2013-02-26 22:16:28 -
Verisk Analytics, Inc., Reports Fourth-Quarter 2012 Financial Results
Delivers 18.2% Revenue Growth and 26.0% Diluted Adjusted EPS Growth
JERSEY CITY, N.J., February 26, 2013 - Verisk Analytics, Inc. (Nasdaq:VRSK), a
leading source of information about risk, today announced results for the fiscal
quarter and year ended December 31, 2012:
Financial Highlights
See Tables 4 and 5 for a reconciliation of non-GAAP financial measures to the
relevant GAAP measures.
* Diluted GAAP earnings per share (diluted GAAP EPS) were $0.57 for fourth-
quarter 2012. Diluted adjusted earnings per share (diluted adjusted EPS)
were $0.63 for fourth-quarter 2012, an increase of 26.0% versus the same
period in 2011. For the fiscal year ended December 31, 2012 diluted GAAP EPS
were $1.92 and diluted adjusted EPS were $2.10.
* Total revenue increased 18.2% in the fourth quarter and 15.2% for fiscal
year 2012. Excluding the impact of recent acquisitions, revenue grew 6.7%
for fourth-quarter 2012 and 7.3% for fiscal year 2012. Revenue growth in the
fourth quarter was driven by a 28.7% increase in Decision Analytics revenue,
with additional contribution from the 2.9% growth in Risk Assessment
revenue. Risk Assessment revenue growth, excluding the reclassification of
$3.0 million and $12.1 million of revenue to Decision Analytics in fourth-
quarter 2012 and fiscal year 2012, was 5.0%.
* EBITDA increased 19.4% to $189.6 million for fourth-quarter 2012, with an
EBITDA margin of 45.6%. For fiscal year 2012, EBITDA increased 17.4% to
$695.9 million, with an EBITDA margin of 45.4%.
* Net income was $98.3 million for fourth-quarter 2012 and adjusted net income
was $108.7 million, an increase of 22.4% and 27.1%, respectively, versus the
comparable periods in 2011. Net income was $329.1 million and adjusted net
income was $361.3 million for fiscal year 2012, an increase of 16.4% and
19.0% versus 2011.
* In fourth-quarter 2012, the company repurchased a total of $34.8 million of
its common stock under its existing repurchase program. For fiscal 2012,
total repurchases were $162.6 million, and as of December 31, 2012, the
company had $144.2 million remaining under its share repurchase
authorization.
Frank J. Coyne, chairman and chief executive officer, said, "Our fourth-quarter
results were strong with solid, broad-based contributions from our businesses.
Our healthcare business finished 2012 with organic growth exceeding 30% and is
well positioned for the future, with the unified healthcare technology platform
continuing apace. The performance of Argus remains exceptional, with strong
growth prospects."
"Even as our insurance solutions continue to lead the market, we are developing
additional valuable analytic offerings for the future. We are excited about
many initiatives we have under way, including use of remote imagery and our
next-generation catastrophe modeling platform, Touchstone. While the mortgage
market remains challenging, we did finish 2012 somewhat better than expected.
However, we do anticipate challenges for mortgage to continue in 2013,"
concluded Coyne.
Table 1: Summary of Results for 2012
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 Change 2012 2011 Change
----------- ----------- -------- ------------- ------------- -------
Revenues $ 415,730 $ 351,593 18.2% $ 1,534,320 $ 1,331,840 15.2%
EBITDA $ 189,578 $ 158,776 19.4% $ 695,915 $ 592,887 17.4%
Net income $ 98,299 $ 80,318 22.4% $ 329,142 $ 282,758 16.4%
Adjusted
net income $ 108,714 $ 85,516 27.1% $ 361,287 $ 303,633 19.0%
Diluted
GAAP EPS $ 0.57 $ 0.47 21.3% $ 1.92 $ 1.63 17.8%
Diluted
adjusted
EPS $ 0.63 $ 0.50 26.0% $ 2.10 $ 1.75 20.0%
Revenue
Revenue grew 18.2% for the quarter ended December 31, 2012 and 15.2% for fiscal
year 2012. Excluding the effect of recent acquisitions (MediConnect, Argus, and
Aspect Loss Prevention), revenue grew 6.7% in the fourth quarter and 7.3% for
fiscal year 2012. Overall revenue growth was the result of continued double-
digit growth in Decision Analytics and single-digit growth in Risk Assessment.
For fourth-quarter 2012, Decision Analytics revenue represented approximately
65% of total revenue and 62% for fiscal year 2012.
Table 2A: Decision Analytics Revenues by Category
(in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 Change 2012 2011 Change
----------- ----------- -------- ----------- ----------- -------
Insurance $ 128,609 $ 117,301 9.6% $ 493,456 $ 451,216 9.4%
Financial
services 45,505 32,091 41.8% 153,039 134,702 13.6%
Healthcare 72,802 38,506 89.1% 222,955 103,722 115.0%
Specialized
markets 22,333 21,384 4.4% 85,364 78,839 8.3%
----------- ----------- ----------- -----------
Total Decision
Analytics $ 269,249 $ 209,282 28.7% $ 954,814 $ 768,479 24.2%
----------- ----------- ----------- -----------
Within the Decision Analytics segment, revenue grew 28.7% for fourth-quarter
2012, and growth excluding recent acquisitions and the reclassification of
property-specific revenue to Decision Analytics was 7.9%. Growth in the quarter
was driven by strong increases in healthcare revenue, including the recent
acquisition of MediConnect, and good contributions from the insurance-facing
revenue category, as well as the revenue from the acquisition of Argus, which
was owned for the full quarter and is reported in the financial services
category.
Within the insurance category, revenue growth was 9.6% for the fourth quarter of
2012 and 9.3% excluding the recent acquisition of Aspect. This growth was driven
by continued good growth in catastrophe modeling solutions and satisfactory
growth in loss quantification and from fraud solutions. Catastrophe modeling
continued to benefit from new and expanded use of our models as well as strong
market share for catastrophe bond modeling. Loss quantification solutions growth
moderated as fourth-quarter revenue related to storm activity was captured under
customer contract minimums. Insurance fraud claims solutions also delivered
revenue growth, driven by annual invoice increases for certain solutions and
increased adoption of existing and new solutions.
In the financial services category, revenue increased 41.8% in fourth-quarter
2012 but declined 19.6% after adjusting for the acquisition of Argus and the
2012 transition of appraisal tool revenue into the financial services category
from the property-specific rating and underwriting information category in Risk
Assessment. The decline in mortgage revenue within the financial services
category reflected continued lower volumes in forensic audit solutions, which
were not offset by strong growth in underwriting. For fiscal year 2012,
financial services revenue declined 11.3% after adjusting for the acquisition of
Argus and the 2012 transition of appraisal tool revenue into the financial
services category from Risk Assessment.
In the healthcare vertical, revenue in the fourth quarter grew 89.1%, with
organic growth of 28.5%, driven by double-digit growth for payment accuracy
fraud solutions and revenue integrity, and good growth for enterprise analytics.
Total revenue growth included the 2012 acquisition of MediConnect. Organic
growth reflected continued customer implementations and new customer sales.
In the specialized markets category, revenue grew 4.4% in fourth-quarter 2012,
as good growth in weather and climate analytics was moderated by slower growth
in environmental health and safety solutions.
Table 2B: Risk Assessment Revenues by Category
(in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 Change 2012 2011 Change
----------- ----------- -------- ----------- ----------- -------
Industry-
standard
insurance
programs $ 114,052 $ 107,799 5.8% $ 450,646 $ 426,228 5.7%
Property-
specific
rating and
underwriting
information 32,429 34,512 (6.0%) 128,860 137,133 (6.0%)
----------- ----------- ----------- -----------
Total Risk
Assessment $ 146,481 $ 142,311 2.9% $ 579,506 $ 563,361 2.9%
----------- ----------- ----------- -----------
Within the Risk Assessment segment, revenue grew 2.9% for the quarter and 5.0%
excluding the reclassification of property-specific revenue to Decision
Analytics as discussed previously. The overall increase within the segment was
due principally to 5.8% revenue growth in industry-standard insurance programs
resulting primarily from the continued annual effect of growth in 2012 invoices
effective from January 1 as well as continued strong performance from premium
leakage solutions. As of fourth-quarter 2012, the statistical agency and
actuarial services revenue categories are included in the industry-standard
insurance programs line.
Property-specific rating and underwriting information revenue declined 6.0% in
the fourth quarter. After adjusting for the reclassification of $3.0 million of
revenue in fourth-quarter 2012 from the property-specific revenue category into
the financial services revenue category of Decision Analytics, property-specific
rating and underwriting information revenue grew 2.6%. Growth was due to new
sales and higher volumes from certain customers, offset by lower revenue from
appraisal solutions.
Cost of Revenue
Cost of revenue increased 21.1% in fourth-quarter 2012 and 6.4% excluding recent
acquisitions as compared to 2011. For fiscal year 2012, cost of revenue
increased 13.8% and 4.1% excluding acquisitions. The year-over-year increase
relates primarily to 2012 annual compensation adjustments and higher headcount
in Decision Analytics in support of the growth of our business, partially offset
by reduced pension costs related to the freeze of the pension plan in February
2012.
For fourth-quarter 2012, cost of revenue decreased 3.1% for Risk Assessment,
primarily related to reduced pension expense, and increased 33.8% for Decision
Analytics (11.3% excluding recent acquisitions). For fiscal year 2012, cost of
revenue decreased 5.8% for Risk Assessment and increased 24.9% for Decision
Analytics (9.8% excluding recent acquisitions).
Selling, General, and Administrative
Selling, general, and administrative expense, or SG&A, increased 6.4% in fourth-
quarter 2012 and 1.0% excluding recent acquisitions. For fiscal year 2012, SG&A
increased 10.4% and 5.2% excluding recent acquisitions. The increase relates
primarily to 2012 annual compensation adjustments and higher headcount in
Decision Analytics in support of the growth of our business, which were
partially offset by reduced pension costs related to the pension plan freeze.
In fourth-quarter 2012, SG&A decreased 10.9% for Risk Assessment. SG&A grew
17.8% for Decision Analytics (8.8% excluding recent acquisitions), reflecting
increased headcount and commissions related to the growth of the business. For
fiscal year 2012, SG&A decreased 3.1% for Risk Assessment and increased 19.4%
for Decision Analytics (10.8% excluding recent acquisitions).
EBITDA
For fourth-quarter 2012, consolidated EBITDA grew 19.4% to $189.6 million, with
a consolidated EBITDA margin of 45.6%. For fiscal year 2012, consolidated EBITDA
grew 17.4% to $695.9 million, with a consolidated EBITDA margin of 45.4%.
Table 3: Segment EBITDA
(in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 Change 2012 2011 Change
----------- ----------- -------- ----------- ----------- -------
Decision
Analytics $ 108,376 $ 85,220 27.2% $ 379,655 $ 305,837 24.1%
EBITDA margin 40.3% 40.7% 39.8% 39.8%
Risk
Assessment $ 81,202 $ 73,556 10.4% $ 316,260 $ 287,050 10.2%
EBITDA margin 55.4% 51.7% 54.6% 51.0%
Total EBITDA $ 189,578 $ 158,776 19.4% $ 695,915 $ 592,887 17.4%
EBITDA margin 45.6% 45.2% 45.4% 44.5%
Decision Analytics EBITDA grew 27.2% in fourth-quarter 2012 and Risk Assessment
EBITDA grew 10.4% versus the same period in the previous year, as shown in Table
3. For fiscal year 2012, Risk Assessment EBITDA grew 10.2% and Decision
Analytics EBITDA grew 24.1%.
The fourth-quarter 2012 EBITDA margin in Risk Assessment increased to 55.4% from
51.7% in fourth-quarter 2011 because revenue outpaced our primary costs, which
were personnel-related, including pension. The fiscal year 2012 EBITDA margin in
Risk Assessment was 54.6% versus 51.0% in fiscal year 2011.
The fourth-quarter 2012 EBITDA margin for Decision Analytics decreased slightly
to 40.3% from 40.7% in fourth-quarter 2011 because of investment in certain
businesses. The fiscal year 2012 EBITDA margin in Decision Analytics was 39.8%,
the same as in fiscal year 2011.
Net Income and Adjusted Net Income
Net income increased 22.4% in fourth-quarter 2012, driven by growth in the
business and favorable tax benefits relating to fiscal year 2012 as well as
previous periods, partially offset by increased interest expense and
amortization associated with acquisitions. Tax benefits recognized for previous
periods totaled approximately $12.3 million in the fourth quarter and
contributed about $0.07 to diluted adjusted EPS. Net income grew 16.4% for
fiscal year 2012.
Adjusted net income grew 27.1% for fourth-quarter 2012 and 19.0% for fiscal year
2012. The table below sets forth a reconciliation of net income to adjusted net
income and adjusted EPS based on historical results:
Table 4: Net Income and Adjusted Net Income
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 Change 2012 2011 Change
----------- ----------- -------- ------------ ------------ -------
Net Income $ 98,299 $ 80,318 22.4% $ 329,142 $ 282,758 16.4%
plus:
Amortization
of
intangibles 17,359 8,663 53,575 34,792
less: Income
tax effect on
amortization
of
intangibles (6,944) (3,465) (21,430) (13,917)
----------- ----------- ------------ ------------
Adjusted net
income $ 108,714 $ 85,516 27.1% $ 361,287 $ 303,633 19.0%
----------- ----------- ------------ ------------
Basic
adjusted EPS $ 0.65 $ 0.52 25.0% $ 2.18 $ 1.83 19.1%
----------- ----------- ------------ ------------
Diluted
adjusted EPS $ 0.63 $ 0.50 26.0% $ 2.10 $ 1.75 20.0%
----------- ----------- ------------ ------------
Weighted
average
shares
outstanding
(in millions)
Basic 166.8 163.9 165.9 166.0
----------- ----------- ------------ ------------
Diluted 171.9 170.5 171.7 173.3
----------- ----------- ------------ ------------
Net Cash Provided by Operating Activities and Capital Expenditures
Net cash provided by operating activities was $468.2 million, an increase of
$92.5 million, or 24.6%, for the fiscal year ended December 31, 2012, compared
to 2011. This change was the result of a $107.0 million increase caused by the
improved profitability of the business, a $62.7 million decrease in income taxes
paid, and a $9.5 million decrease in working capital, partially offset by a
$73.4 million increase in pension and postretirement funding primarily due to
the voluntary $72.0 million contribution to our pension and a $12.8 million
increase in interest paid due to higher debt levels.
Capital expenditures were $79.8 million in fiscal year 2012, an increase of
$11.4 million over the same period in 2011. Capital expenditures were 5.2% of
revenue in fiscal year 2012. Net cash provided by operating activities less
capital expenditures represented 55.8% of EBITDA in fiscal year 2012. The cash
flow conversion rate was lowered by the voluntary pension funding of $72.0
million discussed above.
Share Repurchases and Financing Activities
The company continued to balance its internal investment and acquisition
initiatives with share repurchases. In fourth-quarter 2012, the company
repurchased shares for a total cost of $34.8 million at an average price of
$48.60. At December 31, 2012, the company had $144.2 million remaining under its
share repurchase authorization.
Conference Call
Verisk's management team will host a live audio webcast on Wednesday, February
27, 2013, at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss the
financial results and business highlights. All interested parties are invited to
listen to the live event via webcast on the Verisk investor website at
investor.verisk.com. The discussion is also available through dial-in
number 1-877-755-3792 for U.S./Canada participants or 706-758-8912 for
international participants.
A replay of the webcast will be available on the Verisk investor website for 30
days and also through the conference call number 1-855-859-2056 for U.S./Canada
participants or 404-537-3406 for international participants using Conference ID
#96739276.
About Verisk Analytics
Verisk Analytics (Nasdaq:VRSK) is a leading provider of information about risk
to professionals in insurance, healthcare, financial services, government, and
risk management. Using advanced technologies to collect and analyze billions of
records, Verisk Analytics draws on vast industry expertise and unique
proprietary data sets to provide predictive analytics and decision support
solutions in fraud prevention, actuarial science, insurance coverages, fire
protection, catastrophe and weather risk, data management, and many other
fields. In the United States and around the world, Verisk Analytics helps
customers protect people, property, and financial assets. For more information,
visit www.verisk.com.
Forward-Looking Statements
This release contains forward-looking statements. These statements relate to
future events or to future financial performance and involve known and unknown
risks, uncertainties, and other factors that may cause our actual results,
levels of activity, performance, or achievements to be materially different from
any future results, levels of activity, performance, or achievements expressed
or implied by these forward-looking statements. In some cases, you can identify
forward-looking statements by the use of words such as "may," "could,"
"expect,"
"intend," "plan," "target," "seek,"
"anticipate," "believe," "estimate,"
"predict," "potential," or "continue" or the negative of these
terms or other
comparable terminology. You should not place undue reliance on forward-looking
statements because they involve known and unknown risks, uncertainties, and
other factors that are, in some cases, beyond our control and that could
materially affect actual results, levels of activity, performance, or
achievements.
Other factors that could materially affect actual results, levels of activity,
performance, or achievements can be found in Verisk's quarterly reports on Form
10-Q, annual reports on Form 10-K, and current reports on
Form 8-K filed with the Securities and Exchange Commission. If any of these
risks or uncertainties materialize, or if our underlying assumptions prove to be
incorrect, actual results may vary significantly from what we projected. Any
forward-looking statement in this release reflects our current views with
respect to future events and is subject to these and other risks, uncertainties,
and assumptions relating to our operations, results of operations, growth
strategy, and liquidity. We assume no obligation to publicly update or revise
these forward-looking statements for any reason, whether as a result of new
information, future events, or otherwise.
Notes Regarding the Use of Non-GAAP Financial Measures
The company has provided certain non-GAAP financial information as supplemental
information regarding its operating results. These measures are not in
accordance with, or an alternative for, U.S. GAAP and may be different from non-
GAAP measures reported by other companies. The company believes that its
presentation of non-GAAP measures, such as EBITDA, EBITDA margin, adjusted net
income, and adjusted EPS, provides useful information to management and
investors regarding certain financial and business trends relating to its
financial condition and results of operations. In addition, the company's
management uses these measures for reviewing the financial results of the
company and for budgeting and planning purposes.
EBITDA
Table 5 below sets forth a reconciliation of net income to EBITDA based on our
historical results:
Table 5: EBITDA Reconciliation
(in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 Change 2012 2011 Change
----------- ----------- -------- ----------- ----------- -------
Net income $ 98,299 $ 80,318 22.4% $ 329,142 $ 282,758 16.4%
Depreciation
and
amortization
of fixed and
intangible
assets 30,535 19,532 56.3% 104,199 78,619 32.5%
Interest
expense 20,613 14,754 39.7% 72,508 53,847 34.7%
Provision for
income taxes 40,131 44,172 (9.1%) 190,066 177,663 7.0%
----------- ----------- ----------- -----------
EBITDA $ 189,578 $ 158,776 19.4% $ 695,915 $ 592,887 17.4%
----------- ----------- ----------- -----------
EBITDA is a financial measure that management uses to evaluate the performance
of our segments. In all periods shown here and going forward, the company
defines "EBITDA" as net income before interest expense, income taxes, and
depreciation and amortization of fixed and intangible assets. In previous
periods, this measure also excluded investment income and realized gain on
securities, net.
Although EBITDA is frequently used by securities analysts, lenders, and others
in their evaluation of companies, EBITDA has limitations as an analytical tool
and should not be considered in isolation or as a substitute for an analysis of
our statement of cash flow reported under U.S. GAAP. Management uses EBITDA in
conjunction with traditional U.S. GAAP operating performance measures as part of
its overall assessment of company performance. Some of these limitations are as
follows:
* EBITDA does not reflect our cash expenditures or future requirements for
capital expenditures or contractual commitments.
* EBITDA does not reflect changes in, or cash requirement for, our working
capital needs.
* Although depreciation and amortization are noncash charges, the assets being
depreciated and amortized often will have to be replaced in the future, and
EBITDA does not reflect any cash requirements for such replacements.
* Other companies in our industry may calculate EBITDA differently than we do,
limiting the usefulness of their calculations as comparative measures.
Attached Financial Statements
Please refer to the full Form 10-K filing for the complete financial statements
and related notes.
VERISK ANALYTICS, INC.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2012 and 2011
(In thousands, except for share 2012 2011
and per share data)
----------------------- ----------------------
ASSETS
Current assets:
Cash and cash equivalents $ 89,819 $ 191,603
Available-for-sale securities 4,883 5,066
Accounts receivable, net 178,430 153,339
Prepaid expenses 21,946 21,905
Deferred income taxes, net 10,397 3,818
Income taxes receivable 45,975 36,675
Other current assets 39,109 41,248
----------------------- ----------------------
Total current assets 390,559 453,654
Noncurrent assets:
Fixed assets, net 154,084 119,411
Intangible assets, net 520,935 226,424
Goodwill 1,247,459 709,944
Deferred income taxes, net - 10,480
Other assets 47,299 21,193
----------------------- ----------------------
Total assets $ 2,360,336 $ 1,541,106
----------------------- ----------------------
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued $ 187,648 $ 162,992
liabilities
Acquisition related liabilities -
250
Short-term debt and current 195,263 5,554
portion of long-term debt
Pension and postretirement 1,734 4,012
benefits, current
Fees received in advance 200,705 176,842
----------------------- ----------------------
Total current liabilities 585,350 349,650
Noncurrent liabilities:
Long-term debt 1,266,162 1,100,332
Pension benefits 38,655 109,161
Postretirement benefits 2,627 18,587
Deferred income taxes, net 133,761
-
Other liabilities 78,190 61,866
----------------------- ----------------------
Total liabilities 2,104,745 1,639,596
----------------------- ----------------------
Stockholders' equity (deficit):
Verisk Class A common stock,
$.001 par value; 1,200,000,000
shares authorized; 544,003,038 137
137
shares issued and 167,727,073
and 164,285,227 outstanding,
respectively
Unearned KSOP contributions (483) (691)
Additional paid-in capital 1,044,746 874,808
Treasury stock, at cost,
376,275,965 and 379,717,811 (1,605,376) (1,471,042)
shares, respectively
Retained earnings 905,727 576,585
Accumulated other comprehensive (89,160) (78,287)
losses
----------------------- ----------------------
Total stockholders' equity 255,591 (98,490)
(deficit)
----------------------- ----------------------
Total liabilities and $ 2,360,336 $ 1,541,106
stockholders' equity (deficit)
----------------------- ----------------------
VERISK ANALYTICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Twelve Months Ended December 31, 2012 and 2011
(In thousands,
except for Three Months Ended December 31, Twelve Months Ended December
share and per 31,
share data)
2012 2011 2012 2011
--------------------------------- --------------------------------
Revenues $ $ $ $
415,730 351,593 1,534,320 1,331,840
--------------------------------- --------------------------------
Expenses:
Cost of
revenues
(exclusive of
items shown 170,021 140,375 607,174 533,735
separately
below)
Selling,
general and 56,200 52,829 231,359 209,469
administrative
Depreciation
and
amortization 13,176 10,869 50,624 43,827
of fixed
assets
Amortization
of intangible 17,359 8,663 53,575 34,792
assets
Acquisition
related
liabilities - - -
(3,364)
adjustment
--------------------------------- --------------------------------
Total expenses
256,756 212,736 942,732 818,459
--------------------------------- --------------------------------
Operating
income 158,974 138,857 591,588 513,381
--------------------------------- --------------------------------
Other income
(expense):
Investment
income 63 102 460 201
Realized gain
(loss) on
securities, 6 285 (332) 686
net
Interest
expense (20,613) (14,754) (72,508) (53,847)
--------------------------------- --------------------------------
Total other
expense, net (20,544) (14,367) (72,380) (52,960)
--------------------------------- --------------------------------
Income before
income taxes 138,430 124,490 519,208 460,421
Provision for
income taxes (40,131) (44,172) (190,066) (177,663)
--------------------------------- --------------------------------
Net income $ $ $ $
98,299 80,318 329,142 282,758
--------------------------------- --------------------------------
Basic net
income per $ 0.59 $ 0.49 $ 1.98 $ 1.70
share
--------------------------------- --------------------------------
Diluted net
income per $ 0.57 $ 0.47 $ 1.92 $ 1.63
share
--------------------------------- --------------------------------
Weighted
average shares
outstanding:
Basic 166,799,952 163,874,595 165,890,258 166,015,238
--------------------------------- --------------------------------
Diluted 171,925,360 170,532,542 171,709,518 173,325,110
--------------------------------- --------------------------------
VERISK ANALYTICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2012 and 2011
(In thousands) 2012 2011
-------------------- -------------------
Cash flows from operating activities:
Net income $ 329,142 $ 282,758
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization of fixed 50,624 43,827
assets
Amortization of intangible assets 53,575 34,792
Amortization of debt issuance costs 2,337 1,655
and original issue discount
Allowance for doubtful accounts 1,065 1,278
KSOP compensation expense 13,111 12,615
Stock based compensation 24,696 22,656
Noncash charges associated with - 585
performance based appreciation awards
Acquisition related liabilities - (3,364)
adjustment
Realized loss (gain) on securities, 332 (686)
net
Deferred income taxes 63,261 21,321
Loss on disposal of fixed assets 597 868
Excess tax benefits from exercised (60,672) (53,195)
stock options
Other operating activities, net 265 132
Changes in assets and liabilities, net
of effects from acquisitions:
Accounts receivable (6,425) (25,926)
Prepaid expenses and other assets 550 (2,720)
Income taxes 83,711 46,959
Accounts payable and accrued 11,256 15,468
liabilities
Fees received in advance 20,493 12,373
Pension and postretirement benefits (105,829) (13,599)
Other liabilities (13,860) (22,076)
-------------------- -------------------
Net cash provided by operating 468,229 375,721
activities
-------------------- -------------------
Cash flows from investing activities:
Acquisitions, net of cash acquired of (769,513) (121,721)
$36,113 and $590 respectively
Purchase of non-controlling interest (2,250) -
in non-public companies
Earnout payments (250) (3,500)
Escrow funding associated with (38,800) (19,560)
acquisitions
Proceeds from release of acquisition 1,455 -
related escrows
Purchases of fixed assets (74,373) (59,829)
Purchases of available-for-sale (1,784) (1,549)
securities
Proceeds from sales and maturities of 1,932 1,730
available-for-sale securities
Other investing activities, net - 300
-------------------- -------------------
Net cash used in investing activities (883,583) (204,129)
-------------------- -------------------
Cash flows from financing activities:
Proceeds from issuance of long-term 347,224 696,559
debt, net of original issue discount
Repayment of current portion of long- - (125,000)
term debt
Repayment of short-term debt (347,224) (440,000)
refinanced on a long-term basis
Proceeds from issuance of short-term
debt with original maturities greater - 120,000
than three months
Proceeds from short-term debt, net 357,224 10,000
Payment of debt issuance cost (3,905) (7,835)
Repurchase of Class A common stock (162,275) (381,776)
Excess tax benefits from exercised 60,672 53,195
stock options
Proceeds from stock options exercised 68,388 43,345
Other financing activities, net (6,549) (3,268)
-------------------- -------------------
Net cash provided by (used in) 313,555 (34,780)
financing activities
-------------------- -------------------
Effect of exchange rate changes 15 (183)
-------------------- -------------------
(Decrease) increase in cash and cash (101,784) 136,629
equivalents
Cash and cash equivalents, beginning 191,603 54,974
of period
-------------------- -------------------
Cash and cash equivalents, end of $ 89,819 $ 191,603
period
-------------------- -------------------
Supplemental disclosures:
Taxes paid $ 47,516 $ 117,717
-------------------- -------------------
Interest paid $ 60,977 $ 48,158
-------------------- -------------------
Non-cash investing and financing
activities:
Repurchase of Class A common stock
included in accounts payable and $ 1,511 $ 1,200
accrued liabilities
-------------------- -------------------
Deferred tax (liability) asset
established on the date of $ (80,979) $ 1,324
acquisitions
-------------------- -------------------
Capital lease obligations $ 3,869 $ 7,248
-------------------- -------------------
Capital expenditures included in
accounts payable and accrued $ 4,946 $ 3,437
liabilities
-------------------- -------------------
Increase in goodwill due to
acquisition related escrow $ 5,934 $ -
distributions
-------------------- -------------------
Increase in goodwill due to accrual of $ - $ 250
acquisition related liabilities
-------------------- -------------------
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Verisk Analytics Inc. via Thomson Reuters ONE
[HUG#1680993]
