Verisk Analytics, Inc. Reports Third-Quarter 2009 Financial Results

JERSEY CITY, N.J., Nov. 16, 2009 (GLOBE NEWSWIRE) -- Verisk Analytics, Inc. (Nasdaq:VRSK), a leading source of information about risk, today announced results for the nine-month period ended September 30, 2009:

Financial Highlights
See Tables 3A, 4, and 5 for a reconciliation of non-GAAP financial measures to the relevant GAAP measures.

  • Total revenues increased 15.1% for the first nine months of 2009, including a 30.2% increase in Decision Analytics revenues and a 3.8% increase in Risk Assessment revenues. Excluding the impact of recent acquisitions, revenues grew 21.5% in Decision Analytics, 3.8% in Risk Assessment and 11.4% for the total company.
  • Net income for the nine months ended September 30, 2009 was $133.1 million and adjusted net income was $161.2 million. Net income for the third quarter of 2009 was $42.2 million and adjusted net income was $53.8 million.
  • Adjusted EBITDA increased 10.7% to $326.9 million for the first nine months of 2009 and 11.4% to $109.4 million for the third quarter of 2009. Adjusted net income increased 8.8% to $161.2 million for the first nine months of 2009 and 9.0% to $53.9 million for the third quarter of 2009.
  • For the first nine months of 2009, adjusted EBITDA margin was 42.9%. Increased pension expense primarily related to the downturn in the global financial markets in 2008 resulted in a 1.8% negative impact on adjusted EBITDA margin. Adjusted EBITDA margin was 44.6% in the same period of 2008.
  • Diluted GAAP earnings per share ("Diluted GAAP EPS") were $0.74 for the first nine months of 2009 and $0.23 for the third quarter of 2009. Diluted adjusted earnings per share ("diluted adjusted EPS") were $0.89 for the first nine months of 2009 and $0.30 for the third quarter of 2009, an increase of 15.6% and 15.4%, respectively, versus the same periods in 2008.
  • Subsequent to the quarter close, on October 9th, Verisk completed its initial public offering, raising gross proceeds of approximately $2.2 billion for its selling shareholders.

Frank J. Coyne, chairman, president, and CEO, said, "We are pleased to report these strong results in our first quarterly report as a public company. We believe this shows we have a strong foundation to deliver both growth and strong margins for our shareholders over the long term. Our client-centric solutions remain valuable and unique in measuring risk in the key end markets of insurance, mortgage and healthcare and are able to deliver growth despite weakness in the economy."

"Recent business achievements also highlight our ability to deliver on the Verisk strategy of using innovative approaches to risk analysis to grow our presence in new end markets. In 2009, we have continued to invest in new product development, announced a launch of our important partnership with MERSCORP, Inc. in mortgage fraud analytics to create a nationwide fraud database, and acquired two companies, TierMed and D2Hawkeye, in the healthcare analytics space. At the same time, we continue to grow our Risk Assessment business during one of the softest premium markets in recent history," added Mr. Coyne.

 Summary of Results through September 30, 2009
 ---------------------------------------------
 Table 1
                 Three Months Ended         Nine Months Ended
                    September 30,              September 30,
                 ------------------ Change  ------------------ Change
                   2009       2008    (%)     2009      2008     (%)
                 -----------------------------------------------------
                        (In thousands, except per share amounts)
 Revenues        $258,311  $224,391  15.1%  $761,978  $662,081  15.1%
 Adjusted EBITDA $109,404  $ 98,230  11.4%  $326,937  $295,302  10.7%
 Net income      $ 42,205  $ 40,840   3.3%  $133,059  $121,789   9.3%
 Adjusted net 
  income         $ 53,848  $ 49,383   9.0%  $161,181  $148,186   8.8%
 Diluted GAAP 
  EPS            $   0.23  $   0.22   4.5%  $   0.74  $   0.63  17.5%
 Diluted 
  adjusted EPS   $   0.30  $   0.26  15.4%  $   0.89  $   0.77  15.6%

Revenues
Revenues grew 15.1% for both the nine months and three months ended September 30, 2009. Excluding the impact of recent acquisitions (AER, D2Hawkeye, and TierMed), revenue grew 11.4% for the first nine months of 2009.

 Table 2A

                 Three Months Ended         Nine Months Ended
                    September 30,              September 30,
                 ------------------ Change  ------------------ Change
                   2009       2008    (%)     2009      2008     (%)
                 -----------------------------------------------------
                                   (In thousands)

 Decision 
  Analytics 
  revenues by 
  category:
  Fraud 
   identification 
   and detection
   solutions     $ 69,303  $ 54,796  26.5%  $199,778  $157,654   26.7%
  Loss 
   prediction 
   solutions       33,806    23,093  46.4%   100,702    69,353   45.2%
  Loss 
   quantification 
   solutions       25,182    21,316  18.1%    68,605    56,532   21.4%
   Total 
    Decision 
    Analytics    $128,291  $ 99,205  29.3%  $369,085  $283,539  30.2%
                 ---------------------------------------------

Within our Decision Analytics segment, revenues grew 30.2% for the nine months ended September 30, 2009 and 21.5% excluding the revenue associated with recent acquisitions. Year-to-date revenue growth was led by a 26.7% increase in our fraud identification solutions. Loss quantification solutions grew 21.4%. Loss prediction solutions grew at 9.7%, excluding the impact of the recent acquisitions of AER, D2Hawkeye and TierMed. Overall, our Decision Analytics revenues now compose approximately 48% of our total revenues in the nine months ended September 30, 2009, up from approximately 43% in the same period in 2008 as we continue to balance our sources of revenue by growing our Decision Analytics segment.

 Table 2B
                 Three Months Ended         Nine Months Ended
                    September 30,              September 30,
                 ------------------ Change  ------------------ Change
                   2009     2008     (%)      2009      2008     (%)
                 -----------------------------------------------------
                                  (In thousands)

 Risk Assessment 
  revenues by
  category:
  Industry 
   standard 
   insurance
   programs      $ 84,159  $ 81,801  2.9%   $256,352  $247,520  3.6%
  Property-
   specific 
   rating and
   underwriting 
   information     33,219    31,230  6.4%     99,088    94,574  4.8%
  Statistical 
   agency and 
   data services    7,019     6,736  4.2%     21,154    20,556  2.9%
  Actuarial 
   services         5,623     5,419  3.8%     16,299    15,892  2.6%
   Total Risk 
    Assessment   $130,020  $125,186  3.9%   $392,893  $378,542  3.8%
                 ==================         ==================

Within our Risk Assessment segment, revenues grew 3.8% in the nine months ended September 30, 2009. Our revenues in this segment continued to grow even with the impact of the soft premium market, which is the basis for the premium-based component of revenue.

Cost of Revenues
Cost of revenues increased 16.9% in the nine months ended September 30, 2009 and 12.1% excluding the impact of recent acquisitions. After also excluding the increased pension costs discussed earlier, cost of revenues grew 8.3%. Excluding recent acquisitions and increased pension costs, the increase in cost of revenues was primarily due to staff-related costs, with some additional costs for data and consultants related to the growth of our Decision Analytics segment.

Selling, General and Administrative
Selling, general and administrative expense increased 21.3% in the nine months ended September 30, 2009 and 11.3% excluding the impact of recent acquisitions. After also excluding the increased pension costs discussed earlier, selling, general and administrative expense grew 8.4%. The increase in selling, general and administrative expense excluding recent acquisitions and increased pension costs was primarily due to staff-related costs.

EBITDA and Adjusted EBITDA
EBITDA grew 11.2% in the nine months ended September 30, 2009 and Adjusted EBITDA grew 10.7% in the nine months ended September 30 as shown in Table 3A. Increased pension expense primarily related to the downturn in the global financial markets negatively impacted adjusted EBITDA growth by 4.6%.

At the time of the IPO, the company accelerated the allocation of ESOP shares, which will cause a one-time non- cash charge of approximately $57.7 million in fourth quarter of 2009 and then eliminate the portion of ESOP expense not associated with our 401(k) and profit sharing going forward. Because we do not expect these expenses to impact our EBITDA in 2010 and forward, we believe it is appropriate to present adjusted EBITDA.

 Table 3A
                 Three Months Ended         Nine Months Ended
                    September 30,              September 30,
                 ------------------ Change  ------------------ Change
                   2009     2008     (%)      2009      2008     (%)
                 ------------------ ----------------------------------
                                   (In thousands)

 EBITDA          $102,428  $ 93,819   9.2%  $313,369  $281,803  11.2%
  plus: ESOP 
   allocation
   expense          3,822     3,240            9,602    10,017
  plus: IPO-
   related costs    3,154     1,171            3,966     3,482
   Adjusted 
    EBITDA       $109,404  $ 98,230  11.4%  $326,937  $295,302  10.7%
    EBITDA margin   39.7%     41.8%            41.1%     42.6%
    Adjusted 
     EBITDA 
     margin         42.4%     43.8%            42.9%     44.6%

Adjusted EBITDA grew 19.6% for Decision Analytics and 4.7% for Risk Assessment for the nine months ended September 30, 2009 as shown in Table 3B. Adjusted EBITDA margin was 42.9% for the first nine months of 2009, a decline from adjusted EBITDA margin of 44.6% in the same period in 2008. However, increased pension costs primarily related to the global economic downturn in 2008 had a negative impact of 1.8% on our EBITDA margin during the first nine months of 2009. Increased pension costs had a negative impact on adjusted EBITDA growth of 2.0% for Decision Analytics and 6.4% for Risk Assessment.

 Table 3B
                 Three Months Ended         Nine Months Ended
                    September 30,              September 30,
                 ------------------ Change  ------------------ Change
                   2009     2008     (%)      2009      2008     (%)
                 ----------------------------------------------------
                                  (In thousands)

 Segment EBITDA:
  Risk 
   Assessment    $ 55,919  $ 53,813  3.9%   $177,116  $167,313   5.9%
   EBITDA margin    43.0%     43.0%            45.1%     44.2%
  Decision 
   Analytics     $ 46,509  $ 40,006 16.3%   $136,253  $114,490  19.0%
   EBITDA margin    36.3%     40.3%            36.9%     40.4%
    Total EBITDA $102,428  $ 93,819  9.2%   $313,369  $281,803  11.2%
     EBITDA 
      margin        39.7%     41.8%            41.1%     42.6%

 Adjusted 
  segment EBITDA:
  Risk 
   Assessment    $ 59,871  $ 56,833  5.3%   $184,912  $176,566   4.7%
   Adjusted 
    EBITDA 
    margin          46.0%     45.4%            47.1%    46.6%
  Decision 
   Analytics     $ 49,533  $ 41,397 19.7%   $142,025  $118,736  19.6%
   Adjusted 
    EBITDA 
    margin          38.6%     41.7%            38.5%     41.9%
    Total 
     adjusted 
     EBITDA      $109,404  $ 98,230 11.4%   $326,937  $295,302  10.7%
     Adjusted 
      EBITDA 
      margin        42.4%     43.8%            42.9%     44.6%

Net Income and Adjusted Net Income
Net income grew 9.3% in the first nine months of 2009. Adjusted net income grew 8.8% in the first nine months of 2009 as growth in adjusted EBITDA was partially offset by increased interest expense related to increased debt outstanding during the period and increased provision for income taxes related to a higher effective tax rate due to non-deductibility of the majority of our ESOP expenses and of certain expenses related to the initial public offering.

The table below sets forth a reconciliation of net income to adjusted net income and adjusted EPS based on our historical results:

 Table 4
                                      Three Months Ended
                                         September 30,             
                                  --------------------------  Change 
                                       2009          2008       (%)
                                  -----------------------------------
                                   (In thousands, except share and 
                                          per share amounts)
  Net income                      $     42,205  $     40,840    3.3%
    plus: Amortization of
     intangibles                         8,012         7,041
   plus: ESOP allocation expense         3,822         3,240

   plus: IPO-related costs               3,154         1,171
    less: Income tax effect on
     amortization of intangibles        (3,345)       (2,909)
 Adjusted net income              $     53,848  $     49,383    9.0%

  Basic adjusted EPS              $       0.31  $       0.27   14.8%
  Diluted adjusted EPS            $       0.30  $       0.26   15.4%

  Weighted average shares
   outstanding
   Basic                           172,796,400   182,267,667
   Diluted                         179,850,850   189,667,514
                                  --------------------------

                                      Nine Months Ended
                                         September 30,             
                                  --------------------------  Change 
                                       2009          2008       (%)
                                  -----------------------------------
                                   (In thousands, except share and 
                                          per share amounts)
  Net income                      $     133,059  $     121,789   9.3%
   plus: Amortization of
    intangibles                          24,986         21,978
   plus: ESOP allocation expense          9,602         10,017
   plus: IPO-related costs                3,966          3,482
   less: Income tax effect on
    amortization of intangibles         (10,432)        (9,080)
 Adjusted net income              $     161,181  $     148,186   8.8%

  Basic adjusted EPS              $        0.93  $        0.80  16.3%
  Diluted adjusted EPS            $        0.89  $        0.77  15.6%

  Weighted average shares
   outstanding
   Basic                            173,216,650    184,925,950
   Diluted                          180,117,150    192,493,650
                                  ----------------------------

Net Cash Provided by Operating Activities and Capital Expenditures
Net cash provided by operating activities was $255.6 million and increased $61.5 million or 31.7% for the nine months ended September 30, 2009. This growth was primarily a result of a $35.5 million increase due to the strong operations of the business, $4.6 million due to working capital benefit, $10.2 million due to decreased in employee- related payments related to an additional pay cycle that occurred in 2008, and $15.4 million of excess tax benefits related to exercised stock options.

Capital expenditures increased by $6.5 million over the prior period to $31.3 million because of investment in infrastructure and new product development.

Business Outlook
Mr. Coyne concluded, "We're confident in our ability to execute our growth plans. As the economy continues to grow, so does the value of assets at risk and the complexity in analyzing and protecting against those risks." The company has set its long-term organic financial targets as follows:

 Revenue growth, excluding new acquisitions          10-12%
 Adjusted EBITDA margin                              43-45%
 Growth of net cash provided by operating activities 
 less capital expenditures                           12-13%

Conference Call Information
Verisk's management team will host a live audio webcast on Tuesday, November 17, 2009, at 8:00 a.m. Eastern time (5:00 a.m. Pacific time) to discuss the financial results and business highlights. All interested parties are invited to listen to the live webcast on the Verisk investor website at http://investor.verisk.com. A replay of the webcast will be available on the Verisk investor website for 30 days.

An audio recording of the conference call will be available on our website (approximately two hours) after the conclusion of the live event. To listen to the recording, visit http://investor.verisk.com. Alternatively, you may dial 1- 888-203-1112 or 1-719-457-0820 and enter replay pass code 4704330. The replay will be available from November 17, 2009 at 11:00 a.m. Eastern time through December 16, 2009 at 11:59 p.m.

About Verisk Analytics
Verisk Analytics (Nasdaq:VRSK) is a leading provider of risk assessment solutions to professionals in insurance, healthcare, mortgage lending, government, risk management, and human resources. For more information, visit www.verisk.com.

Forward-Looking Statements
This release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," or "continue," or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements.

Other factors that could materially affect actual results, levels of activity, performance or achievements can be found in Verisk's final prospectus dated October 6, 2009 filed with the Securities and Exchange Commission and in quarterly reports on Form 10-Q and current reports on Form 8-K. If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement in this release reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.

Notes Regarding the Use of Non-GAAP Financial Measures
The company has provided certain non-GAAP financial information as supplemental information regarding its operating results. These measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP measures reported by other companies. The company believes that its presentation of non-GAAP measures, such as EBITDA and adjusted EBITDA, adjusted net income, and adjusted EPS, provides useful information to management and investors regarding certain financial and business trends relating to its financial condition and results of operations. In addition, the company's management uses these measures for reviewing the financial results of the company and for budgeting and planning purposes.

EBITDA and Adjusted EBITDA
The table below sets forth a reconciliation of net income to EBITDA and adjusted EBITDA based on our historical results:

 Table 5
                               Three Months Ended   Nine Months Ended
                                  September 30,       September 30,
                               --------------------------------------
                                 2009      2008      2009      2008
                               --------------------------------------
                                           (In thousands)

 Net income                    $ 42,205  $ 40,840  $133,059  $121,789
 Depreciation and amortization
  of fixed and intangible
  assets                         17,633    16,095    53,520    47,456
 Investment income and 
  realized (gains)/losses on 
  securities, net                   (53)       (2)      220      (319)
 Interest expense                 9,449     8,393    26,126    22,566
 Provision for income taxes      33,194    28,493   100,444    90,311
                               --------------------------------------
  EBITDA                       $102,428  $ 93,819  $313,369  $281,803
   plus: ESOP allocation
    expense                       3,822     3,240     9,602    10,017
   plus: IPO-related costs        3,154     1,171     3,966     3,482
                               --------------------------------------
    Adjusted EBITDA            $109,404  $ 98,230  $326,937  $295,302
                               --------------------------------------

EBITDA and adjusted EBITDA are financial measures that management uses to evaluate the performance of our segments. The company defines "EBITDA" as net income before investment income, realized (gains)/losses on securities interest expense, income taxes, depreciation, and amortization. The company defines "adjusted EBITDA" as EBITDA before ESOP allocation expense and IPO-related costs.

Although EBITDA and adjusted EBITDA are frequently used by securities analysts, lenders and others in their evaluation of companies, EBITDA and adjusted EBITDA have limitations as an analytical tool and should not be considered in isolation, or as a substitute for an analysis of our statement of cash flow reported under GAAP. Management uses EBITDA and adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of its overall assessment of company performance. Some of these limitations are:

  • 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 requirement 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 and adjusted EBITDA does not reflect any cash requirements for such replacements.
  • Other companies in our industry may calculate EBITDA and adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Note on the Attached Financial Information
Verisk Analytics, Inc ("Verisk") was established on May 23, 2008 to serve as the parent holding company of Insurance Services Office, Inc ("ISO") upon completion of the proposed initial public offering ("IPO"). On June 27, 2008, the company's stockholders approved certain corporate governance changes necessary to allow Verisk to proceed with a proposed IPO. On October 6, 2009, Verisk effected a corporate reorganization whereby the Class A and Class B common stock of ISO was exchanged for the common stock of Verisk on a one-for-one basis. Verisk immediately thereafter effected a fifty-for-one stock split of Class A and Class B common stock. The unaudited financial information presented in the attachment for the periods is that of ISO. Verisk had no operating activity from its formation on May 23, 2008 through September 30, 2009.

        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
      For The Three and Nine Month Periods Ended September 30, 2009
                                  and 2008

                     Three Months Ended          Nine Months Ended
                        September 30,               September 30,
                  ---------------------------------------------------
                      2009         2008         2009         2008
                  ---------------------------------------------------
                  (In thousands, except for share and per share data)
 Revenues (include
  revenues from
  related parties
  of $25,120 and
  $22,228 for the
  three months
  ended September
  30, 2009 and
  2008 and
  $73,263 and
  $65,417 for the
  nine months
  ended September
  30, 2009 and
  2008,
  respectively)   $    258,311 $    224,391 $    761,978 $    662,081

 Expenses:
  Cost of
   revenues
   (exclusive of
   items shown
   separately
   below)              117,383       98,307      337,884      288,985
  Selling,
   general and
   administrative       38,500       32,265      110,725       91,293
  Depreciation
   and
   amortization
   of fixed
   assets                9,621        9,054       28,534       25,478

  Amortization of
   intangible
   assets                8,012        7,041       24,986       21,978
                  ---------------------------------------------------
   Total expenses      173,516      146,667      502,129      427,734
                  ---------------------------------------------------
 Operating income       84,795       77,724      259,849      234,347
 Other income/
  (expense):
  Investment
   income                   29          381          121        1,984
  Realized gains/
   (losses) on
   securities,
   net                      24         (379)        (341)      (1,665)
  Interest
   expense              (9,449)      (8,393)     (26,126)     (22,566)
                  ---------------------------------------------------
   Total other
    expense, net        (9,396)      (8,391)     (26,346)     (22,247)
                  ---------------------------------------------------

 Income before
  income taxes          75,399       69,333      233,503      212,100
 Provision for
  income taxes         (33,194)     (28,493)    (100,444)     (90,311)
                  ---------------------------------------------------
   Net income     $     42,205 $     40,840 $    133,059 $    121,789
                  ===================================================

 Basic net income
  per share of
  Class A and
  Class B (1)     $       0.24 $       0.22 $       0.77 $       0.66
                  ---------------------------------------------------
 Diluted net
  income per
  share of Class
  A and Class
  B (1)           $       0.23 $       0.22 $       0.74 $       0.63
                  ---------------------------------------------------

 Weighted average
  shares
  outstanding:

   Basic (1)       172,796,400  182,267,667  173,216,650  184,925,950
                  ---------------------------------------------------
   Diluted (1)     179,850,850  189,667,514  180,117,150  192,493,650
                  ---------------------------------------------------

 (1)  All share and per share data has been adjusted to reflect a
      fifty-for-one stock split. See Note 1 in the 10Q dated
      September 30, 2009 for further information.


         CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
          As of September 30, 2009 and December 31, 2008

                                                2009         2008
                                             ------------------------
                                              (In thousands, except 
                                             for share and per share 
                                                       data)
                ASSETS

 Current assets:
  Cash and cash equivalents                  $    60,560  $    33,185
  Available-for-sale securities                    5,352        5,114
  Accounts receivable, net (including 
   amounts from related parties of $2,992 
   and $3,421, respectively)                     104,083       83,941
  Prepaid expenses                                16,729       13,010
  Deferred income taxes                            4,490        4,490
  Federal and foreign income taxes 
   receivable                                      2,935       12,311
  State and local income taxes receivable          3,984          689
  Other current assets                            22,630       16,187
                                             ------------------------
   Total current assets                          220,763      168,927

 Noncurrent assets:
  Fixed assets, net                               87,229       82,587
  Intangible assets, net                         118,338      112,713
  Goodwill                                       489,245      447,372
  Deferred income taxes                           83,629      100,256
  State income taxes receivable                    7,793        8,112
  Other assets                                    12,379        8,910
                                             ------------------------
   Total assets                              $ 1,019,376  $   928,877
                                             ========================

   LIABILITIES, REDEEMABLE COMMON STOCK AND
          STOCKHOLDERS' DEFICIT
 Current liabilities:
  Accounts payable and accrued liabilities   $   100,979  $    83,381
  Acquisition related liabilities                     --       82,700
  Short-term debt and current portion of
   long-term debt                                131,528      219,398
  Pension and postretirement benefits, 
   current                                         5,397        5,397
  Fees received in advance (including 
   amounts from related parties of $6,711 
   and $3,699, respectively)                     153,415      114,023
                                             ------------------------
   Total current liabilities                     391,319      504,899

 Noncurrent liabilities:
  Long-term debt                                 527,894      450,356
  Pension benefits                               137,417      133,914
  Postretirement benefits                         21,936       23,798
  Other liabilities                               77,258       76,194
                                             ------------------------
   Total liabilities                           1,155,824    1,189,161

 Redeemable common stock:
  Class A redeemable common stock, stated at
   redemption value, $.0002 par value;
   335,000,000 shares authorized; 
   150,882,000 and 150,388,050 shares 
   issued and 34,768,750 and 37,306,950 
   outstanding as of September 30, 2009 and 
   December 31, 2008, respectively, and 
   vested options at intrinsic value (1)       1,064,896      752,912
  Class A unearned common stock KSOP shares       (2,827)      (3,373)
                                             ------------------------
   Total redeemable common stock               1,062,069      749,539
 Commitments and contingencies
 Stockholders' deficit:

  Class B common stock, $.0002 par value;
   1,000,000,000 shares authorized;
   500,225,000 shares issued and 143,187,100
   outstanding as of September 30, 2009 and
   December 31, 2008 (1)                             100          100
  Accumulated other comprehensive loss           (75,561)     (82,434)
  Accumulated deficit                           (439,062)    (243,495)
  Class B common stock, treasury stock,
   357,037,900 shares as of September 30, 
   2009 and December 31, 2008 (1)               (683,994)    (683,994)
                                             ------------------------
   Total stockholders' deficit                (1,198,517)  (1,009,823)
                                             ------------------------
   Total liabilities, redeemable common 
    stock and stockholders' deficit          $ 1,019,376  $   928,877
                                             ------------------------

 (1) All share and per share data has been adjusted to reflect a 
     fifty-for-one stock split. See Note 1 in the 10Q dated 
     September 30, 2009 for further information.

      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 
        For The Nine Months Ended September 30, 2009 and 2008

                                                  2009       2008
                                               --------------------
                                                  (In thousands)

 Cash flows from operating activities:
 Net income                                    $ 133,059  $ 121,789
 Adjustments to reconcile net income to net
  cash provided by operating activities:
  Depreciation and amortization of fixed
   assets                                         28,534     25,478
  Amortization of intangible assets               24,986     21,978
  Allowance for doubtful accounts                    692        266
  KSOP compensation expense                       17,620     17,353
  Acquisition related compensation expense            --        550
  Stock-based compensation                         8,526      7,522
  Non-cash charges associated with performance
   based appreciation awards                       2,649      2,618
  Interest income on notes receivable from
   stockholders                                       --     (1,142)
  Realized losses on securities, net                 341      1,665
  Deferred income taxes                            4,990         --
  Other operating                                    207        282
  Loss on disposal of assets                         342         31
  Non-cash charges associated with lease
   termination                                       196         --
  Excess tax benefits from exercised stock
   options                                        (1,723)   (17,101)
 Changes in assets and liabilities, net of
  effects from acquisitions:
   Accounts receivable                           (16,946)     4,145
   Prepaid expenses and other assets              (2,241)    (3,479)
   Federal and foreign income taxes               10,460    (13,292)
   State and local income taxes                   (2,082)    17,669
   Accounts payable and accrued liabilities        1,359     (9,082)
   Acquisition related liabilities                  (300)    (2,200)
   Fees received in advance                       38,414     22,830
   Other liabilities                               6,493     (3,834)
    Net cash provided by operating activities    255,576    194,046

        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) 
                                 (UNAUDITED)
          For The Nine Months Ended September 30, 2009 and 2008

                                                     2009       2008
                                                     (In thousands)

 Cash flows from investing activities:
  Acquisitions, net of cash acquired of $9,477
   in 2009                                         (58,831)       (41)
  Purchase of cost-based investments                    --     (3,822)
  Earnout payments                                 (78,100)   (98,100)
  Proceeds from release of contingent escrows           24        549
  Escrow funding associated with acquisitions       (7,400)    (3,320)
  Purchases of available-for-sale securities          (450)      (156)
  Proceeds from sales and maturities of
   available-for-sale securities                       772     21,609
  Purchases of fixed assets                        (24,319)   (22,323)
  Proceeds from repayment of notes receivable
   from stockholders                                    --      6,181
  Issuance of notes receivable from stockholders        --     (1,247)
   Net cash used in investing activities          (168,304)  (100,670)
 Cash flows from financing activities:
  Proceeds from issuance of long-term debt          80,000    150,000
  Proceeds from issuance of short-term debt, net     6,808     40,000
  Redemption of Class A common stock               (46,740)  (263,744)
  Repurchase of Class B common stock                    --     (5,001)
  Repayment of current portion of long-term debt  (100,000)        --
  Repayment of short-term debt, net                     --    (35,219)
  Debt issuance cost                                (4,510)        --
  Excess tax benefits from exercised stock
   options                                           1,723     17,101
  Proceeds from repayment of exercise price
   loans classified as a component of
   redeemable common stock                              --     29,482
  Proceeds from stock options exercised              2,612        892
   Net cash used in financing activities           (60,107)   (66,489)
   Effect of exchange rate changes                     210         88
   Increase in cash and cash equivalents            27,375     26,975
   Cash and cash equivalents, beginning of
    period                                          33,185     24,049
   Cash and cash equivalents, end of period      $  60,560  $  51,024

 Supplemental disclosures:
  Taxes paid                                     $  90,917  $  85,498

  Interest paid                                  $  25,824  $  20,896

 Non-cash investing and financing activities:
  Loans made to directors and officers in
   connection with the exercise of stock options $      --  $  20,148

  Redemption of Class A common stock used to
   repay maturities of notes receivable from
   stockholders                                  $      --  $  41,970

  Redemption of Class A common stock used to
   fund the exercise of stock options            $   2,326  $   3,838

  Deferred tax liability established on date of
   acquisition                                   $  (8,907) $      --

  Capital lease obligations                      $   2,860  $   2,485

  Capital expenditures included in accounts
   payable and accrued liabilities               $   4,165  $      --

  Decrease in goodwill due to finalization of
   acquisition related liabilities               $  (4,300) $      --

  Accrual of acquisition related liabilities     $      --  $  15,200

Contact:

Verisk Analytics, Inc.
Investor Relations
Eva Huston
Head of Investor Relations
201-469-2142
eva.huston@verisk.com

MWW Group (for Verisk Analytics)
Media
Rich Tauberman
202-600-4546
rtauberman@mww.com

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