulting while we're not investing significantly in consulting that performs well another record-breaking CERAWeek. And Lance called out in a script that we do expect to see good non-recurring inside analytics next year. And I think when we look at the backlog going into the year, we feel okay about where we're at. Q – Manav Patnaik: It’s good. A – Todd Hyatt: Good. Thank you. Next question.

Our next question comes from Bill Warmington with Wells Fargo. Your line is open. Q – Bill Warmington: Good morning, everyone. And to Todd congratulations on a great run and happy trails. So, a question for you on the data lake, you mentioned that the data lake is full. You also mentioned some products in passing in the prepared remarks. And I wanted to know if you could review for us, how the data lake is being commercialized today? And your thoughts on how you plan to commercialize it further in the future? A – Todd Hyatt: Okay. So Yaacov is actually with me, so I'll let him add to parts of what I'm going to say now. So first off, 2019 is about making sure -- and it was a Board commitment to get all of our data sets across our verticals into the data lake. And that was the successful outing. And we also had said that we'd begin the commercialization by building new products in 2019 to the data lake. And I think we talked about those throughout the year in various quarterly calls. So a great success. So we have discoverability of our data across the entire firm for the first time in a single location. That's not just valuable externally, but also to our people internally who want to gain access to the data for product development. As we move into 2020, we don't want the marketplace to just discover our data sets, we want them to be able to discover our 2,000 or 3,000 -- our 3,000 subject matter experts globally that are experts on various parts of our data assets. We'd like our research to be discoverable, and therefore, we'd like to be able to create new commercial packets of information that are more readily available to our customers, both domestically and abroad. And we see that as incremental growth for our key data sets going forward. Finally, I'd say that this year is about building that commercial model. So Yaacov has passed the commercial aspects of the data lake over to Sally Moore who's taken responsibility, and she recently hired an executive to come in to lead that product offering reporting to her and he's already started. Yaacov, do you want to add anything to my comments there in terms of excitement around the data lake, the types of things you're working on that are exciting you for 2020?

So, thank you, Lance. Just a few points. About 98% of all our curated data is discoverable is in data lake and available to anybody, internally, externally to use to-date. Although, to-date we opened the data lake for internal use only up to March 2020. Although, during the data lake build, the various data science projects we have powered by the data lake, today the BAU, the businesses are engaging with data lake because of the way it's constructed and people have been trained worldwide how to engage with that technology and what opportunities it opens. The next thing that I wanted to mention, the platform for March this year is going to open in a multi-tenant way, which allows us the opportunity to coalesce our client or partner data together with our data with the same level of discoverability, ease of access, and the same API subject to security constraints, et cetera. In my view, this opens for us a new pathway the way we engage our clients and the way we engage our partners. In terms of other key issues of 2020, up to this point in time, we mostly focused on structured and semi-structured data. It is our objective before the end of 2020 to ingest all our research content and to make it a discoverable in a similar way we discover unstructured -- structured data as well as through feature engineering and similar processes, connect our research content to our structured data in a technology, which is generally called enterprise knowledge graph. I will stop there and answer any question that's relevant.

No, that's good. Thanks Yaacov. So, there's a lot going on. It is a exciting strategic initiative over the last few years for our firm post-merger, but the investments that we've made in the technology stack will begin to pay-off commercially, but also pay-off from a -- we expect in our quest for 100 basis points of margin a year, we hope that we start to see some of that margin coming from data ingestion and lowering the cost of handling the data into the firm as well. And we hope that in 2020, some of that 100 basis points will come from efficiencies there. Next question?

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

Yeah. Thank you. Good morning. On CARFAX for Life, how are you measuring success at this point? Is it about service provider sign-ups or consumer engagement with the myCARFAX app, and whatever the KPIs are? How are they trending? And then, where are you in terms of monetizing the CARFAX for Life initiative? Is it a needle mover on the particularly strong transportation recurring growth that you delivered this quarter? Thank you.

Thanks. Jonathan, you want to grab that?

Sure. I'll go ahead and dive into. Thanks for the question. So in terms of metrics, again, we launched the program early in 2019. It's been a lot of historical bolt-on before that in the myCARFAX app in building the consumer uptake of it, but we launched this formally in 2019. So the metrics in 2019 were really around customer penetration. We sell it as an add-on, primarily to our vehicle -- our core VHR dealer customers. So the metrics have been around rooftop penetration. We feel very, very good about the progress being made there. It’s really hit – hit all the internal milestones we had around that. In terms of a needle mover, not a huge revenue impact in 2019. We certainly had that. I think you'll see some impact in 2020. But one of those long-term growth engines that we see from CARFAX, we've seen really the last six, seven years starting with the core VHR then build to used-car listings, which certainly saw impact from UCL in 2019. CARFAX for Life, I expect this to be a growth driver beginning to have impact really in 2021 and beyond.

Thanks, Jonathan. Next question?

Our next question comes from Kevin McVeigh with Credit Suisse. Your line is open.

Great. Thanks. Hey, congrats to Todd and Jonathan as well. Hey, Todd real quick. Just you've done kind of automotive mastermind. You've done inform the informer swap Ipreo deal, sale of A&D. Is there any way to think about, as you position the portfolio, what it can do to the longer-term growth given, you're clearly transitioning the model into higher growth end markets, what that can mean for the organic growth longer term?

Well, you addressed it to me, so I'll start. I'm sure Lance will jump in. I mean, I think the key on acquisitions is we want to acquire companies that are complementary to and support our existing asset positions. And so we can support those assets to be more successful, the acquired assets, but we can also use the assets that we acquired to support our underlying core businesses. And I think that's what you see with Ipreo. You see synergistic value with Ipreo, bringing additional pricing data to our municipal bond offering, to our loan business. You see our FS account managers being very effective on cross-selling the Ipreo into a lot of the alternative space. And so to me, it really is about building on our core underlying market positions and competitive advantage and acquiring assets that are very complementary to and support that. AMM, similarly, filled the gap in our automotive portfolio, where we really didn't have a presence in the new car dealer space. And now we look at AMM, and we say, okay, we are using information in our core OEM space to support AMM. Likewise, we can use AMM product to start to build an enterprise mastermind life product. So to me that's what we've done successfully. I think is what we'll continue to do. A – Lance Uggla: Right. I may just add a little bit to that as well. If I look at our three scaled verticals, where you look at Transportation, you look at Resources, you look at financial markets and you look at each of those verticals, each of them plays a big role in cleaning, processing and providing data to our customers to use in decision-making. And there's a lot of synergies around the management of that data and…

Our next question comes from Andrew Steinerman with JPMorgan. Your line is open.

Hi. Could you share what the Ipreo organic revenue growth rate is assumed within the 2020 guide? A – Lance Uggla: We don't do that. I think when we acquired it, we talked about double digit and it's been performing at double digits. A – Todd Hyatt: Yes. A – Lance Uggla: Next question?

Our next question comes from Andrew Jeffrey with SunTrust. Your line is open. Q – Andrew Jeffrey: Hi. Good morning guys. Thanks for taking the question. Lance, I had hope you could elaborate a little bit on a comment you made in auto in particular, on the new side of the business. I think you mentioned that, you feel like you're well-positioned to help manufacturers, sort of manage through more challenging SAAR environment. Could you just kind of flesh that out a little bit? I would think that might present challenges rather than opportunities. So, that was a notable comment.

Okay. Well, I think the transition by auto makers to EVs, the research and development into AVs, the overall componentry and management of the connected car, these are all quite complex. And so what we're finding, in the demanding regulatory environment around emissions, those are things that are all playing favorably into somebody like ourselves benchmarking, cleaning, processing data for decision-making, and those are subscription based longer term contracts. So, they really don't have the ups and downs of the actual 5% decline in the auto market, really you can see year-over-year it's not impacting us. And if anything our recurring growth in the quarter was at 12%, so a substantive -- very strong. The second thing I would say is that, in tough markets, our customers become twofold in terms of their challenges. One, they've got big incentives they're applying to the marketplace to sell cars and those incentives require audience building and we're the world leaders in terms of car registration and our ability to help our customers build an audience for direct TV, social media, print-based advertising, and so that's one piece. And incentives is tens of billions and it plays very well with master minds, in terms of a product we're calling enterprise mastermind, and we hired a very seasoned executive to lead that for us. And it's marrying mastermind, CARFAX and our registration data to help the incentive spend. The second bit that's really important is the advertising spends and that gets right down into the dealer footprint. And the dealers also need help with the building of the audiences around their marketplaces and we have a great role to play there as well. So, in general, I guess, what I'm saying to you is, I don't wake up in the morning and look at the 5% declines in the auto market and have a concern that our transportation segment is going to be down. If anything, in both resources and automotive, today, I look at the decision-making complexities of our customers and I feel we have a growing role to help them navigate that. And the cost of them buying a service from us versus trying to do these things on their own is a substantive savings to them. So, I feel well insulated around helping our customers' decision make, in complex challenged market, when we're at data insight Analytics Company. Next question?

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

Good morning. Best of luck hard, Todd, as well. My question is just around retention rates overall in the portfolio. I think back in 2017 they maybe were in the low 90s. Any opportunity on retention rates as you look across your portfolio? Thank you.

Well, obviously that's the best – I would say that's the best revenue you get it's retaining the customer and – but we still operate in that 92%, 93% retention rate across the firm and it seems pretty consistent. But I can tell you that every one of our business leads looks to try to improve on that. And so of course, that's always a full-time effort by the teams to try to move their retention up slightly, but it has been consistently in that low 90s and I don't see that changing. Next question?

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

Hey, good morning, everyone. Just wanted to come back to the resources Lance and I guess Todd too. You guys sound very comfortable with the guidance range here. But when I look at kind of some of the data in this quarter, I mean, the non-subscription growth obviously was negative, and I appreciate it's lumpy but historically, it's been a leading indicator. And then more importantly, ACV, I think Todd have heard you right, plus $2 million quarter-over-quarter, plus $24 million year-over-year that's pretty soft I think the lowest since 2017. So that doesn't suggest – that suggest you're actually adding subscription at a lower rate. So just, is there a timing issue? Or why is the ACV so low relative to your guidance?

I think ACV has been – it's been pretty consistent for the last three years. So that ACV number has been in the 3% to 4% range consistently over that period of time. We didn't see a step-up on it – of it in Q4, but it's certainly, when we look at our plan and we look at our expectation that the non-recurring will over-perform, again, we certainly see a clear path to deliver within the guided range. But certainly, something we're very focused on is elevating that ACV. But I don't think we really indicate. What we've consistently said is it's very stable. And we feel comfortable with sort of the stability of the business. And really a big question is, so when do we see this upward acceleration. And as you know right now, I think we have performance that supports within the guided range for 2020.

Yeah. Good. Maybe I can add a little bit to how I look at it, because I really since merger I've never been that fussed about the energy price relative to what our performance can be in E&R. And if I look at it now, I look at our performance in both downstream, which we've diversified with acquisitions of OPIS, agribusiness, chemicals, pricing and news business so three small – two small, one bit larger acquisition there. We're world leaders in chemicals. We're the go-to around plastics and sustainability. We're now leading player in the discussion around energy transition with topics, such as hydrogen, battery storage, solar technology. You know -- really having a real understanding of the marketplace and its extension into ESG, which will be worked on between financial markets and energy. We understand the climate story and we understand the impact that that's having to our customers. And we're required there to support them shortage of food with our Agribusiness. We've got a great position there. Our environmental registry last year, albeit small grew north of 40%. So the whole topic of voluntary carbon credits. So I look at it and I go, if data is our storefront and last year North American data demands were down and international up that was interesting that was a small offset. But you're talking around one-third of the revenue of the division. If you go the year before, international was flat or at the time of merger and North America was growing. But if you really look at what are the customers in those areas need, the people that are lending money to the assets, buying the assets, selling the assets, consolidating the assets. They need to understand the downstream markets. They need to understand gaining efficiencies in their current…

Our next question comes from Jeff Silber with BMO Capital Markets. Your line is open. Q – Jeff Silber: Thanks so much. Just wanted to go back to the resources performance in the quarter. Todd, I think, you had mentioned some timing of non-recurring that kind of got you to the 3% organic growth, yet you're still confirming your guidance for 4% to 6% organic growth in 2020. Is there anything we need to know about the cadence on a quarterly basis? I know the comps will get easy in the fourth quarter next year. But anything else into the year that you can point out would be great? Thanks.

I don't think there's anything. I mean, you just have to be aware Q2 is a big quarter with events. And so you'll see -- I think if you just look at the trends, the relative proportion of revenue that was delivered last year quarterly, that's probably as good as anything. I mean, there's always going to be a little bit of bumpiness in non-recurring, but I think you'll be close enough.

Thanks Todd. Thanks. Next question.

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

Hi. Thank you for squeezing me in over here. Hey, just questions on two areas. Just in the Resources area, can you give some examples of the investments that are being made? And are they product-specific right now or they in the data lake area? And then also if you could just comment on the growth in solutions, which seems to have kind of trended down?

Jonathan, do you want to start and then I can add?

Sure. So, I'll kick-off and talk about the investments in energy and natural resources. And then maybe one or two I'll call out. First, Lance did mention Energy Studio, which is our platform for all of our underlying data. And it's something we've been working on the last few quarters. We expect to launch kind of end of this year. And that will be a brand-new state-of-the-art platform leveraging the data lake. There will be a whole way of delivering, visualizing and analyzing our core energy data. I think it puts us in a very, very strong competitive position both B2B competitors in new ways for our clients to leverage underlying data. So, that's kind of a core thing around our data. And then we've also been launching in the world of energy is interesting, it's a lot of singles and doubles and there are lots of new products we had launched, we have launched end of the quarter. In Q4, our launch this year around pricing, providing new pricing benchmarks. Actually with our agriculture acquisition last year, taking that business model, applying some business models that we've seen successful in the past around pricing and adding market intelligence, launching that throughout the year. And so lots of singles throughout the year that really kind of add up to something impactful. Lance, you want to talk about solutions?

Yeah. I would just say that one of the more exciting areas we pulled together under Atul Arya, who was the ex-Head of BP's strategy team. He's pulled together a cross firm team across financial markets, energy, and automotive. And it's here where all the discussions around clean tech are taken place and energy transition. And I know those are big buzzwords. But if you take it down, what are types of things we're doing there. Take for example hydrogen. Hydrogen is a future -- has a lot of future potential. In order for the energy market participants to understand and look at the market, the distribution of new power sources into the marketplaces, the contribution to the energy grid; it always starts with what you might call non-recurring revenue. So, in the first year, we may do a cross-industry report that might add $1 million or $2 million or even $3 million. But out of the back of that comes the recurring subscription services around the study. And so we have that going on within -- across hydrogen. We formed a market group around plastics and sustainability. We have the commodities at sea project. We're extending that from crude to coal and to iron ore. So, all these very interesting data-led initiatives where we're applying our subject matter experts to activity in the marketplace that's affecting our customers and our customers need help to decision make and need the cross-market expertise to come together in formal studies. And our teams are really, really good at working with the customers to develop new products. And so, I would say that you'll see more of us in terms of revenue growth around energy transition, cleantech, and then the extensions into climate. Next question?

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

Hi. Thanks. Good morning. Todd, I also want to add my thanks and best wishes ahead. Within Financial Services, you experienced a 13% non-recurring revenue organic decline in the quarter. Can you drill into the factors behind the decline if it should continue? And also touch on Ipreo performance?

I wouldn't expect it to continue. I mean the numbers are relatively small. So I think the percent seems big, but the decline is $2 million year-over-year. And I think if you look sequentially, you'll see a few ups and downs, but I wouldn't call out anything specific or any concern. And then the question on Ipreo, can you say that again George?

Just the performance.

It's been strong. I mean Ipreo has performed well. And we got off to a slow start in Q1. We talked about that. But at the top line, it performed very well throughout the year. We've been very effective from a synergy perspective, and the cost, particularly around shared services. And it was a very good story. And I think we continue to expect it to be a good performer going forward and would expect it to deliver at this double-digit level that Lance talked about earlier. I mean the private capital markets in particular very, very strong, very high growth, but the global markets and the corporate services are also performing very well.

Thanks, Todd. Next question?

Our next question comes from Ashish Sabadra with Deutsche Bank. Your line is open.

Thanks for taking my question. My question was on the product design. We've seen pretty good stable growth there in the mid-single digit, but as you think about the strategic fit with the rest of the businesses, how do you think about it now? And is there more opportunity for portfolio rationalization? Thanks.

You want to start with that?

Sorry.

Jonathan, why don't you start, I'll end up again talk up Todd and then we excel. Well, firstly I think your observation is a good one. It has become a very strong stable growing strong business line. It was hit a little bit with the other performance of CMS, the last couple of years here. But it has been delivering particularly the last few quarters as we look into next year, it's going to be a good strong performer kind of as we expect to be. And in terms of it performance -- it’s fit in our portfolio. It's an interesting asset. I mean financially different profile than the rest of our businesses, given primarily the royalty-bearing nature of the product. However, it does serve the customers we serve in automotive, the customers we serve in energy, rather large manufacturing businesses. So, we see certainly see an opportunity to see synergies particularly on the customer lands going forward. Todd, anything you want to add? No. Okay. A – Todd Hyatt: No. That's good. A – Lance Uggla: Thank you. Next question?

Our next question comes from Seth Weber with RBC Capital Markets. Your line is open. Q – Seth Weber: Hey good morning guys. Thanks for keeping the call going. Lance, in your prepared remarks, I think, I heard you say something about the China JV update. I'm just wondering, if there's anything -- any color there and what -- should we expect you to accelerate your business in China? Should we expect to see more deals there, more JVs, or how you're thinking about that market? Thanks. A – Lance Uggla: Okay. Well we've -- across the firm now, we have several JVs and partnerships within China across our three verticals. It's definitely on a percentage term growing faster than Europe or North America, but absolute terms. Of course, we still got strong absolute performance out of our more developed markets. That particular JV bodes well for Financial Services in particular the Ipreo businesses where we formed a full JV to leverage our book building and syndicate book building expertise into the Chinese debt markets which are amongst the largest in the world. So, we do see some good growth that will support the continued 6% to 8% organic growth targets we have for financial services. Next question?

Our next question comes from Joseph Foresi with Cantor Fitzgerald. Your line is open. Q – Steve Chang: Hi, this is Steve Chang coming off for Joe. Thanks for taking my question. We were just wondering -- do you see any swing factors for growth from any of the verticals? And maybe also, how economically sensitive do you think the business is now compared to prior years? Thank you. A – Lance Uggla: Yes, I see in each of our divisions, I think we've got -- we have strong opportunities for growth that are undeveloped or not developed fully yet. So, I've talked already about energy and natural resources. There it's about energy transition, it's about climate, it's about data science and analytics. When you get into transportation, I talked a bit about that connected car, CARFAX for Life enterprise, Mastermind, data science and analytics around emissions and regulatory compliance. And we're well positioned there. And then finally, I'd say in Financial Services, I still see the biggest growth for us coming long-term in providing middle and back office, pricing valuations, reporting solutions into the alternative space which is a rapidly growing part of the financial markets. And one where, the call for increased transparency is starting to come from not just the market participants, the LPs that are buying the product from the GPs, but also from some of the associations and bodies around the marketplace. And so I see a great role for us there. And then finally, I'd say asset managers are struggling with the cost -- the total cost of ownership of their infrastructure. So, like banks in post-2008, the cost of systems and compliance and build versus buy has shifted to a favorable place for companies like ourselves and we'd see a growth around data management solutions, risk, corporate actions, the order management, the tools that we provide to support the asset managers in terms of their tech footprint. So, I think we're very well-positioned. On CMS, product design one of the growth areas there is leveraging our natural language processing and data lake capabilities around the search and dissemination of specs and standards also providing efficiencies for our customers. So, in all of our divisions, we have new growth to focus on. And our teams are spending a lot of time strategically on figuring out how to develop product into those new areas, leveraging both, our tech footprint, our customer footprint, and our current products globally. Next question.

Our next question comes from Andrew Nicholas with William Blair. Your line is open.

Hi. Good morning. Thanks for taking my questions. I was hoping you could speak to major growth initiatives at Ipreo in 2020. In the past. I think you've talked about doing some additional work around valuation. But I'm wondering if there's, any other areas of focus this year in terms of investment? And then, relatedly, if there's any commentary you could provide about how you think about end market cyclicality when investing in new products with respect to Ipreo specifically? Thank you.

Right. Well, the cyclicality there is, obviously, around the marketplace in terms of security issuance. So, of course, in municipals, that's pretty steady. We actually -- when we budget equity and debt markets, we take a long-term look at what has been the average amount of issuance in terms of number of deals and we model that. And we take into account to some pretty low cycle years. But the real growth for us is coming around, again, the reporting tools into the private markets. As I said in the call, we added 100 new customers globally, in private markets alone this year. And we see that as an expensive growth area for us, providing tools to help GPs, report to LPs, and LPs to organize themselves in terms of compliance of -- and understanding of the attributes of their investments. So, we're really well-positioned there. We're now building -- we put all of those products under Andrew Eisen. And he's looking to gain the synergies between data management, iLEVEL, which is the reporting tool I just talked about, WSO which is our products for the leveraged loan market, in terms of middle and back office reporting and other tools. So, bringing those together really is a powerful opportunity with great growth. And I think the alternatives piece of that that was in the Ipreo acquisition is one of two major alternative data management plays in the marketplace. I put eFront, which recently sold the BlackRock and Eye Level which is our product is probably the two most important alternative markets platforms in terms of building off of for future revenue. Next question.

Our next question comes from Joseph Vafi with Canaccord. Your line is open.

Hi, guys. Just a question on the margin side. I was wondering, if you could just remind us where we are now in delivery mix in terms of resource delivery kind of maybe from lower cost geographies where that could go? And then secondly, just related to that margin potential on incremental investment spend on new products today versus what maybe the margin potential on kind of some of the existing business? Thanks.

Okay. We have about 25% of our staff in our lowest cost, total cost location in terms of overall cost health benefits cost of living. We have another probably 25% in kind of nearshore advantageous cost centers whether it's Raleigh,. Manchester, Calgary places like that. And then, we of course have still a large number of our teams in London and New York and Houston and Dallas. Of course, those are a lot more expensive. So we do see that over the course of a two, three, five year period there's ample opportunity for us to manage our growth and attrition to allow us to have efficiencies on our salaries and benefits and those fixed costs. The second piece that we think that we have benefits on is one that you alluded to, which are tech efficiencies gained through using technology to be more efficient, machine learning other tools around data ingestion that actually can become less people intensive. And Yaacov is spending a fair amount of time with the technologists on identifying those opportunities. So I think the 100 basis points, until we get to 45%, 47% margin, which is a five-year target. I think we've got ample opportunities to deliver that margin expansion and it would also add our 5% to 7% growth right leads the appropriate amount of investment to support our organic growth. So I think we're – we're in a well oiled part of our strategy and one that I think that will be able to consistently deliver on for the next few years. Next question?

I'm currently show no further questions at this time. I'd like to turn the call back over to Eric Boyer for closing remarks.

We thank you for your interest in IHS Markit. This call can be accessed via replay 855-859-2056 or international dial-in 404-537-3406. Conference ID 7562478 beginning in about two hours and running through January 21, 2020. In addition, the webcast can be -- will be archived for one year on our website at www.ihsmarkit.com. Thank you and we appreciate your interest and time. Thank you.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.