IHS Markit plans to keep liquidity levels high, won’t draw down yet

By Devika Patel

Knoxville, Tenn., March 24 – IHS Markit Ltd. plans to maintain high liquidity levels and flexibility as it navigates a challenging market.

The company doesn’t plan to draw down on its liquidity, as it has no need to do so yet.

“In terms of capital allocation, given the current market conditions, we are focused on maintaining high levels of liquidity and capital structure flexibility,” executive vice president and chief financial officer Jonathan Gear said on the company’s first quarter ended Feb. 29 earnings conference call on Tuesday.

“We do plan to pause share buybacks and plan to maximize our capacity under our bank credit facility.

“We maintain a very healthy and strong balance sheet, investor-grade ratings, a well-positioned debt maturity ladder and a strong, diversified bank group.

“While there will be negative impacts from the current external challenges, we do have a model that absorbs the risk in this environment yet still delivers solid earnings growth,” Gear said.

Management has no plans to draw on the company’s liquidity lines, as it does not need to do so.

“We’re not going to draw down on our liquidity lines,” chairman and chief executive officer Lance Uggla said on the call.

“We’ve got a diversified bank group that’s strong and we’ve talked to them all and we don’t see a need to draw down on those bank lines,” Uggla said.

“We really, frankly, don’t have a need to draw down on it, so, we don’t have any plans at this point to do it but we certainly have the liquidity there should we choose to in the future,” Gear said.

Adjusted EBITDA was $432 million for the quarter and free cash flow was $117.4 million.

Cash and cash equivalents were $143.9 million as of Feb. 29, 2020, compared to $111.5 million as of Nov. 30, 2019.

Net long-term debt was $4,961,300,000 as of Feb. 29, 2020, compared to $4,874,400,000 as of Nov. 30, 2019.

IHS Markit is London-based provider of information and analytics.

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