IHS (IHS)

Stock-Based Compensation

        We have one share-based compensation plan, the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan (the "2004 Long-Term Incentive Plan"), that provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares, cash-based awards, other stock- based awards, and covered employee annual incentive awards. Our Amended and Restated IHS Inc. 2004 Directors Stock Plan, a sub-plan under our 2004 Long-Term Incentive Plan, provides for the grant of restricted stock and restricted stock units to non-employee directors as defined in that plan.

        As of November 30, 2008, we had approximately 2.4 million stock-based awards outstanding, of which approximately 1.3 million were performance-based awards, assuming maximum potential payout of the performance awards.

        As of November 30, 2008, we have estimated that the maximum number of shares issuable for the 2009 fiscal year will vest, and that the target number of shares issuable for the 2010 and 2011 fiscal years will vest. Using these estimates, projected share-based compensation expense for 2009 is estimated at $55 -$60 million, and incorporates these grants. A change in the actual performance levels achieved by the Company could result in a change in the actual amount of stock based compensation that we recognize. For example, in the event we do not achieve the projected performance metrics for 2009, 2010 or 2011, our stock based compensation expense would decrease.

        We believe that the assumptions related to our performance-based stock awards are critical because they are susceptible to change from period to period based on market and other uncertain conditions beyond our control.

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        We determine the fair value of our stock options using the Black-Scholes pricing model. This valuation model requires management to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating:

•

the future volatility of our stock price,



•

expected dividend yield,



•

future employee turnover rates, and



•

future employee stock option exercise behaviors.

        Given that we only had 0.3 million options outstanding as of November 30, 2008, changes in these assumptions were not likely to materially affect our financial results. However, if the number of options granted materially increases in the future, the likelihood that changes in our valuation assumptions could materially impact our financial results also increases.

Stock-Based Compensation

        We have one share-based compensation plan, the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan (the "2004 Long-Term Incentive Plan"), that provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares, cash-based awards, other stock- based awards, and covered employee annual incentive awards. Our Amended and Restated IHS Inc. 2004 Directors Stock Plan, a sub-plan under our 2004 Long-Term Incentive Plan, provides for the grant of restricted stock and restricted stock units to non-employee directors as defined in that plan.

        As of November 30, 2008, we had approximately 2.4 million stock-based awards outstanding, of which approximately 1.3 million were performance-based awards, assuming maximum potential payout of the performance awards.

        As of November 30, 2008, we have estimated that the maximum number of shares issuable for the 2009 fiscal year will vest, and that the target number of shares issuable for the 2010 and 2011 fiscal years will vest. Using these estimates, projected share-based compensation expense for 2009 is estimated at $55 -$60 million, and incorporates these grants. A change in the actual performance levels achieved by the Company could result in a change in the actual amount of stock based compensation that we recognize. For example, in the event we do not achieve the projected performance metrics for 2009, 2010 or 2011, our stock based compensation expense would decrease.

        We believe that the assumptions related to our performance-based stock awards are critical because they are susceptible to change from period to period based on market and other uncertain conditions beyond our control.

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Table of Contents

        We determine the fair value of our stock options using the Black-Scholes pricing model. This valuation model requires management to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating:

•

the future volatility of our stock price,



•

expected dividend yield,



•

future employee turnover rates, and



•

future employee stock option exercise behaviors.

        Given that we only had 0.3 million options outstanding as of November 30, 2008, changes in these assumptions were not likely to materially affect our financial results. However, if the number of options granted materially increases in the future, the likelihood that changes in our valuation assumptions could materially impact our financial results also increases.

Stock-Based Compensation

        We have one share-based compensation plan, the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan (the "2004
Long-Term Incentive Plan"), that provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock
units, performance units and performance shares, cash-based awards, other stock- based awards, and covered employee annual incentive awards. Our Amended and Restated IHS Inc. 2004
Directors Stock Plan, a sub-plan under our 2004 Long-Term Incentive Plan, provides for the grant of restricted stock and restricted stock units to non-employee
directors as defined in that plan.

        As
of November 30, 2008, we had approximately 2.4 million stock-based awards outstanding, of which approximately 1.3 million were performance-based awards, assuming
maximum potential payout of the performance awards.

        As
of November 30, 2008, we have estimated that the maximum number of shares issuable for the 2009 fiscal year will vest, and that the target number of shares issuable for the
2010 and 2011 fiscal years will vest. Using these estimates, projected share-based compensation expense for 2009 is estimated at $55 -$60 million, and incorporates these grants. A change
in the actual performance levels achieved by the Company could result in a change in the actual amount of stock based compensation that we recognize. For example, in the event we do not achieve the
projected performance metrics for 2009, 2010 or 2011, our stock based compensation expense would decrease.

        We
believe that the assumptions related to our performance-based stock awards are critical because they are susceptible to change from period to period based on market and other
uncertain conditions beyond our control.

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        We
determine the fair value of our stock options using the Black-Scholes pricing model. This valuation model requires management to make assumptions and to apply judgment to determine
the fair value of our awards. These assumptions and judgments include estimating:

•

the future volatility of our stock price,




•

expected dividend yield,




•

future employee turnover rates, and




•

future employee stock option exercise behaviors.

        Given
that we only had 0.3 million options outstanding as of November 30, 2008, changes in these assumptions were not likely to materially affect our financial results.
However, if the number of options granted materially increases in the future, the likelihood that changes in our valuation assumptions could materially impact our financial results also increases.

Stock-Based Compensation

        We have one share-based compensation plan, the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan (the "2004
Long-Term Incentive Plan"), that provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock
units, performance units and performance shares, cash-based awards, other stock- based awards, and covered employee annual incentive awards. Our Amended and Restated IHS Inc. 2004
Directors Stock Plan, a sub-plan under our 2004 Long-Term Incentive Plan, provides for the grant of restricted stock and restricted stock units to non-employee
directors as defined in that plan.

        As
of November 30, 2008, we had approximately 2.4 million stock-based awards outstanding, of which approximately 1.3 million were performance-based awards, assuming
maximum potential payout of the performance awards.

        As
of November 30, 2008, we have estimated that the maximum number of shares issuable for the 2009 fiscal year will vest, and that the target number of shares issuable for the
2010 and 2011 fiscal years will vest. Using these estimates, projected share-based compensation expense for 2009 is estimated at $55 -$60 million, and incorporates these grants. A change
in the actual performance levels achieved by the Company could result in a change in the actual amount of stock based compensation that we recognize. For example, in the event we do not achieve the
projected performance metrics for 2009, 2010 or 2011, our stock based compensation expense would decrease.

        We
believe that the assumptions related to our performance-based stock awards are critical because they are susceptible to change from period to period based on market and other
uncertain conditions beyond our control.

48

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        We
determine the fair value of our stock options using the Black-Scholes pricing model. This valuation model requires management to make assumptions and to apply judgment to determine
the fair value of our awards. These assumptions and judgments include estimating:

•

the future volatility of our stock price,




•

expected dividend yield,




•

future employee turnover rates, and




•

future employee stock option exercise behaviors.

        Given
that we only had 0.3 million options outstanding as of November 30, 2008, changes in these assumptions were not likely to materially affect our financial results.
However, if the number of options granted materially increases in the future, the likelihood that changes in our valuation assumptions could materially impact our financial results also increases.

Stock-Based Compensation

        We account for stock-based compensation under SFAS No. 123 (revised 2004), Share-Based Payment (SFAS No. 123(R)) and the related SEC Staff Accounting Bulletin No. 107, Share-Based Payments. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.

        SFAS No. 123(R) also requires forfeitures to be estimated at the grant date. Accordingly, compensation cost is recognized based on the number of awards expected to vest. There may be adjustments in future periods if actual forfeitures differ from our estimates. Our forfeiture rate is based upon historical experience as well as anticipated employee turnover considering certain qualitative factors. We amortize the value of nonvested share awards to expense over the vesting period on a straight-line basis. For awards with performance conditions, an evaluation is made each quarter as to the likelihood of the performance criteria being met. Compensation expense is then adjusted to reflect the number of shares expected to vest and the cumulative vesting period met to date. For stock options, we estimate the fair value of awards on the date of grant using the Black-Scholes pricing model. We amortize the value of stock options to expense over the vesting period on a straight-line basis.

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IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

Stock-Based Compensation

        We account for stock-based compensation under SFAS No. 123 (revised 2004), Share-Based Payment (SFAS No. 123(R)) and the related SEC Staff Accounting Bulletin No. 107, Share-Based Payments. SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.

        SFAS No. 123(R) also requires forfeitures to be estimated at the grant date. Accordingly, compensation cost is recognized based on the number of awards expected to vest. There may be adjustments in future periods if actual forfeitures differ from our estimates. Our forfeiture rate is based upon historical experience as well as anticipated employee turnover considering certain qualitative factors. We amortize the value of nonvested share awards to expense over the vesting period on a straight-line basis. For awards with performance conditions, an evaluation is made each quarter as to the likelihood of the performance criteria being met. Compensation expense is then adjusted to reflect the number of shares expected to vest and the cumulative vesting period met to date. For stock options, we estimate the fair value of awards on the date of grant using the Black-Scholes pricing model. We amortize the value of stock options to expense over the vesting period on a straight-line basis.

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IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

Stock-Based Compensation

        We account for stock-based compensation under SFAS No. 123 (revised 2004), Share-Based
Payment (SFAS No. 123(R)) and the related SEC Staff Accounting Bulletin No. 107, Share-Based Payments. SFAS
No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.

        SFAS
No. 123(R) also requires forfeitures to be estimated at the grant date. Accordingly, compensation cost is recognized based on the number of awards expected to vest. There may
be adjustments in future periods if actual forfeitures differ from our estimates. Our forfeiture rate is based upon historical experience as well as anticipated employee turnover considering certain
qualitative factors. We amortize the value of nonvested share awards to expense over the vesting period on a straight-line basis. For awards with performance conditions, an evaluation is
made each quarter as to the likelihood of the performance criteria being met. Compensation expense is then adjusted to reflect the number of shares expected to vest and the cumulative vesting period
met to date. For stock options, we estimate the fair value of awards on the date of grant using the Black-Scholes pricing model. We amortize the value of stock options to expense over the vesting
period on a straight-line basis.

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IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

Stock-Based Compensation

        We account for stock-based compensation under SFAS No. 123 (revised 2004), Share-Based
Payment (SFAS No. 123(R)) and the related SEC Staff Accounting Bulletin No. 107, Share-Based Payments. SFAS
No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.

        SFAS
No. 123(R) also requires forfeitures to be estimated at the grant date. Accordingly, compensation cost is recognized based on the number of awards expected to vest. There may
be adjustments in future periods if actual forfeitures differ from our estimates. Our forfeiture rate is based upon historical experience as well as anticipated employee turnover considering certain
qualitative factors. We amortize the value of nonvested share awards to expense over the vesting period on a straight-line basis. For awards with performance conditions, an evaluation is
made each quarter as to the likelihood of the performance criteria being met. Compensation expense is then adjusted to reflect the number of shares expected to vest and the cumulative vesting period
met to date. For stock options, we estimate the fair value of awards on the date of grant using the Black-Scholes pricing model. We amortize the value of stock options to expense over the vesting
period on a straight-line basis.

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IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

15. Stock-Based Compensation

        As of November 30, 2008, we had one share-based compensation plan: the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan, which is described further below.

        Stock-based compensation expense for the three years ended November 30 was as follows:

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IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Stock-Based Compensation (Continued)

        Total income tax benefit recognized in the income statement for share-based compensation arrangements for the three years ended November 30 was as follows:

        No compensation cost was capitalized during the years ended November 30, 2008, 2007 and 2006.

15. Stock-Based Compensation

        As of November 30, 2008, we had one share-based compensation plan: the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan, which is described further below.

        Stock-based compensation expense for the three years ended November 30 was as follows:

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IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Stock-Based Compensation (Continued)

        Total income tax benefit recognized in the income statement for share-based compensation arrangements for the three years ended November 30 was as follows:

        No compensation cost was capitalized during the years ended November 30, 2008, 2007 and 2006.

15. Stock-Based Compensation

        As of November 30, 2008, we had one share-based compensation plan: the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan, which is described further
below.

        Stock-based
compensation expense for the three years ended November 30 was as follows:

91

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IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Stock-Based Compensation (Continued)

        Total income tax benefit recognized in the income statement for share-based compensation arrangements for the three years ended November 30 was as follows:

        No
compensation cost was capitalized during the years ended November 30, 2008, 2007 and 2006.

15. Stock-Based Compensation

        As of November 30, 2008, we had one share-based compensation plan: the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan, which is described further
below.

        Stock-based
compensation expense for the three years ended November 30 was as follows:

91

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Table of Contents

IHS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Stock-Based Compensation (Continued)

        Total income tax benefit recognized in the income statement for share-based compensation arrangements for the three years ended November 30 was as follows:

        No
compensation cost was capitalized during the years ended November 30, 2008, 2007 and 2006.

14. Stock-Based Compensation

        As of November 30, 2007, we had one share-based compensation plan: the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan, which is described further below.

        Stock-based compensation expense for the three years ended November 30 was as follows:

        Total income tax benefit recognized in the income statement for share-based compensation arrangements for the three years ended November 30 was as follows:

        No compensation cost was capitalized during the years ended November 30, 2007, 2006 and 2005.

14. Stock-Based Compensation

        As of November 30, 2007, we had one share-based compensation plan: the Amended and Restated IHS Inc. 2004 Long-Term Incentive Plan,
which is described further below.

        Stock-based
compensation expense for the three years ended November 30 was as follows:

        Total
income tax benefit recognized in the income statement for share-based compensation arrangements for the three years ended November 30 was as follows:

        No
compensation cost was capitalized during the years ended November 30, 2007, 2006 and 2005.

Stock-Based Compensation

We adopted SFAS No. 123 (revised 2004), Share Based Payment, effective December 1, 2005, the first day of our 2006 fiscal year. SFAS 123(R) is a revision of SFAS No. 123. SFAS 123(R) supersedes APB

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IHS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Opinion No. 25, Accounting for Stock Issued to Employees, and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS 123(R) is similar to the approach described in SFAS 123. However, SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107, Share-Based Payment, (SAB 107) related to SFAS 123(R). We have applied the provisions of SAB 107 in our adoption of SFAS 123(R).

We adopted SFAS 123(R) using the modified prospective transition method, and, consequently, it applies to all of our outstanding nonvested share-based payment awards as of December 1, 2005, and all prospective awards. Accordingly, the consolidated financial statement amounts for the prior periods have not been restated. At December 1, 2005, we had no stock options issued or outstanding, only restricted stock and deferred stock units. Prior to adopting SFAS 123(R) on December 1, 2005, the fair value of nonvested awards (restricted stock and deferred stock units) was recorded to additional paid-in capital with the offsetting entry posted to unearned compensation, also an equity account. The unearned compensation was then amortized to compensation expense related to equity awards over the vesting period using the straight-line method. With the adoption of SFAS 123(R) on December 1, 2005, we reclassified $24.8 million of unearned compensation to additional paid-in capital.

Prior to December 1, 2005, we also had a limited number of stock options outstanding which were granted by one of our subsidiaries. As discussed in Note 16, the costs associated with settling these options were accrued as of November 30, 2004. Our subsidiary elected to follow the guidance of APB 25 and related interpretation and accounted for its employee stock options using the intrinsic value method. As a result, no compensation expense related to stock options was recognized—aside from the costs accrued as of November 30, 2004 associated with settling all outstanding options granted by our subsidiary—for the years ended November 30, 2005 and 2004, because the exercise prices of our subsidiary’s stock options were equal to or greater than the estimated fair market value of the underlying stock on the date of grant.

SFAS 123(R) requires forfeitures to be estimated at the grant date. Accordingly, compensation cost is recognized based on the number of awards expected to vest. There may be adjustments in future periods if actual forfeitures differ from our estimates. Our forfeiture rate is based upon historical experience as well as anticipated employee turnover considering certain qualitative factors. We amortize the value of nonvested share awards to expense over the vesting period on a straight-line basis. For awards with performance conditions, an evaluation is made each quarter as to the likelihood of the performance criteria being met. Compensation expense is then adjusted to reflect the number of shares expected to vest and the cumulative vesting period met to date. For stock options, we estimate the fair value of awards on the date of grant using the Black-Scholes pricing model. We amortize the value of stock options to expense over the vesting period on a straight-line basis.