Free Cash Flow: Free cash flow represents net cash provided by operating activities determined in accordance with GAAP minus payments for capital expenditures. The company believes free cash flow is an important measure of the recurring cash generated by the company’s operations that may be available to repay debt obligations, repurchase its stock, invest in future growth through new business development activities, or make acquisitions.
Organic Constant Currency (OCC): The company’s operating results, such as, but not limited to, revenue and adjusted EBITDA, reported in U.S. dollars are affected by foreign currency exchange rate fluctuations because the underlying foreign currencies in which it transacts change in value over time compared with the U.S. dollar; accordingly, it presents certain constant currency financial information to assess how the company performed excluding the impact of foreign currency exchange rate fluctuations. The company calculates constant currency by translating comparable prior-year-period results at the currency exchange rates used in the current period. The company defines “organic” as operating results excluding the effect of recent acquisitions and dispositions (which include businesses held for sale) that have occurred over the past year. An acquisition is included as organic at the beginning of the calendar quarter that occurs subsequent to the one-year anniversary of the acquisition date. Once an acquisition is included in its current-period organic base, its comparable prior-year-period operating results are also included to calculate organic growth. A disposition (which includes a business held for sale) is excluded from organic at the beginning of the calendar quarter in which the disposition occurs (or when a business meets the held-for-sale criteria under U.S. GAAP). Once a disposition is excluded from its current-period organic base, its comparable prior-year-period operating results are also excluded to calculate organic growth. The organic presentation enables investors to assess the growth of the business without the impact of recent acquisitions for which there is no prior-year comparison. A disposition’s results are removed from all prior periods presented to allow for comparability. The company believes organic constant currency is a useful and meaningful measure to enhance investors’ understanding of the continuing operating performance of its business and to facilitate the comparison of period-to-period performance because it excludes the impact of foreign exchange rate movements, acquisitions, and dispositions.
See page 11 for a reconciliation of consolidated adjusted EBITDA. See pages 11 and 12 for a segment results summary and a reconciliation of adjusted EBITDA. See page 12 for a reconciliation of segment adjusted EBITDA margin. See page 13 for a reconciliation of adjusted EBITDA expenses and a reconciliation of diluted adjusted EPS. See page 14 for a reconciliation of net cash provided by operating activities to free cash flow.
Attached Financial Statements
Please refer to the full Form 10-K filing for the complete financial statements and related notes.
VERISK ANALYTICS, INC.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2019 and 2018
| 2019 | 2018 | ||||||
| (in millions, except for share and per share data) | |||||||
| ASSETS: | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 184.6 | $ | 139.5 | |||
| Accounts receivable, net | 441.6 | 356.4 | |||||
| Prepaid expenses | 60.9 | 63.9 | |||||
| Income taxes receivable | 25.9 | 34.0 | |||||
| Other current assets | 17.8 | 50.7 | |||||
| Current assets held for sale | 14.1 | — | |||||
| Total current assets | 744.9 | 644.5 | |||||
| Noncurrent assets: | |||||||
| Fixed assets, net | 548.1 | 555.9 | |||||
| Operating lease right-of-use assets, net | 218.6 | — | |||||
| Intangible assets, net | 1,398.9 | 1,227.8 | |||||
| Goodwill | 3,864.3 | 3,361.5 | |||||
| Deferred income tax assets | 9.8 | 11.1 | |||||
| Other noncurrent assets | 159.8 | 99.5 | |||||
| Noncurrent assets held for sale | 110.8 | — | |||||
| Total assets | $ | 7,055.2 | $ | 5,900.3 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 375.0 | $ | 250.9 | |||
| Acquisition-related liabilities | 111.2 | 12.6 | |||||
| Short-term debt and current portion of long-term debt | 499.4 | 672.8 | |||||
| Deferred revenues | 440.1 | 383.1 | |||||
| Operating lease liabilities | 40.6 | — | |||||
| Income taxes payable | 6.8 | 5.2 | |||||
| Current liabilities held for sale | 18.7 | — | |||||
| Total current liabilities | 1,491.8 | 1,324.6 | |||||
| Noncurrent liabilities: | |||||||
| Long-term debt | 2,651.6 | 2,050.5 | |||||
| Deferred income tax liabilities | 356.0 | 350.6 | |||||
| Operating lease liabilities | 208.1 | — | |||||
| Acquisition-related liabilities | 0.2 | 28.3 | |||||
| Other noncurrent liabilities | 48.6 | 75.7 | |||||
| Noncurrent liabilities held for sale | 38.1 | — | |||||
| Total liabilities | 4,794.4 | 3,829.7 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Common stock, $.001 par value; 2,000,000,000 shares authorized; 544,003,038 shares issued; 163,161,564 and 163,970,410 shares outstanding, respectively | 0.1 | 0.1 | |||||
| Additional paid-in capital | 2,369.1 | 2,283.0 | |||||
| Treasury stock, at cost, 380,841,474 and 380,032,628 shares, respectively | (3,849.9 | ) | (3,563.2 | ) | |||
| Retained earnings | 4,228.4 | 3,942.6 | |||||
| Accumulated other comprehensive loss | (486.9 | ) | (591.9 | ) | |||
| Total stockholders’ equity | 2,260.8 | 2,070.6 | |||||
| Total liabilities and stockholders’ equity | $ | 7,055.2 | $ | 5,900.3 | |||
VERISK ANALYTICS, INC.
