Delaware | 001-34480 | 26-2994223 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
545 Washington Boulevard, Jersey City, NJ | 07310 | |
(Address of principal executive offices) | (Zip Code) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit No. | Description | |
Press Release, dated February 19, 2019 |
VERISK ANALYTICS, INC. | |||||
Date: February 19, 2019 | /s/ Kenneth E. Thompson | ||||
Name: | Kenneth E. Thompson | ||||
Title: | Executive Vice President, General Counsel and Corporate Secretary |
• | Consolidated revenue grew 7.7% to $614 million; organic constant currency revenue growth, a non-GAAP measure, was 5.4%. Normalizing for the revenue associated with exceptional storm activity in the prior-year period, organic constant currency revenue would have grown 6.9%. |
• | Net income was $146 million; adjusted EBITDA, a non-GAAP measure, was $289 million. |
• | Net income declined 28.5%, reflecting an $89 million tax benefit in the fourth quarter of 2017 due to tax reform. Equalizing the fourth-quarter 2017 effective tax rate, adjusted net income would have increased 5.6%. Organic constant currency adjusted EBITDA growth was 4.2%. Normalizing for the revenue associated with exceptional storm activity, organic constant currency adjusted EBITDA would have grown 7.3%. |
• | Diluted GAAP earnings per share (GAAP EPS) were $0.87; diluted adjusted earnings per share (adjusted EPS), a non-GAAP measure, were $1.04. |
• | Net cash provided by operating activities was $934 million for 2018; free cash flow, a non-GAAP measure, was $703 million for 2018. |
• | The Board of Directors declared a cash dividend of 25 cents per share, the first in the company’s history. |
• | The company repurchased $156 million of its shares for the quarter ended December 31, 2018. |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Revenues | $ | 613.9 | $ | 570.3 | 7.7 | % | $ | 2,395.1 | $ | 2,145.2 | 11.6 | % | |||||||||
Adjusted EBITDA | $ | 289.1 | $ | 272.5 | 6.1 | % | $ | 1,130.2 | $ | 1,036.0 | 9.1 | % | |||||||||
Net income | $ | 146.2 | $ | 204.6 | (28.5 | )% | $ | 598.7 | $ | 555.1 | 7.9 | % | |||||||||
Adjusted net income | $ | 174.0 | $ | 223.4 | (22.1 | )% | $ | 691.6 | $ | 623.0 | 11.0 | % | |||||||||
Diluted GAAP EPS | $ | 0.87 | $ | 1.22 | (28.7 | )% | $ | 3.56 | $ | 3.29 | 8.2 | % | |||||||||
Diluted adjusted EPS | $ | 1.04 | $ | 1.33 | (21.8 | )% | $ | 4.11 | $ | 3.69 | 11.4 | % |
Revenue Growth | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, 2018 | |||||||||||||||
2018 | 2017 | Reported | Organic | Organic Constant Currency | ||||||||||||
Underwriting & rating | $ | 289.9 | $ | 269.8 | 7.4 | % | 6.9 | % | 7.0 | % | ||||||
Claims | 146.3 | 135.5 | 8.0 | % | 5.0 | % | 5.1 | % | ||||||||
Insurance | 436.2 | 405.3 | 7.6 | % | 6.2 | % | 6.4 | % | ||||||||
Energy and Specialized Markets | 130.2 | 116.6 | 11.7 | % | 4.1 | % | 5.1 | % | ||||||||
Financial Services | 47.5 | 48.4 | (1.8 | )% | (2.8 | )% | (2.2 | )% | ||||||||
Revenues | $ | 613.9 | $ | 570.3 | 7.7 | % | 5.0 | % | 5.4 | % |
Revenue Growth | ||||||||||||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, 2018 | |||||||||||||||
2018 | 2017 | Reported | Organic | Organic Constant Currency | ||||||||||||
Underwriting & rating | $ | 1,144.5 | $ | 1,046.9 | 9.3 | % | 6.6 | % | 6.6 | % | ||||||
Claims | 561.4 | 503.7 | 11.5 | % | 8.5 | % | 8.4 | % | ||||||||
Insurance | 1,705.9 | 1,550.6 | 10.0 | % | 7.2 | % | 7.2 | % | ||||||||
Energy and Specialized Markets | 513.3 | 444.6 | 15.4 | % | 6.9 | % | 4.9 | % | ||||||||
Financial Services | 175.9 | 150.0 | 17.3 | % | (2.0 | )% | (1.8 | )% | ||||||||
Revenues | $ | 2,395.1 | $ | 2,145.2 | 11.6 | % | 6.5 | % | 6.1 | % |
• | Underwriting & rating revenue increased 7.4% in the quarter and 7.0% on an organic constant currency basis, resulting primarily from increases within its underwriting and catastrophe modeling solutions revenue. |
• | Claims revenue grew 8.0% in the quarter and 5.1% on an organic constant currency basis. Growth was driven by its claims analytics and repair cost estimating solutions revenue. Excluding the impact of approximately $8 million in storm-related revenue in the fourth quarter of 2017, claims revenue on an organic constant currency basis would have grown 11.7% in the quarter. |
Adjusted EBITDA Growth | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
December 31, | December 31, 2018 | |||||||||||||||
2018 | 2017 | Reported | Organic | Organic Constant Currency | ||||||||||||
Insurance | $ | 231.0 | $ | 217.0 | 6.5 | % | 5.7 | % | 5.8 | % | ||||||
Energy and Specialized Markets | 40.1 | 34.5 | 16.1 | % | 9.2 | % | 4.6 | % | ||||||||
Financial Services | 18.0 | 21.0 | (14.4 | )% | (13.8 | )% | (12.8 | )% | ||||||||
Adjusted EBITDA | $ | 289.1 | $ | 272.5 | 6.1 | % | 4.7 | % | 4.2 | % |
Adjusted EBITDA Growth | ||||||||||||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, 2018 | |||||||||||||||
2018 | 2017 | Reported | Organic | Organic Constant Currency | ||||||||||||
Insurance | $ | 914.2 | $ | 844.0 | 8.3 | % | 7.0 | % | 7.2 | % | ||||||
Energy and Specialized Markets | 155.4 | 133.6 | 16.4 | % | 8.6 | % | 1.9 | % | ||||||||
Financial Services | 60.6 | 58.4 | 3.6 | % | (12.6 | )% | (12.0 | )% | ||||||||
Adjusted EBITDA | $ | 1,130.2 | $ | 1,036.0 | 9.1 | % | 6.1 | % | 5.4 | % |
Three Months Ended | ||||||||||||||||
December 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||
Reported | Organic | Organic Constant Currency | ||||||||||||||
Insurance | 53.0 | % | 53.5% | 53.4 | % | 53.6 | % | 53.5 | % | 53.7 | % | |||||
Energy and Specialized Markets | 30.8 | % | 29.6% | 31.3 | % | 29.8 | % | 31.3 | % | 31.4 | % | |||||
Financial Services | 37.9 | % | 43.5% | 38.5 | % | 43.5 | % | 39.0 | % | 43.7 | % | |||||
Adjusted EBITDA margins | 47.1 | % | 47.8% | 47.7 | % | 47.9 | % | 47.8 | % | 48.4 | % |
Twelve Months Ended | |||||||||||||||
December 31, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||
Reported | Organic | Organic Constant Currency | |||||||||||||
Insurance | 53.6% | 54.4% | 54.8 | % | 54.9 | % | 54.8 | % | 54.8 | % | |||||
Energy and Specialized Markets | 30.3% | 30.0% | 30.5 | % | 30.0 | % | 30.4 | % | 31.3 | % | |||||
Financial Services | 34.4% | 39.0% | 35.2 | % | 39.4 | % | 35.2 | % | 39.3 | % | |||||
Adjusted EBITDA margins | 47.2% | 48.3% | 48.5 | % | 48.7 | % | 48.5 | % | 48.8 | % |
• | EBITDA and adjusted EBITDA do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments. |
• | EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs. |
• | Although depreciation and amortization are noncash charges, the assets being depreciated and amortized often will have to be replaced in the future; EBITDA and adjusted EBITDA do not reflect any cash requirements for such replacements. |
• | Other companies in our industry may calculate EBITDA and adjusted EBITDA differently than we do, limiting the usefulness of their calculations as comparative measures. |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Cost of revenues | $ | 224.0 | $ | 208.7 | 7.3 | % | $ | 886.2 | $ | 783.8 | 13.1 | % | |||||||||
Selling, general and administrative | 97.7 | 87.2 | 12.1 | % | 378.7 | 322.8 | 17.3 | % | |||||||||||||
Investment income and others, net | 4.0 | (1.3 | ) | (422.6 | )% | (15.3 | ) | (9.2 | ) | 66.0 | % | ||||||||||
Acquisition-related costs (earn-out) | (0.9 | ) | 0.2 | N/A | (5.1 | ) | 0.2 | N/A | |||||||||||||
Gain and interest income on subordinated promissory note receivable | — | 3.0 | (100.0 | )% | 20.4 | 11.6 | 75.6 | % | |||||||||||||
Adjusted EBITDA expenses | $ | 324.8 | $ | 297.8 | 9.1 | % | $ | 1,264.9 | $ | 1,109.2 | 14.0 | % |
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 | ||||||||||||||||||||||||||||||
Insurance | Energy and Specialized Markets | Financial Services | Total | Insurance | Energy and Specialized Markets | Financial Services | Total | ||||||||||||||||||||||||
Organic revenues | $ | 430.4 | $ | 121.3 | $ | 47.1 | $ | 598.8 | $ | 405.1 | $ | 116.6 | $ | 48.4 | $ | 570.1 | |||||||||||||||
Revenues from acquisitions | 5.8 | 8.9 | 0.4 | 15.1 | 0.2 | — | — | 0.2 | |||||||||||||||||||||||
Revenues | $ | 436.2 | $ | 130.2 | $ | 47.5 | $ | 613.9 | $ | 405.3 | $ | 116.6 | $ | 48.4 | $ | 570.3 | |||||||||||||||
Organic adjusted EBITDA | $ | 229.7 | $ | 38.0 | $ | 18.1 | $ | 285.8 | $ | 217.2 | $ | 34.8 | $ | 21.0 | $ | 273.0 | |||||||||||||||
Adjusted EBITDA from acquisitions | 1.3 | 2.1 | (0.1 | ) | 3.3 | (0.2 | ) | (0.3 | ) | — | (0.5 | ) | |||||||||||||||||||
Adjusted EBITDA | 231.0 | 40.1 | 18.0 | 289.1 | 217.0 | 34.5 | 21.0 | 272.5 | |||||||||||||||||||||||
Acquisition-related costs (earn-out) | 0.8 | (1.7 | ) | — | (0.9 | ) | 0.2 | — | — | 0.2 | |||||||||||||||||||||
Gain and interest income on subordinated promissory note receivable | — | — | — | — | 3.0 | — | — | 3.0 | |||||||||||||||||||||||
Depreciation and amortization of fixed assets | (29.4 | ) | (10.4 | ) | (3.9 | ) | (43.7 | ) | (23.2 | ) | (10.3 | ) | (2.7 | ) | (36.2 | ) | |||||||||||||||
Amortization of intangible assets | (6.0 | ) | (20.5 | ) | (5.8 | ) | (32.3 | ) | (4.3 | ) | (18.2 | ) | (5.6 | ) | (28.1 | ) | |||||||||||||||
Investment income and others, net | 3.0 | 0.8 | 0.2 | 4.0 | (2.8 | ) | 1.5 | — | (1.3 | ) | |||||||||||||||||||||
Operating income | $ | 199.4 | $ | 8.3 | $ | 8.5 | $ | 216.2 | $ | 189.9 | $ | 7.5 | $ | 12.7 | $ | 210.1 |
Twelve Months Ended December 31, 2018 | Twelve Months Ended December 31, 2017 | ||||||||||||||||||||||||||||||
Insurance | Energy and Specialized Markets | Financial Services | Total | Insurance | Energy and Specialized Markets | Financial Services | Total | ||||||||||||||||||||||||
Organic revenues | $ | 1,658.5 | $ | 474.6 | $ | 141.5 | $ | 2,274.6 | $ | 1,547.1 | $ | 444.1 | $ | 144.4 | $ | 2,135.6 | |||||||||||||||
Revenues from acquisitions | 47.4 | 38.7 | 34.4 | 120.5 | 3.5 | 0.5 | 5.6 | 9.6 | |||||||||||||||||||||||
Revenues | $ | 1,705.9 | $ | 513.3 | $ | 175.9 | $ | 2,395.1 | $ | 1,550.6 | $ | 444.6 | $ | 150.0 | $ | 2,145.2 | |||||||||||||||
Organic adjusted EBITDA | $ | 908.1 | $ | 144.7 | $ | 49.8 | $ | 1,102.6 | $ | 848.9 | $ | 133.3 | $ | 57.0 | $ | 1,039.2 | |||||||||||||||
Adjusted EBITDA from acquisitions | 6.1 | 10.7 | 10.8 | 27.6 | (4.9 | ) | 0.3 | 1.4 | (3.2 | ) | |||||||||||||||||||||
Adjusted EBITDA | 914.2 | 155.4 | 60.6 | 1,130.2 | 844.0 | 133.6 | 58.4 | 1,036.0 | |||||||||||||||||||||||
Acquisition-related costs (earn-out) | 0.8 | (2.4 | ) | (3.5 | ) | (5.1 | ) | 0.2 | — | — | 0.2 | ||||||||||||||||||||
Gain and interest income on subordinated promissory note receivable | 17.2 | 1.4 | 1.8 | 20.4 | 11.6 | — | — | 11.6 | |||||||||||||||||||||||
Depreciation and amortization of fixed assets | (107.0 | ) | (42.7 | ) | (15.6 | ) | (165.3 | ) | (91.2 | ) | (36.4 | ) | (8.0 | ) | (135.6 | ) | |||||||||||||||
Amortization of intangible assets | (22.8 | ) | (84.6 | ) | (23.4 | ) | (130.8 | ) | (13.7 | ) | (70.3 | ) | (17.8 | ) | (101.8 | ) | |||||||||||||||
Investment income and others, net | (13.2 | ) | (0.4 | ) | (1.7 | ) | (15.3 | ) | (11.7 | ) | 2.8 | (0.3 | ) | (9.2 | ) | ||||||||||||||||
Operating income | $ | 789.2 | $ | 26.7 | $ | 18.2 | $ | 834.1 | $ | 739.2 | $ | 29.7 | $ | 32.3 | $ | 801.2 |
Three Months Ended December 31, 2018 | Three Months Ended December 31, 2017 | ||||||||||||||||||||||||||||||
Insurance | Energy and Specialized Markets | Financial Services | Total | Insurance | Energy and Specialized Markets | Financial Services | Total | ||||||||||||||||||||||||
Organic constant currency adjusted EBITDA margin | 53.5 | % | 31.3 | % | 39.0 | % | 47.8 | % | 53.7 | % | 31.4 | % | 43.7 | % | 48.4 | % | |||||||||||||||
Foreign currency impact | (0.1 | )% | — | % | (0.5 | )% | (0.1 | )% | (0.1 | )% | (1.6 | )% | (0.2 | )% | (0.5 | )% | |||||||||||||||
Organic adjusted EBITDA margin | 53.4 | % | 31.3 | % | 38.5 | % | 47.7 | % | 53.6 | % | 29.8 | % | 43.5 | % | 47.9 | % | |||||||||||||||
Adjusted EBITDA from acquisitions | (0.4 | )% | (0.5 | )% | (0.6 | )% | (0.6 | )% | (0.1 | )% | (0.2 | )% | — | % | (0.1 | )% | |||||||||||||||
Adjusted EBITDA | 53.0 | % | 30.8 | % | 37.9 | % | 47.1 | % | 53.5 | % | 29.6 | % | 43.5 | % | 47.8 | % | |||||||||||||||
Acquisition-related costs (earn-out) | 0.2 | % | (1.3 | )% | — | % | (0.1 | )% | — | % | — | % | — | % | — | % | |||||||||||||||
Gain and interest income on subordinated promissory note receivable | — | % | — | % | — | % | — | % | 0.7 | % | — | % | — | % | 0.5 | % | |||||||||||||||
Depreciation and amortization of fixed assets | (6.8 | )% | (8.0 | )% | (8.1 | )% | (7.1 | )% | (5.7 | )% | (8.8 | )% | (5.6 | )% | (6.4 | )% | |||||||||||||||
Amortization of intangible assets | (1.4 | )% | (15.7 | )% | (12.3 | )% | (5.3 | )% | (1.0 | )% | (15.6 | )% | (11.7 | )% | (4.9 | )% | |||||||||||||||
Investment income and others, net | 0.7 | % | 0.6 | % | 0.3 | % | 0.6 | % | (0.7 | )% | 1.3 | % | — | % | (0.2 | )% | |||||||||||||||
Operating income margin | 45.7 | % | 6.4 | % | 17.8 | % | 35.2 | % | 46.8 | % | 6.5 | % | 26.2 | % | 36.8 | % |
Twelve Months Ended December 31, 2018 | Twelve Months Ended December 31, 2017 | ||||||||||||||||||||||||||||||
Insurance | Energy and Specialized Markets | Financial Services | Total | Insurance | Energy and Specialized Markets | Financial Services | Total | ||||||||||||||||||||||||
Organic constant currency adjusted EBITDA margin | 54.8 | % | 30.4 | % | 35.2 | % | 48.5 | % | 54.8 | % | 31.3 | % | 39.3 | % | 48.8 | % | |||||||||||||||
Foreign currency impact | — | % | 0.1 | % | — | % | — | % | 0.1 | % | (1.3 | )% | 0.1 | % | (0.1 | )% | |||||||||||||||
Organic adjusted EBITDA margin | 54.8 | % | 30.5 | % | 35.2 | % | 48.5 | % | 54.9 | % | 30.0 | % | 39.4 | % | 48.7 | % | |||||||||||||||
Adjusted EBITDA from acquisitions | (1.2 | )% | (0.2 | )% | (0.8 | )% | (1.3 | )% | (0.5 | )% | — | % | (0.4 | )% | (0.4 | )% | |||||||||||||||
Adjusted EBITDA | 53.6 | % | 30.3 | % | 34.4 | % | 47.2 | % | 54.4 | % | 30.0 | % | 39.0 | % | 48.3 | % | |||||||||||||||
Acquisition-related costs (earn-out) | 0.1 | % | (0.5 | )% | (1.9 | )% | (0.2 | )% | — | % | — | % | — | % | — | % | |||||||||||||||
Gain and interest income on subordinated promissory note receivable | 1.0 | % | 0.3 | % | 1.0 | % | 0.8 | % | 0.7 | % | — | % | — | % | 0.5 | % | |||||||||||||||
Depreciation and amortization of fixed assets | (6.3 | )% | (8.3 | )% | (8.9 | )% | (6.9 | )% | (5.8 | )% | (8.1 | )% | (5.3 | )% | (6.3 | )% | |||||||||||||||
Amortization of intangible assets | (1.3 | )% | (16.5 | )% | (13.3 | )% | (5.5 | )% | (0.9 | )% | (15.8 | )% | (11.9 | )% | (4.8 | )% | |||||||||||||||
Investment income and others, net | (0.8 | )% | (0.1 | )% | (1.0 | )% | (0.6 | )% | (0.7 | )% | 0.6 | % | (0.3 | )% | (0.4 | )% | |||||||||||||||
Operating income margin | 46.3 | % | 5.2 | % | 10.3 | % | 34.8 | % | 47.7 | % | 6.7 | % | 21.5 | % | 37.3 | % |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2018 | 2017 | Change | 2018 | 2017 | Change | ||||||||||||||||
Net income | $ | 146.2 | $ | 204.6 | (28.5 | )% | $ | 598.7 | $ | 555.1 | 7.9 | % | |||||||||
plus: Amortization of intangibles | 32.3 | 28.1 | 130.8 | 101.8 | |||||||||||||||||
less: Income tax effect on amortization of intangibles | (6.7 | ) | (7.3 | ) | (27.5 | ) | (26.5 | ) | |||||||||||||
plus: Acquisition-related costs and interest expense (earn-out) | 2.2 | (0.2 | ) | 6.4 | (0.2 | ) | |||||||||||||||
less: Income tax effect on acquisition-related costs and interest expense (earn-out) | — | 0.1 | (1.2 | ) | 0.1 | ||||||||||||||||
plus: Interest income and gain on subordinated promissory note receivable | — | (3.0 | ) | (20.4 | ) | (11.6 | ) | ||||||||||||||
less: Income tax effect on interest income and gain on subordinated promissory note receivable | — | 1.1 | 4.8 | 4.3 | |||||||||||||||||
Adjusted net income | $ | 174.0 | $ | 223.4 | (22.1 | )% | $ | 691.6 | $ | 623.0 | 11.0 | % | |||||||||
Basic adjusted EPS | $ | 1.06 | $ | 1.36 | (22.1 | )% | $ | 4.20 | $ | 3.77 | 11.4 | % | |||||||||
Diluted adjusted EPS | $ | 1.04 | $ | 1.33 | (21.8 | )% | $ | 4.11 | $ | 3.69 | 11.4 | % | |||||||||
Weighted average shares outstanding (in millions) | |||||||||||||||||||||
Basic | 164.3 | 164.7 | 164.8 | 165.2 | |||||||||||||||||
Diluted | 167.3 | 168.3 | 168.3 | 168.7 |
Twelve Months Ended | ||||||||||||
December 31, | ||||||||||||
2018 | 2017 | Change | ||||||||||
Net cash provided by operating activities | $ | 934.4 | $ | 743.5 | 25.7 | % | ||||||
Capital expenditures | (231.0 | ) | (183.5 | ) | 25.9 | % | ||||||
Free cash flow from continuing operations | $ | 703.4 | $ | 560.0 | 25.6 | % |
2018 | 2017 | ||||||
(in millions, except for share and per share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 139.5 | $ | 142.3 | |||
Accounts receivable, net | 356.4 | 345.5 | |||||
Prepaid expenses | 63.9 | 38.1 | |||||
Income taxes receivable | 34.0 | 28.8 | |||||
Other current assets | 50.7 | 42.9 | |||||
Total current assets | 644.5 | 597.6 | |||||
Noncurrent assets: | |||||||
Fixed assets, net | 555.9 | 478.3 | |||||
Intangible assets, net | 1,227.8 | 1,345.3 | |||||
Goodwill | 3,361.5 | 3,368.7 | |||||
Deferred income tax assets | 11.1 | 15.9 | |||||
Other assets | 99.5 | 214.5 | |||||
Total assets | $ | 5,900.3 | $ | 6,020.3 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued liabilities | $ | 263.5 | $ | 225.4 | |||
Short-term debt and current portion of long-term debt | 672.8 | 724.4 | |||||
Deferred revenues | 383.1 | 384.7 | |||||
Income taxes payable | 5.2 | 3.1 | |||||
Total current liabilities | 1,324.6 | 1,337.6 | |||||
Noncurrent liabilities: | |||||||
Long-term debt | 2,050.5 | 2,284.4 | |||||
Deferred income tax liabilities | 350.6 | 337.8 | |||||
Other liabilities | 104.0 | 135.1 | |||||
Total liabilities | 3,829.7 | 4,094.9 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Verisk common stock, $.001 par value; 2,000,000,000 shares authorized; 544,003,038 shares issued and 163,970,410 and 164,878,930 shares outstanding, respectively | 0.1 | 0.1 | |||||
Additional paid-in capital | 2,283.0 | 2,180.1 | |||||
Treasury stock, at cost, 380,032,628 and 379,124,108 shares, respectively | (3,563.2 | ) | (3,150.5 | ) | |||
Retained earnings | 3,942.6 | 3,308.0 | |||||
Accumulated other comprehensive losses | (591.9 | ) | (412.3 | ) | |||
Total stockholders’ equity | 2,070.6 | 1,925.4 | |||||
Total liabilities and stockholders’ equity | $ | 5,900.3 | $ | 6,020.3 |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions, except for share and per share data) | |||||||||||||||
Revenues | $ | 613.9 | $ | 570.3 | $ | 2,395.1 | $ | 2,145.2 | |||||||
Operating expenses: | |||||||||||||||
Cost of revenues (exclusive of items shown separately below) | 224.0 | 208.7 | 886.2 | 783.8 | |||||||||||
Selling, general and administrative | 97.7 | 87.2 | 378.7 | 322.8 | |||||||||||
Depreciation and amortization of fixed assets | 43.7 | 36.2 | 165.3 | 135.6 | |||||||||||
Amortization of intangible assets | 32.3 | 28.1 | 130.8 | 101.8 | |||||||||||
Total operating expenses | 397.7 | 360.2 | 1,561.0 | 1,344.0 | |||||||||||
Operating income | 216.2 | 210.1 | 834.1 | 801.2 | |||||||||||
Other income (expense): | |||||||||||||||
Investment income and others, net | (4.0 | ) | 1.3 | 15.3 | 9.2 | ||||||||||
Interest expense | (32.7 | ) | (32.1 | ) | (129.7 | ) | (119.4 | ) | |||||||
Total other expense, net | (36.7 | ) | (30.8 | ) | (114.4 | ) | (110.2 | ) | |||||||
Income before income taxes | 179.5 | 179.3 | 719.7 | 691.0 | |||||||||||
Provision (benefit) for income taxes | (33.3 | ) | 25.3 | (121.0 | ) | (135.9 | ) | ||||||||
Net income | $ | 146.2 | $ | 204.6 | $ | 598.7 | $ | 555.1 | |||||||
Basic net income per share | $ | 0.89 | $ | 1.24 | $ | 3.63 | $ | 3.36 | |||||||
Diluted net income per share | $ | 0.87 | $ | 1.22 | $ | 3.56 | $ | 3.29 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 164,344,502 | 164,730,093 | 164,808,110 | 165,168,224 | |||||||||||
Diluted | 167,346,841 | 168,333,256 | 168,297,836 | 168,688,868 |
2018 | 2017 | ||||||
(in millions) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 598.7 | $ | 555.1 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization of fixed assets | 165.3 | 135.6 | |||||
Amortization of intangible assets | 130.8 | 101.8 | |||||
Amortization of debt issuance costs and original issue discount | 4.2 | 4.2 | |||||
Provision for doubtful accounts | 5.6 | 2.0 | |||||
Realized gain on settlement of subordinated promissory note | (12.3 | ) | — | ||||
Stock based compensation | 38.5 | 31.8 | |||||
Realized loss on securities, net | 0.1 | — | |||||
Deferred income taxes | 18.3 | (73.6 | ) | ||||
Loss on disposal of fixed assets | 0.3 | 0.1 | |||||
Changes in assets and liabilities, net of effects from acquisitions: | |||||||
Accounts receivable | (17.4 | ) | (45.5 | ) | |||
Prepaid expenses and other assets | (28.2 | ) | (30.6 | ) | |||
Income taxes | (2.9 | ) | 22.7 | ||||
Accounts payable and accrued liabilities | 67.8 | 28.5 | |||||
Deferred revenues | 0.8 | 29.2 | |||||
Other liabilities | (35.2 | ) | (17.8 | ) | |||
Net cash provided by operating activities | 934.4 | 743.5 | |||||
Cash flows from investing activities: | |||||||
Acquisitions, net of cash acquired of $3.3 million and $29.9 million, respectively | (138.2 | ) | (873.3 | ) | |||
Escrow funding associated with acquisitions | (14.9 | ) | (41.6 | ) | |||
Proceeds from subordinated promissory note | 121.4 | — | |||||
Capital expenditures | (231.0 | ) | (183.5 | ) | |||
Purchases of available-for-sale securities | (0.1 | ) | (0.3 | ) | |||
Proceeds from sales and maturities of available-for-sale securities | 0.5 | 0.4 | |||||
Other investing activities, net | (3.1 | ) | (7.2 | ) | |||
Net cash used in investing activities | (265.4 | ) | (1,105.5 | ) | |||
2018 | 2017 | ||||||
(in millions) | |||||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of short-term debt with original maturities greater than three months | — | 455.0 | |||||
(Repayments) proceeds from short-term debt, net | (300.0 | ) | 160.0 | ||||
Payment of debt issuance costs | — | (0.5 | ) | ||||
Repurchases of common stock | (438.6 | ) | (276.3 | ) | |||
Net share settlement of taxes from restricted stock awards | (3.7 | ) | (2.9 | ) | |||
Proceeds from stock options exercised | 87.3 | 35.0 | |||||
Other financing activities, net | (14.8 | ) | (7.8 | ) | |||
Net cash (used in) provided by financing activities | (669.8 | ) | 362.5 | ||||
Effect of exchange rate changes | (2.0 | ) | 6.7 | ||||
(Decrease) increase in cash and cash equivalents | (2.8 | ) | 7.2 | ||||
Cash and cash equivalents, beginning of period | 142.3 | 135.1 | |||||
Cash and cash equivalents, end of period | $ | 139.5 | $ | 142.3 | |||
Supplemental disclosures: | |||||||
Income taxes paid | $ | 103.2 | $ | 186.3 | |||
Interest paid | $ | 125.2 | $ | 113.9 | |||
Noncash investing and financing activities: | |||||||
Deferred tax liability established on the date of acquisitions | $ | 5.6 | $ | 74.4 | |||
Tenant improvement allowance | $ | 0.3 | $ | — | |||
Capital lease obligations | $ | 21.3 | $ | 10.9 | |||
Capital expenditures included in accounts payable and accrued liabilities | $ | 0.3 | $ | 2.9 |