þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 26-2994223 | |
(State or other jurisdiction of incorporation | (I.R.S. Employer | |
or organization) | Identification No.) | |
545 Washington Boulevard | ||
Jersey City, NJ | 07310-1686 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Class | Shares Outstanding | |
Class A common stock $.001 par value | 150,042,965 | |
Class B (Series 2) common stock $.001 par value | 14,771,340 |
Item 1. | Financial Statements |
2011 | ||||||||
unaudited | 2010 | |||||||
(In thousands, except for | ||||||||
share and per share data) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 51,970 | $ | 54,974 | ||||
Available-for-sale securities |
5,351 | 5,653 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $3,829 and $4,028 (including amounts
from related parties of $727 and $515, respectively) (1) |
145,632 | 126,564 | ||||||
Prepaid expenses |
26,015 | 17,791 | ||||||
Deferred income taxes, net |
3,681 | 3,681 | ||||||
Federal and foreign income taxes receivable |
24,610 | 15,783 | ||||||
State and local income taxes receivable |
9,063 | 8,923 | ||||||
Other current assets |
29,155 | 7,066 | ||||||
Total current assets |
295,477 | 240,435 | ||||||
Noncurrent assets: |
||||||||
Fixed assets, net |
107,645 | 93,409 | ||||||
Intangible assets, net |
241,330 | 200,229 | ||||||
Goodwill |
712,561 | 632,668 | ||||||
Deferred income taxes, net |
20,977 | 21,879 | ||||||
State income taxes receivable |
1,773 | 1,773 | ||||||
Other assets |
28,326 | 26,697 | ||||||
Total assets |
$ | 1,408,089 | $ | 1,217,090 | ||||
LIABILITIES AND STOCKHOLDERS DEFICIT |
||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 121,285 | $ | 111,995 | ||||
Acquisition related liabilities |
| 3,500 | ||||||
Short-term debt and current portion of long-term debt |
170,663 | 437,717 | ||||||
Pension and postretirement benefits, current |
4,663 | 4,663 | ||||||
Fees received in advance (including amounts from related parties of $1,626 and $1,231, respectively) (1) |
214,989 | 163,007 | ||||||
Total current liabilities |
511,600 | 720,882 | ||||||
Noncurrent liabilities: |
||||||||
Long-term debt |
854,499 | 401,826 | ||||||
Pension benefits |
83,995 | 95,528 | ||||||
Postretirement benefits |
22,203 | 23,083 | ||||||
Other liabilities |
80,232 | 90,213 | ||||||
Total liabilities |
1,552,529 | 1,331,532 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity/(deficit): |
||||||||
Verisk Class A common stock, $.001 par value; 1,200,000,000 shares authorized; 350,338,030 and
150,179,126 shares issued and 150,625,134 and 143,067,924 outstanding as of June 30, 2011 and December
31, 2010, respectively |
88 | 39 | ||||||
Verisk Class B (Series 1) common stock, $.001 par value; 400,000,000 shares authorized; 0 and
198,327,962 shares issued and 0 and 12,225,480 outstanding as of June 30, 2011 and December 31, 2010,
respectively |
| 47 | ||||||
Verisk Class B (Series 2) common stock, $.001 par value; 400,000,000 shares authorized; 193,665,008
shares issued and 14,771,340 outstanding as of June 30, 2011 and December 31, 2010, respectively |
49 | 49 | ||||||
Unearned KSOP contributions |
(836 | ) | (988 | ) | ||||
Additional paid-in capital |
807,855 | 754,708 | ||||||
Treasury stock, at cost, 378,606,564 and 372,107,352 shares as of June 30, 2011 and December 31, 2010,
respectively |
(1,323,368 | ) | (1,106,321 | ) | ||||
Retained earnings |
425,280 | 293,827 | ||||||
Accumulated other comprehensive losses |
(53,508 | ) | (55,803 | ) | ||||
Total stockholders deficit |
(144,440 | ) | (114,442 | ) | ||||
Total liabilities and stockholders deficit |
$ | 1,408,089 | $ | 1,217,090 | ||||
(1) | See Note 13. Related Parties for further information. |
3
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands, except for share and per share data) | ||||||||||||||||
Revenues (including amounts from related parties of $4,787
and $15,280 for the three months ended June 30, 2011 and
2010 and $9,183 and $30,413 for the six months ended June
30, 2011 and 2010, respectively) (1) |
$ | 327,280 | $ | 281,677 | $ | 640,149 | $ | 557,831 | ||||||||
Expenses: |
||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
131,185 | 115,000 | 255,741 | 229,993 | ||||||||||||
Selling, general and administrative |
55,909 | 42,638 | 105,165 | 80,152 | ||||||||||||
Depreciation and amortization of fixed assets |
10,855 | 9,944 | 22,160 | 19,873 | ||||||||||||
Amortization of intangible assets |
8,877 | 7,020 | 17,332 | 14,324 | ||||||||||||
Acquisition related liabilities adjustment |
(3,364 | ) | | (3,364 | ) | | ||||||||||
Total expenses |
203,462 | 174,602 | 397,034 | 344,342 | ||||||||||||
Operating income |
123,818 | 107,075 | 243,115 | 213,489 | ||||||||||||
Other income/(expense): |
||||||||||||||||
Investment (loss)/income |
(10 | ) | 92 | | 124 | |||||||||||
Realized gain on securities, net |
125 | 29 | 487 | 61 | ||||||||||||
Interest expense |
(14,885 | ) | (8,445 | ) | (24,500 | ) | (16,911 | ) | ||||||||
Total other expense, net |
(14,770 | ) | (8,324 | ) | (24,013 | ) | (16,726 | ) | ||||||||
Income before income taxes |
109,048 | 98,751 | 219,102 | 196,763 | ||||||||||||
Provision for income taxes |
(43,471 | ) | (40,347 | ) | (87,649 | ) | (82,984 | ) | ||||||||
Net income |
$ | 65,577 | $ | 58,404 | $ | 131,453 | $ | 113,779 | ||||||||
Basic net income per share of Class A and Class B: |
$ | 0.39 | $ | 0.32 | $ | 0.78 | $ | 0.63 | ||||||||
Diluted net income per share of Class A and Class B: |
$ | 0.38 | $ | 0.31 | $ | 0.75 | $ | 0.60 | ||||||||
Weighted average shares outstanding: |
||||||||||||||||
Basic |
166,960,806 | 180,492,106 | 167,995,517 | 180,272,828 | ||||||||||||
Diluted |
174,634,046 | 189,541,893 | 175,799,120 | 189,498,324 | ||||||||||||
(1) | See Note 13. Related Parties for further information. |
4
Accumulated | Total | |||||||||||||||||||||||||||||||||||||||
Common Stock Issued | Unearned | Additional | Other | Stockholders | ||||||||||||||||||||||||||||||||||||
Verisk | Verisk | KSOP | Paid-in | Treasury | Retained | Comprehensive | (Deficit)/ | |||||||||||||||||||||||||||||||||
Verisk Class A | Class B (Series 1) | Class B (Series 2) | Par Value | Contributions | Capital | Stock | Earnings | Income/(Loss) | Equity | |||||||||||||||||||||||||||||||
(In thousands, except for share data) | ||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2010 |
125,815,600 | 205,637,925 | 205,637,925 | $ | 130 | $ | (1,305 | ) | $ | 652,573 | $ | (683,994 | ) | $ | 51,275 | $ | (53,628 | ) | $ | (34,949 | ) | |||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||||||||||||||
Net income |
| | | | | | | 242,552 | | 242,552 | ||||||||||||||||||||||||||||||
Other comprehensive loss |
| | | | | | | | (2,175 | ) | (2,175 | ) | ||||||||||||||||||||||||||||
Comprehensive income |
240,377 | |||||||||||||||||||||||||||||||||||||||
Conversion of Class B-1 common stock upon follow-on public
offering (Note 1) |
7,309,963 | (7,309,963 | ) | | | | | | | | | |||||||||||||||||||||||||||||
Conversion of Class B-2 common stock upon follow-on public
offering (Note 1) |
11,972,917 | | (11,972,917 | ) | | | | | | | | |||||||||||||||||||||||||||||
Treasury stock acquired Class A (7,111,202 shares) |
| | | | | | (212,512 | ) | | | (212,512 | ) | ||||||||||||||||||||||||||||
Treasury stock acquired Class B-1 (7,583,532 shares) |
| | | | | | (199,936 | ) | | | (199,936 | ) | ||||||||||||||||||||||||||||
Treasury stock acquired Class B-2 (374,718 shares) |
| | | | | | (9,879 | ) | | | (9,879 | ) | ||||||||||||||||||||||||||||
KSOP shares earned |
| | | | 317 | 11,256 | | | | 11,573 | ||||||||||||||||||||||||||||||
Stock options exercised (including tax benefit of $49,015) |
5,579,135 | | | 5 | | 84,492 | | | | 84,497 | ||||||||||||||||||||||||||||||
Net share settlement of taxes upon exercise of stock options |
(503,043 | ) | | | | | (15,051 | ) | | | | (15,051 | ) | |||||||||||||||||||||||||||
Stock based compensation |
| | | | | 21,298 | | | | 21,298 | ||||||||||||||||||||||||||||||
Other stock issuances |
4,554 | | | | | 140 | | | | 140 | ||||||||||||||||||||||||||||||
Balance, December 31, 2010 |
150,179,126 | 198,327,962 | 193,665,008 | $ | 135 | $ | (988 | ) | $ | 754,708 | $ | (1,106,321 | ) | $ | 293,827 | $ | (55,803 | ) | $ | (114,442 | ) | |||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||||||||||||||
Net income |
| | | | | | | 131,453 | | 131,453 | ||||||||||||||||||||||||||||||
Other comprehensive income |
| | | | | | | | 2,295 | 2,295 | ||||||||||||||||||||||||||||||
Comprehensive income |
133,748 | |||||||||||||||||||||||||||||||||||||||
Conversion of Class B-1 common stock (Note 1) |
198,327,962 | (198,327,962 | ) | | | | | | | | | |||||||||||||||||||||||||||||
Treasury stock acquired Class A (6,499,212 shares) |
| | | | | | (217,047 | ) | | | (217,047 | ) | ||||||||||||||||||||||||||||
KSOP shares earned |
| | | | 152 | 6,256 | | | | 6,408 | ||||||||||||||||||||||||||||||
Stock options exercised (including tax benefit of $16,530) |
1,830,942 | | | 2 | | 34,560 | | | | 34,562 | ||||||||||||||||||||||||||||||
Stock-based compensation |
| | | | | 12,331 | | | | 12,331 | ||||||||||||||||||||||||||||||
Balance, June 30, 2011 |
350,338,030 | | 193,665,008 | $ | 137 | $ | (836 | ) | $ | 807,855 | $ | (1,323,368 | ) | $ | 425,280 | $ | (53,508 | ) | $ | (144,440 | ) | |||||||||||||||||||
5
2011 | 2010 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 131,453 | $ | 113,779 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization of fixed assets |
22,160 | 19,873 | ||||||
Amortization of intangible assets |
17,332 | 14,324 | ||||||
Amortization of debt issuance costs |
729 | 789 | ||||||
Amortization of debt original issue discount |
25 | | ||||||
Allowance for doubtful accounts |
557 | 526 | ||||||
KSOP compensation expense |
6,408 | 5,729 | ||||||
Stock-based compensation |
12,331 | 10,284 | ||||||
Non-cash charges associated with performance based appreciation awards |
583 | 792 | ||||||
Acquisition related liabilities adjustment |
(3,364 | ) | | |||||
Realized gain on securities, net |
(487 | ) | (61 | ) | ||||
Deferred income taxes |
1,660 | 507 | ||||||
Other operating |
30 | 30 | ||||||
Loss on disposal of assets |
221 | 38 | ||||||
Excess tax benefits from exercised stock options |
(5,470 | ) | (10,036 | ) | ||||
Changes in assets and liabilities, net of effects from acquisitions: |
||||||||
Accounts receivable |
(16,979 | ) | (28,694 | ) | ||||
Prepaid expenses and other assets |
(8,082 | ) | (5,504 | ) | ||||
Federal and foreign income taxes |
7,703 | 17,729 | ||||||
State and local income taxes |
(140 | ) | (1,387 | ) | ||||
Accounts payable and accrued liabilities |
(15,190 | ) | (18,327 | ) | ||||
Fees received in advance |
50,520 | 55,959 | ||||||
Other liabilities |
(14,913 | ) | (3,316 | ) | ||||
Net cash provided by operating activities |
187,087 | 173,034 | ||||||
Cash flows from investing activities: |
||||||||
Acquisitions, net of cash acquired of $590 and $1,556, respectively |
(121,721 | ) | (6,386 | ) | ||||
Earnout payments |
(3,500 | ) | | |||||
Proceeds from release of acquisition related escrows |
| 283 | ||||||
Escrow funding associated with acquisitions |
(19,560 | ) | (1,500 | ) | ||||
Purchases of available-for-sale securities |
(1,338 | ) | (262 | ) | ||||
Proceeds from sales and maturities of available-for-sale securities |
1,704 | 511 | ||||||
Purchases of fixed assets |
(28,171 | ) | (15,570 | ) | ||||
Net cash used in investing activities |
(172,586 | ) | (22,924 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds
from issuance of long-term debt, net of original issue discount |
448,956 | | ||||||
Repayment
of short-term debt refinanced on a long-term basis |
(295,000 | ) | | |||||
Proceeds/(repayments)
of short-term debt, net |
72,919 | (64,069 | ) | |||||
Repurchase of Verisk Class A common stock |
(214,021 | ) | (62,266 | ) | ||||
Repayment of current portion of long-term debt |
(50,000 | ) | | |||||
Payment of debt issuance cost |
(4,434 | ) | | |||||
Net share settlement of taxes upon exercise of stock options |
| (15,051 | ) | |||||
Excess tax benefits from exercised stock options |
5,470 | 10,036 | ||||||
Proceeds from stock options exercised |
18,032 | 16,733 | ||||||
Net cash used in financing activities |
(18,078 | ) | (114,617 | ) | ||||
Effect of exchange rate changes |
573 | (193 | ) | |||||
(Decrease)/increase in cash and cash equivalents |
(3,004 | ) | 35,300 | |||||
Cash and cash equivalents, beginning of period |
54,974 | 71,527 | ||||||
Cash and cash equivalents, end of period |
$ | 51,970 | $ | 106,827 | ||||
Supplemental disclosures: |
||||||||
Taxes paid |
$ | 80,924 | $ | 63,545 | ||||
Interest paid |
$ | 17,997 | $ | 16,299 | ||||
Non-cash investing and financing activities: |
||||||||
Repurchase of Verisk Class A common stock included in accounts payable and
accrued liabilities |
$ | 5,292 | $ | 2,635 | ||||
Deferred tax
asset/(liability) established on date of acquisition |
$ | 1,280 | $ | (732 | ) | |||
Capital lease obligations |
$ | 8,013 | $ | 602 | ||||
Capital expenditures included in accounts payable and accrued liabilities |
$ | 307 | $ | 668 | ||||
Increase in goodwill due to acquisition related escrow distributions |
$ | | $ | 6,996 | ||||
6
7
8
Gross | Gross | |||||||||||||||
Adjusted | Unrealized | Unrealized | ||||||||||||||
Cost | Gain | Loss | Fair Value | |||||||||||||
June 30, 2011 |
||||||||||||||||
Registered investment companies |
$ | 4,519 | $ | 823 | $ | | $ | 5,342 | ||||||||
Equity securities |
14 | | (5 | ) | 9 | |||||||||||
Total available-for-sale
securities |
$ | 4,533 | $ | 823 | $ | (5 | ) | $ | 5,351 | |||||||
December 31, 2010 |
||||||||||||||||
Registered investment companies |
$ | 4,398 | $ | 1,248 | $ | | $ | 5,646 | ||||||||
Equity securities |
14 | | (7 | ) | 7 | |||||||||||
Total available-for-sale
securities |
$ | 4,412 | $ | 1,248 | $ | (7 | ) | $ | 5,653 | |||||||
Level 1 | Assets or liabilities for which the identical item is traded on an active exchange, such as publicly-traded instruments. | |||
Level 2 | Assets and liabilities valued based on observable market data for similar instruments. | |||
Level 3 | Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed, and considers risk premiums that a market participant would require. |
9
Quoted Prices | ||||||||||||||||
in Active Markets | Significant Other | Significant | ||||||||||||||
for Identical | Observable | Unobservable | ||||||||||||||
Total | Assets (Level 1) | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||
June 30, 2011 |
||||||||||||||||
Cash equivalents money-market funds |
$ | 349 | $ | | $ | 349 | $ | | ||||||||
Registered investment companies (1) |
$ | 5,342 | $ | 5,342 | $ | | $ | | ||||||||
Equity securities (1) |
$ | 9 | $ | 9 | $ | | $ | | ||||||||
December 31, 2010 |
||||||||||||||||
Cash equivalents money-market funds |
$ | 2,273 | $ | | $ | 2,273 | $ | | ||||||||
Registered investment companies (1) |
$ | 5,646 | $ | 5,646 | $ | | $ | | ||||||||
Equity securities (1) |
$ | 7 | $ | 7 | $ | | $ | | ||||||||
Contingent consideration under ASC
805 (2) |
$ | (3,337 | ) | $ | | $ | | $ | (3,337 | ) |
(1) | Registered investment companies and equity securities are classified as
available-for-sale securities and are valued using quoted prices in active markets multiplied
by the number of shares owned. |
|
(2) | Under ASC 805, contingent consideration is recognized at fair value at the end of each
reporting period for acquisitions after January 1, 2009. The Company records the initial
recognition of the fair value of contingent consideration in other liabilities on the
condensed consolidated balance sheet. Subsequent changes in the fair value of contingent
consideration are recorded in the statement of operations. |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||||
Beginning balance |
$ | 3,351 | $ | 3,840 | $ | 3,337 | $ | 3,344 | ||||||||
Acquisitions (1) |
| | | 491 | ||||||||||||
Acquisition related liabilities adjustment
(1) |
(3,364 | ) | | (3,364 | ) | | ||||||||||
Accretion on acquisition related liabilities |
13 | 13 | 27 | 18 | ||||||||||||
Ending balance |
$ | | $ | 3,853 | $ | | $ | 3,853 | ||||||||
(1) | Under ASC 805, contingent consideration is recognized at fair value at the end of each
reporting period for acquisitions after January 1, 2009. The Company records the initial
recognition of the fair value of contingent consideration in acquisition related liabilities
on the consolidated balance sheet. Subsequent changes in the fair value of contingent
consideration is recorded in the statement of operations. See Note 6 for further information
regarding the acquisition related liabilities adjustment associated with D2 Hawkeye, Inc. and
Strategic Analytics, Inc. |
Risk | Decision | |||||||||||
Assessment | Analytics | Total | ||||||||||
Goodwill at December 31, 2010 (1) |
$ | 27,908 | $ | 604,760 | $ | 632,668 | ||||||
Current year acquisitions |
| 79,893 | 79,893 | |||||||||
Goodwill at June 30, 2011 (1) |
$ | 27,908 | $ | 684,653 | $ | 712,561 | ||||||
(1) | These balances are net of accumulated impairment charges of $3,244 that occurred prior
to the periods included within the condensed consolidated financial statements. |
10
Weighted | ||||||||||||||
Average | Accumulated | |||||||||||||
Useful Life | Cost | Amortization | Net | |||||||||||
June 30, 2011 |
||||||||||||||
Technology-based |
7 years | $ | 234,755 | $ | (146,291 | ) | $ | 88,464 | ||||||
Marketing-related |
5 years | 48,103 | (30,900 | ) | 17,203 | |||||||||
Contract-based |
6 years | 6,555 | (6,385 | ) | 170 | |||||||||
Customer-related |
13 years | 172,236 | (36,743 | ) | 135,493 | |||||||||
Total intangible
assets |
$ | 461,649 | $ | (220,319 | ) | $ | 241,330 | |||||||
Weighted | ||||||||||||||
Average | Accumulated | |||||||||||||
Useful Life | Cost | Amortization | Net | |||||||||||
December 31, 2010 |
||||||||||||||
Technology-based |
7 years | $ | 210,212 | $ | (136,616 | ) | $ | 73,596 | ||||||
Marketing-related |
5 years | 40,882 | (28,870 | ) | 12,012 | |||||||||
Contract-based |
6 years | 6,555 | (6,287 | ) | 268 | |||||||||
Customer-related |
13 years | 145,567 | (31,214 | ) | 114,353 | |||||||||
Total intangible
assets |
$ | 403,216 | $ | (202,987 | ) | $ | 200,229 | |||||||
Year | Amount | |||
2011 |
$ | 17,448 | ||
2012 |
33,927 | |||
2013 |
28,414 | |||
2014 |
21,288 | |||
2015 |
21,063 | |||
2016-Thereafter |
119,190 | |||
$ | 241,330 | |||
11
Bloodhound | HRP | Total | ||||||||||
Accounts receivable |
$ | 2,278 | $ | 378 | $ | 2,656 | ||||||
Current assets |
6,646 | 297 | 6,943 | |||||||||
Fixed assets |
1,091 | 1,147 | 2,238 | |||||||||
Intangible assets |
34,433 | 24,000 | 58,433 | |||||||||
Goodwill |
44,870 | 35,023 | 79,893 | |||||||||
Other assets |
16 | 13,000 | 13,016 | |||||||||
Deferred income taxes |
1,280 | | 1,280 | |||||||||
Total assets acquired |
90,614 | 73,845 | 164,459 | |||||||||
Current liabilities |
6,869 | 1,445 | 8,314 | |||||||||
Other liabilities |
1,864 | 13,000 | 14,864 | |||||||||
Total liabilities assumed |
8,733 | 14,445 | 23,178 | |||||||||
Net assets acquired |
$ | 81,881 | $ | 59,400 | $ | 141,281 | ||||||
Weighted | ||||||||||||||||
Average Useful | ||||||||||||||||
Life | Bloodhound | HRP | Total | |||||||||||||
Technology-based |
10 years | $ | 16,043 | $ | 8,500 | $ | 24,543 | |||||||||
Marketing-related |
6 years | 2,221 | 5,000 | 7,221 | ||||||||||||
Customer-related |
10 years | 16,169 | 10,500 | 26,669 | ||||||||||||
Total intangible assets |
$ | 34,433 | $ | 24,000 | $ | 58,433 | ||||||||||
12
13
Issuance | Maturity | June 30, | December 31, | |||||||||
Date | Date | 2011 | 2010 | |||||||||
Short-term debt and current portion of
long-term debt: |
||||||||||||
Syndicated revolving credit facility |
Various | Various | $ | 90,000 | $ | 310,000 | ||||||
Prudential senior notes: |
||||||||||||
4.60% Series E senior notes |
6/14/2005 | 6/13/2011 | | 50,000 | ||||||||
6.00% Series F senior notes |
8/8/2006 | 8/8/2011 | 25,000 | 25,000 | ||||||||
Principal senior notes: |
||||||||||||
6.03% Series A senior notes |
8/8/2006 | 8/8/2011 | 50,000 | 50,000 | ||||||||
Capital lease obligations and other |
Various | Various | 5,663 | 2,717 | ||||||||
Short-term debt and current portion
of long-term debt |
$ | 170,663 | $ | 437,717 | ||||||||
Long-term debt: |
||||||||||||
Verisk senior notes: |
||||||||||||
5.80% senior notes, less
unamortized discount of $1,019
as of June 30, 2011 |
4/6/2011 | 5/1/2021 | $ | 448,981 | $ | | ||||||
Prudential senior notes: |
||||||||||||
6.13% Series G senior notes |
8/8/2006 | 8/8/2013 | 75,000 | 75,000 | ||||||||
5.84% Series H senior notes |
10/26/2007 | 10/26/2013 | 17,500 | 17,500 | ||||||||
5.84% Series H senior notes |
10/26/2007 | 10/26/2015 | 17,500 | 17,500 | ||||||||
6.28% Series I senior notes |
4/29/2008 | 4/29/2013 | 15,000 | 15,000 | ||||||||
6.28% Series I senior notes |
4/29/2008 | 4/29/2015 | 85,000 | 85,000 | ||||||||
6.85% Series J senior notes |
6/15/2009 | 6/15/2016 | 50,000 | 50,000 | ||||||||
Principal senior notes: |
||||||||||||
6.16% Series B senior notes |
8/8/2006 | 8/8/2013 | 25,000 | 25,000 | ||||||||
New York Life senior notes: |
||||||||||||
5.87% Series A senior notes |
10/26/2007 | 10/26/2013 | 17,500 | 17,500 | ||||||||
5.87% Series A senior notes |
10/26/2007 | 10/26/2015 | 17,500 | 17,500 | ||||||||
6.35% Series B senior notes |
4/29/2008 | 4/29/2015 | 50,000 | 50,000 | ||||||||
Aviva Investors North America: |
||||||||||||
6.46% Series A senior notes |
4/27/2009 | 4/27/2013 | 30,000 | 30,000 | ||||||||
Capital lease obligations and other |
Various | Various | 5,518 | 1,826 | ||||||||
Long-term debt |
$ | 854,499 | $ | 401,826 | ||||||||
Total debt |
$ | 1,025,162 | $ | 839,543 | ||||||||
14
15
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | |||||||||||||
Numerator used in basic and diluted EPS: |
||||||||||||||||
Net income |
$ | 65,577 | $ | 58,404 | $ | 131,453 | $ | 113,779 | ||||||||
Denominator: |
||||||||||||||||
Weighted average number of common shares used in basic EPS |
166,960,806 | 180,492,106 | 167,995,517 | 180,272,828 | ||||||||||||
Effect of dilutive shares: |
||||||||||||||||
Potential Class A common stock issuable upon the exercise of stock options |
7,673,240 | 9,049,787 | 7,803,603 | 9,225,496 | ||||||||||||
Weighted average number of common shares and dilutive potential common
shares used in diluted EPS |
174,634,046 | 189,541,893 | 175,799,120 | 189,498,324 | ||||||||||||
Basic EPS of Class A and Class B |
$ | 0.39 | $ | 0.32 | $ | 0.78 | $ | 0.63 | ||||||||
Diluted EPS of Class A and Class B |
$ | 0.38 | $ | 0.31 | $ | 0.75 | $ | 0.60 | ||||||||
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
Unrealized gain on investments, net of tax |
$ | 473 | $ | 725 | ||||
Unrealized foreign currency loss |
(219 | ) | (792 | ) | ||||
Pension and postretirement unfunded
liability adjustment, net of tax |
(53,762 | ) | (55,736 | ) | ||||
Accumulated other comprehensive losses |
$ | (53,508 | ) | $ | (55,803 | ) | ||
Tax Benefit/ | ||||||||||||
Before Tax | (Expense) | After Tax | ||||||||||
For the Six Months Ended June 30, 2011 |
||||||||||||
Unrealized holding loss on investments arising during
the year |
$ | (423 | ) | $ | 171 | $ | (252 | ) | ||||
Unrealized foreign currency gain |
573 | | 573 | |||||||||
Pension and postretirement unfunded liability adjustment |
2,668 | (694 | ) | 1,974 | ||||||||
Total other comprehensive income |
$ | 2,818 | $ | (523 | ) | $ | 2,295 | |||||
For the Six Months Ended June 30, 2010 |
||||||||||||
Unrealized holding loss on investments arising during
the year |
$ | (190 | ) | $ | 80 | $ | (110 | ) | ||||
Unrealized foreign currency loss |
(193 | ) | | (193 | ) | |||||||
Pension and postretirement unfunded liability adjustment |
2,926 | (1,179 | ) | 1,747 | ||||||||
Total other comprehensive income |
$ | 2,543 | $ | (1,099 | ) | $ | 1,444 | |||||
16
June 30, 2011 | June 30, 2010 | |||||||
Option pricing model |
Black-Scholes | Black-Scholes | ||||||
Expected volatility |
30.04 | % | 30.99 | % | ||||
Risk-free interest rate |
2.32 | % | 2.47 | % | ||||
Expected term in years |
5.3 | 4.8 | ||||||
Dividend yield |
0.00 | % | 0.00 | % | ||||
Weighted average grant date fair
value per stock option |
$ | 10.48 | $ | 8.70 |
Options Exercisable | ||||||||||||||||||||||||
Options Outstanding | Weighted | |||||||||||||||||||||||
Weighted | Average | Weighted | ||||||||||||||||||||||
Average | Stock | Weighted | Remaining | Stock | Average | |||||||||||||||||||
Range of | Remaining | Options | Average | Contractual | Options | Exercise | ||||||||||||||||||
Exercise Prices | Contractual Life | Outstanding | Exercise Price | Life | Exercisable | Price | ||||||||||||||||||
$2.16 to $2.96 |
1.6 | 1,369,102 | $ | 2.79 | 1.6 | 1,369,102 | $ | 2.79 | ||||||||||||||||
$2.97 to $4.80 |
2.0 | 3,589,250 | $ | 3.78 | 2.0 | 3,589,250 | $ | 3.78 | ||||||||||||||||
$4.81 to $8.90 |
3.9 | 3,708,000 | $ | 8.52 | 3.9 | 3,708,000 | $ | 8.52 | ||||||||||||||||
$8.91 to $15.10 |
5.2 | 2,434,905 | $ | 13.58 | 5.2 | 2,434,905 | $ | 13.58 | ||||||||||||||||
$15.11 to $17.84 |
7.2 | 5,248,457 | $ | 16.68 | 7.1 | 3,146,832 | $ | 16.84 | ||||||||||||||||
$17.85 to $22.00 |
8.3 | 2,716,503 | $ | 22.00 | 8.3 | 419,707 | $ | 22.00 | ||||||||||||||||
$22.01 to $33.30 |
9.1 | 3,445,183 | $ | 30.37 | 8.7 | 489,563 | $ | 28.34 | ||||||||||||||||
22,511,400 | 15,157,359 | |||||||||||||||||||||||
17
Weighted | Aggregate | |||||||||||
Number | Average | Intrinsic | ||||||||||
of Options | Exercise Price | Value | ||||||||||
Outstanding at December 31, 2010 |
23,057,857 | $ | 13.35 | $ | 478,014 | |||||||
Granted |
1,401,308 | $ | 33.30 | |||||||||
Exercised |
(1,830,942 | ) | $ | 9.85 | $ | 43,442 | ||||||
Cancelled or expired |
(116,823 | ) | $ | 20.92 | ||||||||
Outstanding at June 30, 2011 |
22,511,400 | $ | 13.33 | $ | 479,184 | |||||||
Options exercisable at June 30, 2011 |
15,157,359 | $ | 10.43 | $ | 366,593 | |||||||
Options exercisable at December 31,
2010 |
14,820,447 | $ | 9.22 | $ | 368,466 | |||||||
Number | Weighted average grant | |||||||
of shares | date fair value | |||||||
Outstanding at December 31, 2010 |
| $ | | |||||
Granted |
146,664 | 33.30 | ||||||
Forfeited |
(349 | ) | 33.30 | |||||
Outstanding at June 30, 2011 |
146,315 | $ | 33.30 | |||||
18
For the Three Months Ended June 30, | ||||||||||||||||
Pension Plan | Postretirement Plan | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Service cost |
$ | 1,611 | $ | 1,397 | $ | | $ | | ||||||||
Interest cost |
5,397 | 5,408 | 251 | 211 | ||||||||||||
Amortization of transition
obligation |
| | | (42 | ) | |||||||||||
Expected return on plan assets |
(6,434 | ) | (5,687 | ) | | | ||||||||||
Amortization of prior service cost |
(201 | ) | (201 | ) | (36 | ) | (73 | ) | ||||||||
Amortization of net actuarial loss |
1,406 | 1,622 | 163 | 229 | ||||||||||||
Net periodic benefit cost |
$ | 1,779 | $ | 2,539 | $ | 378 | $ | 325 | ||||||||
Employer contributions |
$ | 6,487 | $ | 5,546 | $ | 1,067 | $ | 1,298 | ||||||||
For the Six Months Ended June 30, | ||||||||||||||||
Pension Plan | Postretirement Plan | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Service cost |
$ | 3,181 | $ | 3,207 | $ | | $ | | ||||||||
Interest cost |
10,838 | 10,683 | 502 | 531 | ||||||||||||
Expected return on plan assets |
(12,899 | ) | (11,325 | ) | | | ||||||||||
Amortization of prior service
cost |
(401 | ) | (401 | ) | (72 | ) | (73 | ) | ||||||||
Amortization of net actuarial
loss |
2,815 | 3,033 | 326 | 367 | ||||||||||||
Net periodic benefit cost |
$ | 3,534 | $ | 5,197 | $ | 756 | $ | 825 | ||||||||
Employer contributions |
$ | 12,655 | $ | 9,711 | $ | 1,382 | $ | 2,053 | ||||||||
19
20
For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | |||||||||||||||||||||||
Risk | Decision | Risk | Decision | |||||||||||||||||||||
Assessment | Analytics | Total | Assessment | Analytics | Total | |||||||||||||||||||
Revenues |
$ | 140,530 | $ | 186,750 | $ | 327,280 | $ | 134,289 | $ | 147,388 | $ | 281,677 | ||||||||||||
Expenses: |
||||||||||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
49,053 | 82,132 | 131,185 | 48,652 | 66,348 | 115,000 | ||||||||||||||||||
Selling, general and administrative |
23,345 | 32,564 | 55,909 | 19,439 | 23,199 | 42,638 | ||||||||||||||||||
Acquisition related liabilities adjustment |
| (3,364 | ) | (3,364 | ) | | | | ||||||||||||||||
Segment EBITDA |
68,132 | 75,418 | 143,550 | 66,198 | 57,841 | 124,039 | ||||||||||||||||||
Depreciation and amortization of fixed assets |
3,530 | 7,325 | 10,855 | 4,163 | 5,781 | 9,944 | ||||||||||||||||||
Amortization of intangible assets |
36 | 8,841 | 8,877 | 37 | 6,983 | 7,020 | ||||||||||||||||||
Operating income |
64,566 | 59,252 | 123,818 | 61,998 | 45,077 | 107,075 | ||||||||||||||||||
Unallocated expenses: |
||||||||||||||||||||||||
Investment (loss)/income |
(10 | ) | 92 | |||||||||||||||||||||
Realized gain on securities, net |
125 | 29 | ||||||||||||||||||||||
Interest expense |
(14,885 | ) | (8,445 | ) | ||||||||||||||||||||
Income before income taxes |
$ | 109,048 | $ | 98,751 | ||||||||||||||||||||
Capital expenditures, including non-cash purchases of fixed
assets and capital lease obligations |
$ | 3,394 | $ | 12,219 | $ | 15,613 | $ | 1,500 | $ | 6,452 | $ | 7,952 | ||||||||||||
For the Six Months Ended | For the Six Months Ended | |||||||||||||||||||||||
June 30, 2011 | June 30, 2010 | |||||||||||||||||||||||
Risk | Decision | Risk | Decision | |||||||||||||||||||||
Assessment | Analytics | Total | Assessment | Analytics | Total | |||||||||||||||||||
Revenues |
$ | 281,073 | $ | 359,076 | $ | 640,149 | $ | 268,867 | $ | 288,964 | $ | 557,831 | ||||||||||||
Expenses: |
||||||||||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
96,310 | 159,431 | 255,741 | 98,550 | 131,443 | 229,993 | ||||||||||||||||||
Selling, general and administrative |
42,472 | 62,693 | 105,165 | 38,623 | 41,529 | 80,152 | ||||||||||||||||||
Acquisition related liabilities adjustment |
| (3,364 | ) | (3,364 | ) | | | | ||||||||||||||||
Segment EBITDA |
142,291 | 140,316 | 282,607 | 131,694 | 115,992 | 247,686 | ||||||||||||||||||
Depreciation and amortization of fixed assets |
7,848 | 14,312 | 22,160 | 8,486 | 11,387 | 19,873 | ||||||||||||||||||
Amortization of intangible assets |
72 | 17,260 | 17,332 | 73 | 14,251 | 14,324 | ||||||||||||||||||
Operating income |
134,371 | 108,744 | 243,115 | 123,135 | 90,354 | 213,489 | ||||||||||||||||||
Unallocated expenses: |
||||||||||||||||||||||||
Investment income |
| 124 | ||||||||||||||||||||||
Realized gain on securities, net |
487 | 61 | ||||||||||||||||||||||
Interest expense |
(24,500 | ) | (16,911 | ) | ||||||||||||||||||||
Income before income taxes |
$ | 219,102 | $ | 196,763 | ||||||||||||||||||||
Capital expenditures, including non-cash purchases of fixed
assets and capital lease obligations |
$ | 6,789 | $ | 27,564 | $ | 34,353 | $ | 3,389 | $ | 13,451 | $ | 16,840 | ||||||||||||
21
For the Three Months Ended | For the Six Months Ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Risk Assessment: |
||||||||||||||||
Industry-standard insurance programs |
$ | 92,389 | $ | 87,427 | $ | 185,246 | $ | 175,471 | ||||||||
Property-specific rating and underwriting
information |
35,017 | 34,267 | 69,514 | 68,226 | ||||||||||||
Statistical agency and data services |
7,633 | 7,190 | 15,375 | 14,369 | ||||||||||||
Actuarial services |
5,491 | 5,405 | 10,938 | 10,801 | ||||||||||||
Total Risk Assessment |
140,530 | 134,289 | 281,073 | 268,867 | ||||||||||||
Decision Analytics: |
||||||||||||||||
Fraud identification and detection solutions |
93,068 | 79,195 | 179,654 | 157,990 | ||||||||||||
Loss prediction solutions |
55,405 | 39,779 | 108,346 | 76,707 | ||||||||||||
Loss quantification solutions |
38,277 | 28,414 | 71,076 | 54,267 | ||||||||||||
Total Decision Analytics |
186,750 | 147,388 | 359,076 | 288,964 | ||||||||||||
Total revenues |
$ | 327,280 | $ | 281,677 | $ | 640,149 | $ | 557,831 | ||||||||
22
23
24
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 5,082 | $ | 18,404 | $ | 28,484 | $ | | $ | 51,970 | ||||||||||
Available-for-sale securities |
| 5,351 | | | 5,351 | |||||||||||||||
Accounts receivable, net of allowance for doubtful
accounts of $3,829 (including amounts from related
parties of $727) |
| 121,319 | 24,313 | | 145,632 | |||||||||||||||
Prepaid expenses |
| 23,705 | 2,310 | | 26,015 | |||||||||||||||
Deferred income taxes, net |
| 2,745 | 936 | | 3,681 | |||||||||||||||
Federal and foreign income taxes receivable |
2,612 | 21,898 | 100 | | 24,610 | |||||||||||||||
State and local income taxes receivable |
218 | 7,959 | 886 | | 9,063 | |||||||||||||||
Intercompany receivables |
140,194 | 289,405 | 94,429 | (524,028 | ) | | ||||||||||||||
Other current assets |
| 14,333 | 14,822 | | 29,155 | |||||||||||||||
Total current assets |
148,106 | 505,119 | 166,280 | (524,028 | ) | 295,477 | ||||||||||||||
Noncurrent assets: |
||||||||||||||||||||
Fixed assets, net |
| 90,985 | 16,660 | | 107,645 | |||||||||||||||
Intangible assets, net |
| 89,190 | 152,140 | | 241,330 | |||||||||||||||
Goodwill |
| 484,088 | 228,473 | | 712,561 | |||||||||||||||
Deferred income taxes, net |
| 62,202 | | (41,225 | ) | 20,977 | ||||||||||||||
State income taxes receivable |
| 1,773 | | | 1,773 | |||||||||||||||
Intercompany
note receivable |
| 166,387 | | (166,387 | ) | | ||||||||||||||
Investment in subsidiaries |
465,023 | 105,395 | | (570,418 | ) | | ||||||||||||||
Other assets |
4,216 | 22,120 | 1,990 | | 28,326 | |||||||||||||||
Total assets |
$ | 617,345 | $ | 1,527,259 | $ | 565,543 | $ | (1,302,058 | ) | $ | 1,408,089 | |||||||||
LIABILITIES AND STOCKHOLDERS (DEFICIT)/EQUITY | ||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued liabilities |
$ | 11,455 | $ | 79,696 | $ | 30,134 | $ | | $ | 121,285 | ||||||||||
Short-term debt and current portion of long-term debt |
| 170,085 | 578 | | 170,663 | |||||||||||||||
Pension and postretirement benefits, current |
| 4,663 | | | 4,663 | |||||||||||||||
Fees received in advance (including amounts from
related parties of $1,626) |
| 192,829 | 22,160 | | 214,989 | |||||||||||||||
Intercompany payables |
134,962 | 234,866 | 154,200 | (524,028 | ) | | ||||||||||||||
Total current liabilities |
146,417 | 682,139 | 207,072 | (524,028 | ) | 511,600 | ||||||||||||||
Noncurrent liabilities: |
||||||||||||||||||||
Long-term debt |
448,981 | 405,287 | 231 | | 854,499 | |||||||||||||||
Intercompany
note payable |
166,387 | | | (166,387 | ) | | ||||||||||||||
Pension and postretirement benefits |
| 106,198 | | | 106,198 | |||||||||||||||
Deferred income taxes, net |
| | 41,225 | (41,225 | ) | | ||||||||||||||
Other liabilities |
| 76,800 | 3,432 | | 80,232 | |||||||||||||||
Total liabilities |
761,785 | 1,270,424 | 251,960 | (731,640 | ) | 1,552,529 | ||||||||||||||
Total stockholders (deficit)/equity |
(144,440 | ) | 256,835 | 313,583 | (570,418 | ) | (144,440 | ) | ||||||||||||
Total liabilities and stockholders (deficit)/equity |
$ | 617,345 | $ | 1,527,259 | $ | 565,543 | $ | (1,302,058 | ) | $ | 1,408,089 | |||||||||
25
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
ASSETS |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 1 | $ | 31,576 | $ | 23,397 | $ | | $ | 54,974 | ||||||||||
Available-for-sale securities |
| 5,653 | | | 5,653 | |||||||||||||||
Accounts receivable, net of allowance for doubtful accounts of $4,028
(including amounts from related parties of $515) |
| 98,817 | 27,747 | | 126,564 | |||||||||||||||
Prepaid expenses |
| 15,566 | 2,225 | | 17,791 | |||||||||||||||
Deferred income taxes, net |
| 2,745 | 936 | | 3,681 | |||||||||||||||
Federal and foreign income taxes receivable |
| 13,590 | 2,193 | | 15,783 | |||||||||||||||
State and local income taxes receivable |
| 7,882 | 1,041 | | 8,923 | |||||||||||||||
Intercompany receivables |
101,470 | 668,906 | 59,021 | (829,397 | ) | | ||||||||||||||
Other current assets |
| 6,720 | 346 | | 7,066 | |||||||||||||||
Total current assets |
101,471 | 851,455 | 116,906 | (829,397 | ) | 240,435 | ||||||||||||||
Noncurrent assets: |
||||||||||||||||||||
Fixed assets, net |
| 78,928 | 14,481 | | 93,409 | |||||||||||||||
Intangible assets, net |
| 75,307 | 124,922 | | 200,229 | |||||||||||||||
Goodwill |
| 449,065 | 183,603 | | 632,668 | |||||||||||||||
Deferred income taxes, net |
| 64,421 | | (42,542 | ) | 21,879 | ||||||||||||||
State income taxes receivable |
| 1,773 | | | 1,773 | |||||||||||||||
Investment in subsidiaries |
326,387 | 20,912 | | (347,299 | ) | | ||||||||||||||
Other assets |
| 10,248 | 16,449 | | 26,697 | |||||||||||||||
Total assets |
$ | 427,858 | $ | 1,552,109 | $ | 456,361 | $ | (1,219,238 | ) | $ | 1,217,090 | |||||||||
LIABILITIES AND STOCKHOLDERS (DEFICIT)/EQUITY |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable and accrued liabilities |
$ | | $ | 95,425 | $ | 16,570 | $ | | $ | 111,995 | ||||||||||
Acquisition related liabilities |
| | 3,500 | | 3,500 | |||||||||||||||
Short-term debt and current portion of long-term debt |
| 437,457 | 260 | | 437,717 | |||||||||||||||
Pension and postretirement benefits, current |
| 4,663 | | | 4,663 | |||||||||||||||
Fees received in advance (including amounts from related parties of $1,231) |
| 137,521 | 25,486 | | 163,007 | |||||||||||||||
Intercompany payables |
542,300 | 165,681 | 121,416 | (829,397 | ) | | ||||||||||||||
Total current liabilities |
542,300 | 840,747 | 167,232 | (829,397 | ) | 720,882 | ||||||||||||||
Noncurrent liabilities: |
||||||||||||||||||||
Long-term debt |
| 401,788 | 38 | | 401,826 | |||||||||||||||
Pension and postretirement benefits |
| 118,611 | | | 118,611 | |||||||||||||||
Deferred income taxes, net |
| | 42,542 | (42,542 | ) | | ||||||||||||||
Other liabilities |
| 71,663 | 18,550 | | 90,213 | |||||||||||||||
Total liabilities |
542,300 | 1,432,809 | 228,362 | (871,939 | ) | 1,331,532 | ||||||||||||||
Total stockholders (deficit)/equity |
(114,442 | ) | 119,300 | 227,999 | (347,299 | ) | (114,442 | ) | ||||||||||||
Total liabilities and stockholders (deficit)/equity |
$ | 427,858 | $ | 1,552,109 | $ | 456,361 | $ | (1,219,238 | ) | $ | 1,217,090 | |||||||||
26
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues |
$ | | $ | 289,353 | $ | 43,842 | $ | (5,915 | ) | $ | 327,280 | |||||||||
Expenses: |
||||||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
| 114,120 | 19,906 | (2,841 | ) | 131,185 | ||||||||||||||
Selling, general and administrative |
| 45,936 | 13,047 | (3,074 | ) | 55,909 | ||||||||||||||
Depreciation and amortization of fixed assets |
| 8,739 | 2,116 | | 10,855 | |||||||||||||||
Amortization of intangible assets |
| 4,797 | 4,080 | | 8,877 | |||||||||||||||
Acquisition related liabilities adjustment |
| (2,800 | ) | (564 | ) | | (3,364 | ) | ||||||||||||
Total expenses |
| 170,792 | 38,585 | (5,915 | ) | 203,462 | ||||||||||||||
Operating income |
| 118,561 | 5,257 | | 123,818 | |||||||||||||||
Other income/(expense): |
||||||||||||||||||||
Investment income/(loss) |
| 1,457 | (38 | ) | (1,429 | ) | (10 | ) | ||||||||||||
Realized gain on securities, net |
| 125 | | | 125 | |||||||||||||||
Interest expense |
(7,681 | ) | (8,562 | ) | (71 | ) | 1,429 | (14,885 | ) | |||||||||||
Total other expense, net |
(7,681 | ) | (6,980 | ) | (109 | ) | | (14,770 | ) | |||||||||||
Income/(loss) before equity in net income of subsidiary
and income taxes |
(7,681 | ) | 111,581 | 5,148 | | 109,048 | ||||||||||||||
Equity in net income of subsidiary |
70,428 | 2,702 | | (73,130 | ) | | ||||||||||||||
Provision for income taxes |
2,830 | (44,525 | ) | (1,776 | ) | | (43,471 | ) | ||||||||||||
Net income |
$ | 65,577 | $ | 69,758 | $ | 3,372 | $ | (73,130 | ) | $ | 65,577 | |||||||||
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues |
$ | | $ | 568,933 | $ | 78,964 | $ | (7,748 | ) | $ | 640,149 | |||||||||
Expenses: |
||||||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
| 222,903 | 36,659 | (3,821 | ) | 255,741 | ||||||||||||||
Selling, general and administrative |
| 82,414 | 26,678 | (3,927 | ) | 105,165 | ||||||||||||||
Depreciation and amortization of fixed assets |
| 18,181 | 3,979 | | 22,160 | |||||||||||||||
Amortization of intangible assets |
| 10,117 | 7,215 | | 17,332 | |||||||||||||||
Acquisition related liabilities adjustment |
| (2,800 | ) | (564 | ) | | (3,364 | ) | ||||||||||||
Total expenses |
| 330,815 | 73,967 | (7,748 | ) | 397,034 | ||||||||||||||
Operating income |
| 238,118 | 4,997 | | 243,115 | |||||||||||||||
Other income/(expense): |
||||||||||||||||||||
Investment income/(loss) |
| 1,471 | (42 | ) | (1,429 | ) | | |||||||||||||
Realized gain on securities, net |
| 487 | | | 487 | |||||||||||||||
Interest expense |
(7,681 | ) | (18,157 | ) | (91 | ) | 1,429 | (24,500 | ) | |||||||||||
Total other expense, net |
(7,681 | ) | (16,199 | ) | (133 | ) | | (24,013 | ) | |||||||||||
Income/(loss) before equity in net income of subsidiary and income taxes |
(7,681 | ) | 221,919 | 4,864 | | 219,102 | ||||||||||||||
Equity in net income of subsidiary |
136,304 | 1,614 | | (137,918 | ) | | ||||||||||||||
Provision for income taxes |
2,830 | (88,078 | ) | (2,401 | ) | | (87,649 | ) | ||||||||||||
Net income |
$ | 131,453 | $ | 135,455 | $ | 2,463 | $ | (137,918 | ) | $ | 131,453 | |||||||||
27
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues |
$ | | $ | 268,209 | $ | 15,692 | (2,224 | ) | $ | 281,677 | ||||||||||
Expenses: |
||||||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
| 107,254 | 8,951 | (1,205 | ) | 115,000 | ||||||||||||||
Selling, general and administrative |
| 37,182 | 6,203 | (747 | ) | 42,638 | ||||||||||||||
Depreciation and amortization of fixed assets |
| 8,805 | 1,432 | (293 | ) | 9,944 | ||||||||||||||
Amortization of intangible assets |
| 6,382 | 638 | | 7,020 | |||||||||||||||
Total expenses |
| 159,623 | 17,224 | (2,245 | ) | 174,602 | ||||||||||||||
Operating income/(loss) |
| 108,586 | (1,532 | ) | 21 | 107,075 | ||||||||||||||
Other income/(expense): |
||||||||||||||||||||
Investment income |
| 71 | 61 | (40 | ) | 92 | ||||||||||||||
Realized gain on securities, net |
| 29 | | | 29 | |||||||||||||||
Interest expense |
| (8,427 | ) | (37 | ) | 19 | (8,445 | ) | ||||||||||||
Total other expense, net |
| (8,327 | ) | 24 | (21 | ) | (8,324 | ) | ||||||||||||
Income/(loss) before equity in net income/(loss) of
subsidiary and income taxes |
| 100,259 | (1,508 | ) | | 98,751 | ||||||||||||||
Equity in net income/(loss) of subsidiary |
58,404 | (1,065 | ) | | (57,339 | ) | | |||||||||||||
Provision for income taxes |
| (40,790 | ) | 443 | | (40,347 | ) | |||||||||||||
Net income/(loss) |
$ | 58,404 | $ | 58,404 | $ | (1,065 | ) | (57,339 | ) | $ | 58,404 | |||||||||
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues |
$ | | $ | 531,899 | $ | 29,155 | $ | (3,223 | ) | $ | 557,831 | |||||||||
Expenses: |
||||||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
| 213,330 | 18,316 | (1,653 | ) | 229,993 | ||||||||||||||
Selling, general and administrative |
| 71,138 | 9,849 | (835 | ) | 80,152 | ||||||||||||||
Depreciation and amortization of fixed assets |
| 17,794 | 2,814 | (735 | ) | 19,873 | ||||||||||||||
Amortization of intangible assets |
| 12,999 | 1,325 | | 14,324 | |||||||||||||||
Total expenses |
| 315,261 | 32,304 | (3,223 | ) | 344,342 | ||||||||||||||
Operating income/(loss) |
| 216,638 | (3,149 | ) | | 213,489 | ||||||||||||||
Other income/(expense): |
||||||||||||||||||||
Investment income |
| 91 | 73 | (40 | ) | 124 | ||||||||||||||
Realized gain on securities, net |
| 61 | | | 61 | |||||||||||||||
Interest expense |
| (16,885 | ) | (66 | ) | 40 | (16,911 | ) | ||||||||||||
Total other expense, net |
| (16,733 | ) | 7 | | (16,726 | ) | |||||||||||||
Income/(loss) before equity in net income/(loss) of
subsidiary and income taxes |
| 199,905 | (3,142 | ) | | 196,763 | ||||||||||||||
Equity in net income/(loss) of subsidiary |
113,779 | (2,263 | ) | | (111,516 | ) | | |||||||||||||
Provision for income taxes |
| (83,863 | ) | 879 | | (82,984 | ) | |||||||||||||
Net income/(loss) |
$ | 113,779 | $ | 113,779 | $ | (2,263 | ) | $ | (111,516 | ) | $ | 113,779 | ||||||||
28
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net cash provided by operating activities |
$ | | $ | 173,935 | $ | 13,152 | $ | | $ | 187,087 | ||||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Acquisitions, net of cash acquired of $590 |
| (121,721 | ) | | | (121,721 | ) | |||||||||||||
Earnout payments |
| | (3,500 | ) | | (3,500 | ) | |||||||||||||
Escrow funding associated with acquisitions |
| (19,560 | ) | | | (19,560 | ) | |||||||||||||
Advances provided to other subsidiaries |
| | (31,996 | ) | 31,996 | | ||||||||||||||
Repayments
received from other subsidiaries |
| 152,769 | | (152,769 | ) | | ||||||||||||||
Proceeds from repayment of intercompany note receivable |
| 440,950 | | (440,950 | ) | | ||||||||||||||
Purchases of available-for-sale securities |
| (1,338) | | | (1,338) | |||||||||||||||
Proceeds from sales and maturities of available-for-sale securities |
| 1,704 | | | 1,704 | |||||||||||||||
Purchases of fixed assets |
| (23,189 | ) | (4,982 | ) | | (28,171 | ) | ||||||||||||
Net cash
provided by/(used in) investing activities |
| 429,615 | (40,478 | ) | (561,723 | ) | (172,586 | ) | ||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Proceeds
from issuance of long-term debt, net of original issue discount |
448,956 | | | | 448,956 | |||||||||||||||
Repayment of short-term debt refinanced on a long-term basis |
| (295,000 | ) | | | (295,000 | ) | |||||||||||||
Proceeds/(repayments)
of short-term debt, net |
| 73,114 | (195 | ) | | 72,919 | ||||||||||||||
Repurchase of Verisk Class A common stock |
| (214,021 | ) | | | (214,021 | ) | |||||||||||||
Repayment of current portion of long-term debt |
| (50,000 | ) | | | (50,000 | ) | |||||||||||||
Repayments
of advances to other subsidiaries |
| (152,769 | ) | | 152,769 | | ||||||||||||||
Repayment of
intercompany note payable |
(440,950 | ) | | | 440,950 | | ||||||||||||||
Advances received from other subsidiaries |
| | 31,996 | (31,996 | ) | | ||||||||||||||
Payment of debt issuance cost |
(2,925 | ) | (1,509 | ) | | | (4,434 | ) | ||||||||||||
Excess tax
benefits from exercised stock options |
| 5,470 | | | 5,470 | |||||||||||||||
Proceeds
from stock options exercised |
| 18,032 | | | 18,032 | |||||||||||||||
Net cash
provided by/(used in) financing activities |
5,081 | (616,683 | ) | 31,801 | 561,723 | (18,078 | ) | |||||||||||||
Effect of exchange rate changes |
| (39 | ) | 612 | | 573 | ||||||||||||||
Increase/(decrease) in cash and cash equivalents |
5,081 | (13,172 | ) | 5,087 | | (3,004 | ) | |||||||||||||
Cash and cash equivalents, beginning of period |
1 | 31,576 | 23,397 | | 54,974 | |||||||||||||||
Cash and cash equivalents, end of period |
$ | 5,082 | $ | 18,404 | $ | 28,484 | | $ | 51,970 | |||||||||||
Supplemental disclosures: |
||||||||||||||||||||
Increase in intercompany balances
from the purchase of treasury stock
by Verisk funded directly by ISO |
$ | 214,021 | $ | 214,021 | $ | | $ | | $ | | ||||||||||
Increase in intercompany balances
from proceeds received by ISO related
to issuance of Verisk common stock
from options exercised |
$ | 18,032 | $ | 18,032 | $ | | $ | | $ | | ||||||||||
Issuance of intercompany note
payable/(receivable) from amounts previously recorded as intercompany
payables/(receivables) |
$ | 615,000 | $ | (615,000 | ) | $ | | $ | | $ | | |||||||||
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED) For The Six Months Ended June 30, 2010 |
||||||||||||||||||||
Verisk | Guarantor | Non-Guarantor | Eliminating | |||||||||||||||||
Analytics, Inc. | Subsidiaries | Subsidiaries | Entries | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net cash provided by/(used in) operating activities |
$ | | $ | 180,463 | $ | (7,429 | ) | $ | | $ | 173,034 | |||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Acquisitions, net of cash acquired of $1,556 |
| (6,386 | ) | | | (6,386 | ) | |||||||||||||
Proceeds from release of acquisition related escrows |
| 274 | 9 | | 283 | |||||||||||||||
Escrow funding associated with acquisitions |
| (1,500 | ) | | | (1,500 | ) | |||||||||||||
Advances provided to other subsidiaries |
| (14,905 | ) | (291 | ) | 15,196 | | |||||||||||||
Purchases of available-for-sale securities |
| (262 | ) | | | (262 | ) | |||||||||||||
Proceeds from sales and maturities of available-for-sale securities |
| 511 | | | 511 | |||||||||||||||
Purchases of fixed assets |
| (13,037 | ) | (2,533 | ) | | (15,570 | ) | ||||||||||||
Net cash used in investing activities |
| (35,305 | ) | (2,815 | ) | 15,196 | (22,924 | ) | ||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Repayments of short-term debt, net |
| (64,049 | ) | (20 | ) | | (64,069 | ) | ||||||||||||
Repurchase of Verisk Class A common stock |
| (62,266 | ) | | | (62,266 | ) | |||||||||||||
Net share settlement of taxes upon exercise of stock options |
| (15,051 | ) | | | (15,051 | ) | |||||||||||||
Advance received from other subsidiaries |
| 5,806 | 9,390 | (15,196 | ) | | ||||||||||||||
Excess tax benefits from exercised stock options |
| 10,036 | | | 10,036 | |||||||||||||||
Proceeds from stock options exercised |
| 16,733 | | | 16,733 | |||||||||||||||
Net cash (used in)/provided by financing activities |
| (108,791 | ) | 9,370 | (15,196 | ) | (114,617 | ) | ||||||||||||
Effect of exchange rate changes |
| 50 | (243 | ) | | (193 | ) | |||||||||||||
Increase/(decrease) in cash and cash equivalents |
| 36,417 | (1,117 | ) | | 35,300 | ||||||||||||||
Cash and cash equivalents, beginning of period |
1 | 51,005 | 20,521 | | 71,527 | |||||||||||||||
Cash and cash equivalents, end of period |
$ | 1 | $ | 87,422 | $ | 19,404 | | $ | 106,827 | |||||||||||
Supplemental disclosure: |
||||||||||||||||||||
Increase in intercompany balances from the purchase of treasury stock by Verisk funded directly by ISO |
$ | 62,266 | $ | 62,266 | $ | | $ | | $ | | ||||||||||
Increase in intercompany balances from proceeds received by ISO related to issuance of Verisk common
stock from options exercised |
$ | 16,733 | $ | 16,733 | $ | | $ | | $ | | ||||||||||
29
Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
30
31
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
ESOP costs by contribution type: |
||||||||||||||||
401(k) matching contribution
expense |
$ | 2,771 | $ | 2,495 | $ | 5,426 | $ | 4,848 | ||||||||
Profit sharing contribution expense |
526 | 384 | 982 | 881 | ||||||||||||
Total ESOP costs |
$ | 3,297 | $ | 2,879 | $ | 6,408 | $ | 5,729 | ||||||||
ESOP costs by segment: |
||||||||||||||||
Risk Assessment ESOP costs |
$ | 1,840 | $ | 1,688 | $ | 3,588 | $ | 3,415 | ||||||||
Decision Analytics ESOP costs |
1,457 | 1,191 | 2,820 | 2,314 | ||||||||||||
Total ESOP costs |
$ | 3,297 | $ | 2,879 | $ | 6,408 | $ | 5,729 | ||||||||
32
Three Months Ended June 30, | Percentage | Six Months Ended June 30, | Percentage | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
(In thousands, except for share and per share data) | ||||||||||||||||||||||||
Statement of income data: |
||||||||||||||||||||||||
Revenues : |
||||||||||||||||||||||||
Risk Assessment revenues |
$ | 140,530 | $ | 134,289 | 4.6 | % | $ | 281,073 | $ | 268,867 | 4.5 | % | ||||||||||||
Decision Analytics revenues |
186,750 | 147,388 | 26.7 | % | 359,076 | 288,964 | 24.3 | % | ||||||||||||||||
Revenues |
327,280 | 281,677 | 16.2 | % | 640,149 | 557,831 | 14.8 | % | ||||||||||||||||
Expenses: |
||||||||||||||||||||||||
Cost of revenues (exclusive of items shown separately below) |
131,185 | 115,000 | 14.1 | % | 255,741 | 229,993 | 11.2 | % | ||||||||||||||||
Selling, general and administrative |
55,909 | 42,638 | 31.1 | % | 105,165 | 80,152 | 31.2 | % | ||||||||||||||||
Depreciation and amortization of fixed assets |
10,855 | 9,944 | 9.2 | % | 22,160 | 19,873 | 11.5 | % | ||||||||||||||||
Amortization of intangible assets |
8,877 | 7,020 | 26.5 | % | 17,332 | 14,324 | 21.0 | % | ||||||||||||||||
Acquisition related liabilities adjustment |
(3,364 | ) | | N/A | (3,364 | ) | | N/A | ||||||||||||||||
Total expenses |
203,462 | 174,602 | 16.5 | % | 397,034 | 344,342 | 15.3 | % | ||||||||||||||||
Operating income |
123,818 | 107,075 | 15.6 | % | 243,115 | 213,489 | 13.9 | % | ||||||||||||||||
Other income/(expense): |
||||||||||||||||||||||||
Investment (loss)/income |
(10 | ) | 92 | (110.9 | )% | | 124 | (100.0 | )% | |||||||||||||||
Realized gain on securities, net |
125 | 29 | 331.0 | % | 487 | 61 | 698.4 | % | ||||||||||||||||
Interest expense |
(14,885 | ) | (8,445 | ) | 76.3 | % | (24,500 | ) | (16,911 | ) | 44.9 | % | ||||||||||||
Total other expense, net |
(14,770 | ) | (8,324 | ) | 77.4 | % | (24,013 | ) | (16,726 | ) | 43.6 | % | ||||||||||||
Income before income taxes |
109,048 | 98,751 | 10.4 | % | 219,102 | 196,763 | 11.4 | % | ||||||||||||||||
Provision for income taxes |
(43,471 | ) | (40,347 | ) | 7.7 | % | (87,649 | ) | (82,984 | ) | 5.6 | % | ||||||||||||
Net income |
$ | 65,577 | $ | 58,404 | 12.3 | % | $ | 131,453 | $ | 113,779 | 15.5 | % | ||||||||||||
Basic net income per share |
$ | 0.39 | $ | 0.32 | 21.9 | % | $ | 0.78 | $ | 0.63 | 23.8 | % | ||||||||||||
Diluted net income per share |
$ | 0.38 | $ | 0.31 | 22.6 | % | $ | 0.75 | $ | 0.60 | 25.0 | % | ||||||||||||
Weighted average shares outstanding: |
||||||||||||||||||||||||
Basic |
166,960,806 | 180,492,106 | (7.5) | % | 167,995,517 | 180,272,828 | (6.8) | % | ||||||||||||||||
Diluted |
174,634,046 | 189,541,893 | (7.9) | % | 175,799,120 | 189,498,324 | (7.2) | % | ||||||||||||||||
The financial operating data below sets forth the information we believe is useful for investors in evaluating our overall financial performance: | ||||||||||||||||||||||||
Other data: |
||||||||||||||||||||||||
EBITDA (1): |
||||||||||||||||||||||||
Risk Assessment EBITDA |
$ | 68,132 | $ | 66,198 | 2.9 | % | $ | 142,291 | $ | 131,694 | 8.0 | % | ||||||||||||
Decision Analytics EBITDA |
75,418 | 57,841 | 30.4 | % | 140,316 | 115,992 | 21.0 | % | ||||||||||||||||
EBITDA |
$ | 143,550 | $ | 124,039 | 15.7 | % | $ | 282,607 | $ | 247,686 | 14.1 | % | ||||||||||||
The following is a reconciliation of net income to EBITDA: |
||||||||||||||||||||||||
Net income |
$ | 65,577 | $ | 58,404 | 12.3 | % | $ | 131,453 | $ | 113,779 | 15.5 | % | ||||||||||||
Depreciation and amortization |
19,732 | 16,964 | 16.3 | % | 39,492 | 34,197 | 15.5 | % | ||||||||||||||||
Investment income and realized gain on securities, net |
(115 | ) | (121 | ) | (5.0) | % | (487 | ) | (185 | ) | 163.2 | % | ||||||||||||
Interest expense |
14,885 | 8,445 | 76.3 | % | 24,500 | 16,911 | 44.9 | % | ||||||||||||||||
Provision for income taxes |
43,471 | 40,347 | 7.7 | % | 87,649 | 82,984 | 5.6 | % | ||||||||||||||||
EBITDA |
$ | 143,550 | $ | 124,039 | 15.7 | % | $ | 282,607 | $ | 247,686 | 14.1 | % | ||||||||||||
(1) | EBITDA is the financial measure which management uses to evaluate the performance of
our segments. EBITDA is defined as net income before investment (loss)/income and realized
gain on securities, net, interest expense, provision for income taxes, and
depreciation and amortization of fixed and intangible assets. Beginning 2011, our EBITDA
includes acquisition related liabilities adjustment for all periods presented. In addition, this Managements Discussion and Analysis
includes references to EBITDA margin, which is computed as EBITDA divided by revenues. See
Note 12 of our condensed consolidated financial statements included in this Form 10-Q filing. |
33
| EBITDA does not reflect our cash expenditures, or future requirements for
capital expenditures or contractual commitments; |
||
| EBITDA does not reflect changes in, or cash requirements for, our working
capital needs; |
||
| Although depreciation and amortization are non-cash 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; and |
||
| Other companies in our industry may calculate EBITDA differently than we do,
limiting its usefulness as a comparative measure. |
34
35
Three Months Ended June 30, | Percentage | Six Months Ended June 30, | Percentage | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||
Industry-standard insurance programs |
$ | 92,389 | $ | 87,427 | 5.7 | % | $ | 185,246 | $ | 175,471 | 5.6 | % | ||||||||||||
Property-specific rating and
underwriting information |
35,017 | 34,267 | 2.2 | % | 69,514 | 68,226 | 1.9 | % | ||||||||||||||||
Statistical agency and data services |
7,633 | 7,190 | 6.2 | % | 15,375 | 14,369 | 7.0 | % | ||||||||||||||||
Actuarial services |
5,491 | 5,405 | 1.6 | % | 10,938 | 10,801 | 1.3 | % | ||||||||||||||||
Total Risk Assessment |
$ | 140,530 | $ | 134,289 | 4.6 | % | $ | 281,073 | $ | 268,867 | 4.5 | % | ||||||||||||
36
37
Three Months Ended June 30, | Percentage | Six Months Ended June 30, | Percentage | |||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||
Fraud identification and
detection solutions |
$ | 93,068 | $ | 79,195 | 17.5 | % | $ | 179,654 | $ | 157,990 | 13.7 | % | ||||||||||||
Loss prediction solutions |
55,405 | 39,779 | 39.3 | % | 108,346 | 76,707 | 41.2 | % | ||||||||||||||||
Loss quantification solutions |
38,277 | 28,414 | 34.7 | % | 71,076 | 54,267 | 31.0 | % | ||||||||||||||||
Total Decision Analytics |
$ | 186,750 | $ | 147,388 | 26.7 | % | $ | 359,076 | $ | 288,964 | 24.3 | % | ||||||||||||
38
39
For the Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Net cash provided by operating activities |
$ | 187,087 | $ | 173,034 | ||||
Net cash used in investing activities |
$ | (172,586 | ) | $ | (22,924 | ) | ||
Net cash used in financing activities |
$ | (18,078 | ) | $ | (114,617 | ) |
40
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
41
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Approximate Dollar | ||||||||||||||||
Total Number of | Value of Shares that | |||||||||||||||
Shares Purchased | May Yet Be | |||||||||||||||
Total Number | Average | as Part of Publicly | Purchased Under the | |||||||||||||
of Shares | Price Paid | Announced Plans | Plans or Programs | |||||||||||||
Period | Purchased | per Share | or Programs | (in thousands) | ||||||||||||
April 1, 2011 through April 30,
2011 |
997,951 | $ | 33.06 | 997,951 | $ | 131,117 | ||||||||||
May 1, 2011 through May 31, 2011 |
1,409,663 | $ | 34.01 | 1,409,663 | $ | 83,172 | ||||||||||
June 1, 2011 through June 30, 2011 |
1,848,016 | $ | 33.94 | 1,848,016 | $ | 20,441 | ||||||||||
Total |
4,255,630 | $ | 33.76 | 4,255,630 | ||||||||||||
Item 3. | Defaults Upon Senior Securities |
Item 4. | (Removed and Reserved) |
Item 5. | Other Information |
Item 6. | Exhibits |
42
Verisk Analytics, Inc. (Registrant) |
||||||
by: | /s/Mark V. Anquillare | |||||
Date: August 2, 2011
|
||||||
Executive Vice President and Chief Financial Officer | ||||||
(Principal Financial Officer and Duly Authorized Officer) |
43
Exhibit | ||||
Number | Description | |||
31.1 | Certification of the Chief Executive Officer of Verisk Analytics, Inc. pursuant to Rule 13a-14 under the
Securities Exchange Act of 1934.* |
|||
31.2 | Certification of the Chief Financial Officer of Verisk Analytics, Inc. pursuant to Rule 13a-14 under the
Securities Exchange Act of 1934.* |
|||
32.1 | Certification of the Chief Executive Officer and Chief Financial Officer of Verisk
Analytics, Inc. pursuant to
18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.* |
* | Filed herewith. |
Date: August 2, 2011 |
/s/Frank J. Coyne | |||
Chairman of the Board of Directors and | ||||
Chief Executive Officer |
/s/Mark V. Anquillare | ||||
Executive Vice President and Chief Financial Officer |
1. | the Report fully complies with the requirements of Section 13(a) or 15(d) of the
Exchange Act; and |
2. | the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company. |
/s/ Frank J. Coyne | ||||
Chairman of the Board of Directors and | ||||
Chief Executive Officer | ||||
Date: August 2, 2011 |
||||
/s/Mark V. Anquillare | ||||
Executive Vice President and Chief Financial Officer |
Stockholders' Deficit (Details) (USD $)
In Thousands, except Share data |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Numerator used in basic and diluted EPS: | |||||
Net income | $ 65,577 | $ 58,404 | $ 131,453 | $ 113,779 | $ 242,552 |
Denominator: | |||||
Weighted average number of common shares used in basic EPS | 166,960,806 | 180,492,106 | 167,995,517 | 180,272,828 | |
Effect of dilutive shares: | |||||
Potential Class A common Stock issuable upon the exercise of stock options | 7,673,240 | 9,049,787 | 7,803,603 | 9,225,496 | |
Weighted average number of common shares and dilutive potential common shares used in diluted EPS | 174,634,046 | 189,541,893 | 175,799,120 | 189,498,324 | |
Basic EPS of Class A and Class B | $ 0.39 | $ 0.32 | $ 0.78 | $ 0.63 | |
Diluted EPS of Class A and Class B | $ 0.38 | $ 0.31 | $ 0.75 | $ 0.60 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)
In Thousands, except Share data |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|||||||
Condensed Consolidated Statements of Operations [Abstract] | |||||||||||
Revenues (including amounts from related parties of $4,787 and $15,280 for the three months ended June 30, 2011 and 2010 and $9,183 and $30,413 for the six months ended June 30, 2011 and 2010, respectively) | $ 327,280 | [1] | $ 281,677 | [1] | $ 640,149 | [1] | $ 557,831 | [1] | |||
Expenses: | |||||||||||
Cost of revenues (exclusive of items shown separately below) | 131,185 | 115,000 | 255,741 | 229,993 | |||||||
Selling, general and administrative | 55,909 | 42,638 | 105,165 | 80,152 | |||||||
Depreciation and amortization of fixed assets | 10,855 | 9,944 | 22,160 | 19,873 | |||||||
Amortization of intangible assets | 8,877 | 7,020 | 17,332 | 14,324 | |||||||
Acquisition related liabilities adjustment | (3,364) | 0 | (3,364) | 0 | |||||||
Total expenses | 203,462 | 174,602 | 397,034 | 344,342 | |||||||
Operating income | 123,818 | 107,075 | 243,115 | 213,489 | |||||||
Other income/(expense): | |||||||||||
Investment (loss)/income | (10) | 92 | 0 | 124 | |||||||
Realized gain on securities, net | 125 | 29 | 487 | 61 | |||||||
Interest expense | (14,885) | (8,445) | (24,500) | (16,911) | |||||||
Total other expense, net | (14,770) | (8,324) | (24,013) | (16,726) | |||||||
Income before income taxes | 109,048 | 98,751 | 219,102 | 196,763 | |||||||
Provision for income taxes | (43,471) | (40,347) | (87,649) | (82,984) | |||||||
Net income | $ 65,577 | $ 58,404 | $ 131,453 | $ 113,779 | $ 242,552 | ||||||
Basic net income per share of Class A and Class B: | $ 0.39 | $ 0.32 | $ 0.78 | $ 0.63 | |||||||
Diluted net income per share of Class A and Class B: | $ 0.38 | $ 0.31 | $ 0.75 | $ 0.60 | |||||||
Weighted average shares outstanding: | |||||||||||
Basic | 166,960,806 | 180,492,106 | 167,995,517 | 180,272,828 | |||||||
Diluted | 174,634,046 | 189,541,893 | 175,799,120 | 189,498,324 | |||||||
|
Stockholders' Deficit (Details Textuals) (USD $)
In Thousands, except Share data |
6 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jul. 08, 2011
|
Dec. 31, 2010
|
Apr. 29, 2010
|
Oct. 06, 2009
|
Jun. 30, 2011
Treasury Stock
|
Jun. 30, 2011
Verisk Class A [Member]
|
Dec. 31, 2010
Verisk Class A [Member]
|
Oct. 06, 2009
Verisk Class A [Member]
|
Oct. 01, 2010
Verisk Class B [Member]
|
Oct. 06, 2009
Verisk Class B [Member]
|
Dec. 31, 2010
Verisk Class B [Member]
Series 1 [Member]
|
Jun. 30, 2011
Verisk Class B [Member]
Series 1 [Member]
|
Oct. 06, 2009
Verisk Class B [Member]
Series 1 [Member]
|
Dec. 31, 2010
Verisk Class B [Member]
Series 2 [Member]
|
Jun. 30, 2011
Verisk Class B [Member]
Series 2 [Member]
|
Oct. 06, 2009
Verisk Class B [Member]
Series 2 [Member]
|
Nov. 18, 1996
Iso Class A [Member]
|
Nov. 18, 1996
ISO Class B [Member]
|
|
Class of Stock [Line Items] | ||||||||||||||||||||
Authorized common stock shares | 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | 800,000,000 | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 | 400,000,000 | 335,000,000 | 1,000,000,000 | ||||||||
Treasury stock, shares acquired | 6,499,212 | 6,499,212 | 7,111,202 | 7,583,532 | 374,718 | |||||||||||||||
Accounts payable and accrued liabilities | $ 121,285 | $ 111,995 | $ 5,292 | |||||||||||||||||
Weighted average price of repurchase of shares | $ 33.40 | $ 26.3644 | ||||||||||||||||||
Treasury stock shares acquired | 378,606,564 | 372,107,352 | 378,606,564 | 372,107,352 | ||||||||||||||||
Stockholders Deficit (Textuals) [Abstract] | ||||||||||||||||||||
Common stock, shares issued | 350,338,030 | 150,179,126 | 198,327,962 | 0 | 193,665,008 | 193,665,008 | 500,225,000 | |||||||||||||
Authorized preferred stock shares | 80,000,000 | |||||||||||||||||||
Par value of preferred stock shares | $ 0.001 | |||||||||||||||||||
Preferred stock shares issued | 0 | |||||||||||||||||||
Authorized repurchase program of common stock shares | 600,000 | 150,000 | 450,000 | |||||||||||||||||
Available repurchase value under share repurchase program | $ 20,441 | |||||||||||||||||||
Common stock shares excluded from diluted EPS | 1,402,980 | 2,004,390 |
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies |
14. Commitments and Contingencies:
The Company is a party to legal proceedings with respect to a variety of matters
in the ordinary course of business, including those matters described below. The Company is unable,
at the present time, to determine the ultimate resolution of or provide a reasonable estimate of
the range of possible loss attributable to these matters or the impact they may have on the
Company’s results of operations, financial position or cash flows. This is primarily because many
of these cases remain in their early stages and only limited discovery has taken place. Although
the Company believes it has strong defenses for the litigation proceedings described below, the
Company could in the future incur judgments or enter into settlements of claims that could have a
material adverse effect on its results of operations, financial position or cash flows.
Claims Outcome Advisor Litigation
Hensley, et al. v. Computer Sciences Corporation et al. was a putative nationwide class action
complaint, filed in February 2005, in Miller County, Arkansas state court. Defendants included
numerous insurance companies and providers of software products used by insurers in paying claims.
The Company was among the named defendants. Plaintiffs alleged that certain software products,
including the Company’s Claims Outcome Advisor product and a competing software product sold by
Computer Sciences Corporation, improperly estimated the amount to be paid by insurers to their
policyholders in connection with claims for bodily injuries.
The Company entered into settlement agreements with plaintiffs asserting claims relating to
the use of Claims Outcome Advisor by defendants Hanover Insurance Group, Progressive Car Insurance
and Liberty Mutual Insurance Group. Each of these settlements was granted final approval by the
court and together the settlements resolve the claims asserted in this case against the Company
with respect to the above insurance companies, who settled the claims against them as well. A
provision was made in 2006 for this proceeding and the total amount the Company paid in 2008 with
respect to these settlements was less than $2,000. A fourth defendant, The Automobile Club of
California, which is alleged to have used Claims Outcome Advisor, was dismissed from the action. On
August 18, 2008, pursuant to the agreement of the parties the Court ordered that the claims against
the Company be dismissed with prejudice.
Subsequently, Hanover Insurance Group made a demand for reimbursement, pursuant to an
indemnification provision contained in a December 30, 2004 License Agreement between Hanover and
the Company, of its settlement and defense costs in the Hensley class action. Specifically, Hanover
demanded $2,536 including $600 in attorneys’ fees and expenses. The Company disputes that Hanover
is entitled to any reimbursement pursuant to the License Agreement. In July 2010, after the Company
and Hanover were unable to resolve the dispute in mediation, Hanover served a summons and complaint
seeking indemnity and contribution from the Company. At this time, it is not possible to determine
the ultimate resolution of or estimate the liability related to this matter.
Xactware Litigation
The following two lawsuits were filed by or on behalf of groups of Louisiana insurance
policyholders who claim, among other things, that certain insurers who used products and price
information supplied by the Company’s Xactware subsidiary (and those of another provider) did not
fully compensate policyholders for property damage covered under their insurance policies. The
plaintiffs seek to recover compensation for their damages in an amount equal to the difference
between the amount paid by the defendants and the fair market repair/restoration costs of their
damaged property.
Schafer v. State Farm Fire & Cas. Co., et al. was a putative class action pending against the
Company and State Farm Fire & Casualty Company filed in March 2007 in the Eastern District of
Louisiana. The complaint alleged antitrust violations, breach of contract, negligence, bad faith,
and fraud. The court dismissed the antitrust claim as to both defendants and dismissed all claims
against the Company other than fraud. Judge Duval denied plaintiffs’ motion to certify a class with
respect to the fraud and breach of contract claims on August 3, 2009. After the single action was
reassigned to Judge Africk plaintiffs agreed to settle the matter with the Company and State Farm
and a Settlement Agreement and Release was executed by all parties in June 2010. The settlement
agreement was not considered material to the Company.
Mornay v. Travelers Ins. Co., et al. is a putative class action pending against the Company
and Travelers Insurance Company filed in November 2007 in the Eastern District of Louisiana. The
complaint alleged antitrust violations, breach of contract, negligence, bad faith, and fraud. As in
Schafer, the court dismissed the antitrust claim as to both defendants and dismissed all claims
against the Company other than fraud. Judge Duval stayed all proceedings in the case pending an
appraisal of the lead plaintiff’s insurance claim. The matter was re-assigned to Judge Barbier, who
on September 11, 2009 issued an order administratively closing the matter pending completion of the
appraisal process. At this time, it is not possible to determine the ultimate resolution of or
estimate the liability related to this matter.
iiX Litigation
In
April 2010, the Company’s subsidiary, Insurance Information
Exchange or iiX, as well as other information
providers in the State of Missouri were served with a summons and class action complaint filed in
the United States District Court for the Western District of Missouri alleging violations of the
Driver Privacy Protection Act, or the DPPA, entitled Janice Cook, et al. v. ACS State & Local
Solutions, et al. Plaintiffs brought the action on their own behalf and on behalf of all similarly
situated individuals whose personal information is contained in any motor vehicle record maintained
by the State of Missouri and who have not provided express consent to the State of Missouri for the
distribution of their personal information for purposes not enumerated by the DPPA and whose
personal information has been knowingly obtained and used by the defendants. The class complaint
alleges that the defendants knowingly obtained personal information for a purpose not authorized by
the DPPA and seeks liquidated damages in the amount of two thousand five hundred dollars for each
instance of a violation of the DPPA, punitive damages and the destruction of any illegally obtained
personal information. The court granted iiX’s motion to dismiss the complaint based on a failure to
state a claim on November 19, 2010. Plaintiffs filed a notice of appeal on December 17, 2010. At
this time, it is not possible to determine the ultimate resolution of or estimate the liability
related to this matter.
Interthinx Litigation
In September 2009, the Company’s subsidiary, Interthinx, Inc., was served with a putative
class action entitled Renata Gluzman v. Interthinx, Inc. The plaintiff, a former Interthinx
employee, filed the class action on August 13, 2009 in the Superior Court of the State of
California, County of Los Angeles on behalf of all Interthinx information technology employees for
unpaid overtime and missed meals and rest breaks, as well as various related claims claiming that
the information technology employees were misclassified as exempt employees and, as a result, were
denied certain wages and benefits that would have been received if they were properly classified as
non-exempt employees. The pleadings included, among other things, a violation of Business and
Professions Code 17200 for unfair business practices, which allowed plaintiffs to include as class
members all information technology employees employed at Interthinx for four years prior to the
date of filing the complaint. The complaint sought compensatory damages, penalties that are
associated with the various statutes, restitution, interest costs, and attorney fees. On June 2,
2010, plaintiffs agreed to settle their claims with Interthinx and the court granted final approval
to the settlement on February 23, 2011. The settlement agreement was not considered material to the
Company.
|
Document and Entity Information
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Jul. 29, 2011
Verisk Class A [Member]
|
Jul. 29, 2011
Verisk Class B [Member]
Series 2 [Member]
|
|
Entity Registrant Name | Verisk Analytics, Inc. | ||
Entity Central Index Key | 0001442145 | ||
Document Type | 10-Q | ||
Document Period End Date | Jun. 30, 2011 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2011 | ||
Document Fiscal Period Focus | Q2 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 150,042,965 | 14,771,340 |
Investments (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of available-for-sale securities |
|
Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Mar. 31, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Income Tax (Textuals) [Abstract] | |||||
Effective tax rate | 39.90% | 40.90% | 40.00% | 42.20% | |
Effective tax rate excluding non cash charge | 41.00% | ||||
Change in deferred tax assets | $ 2,362 | ||||
Non-cash tax charge | $ 2,362 |
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Investments
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments |
3. Investments:
The following is a summary of available-for-sale securities:
In addition to the available-for-sale securities above, the Company has equity
investments in non-public companies in which the Company acquired non-controlling interests and for
which no readily determinable market value exists. These securities were accounted for under the
cost method in accordance with ASC 323-10-25, The Equity Method of Accounting for Investments in
Common Stock (“ASC 323-10-25”). At June 30, 2011 and December 31, 2010, the carrying value of such
securities was $3,443 and $3,642 for each period and has been included in “Other assets” in the
accompanying condensed consolidated balance sheets.
|
Fair Value Measurements (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial assets and liabilities accounted at fair value |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingent consideration liability |
|
Goodwill and Intangible Assets (Details Textuals) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Goodwill and Intangible Assets (Textuals) [Abstract] | ||||
Impairment of goodwill | $ 0 | |||
Amortization of intangible assets | 8,877 | 7,020 | 17,332 | 14,324 |
Accumulated impairment charges | $ 3,244 |
Fair Value Measurements (Details) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
||||||
---|---|---|---|---|---|---|---|---|
Summary of financial assets and liabilities accounted at fair value | ||||||||
Contingent consideration under ASC 805 | $ (3,337) | [1] | ||||||
Registered investment companies [Member] | Quoted Prices Active Markets for Identical Assets (Level 1) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 5,342 | [2] | 5,646 | [2] | ||||
Equity securities [Member] | Quoted Prices Active Markets for Identical Assets (Level 1) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 9 | [2] | 7 | [2] | ||||
Quoted Prices Active Markets for Identical Assets (Level 1) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Contingent consideration under ASC 805 | 0 | [1] | ||||||
Quoted Prices Active Markets for Identical Assets (Level 1) [Member] | Cash equivalents - money-market funds [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Cash equivalents - money market funds | 0 | 0 | ||||||
Registered investment companies [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 0 | [2] | 0 | [2] | ||||
Equity securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 0 | [2] | 0 | [2] | ||||
Significant Other Observable Inputs (Level 2) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Contingent consideration under ASC 805 | 0 | [1] | ||||||
Significant Other Observable Inputs (Level 2) [Member] | Cash equivalents - money-market funds [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Cash equivalents - money market funds | 349 | 2,273 | ||||||
Registered investment companies [Member] | Significant Unobservable Inputs (Level 3) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 0 | [2] | 0 | [2] | ||||
Equity securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 0 | [2] | 0 | [2] | ||||
Significant Unobservable Inputs (Level 3) [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Contingent consideration under ASC 805 | (3,337) | [1] | ||||||
Significant Unobservable Inputs (Level 3) [Member] | Cash equivalents - money-market funds [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Cash equivalents - money market funds | 0 | 0 | ||||||
Registered investment companies [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 5,342 | [2] | 5,646 | [2] | ||||
Equity securities [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Recurring basis investments | 9 | [2] | 7 | [2] | ||||
Cash equivalents - money-market funds [Member]
|
||||||||
Summary of financial assets and liabilities accounted at fair value | ||||||||
Cash equivalents - money market funds | $ 349 | $ 2,273 | ||||||
|
Significant Accounting Policies (Policies)
|
6 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||
Comprehensive Income |
In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards
Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income (“ASU No. 2011-05”). Under ASU
No. 2011-05, an entity has the option to present the total of comprehensive income, the components
of net income, and the components of other comprehensive income either in a single continuous
statement of comprehensive income or in two separate but consecutive statements. In both choices,
an entity is required to present each component of net income along with total net income, each
component of other comprehensive income along with a total for other comprehensive income, and a
total amount for comprehensive income. ASU No. 2011-05 is effective for fiscal years, and interim
periods within those years, beginning after December 15, 2011. Early adoption is permitted. The
Company has elected not to early adopt. ASU No. 2011-05 is not expected to have a material impact
on the Company’s consolidated financial statements as this guidance does not result in a change in
the items that are required to be reported in other comprehensive income or when an item of other
comprehensive income must be reclassified to net income.
|
||||||||||||||||||||||||||||||
Fair Value of Financial Instruments, Policy |
In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU No. 2011-04”). ASU No.
2011-04 clarifies certain FASB’s intent about the application of existing fair value measurement
and develops common requirements for measuring fair value and for disclosing information about fair
value measurements in accordance with U.S. GAAP and International Financial Reporting Standards
(“IFRS”). ASU No. 2011-04 is effective for fiscal years, and interim periods within those years,
beginning after December 15, 2011. Early adoption is not permitted. ASU No. 2011-04 is not
expected to have a material impact on the Company’s consolidated financial statements as this
guidance does not result in a change in the application of the requirements in ASC 820, Fair Value
Measurements.
Certain assets and liabilities of the Company are reported at fair value in the accompanying
condensed consolidated balance sheets. Such assets and liabilities include amounts for both
financial and non-financial instruments. To increase consistency and comparability of assets and
liabilities recorded at fair value, ASC 820-10, Fair Value Measurements (“ASC 820-10”) establishes
a three-level fair value hierarchy to prioritize the inputs to valuation techniques used to measure
fair value. ASC 820-10 requires disclosures detailing the extent to which companies measure assets
and liabilities at fair value, the methods and assumptions used to measure fair value and the
effect of fair value measurements on earnings. In accordance with ASC 820-10, the Company applied
the following fair value hierarchy:
The following tables provide information for such assets and liabilities as of June 30, 2011
and December 31, 2010. The fair values of cash and cash equivalents, accounts receivable, accounts
payable and accrued liabilities, acquisitions related liabilities prior to the adoption of ASC 805,
Business Combinations (“ASC 805”), and short-term debt approximate their carrying amounts because
of the short-term maturity of these instruments.
|
||||||||||||||||||||||||||||||
Investments [Abstract] | |||||||||||||||||||||||||||||||
The Equity Method of Accounting for Investments in Common Stock |
In addition to the available-for-sale securities above, the Company has equity
investments in non-public companies in which the Company acquired non-controlling interests and for
which no readily determinable market value exists. These securities were accounted for under the
cost method in accordance with ASC 323-10-25, The Equity Method of Accounting for Investments in
Common Stock (“ASC 323-10-25”). At June 30, 2011 and December 31, 2010, the carrying value of such
securities was $3,443 and $3,642 for each period and has been included in “Other assets” in the
accompanying condensed consolidated balance sheets.
|
||||||||||||||||||||||||||||||
Acquisitions [Abstract] | |||||||||||||||||||||||||||||||
Business Combinations |
Acquisition Related Liabilities
Based on the results of operations of Atmospheric and Environmental Research, Inc. (“AER”),
which was acquired in 2008, the Company recorded an increase of $3,500 to acquisition related
liabilities and goodwill during the year ended December 31, 2010. AER was acquired in 2008 and
therefore, accounted for under the transition provisions of FASB No. 141 (Revised), Business
Combinations (“FAS No. 141(R)”). In April 2011, the Company finalized the AER acquisition
contingent liability and made a payment of $3,500.
|
||||||||||||||||||||||||||||||
Debt [Abstract] | |||||||||||||||||||||||||||||||
Classification of Short Term Obligations Expected to be Refinanced |
On March 16, 2011, The Northern Trust Company joined the syndicated revolving credit
facility to increase the capacity by $25,000, for a $600,000 total commitment. On March 28, 2011,
the Company entered into amendments to its revolving credit facility and its master shelf
agreements to, among other things, permit the issuance of the senior notes and guarantees noted below.
On April 6, 2011, the Company completed an issuance of senior notes in the aggregate principal
amount of $450,000. These senior notes are due on May 1, 2021 and accrue interest at a rate of
5.80%. The Company received net proceeds of $446,031 after deducting original issue discount,
underwriting discount, and commissions of $3,969. The senior notes are fully and unconditionally
guaranteed, jointly and severally, on an unsecured and unsubordinated basis by ISO and certain
subsidiaries that guarantee our syndicated revolving credit facility or any amendment, refinancing
or replacement thereof (See Note 15. Condensed Consolidated Financial Information for Guarantor
Subsidiaries and Non-Guarantor Subsidiaries for further information). Interest will be payable
semi-annually on May 1st and November 1st of each year, beginning on November 1, 2011. Interest
accrues from April 6, 2011. The debt issuance costs will be amortized from the date of issuance to
the maturity date. The senior notes rank equally with all of the Company’s existing and future
senior unsecured and unsubordinated indebtedness. However, the senior notes are structurally
subordinated to the indebtedness of any of the subsidiaries that do not guarantee the notes and are
effectively subordinated to any future secured indebtedness to the extent of the value of the
assets securing such indebtedness. The guarantees of the senior notes rank equally and ratably in
right of payment with all other existing and future unsecured and unsubordinated indebtedness of
the guarantors, and senior in right of payment to all future subordinated indebtedness of the
guarantors. Because the guarantees of the notes are not secured, such guarantees will be
effectively subordinated to any existing and future secured indebtedness of the applicable
guarantor to the extent of the value of the collateral securing that
indebtedness. Upon a change of control event, the holders of
the notes have the right to require the Company to repurchase all or any part of such holder’s
notes at a purchase price in cash equal to 101% of the principal amount of the notes plus accrued
and unpaid interest, if any, to the date of repurchase.
|
||||||||||||||||||||||||||||||
Equity Compensation Plans [Abstract] | |||||||||||||||||||||||||||||||
ASC 718, Stock Compensation |
In accordance with ASC 718, Stock Compensation, excess tax
benefit from exercised stock options is recorded as an increase to additional paid-in capital and a
corresponding reduction in taxes payable. This tax benefit is calculated as the excess of the
intrinsic value of options exercised in excess of compensation recognized for financial reporting
purposes. The amount of the tax benefit that has been realized, as a result of those excess tax
benefits, is presented in the statement of cash flows as a financing cash inflow. For the six
months ended June 30, 2011 and 2010, the Company recorded excess tax benefit from stock options
exercised of $16,530 and $20,507, respectively. The Company realized
$5,470 and $10,036 of tax
benefit within the Company’s quarterly tax payments through June 30, 2011 and 2010, respectively.
The realized tax benefit is presented as a financing cash inflow within the accompanying condensed
consolidated statements of cash flows.
|
||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||
Disclosures About Segments of an Enterprise and Related Information |
ASC 280-10, Disclosures About Segments of an Enterprise and Related Information (“ASC
280-10”), establishes standards for reporting information about operating segments. ASC 280-10
requires that a public business enterprise report financial and descriptive information about its
reportable operating segments. Operating segments are components of an enterprise for which
separate financial information is available that is evaluated regularly by the chief operating
decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The
Company’s CEO and Chairman of the Board is identified as the CODM as defined by ASC 280-10. To
align with the internal management of the Company’s business operations based on service offerings,
the Company is organized into the following two operating segments, which are also the Company’s
reportable segments:
Risk Assessment: The Company is the leading provider of statistical, actuarial and
underwriting data for the U.S. P&C insurance industry. The Company’s databases include cleansed
and standardized records describing premiums and losses in insurance transactions, casualty and
property risk attributes for commercial buildings and their occupants and fire suppression
capabilities of municipalities. The Company uses this data to create policy language and
proprietary risk classifications that are industry standards and to generate prospective loss
cost estimates used to price insurance policies.
Decision Analytics: The Company develops solutions that its customers use to analyze the three
key processes in managing risk: ‘prediction of loss’, ‘detection and prevention of fraud’ and
‘quantification of loss’. The Company’s combination of algorithms and analytic methods
incorporates its proprietary data to generate solutions in each of these three categories. In
most cases, the Company’s customers integrate the solutions into their models, formulas or
underwriting criteria in order to predict potential loss events, ranging from hurricanes and
earthquakes to unanticipated healthcare claims. The Company develops catastrophe and extreme
event models and offers solutions covering natural and man-made risks, including acts of
terrorism. The Company also develops solutions that allow customers to quantify costs after
loss events occur. Fraud solutions include data on claim histories, analysis of mortgage
applications to identify misinformation, analysis of claims to find emerging patterns of fraud,
and identification of suspicious claims in the insurance, mortgage and healthcare sectors.
|
||||||||||||||||||||||||||||||
Related Parties [Abstract] | |||||||||||||||||||||||||||||||
Related Party Disclosures |
The Company considers its Verisk Class A and Class B stockholders that own more than 5% of the
outstanding stock within the respective class to be related parties as defined within ASC 850,
Related Party Disclosures. At June 30, 2011, the related parties were five Class B stockholders
each owning more than 5% of the outstanding Class B shares compared to six Class B stockholders at
June 30, 2010 of which four remained unchanged.
|
Debt
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
8. Debt:
The following table presents short-term and long-term debt by issuance:
On March 16, 2011, The Northern Trust Company joined the syndicated revolving credit
facility to increase the capacity by $25,000, for a $600,000 total commitment. On March 28, 2011,
the Company entered into amendments to its revolving credit facility and its master shelf
agreements to, among other things, permit the issuance of the senior notes and guarantees noted below.
On April 6, 2011, the Company completed an issuance of senior notes in the aggregate principal
amount of $450,000. These senior notes are due on May 1, 2021 and accrue interest at a rate of
5.80%. The Company received net proceeds of $446,031 after deducting original issue discount,
underwriting discount, and commissions of $3,969. The senior notes are fully and unconditionally
guaranteed, jointly and severally, on an unsecured and unsubordinated basis by ISO and certain
subsidiaries that guarantee our syndicated revolving credit facility or any amendment, refinancing
or replacement thereof (See Note 15. Condensed Consolidated Financial Information for Guarantor
Subsidiaries and Non-Guarantor Subsidiaries for further information). Interest will be payable
semi-annually on May 1st and November 1st of each year, beginning on November 1, 2011. Interest
accrues from April 6, 2011. The debt issuance costs will be amortized from the date of issuance to
the maturity date. The senior notes rank equally with all of the Company’s existing and future
senior unsecured and unsubordinated indebtedness. However, the senior notes are structurally
subordinated to the indebtedness of any of the subsidiaries that do not guarantee the notes and are
effectively subordinated to any future secured indebtedness to the extent of the value of the
assets securing such indebtedness. The guarantees of the senior notes rank equally and ratably in
right of payment with all other existing and future unsecured and unsubordinated indebtedness of
the guarantors, and senior in right of payment to all future subordinated indebtedness of the
guarantors. Because the guarantees of the notes are not secured, such guarantees will be
effectively subordinated to any existing and future secured indebtedness of the applicable
guarantor to the extent of the value of the collateral securing that
indebtedness. Upon a change of control event, the holders of
the notes have the right to require the Company to repurchase all or any part of such holder’s
notes at a purchase price in cash equal to 101% of the principal amount of the notes plus accrued
and unpaid interest, if any, to the date of repurchase.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
In Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Cash flows from operating activities: | ||
Net income | $ 131,453 | $ 113,779 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of fixed assets | 22,160 | 19,873 |
Amortization of intangible assets | 17,332 | 14,324 |
Amortization of debt issuance costs | 729 | 789 |
Amortization of debt original issue discount | 25 | 0 |
Allowance for doubtful accounts | 557 | 526 |
KSOP compensation expense | 6,408 | 5,729 |
Stock-based compensation | 12,331 | 10,284 |
Non-cash charges associated with performance based appreciation awards | 583 | 792 |
Acquisition related liabilities adjustment | (3,364) | 0 |
Realized gain on securities, net | (487) | (61) |
Deferred income taxes | 1,660 | 507 |
Other operating | 30 | 30 |
Loss on disposal of assets | 221 | 38 |
Excess tax benefits from exercised stock options | (5,470) | (10,036) |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Accounts receivable | (16,979) | (28,694) |
Prepaid expenses and other assets | (8,082) | (5,504) |
Federal and foreign income taxes | 7,703 | 17,729 |
State and local income taxes | (140) | (1,387) |
Accounts payable and accrued liabilities | (15,190) | (18,327) |
Fees received in advance | 50,520 | 55,959 |
Other liabilities | (14,913) | (3,316) |
Net cash provided by operating activities | 187,087 | 173,034 |
Cash flows from investing activities: | ||
Acquisitions, net of cash acquired of $590 and $1,556, respectively | (121,721) | (6,386) |
Earnout payments | (3,500) | 0 |
Proceeds from release of acquisition related escrows | 0 | 283 |
Escrow funding associated with acquisitions | (19,560) | (1,500) |
Purchases of available-for-sale securities | (1,338) | (262) |
Proceeds from sales and maturities of available-for-sale securities | 1,704 | 511 |
Purchases of fixed assets | (28,171) | (15,570) |
Net cash provided by/(used in) investing activities | (172,586) | (22,924) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt, net of original issue discount | 448,956 | 0 |
Repayment of short term debt refinanced on a long term basis | (295,000) | 0 |
Proceeds/(repayments) of short-term debt, net | 72,919 | (64,069) |
Repayment of current portion of long-term debt | (50,000) | 0 |
Payment of debt issuance cost | (4,434) | 0 |
Net share settlement of taxes upon exercise of stock options | 0 | (15,051) |
Excess tax benefits from exercised stock options | 5,470 | 10,036 |
Proceeds from stock options exercised | 18,032 | 16,733 |
Net cash provided by/(used in) financing activities | (18,078) | (114,617) |
Effect of exchange rate changes | 573 | (193) |
(Decrease)/increase in cash and cash equivalents | (3,004) | 35,300 |
Cash and cash equivalents, beginning of period | 54,974 | 71,527 |
Cash and cash equivalents, end of period | 51,970 | 106,827 |
Supplemental disclosures: | ||
Taxes paid | 80,924 | 63,545 |
Interest paid | 17,997 | 16,299 |
Non-cash investing and financing activities: | ||
Deferred tax asset/(liability) established on date of acquisition | 1,280 | (732) |
Capital lease obligations | 8,013 | 602 |
Capital expenditures included in accounts payable and accrued liabilities | 307 | 668 |
Increase in goodwill due to acquisition related escrow distributions | 0 | 6,996 |
Verisk Class A [Member]
|
||
Cash flows from financing activities: | ||
Repurchase of Verisk Class A common stock | (214,021) | (62,266) |
Non-cash investing and financing activities: | ||
Repurchase of Verisk Class A common stock included in accounts payable and accrued liabilities | $ 5,292 | $ 2,635 |
Condensed Consolidated Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Condensed Consolidated Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATING BALANCE SHEETS |
CONDENSED CONSOLIDATING BALANCE SHEET (UNAUDITED)
As of June 30, 2011
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2010
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CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
For The Three Month Period Ended June 30, 2011
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
For The Six Month Period Ended June 30, 2011
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
For The Three Month Period Ended June 30, 2010
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
For The Six Month Period Ended June 30, 2010
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CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)
For The Six Months Ended June 30, 2011
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Goodwill and Intangible Assets
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Goodwill and Intangible Assets [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets |
5. Goodwill and Intangible Assets:
The following is a summary of the change in goodwill from December 31, 2010 through June 30,
2011, both in total and as allocated to the Company’s operating segments:
Goodwill and intangible assets with indefinite lives are subject to impairment testing
annually as of June 30, or whenever events or changes in circumstances indicate that the carrying
amount may not be fully recoverable. This testing compares the carrying value of each reporting unit
to its fair value. If the fair value of the reporting unit exceeds the carrying value of the net
assets, including goodwill assigned to that reporting unit, goodwill is not impaired. If the
carrying value of the reporting unit’s net assets including goodwill exceeds the fair value of the
reporting unit, then the Company will determine the implied fair value of the reporting unit’s
goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, then
an impairment loss is recorded for the difference between the carrying amount and the implied fair
value of goodwill. The Company completed the required annual impairment test as
of June 30, 2011, which resulted in no impairment of goodwill. Based on the results of the
impairment assessment as of June 30, 2011, the Company confirmed that the fair value of its
reporting units exceeded their respective carrying value. Given the
limited amount of time between the acquisition date and the timing of
the Company’s annual impairment test, the fair value of certain
reporting units exceeded their carrying value by a moderate amount.
The Company’s intangible assets and related accumulated amortization consisted of the
following:
Consolidated amortization expense related to intangible assets for the three months ended June
30, 2011 and 2010, was $8,877 and $7,020, respectively. Consolidated amortization expense related
to intangible assets for the six months ended June 30, 2011 and 2010, was $17,332 and $14,324,
respectively. Estimated amortization expense in future periods
through 2016 and thereafter for
intangible assets subject to amortization is as follows:
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Equity Compensation Plans
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Equity Compensation Plans [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Compensation Plans |
10. Equity Compensation Plans:
All of the Company’s granted equity awards, including outstanding stock options and restricted
stock, are covered under the Incentive Plan or the Option Plan. Awards under the Incentive Plan
may include one or more of the following types: (i) stock options (both nonqualified and incentive
stock options), (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock
units, (v) performance awards, (vi) other share-based awards, and (vii) cash. Employees, directors
and consultants are eligible for awards under the Incentive Plan. Cash received from stock option
exercises for the six months ended June 30, 2011 and 2010 was
$18,032 and $16,733, respectively. On July 1, 2011, the Company
granted 2,506 shares of Class A common stock, 34,011 nonqualified
stock options that were immediately vested and 125,500 nonqualified
stock options with a one year service vesting period, to the
directors of the Company. These options have an exercise price equal
to the closing price of the Company’s Class A common stock on
the grant date and a ten year contractual term.
On April 1, 2011, the Company granted 1,401,308 nonqualified stock options and 146,664 shares
of restricted stock to key employees. The nonqualified stock options have an exercise price equal
to the closing price of the Company’s Class A common stock on the grant date, with a ten-year
contractual term and a service vesting period of four years. The restricted stock is valued at the
closing price of the Company’s Class A common stock on the date of grant and has a service vesting
period of four years. The Company recognizes the expense of the restricted stock ratably over the
periods in which the restrictions lapse. The restricted stock is not assignable or transferrable
until it becomes vested. As
of June 30, 2011, there were 7,135,187 shares of Class A common stock reserved and available for
future issuance.
The fair value of the stock options granted during the six months ended June 30, 2011 and 2010
were estimated using a Black-Scholes valuation model that uses the weighted average assumptions
noted in the following table:
The expected term for a majority of the stock options granted was estimated based on
studies of historical experience and projected exercise behavior. However, for certain stock
options granted, for which no historical exercise pattern exists, the expected term was estimated
using the simplified method. The risk-free interest rate is based on the yield of U.S. Treasury
zero coupon securities with a maturity equal to the expected term of the equity award. The
volatility factor was based on the average volatility of the Company’s peers, calculated using
historical daily closing prices over the most recent period commensurate with the expected term of
the stock option award. The expected dividend yield was based on the Company’s expected annual
dividend rate on the date of grant.
Exercise prices for options outstanding and exercisable at June 30, 2011 ranged from $2.16 to
$33.30 as outlined in the following table:
A summary of options outstanding under the Incentive Plan and the Option Plan as of June
30, 2011 and changes during the six months ended are presented below:
Intrinsic value for stock options is calculated based on the exercise price of the
underlying awards and the quoted price of Verisk’s common stock as of the reporting date. The
aggregate intrinsic value of stock options outstanding and exercisable at June 30, 2011 was
$479,184 and $366,593, respectively.
In accordance with ASC 718, Stock Compensation, excess tax
benefit from exercised stock options is recorded as an increase to additional paid-in capital and a
corresponding reduction in taxes payable. This tax benefit is calculated as the excess of the
intrinsic value of options exercised in excess of compensation recognized for financial reporting
purposes. The amount of the tax benefit that has been realized, as a result of those excess tax
benefits, is presented in the statement of cash flows as a financing cash inflow. For the six
months ended June 30, 2011 and 2010, the Company recorded excess tax benefit from stock options
exercised of $16,530 and $20,507, respectively. The Company realized
$5,470 and $10,036 of tax
benefit within the Company’s quarterly tax payments through June 30, 2011 and 2010, respectively.
The realized tax benefit is presented as a financing cash inflow within the accompanying condensed
consolidated statements of cash flows.
The Company estimates expected forfeitures of equity awards at the date of grant and
recognizes compensation expense only for those awards that the Company expects to vest. The
forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Changes in the
forfeiture assumptions may impact the total amount of expense ultimately recognized over the
requisite service period and may impact the timing of expense recognized over the requisite service
period.
A summary of the status of the restricted stock under the Incentive Plan as of June 30, 2011
and changes during the six months ended are presented below:
As of June 30, 2011, there was $48,604 of total unrecognized compensation cost related to
nonvested share-based compensation arrangements granted under the Incentive Plan and the Option
Plan. That cost is expected to be recognized over a weighted average period of 2.71 years. As of
June 30, 2011, there were 7,354,041 and 146,315 nonvested stock options and restricted stock,
respectively, of which 6,351,317 and 120,331 are expected to vest. The total grant date fair value
of options vested during the six months ended June 30, 2011 and 2010 was $9,838 and $10,030,
respectively. The total grant date fair value of restricted stock vested during the six months
ended June 30, 2011 was $305.
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Acquisitions
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Acquisitions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions |
6. Acquisitions:
2011
Acquisitions
On June 17, 2011, the Company acquired the net assets of Health Risk Partners, LLC (“HRP”), a
provider of solutions to optimize revenue, ensure compliance and improve quality of care for
Medicare Advantage and Medicaid health plans, for a net cash purchase price of approximately
$46,400 and funded $3,000 of indemnity escrows and $10,000 of contingency escrows. Within the
Company’s Decision Analytics segment, this acquisition will further advance the Company’s position
as a major provider of data, analytics, and decision-support solutions to the healthcare industry.
On April 27, 2011, the Company acquired 100% of the stock of Bloodhound Technologies, Inc
(“Bloodhound”), a provider of real-time pre-adjudication medical claims editing, for a net cash
purchase price of approximately $75,321 and funded $6,560 of indemnity escrows. Within the
Company’s Decision Analytics segment, Bloodhound addresses the need of healthcare payers to control
fraud and waste in a real-time claims-processing environment, and these capabilities align with the
Company’s existing fraud identification tools.
The preliminary purchase price allocations of the acquisitions resulted in the following:
The amounts assigned to intangible assets by type for current year acquisitions are summarized in
the table below:
Due to the timing
of the acquisitions, the allocations of the purchase price are subject to revisions as additional
information is obtained about the facts and circumstances that existed as of the acquisition
dates. The revisions may have a material impact on the consolidated financial statements.
The allocations of the purchase price will be finalized once all information is obtained, but not to exceed one year from the acquisition dates.
2010 Acquisitions
On December 16, 2010, the Company acquired 100% of the stock of 3E Company (“3E”), a
global source for a comprehensive suite of environmental health and safety compliance solutions,
for a net cash purchase price of approximately $99,603 and funded $7,730 of indemnity escrows.
Within the Company’s Decision Analytics segment, 3E overlaps the customer sets served by the other
supply chain risk management solutions and helps the Company’s customers across a variety of
vertical markets address their environmental health and safety issues.
On December 14, 2010, the Company acquired 100% of the stock of Crowe Paradis Services
Corporation (“CP”), a provider of claims analysis and compliance solutions to the P&C insurance
industry, for a net cash purchase price of approximately $83,589 and funded $6,750 of indemnity
escrows. Within the Company’s Decision Analytics segment, CP offers solutions for complying with
the Medicare Secondary Payer Act, provides services to P&C insurance companies, third-party
administrators and self-insured companies, which the Company believes further enhances the solution
it currently offers.
On February 26, 2010, the Company acquired 100% of the stock of Strategic Analytics
(“SA”), a provider of credit risk and capital management solutions to consumer and mortgage
lenders, for a net cash purchase price of approximately $6,386 and the Company funded $1,500 of
indemnity escrows. Within the Decision Analytics segment, the Company believes SA solutions and
application set will allow customers to take advantage of state-of-the-art loss forecasting, stress
testing, and economic capital requirement tools to better understand and forecast the risk
associated within their credit portfolios.
Acquisition Escrows
Pursuant to the related acquisition agreements, the Company has funded various escrow accounts
to satisfy pre-acquisition indemnity and tax claims arising subsequent to the acquisition date, as
well as a portion of the contingent payments. At June 30, 2011 and December 31, 2010, the current
portion of the escrows amounted to $27,056 and $6,167, respectively, and has been included in
“Other current assets” in the accompanying condensed consolidated balance sheets. At June 30, 2011
and December 31, 2010, the noncurrent portion of the escrow amounted to $14,505 and $15,953,
respectively.
Acquisition Related Liabilities
Based on the results of operations of Atmospheric and Environmental Research, Inc. (“AER”),
which was acquired in 2008, the Company recorded an increase of $3,500 to acquisition related
liabilities and goodwill during the year ended December 31, 2010. AER was acquired in 2008 and
therefore, accounted for under the transition provisions of FASB No. 141 (Revised), Business
Combinations (“FAS No. 141(R)”). In April 2011, the Company finalized the AER acquisition
contingent liability and made a payment of $3,500.
As of June 30, 2011, the Company reevaluated the probability of D2 Hawkeye, Inc. (“D2”) and SA
achieving the specific predetermined EBITDA and revenue earnout targets for exceptional performance
in fiscal year 2011 and reversed its contingent consideration related to these acquisitions. These
reversals resulted in a reduction of $3,364 to contingent consideration and a decrease of $3,364 to
“Acquisition related liabilities adjustment” in the accompanying condensed consolidated statements
of operations during the three- and six-month periods ended
June 30, 2011. Thus, based on current estimates, the sellers of D2 and
SA will not receive any acquisition contingent payments.
|
Equity Compensation Plans (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Stock Option Plan (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of the stock options granted using a Black- Scholes valuation model |
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Exercise prices for options outstanding and exercisable |
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Options outstanding under the Incentive Plan and the Option Plan |
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Summary of Restricted Stock Under Incentive Plan |
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Fair Value Measurements
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
4. Fair Value Measurements:
Certain assets and liabilities of the Company are reported at fair value in the accompanying
condensed consolidated balance sheets. Such assets and liabilities include amounts for both
financial and non-financial instruments. To increase consistency and comparability of assets and
liabilities recorded at fair value, ASC 820-10, Fair Value Measurements (“ASC 820-10”) establishes
a three-level fair value hierarchy to prioritize the inputs to valuation techniques used to measure
fair value. ASC 820-10 requires disclosures detailing the extent to which companies measure assets
and liabilities at fair value, the methods and assumptions used to measure fair value and the
effect of fair value measurements on earnings. In accordance with ASC 820-10, the Company applied
the following fair value hierarchy:
The following tables provide information for such assets and liabilities as of June 30, 2011
and December 31, 2010. The fair values of cash and cash equivalents, accounts receivable, accounts
payable and accrued liabilities, acquisitions related liabilities prior to the adoption of ASC 805,
Business Combinations (“ASC 805”), and short-term debt approximate their carrying amounts because
of the short-term maturity of these instruments.
The fair value of the Company’s long-term debt
was estimated at $1,006,810 and $584,361 as of June 30, 2011 and December 31, 2010, respectively,
and is based on quoted market prices if available and if not, an estimate of interest rates available to
the Company for debt with similar features, the Company’s current credit rating and spreads
applicable to the Company. These assets and liabilities are not presented in the following table.
The table below includes a rollforward of the Company’s contingent consideration liability
under ASC 805 for the three- and six-month periods ended June 30, 2011 and 2010:
|
Stockholders' Deficit (Details 2) (USD $)
In Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Before Tax | |||
Unrealized holding loss on investments arising during the year, Before tax | $ (423) | $ (190) | |
Unrealized foreign currency gain/loss, Before Tax | 573 | (193) | |
Pension and postretirement unfunded liability adjustment, Before Tax | 2,668 | 2,926 | |
Total other comprehensive income, Before Tax | 2,818 | 2,543 | |
Tax Benefit/(Expense) | |||
Unrealized holding loss on investments arising during the year, Tax Benefit/(Expense) | 171 | 80 | |
Pension and postretirement unfunded liability adjustment, Tax Benefit/(Expense) | (694) | (1,179) | |
Unrealized foreign currency gain/loss, Tax Benefit/(Expense) | 0 | 0 | |
Total other comprehensive income, Tax Benefit/(Expense) | (523) | (1,099) | |
After Tax | |||
Unrealized holding loss on investments arising during the year, After Tax | (252) | (110) | |
Unrealized foreign currency gain/loss, After Tax | 573 | (193) | |
Pension and postretirement unfunded liability adjustment, After Tax | 1,974 | 1,747 | |
Total other comprehensive income, After Tax | $ 2,295 | $ 1,444 | $ (2,175) |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT) (Unaudited) (USD $)
In Thousands, except Share data |
Total
|
Verisk Class A [Member]
|
Verisk Class B [Member]
Series 1 [Member]
|
Verisk Class B [Member]
Series 2 [Member]
|
Par Value
|
Unearned KSOP Contributions
|
Additional Paid-in Capital
|
Treasury Stock
|
Treasury Stock
Verisk Class A [Member]
|
Treasury Stock
Verisk Class B [Member]
Series 1 [Member]
|
Treasury Stock
Verisk Class B [Member]
Series 2 [Member]
|
Retained Earnings
|
Accumulated Other Comprehensive Income (Loss)
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2009 | $ (34,949) | $ 130 | $ (1,305) | $ 652,573 | $ (683,994) | $ 51,275 | $ (53,628) | ||||||
Beginning Balance, Shares at Dec. 31, 2009 | 125,815,600 | 205,637,925 | 205,637,925 | ||||||||||
Comprehensive income: | |||||||||||||
Net income | 242,552 | 242,552 | |||||||||||
Other comprehensive income (loss) | (2,175) | (2,175) | |||||||||||
Comprehensive income | 240,377 | ||||||||||||
Conversion of Class B-1 common stock upon follow-on public offering (Note 1), Shares | 7,309,963 | (7,309,963) | |||||||||||
Conversion of Class B-2 common stock upon follow-on public offering (Note 1), Shares | 11,972,917 | (11,972,917) | |||||||||||
Treasury stock acquired - Class A 6,499,212 shares in 2011 and 7,111,202 shares in 2010, Class B-1 7,583,532 shares in 2010 and Class B-2 374,718 shares in 2010 | (212,512) | (199,936) | (9,879) | (212,512) | (199,936) | (9,879) | |||||||
KSOP shares earned | 11,573 | 317 | 11,256 | ||||||||||
Stock options exercised (including tax benefit of $49,015 for 2010 and $16,530 for 2011 respectively) | 84,497 | 5 | 84,492 | ||||||||||
Stock options exercised (including tax benefit of $49,015 for 2010 and $16,530 for 2011 respectively), Shares | 5,579,135 | ||||||||||||
Net share settlement of taxes upon exercise of stock options | (15,051) | (15,051) | |||||||||||
Net share settlement of taxes upon exercise of stock options, Shares | (503,043) | ||||||||||||
Stock-based compensation | 21,298 | 21,298 | |||||||||||
Other stock issuances | 140 | 140 | |||||||||||
Other stock issuances, Shares | 4,554 | ||||||||||||
Ending Balance at Dec. 31, 2010 | (114,442) | 135 | (988) | 754,708 | (1,106,321) | 293,827 | (55,803) | ||||||
Ending Balance, Shares at Dec. 31, 2010 | 150,179,126 | 198,327,962 | 193,665,008 | ||||||||||
Comprehensive income: | |||||||||||||
Net income | 131,453 | 131,453 | |||||||||||
Other comprehensive income (loss) | 2,295 | 2,295 | |||||||||||
Comprehensive income | 133,748 | ||||||||||||
Conversion of Class B-1 common stock (Note1) | 198,327,962 | (198,327,962) | |||||||||||
Treasury stock acquired - Class A 6,499,212 shares in 2011 and 7,111,202 shares in 2010, Class B-1 7,583,532 shares in 2010 and Class B-2 374,718 shares in 2010 | (217,047) | (217,047) | |||||||||||
KSOP shares earned | 6,408 | 152 | 6,256 | ||||||||||
Stock options exercised (including tax benefit of $49,015 for 2010 and $16,530 for 2011 respectively) | 34,562 | 2 | 34,560 | ||||||||||
Stock options exercised (including tax benefit of $49,015 for 2010 and $16,530 for 2011 respectively), Shares | 1,830,942 | ||||||||||||
Stock-based compensation | 12,331 | 12,331 | |||||||||||
Ending Balance at Jun. 30, 2011 | $ (144,440) | $ 137 | $ (836) | $ 807,855 | $ (1,323,368) | $ 425,280 | $ (53,508) | ||||||
Ending Balance, Shares at Jun. 30, 2011 | 350,338,030 | 0 | 193,665,008 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) (USD $)
In Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Cash flows from investing activities: | ||
Net of cash acquired from acquisitions | $ 590 | $ 1,556 |
Goodwill and Intangible Assets (Details ) (USD $)
In Thousands |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Changes in goodwill | |
Goodwill at December 31, 2010 (1) | $ 632,668 |
Current year acquisitions | 79,893 |
Goodwill at June 30, 2011(1) | 712,561 |
Risk Assessment [Member]
|
|
Changes in goodwill | |
Goodwill at December 31, 2010 (1) | 27,908 |
Current year acquisitions | 0 |
Goodwill at June 30, 2011(1) | 27,908 |
Decision Analytics [Member]
|
|
Changes in goodwill | |
Goodwill at December 31, 2010 (1) | 604,760 |
Current year acquisitions | 79,893 |
Goodwill at June 30, 2011(1) | $ 684,653 |
Stockholders' Deficit (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Deficit (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted EPS |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of accumulated other comprehensive loss |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Before tax and after tax amounts of other comprehensive income |
|
Equity Compensation Plans (Details Textuals) (USD $)
|
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonqualified stock option granted | 1,401,308 | ||
Class A common stock reserved | 7,135,187 | ||
Stock Option Plan (Textuals) [Abstract] | |||
Cash received from stock option exercised | $ 18,032,000 | $ 16,733,000 | |
Nonqualified stock option contractual term | P10Y | ||
Exercise price for option outstanding and exercisable, lower limit | $ 2.16 | ||
Exercise price for option outstanding and exercisable, upper limit | $ 33.30 | ||
Aggregate intrinsic value of stock option outstanding | 479,184,000 | 478,014,000 | |
Aggregate intrinsic value of stock option exercisable | 366,593,000 | 368,466,000 | |
Realized tax benefit from stock option exercised | 5,470,000 | 10,036,000 | |
Excess tax benefit from stock option exercised | 16,530,000 | 20,507,000 | |
Total unrecognized compensation cost related to nonvested share based compensation arrangements | 48,604,000 | ||
Unrecognized compensation cost weighted average period | 2.71 | ||
Non vested stock option | 7,354,041 | ||
Stock option expected to vest | 6,351,317 | ||
Restricted stock expected to vest | 120,331 | ||
Grant date fair value option vested | $ 9,838,000 | $ 10,030,000 | |
Grant date fair value restricted stock vested | 305,000 | ||
Stock Options [Member] | Key Employee [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonqualified stock option granted | 1,401,308 | ||
Restricted Stock [Member] | Key Employee [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonqualified stock option granted | 146,664 | ||
Key Employee [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonqualified stock option, service vesting period | 4 years | ||
Stock Options [Member] | Director [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonqualified stock option granted | 125,500 | ||
Restricted Stock [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Class A common stock granted | 146,664 | ||
Restricted stock | 146,315 | 0 | |
Verisk Class A [Member] | Stock Options [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonqualified stock option granted | 2,506 | ||
Stock Options [Member]
|
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Nonqualified stock option, service vesting period | 1 year | ||
Number of non qualified stock options that were immediately vested | 34,011 |
Segment Reporting (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|||||||
Reconciliation to income before income taxes of the company's reporting segment | ||||||||||
Revenues | $ 327,280 | [1] | $ 281,677 | [1] | $ 640,149 | [1] | $ 557,831 | [1] | ||
Expenses: | ||||||||||
Cost of revenues (exclusive of items shown separately below) | 131,185 | 115,000 | 255,741 | 229,993 | ||||||
Selling, general and administrative | 55,909 | 42,638 | 105,165 | 80,152 | ||||||
Acquisition related liabilities adjustment | (3,364) | 0 | (3,364) | 0 | ||||||
Segment EBITDA | 143,550 | 124,039 | 282,607 | 247,686 | ||||||
Depreciation and amortization of fixed assets | 10,855 | 9,944 | 22,160 | 19,873 | ||||||
Amortization of intangible assets | 8,877 | 7,020 | 17,332 | 14,324 | ||||||
Operating income | 123,818 | 107,075 | 243,115 | 213,489 | ||||||
Unallocated expenses: | ||||||||||
Investment income/(loss) | (10) | 92 | 0 | 124 | ||||||
Realized gain on securities, net | 125 | 29 | 487 | 61 | ||||||
Interest expense | (14,885) | (8,445) | (24,500) | (16,911) | ||||||
Income before income taxes | 109,048 | 98,751 | 219,102 | 196,763 | ||||||
Capital expenditures, including non-cash purchases of fixed assets and capital lease obligations | 15,613 | 7,952 | 34,353 | 16,840 | ||||||
Risk Assessment [Member]
|
||||||||||
Reconciliation to income before income taxes of the company's reporting segment | ||||||||||
Revenues | 140,530 | 134,289 | 281,073 | 268,867 | ||||||
Expenses: | ||||||||||
Cost of revenues (exclusive of items shown separately below) | 49,053 | 48,652 | 96,310 | 98,550 | ||||||
Selling, general and administrative | 23,345 | 19,439 | 42,472 | 38,623 | ||||||
Acquisition related liabilities adjustment | 0 | 0 | 0 | 0 | ||||||
Segment EBITDA | 68,132 | 66,198 | 142,291 | 131,694 | ||||||
Depreciation and amortization of fixed assets | 3,530 | 4,163 | 7,848 | 8,486 | ||||||
Amortization of intangible assets | 36 | 37 | 72 | 73 | ||||||
Operating income | 64,566 | 61,998 | 134,371 | 123,135 | ||||||
Unallocated expenses: | ||||||||||
Capital expenditures, including non-cash purchases of fixed assets and capital lease obligations | 3,394 | 1,500 | 6,789 | 3,389 | ||||||
Decision Analytics [Member]
|
||||||||||
Reconciliation to income before income taxes of the company's reporting segment | ||||||||||
Revenues | 186,750 | 147,388 | 359,076 | 288,964 | ||||||
Expenses: | ||||||||||
Cost of revenues (exclusive of items shown separately below) | 82,132 | 66,348 | 159,431 | 131,443 | ||||||
Selling, general and administrative | 32,564 | 23,199 | 62,693 | 41,529 | ||||||
Acquisition related liabilities adjustment | (3,364) | 0 | (3,364) | 0 | ||||||
Segment EBITDA | 75,418 | 57,841 | 140,316 | 115,992 | ||||||
Depreciation and amortization of fixed assets | 7,325 | 5,781 | 14,312 | 11,387 | ||||||
Amortization of intangible assets | 8,841 | 6,983 | 17,260 | 14,251 | ||||||
Operating income | 59,252 | 45,077 | 108,744 | 90,354 | ||||||
Unallocated expenses: | ||||||||||
Capital expenditures, including non-cash purchases of fixed assets and capital lease obligations | $ 12,219 | $ 6,452 | $ 27,564 | $ 13,451 | ||||||
|
Stockholders' Deficit (Details 1) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Summary of accumulated other comprehensive loss | ||
Unrealized gain on investments, net of tax | $ 473 | $ 725 |
Unrealized foreign currency loss | (219) | (792) |
Pension and postretirement unfunded liability adjustment, net of tax | (53,762) | (55,736) |
Accumulated other comprehensive losses | $ (53,508) | $ (55,803) |
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Dec. 31, 2008
|
Dec. 30, 2004
|
Apr. 30, 2010
|
|
Commitments and Contingencies (Textuals) [Abstract] | ||||
Payment for settlement of plaintiffs asserting claims | Less than $2,000 | |||
Demanded amount for litigation reimbursement | $ 2,536 | |||
Attorneys fees and expenses | 600 | |||
Amount of liquidated damages for each instance of a violation of the DPPA | $ 2,500 | |||
Number of years of employment to include employees in interthinx litigation | 4 | |||
Number of Lawsuits Filed | 2 |
Organization
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Organization [Abstract] | |
Organization |
1. Organization:
Verisk Analytics, Inc. and its consolidated subsidiaries (“Verisk” or the “Company”) enable
risk-bearing businesses to better understand and manage their risks. The Company provides its
customers proprietary data that, combined with analytic methods, create embedded decision support
solutions. The Company is one of the largest aggregators and providers of data pertaining to
property and casualty (“P&C”) insurance risks in the United States of America (“U.S.”). The
Company offers solutions for detecting fraud in the U.S. P&C insurance, mortgage and healthcare
industries and sophisticated methods to predict and quantify loss in diverse contexts ranging from
natural catastrophes to supply chain to health insurance. The Company provides solutions, including data,
statistical models or tailored analytics, all designed to allow clients to make more logical
decisions.
Verisk was established on May 23, 2008 to serve as the parent holding company of Insurance
Services Office, Inc. (“ISO”) upon completion of the initial public offering (“IPO”). ISO was
formed in 1971 as an advisory and rating organization for the P&C insurance industry to provide
statistical and actuarial services, to develop insurance programs and to assist insurance companies
in meeting state regulatory requirements. Over the past decade, the Company has broadened its data
assets, entered new markets, placed a greater emphasis on analytics, and pursued strategic
acquisitions. On October 6, 2009, ISO effected a corporate reorganization whereby the Class A and
Class B common stock of ISO were exchanged by the current stockholders for the common stock of
Verisk on a one-for-one basis. Verisk immediately thereafter effected a fifty-for-one stock split
of its Class A and Class B common stock and equally sub-divided the Class B common stock into two
new series of stock, Verisk Class B (Series 1) (“Class B-1”) and Verisk Class B (Series 2) (“Class
B-2”).
On October 9, 2009, the Company completed its IPO. Upon completion of the IPO, the selling
stockholders sold 97,995,750 shares of Class A common stock of Verisk, which included the
12,745,750 over-allotment option, at the IPO price of $22.00 per share. The Company did not
receive any proceeds from the sales of common stock in the offering. Verisk trades under the
ticker symbol “VRSK” on the NASDAQ Global Select Market.
On October 1, 2010, the Company completed a follow-on public offering. Upon completion of
this offering, the selling stockholders sold 2,602,212 and 19,282,880 shares of Class A and Class B
common stock of Verisk, respectively, which included the underwriters’ 2,854,577 over-allotment
option, at the public offering price of $27.25 per share. Class B common stock sold into this
offering was automatically converted into Class A common stock. The Company did not receive any
proceeds from the sale of common stock in the offering. Concurrently with the closing of this
offering, the Company also repurchased 7,300,000 shares of Class B common stock at $26.3644 per
share, which represents the net proceeds per share the selling stockholders received in the public
offering. The Company funded a portion of this repurchase with proceeds from borrowings of
$160,000 under its syndicated revolving credit facility. Upon consummation of the offering and the
repurchase, the Company’s Class B-1 and Class B-2 common stock outstanding was 12,554,605 and
15,100,465 shares, respectively. The Class B-1 shares converted to Class A common stock on April
6, 2011 and the Class B-2 shares will automatically convert to Class A common stock on October 6,
2011.
|
Goodwill And Intangible Assets (Details 2) (USD $)
In Thousands |
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Estimated amortization expense | |
2011 | $ 17,448 |
2012 | 33,927 |
2013 | 28,414 |
2014 | 21,288 |
2015 | 21,063 |
Thereafter | 119,190 |
Total | $ 241,330 |
Goodwill and Intangible Assets (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets and related accumulated amortization |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated amortization expense |
|
Condensed Consolidated Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Details 1) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|||||||
Condensed Consolidating Statement of Operations | |||||||||||
Revenues | $ 327,280 | [1] | $ 281,677 | [1] | $ 640,149 | [1] | $ 557,831 | [1] | |||
Expenses: | |||||||||||
Cost of revenues (exclusive of items shown separately below) | 131,185 | 115,000 | 255,741 | 229,993 | |||||||
Selling, general and administrative | 55,909 | 42,638 | 105,165 | 80,152 | |||||||
Depreciation and amortization of fixed assets | 10,855 | 9,944 | 22,160 | 19,873 | |||||||
Amortization of intangible assets | 8,877 | 7,020 | 17,332 | 14,324 | |||||||
Acquisition related liabilities adjustment | (3,364) | 0 | (3,364) | 0 | |||||||
Total expenses | 203,462 | 174,602 | 397,034 | 344,342 | |||||||
Operating income | 123,818 | 107,075 | 243,115 | 213,489 | |||||||
Other income/(expense): | |||||||||||
Investment income/(loss) | (10) | 92 | 0 | 124 | |||||||
Realized gain on securities, net | 125 | 29 | 487 | 61 | |||||||
Interest expense | (14,885) | (8,445) | (24,500) | (16,911) | |||||||
Total other expense, net | (14,770) | (8,324) | (24,013) | (16,726) | |||||||
Income before income taxes | 109,048 | 98,751 | 219,102 | 196,763 | |||||||
Equity in net income of subsidiary | 0 | 0 | 0 | ||||||||
Provision for income taxes | (43,471) | (40,347) | (87,649) | (82,984) | |||||||
Net income | 65,577 | 58,404 | 131,453 | 113,779 | 242,552 | ||||||
Verisk Analytics, Inc.[Member]
|
|||||||||||
Condensed Consolidating Statement of Operations | |||||||||||
Revenues | 0 | 0 | 0 | 0 | |||||||
Expenses: | |||||||||||
Cost of revenues (exclusive of items shown separately below) | 0 | 0 | 0 | 0 | |||||||
Selling, general and administrative | 0 | 0 | 0 | 0 | |||||||
Depreciation and amortization of fixed assets | 0 | 0 | 0 | 0 | |||||||
Amortization of intangible assets | 0 | 0 | 0 | 0 | |||||||
Acquisition related liabilities adjustment | 0 | 0 | 0 | 0 | |||||||
Total expenses | 0 | 0 | 0 | 0 | |||||||
Operating income | 0 | 0 | 0 | 0 | |||||||
Other income/(expense): | |||||||||||
Investment income/(loss) | 0 | 0 | 0 | 0 | |||||||
Realized gain on securities, net | 0 | 0 | 0 | 0 | |||||||
Interest expense | (7,681) | 0 | (7,681) | 0 | |||||||
Total other expense, net | (7,681) | 0 | (7,681) | 0 | |||||||
Income before income taxes | (7,681) | 0 | (7,681) | 0 | |||||||
Equity in net income of subsidiary | 70,428 | 58,404 | 136,304 | 113,779 | |||||||
Provision for income taxes | 2,830 | 0 | 2,830 | 0 | |||||||
Net income | 65,577 | 58,404 | 131,453 | 113,779 | |||||||
Guarantor Subsidiaries [Member]
|
|||||||||||
Condensed Consolidating Statement of Operations | |||||||||||
Revenues | 289,353 | 268,209 | 568,933 | 531,899 | |||||||
Expenses: | |||||||||||
Cost of revenues (exclusive of items shown separately below) | 114,120 | 107,254 | 222,903 | 213,330 | |||||||
Selling, general and administrative | 45,936 | 37,182 | 82,414 | 71,138 | |||||||
Depreciation and amortization of fixed assets | 8,739 | 8,805 | 18,181 | 17,794 | |||||||
Amortization of intangible assets | 4,797 | 6,382 | 10,117 | 12,999 | |||||||
Acquisition related liabilities adjustment | (2,800) | 0 | (2,800) | 0 | |||||||
Total expenses | 170,792 | 159,623 | 330,815 | 315,261 | |||||||
Operating income | 118,561 | 108,586 | 238,118 | 216,638 | |||||||
Other income/(expense): | |||||||||||
Investment income/(loss) | 1,457 | 71 | 1,471 | 91 | |||||||
Realized gain on securities, net | 125 | 29 | 487 | 61 | |||||||
Interest expense | (8,562) | (8,427) | (18,157) | (16,885) | |||||||
Total other expense, net | (6,980) | (8,327) | (16,199) | (16,733) | |||||||
Income before income taxes | 111,581 | 100,259 | 221,919 | 199,905 | |||||||
Equity in net income of subsidiary | 2,702 | (1,065) | 1,614 | (2,263) | |||||||
Provision for income taxes | (44,525) | (40,790) | (88,078) | (83,863) | |||||||
Net income | 69,758 | 58,404 | 135,455 | 113,779 | |||||||
Non- Guarantor Subsidiaries [Member]
|
|||||||||||
Condensed Consolidating Statement of Operations | |||||||||||
Revenues | 43,842 | 15,692 | 78,964 | 29,155 | |||||||
Expenses: | |||||||||||
Cost of revenues (exclusive of items shown separately below) | 19,906 | 8,951 | 36,659 | 18,316 | |||||||
Selling, general and administrative | 13,047 | 6,203 | 26,678 | 9,849 | |||||||
Depreciation and amortization of fixed assets | 2,116 | 1,432 | 3,979 | 2,814 | |||||||
Amortization of intangible assets | 4,080 | 638 | 7,215 | 1,325 | |||||||
Acquisition related liabilities adjustment | (564) | 0 | (564) | 0 | |||||||
Total expenses | 38,585 | 17,224 | 73,967 | 32,304 | |||||||
Operating income | 5,257 | (1,532) | 4,997 | (3,149) | |||||||
Other income/(expense): | |||||||||||
Investment income/(loss) | (38) | 61 | (42) | 73 | |||||||
Realized gain on securities, net | 0 | 0 | 0 | 0 | |||||||
Interest expense | (71) | (37) | (91) | (66) | |||||||
Total other expense, net | (109) | 24 | (133) | 7 | |||||||
Income before income taxes | 5,148 | (1,508) | 4,864 | (3,142) | |||||||
Equity in net income of subsidiary | 0 | 0 | 0 | 0 | |||||||
Provision for income taxes | (1,776) | 443 | (2,401) | 879 | |||||||
Net income | 3,372 | (1,065) | 2,463 | (2,263) | |||||||
Eliminating Entries [Member]
|
|||||||||||
Condensed Consolidating Statement of Operations | |||||||||||
Revenues | (5,915) | (2,224) | (7,748) | (3,223) | |||||||
Expenses: | |||||||||||
Cost of revenues (exclusive of items shown separately below) | (2,841) | (1,205) | (3,821) | (1,653) | |||||||
Selling, general and administrative | (3,074) | (747) | (3,927) | (835) | |||||||
Depreciation and amortization of fixed assets | 0 | (293) | 0 | (735) | |||||||
Amortization of intangible assets | 0 | 0 | 0 | 0 | |||||||
Acquisition related liabilities adjustment | 0 | 0 | 0 | 0 | |||||||
Total expenses | (5,915) | (2,245) | (7,748) | (3,223) | |||||||
Operating income | 0 | 21 | 0 | 0 | |||||||
Other income/(expense): | |||||||||||
Investment income/(loss) | (1,429) | (40) | (1,429) | (40) | |||||||
Realized gain on securities, net | 0 | 0 | 0 | 0 | |||||||
Interest expense | 1,429 | 19 | 1,429 | 40 | |||||||
Total other expense, net | 0 | (21) | 0 | 0 | |||||||
Income before income taxes | 0 | 0 | 0 | 0 | |||||||
Equity in net income of subsidiary | (73,130) | (57,339) | (137,918) | (111,516) | |||||||
Provision for income taxes | 0 | 0 | 0 | 0 | |||||||
Net income | $ (73,130) | $ (57,339) | $ (137,918) | $ (111,516) | |||||||
|
Segment Reporting (Details Textuals)
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Segment Reporting (Textuals) [Abstract] | |||
Number of outside countries accounted for Company's consolidated revenue | 0 | 0 | |
Proportion of Company's consolidated revenue accounted by countries outside US | 1% or more | 1% or more | |
Number of outside countries accounted for Company's consolidated long-term asset | 0 | 0 | |
Proportion of Company's consolidated long term assets accounted by countries outside US | 1% or more | 1% or more |
Pension and Postretirement Benefits (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Pension And Postretirement Benefits (Tables) ]Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The components of net periodic benefit cost and the amounts recognized in other comprehensive income |
|
Goodwill and Intangible Assets (Details 1) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
|
|
Intangible assets and related accumulated amortization | ||
Cost | $ 461,649 | $ 403,216 |
Accumulated Amortization | (220,319) | (202,987) |
Net | 241,330 | 200,229 |
Technology-based [Member]
|
||
Intangible assets and related accumulated amortization | ||
Weighted Average Useful Life | 7 | 7 |
Cost | 234,755 | 210,212 |
Accumulated Amortization | (146,291) | (136,616) |
Net | 88,464 | 73,596 |
Marketing-related [Member]
|
||
Intangible assets and related accumulated amortization | ||
Weighted Average Useful Life | 5 | 5 |
Cost | 48,103 | 40,882 |
Accumulated Amortization | (30,900) | (28,870) |
Net | 17,203 | 12,012 |
Contract-based [Member]
|
||
Intangible assets and related accumulated amortization | ||
Weighted Average Useful Life | 6 | 6 |
Cost | 6,555 | 6,555 |
Accumulated Amortization | (6,385) | (6,287) |
Net | 170 | 268 |
Customer-related [Member]
|
||
Intangible assets and related accumulated amortization | ||
Weighted Average Useful Life | 13 | 13 |
Cost | 172,236 | 145,567 |
Accumulated Amortization | (36,743) | (31,214) |
Net | $ 135,493 | $ 114,353 |
Debt (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Debt (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term and long-term debt |
|
Stockholders' Deficit
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Stockholders' Deficit [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Deficit |
9. Stockholders’ Deficit:
On November 18, 1996, the Company authorized 335,000,000 shares of ISO Class A redeemable
common stock. Effective with the corporate reorganization on October 6, 2009, the ISO Class A
redeemable common stock and all Verisk Class B shares sold into the IPO were converted to Verisk
Class A common stock on a one-for-one basis. In addition, the Verisk Class A common stock
authorized was increased to 1,200,000,000 shares. The Verisk Class A common shares have rights to
any dividend declared by the board of directors, subject to any preferential or other rights of any
outstanding preferred stock, and voting rights to elect eight of the eleven members of the board of
directors. The eleventh seat on the board of directors is held by the CEO of the Company.
On November 18, 1996, the Company authorized 1,000,000,000 ISO Class B shares and issued
500,225,000 shares. On October 6, 2009, the Company completed a corporate reorganization whereby
the ISO Class B common stock and ISO Class B treasury stock were converted to Verisk Class B common
stock and Verisk Class B treasury stock on a one-for-one basis. All Verisk Class B shares sold
into the IPO were converted to Verisk Class A common stock on a one-for-one basis. In addition,
the Verisk Class B common stock authorized was reduced to 800,000,000 shares, sub-divided into
400,000,000 shares of Class B-1 and 400,000,000 shares of Class B-2. Each share of Class B-1
common stock converted automatically, without any action by the stockholder, into one share of
Verisk Class A common stock on April 6, 2011. Each share of Class B-2 common stock shall convert
automatically, without any action by the stockholder, into one share of Verisk Class A common stock
on October 6, 2011. The Class B shares have the same rights as Verisk Class A shares with respect
to dividends and economic ownership, but have voting rights to elect three of the eleven directors.
The Company did not repurchase any Class B shares during the six months ended June 30, 2011 and
2010.
On October 6, 2009, the Company authorized 80,000,000 shares of preferred stock, par value
$0.001 per share, in connection with the reorganization. The preferred shares have preferential
rights over the Verisk Class A and Class B common shares with respect to dividends and net
distribution upon liquidation. The Company did not issue any preferred shares from the
reorganization date through June 30, 2011.
Share Repurchase Program
On April 29, 2010, the Company’s board of directors authorized a share repurchase program of
the Company’s common stock (the “Repurchase Program”). Under the Repurchase Program, the Company
may repurchase up to $450,000 of stock in the open market or as otherwise determined by the
Company. On July 8, 2011, the Company’s board of directors authorized an additional $150,000 of
share repurchases under the Repurchase Program, thereby increasing the capacity to $600,000. The
Company has no obligation to repurchase stock under this program and intends to use this
authorization as a means of offsetting dilution from the issuance of shares under the KSOP, the
Verisk Analytics, Inc. 2009 Equity Incentive Plan (the “Incentive Plan”) and the Insurance Services
Office, Inc. 1996 Incentive Plan (the “Option Plan”). This authorization has no expiration date
and may be suspended or terminated at any time. Repurchased shares will be recorded as treasury
stock and will be available for future issuance as part of the Repurchase Program.
During the six months ended June 30, 2011, 6,499,212 shares of Verisk Class A common stock
were repurchased by the Company as part of this program at a weighted average price of $33.40 per
share. The Company utilized cash from operations and the proceeds from its senior notes to fund
these repurchases. As treasury stock purchases are recorded based on trade date, the Company has
included $5,292 in “Accounts payable and accrued liabilities” in the accompanying condensed
consolidated balance sheets for those purchases that have not settled as of June 30, 2011. The
Company had $20,441 available to repurchase shares under the Repurchase Program as of June 30,
2011.
Treasury Stock
As of June 30, 2011, the Company’s treasury stock consisted of 199,712,896 Class A common
stock and 178,893,668 Class B-2 common stock. Consistent with the Class B-1 and Class B-2 common
stock, the Company’s Class B-1 treasury stock converted to
Class A treasury stock on April 6, 2011
and the Class B-2 treasury stock will convert to Class A
treasury stock on October 6, 2011.
Earnings Per Share (“EPS”)
Basic earnings per common share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding during the period. The
computation of diluted EPS is similar to the computation of basic EPS except that the denominator
is increased to include the number of additional common shares that would have been outstanding,
using the treasury stock method, if the dilutive potential common shares, including stock options
and nonvested restricted stock, had been issued.
The following is a reconciliation of the numerators and denominators of the basic and diluted
EPS computations for the three-and six-month periods ended June 30, 2011 and 2010:
The potential shares of common stock that were excluded from diluted EPS were 1,402,980
and 2,004,390 for the six months ended June 30, 2011 and 2010, respectively, because the effect of
including these potential shares was anti-dilutive.
Accumulated Other Comprehensive Losses
The following is a summary of accumulated other comprehensive losses:
The before tax and after tax amounts of other comprehensive income for the six months
ended June 30, 2011 and 2010 are summarized below:
|
Equity Compensation Plans (Details 2) (USD $)
In Thousands, except Share data |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
|
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Number of options outstanding, beginning balance | 23,057,857 | |
Number of options, granted | 1,401,308 | |
Number of Options, Exercised | (1,830,942) | |
Number of Options, Cancelled or expired | (116,823) | |
Number of options outstanding, ending balance | 22,511,400 | 23,057,857 |
Stock options exercisable, end of period | 15,157,359 | 14,820,447 |
Stock options exercisable, beginning of period | 14,820,447 | |
Weighted average exercise price, beginning of period | $ 13.35 | |
Weighted Average Exercise Price ,Granted | $ 33.30 | |
Weighted Average Exercise Price, Exercised | $ 9.85 | |
Weighted Average Exercise Price, Cancelled or expired | $ 20.92 | |
Weighted average exercise price, end of period | $ 13.33 | $ 13.35 |
Weighted average exercise price, option exercisable, end of period | $ 10.43 | $ 9.22 |
Weighted average exercise price, option exercisable, beginning of period | $ 9.22 | |
Aggregate Intrinsic Value option outstanding, beginning balance | $ 478,014 | |
Aggregate Intrinsic Value, Exercised | 43,442 | |
Aggregate Intrinsic Value option outstanding, ending balance | 479,184 | 478,014 |
Aggregate intrinsic value of stock option exercisable, end of period | 366,593 | 368,466 |
Aggregate intrinsic value of stock option exercisable, beginning of period | $ 366,593 | $ 368,466 |
Segment Reporting (Details 1) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|||||||
Operating segment revenue by type of service | ||||||||||
Revenues | $ 327,280 | [1] | $ 281,677 | [1] | $ 640,149 | [1] | $ 557,831 | [1] | ||
Risk Assessment [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 140,530 | 134,289 | 281,073 | 268,867 | ||||||
Risk Assessment [Member] | Industry Standard Insurance Programs [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 92,389 | 87,427 | 185,246 | 175,471 | ||||||
Risk Assessment [Member] | Property Specific Rating And Underwriting Information [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 35,017 | 34,267 | 69,514 | 68,226 | ||||||
Risk Assessment [Member] | Statistical Agency And Data Services [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 7,633 | 7,190 | 15,375 | 14,369 | ||||||
Risk Assessment [Member] | Actuarial Services [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 5,491 | 5,405 | 10,938 | 10,801 | ||||||
Decision Analytics [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 186,750 | 147,388 | 359,076 | 288,964 | ||||||
Decision Analytics [Member] | Fraud Identification And Detection Solutions [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 93,068 | 79,195 | 179,654 | 157,990 | ||||||
Decision Analytics [Member] | Loss Prediction Solutions [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | 55,405 | 39,779 | 108,346 | 76,707 | ||||||
Decision Analytics [Member] | Loss Quantification Solutions [Member]
|
||||||||||
Operating segment revenue by type of service | ||||||||||
Revenues | $ 38,277 | $ 28,414 | $ 71,076 | $ 54,267 | ||||||
|
Basis of Presentation and Summary of Significant Accounting Policies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Basis of Presentation and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies |
2. Basis of Presentation and Summary of Significant Accounting Policies:
The accompanying unaudited condensed consolidated financial statements have been prepared on
the basis of accounting principles generally accepted in the U.S. (“U.S. GAAP”). The preparation
of financial statements in conformity with these accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting periods. Significant estimates
include acquisition purchase price allocations, the fair value of goodwill, the realization of
deferred tax assets, acquisition related liabilities, fair value of stock-based compensation,
liabilities for pension and postretirement benefits, and the estimate for the allowance for
doubtful accounts. Actual results may ultimately differ from those estimates.
The condensed consolidated financial statements as of June 30, 2011 and for the three- and
six-month periods ended June 30, 2011 and 2010, in the opinion of management, include all
adjustments, consisting of normal recurring accruals, to present fairly the Company’s financial
position, results of operations and cash flows. The operating results for the three- and six-month
periods ended June 30, 2011 are not necessarily indicative of the results to be expected for the
full year. The condensed consolidated financial statements and related notes for the three- and
six-month periods ended June 30, 2011 have been prepared on the same basis as and should be read in
conjunction with our annual report on Form 10-K for the year ended December 31, 2010. Certain
information and footnote disclosures normally included in financial statements prepared in
accordance with U.S. GAAP have been condensed or omitted pursuant to the rules of the Securities
and Exchange Commission (“SEC”). The Company believes the disclosures made are adequate to keep the
information presented from being misleading. Within this filing on Form 10-Q, the Company has
corrected a typographical error, which reduced the change in “Federal and foreign income taxes” by
$200 in the condensed consolidated statement of cash flows
(unaudited), but did not affect the
totals for the six months ended June 30, 2010.
Recent Accounting Pronouncements
In June 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards
Update (“ASU”) No. 2011-05, Presentation of Comprehensive Income (“ASU No. 2011-05”). Under ASU
No. 2011-05, an entity has the option to present the total of comprehensive income, the components
of net income, and the components of other comprehensive income either in a single continuous
statement of comprehensive income or in two separate but consecutive statements. In both choices,
an entity is required to present each component of net income along with total net income, each
component of other comprehensive income along with a total for other comprehensive income, and a
total amount for comprehensive income. ASU No. 2011-05 is effective for fiscal years, and interim
periods within those years, beginning after December 15, 2011. Early adoption is permitted. The
Company has elected not to early adopt. ASU No. 2011-05 is not expected to have a material impact
on the Company’s consolidated financial statements as this guidance does not result in a change in
the items that are required to be reported in other comprehensive income or when an item of other
comprehensive income must be reclassified to net income.
In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU No. 2011-04”). ASU No.
2011-04 clarifies certain FASB’s intent about the application of existing fair value measurement
and develops common requirements for measuring fair value and for disclosing information about fair
value measurements in accordance with U.S. GAAP and International Financial Reporting Standards
(“IFRS”). ASU No. 2011-04 is effective for fiscal years, and interim periods within those years,
beginning after December 15, 2011. Early adoption is not permitted. ASU No. 2011-04 is not
expected to have a material impact on the Company’s consolidated financial statements as this
guidance does not result in a change in the application of the requirements in ASC 820, Fair Value
Measurements.
|
Segment Reporting
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting |
12. Segment Reporting:
ASC 280-10, Disclosures About Segments of an Enterprise and Related Information (“ASC
280-10”), establishes standards for reporting information about operating segments. ASC 280-10
requires that a public business enterprise report financial and descriptive information about its
reportable operating segments. Operating segments are components of an enterprise for which
separate financial information is available that is evaluated regularly by the chief operating
decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The
Company’s CEO and Chairman of the Board is identified as the CODM as defined by ASC 280-10. To
align with the internal management of the Company’s business operations based on service offerings,
the Company is organized into the following two operating segments, which are also the Company’s
reportable segments:
Risk Assessment: The Company is the leading provider of statistical, actuarial and
underwriting data for the U.S. P&C insurance industry. The Company’s databases include cleansed
and standardized records describing premiums and losses in insurance transactions, casualty and
property risk attributes for commercial buildings and their occupants and fire suppression
capabilities of municipalities. The Company uses this data to create policy language and
proprietary risk classifications that are industry standards and to generate prospective loss
cost estimates used to price insurance policies.
Decision Analytics: The Company develops solutions that its customers use to analyze the three
key processes in managing risk: ‘prediction of loss’, ‘detection and prevention of fraud’ and
‘quantification of loss’. The Company’s combination of algorithms and analytic methods
incorporates its proprietary data to generate solutions in each of these three categories. In
most cases, the Company’s customers integrate the solutions into their models, formulas or
underwriting criteria in order to predict potential loss events, ranging from hurricanes and
earthquakes to unanticipated healthcare claims. The Company develops catastrophe and extreme
event models and offers solutions covering natural and man-made risks, including acts of
terrorism. The Company also develops solutions that allow customers to quantify costs after
loss events occur. Fraud solutions include data on claim histories, analysis of mortgage
applications to identify misinformation, analysis of claims to find emerging patterns of fraud,
and identification of suspicious claims in the insurance, mortgage and healthcare sectors.
The two aforementioned operating segments represent the segments for which separate discrete
financial information is available and upon which operating results are regularly evaluated by the
CODM in order to assess performance and allocate resources. The Company uses segment EBITDA as the
profitability measure for making decisions regarding ongoing operations. Segment EBITDA is net
income before investment (loss)/income, realized gain on securities, net, interest expense, income
taxes, and depreciation and amortization. Beginning 2011, the Company’s definition of Segment
EBITDA includes acquisition related liabilities adjustment for all periods presented. Segment EBITDA is the
measure of operating results used to assess corporate performance and optimal utilization of debt
and acquisitions. Segment operating expenses consist of direct and indirect costs principally
related to personnel, facilities, software license fees, consulting, travel, and third-party
information services. Indirect costs are generally allocated to the segments using fixed rates
established by management based upon estimated expense contribution levels and other assumptions
that management considers reasonable. The Company does not allocate investment income, realized
gain/(loss) on securities, net, interest expense, or income tax expense, since these items are
not considered in evaluating the segment’s overall operating performance. The CODM does not
evaluate the financial performance of each segment based on assets. On a geographic basis, no
individual country outside of the U.S. accounted for 1% or more of the Company’s consolidated
revenue for either the three- or six-month periods ended June 30, 2011 or 2010. No individual
country outside of the U.S. accounted for 1% or more of total consolidated long-term assets as of
June 30, 2011 or December 31, 2010.
The following tables provide the Company’s revenue and operating income performance by
reportable segment for the three- and six-month periods ended June 30, 2011 and 2010, as well as a
reconciliation to income before income taxes for all periods presented in the accompanying
condensed consolidated statements of operations:
Operating segment revenue by type of service is provided below:
|
Condensed Consolidated Financial Information for Guarantor Subsidiaries and Non-Guarantor Subsidiaries (Details) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
Jun. 30, 2010
|
Dec. 31, 2009
|
||||||
---|---|---|---|---|---|---|---|---|---|---|
Current assets: | ||||||||||
Cash and cash equivalents | $ 51,970 | $ 54,974 | $ 106,827 | $ 71,527 | ||||||
Available-for-sale securities | 5,351 | 5,653 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of $3,829 and $4,028 (including amounts from related parties of $727 and $515, respectively) | 145,632 | [1] | 126,564 | [1] | ||||||
Prepaid expenses | 26,015 | 17,791 | ||||||||
Deferred income taxes, net | 3,681 | [2] | 3,681 | |||||||
Federal and foreign income taxes receivable | 24,610 | 15,783 | ||||||||
State and local income taxes receivable | 9,063 | 8,923 | [2] | |||||||
Intercompany receivables | 0 | 0 | ||||||||
Other current assets | 29,155 | 7,066 | ||||||||
Total current assets | 295,477 | 240,435 | ||||||||
Noncurrent assets: | ||||||||||
Fixed assets, net | 107,645 | 93,409 | ||||||||
Intangible assets, net | 241,330 | 200,229 | ||||||||
Goodwill | 712,561 | 632,668 | ||||||||
Deferred income taxes, net | 20,977 | 21,879 | ||||||||
State income taxes receivable | 1,773 | 1,773 | ||||||||
Intercompany note receivable | 0 | 0 | ||||||||
Investment in subsidiaries | 0 | 0 | ||||||||
Other assets | 28,326 | 26,697 | ||||||||
Total assets | 1,408,089 | 1,217,090 | ||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued liabilities | 121,285 | 111,995 | ||||||||
Acquisition related liabilities | 0 | 3,500 | ||||||||
Short-term debt and current portion of long-term debt | 170,663 | 437,717 | ||||||||
Pension and postretirement benefits, current | 4,663 | 4,663 | ||||||||
Fees received in advance (including amounts from related parties of $1,626 and $1,231, respectively) | 214,989 | [1] | 163,007 | [1] | ||||||
Intercompany payables | 0 | 0 | ||||||||
Total current liabilities | 511,600 | 720,882 | ||||||||
Noncurrent liabilities: | ||||||||||
Long-term debt | 854,499 | 401,826 | ||||||||
Intercompany note payable | 0 | 0 | ||||||||
Pension and postretirement benefits | 106,981 | 118,611 | ||||||||
Deferred income taxes, net | 0 | 0 | ||||||||
Other liabilities | 80,232 | 90,213 | ||||||||
Total liabilities | 1,552,529 | 1,331,532 | ||||||||
Total stockholders' (deficit)/equity | (144,440) | (114,442) | (34,949) | |||||||
Total liabilities and stockholders' (deficit)/equity | 1,408,089 | 1,217,090 | ||||||||
Verisk Analytics, Inc.[Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 5,082 | 1 | 1 | 1 | ||||||
Available-for-sale securities | 0 | 0 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of $3,829 and $4,028 (including amounts from related parties of $727 and $515, respectively) | 0 | 0 | ||||||||
Prepaid expenses | 0 | 0 | ||||||||
Deferred income taxes, net | 0 | 0 | ||||||||
Federal and foreign income taxes receivable | 2,612 | 0 | ||||||||
State and local income taxes receivable | 218 | 0 | ||||||||
Intercompany receivables | 140,194 | 101,470 | ||||||||
Other current assets | 0 | 0 | ||||||||
Total current assets | 148,106 | 101,471 | ||||||||
Noncurrent assets: | ||||||||||
Fixed assets, net | 0 | 0 | ||||||||
Intangible assets, net | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Deferred income taxes, net | 0 | 0 | ||||||||
State income taxes receivable | 0 | 0 | ||||||||
Intercompany note receivable | 0 | 0 | ||||||||
Investment in subsidiaries | 465,023 | 326,387 | ||||||||
Other assets | 4,216 | 0 | ||||||||
Total assets | 617,345 | 427,858 | ||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued liabilities | 11,455 | 0 | ||||||||
Acquisition related liabilities | 0 | 0 | ||||||||
Short-term debt and current portion of long-term debt | 0 | 0 | ||||||||
Pension and postretirement benefits, current | 0 | 0 | ||||||||
Fees received in advance (including amounts from related parties of $1,626 and $1,231, respectively) | 0 | 0 | ||||||||
Intercompany payables | 134,962 | 542,300 | ||||||||
Total current liabilities | 146,417 | 542,300 | ||||||||
Noncurrent liabilities: | ||||||||||
Long-term debt | 448,981 | 0 | ||||||||
Intercompany note payable | 166,387 | 0 | ||||||||
Pension and postretirement benefits | 0 | 0 | ||||||||
Deferred income taxes, net | 0 | 0 | ||||||||
Other liabilities | 0 | 0 | ||||||||
Total liabilities | 761,785 | 542,300 | ||||||||
Total stockholders' (deficit)/equity | (144,440) | (114,442) | ||||||||
Total liabilities and stockholders' (deficit)/equity | 617,345 | 427,858 | ||||||||
Guarantor Subsidiaries [Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 18,404 | 31,576 | 87,422 | 51,005 | ||||||
Available-for-sale securities | 5,351 | 5,653 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of $3,829 and $4,028 (including amounts from related parties of $727 and $515, respectively) | 121,319 | 98,817 | ||||||||
Prepaid expenses | 23,705 | 15,566 | ||||||||
Deferred income taxes, net | 2,745 | 2,745 | ||||||||
Federal and foreign income taxes receivable | 21,898 | 13,590 | ||||||||
State and local income taxes receivable | 7,959 | 7,882 | ||||||||
Intercompany receivables | 289,405 | 668,906 | ||||||||
Other current assets | 14,333 | 6,720 | ||||||||
Total current assets | 505,119 | 851,455 | ||||||||
Noncurrent assets: | ||||||||||
Fixed assets, net | 90,985 | 78,928 | ||||||||
Intangible assets, net | 89,190 | 75,307 | ||||||||
Goodwill | 484,088 | 449,065 | ||||||||
Deferred income taxes, net | 62,202 | 64,421 | ||||||||
State income taxes receivable | 1,773 | 1,773 | ||||||||
Intercompany note receivable | 166,387 | 0 | ||||||||
Investment in subsidiaries | 105,395 | 20,912 | ||||||||
Other assets | 22,120 | 10,248 | ||||||||
Total assets | 1,527,259 | 1,552,109 | ||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued liabilities | 79,696 | 95,425 | ||||||||
Acquisition related liabilities | 0 | 0 | ||||||||
Short-term debt and current portion of long-term debt | 170,085 | 437,457 | ||||||||
Pension and postretirement benefits, current | 4,663 | 4,663 | ||||||||
Fees received in advance (including amounts from related parties of $1,626 and $1,231, respectively) | 192,829 | 137,521 | ||||||||
Intercompany payables | 234,866 | 165,681 | ||||||||
Total current liabilities | 682,139 | 840,747 | ||||||||
Noncurrent liabilities: | ||||||||||
Long-term debt | 405,287 | 401,788 | ||||||||
Intercompany note payable | 0 | 0 | ||||||||
Pension and postretirement benefits | 106,198 | 118,611 | ||||||||
Deferred income taxes, net | 0 | 0 | ||||||||
Other liabilities | 76,800 | 71,663 | ||||||||
Total liabilities | 1,270,424 | 1,432,809 | ||||||||
Total stockholders' (deficit)/equity | 256,835 | 119,300 | ||||||||
Total liabilities and stockholders' (deficit)/equity | 1,527,259 | 1,552,109 | ||||||||
Non- Guarantor Subsidiaries [Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 28,484 | 23,397 | 19,404 | 20,521 | ||||||
Available-for-sale securities | 0 | 0 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of $3,829 and $4,028 (including amounts from related parties of $727 and $515, respectively) | 24,313 | 27,747 | ||||||||
Prepaid expenses | 2,310 | 2,225 | ||||||||
Deferred income taxes, net | 936 | 936 | ||||||||
Federal and foreign income taxes receivable | 100 | 2,193 | ||||||||
State and local income taxes receivable | 886 | 1,041 | ||||||||
Intercompany receivables | 94,429 | 59,021 | ||||||||
Other current assets | 14,822 | 346 | ||||||||
Total current assets | 166,280 | 116,906 | ||||||||
Noncurrent assets: | ||||||||||
Fixed assets, net | 16,660 | 14,481 | ||||||||
Intangible assets, net | 152,140 | 124,922 | ||||||||
Goodwill | 228,473 | 183,603 | ||||||||
Deferred income taxes, net | 0 | 0 | ||||||||
State income taxes receivable | 0 | 0 | ||||||||
Intercompany note receivable | 0 | 0 | ||||||||
Investment in subsidiaries | 0 | 0 | ||||||||
Other assets | 1,990 | 16,449 | ||||||||
Total assets | 565,543 | 456,361 | ||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued liabilities | 30,134 | 16,570 | ||||||||
Acquisition related liabilities | 0 | 3,500 | ||||||||
Short-term debt and current portion of long-term debt | 578 | 260 | ||||||||
Pension and postretirement benefits, current | 0 | 0 | ||||||||
Fees received in advance (including amounts from related parties of $1,626 and $1,231, respectively) | 22,160 | 25,486 | ||||||||
Intercompany payables | 154,200 | 121,416 | ||||||||
Total current liabilities | 207,072 | 167,232 | ||||||||
Noncurrent liabilities: | ||||||||||
Long-term debt | 231 | 38 | ||||||||
Intercompany note payable | 0 | 0 | ||||||||
Pension and postretirement benefits | 0 | 0 | ||||||||
Deferred income taxes, net | 41,225 | 42,542 | ||||||||
Other liabilities | 3,432 | 18,550 | ||||||||
Total liabilities | 251,960 | 228,362 | ||||||||
Total stockholders' (deficit)/equity | 313,583 | 227,999 | ||||||||
Total liabilities and stockholders' (deficit)/equity | 565,543 | 456,361 | ||||||||
Eliminating Entries [Member]
|
||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | ||||||
Available-for-sale securities | 0 | 0 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of $3,829 and $4,028 (including amounts from related parties of $727 and $515, respectively) | 0 | 0 | ||||||||
Prepaid expenses | 0 | 0 | ||||||||
Deferred income taxes, net | 0 | 0 | ||||||||
Federal and foreign income taxes receivable | 0 | 0 | ||||||||
State and local income taxes receivable | 0 | 0 | ||||||||
Intercompany receivables | (524,028) | (829,397) | ||||||||
Other current assets | 0 | 0 | ||||||||
Total current assets | (524,028) | (829,397) | ||||||||
Noncurrent assets: | ||||||||||
Fixed assets, net | 0 | 0 | ||||||||
Intangible assets, net | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Deferred income taxes, net | (41,225) | (42,542) | ||||||||
State income taxes receivable | 0 | 0 | ||||||||
Intercompany note receivable | (166,387) | 0 | ||||||||
Investment in subsidiaries | (570,418) | (347,299) | ||||||||
Other assets | 0 | 0 | ||||||||
Total assets | (1,302,058) | (1,219,238) | ||||||||
Current liabilities: | ||||||||||
Accounts payable and accrued liabilities | 0 | 0 | ||||||||
Acquisition related liabilities | 0 | 0 | ||||||||
Short-term debt and current portion of long-term debt | 0 | 0 | ||||||||
Pension and postretirement benefits, current | 0 | 0 | ||||||||
Fees received in advance (including amounts from related parties of $1,626 and $1,231, respectively) | 0 | 0 | ||||||||
Intercompany payables | (524,028) | (829,397) | ||||||||
Total current liabilities | (524,028) | (829,397) | ||||||||
Noncurrent liabilities: | ||||||||||
Long-term debt | 0 | 0 | ||||||||
Intercompany note payable | (166,387) | 0 | ||||||||
Pension and postretirement benefits | 0 | 0 | ||||||||
Deferred income taxes, net | (41,225) | (42,542) | ||||||||
Other liabilities | 0 | 0 | ||||||||
Total liabilities | (731,640) | (871,939) | ||||||||
Total stockholders' (deficit)/equity | (570,418) | (347,299) | ||||||||
Total liabilities and stockholders' (deficit)/equity | $ (1,302,058) | $ (1,219,238) | ||||||||
|
Related Parties (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|
Related Parties (Textuals) [Abstract] | |||||
Percentage of ownership on outstanding common stock required to become related party | 5.00% | ||||
Accounts receivable, net | $ 727 | $ 727 | $ 515 | ||
Fees received in advance from related parties | 1,626 | 1,626 | 1,231 | ||
Revenues from related parties | $ 4,787 | $ 15,280 | $ 9,183 | $ 30,413 | |
Number of Class B stockholders which an employee that serves on the Company's board of directors | 5 | 6 | 5 | 6 | |
Verisk Class A [Member]
|
|||||
Related Party Transaction [Line Items] | |||||
Number of Class A stockholders | 3 | 5 | 3 | 5 | |
Verisk Class B [Member]
|
|||||
Related Party Transaction [Line Items] | |||||
Number of Class B stockholders remained unchanged | 4 | 4 |
Fair Value Measurements (Details 1) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Dec. 31, 2010
|
|||||||
Contingent Consideration Liability Abstract | |||||||||||
Beginning balance | $ 3,351 | $ 3,840 | $ 3,337 | $ 3,344 | |||||||
Acquisitions | 0 | [1] | 0 | [1] | 0 | [1] | 491 | [1] | |||
Acquisition related liabilities adjustment | (3,364) | 0 | (3,364) | 0 | |||||||
Accretion on acquisition related liabilities | 13 | 13 | 27 | 18 | |||||||
Ending balance | 0 | 3,853 | 0 | 3,853 | |||||||
Fair Value Measurements (Textuals) [Abstract] | |||||||||||
Estimated fair value of long-term debt | $ 1,006,810 | $ 1,006,810 | $ 584,361 | ||||||||
|
Acquisitions (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preliminary allocation of purchase price |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amounts assigned to intangible assets by type for current year acquisitions |
The amounts assigned to intangible assets by type for current year acquisitions are summarized in
the table below:
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Condensed Consolidated Statements of Operations [Abstract] | ||||
Revenues from related parties | $ 4,787 | $ 15,280 | $ 9,183 | $ 30,413 |
Related Parties
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Related Parties [Abstract] | |
Related Parties |
13. Related Parties:
The Company considers its Verisk Class A and Class B stockholders that own more than 5% of the
outstanding stock within the respective class to be related parties as defined within ASC 850,
Related Party Disclosures. At June 30, 2011, the related parties were five Class B stockholders
each owning more than 5% of the outstanding Class B shares compared to six Class B stockholders at
June 30, 2010 of which four remained unchanged.
At June 30, 2011 and 2010, there were three and
five Class A stockholders owning more than 5% of the outstanding Class A shares, respectively. The
Company had accounts receivable, net of $727 and $515 and fees received in advance of $1,626 and
$1,231 from related parties as of June 30, 2011 and December 31, 2010, respectively. In addition,
the Company had revenues from related parties for the three months ended June 30, 2011 and 2010 of
$4,787 and $15,280, and revenues of $9,183 and $30,413 for the six months ended June 30, 2011 and 2010,
respectively.
Although the customers that make up the Company’s related parties have changed from the prior periods,
the Company continues to generate revenues from these customers.
|
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