Delaware | 7374 | 26-2994223 | ||
(State or Other Jurisdiction
of
Incorporation or Organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Richard J. Sandler
Ethan T. James Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 (212) 450-4000 |
Eric J. Friedman
Richard B. Aftanas Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 (212) 735-3000 |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Title of Each Class
|
Proposed Maximum Aggregate
|
Amount of
|
||||
of Securities to be Registered | Offering Price(1)(2) | Registration Fee | ||||
Class A common stock, par value $0.001 per share
|
$750,000,000 | $29,475(3) | ||||
(1) | Includes shares of Class A common stock which the underwriters have the right to purchase to cover over-allotments. |
(2) | Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933. |
(3) | Previously paid. |
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
|
Per Share
|
Total | |||
Public offering price
|
$ | $ | ||
Underwriting discount
|
$ | $ | ||
Proceeds, before expenses, to the selling stockholders
|
$ | $ |
Merrill Lynch & Co. | Morgan Stanley |
i
Table of Contents
8
25
31
83
93
F-24
F-62
F-63
F-75
F-81
1
Table of Contents
the total value of exposures in risk transactions is increasing;
the number of participants in risk transactions is often large
and the asymmetry of information among participants is often
substantial; and
the failure to understand risk can lead to large and rapid
declines in financial performance.
Our Solutions are Embedded In Our Customers Critical
Decision Processes.
Our customers use our
solutions to make better risk decisions and to price risk
appropriately. In the U.S. P&C insurance industry, our
solutions for prospective loss costs, policy language,
rating/underwriting rules and regulatory filing services are the
industry standard. In the U.S. healthcare and mortgage
industries, our predictive models, loss estimation tools and
fraud identification applications are the primary solutions that
allow customers to understand their risk exposures and
proactively manage them. Over the last three years, we have
retained 98% of our customers across all of our businesses,
which we believe reflects our customers recognition of the
value they derive from our solutions.
Extensive and Differentiated Data Assets and Analytic
Methods.
We maintain what we believe are some
of the largest, most accurate, and most complete databases in
the markets we serve. Much of the information we provide is not
available from any other source and would be difficult and
costly for another party to replicate. As a result, our
accumulated experience and years of significant investment have
given us a competitive advantage in serving our customers.
Culture of Continuous Improvement.
Our
intellectual capital and focus on continuous improvement have
allowed us to develop proprietary algorithms and solutions that
assist our customers in making informed risk decisions. Our team
includes approximately 390 individuals with advanced degrees,
certifications and professional designations in such fields as
actuarial science, data management, mathematics, statistics,
economics, soil mechanics, meteorology and various engineering
disciplines. Our compensation and benefit plans are
pay-for-performance-
2
Table of Contents
oriented, including incentive compensation plans and substantial
equity participation by employees. Today, our employees own
approximately 30% of the company.
Attractive Operating Model.
We believe we have
an attractive operating model due to the recurring nature of our
revenues, the scalability of our solutions and the low capital
intensity of our business.
Increase Sales to Insurance
Customers.
We expect to expand the
application of our solutions in insurance customers
internal risk and underwriting processes. Building on our deep
knowledge of, and embedded position in, the insurance industry,
we expect to sell more solutions to existing customers tailored
to individual insurance segments. By increasing the breadth and
relevance of our offerings, we believe we can strengthen our
relationships with customers and increase our value to their
decision making in critical ways.
Develop New, Proprietary Data Sets and Predictive
Analytics.
We work with our customers to
understand their evolving needs. We plan to create new solutions
by enriching our mix of proprietary data sets, analytic
solutions and effective decision support across the markets we
serve. We constantly seek to add new data sets that can further
leverage our analytic methods, technology platforms and
intellectual capital.
Leverage Our Intellectual Capital to Expand into Adjacent
Markets and New Customer Sectors.
Our
organization is built on nearly four decades of intellectual
property in risk management. We believe we can continue to
profitably expand the use of our intellectual capital and apply
our analytic methods in new markets, where significant
opportunities for long-term growth exist. We also continue to
pursue growth through targeted international expansion. We have
already demonstrated the effectiveness of this strategy with our
expansion into healthcare and non-insurance financial services.
Pursue Strategic Acquisitions that Complement Our
Leadership Positions.
We will continue to
expand our data and analytics capabilities across industries.
While we expect this will occur primarily through organic
growth, we have and will continue to acquire assets and
businesses that strengthen our value proposition to customers.
We have developed an internal capability to source, evaluate and
integrate acquisitions that have created value for shareholders.
We have acquired 14 businesses in the past five years, which in
the aggregate have increased their revenue with a weighted
average CAGR of 40% over the same period.
3
Table of Contents
4
Table of Contents
Class A common stock offered by the selling stockholders
shares
Class A common stock outstanding
shares
Over-allotment option
shares
of Class A common stock from the selling stockholders
Class B common stock outstanding
shares
Sale and transfer restrictions on Class B common stock
The Class B (Series 1) common stock is not
transferable until 18 months after the date of this
prospectus and the Class B (Series 2) common
stock is not transferable until 30 months after the date of
this prospectus.
These transfer restrictions are subject to limited exceptions,
including transfers to another holder of Class B common
stock. See Description of Capital Stock Common
Stock Transfer Restrictions.
Conversion of Class B common stock
After termination of the restrictions on transfer described
above for each series of Class B common stock, such series
of Class B common stock will be automatically converted
into Class A common stock. No later than 30 months
after the date of this prospectus, there will be no outstanding
shares of Class B common stock.
In the event that Class B common stock is transferred and
converts into Class A common stock, it will have the effect
of diluting the voting power of our existing holders of
Class A common stock. See Description of Capital
Stock Common Stock Conversion.
Use of proceeds
The Company will not receive any proceeds from sale of
Class A common stock in the offering.
Dividend policy
Following this offering and subject to legally available funds,
we currently intend to pay a quarterly dividend, in cash, at an
annual rate initially equal to
$ per share of Class A
common stock (representing a quarterly rate initially equal to
$ per share) commencing with
the quarter
ended ,
2008. Our Class B common stock will share ratably on an
as-converted basis in such dividends. The declaration and
payment of any dividends will be at the sole discretion of our
board of directors after taking into account various factors,
including our financial condition, operating results, capital
requirements, covenants in our debt instruments and other
factors that our board of directors deems relevant.
Stock symbol
5
Table of Contents
shares
of Class A common stock issuable upon the exercise of
outstanding stock options as of September 30, 2008 at a
weighted average exercise price of
$ per share; and
an aggregate
of shares
of Class A common stock that will be reserved for future
issuances under our 2008 Equity Incentive Plan as of the closing
of this offering.
6
Table of Contents
Nine Months
Year Ended December 31,
Ended September 30,
2005
2006
2007
2007
2008
(In thousands, except for share and per share data)
$
448,875
$
472,634
$
485,160
$
365,553
$
378,542
196,785
257,499
317,035
234,158
283,539
645,660
730,133
802,195
599,711
662,081
294,911
331,804
357,191
261,845
288,985
88,723
100,124
107,576
82,589
91,293
22,024
28,007
31,745
23,297
25,478
19,800
26,854
33,916
24,964
21,978
425,458
486,789
530,428
392,695
427,734
220,202
243,344
271,767
207,016
234,347
2,932
6,101
9,308
6,688
319
(10,465
)
(16,668
)
(22,928
)
(17,052
)
(22,566
)
(7,533
)
(10,567
)
(13,620
)
(10,364
)
(22,247
)
212,669
232,777
258,147
196,652
212,100
(85,722
)
(86,921
)
(103,184
)
(81,273
)
(90,311
)
126,947
145,856
154,963
115,379
121,789
7
Table of Contents
Nine Months
Year Ended December 31,
Ended September 30,
2005
2006
2007
2007
2008
(In thousands, except for share and per share data)
(2,574
)
(1,805
)
(4,589
)
(3,322
)
$
124,373
$
144,051
$
150,374
$
112,057
$
121,789
$
29.81
$
35.31
$
38.58
$
28.49
$
32.93
(0.61
)
(0.44
)
(1.14
)
(0.82
)
$
29.20
$
34.87
$
37.44
$
27.67
$
32.93
$
28.45
$
33.85
$
37.03
$
27.39
$
31.63
(0.58
)
(0.42
)
(1.10
)
(0.79
)
$
27.87
$
33.43
$
35.93
$
26.60
$
31.63
4,258,989
4,130,962
4,016,928
4,049,460
3,698,519
4,462,109
4,308,976
4,185,151
4,212,518
3,849,873
$
195,951
$
202,872
$
212,780
$
160,018
$
167,313
66,075
95,333
124,648
95,259
114,490
$
262,026
$
298,205
$
337,428
$
255,277
$
281,803
$
(24,019
)
$
(25,742
)
$
(32,941
)
$
(28,328
)
$
(22,323
)
174,071
223,499
248,521
193,034
194,046
(107,444
)
(243,452
)
(110,831
)
(54,812
)
(100,670
)
(90,954
)
75,907
(212,591
)
(196,940
)
(66,489
)
As of December 31,
As of September 30,
2005
2006
2007
2007
2008
(In thousands)
$
42,822
$
99,152
$
24,049
$
40,729
$
51,024
466,244
744,731
828,483
689,160
857,934
276,964
448,698
438,330
401,195
595,682
901,089
1,125,933
1,171,188
1,170,491
985,738
(938,294
)
(1,116,357
)
(1,195,728
)
(1,196,933
)
(1,142,030
)
(1)
As of December 31, 2007, we discontinued operations of our
claim consulting business located in New Hope, Pennsylvania and
the United Kingdom.
(2)
In conjunction with the initial public offering, the stock of
Insurance Services Office, Inc. will convert to stock of Verisk
Analytics, Inc., which plans to effect a stock split of its
common stock. Giving effect to the
approximately -for-one
stock split that will have occurred prior to the completion of
this offering, basic earnings per share from continuing
operations and discontinued operations would have been
$ and
$ , $
and $ , and
$ and
$ for each of the years ended
December 31,
Table of Contents
2005, 2006 and 2007, respectively, and
$ and
$ and
$ and
$ for the nine months ended
September 30, 2007 and 2008, respectively. Diluted earnings
per shares from continuing operations and discontinued
operations would have been $ and
$ , $
and $ , and
$ and
$ for each of the years ended
December 31, 2005, 2006 and 2007 and
$ and
$ and
$ and
$ for the nine months ended
September 30, 2007 and 2008, respectively.
(3)
EBITDA is the financial measure which management uses to
evaluate the performance of our segments. EBITDA is
defined as income from continuing operations before investment
income and interest expense, income taxes, depreciation and
amortization. See note 18 to our audited consolidated
financial statements and note 16 to our unaudited condensed
consolidated financial statements included elsewhere in this
prospectus.
Although EBITDA is frequently used by securities analysts,
lenders and others in their evaluation of companies, EBITDA has
limitations as an analytical tool, and should not be considered
in isolation, or as a substitute for an analysis of our results
of operations or cash flow from operating activities reported
under U.S. GAAP. Management uses EBITDA in conjunction with
traditional GAAP operating performance measures as part of its
overall assessment of company performance. Some of these
limitations are:
Nine Months
Year Ended December 31,
Ended September 30,
2005
2006
2007
2007
2008
(In thousands)
$
126,947
$
145,856
$
154,963
$
115,379
$
121,789
41,824
54,861
65,661
48,261
47,456
10,465
16,668
22,928
17,052
22,566
(2,932
)
(6,101
)
(9,308
)
(6,688
)
(319
)
85,722
86,921
103,184
81,273
90,311
$
262,026
$
298,205
$
337,428
$
255,277
$
281,803
(5)
Prior to this offering, we are required to record our
Class A common stock and vested options at redemption value
at each balance sheet date as the redemption of these securities
is not solely within our control, due to our contractual
obligations to redeem these shares. We classify this redemption
value as redeemable common stock. Subsequent to this offering,
we will no longer be obligated to redeem these shares and
therefore we will not be required to record any redeemable
common stock.
9
Table of Contents
changes in the business analytics industry;
changes in technology;
our inability to obtain or use state fee schedule or claims data
in our insurance solutions;
saturation of market demand;
loss of key customers;
10
Table of Contents
industry consolidation; and
failure to execute our customer-focused selling approach.
11
Table of Contents
amendment, enactment, or interpretation of laws and regulations
which restrict the access and use of personal information and
reduce the supply of data available to customers;
changes in cultural and consumer attitudes to favor further
restrictions on information collection and sharing, which may
lead to regulations that prevent full utilization of our
solutions;
failure of our solutions to comply with current laws and
regulations; and
failure of our solutions to adapt to changes in the regulatory
environment in an efficient, cost-effective manner.
12
Table of Contents
deterring customers from using our solutions;
deterring data suppliers from supplying data to us;
harming our reputation;
exposing us to liability;
increasing operating expenses to correct problems caused by the
breach;
affecting our ability to meet customers expectations; or
causing inquiry from governmental authorities.
13
Table of Contents
failing to implement or remediate controls, procedures and
policies appropriate for a larger public company at acquired
companies that prior to the acquisition lacked such controls,
procedures and policies;
paying more than fair market value for an acquired company or
assets;
failing to integrate the operations and personnel of the
acquired businesses in an efficient, timely manner;
assuming potential liabilities of an acquired company;
managing the potential disruption to our ongoing business;
distracting management focus from our core businesses;
difficulty in acquiring suitable businesses;
impairing relationships with employees, customers, and strategic
partners;
incurring expenses associated with the amortization of
intangible assets;
incurring expenses associated with an impairment of all or a
portion of goodwill and other intangible assets due to changes
in market conditions, weak economies in certain competitive
markets, or the failure of certain acquisitions to realize
expected benefits; and
diluting the share value and voting power of existing
stockholders.
14
Table of Contents
15
Table of Contents
actual or anticipated fluctuations in our quarterly operating
results;
changes in financial estimates by securities research analysts;
changes in the economic performance or market valuations of
other companies engaged in our industry;
regulatory developments in our industry affecting us, our
customers or our competitors;
announcements of technological developments;
sales or expected sales of additional common stock;
continued dislocations and downward pressure in the capital
markets; and
terrorist attacks or natural disasters or other such events
impacting countries where we or our customers have operations.
16
Table of Contents
17
Table of Contents
authorize the issuance of blank check preferred
stock that could be issued by our board of directors to increase
the number of outstanding shares to thwart a takeover attempt;
prohibit cumulative voting in the election of directors, which
would otherwise allow holders of less than a majority of the
stock to elect some directors;
require that vacancies on the board of directors, including
newly-created directorships, be filled only by a majority vote
of directors then in office;
limit who may call special meetings of stockholders;
authorize the issuance of authorized but unissued shares of
common stock and preferred stock without stockholder approval,
subject to the rules and regulations of
the ;
prohibit stockholder action by written consent, requiring all
stockholder actions to be taken at a meeting of the
stockholders; and
establish advance notice requirements for nominating candidates
for election to the board of directors or for proposing matters
that can be acted upon by stockholders at stockholder meetings.
18
Table of Contents
19
Table of Contents
20
Table of Contents
21
Table of Contents
22
Table of Contents
on an actual basis; and
on an as adjusted basis to give effect to changes in the terms
of our capital stock in connection with this initial public
offering and the consequent expiration of our obligations to
redeem our Class A common stock.
(1)
Prior to this offering, we were required to record our
Class A common stock and vested options at redemption value
at each balance sheet date as the redemption of these securities
is not solely within our control, due to our contractual
obligations to redeem these shares. We classify this redemption
value as redeemable common stock. Subsequent to this offering,
we will no longer be obligated to redeem these shares and
therefore we will not be required to record any redeemable
common stock.
(2)
Prior to the filing of this prospectus, we provided full
recourse loans to directors and senior management in connection
with exercising their stock options. The loan program has been
terminated and the loans were called by the Company. The
remaining loan balance of $0.2 million was repaid in
October 2008.
(3)
Giving effect to the
approximately
-for-one stock split that will have occurred prior to the
completion of this offering.
(4)
Prior to the completion of this offering, we intend to
accelerate the allocation of a portion of the shares to the
ESOP, which will result in a
non-recurring
non-cash
charge of approximately
$ million, based on the
mid-point of the range set forth on the cover page of this
prospectus.
23
Table of Contents
Nine Months
Year Ended December 31,
Ended September 30,
2003
2004
2005
2006
2007
2007
2008
(In thousands, except for share and per share data)
$
359,186
$
403,616
$
448,875
$
472,634
$
485,160
$
365,553
$
378,542
118,897
144,711
196,785
257,499
317,035
234,158
283,539
478,083
548,327
645,660
730,133
802,195
599,711
662,081
256,917
263,332
294,911
331,804
357,191
261,845
288,985
75,075
81,020
88,723
100,124
107,576
82,589
91,293
20,261
19,569
22,024
28,007
31,745
23,297
25,478
9,927
11,412
19,800
26,854
33,916
24,964
21,978
362,180
375,333
425,458
486,789
530,428
392,695
427,734
115,903
172,994
220,202
243,344
271,767
207,016
234,347
3,789
950
2,932
6,101
9,308
6,688
319
(2,333
)
(5,241
)
(10,465
)
(16,668
)
(22,928
)
(17,052
)
(22,566
)
1,456
(4,291
)
(7,533
)
(10,567
)
(13,620
)
(10,364
)
(22,247
)
117,359
168,703
212,669
232,777
258,147
196,652
212,100
(47,745
)
(68,925
)
(85,722
)
(86,921
)
(103,184
)
(81,273
)
(90,311
)
69,614
99,778
126,947
145,856
154,963
115,379
121,789
(12
)
(508
)
(2,574
)
(1,805
)
(4,589
)
(3,322
)
$
69,602
$
99,270
$
124,373
$
144,051
$
150,374
$
112,057
$
121,789
24
Table of Contents
Nine Months
Year Ended December 31,
Ended September 30,
2003
2004
2005
2006
2007
2007
2008
(In thousands, except for share and per share data)
$
10.91
$
20.12
$
29.81
$
35.31
$
38.58
$
28.49
$
32.93
(0.10
)
(0.61
)
(0.44
)
(1.14
)
(0.82
)
$
10.91
$
20.02
$
29.20
$
34.87
$
37.44
$
27.67
$
32.93
$
10.62
$
19.28
$
28.45
$
33.85
$
37.03
$
27.39
$
31.63
(0.10
)
(0.58
)
(0.42
)
(1.10
)
(0.79
)
$
10.62
$
19.18
$
27.87
$
33.43
$
35.93
$
26.60
$
31.63
6,382,836
4,958,161
4,258,989
4,130,962
4,016,928
4,049,460
3,698,519
6,557,950
5,174,281
4,462,109
4,308,976
4,185,151
4,212,518
3,849,873
$
(14,385
)
$
(17,516
)
$
(24,019
)
$
(25,742
)
$
(32,941
)
$
(28,328
)
$
(22,323
)
131,340
174,780
174,071
223,499
248,521
193,034
194,046
19,731
(41,851
)
(107,444
)
(243,452
)
(110,831
)
(54,812
)
(100,670
)
(150,912
)
(114,280
)
(90,954
)
75,907
(212,591
)
(196,940
)
(66,489
)
Year Ended December 31,
As of September 30,
2003
2004
2005
2006
2007
2007
2008
(In thousands)
$
48,954
$
67,700
$
42,822
$
99,152
$
24,049
$
40,729
$
51,024
344,145
386,496
466,244
744,731
828,483
689,160
857,934
112,880
206,152
276,964
448,698
438,330
401,195
595,682
380,246
722,532
901,089
1,125,933
1,171,188
1,170,491
985,738
(316,369
)
(737,929
)
(938,294
)
(1,116,357
)
(1,195,728
)
(1,196,933
)
(1,142,030
)
(1)
As of December 31, 2007, we discontinued operations of our
claim consulting business located in New Hope, Pennsylvania and
the United Kingdom.
(2)
In conjunction with the initial public offering, the stock of
Insurance Services Office, Inc. will convert to stock of Verisk
Analytics, Inc., which plans to effect a stock split of its
common stock. Giving effect to the
approximately -for-one
stock split that will have occurred prior to the completion of
this offering, basic earnings per share from continuing
operations and discontinued operations would have been
$ and
$ , $
and $ ,
$ and
$ , $
and $ , and
$ and
$ for each of the years ended
December 31, 2003, 2004, 2005, 2006 and 2007, respectively,
and $ and
$ and
$ and
$ for the nine months ended
September 30, 2007 and 2008, respectively. Diluted earnings
per shares from continuing operations and discontinued
operations would have been $ and
$ , $
and $ , and
$ and
$ for each of the years ended
December 31, 2005, 2006 and 2007, respectively, and
$ and
$ and
$ and
$ for the nine months ended
September 30, 2007 and 2008, respectively.
(3)
Includes capital lease obligations.
(4)
Prior to this offering, we are required to record our
Class A common stock and vested options at redemption value
at each balance sheet date as the redemption of these securities
is not solely within our control, due to our contractual
obligations to redeem these shares. We classify this redemption
value as redeemable common stock. Subsequent to this offering,
we will no longer be obligated to redeem these shares and
therefore we will not be required to record any redeemable
common stock.
Table of Contents
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
26
Table of Contents
27
Table of Contents
28
Table of Contents
Nine Months
Year Ended December 31,
Ended September 30,
2005
2006
2007
2007
2008
(in thousands)
$
4,466
$
4,703
$
4,914
$
3,827
$
4,087
1,689
2,105
2,788
2,116
2,387
6,155
6,808
7,702
5,943
6,474
473
358
544
268
198
318
741
556
862
5,422
8,105
8,807
6,363
6,324
2,051
3,627
4,997
3,518
3,693
7,473
11,732
13,804
9,881
10,017
$
13,628
$
18,540
$
22,247
$
16,380
$
17,353
29
Table of Contents
30
Table of Contents
Nine Months
Ended
Year Ended December 31,
September 30,
2005
2006
2007
2007
2008
45.7
%
45.4
%
44.5
%
43.7
%
43.6
%
13.7
%
13.7
%
13.4
%
13.8
%
13.8
%
3.4
%
3.8
%
4.0
%
3.9
%
3.8
%
3.1
%
3.7
%
4.2
%
4.2
%
3.3
%
65.9
%
66.7
%
66.1
%
65.5
%
64.6
%
34.1
%
33.3
%
33.9
%
34.5
%
35.4
%
0.5
%
0.8
%
1.2
%
1.1
%
0.0
%
(1.6
)%
(2.3
)%
(2.9
)%
(2.8
)%
(3.4
)%
(1.2
)%
(1.4
)%
(1.7
)%
(1.7
)%
(3.4
)%
32.9
%
31.9
%
32.2
%
32.8
%
32.0
%
(13.3
)%
(11.9
)%
(12.9
)%
(13.6
)%
(13.6
)%
19.7
%
20.0
%
19.3
%
19.2
%
18.4
%
(0.4
)%
(0.2
)%
(0.6
)%
(0.6
)%
0.0
%
19.3
%
19.7
%
18.7
%
18.7
%
18.4
%
40.6
%
40.8
%
42.1
%
42.6
%
42.6
%
Table of Contents
32
Table of Contents
Nine Months Ended
September 30,
Percentage
2007
2008
Change
(In thousands)
$
234,518
$
247,520
5.5
%
95,195
94,574
(0.7
)%
20,299
20,556
1.3
%
15,541
15,892
2.3
%
33
Table of Contents
Nine Months
Ended September 30,
Percentage
2007
2008
Change
(In thousands)
$
59,048
$
69,353
17.5
%
129,602
157,654
21.6
%
45,148
56,532
25.2
%
34
Table of Contents
35
Table of Contents
Year Ended
December 31,
Percentage
2006
2007
Change
(In thousands)
$
303,957
$
311,087
2.3
%
123,627
126,291
2.2
%
25,793
27,282
5.8
%
19,257
20,500
6.5
%
36
Table of Contents
Year Ended
December 31,
Percentage
2006
2007
Change
(In thousands)
$
67,129
$
81,110
20.8
%
168,189
172,726
2.7
%
22,181
63,199
184.9
%
37
Table of Contents
38
Table of Contents
39
Table of Contents
Year Ended
December 31,
Percentage
2005
2006
Change
(In thousands)
$
290,204
$
303,957
4.7
%
114,467
123,627
8.0
%
25,228
25,793
2.2
%
18,976
19,257
1.5
%
40
Table of Contents
Year Ended
December 31,
Percentage
2005
2006
Change
(In thousands)
$
53,527
$
67,129
25.4
%
143,258
168,189
17.4
%
22,181
41
Table of Contents
42
Table of Contents
For the Year Ended
For the Nine Months
December 31,
Ended September 30,
2005
2006
2007
2007
2008
(In thousands)
$
174,071
$
223,499
$
248,521
$
193,034
$
194,046
$
(107,444
)
$
(243,452
)
$
(110,831
)
$
(54,812
)
$
(100,670
)
$
(90,954
)
$
75,907
$
(212,591
)
$
(196,940
)
$
(66,489
)
43
Table of Contents
Payments Due by Period
Less than
More than
Total
1 Year
1-3 Years
3-5 Years
5 Years
(In thousands)
$
496,638
$
21,512
$
143,967
$
149,594
$
181,565
12,401
4,818
7,419
164
209,409
19,285
37,115
35,562
117,447
8,000
8,000
123,700
100,300
23,400
322,029
27,091
56,342
60,210
178,386
$
1,172,177
$
173,006
$
268,243
$
245,530
$
485,398
(1)
Other long-term liabilities shown in the table above consists of
our pension plan, deferred compensation plan and the
post-retirement plan, including administrative expenses, net of
employee contributions and net of the federal Medical subsidy.
We also have a deferred compensation plan for our Board of
Directors. Our funding policy is to contribute an amount at
least equal to the minimum legal funding requirement. Based on
past performance and the uncertainty of the dollar amounts to be
paid, if any, we have excluded such amounts from the above table.
(2)
We have FIN 48 obligations that represent uncertain tax
positions related to temporary differences of $7.7 million
that have been omitted from the table above. Approximately
$32.0 million of unrecognized tax benefits have been
recorded as liabilities in accordance with FIN 48, and we
are uncertain as to if or when such amounts may be settled, with
the exception of those amounts subject to a statute of
limitation. Related to the unrecognized tax benefits not
included in the table above, we have also recorded a liability
for potential penalties and interest of $7.0 million.
44
Table of Contents
For the Nine
For the Year Ended
Months Ended
December 31
September 30,
2005
2006
2007
2007
2008
(In thousands)
$
4,094
$
2,661
$
2,424
$
1,832
$
1,737
3,487
2,512
1,884
1,635
3,308
2,362
1,969
2,181
$
4,094
$
6,148
$
8,244
$
6,078
$
7,522
*
Only includes grants through September 30, 2008
45
Table of Contents
46
Table of Contents
1% Decrease
1% Increase
(In thousands)
$
(7
)
$
4
(136
)
76
47
Table of Contents
$
78.8 million
0.6 million
31.4 million
$
110.8 million
48
Table of Contents
our loss predictions are typically used by P&C insurance
and healthcare actuaries, advanced analytics groups and loss
control groups to help drive their own assessments of future
losses;
our risk selection and pricing solutions are typically used by
underwriters as they manage their books of business;
our fraud detection and prevention tools are used by P&C
insurance, healthcare and mortgage underwriters to root out
fraud prospectively and by claims departments to speed claims
and find fraud retroactively; and
our tools to quantify loss are primarily used by claims
departments, independent adjustors and contractors.
49
Table of Contents
50
Table of Contents
51
Table of Contents
the total value of exposures in risk transactions is increasing;
the number of participants in risk transactions is often large
and the asymmetry of information among participants is often
substantial; and
the failure to understand risk can lead to large and rapid
declines in financial performance.
U.S. property value exposed to hurricanes continues to
increase dramatically due to population dynamics and increase of
wealth among other factors, with the current trend predicting a
doubling of losses every ten years. At this rate, a repeat of
the 1926 Great Miami hurricane could result in $500 billion
in economic damage as soon as the 2020s according to
Natural Hazards Review; and
U.S. health expenditures have grown at a CAGR of 7% between
1997 and 2007 and are expected to grow at roughly the same level
through 2016 according to data compiled by the
U.S. Department of Health and Human Services;
the total value of outstanding households mortgage debt
outstanding in the United States has increased by 11% annually
over the past ten years according to the Federal Reserve.
52
Table of Contents
identification applications are the primary solutions that allow
customers to understand their risk exposures and proactively
manage them. Over the last three years, we have retained 98% of
our customers across all of our businesses, which we believe
reflects our customers recognition of the value they
derive from our solutions.
53
Table of Contents
54
Table of Contents
55
Table of Contents
56
Table of Contents
57
Table of Contents
58
Table of Contents
59
Table of Contents
60
Table of Contents
estimating replacement costs during the insurance underwriting
process;
quantifying the ultimate cost of repair or reconstruction of
damaged or destroyed buildings;
aiding in the settlement of insurance claims; and
tracking the process of repair or reconstruction and
facilitating communication among insurers, adjusters,
contractors and policyholders.
61
Table of Contents
62
Table of Contents
63
Table of Contents
LOCATION Analyst, a new portfolio-assessment system that uses
proprietary insurance industry data, visual maps and
sophisticated reporting to help insurers make better risk
management decisions;
360Value, an innovative web-based system for estimating
replacement values of residential, commercial and agricultural
properties; and
Predictive models to help insurers classify, segment and price
risks for a variety of lines of insurance.
64
Table of Contents
65
Table of Contents
66
Table of Contents
Square Feet
Lease Expiration Date
390,991
May 21, 2021
68,343
January 1, 2017
47,000
March 31, 2015
28,666
October 30, 2011
23,505
May 31, 2014
67
Table of Contents
68
Table of Contents
69
Table of Contents
59
Chairman of the Board of Directors, President and Chief
Executive Officer
51
Executive Vice President and Chief Operating Officer
42
Senior Vice President and Chief Financial Officer
48
Senior Vice President, General Counsel and Corporate Secretary
68
Executive Vice President Information Services and
Government Relations
57
Senior Vice President AISG
58
Senior Vice President Insurance Services
72
Director
72
Director
56
Director
52
Director
58
Director
67
Director
58
Director
53
Director
55
Director
73
Director
65
Director
59
Director
70
Table of Contents
71
Table of Contents
72
Table of Contents
between eight to ten Class A directors; and
three Class B directors.
73
Table of Contents
74
Table of Contents
Fees Earned or
Stock Awards
Option Awards
Total
Paid in Cash ($)
($)(1)
($)(1)
($)
7,500
25,080
52,271
84,851
32,500
25,080
97,725
155,305
10,500
152,725
163,225
10,500
147,725
158,225
31,000
12,540
43,540
117,500
117,500
125,000
125,000
32,000
149,996
181,996
4,500
112,500
117,000
9,000
62,700
62,500
134,200
9,000
97,725
106,725
9,000
50,160
27,271
86,431
(1)
For a discussion of the assumptions used to calculate the
amounts shown in the option awards and stock awards columns, see
note 2(j) of the notes to our audited consolidated
financial statements included as part of this prospectus.
75
Table of Contents
(2)
Mr. Brandon received options during 2007 with a fair value
of $25,000, and stock awards with a fair value of $25,080. As of
December 31, 2007, Mr. Brandon owned options covering
3,635 shares. The amount shown in the option column above
includes expense amounts recognized, under FAS 123R, in
2007 relating to option grants made in 2006.
(3)
Mr. Brown received stock awards during 2007 with a fair
value of $25,080. As of December 31, 2007, Mr. Brown
owned options covering 3,000 shares. The amount shown in
the option column above includes expense amounts recognized,
under FAS 123R, in 2007 relating to option grants made in
2006.
(4)
Mr. Dell received options during 2007 with a fair value of
$55,000. As of December 31, 2007, Mr. Dell owned
options covering 1,724 shares. The amount shown in the
option column above includes expense amounts recognized, under
FAS 123R, in 2007 relating to option grants made in 2006.
(5)
Mr. Feinberg received options during 2007 with a fair value
of $50,000. As of December 31, 2007, Mr. Feinberg
owned options covering 3,739 shares. The amount shown in
the option column above includes expense amounts recognized,
under FAS 123R, in 2007 relating to option grants made in
2006.
(6)
Mr. Foskett received stock awards during 2007 with a fair
value of $12,540. As of December 31, 2007, Mr. Foskett
owned 47 stock awards and options covering 1,000 shares.
(7)
Mr. Iordanou received options during 2007 with a fair value
of $117,500. As of December 31, 2007, Mr. Iordanou
owned options covering 8,796 shares.
(8)
Mr. Lehman received options during 2007 with a fair value
of $125,000. As of December 31, 2007, Mr. Lehman owned
options covering 2,517 shares.
(9)
Mr. Liss received options during 2007 with a fair value of
$25,000. As of December 31, 2007, Mr. Liss owned
options covering 1,870 shares. The amount shown in the
option column above includes expense amounts recognized, under
FAS 123R, in 2007 relating to option grants made in 2006.
(10)
Mr. Mills received options during 2007 with a fair value of
$112,500. As of December 31, 2007, Mr. Mills owned
options covering 5,608 shares.
(11)
Mr. Rothkopf received options during 2007 with a fair value
of $62,500, and stock awards with a fair value of $62,700. As of
December 31, 2007, Mr. Rothkopf owned options covering
2,021 shares.
(12)
As of December 31, 2007, Ms. Stewart owned 1,142 stock
awards and options covering 1,500 shares. The amount shown
in the option column above includes expense amounts recognized,
under FAS 123R, in 2007 relating to option grants made in
2006.
(13)
Mr. Wright received stock awards during 2007 with a fair
value of $50,160. As of December 31, 2007, Mr. Wright
owned options covering 3,642 shares. The amount shown in
the option column above includes expense amounts recognized,
under FAS 123R, in 2007 relating to option grants made in
2006.
76
Table of Contents
base salary;
annual cash incentive awards;
long-term equity incentive awards; and
health, welfare and retirement plans.
77
Table of Contents
78
Table of Contents
a combined 401(k) Savings Plan and ESOP,
79
Table of Contents
a defined benefit pension plan with (i) a traditional final
pay formula applicable to employees who were 49 years old
with 15 years of service as of January 1, 2002, and
(ii) a cash balance formula applicable to other employees
hired prior to March 1, 2005, and
a profit sharing plan (as a component of the 401(k) plan) which
is available to employees hired on or after March 1, 2005.
80
Table of Contents
Change in Pension
Value and
Non-Equity
Non-qualified
Option
Incentive Plan
Deferred
Awards ($)
Compensation ($)
Compensation
All Other
Salary ($)
(1)
(2)
Earnings ($)
Compensation ($)
Total ($)
898,654
1,062,800
2,000,000
300,610
80,907
(3)
4,342,971
Chief Executive Officer
256,769
247,512
300,000
63,668
11,868
(4)
879,817
Chief Financial Officer
419,812
644,107
600,000
83,782
52,386
(5)
1,800,087
355,000
276,646
300,000
15,173
(6)
946,819
General Counsel and
Corporate Secretary
302,308
458,546
100,000
284,068
12,044
(8)
1,156,966
78,058
241,342
5,485
119,738
(10)
444,623
(1)
The amounts in this column reflect the expense incurred for
accounting purposes in accordance with FAS 123R for options
granted in 2007 and prior years under the LTI plan. For a
discussion of the assumptions used to calculate the amounts
shown in this column, see note 2(j) of the notes to our
audited consolidated financial statements included as part of
this prospectus.
(2)
The amounts in this column are cash incentive awards under the
STI plan in respect of performance for the year ended
December 31, 2007.
(3)
Amount includes $15,187 for life insurance premiums, a 401(k)
matching contribution of $10,125 and $55,595 for costs of
personal benefits, including club memberships ($44,439) and
automobile allowance.
(4)
Amount includes a 401(k) matching contribution of $11,625.
(5)
Amount includes a 401(k) matching contribution of $10,125 and
$41,291 for costs of personal benefits, including commutation
via commercial air carrier between the Companys
headquarters and the executives home, and temporary living
quarters near the Companys headquarters ($25,891). Costs
of commercial air travel were determined using average rates
incurred for such travel.
(6)
Amount includes a 401(k) matching contribution of $10,125.
(7)
Mr. Boehning retired from the Company on January 31,
2008.
(8)
Amount includes a 401(k) matching contribution of $10,125.
(9)
Mr. Geraghty was Chief Financial Officer until the
termination of his employment effective March 8, 2007.
(10)
Includes a severance payment of $99,310 and a 401(k) matching
contribution of $10,125.
81
Table of Contents
All Other
Estimated
Option
Grant Date
Future Payouts
Awards:
Fair Value of
Under Non-Equity
Number of
Exercise or
Stock and
Incentive Plan
Securities
Base Price
Stock
Option
Awards
Underlying
of Option
Value on
Awards
Grant Date
Approval Date
Target ($)
Options
Awards ($/Sh)
Grant Date
($)
2,700,000
March 1, 2007
February 22, 2007
486,000
2,100
755
755
437,703
June 30, 2007
June 18, 2007
300
836
836
73,443
March 1, 2007
February 22, 2007
756,000
5,200
755
755
1,083,836
March 1, 2007
February 22, 2007
648,000
2,000
755
755
416,860
March 1, 2007
February 22, 2007
549,000
2,200
755
755
458,546
(1)
Mr. Boehning retired from the Company on January 31,
2008.
(2)
Mr. Geraghty was Chief Financial Officer until the
termination of his employment effective March 8, 2007.
Option Awards(1)
Number of
Number of
Securities
Securities
Underlying
Underlying
Unexercised
Unexercised
Option
Date of
Options (#)
Options (#)
Exercise
Option
Option Grant
Exercisable
Unexercisable
Price ($)
Expiration Date
July 1, 2000
10,000
100
July 1, 2010
July 1, 2000
50,000
110
July 1, 2010
December 18, 2002
75,000
155
December 18, 2012
June 29, 2005
30,000
20,000
420
June 29, 2015
March 1, 2001
1,250
92
March 1, 2011
March 1, 2002
1,750
108
March 1, 2012
March 1, 2003
5,000
144
March 1, 2013
March 1, 2004
3,750
1,250
231
March 1, 2014
March 1, 2005
1,250
1,250
437
March 1, 2015
March 1, 2006
525
1,575
565
March 1, 2016
March 1, 2007
2,100
755
March 1, 2017
June 1, 2007
300
836
June 1, 2017
82
Table of Contents
Option Awards(1)
Number of
Number of
Securities
Securities
Underlying
Underlying
Unexercised
Unexercised
Option
Date of
Options (#)
Options (#)
Exercise
Option
Option Grant
Exercisable
Unexercisable
Price ($)
Expiration Date
March 1, 2003
18,750
144
March 1, 2013
March 1, 2004
9,750
3,250
231
March 1, 2014
March 1, 2005
4,000
4,000
437
March 1, 2015
March 1, 2006
1,350
4,050
565
March 1, 2016
March 1, 2007
5,200
755
March 1, 2017
October 2, 2006
1,000
3,000
681
October 2, 2016
March 1, 2007
2,000
755
March 1, 2017
March 1, 2003
1,250
144
March 1, 2013
March 1, 2004
1,000
1,000
231
March 1, 2014
March 1, 2005
625
1,250
437
March 1, 2015
March 1, 2006
575
1,725
565
March 1, 2016
March 1, 2007
2,200
755
March 1, 2017
(1)
The right to exercise stock options vests ratably on the first,
second, third and fourth anniversaries of the date of grant for
options granted to NEOs other than Mr. Coyne. A portion of
Mr. Coynes options with an exercise price above the
grant date fair market value vested immediately.
Option Awards
Number of
Shares Acquired
Value
on Exercise
Realized on
(#)
Exercise ($)
4,850
2,172,400
Table of Contents
Number of Years
Present Value of
Payments During
Credited Service
Accumulated Benefit
Last Fiscal Year
Plan Name
(#)
($)
($)
PPIO
9
94,469
Supplemental Plan
9
1,433,441
PPIO
16
168,385
Supplemental Plan
16
99,879
PPIO
7
90,848
Supplemental Plan
7
249,177
NA
NA
NA
PPIO
10
867,347
Supplemental Plan
10
1,163,069
PPIO
7
41,737
65,570
Supplemental Plan
7
64,364
Aggregate
Executive
Registrant
Aggregate
Aggregate
Balance
Contributions
Contributions
Earnings
Withdrawals/
at end of
in Last FY
in Last FY
in Last FY
Distributions
Last FY
($)
($)
($)
($)
($)
54,242
1,215,357
84
Table of Contents
(i)
a pro rata STI award;
(ii)
a severance payment equal to his base salary plus target bonus
amount multiplied by the lesser of (a) the number of years
remaining in the term of his employment contract or (b) two;
(iii)
continuation of health benefits (at his expense) for
18 months; and
(iv)
immediate vesting of any remaining unvested options.
(i)
a pro rata STI award;
(ii)
a severance payment equal to the executives base salary
plus target bonus amount times two;
(iii)
continuation of health benefits (at the executives expense) for
18 months; and
(iv)
immediate vesting of any remaining unvested options.
85
Table of Contents
86
Table of Contents
87
Table of Contents
Year Ended
Year Ended
Year Ended
As of
December 31, 2005
December 31, 2006
December 31, 2007
September 30, 2008
(In thousands)
$
$
6,449
$
$
5,003
5,160
5,323
487
503
519
3,466
4,193
4,930
528
766
1,428
313
1,930
2,496
3,107
1,665
1,727
1,791
1,930
1,991
2,054
1,801
1,862
1,921
438
457
467
489
511
7,206
8,716
10,588
(1)
Mr. Geraghty was Chief Financial Officer of the Company
until termination of his employment effective March 8, 2007.
88
Table of Contents
Year Ended
Year Ended
Year Ended
Nine Months Ended
December 31, 2005
December 31, 2006
December 31, 2007
September 30, 2008
(In thousands)
$
70,262
$
26,931
$
16,436
$
3,838
2,511
8,060
5,447
55
838
413
1,427
546
1,971
2,525
1,374
594
612
1,152
13,417
417
916
62,993
1,086
10,438
6,019
83,256
(1)
Mr. Geraghty was our Chief Financial Officer until
termination of his employment effective March 8, 2007.
(2)
Mr. Marcon was our Chairman and Chief Executive Officer and
was the beneficial owner of greater that 5% of our Class A
common stock
89
Table of Contents
90
Table of Contents
91
Table of Contents
each person whom we know to own beneficially more than 5% of our
common stock;
each of the directors and named executive officers individually;
all directors and executive officers as a group; and
each of the selling stockholders, which consist of the entities
and individuals shown as having shares listed in the column
Number of Shares Being Offered.
Shares Beneficially
Owned After the Offering(1)
Class of our
Shares Beneficially Owned Before
Number
Common Stock
Name and Address of
Common
the Offering
of Shares
Beneficially
Beneficial Owner
Stock
Number
Percent
Being Offered
Owned
Percent
92
Table of Contents
Shares Beneficially
Owned After the Offering(1)
Class of our
Shares Beneficially Owned Before
Number
Common Stock
Name and Address of
Common
the Offering
of Shares
Beneficially
Beneficial Owner
Stock
Number
Percent
Being Offered
Owned
Percent
(1)
Assumes no exercise of the underwriters over-allotment
option. See Underwriting.
Table of Contents
94
Table of Contents
any transfer to us by any person or entity;
any transfer of any shares of Class B common stock of
either series to any other holder of Class B common stock
or its affiliate;
any transfer of any shares of Class B common stock of any
applicable series to an affiliate of such holder; and
any transfer by a holder of Class B common stock to any
person that succeeds to all or substantially all of the assets
of such holder, whether by merger, consolidation, amalgamation,
sale of substantially all assets or other similar transactions.
95
Table of Contents
the transaction is approved by the board of directors prior to
the date the interested stockholder obtained such status;
upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced; or
on or subsequent to such date the business combination is
approved by the board of directors and authorized at an annual
or special meeting of stockholders by the affirmative vote of at
least
66
2
/
3
%
of the outstanding voting stock which is not owned by the
interested stockholder.
between eight to ten Class A directors; and
three Class B directors.
96
Table of Contents
97
Table of Contents
NON-U.S.
HOLDERS OF COMMON STOCK
a non-resident alien individual, other than certain former
citizens and residents of the United States subject to tax as
expatriates,
a corporation, or other entity treated as a corporation for
U.S. federal income tax purposes, created or organized in
or under the laws of a jurisdiction other than the United States
or any state or political subdivision thereof; or
an estate or trust, other than an estate or trust the income of
which is subject to U.S. federal income taxation regardless
of its source.
98
Table of Contents
the gain is effectively connected with a trade or business of
the
non-U.S. holder
in the United States, subject to an applicable income treaty
providing otherwise, or
the Company is or has been a U.S. real property holding
corporation at any time within the five-year period preceding
the disposition or the
non-U.S. holders
holding period, whichever period is shorter, and its common
stock has ceased to be traded on an established securities
market prior to the beginning of the calendar year in which the
sale or disposition occurs.
99
Table of Contents
On the date of this prospectus.
After 180 days from the date of this prospectus (subject,
in some cases, to volume limitations).
At various times after 180 days from the date of this
prospectus (subject, in some cases, to volume limitations).
one percent of the number of shares of our common stock then
outstanding, which will equal
approximately shares
immediately after this offering; and
100
Table of Contents
the average weekly trading volume of our common stock on
the
during the four calendar weeks preceding the filing of a notice
on Form 144 with respect to the sale.
101
Table of Contents
Number of
Shares
Incorporated
102
Table of Contents
Per Share
Without Option
With Option
$
$
$
$
$
$
$
$
$
the valuation multiples of publicly traded companies that the
representatives believe to be comparable with us;
our financial information;
the history of, and the prospects for, our company and the
industry in which we compete;
an assessment of our management, our past and present
operations, and the prospects for, and timing of, our future
revenues;
the present state of our business; and
the factors listed above in relation to market values and
various valuation measures of other companies engaged in
activities similar to ours.
103
Table of Contents
104
Table of Contents
to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
to fewer than 100 natural or legal persons (other than qualified
investors as defined in the Prospectus Directive) subject to
obtaining the prior content of the manager for any such offer; or
in any other circumstances which do not require the publication
by us of a prospectus pursuant to Article 3 of the
Prospectus Directive.
they have complied and will comply with all applicable
provisions of the Financial Services and Markets Act 2000, or
FSMA, with respect to anything done by them in relation to our
common stock in, from or otherwise involving the United Kingdom;
they have only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation
or inducement to engage in investment activity (within the
meaning of Section 21 of the FSMA) received by them in
connection with the issue or sale of our common stock in
circumstances in which Section 21(1) of the FSMA does not
apply to us; and
they and each of their affiliates have not (i) offered or
sold and will not offer or sell in Hong Kong, by means of any
document, our common stock other than (a) to
professional investors as defined in the Securities
and Futures Ordinance (Cap. 571) of Hong Kong and any rules
made under that Ordinance or (b) in other circumstances
which do not result in the document being a
prospectus as defined in the Companies Ordinance
(Cap. 32) of Hong Kong or which do not constitute an offer
to the public within the meaning of that Ordinance or
(ii) issued or had in their possession for the purposes of
issue, and will not issue or have in their possession for the
purposes of issue, whether in Hong Kong or elsewhere, any
advertisement, invitation or document relating to our common
stock, which is directed at, or the contents of which are likely
to be accessed or read by, the public of Hong Kong (except if
permitted to do so under the securities laws of Hong Kong) other
than with respect to our common stock which are or are intended
to be disposed of only to persons outside Hong Kong or only to
professional investors as defined in the Securities
and Futures Ordinance and any rules made under that Ordinance.
The contents of this document have not been reviewed by any
regulatory authority
105
Table of Contents
in Hong Kong. You are advised to exercise caution in relation to
the offer. If you are in any doubt about any of the contents of
this document, you should obtain independent professional advice.
106
Page
F-2
F-3
F-4
F-5
F-7
F-27
F-28
F-29
F-30
F-31
F-32
F-33
F-34
F-36
F-82
F-83
F-84
F-85
F-90
F-91
F-92
F-93
F-94
F-95
F-1
Table of Contents
September 30,
December 31,
2008
2007
unaudited
(In thousands, except for share and per share data)
$
24,049
$
51,024
28,350
5,899
86,488
82,109
347
2
7,609
12,703
22,654
13,926
3,003
21,540
8,525
17,452
181,025
204,655
85,436
84,735
141,160
112,174
339,891
366,254
12,356
55,679
84,449
12,936
5,667
$
828,483
$
857,934
$
78,234
$
72,553
100,300
15,750
35,171
145,042
4,636
4,712
127,907
150,737
346,248
388,794
403,159
450,640
17,637
95,383
23,894
22,527
62,085
56,882
853,023
1,014,226
1,217,942
989,532
(4,129
)
(3,562
)
(42,625
)
(232
)
1,171,188
985,738
100
100
(8,699
)
(57,171
)
(508,136
)
(400,965
)
(678,993
)
(683,994
)
(1,195,728
)
(1,142,030
)
$
828,483
$
857,934
F-2
Table of Contents
September 30,
September 30,
2007
2008
(In thousands, except for share and per share data)
$
599,711
$
662,081
261,845
288,985
82,589
91,293
23,297
25,478
24,964
21,978
392,695
427,734
207,016
234,347
5,953
2,005
854
(1,665
)
(17,052
)
(22,566
)
(119
)
(21
)
(10,364
)
(22,247
)
196,652
212,100
(81,273
)
(90,311
)
115,379
121,789
(3,322
)
$
112,057
$
121,789
$
28.49
$
32.93
(0.82
)
$
27.67
$
32.93
$
27.39
$
31.63
(0.79
)
$
26.60
$
31.63
4,049,460
3,698,519
4,212,518
3,849,873
F-3
Table of Contents
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS DEFICIT
(UNAUDITED)
For the Year Ended December 31, 2007 and the Nine Months
Ended September 30, 2008
Accumulated
Other
Total
Accumulated
Comprehensive
Class B Common Stock
Treasury
Stockholders
Deficit
Loss
Shares
Par Value
Stock
Deficit
(In thousands, except for share data)
$
(457,557
)
$
(16,017
)
10,004,500
$
100
$
(642,883
)
$
(1,116,357
)
150,374
150,374
7,318
7,318
157,692
(36,110
)
(36,110
)
(36,655
)
(36,655
)
(10,338
)
(10,338
)
(153,960
)
(153,960
)
$
(508,136
)
$
(8,699
)
10,004,500
$
100
$
(678,993
)
$
(1,195,728
)
121,789
121,789
(48,472
)
(48,472
)
73,317
(5,001
)
(5,001
)
(3,261
)
(3,261
)
(11,357
)
(11,357
)
$
(400,965
)
$
(57,171
)
10,004,500
$
100
$
(683,994
)
$
(1,142,030
)
F-4
Table of Contents
September 30,
September 30,
2007
2008
(In thousands)
$
112,057
$
121,789
23,373
25,478
24,964
21,978
2,366
266
16,500
17,353
3,673
550
6,078
7,522
1,850
2,618
1,744
(1,763
)
(1,142
)
483
(854
)
1,665
283
282
1,551
31
(12,461
)
(17,101
)
5,128
4,145
10,825
4,377
(48
)
(3,479
)
(14,874
)
(9,082
)
(14,007
)
(2,200
)
25,697
22,830
469
(3,834
)
193,034
194,046
F-5
Table of Contents
September 30,
September 30,
2007
2008
(In thousands)
(713
)
(41
)
(3,822
)
(3,191
)
(98,100
)
107
549
(3,320
)
(43,887
)
(156
)
22,764
21,609
(28,328
)
(22,323
)
172
6,181
(1,736
)
(1,247
)
(54,812
)
(100,670
)
150,000
85,000
40,000
(127,777
)
(263,744
)
(33,365
)
(5,001
)
(133,648
)
(35,219
)
12,461
17,101
29,482
389
892
(196,940
)
(66,489
)
295
88
(58,423
)
26,975
99,152
24,049
$
40,729
$
51,024
$
69,368
$
85,498
$
18,319
$
20,896
$
14,665
$
20,148
$
23,462
$
41,970
$
2,856
$
3,838
$
2,643
$
$
1,099
$
2,485
$
$
15,200
F-6
Table of Contents
1.
Organization:
2.
Basis of
Presentation and Summary of Significant Accounting
Policies:
F-7
Table of Contents
F-8
Table of Contents
3.
Concentration
of Credit Risk:
F-9
Table of Contents
4.
Accounts
Receivables:
December 31,
September 30,
2007
2008
$
88,370
$
85,969
6,365
3,474
94,735
89,443
(8,247
)
(7,334
)
$
86,488
$
82,109
5.
Notes
Receivable from Stockholders:
6.
Investments:
Gross
Gross
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
29,036
$
$
(686
)
$
28,350
Gross
Gross
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
5,916
$
$
(17
)
$
5,899
F-10
Table of Contents
7.
Fair
Value Measurements:
F-11
Table of Contents
Quoted Prices
in Active Markets
Significant Other
Significant
September 30,
for Identical
Observable
Unobservable
2008
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
$
5,899
$
5,899
$
$
989,532
989,532
(1)
Available-for-sale
equity securities are valued using quoted market prices
multiplied by the number of shares owned.
(2)
The fair value of the Companys Class A redeemable
common stock is established for purposes of the ISO 401
(K) Savings and Employee Stock Ownership Plan
(KSOP) generally on the final day of the quarter and
such price is utilized for all share transactions in the
subsequent quarter. The current valuation in effect for the KSOP
is also considered the fair value for Class A redeemable
common stock and related transactions within the Insurance
Services Office, Inc. 1996 Incentive Plan. See Note 12 for
a description of the valuation process and a reconciliation of
the beginning and ending balance for the redeemable common stock
for the nine months ended September 30, 2008.
8.
Goodwill
and Intangible Assets:
Risk Assessment
Decision Analytics
Total
$
27,908
$
311,983
$
339,891
3,320
3,320
15,200
15,200
7,843
7,843
$
27,908
$
338,346
$
366,254
F-12
Table of Contents
Weighted
Average
Accumulated
Useful Life
Cost
Amortization
Net
5 years
$
164,317
$
(80,419
)
$
83,898
4 years
25,846
(13,667
)
12,179
6 years
6,555
(5,596
)
959
13 years
57,906
(13,782
)
44,124
$
254,624
$
(113,464
)
$
141,160
Weighted
Average
Accumulated
Useful Life
Cost
Amortization
Net
5 years
$
164,129
$
(94,977
)
$
69,152
4 years
25,846
(16,844
)
9,002
6 years
6,555
(5,891
)
664
13 years
51,086
(17,730
)
33,356
$
247,616
$
(135,442
)
$
112,174
Amount
$
7,172
27,232
22,034
15,816
13,674
26,246
9.
Acquisitions
and Discontinued Operations:
F-13
Table of Contents
September 30,
2007
$
2,231
$
(4,402
)
1,080
$
(3,322
)
10.
Income
Taxes:
F-14
Table of Contents
11.
Debt:
Issuance
Maturity
December 31,
September 30,
Date
Date
2007
2008
10/25/2007
4/25/2008
$
15,000
$
9/18/2008
10/20/2008
5,000
9/18/2008
10/20/2008
10,000
12/31/2007
1/3/2008
15,000
9/30/2008
10/30/2008
15,000
9/12/2008
10/13/2008
10,000
6/14/2005
6/13/2009
100,000
Various
Various
4,408
4,568
Various
Various
763
474
$
35,171
$
145,042
6/14/2005
6/13/2009
$
100,000
$
6/14/2005
6/13/2011
50,000
50,000
8/8/2006
8/8/2011
25,000
25,000
8/8/2006
8/8/2013
75,000
75,000
10/26/2007
10/26/2013
17,500
17,500
10/26/2007
10/26/2015
17,500
17,500
4/29/2008
4/29/2013
15,000
4/29/2008
4/29/2015
85,000
8/8/2006
8/8/2011
50,000
50,000
8/8/2006
8/8/2013
25,000
25,000
10/26/2007
10/26/2013
17,500
17,500
10/26/2007
10/26/2015
17,500
17,500
4/29/2008
4/29/2015
50,000
Various
Various
7,299
5,108
Various
Various
860
532
$
403,159
$
450,640
F-15
Table of Contents
12.
Redeemable
Common Stock:
F-16
Table of Contents
Notes
Total
Class A Redeemable Common Stock
Receivable
Redeemable
Outstanding
Redemption
Unearned
Additional
from
Common
Shares
Value
KSOP
Paid in Capital
Stockholders
Stock
1,163,066
$
1,217,942
$
(4,129
)
$
$
(42,625
)
$
1,171,188
(355,994
)
(309,552
)
62,541
(247,011
)
567
16,786
17,353
7,522
7,522
80,506
69,548
(24,308
)
(20,148
)
25,092
266
237
237
11,357
11,357
887,844
$
989,532
$
(3,562
)
$
$
(232
)
$
985,738
13.
Stockholders
Deficit:
F-17
Table of Contents
September 30,
September 30,
2007
2008
$
115,379
$
121,789
(3,322
)
$
112,057
$
121,789
4,049,460
3,698,519
163,058
151,354
4,212,518
3,849,873
$
28.49
$
32.93
(0.82
)
$
27.67
$
32.93
$
27.39
$
31.63
(0.79
)
$
26.60
$
31.63
F-18
Table of Contents
December 31,
September 30,
2007
2008
$
(412
)
$
(11
)
154
242
(8,441
)
(57,402
)
$
(8,699
)
$
(57,171
)
Tax Benefit /
Before Tax
(Expense)
After Tax
$
1,132
$
(465
)
$
667
(967
)
387
(580
)
295
295
8,196
(2,575
)
5,621
$
8,656
$
(2,653
)
$
6,003
$
(819
)
$
325
$
(494
)
1,488
(593
)
895
88
88
(80,552
)
31,591
(48,961
)
$
(79,795
)
$
31,323
$
(48,472
)
14.
Stock
Option Plan:
F-19
Table of Contents
Aggregate
Number
Weighted Average
Intrinsic
of Options
Exercise Price
Value
496,753
$
320.46
$
269,012
62,947
$
864.84
(80,506
)
$
309.02
$
44,670
(10,640
)
$
692.75
468,554
$
387.10
$
230,482
332,619
$
250.30
$
209,118
Stock Options Outstanding
Stock Options Exercisable
Weighted-
Weighted-
Average
Stock
Weighted-
Average
Stock
Weighted-
Range of
Remaining
Options
Average
Remaining
Options
Average
Contractual Life
Outstanding
Exercise Price
Contractual Life
Exercisable
Exercise Price
2.0
77,079
$
106.43
2.0
77,079
$
106.43
4.4
45,102
$
141.89
4.4
45,102
$
141.89
4.6
113,250
$
179.99
4.6
113,250
$
179.99
6.6
88,150
$
415.70
6.6
66,260
$
411.23
7.6
41,396
$
593.97
7.6
19,286
$
610.22
8.5
103,577
$
822.17
7.5
11,642
$
794.60
468,554
332,619
Number of
Fair Value
Black-Scholes
Stock Options
of Common
Exercise
Value of
Granted
Stock(1)
Price
Options
56,990
$
862.00
$
862.00
$
204.72
5,357
892.00
892.00
223.56
600
892.00
892.00
241.85
(1)
The fair value for these shares is the current valuation in
effect for the KSOP. This fair value is also utilized for all
Class A share transactions for the Insurance Services
Office, Inc. 1996 Incentive Plan.
F-20
Table of Contents
September 30, 2008
Black-Scholes
28.02%
2.58%
5.0
1.81%
$206.68
15.
Pension
and Postretirement Benefits:
F-21
Table of Contents
For the Nine Months Ended September 30,
Pension Benefits
Postretirement Plan
2007
2008
2007
2008
$
6,114
$
5,814
$
$
15,714
16,266
1,251
1,275
123
150
3
(20,595
)
(20,580
)
(600
)
(600
)
429
375
$
1,062
$
1,275
$
1,377
$
1,425
$
88
$
3,980
$
3,069
$
2,816
16.
Segment
Reporting:
F-22
Table of Contents
September 30,
2007
Risk
Decision
Assessment
Analytics
Total
$
365,553
$
234,158
$
599,711
153,270
108,575
261,845
52,265
30,324
82,589
160,018
95,259
255,277
14,408
8,889
23,297
796
24,168
24,964
144,814
62,202
207,016
5,953
854
(17,052
)
(119
)
$
196,652
$
14,843
$
13,485
$
28,328
F-23
Table of Contents
September 30,
2008
Risk
Decision
Assessment
Analytics
Total
$
378,542
$
283,539
$
662,081
154,724
134,261
288,985
56,505
34,788
91,293
167,313
114,490
281,803
14,147
11,331
25,478
605
21,373
21,978
152,561
81,786
234,347
2,005
(1,665
)
(22,566
)
(21
)
$
212,100
$
9,741
$
12,582
$
22,323
September 30,
September 30,
2007
2008
234,518
247,520
95,195
94,574
20,299
20,556
15,541
15,892
$
365,553
$
378,542
$
129,602
$
157,654
59,408
69,353
45,148
56,532
$
234,158
$
283,539
$
599,711
$
662,081
17.
Research
and Development Costs:
Table of Contents
18.
Related
Parties:
19.
Commitments
and Contingencies:
F-25
Table of Contents
20.
Subsequent
Events:
F-26
Table of Contents
F-27
Table of Contents
F-28
Table of Contents
1.
Organization:
2.
Basis of
Presentation:
3.
Commitments
and Contingencies:
F-29
Table of Contents
Insurance Services Office, Inc.
Jersey City, New Jersey
August 12, 2008
F-30
Table of Contents
F-31
Table of Contents
2005
2006
2007
(In thousands, except for share
and per share data)
$
645,660
$
730,133
$
802,195
294,911
331,804
357,191
88,723
100,124
107,576
22,024
28,007
31,745
19,800
26,854
33,916
425,458
486,789
530,428
220,202
243,344
271,767
2,919
6,585
8,442
27
(375
)
857
(10,465
)
(16,668
)
(22,928
)
(14
)
(109
)
9
(7,533
)
(10,567
)
(13,620
)
212,669
232,777
258,147
(85,722
)
(86,921
)
(103,184
)
126,947
145,856
154,963
(2,574
)
(1,805
)
(4,589
)
$
124,373
$
144,051
$
150,374
$
29.81
$
35.31
$
38.58
(0.61
)
(0.44
)
(1.14
)
$
29.20
$
34.87
$
37.44
$
28.45
$
33.85
$
37.03
(0.58
)
(0.42
)
(1.10
)
$
27.87
$
33.43
$
35.93
4,258,989
4,130,962
4,016,928
4,462,109
4,308,976
4,185,151
F-32
Table of Contents
Accumulated
Other
Total
Accumulated
Comprehensive
Class B Common Stock
Treasury
Stockholders
Deficit
Income (Loss)
Shares
Par Value
Stock
Deficit
(In thousands, except for share data)
$
(135,830
)
$
191
10,004,500
$
100
$
(602,390
)
$
(737,929
)
124,373
124,373
(2,925
)
(2,925
)
121,448
(39,378
)
(39,378
)
(70,854
)
(70,854
)
(211,581
)
(211,581
)
$
(293,892
)
$
(2,734
)
10,004,500
$
100
$
(641,768
)
$
(938,294
)
144,051
144,051
2,352
2,352
146,403
(15,635
)
(15,635
)
(1,115
)
(1,115
)
(81,516
)
(81,516
)
(226,200
)
(226,200
)
$
(457,557
)
$
(16,017
)
10,004,500
$
100
$
(642,883
)
$
(1,116,357
)
150,374
150,374
7,318
7,318
157,692
(36,110
)
(36,110
)
(36,655
)
(36,655
)
(10,338
)
(10,338
)
(153,960
)
(153,960
)
$
(508,136
)
$
(8,699
)
10,004,500
$
100
$
(678,993
)
$
(1,195,728
)
F-33
Table of Contents
2005
2006
2007
(In thousands)
$
124,373
$
144,051
$
150,374
22,123
28,119
31,843
19,800
26,854
33,916
13,793
18,779
22,247
4,094
6,148
8,244
601
1,909
2,182
1,500
1,744
(1,516
)
(2,190
)
(2,454
)
(27
)
375
(857
)
(7,776
)
(11,848
)
(5,698
)
185
216
298
2,374
1,791
(27,852
)
(31,964
)
(12,798
)
(12,263
)
(3,987
)
7,194
(3,486
)
(1,751
)
2,213
25,938
19,262
13,062
9,656
(7,014
)
(8,294
)
3,682
27,219
3,751
1,246
6,947
(237
)
174,071
223,499
248,521
F-34
Table of Contents
2005
2006
2007
(In thousands)
(59,249
)
(201,617
)
(50,658
)
(10,771
)
(3,191
)
2,024
297
3,039
(14,354
)
(14,600
)
(4,375
)
(496
)
(35,081
)
(44,101
)
402
34,893
22,872
(24,019
)
(25,742
)
(32,941
)
4
301
(985
)
(1,602
)
(1,777
)
(107,444
)
(243,452
)
(110,831
)
15,000
15,000
30,000
220,000
175,000
85,000
(141,857
)
(126,857
)
(168,660
)
(39,378
)
(1,115
)
(36,110
)
100
(172,884
)
(18,356
)
(136,008
)
27,852
31,964
12,798
213
271
389
(90,954
)
75,907
(212,591
)
(551
)
376
(202
)
(24,878
)
56,330
(75,103
)
67,700
42,822
99,152
$
42,822
$
99,152
$
24,049
$
66,841
$
78,800
$
94,258
$
9,814
$
14,901
$
22,752
$
(12,573
)
$
(24,438
)
$
(15,130
)
$
32,720
$
13,854
$
35,429
$
$
10,001
$
2,643
$
(8,918
)
$
7,542
$
24
$
8,712
$
$
9,554
$
$
$
4,688
$
1,000
$
4,362
$
98,343
F-35
Table of Contents
1.
Organization:
2.
Basis of
Presentation and Summary of Significant Accounting
Policies:
F-36
Table of Contents
F-37
Table of Contents
F-38
Table of Contents
F-39
Table of Contents
F-40
Table of Contents
2005
2006
2007
Black-Scholes
Black-Scholes
Black-Scholes
13.77
%
13.53
%
13.40
%
4.08
%
4.59
%
4.54
%
6.13
6.18
6.19
F-41
Table of Contents
$
13,933
$
7,620
$
31,891
$
10,338
F-42
Table of Contents
F-43
Table of Contents
3.
Concentration
of Credit Risk:
F-44
Table of Contents
4.
Cash and
Cash Equivalents:
5.
Accounts
Receivables:
2006
2007
$
90,366
$
88,370
6,632
6,365
96,998
94,735
(5,273
)
(8,247
)
$
91,725
$
86,488
6.
Notes
Receivable from Stockholders:
F-45
Table of Contents
7.
Investments:
Gross
Gross
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
15
$
$
$
15
6,736
506
7,242
$
6,751
$
506
$
$
7,257
Gross
Gross
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
29,036
$
$
(686
)
$
28,350
2005
2006
2007
$
$
$
135
27
114
922
(205
)
(284
)
(200
)
$
27
$
(375
)
$
857
F-46
Table of Contents
8.
Fixed
Assets:
Accumulated
Depreciation and
Useful Life
Cost
Amortization
Net
3-10 years
$
77,372
$
(56,252
)
$
21,120
Lease term
23,573
(6,271
)
17,302
3 years
25,663
(20,759
)
4,904
3 years
58,047
(38,048
)
19,999
3-4 years
21,093
(13,948
)
7,145
$
205,748
$
(135,278
)
$
70,470
3-10 years
$
102,745
$
(67,687
)
$
35,058
Lease term
24,049
(7,876
)
16,173
3 years
30,918
(25,431
)
5,487
3 years
69,758
(45,632
)
24,126
3-4 years
17,080
(12,488
)
4,592
$
244,550
$
(159,114
)
$
85,436
9.
Goodwill
and Intangible Assets:
F-47
Table of Contents
Risk
Decision
Assessment
Analytics
Total
$
23,303
$
126,295
$
149,598
69,328
69,328
4,362
8,934
13,296
(7,542
)
(7,542
)
27,665
197,015
224,680
14,157
14,157
243
102,555
102,798
(1,744
)
(1,744
)
$
27,908
$
311,983
$
339,891
Weighted
Average
Accumulated
Useful Life
Cost
Amortization
Net
6 years
$
157,946
$
(55,869
)
$
102,077
4 years
16,990
(10,678
)
6,312
6 years
6,555
(4,641
)
1,914
9 years
37,775
(8,360
)
29,415
$
219,266
$
(79,548
)
$
139,718
Weighted
Average
Accumulated
Useful Life
Cost
Amortization
Net
5 years
$
164,317
$
(80,419
)
$
83,898
4 years
25,846
(13,667
)
12,179
6 years
6,555
(5,596
)
959
13 years
57,906
(13,782
)
44,124
$
254,624
$
(113,464
)
$
141,160
F-48
Table of Contents
Amount
$
30,025
$
27,920
$
22,721
$
16,455
$
14,319
$
29,720
10.
Acquisitions
and Discontinued Operations:
F-49
Table of Contents
Weighted Average
Useful Life
Total
4 years
$
6,371
4 years
8,856
19 years
20,131
$
35,358
F-50
Table of Contents
Xactware
All other
Total
$
7,061
$
926
$
7,987
2,320
107
2,427
11
11
121,603
7,234
128,837
63,309
6,019
69,328
194,304
14,286
208,590
6,348
93
6,441
6,348
93
6,441
$
187,956
$
14,193
$
202,149
2005
2006
(unaudited)
$
686,851
$
761,192
$
122,901
$
148,009
$
28.86
$
35.83
$
27.54
$
34.35
F-51
Table of Contents
Weighted Average
Useful Life
Xactware
All other
Total
6 years
$
94,604
$
5,221
$
99,825
3 years
4,640
1,074
5,714
12 years
22,359
939
23,298
$
121,603
$
7,234
$
128,837
F-52
Table of Contents
2005
2006
2007
$
4,249
$
4,456
$
2,352
$
(3,295
)
$
(2,517
)
$
(6,085
)
721
712
1,496
$
(2,574
)
$
(1,805
)
$
(4,589
)
F-53
Table of Contents
11.
Income
Taxes:
2006
2007
$
12,633
$
18,118
11,923
11,231
(4,700
)
(3,281
)
4,632
7,391
3,289
3,598
5,768
6,383
9,947
5,621
(189
)
274
15,686
13,159
8,586
1,995
6,260
(2,144
)
(1,534
)
$
56,313
$
78,333
$
78.8 million
0.6 million
31.4 million
$
110.8 million
F-54
Table of Contents
2005
2006
2007
$
82,723
$
86,297
$
96,277
10,718
12,663
17,843
$
93,441
$
98,960
$
114,120
$
(5,944
)
$
(9,800
)
$
(7,041
)
(1,775
)
(2,239
)
(3,895
)
$
(7,719
)
$
(12,039
)
$
(10,936
)
$
85,722
$
86,921
$
103,184
2005
2006
2007
35.0
%
35.0
%
35.0
%
2.7
%
2.9
%
3.2
%
2.1
%
2.7
%
2.9
%
(0.1
)%
(3.1
)%
(0.3
)%
0.6
%
(0.2
)%
(0.8
)%
40.3
%
37.3
%
40.0
%
$
27,052
7,662
(2,684
)
$
32,030
F-55
Table of Contents
12.
Composition
of Certain Financial Statement Captions:
2006
2007
$
11,465
$
5,767
1,726
2,758
$
13,191
$
8,525
$
43,175
$
48,417
23,535
29,817
$
66,710
$
78,234
$
$
39,023
10,044
11,028
12,119
12,034
$
22,163
$
62,085
F-56
Table of Contents
13.
Debt:
As of December 31,
Issuance Date
Maturity Date
2006
2007
6/10/2004
6/10/2007
$
60,000
$
6/28/2004
6/28/2007
40,000
10/25/2006
4/25/2007
15,000
10/25/2007
4/25/2008
15,000
12/31/2007
1/3/2008
15,000
Various
Various
5,463
4,408
Various
Various
388
763
$
120,851
$
35,171
6/14/2005
6/13/2009
$
100,000
$
100,000
6/14/2005
6/13/2011
50,000
50,000
8/8/2006
8/8/2011
25,000
25,000
8/8/2006
8/8/2013
75,000
75,000
10/26/2007
10/26/2013
17,500
10/26/2007
10/26/2015
17,500
8/8/2006
8/8/2011
50,000
50,000
8/8/2006
8/8/2013
25,000
25,000
10/26/2007
10/26/2013
17,500
10/26/2007
10/26/2015
17,500
Various
Various
1,814
7,299
Various
Various
1,033
860
$
327,847
$
403,159
F-57
Table of Contents
F-58
Table of Contents
Amount
$
35,171
104,272
3,548
125,305
34
170,000
Maximum
Effective
Expiration
Available
Interest
Borrowings
Date
Date
Committed
Uncommitted
Rate
Outstanding
9/30/2006
9/30/2007
$
25,000
$
50,000
LIBOR + .65%
$
9/30/2006
9/30/2007
10,000
40,000
LIBOR + .75%
15,000
10/1/2006
10/31/2007
20,000
30,000
PRIME − 1.0%
8/29/2006
8/28/2007
50,000
Determined at the
time of borrowing
$
55,000
$
170,000
$
15,000
10/1/2007
9/30/2008
$
25,000
$
50,000
LIBOR + .65%
$
15,000
9/30/2007
9/30/2008
10,000
50,000
LIBOR + .65%
15,000
10/31/2007
10/29/2008
20,000
30,000
LIBOR + .65%
8/29/2007
8/28/2008
50,000
Determined at the
time of borrowing
$
55,000
$
180,000
$
30,000
F-59
Table of Contents
14.
Redeemable
Common Stock:
F-60
Table of Contents
Notes
Total
Class A Redeemable Common Stock
Receivable
Redeemable
Redemption
Unearned
Additional
from
Common
Shares
Value
KSOP
Pain-in-Capital
Stockholders
Stock
2,435,584
$
764,973
$
(6,561
)
$
$
(35,880
)
$
722,532
(88,305
)
11,411
(76,894
)
838
12,955
13,793
4,094
4,094
233,608
10,484
27,852
(12,573
)
25,763
494
220
220
256,482
(44,901
)
211,581
2,669,686
$
943,854
$
(5,723
)
$
$
(37,042
)
$
901,089
(105,670
)
9,277
(96,393
)
810
17,969
18,779
6,148
6,148
179,967
62,435
31,964
(24,438
)
69,961
232
149
149
282,281
$
(56,081
)
226,200
2,849,885
$
1,183,049
$
(4,913
)
$
$
(52,203
)
$
1,125,933
F-61
Table of Contents
Notes
Total
Class A Redeemable Common Stock
Receivable
Redeemable
Redemption
Unearned
Additional
from
Common
Shares
Value
KSOP
Pain-in-Capital
Stockholders
Stock
(190,336
)
24,708
(165,628
)
784
21,463
22,247
8,244
8,244
72,083
28,526
12,798
(15,130
)
26,194
285
238
238
196,465
(42,505
)
153,960
2,922,253
$
1,217,942
$
(4,129
)
$
$
(42,625
)
$
1,171,188
15.
Stockholders
Deficit:
December 31,
December 31,
December 31,
2005
2006
2007
$
126,947
$
145,856
$
154,963
(2,574
)
(1,805
)
(4,589
)
$
124,373
$
144,051
$
150,374
Table of Contents
December 31,
December 31,
December 31,
2005
2006
2007
4,258,989
4,130,962
4,016,928
203,120
178,014
168,223
4,462,109
4,308,976
4,185,151
$
29.81
$
35.31
$
38.58
(0.61
)
(0.44
)
(1.14
)
$
29.20
$
34.87
$
37.44
$
28.45
$
33.85
$
37.03
(0.58
)
(0.42
)
(1.10
)
$
27.87
$
33.43
$
35.93
2006
2007
$
318
$
(412
)
357
154
(16,692
)
(8,441
)
$
(16,017
)
$
(8,699
)
Table of Contents
Tax Benefit
Before Tax
(Expense)
After Tax
$
176
$
(70
)
$
106
(27
)
9
(18
)
(549
)
(549
)
(4,126
)
1,662
(2,464
)
$
(4,526
)
$
1,601
$
(2,925
)
$
467
$
(176
)
$
291
91
(34
)
57
376
376
2,814
(1,186
)
1,628
$
3,748
$
(1,396
)
$
2,352
$
(2,250
)
$
885
$
(1,365
)
1,057
(422
)
635
(203
)
(203
)
12,577
(4,326
)
8,251
$
11,181
$
(3,863
)
$
7,318
16.
Compensation
Plans:
F-64
Table of Contents
2006
2007
848,730
865,166
125,670
135,382
860
169,400
142,392
1,143,800
1,143,800
$
127,897
$
122,742
F-65
Table of Contents
Weighted
Aggregate
Number
Average
Intrinsic
of Options
Exercise Price
Value
765,800
$
135.40
$
215,649
129,303
$
431.03
(233,608
)
$
110.96
$
70,854
(14,467
)
$
247.07
647,028
$
200.89
$
235,589
69,441
$
586.53
(179,967
)
$
144.16
$
81,516
(12,734
)
$
360.11
523,768
$
267.64
$
255,264
55,979
$
760.35
(72,083
)
$
257.46
$
36,655
(10,911
)
$
458.18
496,753
$
320.46
$
269,012
329,503
$
208.35
$
215,380
287,617
$
179.04
$
165,656
F-66
Table of Contents
Weighted
Average
Number
Grant-Date
of Options
Fair Value
449,486
$
42.71
129,303
$
103.94
(248,810
)
$
51.18
(14,467
)
$
53.39
315,512
$
60.63
69,441
$
167.49
(136,068
)
$
54.86
(12,734
)
$
89.34
236,151
$
93.83
55,979
$
210.69
(113,969
)
$
76.89
(10,911
)
$
117.45
167,250
$
142.94
Options Outstanding
Options Exercisable
Weighted-
Weighted-
Average
Stock
Weighted-
Average
Stock
Weighted-
Range of
Remaining
Options
Average
Remaining
Options
Average
Contractual Life
Outstanding
Exercise Price
Contractual Life
Exercisable
Exercise Price
2.9
97,260
$
104.45
2.9
97,260
$
104.45
5.2
53,460
$
142.01
5.2
53,460
$
142.01
5.5
135,117
$
186.53
5.3
109,967
$
176.36
7.3
101,504
$
418.50
7.3
53,369
$
408.19
8.2
54,337
$
586.88
8.3
13,776
$
607.84
9.1
55,075
$
760.11
9.4
1,671
$
807.89
496,753
329,503
F-67
Table of Contents
Number of
Fair Value
Black-Scholes
Stock Options
of Common
Exercise
Value of
Granted
Stock
(1)
Price
Options
52,280
$
755.00
$
755.00
$
208.43
300
$
836.00
$
836.00
$
244.81
1,315
$
836.00
$
836.00
$
245.91
2,084
$
836.00
$
836.00
$
240.26
(1)
The fair value for these shares is the current valuation in
effect for the KSOP. This fair value is also utilized for all
Class A share transactions for the Insurance Services
Office, Inc. 1996 Incentive Plan.
17.
Pension
and Postretirement Benefits:
F-68
Table of Contents
Percentage of Plan Assets
Target
2006
2007
Allocation
62
%
62
%
60
%
36
%
36
%
40
%
2
%
2
%
0
%
100
%
100
%
100
%
F-69
Table of Contents
December 31, 2006
$
1,687
(4,070
)
679
(23,248
)
(24,952
)
9,317
$
(15,635
)
Pension Plan
Postretirement Plan
2006
2007
2006
2007
$
373,375
$
373,674
$
32,561
$
30,595
8,464
8,152
5
20,054
20,952
1,716
1,669
(8,612
)
(15,934
)
(476
)
441
1,894
2,227
(19,607
)
(23,004
)
(5,497
)
(6,936
)
392
344
$
373,674
$
363,840
$
30,595
$
28,340
$
350,378
$
341,829
5.75
%
6.25
%
5.75
%
5.75
%
3.75
%
4.25
%
N/A
N/A
$
338,338
$
344,235
$
$
25,280
24,604
224
178
3,211
4,365
1,894
2,227
(19,607
)
(23,004
)
(5,497
)
(6,936
)
392
344
$
344,235
$
346,013
$
$
$
(29,439
)
$
(17,827
)
$
(30,595
)
$
(28,340
)
F-70
Table of Contents
Pension Plan
Postretirement Plan
2006
2007
2006
2007
$
$
$
997
$
831
(4,918
)
$
(4,117
)
$
28,166
14,515
2,394
2,833
$
23,248
$
10,398
$
3,391
$
3,664
Pension Plan
Postretirement Plan
2005
2006
2007
2005
2006
2007
$
8,413
$
8,464
$
8,152
$
18
$
5
$
19,755
20,054
20,952
1,866
1,716
1,669
166
166
166
21
4
2
(27,219
)
(26,430
)
(27,458
)
(801
)
(801
)
(801
)
607
901
572
$
755
$
2,188
$
1,417
$
2,071
$
1,891
$
1,837
Pension Plan
Postretirement Plan
2005
2006
2007
2005
2006
2007
N/A
N/A
$
N/A
N/A
$
(166
)
N/A
N/A
(572
)
N/A
N/A
N/A
N/A
801
N/A
N/A
N/A
N/A
(13,079
)
N/A
N/A
439
N/A
N/A
(12,850
)
N/A
N/A
273
$
755
$
2,188
$
(11,433
)
$
2,071
$
1,891
$
2,110
F-71
Table of Contents
Pension
Postretirement
Plan
Plan
Total
$
$
166
$
166
(801
)
(801
)
470
470
$
(331
)
$
166
$
(165
)
Pension Plan
Postretirement Plan
2005
2006
2007
2005
2006
2007
5.75
%
5.50
%
5.75
%
5.75
%
5.50
%
5.75
%
8.50
%
8.25
%
8.25
%
N/A
N/A
N/A
3.75
%
3.75
%
3.75
%
N/A
N/A
N/A
$
(254
)
$
(190
)
$
(4,070
)
$
(4,446
)
(29,185
)
(17,637
)
(26,525
)
(23,894
)
$
(29,439
)
$
(17,827
)
$
(30,595
)
$
(28,340
)
Pension
Postretirement
Plan
Plan
$
22,139
$
4,574
$
23,051
$
4,368
$
24,184
$
4,062
$
25,522
$
3,722
$
26,998
$
3,291
$
164,039
$
11,156
1% Decrease
1% Increase
$
(7
)
$
4
$
(136
)
$
76
F-72
Table of Contents
18.
Segment
Reporting
F-73
Table of Contents
2005
Risk
Decision
Assessment
Analytics
Total
$
448,875
$
196,785
$
645,660
191,516
103,395
294,911
61,408
27,315
88,723
195,951
66,075
262,026
14,373
7,651
22,024
3,239
16,561
19,800
178,339
41,863
220,202
2,919
27
(10,465
)
(14
)
$
212,669
$
24,379
$
8,352
$
32,731
F-74
Table of Contents
2006
Risk
Decision
Assessment
Analytics
Total
$
472,634
$
257,499
$
730,133
203,878
127,926
331,804
65,884
34,240
100,124
202,872
95,333
298,205
17,931
10,076
28,007
3,001
23,853
26,854
181,940
61,404
243,344
6,585
(375
)
(16,668
)
(109
)
$
232,777
$
11,753
$
13,989
$
25,742
2007
Risk
Decision
Assessment
Analytics
Total
$
485,160
$
317,035
$
802,195
204,182
153,009
357,191
68,198
39,378
107,576
212,780
124,648
337,428
19,397
12,348
31,745
1,047
32,869
33,916
192,336
79,431
271,767
8,442
857
(22,928
)
9
$
258,147
$
33,059
$
14,124
$
47,183
Table of Contents
For the Years Ended December 31,
2005
2006
2007
290,204
303,957
311,087
114,467
123,627
126,291
25,228
25,793
27,282
18,976
19,257
20,500
448,875
472,634
485,160
143,258
168,189
172,726
53,527
67,129
81,110
22,181
63,199
196,785
257,499
317,035
$
645,660
$
730,133
$
802,195
19.
Related
Parties:
F-76
Table of Contents
20.
Commitments
and Contingencies:
Operating
Capital
Leases
Leases
$
19,285
$
4,818
18,900
4,136
18,215
3,283
18,250
164
17,312
75,445
42,002
$
209,409
$
12,401
(694
)
$
11,707
F-77
Table of Contents
F-78
Table of Contents
21.
Subsequent
Events
22.
Correction
of an Error
F-79
Table of Contents
For the Year Ended December 31, 2005
Adjustment for
As Previously
Discontinued
Correction
As
Caption of Consolidated Statement of Operations
Reported
Operations
of Errors
Corrected
$
651,340
$
(4,249
)
$
(1,431
)
$
645,660
218,275
3,358
(1,431
)
220,202
210,805
3,295
(1,431
)
212,669
(85,534
)
(721
)
533
(85,722
)
125,271
2,574
(898
)
126,947
125,271
(898
)
124,373
29.41
0.61
(0.21
)
29.81
29.41
(0.21
)
29.20
28.08
0.58
(0.21
)
28.45
28.08
(0.21
)
27.87
For the Year Ended December 31, 2006
As Previously
Correction
Caption of Consolidated Statement of Operations
Reported
of Errors
As Corrected
$
731,636
$
(1,503
)
$
730,133
244,847
(1,503
)
243,344
234,280
(1,503
)
232,777
(87,498
)
577
(86,921
)
146,782
(926
)
145,856
144,977
(926
)
144,051
35.54
(0.23
)
35.31
35.10
(0.23
)
34.87
34.07
(0.22
)
33.85
33.65
(0.22
)
33.43
F-80
Table of Contents
For the Year Ended December 31, 2007
As Previously
Other
Correction
As
Caption of Consolidated Statement of Operations
Reported
Adjustments(1)
of Errors
Corrected
$
803,700
$
$
(1,505
)
$
802,195
273,272
(1,505
)
271,767
259,652
(1,505
)
258,147
(102,546
)
(1,221
)
583
(103,184
)
157,106
(1,221
)
(922
)
154,963
152,517
(1,221
)
(922
)
150,374
39.11
(0.30
)
(0.23
)
38.58
37.97
(0.30
)
(0.23
)
37.44
37.53
(0.28
)
(0.22
)
37.03
36.43
(0.28
)
(0.22
)
35.93
As of December 31, 2006
As Previously
Other
Correction
Caption of Consolidated Balance Sheet
Reported
Adjustments(1)
of Errors
As Corrected
$
14,387
$
$
4,632
$
19,019
244,361
4,632
248,993
37,315
(21
)
37,294
740,120
4,611
744,731
112,509
11,627
124,136
317,554
254
11,627
329,435
723,528
11,627
735,155
(15,996
)
(21
)
(16,017
)
729,971
(1,180,533
)
(6,995
)
(457,557
)
16,592
(1,125,933
)
(7,016
)
(1,116,357
)
740,120
4,611
744,731
As of December 31, 2007
As Previously
Other
Correction
Caption of Consolidated Balance Sheet
Reported
Adjustments(1)
of Errors
As Corrected
$
17,373
$
66
$
5,215
$
22,654
172,741
3,069
5,215
181,025
37,859
17,756
64
55,679
802,379
20,825
5,279
828,483
114,776
13,131
127,907
339,566
(6,449
)
13,131
346,248
807,507
32,385
13,131
853,023
(8,763
)
64
(8,699
)
882,488
(1,382,708
)
(7,916
)
(508,136
)
(5,128
)
(1,182,748
)
(7,852
)
(1,195,728
)
802,379
20,825
5,279
828,483
(1)
The Other Adjustments were required to prepare the
financial statements for the initial public offering and do not
represent a change from non-GAAP or incorrect GAAP to GAAP.
These adjustments related to the adoption of FIN No. 48
(See note 11) and the classification of Class A shares
as redeemable common stock (See note 14).
Table of Contents
June 30,
December 31,
2006
2005
(Unaudited)
$
12,289,605
$
12,636,914
4,682,223
3,450,648
117,267
721,689
433,839
17,693,517
16,638,668
60,034
156,078
13,402,836
13,574,229
304,765
316,463
314,526
228,531
14,082,161
14,275,301
(9,172,370
)
(9,298,899
)
4,909,791
4,976,402
270,320
145,320
285,750
368,616
$
23,159,378
$
22,129,006
$
782,137
$
1,097,437
2,759,008
1,884,386
131,336
101,825
4,963,189
3,822,190
8,635,670
6,905,838
304,347
304,347
14,219,361
14,918,821
14,523,708
15,223,168
$
23,159,378
$
22,129,006
F-82
Table of Contents
Six Months Ended June 30,
2006
2005
$
25,249,061
$
17,121,476
2,851,550
2,183,987
5,855,078
5,707,097
2,046,968
1,532,302
4,906,775
3,768,258
15,660,371
13,191,644
9,588,690
3,929,832
(44,891
)
(94,993
)
289,588
88,541
$
9,833,387
$
3,923,380
F-83
Table of Contents
Six Months Ended June 30,
2006
2005
$
9,833,387
$
3,923,380
1,102,842
1,356,968
34,666
8,037
(1,231,575
)
857,714
117,267
995,062
(287,850
)
(156,427
)
82,866
(92,416
)
(315,300
)
(688,882
)
29,511
345,739
874,622
276,134
1,140,999
(414,647
)
11,381,435
6,410,662
(125,000
)
(65,310
)
(1,070,897
)
(1,632,330
)
9,500
(1,195,897
)
(1,688,140
)
(2,262,606
)
(10,532,847
)
(3,616,533
)
(10,532,847
)
(5,879,139
)
(347,309
)
(1,156,617
)
12,636,914
7,619,555
$
12,289,605
6,462,938
$
10,225
$
76,750
F-84
Table of Contents
1.
Summary
of Significant Accounting Policies
F-85
Table of Contents
7 years
5 years
13 years
14 years
F-86
Table of Contents
$
9,833,387
(8,033
)
$
9,825,354
F-87
Table of Contents
2.
Notes
Receivable from Related Parties
June 30,
December 31,
2006
2005
$
20,320
$
20,320
250,000
125,000
$
270,320
$
145,320
3.
Operating
Lease Obligations
$
95,414
116,077
49,886
16,385
$
277,762
4.
Stockholders
Equity
F-88
Table of Contents
Outstanding
Shares
Stock Options
Weighted-
Available
Number of
Price per
Average
for Grant
Shares
Share
Exercise Price
4,737,521
562,479
$
0.93
$
0.93
19,114
(19,114
)
$
0.93
$
0.93
4,756,635
543,365
$
0.93
$
0.93
4,756,635
543,365
$
0.93
$
0.93
5.
Related
Party Transactions
6.
Employee
Benefits
7.
Subsequent
Events
F-89
Table of Contents
Xactware, Inc.
F-90
Table of Contents
December 31
2005
2004
$
12,636,914
$
7,560,755
58,800
3,450,648
2,600,970
117,267
995,062
99,513
433,839
320,369
16,638,668
11,635,469
156,078
174,867
13,574,229
14,126,285
316,463
269,461
228,531
527,499
14,275,301
15,098,112
(9,298,899
)
(8,415,292
)
4,976,402
6,682,820
145,320
107,652
368,616
302,892
$
22,129,006
$
18,728,833
$
1,097,437
$
832,608
1,884,386
1,628,702
101,825
35,088
3,822,190
2,394,736
2,003,746
6,905,838
6,894,880
1,700,243
6,905,838
8,595,123
304,347
304,347
14,918,821
9,829,363
15,223,168
10,133,710
$
22,129,006
$
18,728,833
F-91
Table of Contents
Years Ended December 31
2005
2004
$
41,190,993
$
32,700,070
4,964,774
4,307,031
12,133,116
10,617,525
3,387,532
2,566,494
7,350,424
6,808,460
27,835,846
24,299,510
13,355,147
8,400,560
(135,013
)
(252,524
)
213,228
98,477
$
13,433,362
$
8,246,513
F-92
Table of Contents
Common Stock
Total
Number
Retained
Stockholders
of Shares
Amount
Earnings
Equity
20,836,870
$
304,347
$
7,938,264
$
8,242,611
(6,355,414
)
(6,355,414
)
8,246,513
8,246,513
20,836,870
304,347
9,829,363
10,133,710
(8,343,904
)
(8,343,904
)
13,433,362
13,433,362
20,836,870
$
304,347
$
14,918,821
$
15,223,168
F-93
Table of Contents
Years Ended December 31
2005
2004
$
13,433,362
$
8,246,513
2,528,710
2,602,690
37,755
(55
)
(1,817
)
(33,572
)
(37,741
)
60,617
58,013
(849,678
)
(281,675
)
877,795
(995,062
)
(113,470
)
(19,028
)
(65,724
)
(74,559
)
264,829
(423,275
)
66,737
15,558
255,684
242,661
1,427,454
197,181
17,922,254
9,497,649
61,845
52,838
(2,262,854
)
(2,588,874
)
158,600
1,087
(2,042,409
)
(2,534,949
)
3,334,739
(3,703,989
)
(2,655,553
)
(7,099,697
)
(6,355,414
)
(10,803,686
)
(5,676,228
)
5,076,159
1,286,472
7,560,755
6,274,283
$
12,636,914
$
7,560,755
$
135,013
$
244,053
$
1,244,207
F-94
Table of Contents
1.
Summary
of Significant Accounting Policies
F-95
Table of Contents
7 years
5 years
13 years
14 years
F-96
Table of Contents
F-97
Table of Contents
December 31
2005
2004
$
13,433,362
$
8,246,513
(16,066
)
(17,327
)
$
13,417,296
$
8,229,186
F-98
Table of Contents
2.
Notes
Receivable from Related Parties
3.
Marketable
Securities
F-99
Table of Contents
4.
Long-Term
Debt
5.
Operating
Lease Obligations
F-100
Table of Contents
$
189,549
106,356
40,166
12,335
$
348,406
6.
Stockholders
Equity
Shares
Outstanding Stock Options
Weighted-
Available
Number of
Price per
Average
for Grant
Shares
Share
Exercise Price
4,725,283
574,717
$
0.93
$
0.93
12,238
(12,238
)
$
0.93
$
0.93
4,737,521
562,479
$
0.93
$
0.93
19,114
(19,114
)
$
0.93
$
0.93
4,756,635
543,365
$
0.93
$
0.93
7.
Related
Party Transactions
F-101
Table of Contents
8.
Employee
Benefits
F-102
Table of Contents
Amount
to be Paid
$
29,475
$
75,500
*
*
*
*
*
*
$
*
*
To be completed by amendment.
Item 14.
Indemnification
of Directors and Officers.
II-1
Table of Contents
Item 15.
Recent
Sales of Unregistered Securities.
Item 16.
Exhibits
and Financial Statement Schedules.
Exhibit
1
.1
Form of Underwriting Agreement
3
.1
Amended and Restated Certificate of Incorporation*
3
.2
Amended and Restated By-Laws*
4
.1
Form of Common Stock Certificate*
4
.2
Prudential Uncommitted Master Shelf Agreement, dated as of June
13, 2003, among Insurance Services Office, Inc., The Prudential
Insurance Company of America, U.S. Private Placement Fund,
Baystate Investments, LLC, United of Omaha Life Insurance
Company and Prudential Investment Management, Inc.
4
.3
Amendment No. 1 to the Prudential Uncommitted Master Shelf
Agreement, dated February 1, 2005, among Insurance Services
Office, Inc., The Prudential Insurance Company of America,
Prudential Investment Management, Inc. and the other purchasers
party thereto
4
.4
Amendment No. 2 to the Prudential Uncommitted Master Shelf
Agreement, dated June 1, 2005, among Insurance Services Office,
Inc., The Prudential Insurance Company of America, Prudential
Investment Management, Inc. and the other purchasers party
thereto
4
.5
Amendment No. 3 to the Prudential Uncommitted Master Shelf
Agreement, dated January 23, 2006, among Insurance Services
Office, Inc., The Prudential Insurance Company of America,
Prudential Investment Management, Inc. and the other purchasers
party thereto
4
.6
Waiver and Amendment No. 4 to the Prudential Uncommitted Master
Shelf Agreement, dated February 28, 2007, among Insurance
Services Office, Inc., The Prudential Insurance Company of
America, Prudential Investment Management, Inc. and the other
purchasers party thereto
4
.7
New York Life Uncommitted Master Shelf Agreement, dated as of
March 16, 2007, among Insurance Services Office, Inc., New York
Life Insurance Company and the other purchasers party thereto
5
.1
Opinion of Davis Polk & Wardwell*
10
.1
401(k) Savings Plan and Employee Stock Ownership Plan**
10
.2
Verisk Analytics, Inc. 2008 Equity Incentive Plan*
10
.3
Form of Letter Agreement**
10
.4
Form of Master License Agreement and Participation Supplement**
10
.5
Schedule of Master License Agreements Substantially Identical in
All Material Respects to the Form of Master License Agreement
and Participation Supplement filed as Exhibit 10.4
21
.1
Subsidiaries of the Registrant*
II-2
Table of Contents
Exhibit
23
.1
Consent of Deloitte & Touche LLP
23
.2
Consent of Deloitte & Touche LLP
23
.3
Consent of Ernst & Young LLP
23
.4
Consent of Davis Polk & Wardwell (included in
Exhibit 5.1)*
24
.1
Power of Attorney**
*
To be filed by amendment.
**
Previously filed
Schedule
Schedule II
Valuation and Qualifying Accounts and Reserves
Years Ended December 31, 2005, 2006 and 2007
II-3
Table of Contents
Item 17.
Undertakings
II-4
Table of Contents
By:
Title:
Chief Executive Officer, President and
Chairman of the Board of Directors
Chief Executive Officer, President
and Chairman of the Board of Directors (principal executive
officer)
November 20, 2008
Chief Financial Officer
(principal financial officer and principal accounting officer)
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
II-5
Table of Contents
Director
November 20, 2008
Director
November 20, 2008
Director
November 20, 2008
*By:
November 20, 2008
II-6
Table of Contents
Years Ended December 31, 2005, 2006 and 2007
(In thousands)
Balance at
Charged to
Beginning
Costs and
Deductions
Balance at
of Year
Expenses(1)
Write-offs(2)
End of Year
$
3,750
$
1,554
$
(1,681
)
$
3,623
$
$
2,144
$
$
2,144
$
3,623
$
3,069
$
(1,419
)
$
5,273
$
2,144
$
$
$
2,144
$
5,273
$
6,807
$
(3,833
)
$
8,247
$
2,144
$
$
(610
)
$
1,534
(1)
Primarily additional reserves for bad debts.
(2)
Primarily accounts receivable balances written off, net of
recoveries, and the expiration of loss carryforwards.
S-1
Table of Contents
*
To be filed by amendment.
**
Previously Filed.
c/o |
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 World Financial Center New York, New York 10080 | |
c/o |
Morgan Stanley & Co. Incorporated
1585 Broadway New York, New York 10036 |
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Very truly yours,
VERISK ANALYTICS, INC. |
||||
By: | ||||
Title: | ||||
By: | ||||
As Attorney-in-Fact acting on behalf of | ||||
the Selling Stockholders named in
Schedule B hereto |
||||
By | ||||
Authorized Signatory | ||||
MORGAN STANLEY & CO. INCORPORATED
|
||||
By | ||||
Name: | ||||
Title: | ||||
28
1.
|
AUTHORIZATION OF ISSUE OF NOTES. | 1 | ||||
1A.
|
Authorization of Issue of Series A Notes. | 1 | ||||
1B.
|
Authorization of Issue of Shelf Notes. | 2 | ||||
|
||||||
2.
|
PURCHASE AND SALE OF NOTES. | 2 | ||||
2A.
|
Purchase and Sale of Series A Notes. | 2 | ||||
2B.
|
Purchase and Sale of Shelf Notes. | 3 | ||||
2B(1).
|
Facility. | 3 | ||||
2B(2).
|
Issuance Period. | 3 | ||||
2B(3).
|
Periodic Spread Information. | 3 | ||||
2B(4).
|
Request for Purchase. | 4 | ||||
2B(5).
|
Rate Quotes. | 5 | ||||
2B(6).
|
Acceptance. | 5 | ||||
2B(7).
|
Market Disruption. | 6 | ||||
2B(8).
|
Facility Closings. | 6 | ||||
2B(9).
|
Fees. | 7 | ||||
|
||||||
2C.
|
CERTAIN FLOATING RATE SHELF NOTE PROVISIONS | 8 | ||||
2C(1).
|
Floating Rate Interest | 8 | ||||
2C(2).
|
Breakage Cost Indemnity. | 9 | ||||
2C(3).
|
Reserve Requirement; Change in Circumstances | 10 | ||||
2C(4).
|
Illegality | 12 | ||||
2C(5).
|
Inability to Determine Interest Rate | 12 | ||||
2C(6).
|
Default Rate | 13 | ||||
2C(7).
|
Interest Rate Limitation | 13 | ||||
2C(8).
|
Assignment of Notes under Certain Circumstances | 13 | ||||
2C(9).
|
Time Bar on Compensation Claims | 14 | ||||
|
||||||
3.
|
CONDITIONS OF CLOSING. | 14 | ||||
3A.
|
Certain Documents. | 14 | ||||
3B.
|
Representations and Warranties; No Default. | 15 | ||||
3C.
|
Purchase Permitted by Applicable Laws. | 15 | ||||
3D.
|
Payment of Fees. | 15 | ||||
3E.
|
Proceedings. | 15 | ||||
|
||||||
4.
|
PREPAYMENTS. | 16 | ||||
4A.
|
No Required Prepayments of Series A Notes. | 16 | ||||
4B.
|
Required Prepayments of Shelf Notes. | 16 | ||||
4C.
|
Optional Prepayment of Shelf Notes. | 16 | ||||
4D.
|
Notice of Optional Prepayment. | 16 |
i
4E.
|
Application of Prepayments. | 17 | ||||
|
||||||
5.
|
AFFIRMATIVE COVENANTS. | 17 | ||||
5A.
|
Financial Statements; Notice of Defaults. | 17 | ||||
5B.
|
Information Required by Rule 144A. | 18 | ||||
5C.
|
Inspection of Property. | 19 | ||||
5D.
|
Intentionally Omitted. | 19 | ||||
5E.
|
Maintenance of Corporate Existence. | 19 | ||||
5F.
|
Maintenance of Insurance. | 19 | ||||
5G.
|
Maintenance of Properties. | 19 | ||||
5H.
|
Compliance with Laws. | 19 | ||||
5I.
|
Environmental and Safety Laws. | 20 | ||||
5J.
|
Payment of Taxes and Claims. | 20 | ||||
5K.
|
ERISA. | 20 | ||||
5L.
|
Pari Passu Status. | 20 | ||||
5M.
|
Most Favored Lender Status. | 20 | ||||
|
||||||
6.
|
NEGATIVE COVENANTS. | 21 | ||||
6A.
|
Financial Covenants. | 21 | ||||
6B.
|
Priority Debt. | 21 | ||||
6C.
|
Limitations on Liens and Encumbrances. | 21 | ||||
6D.
|
Merger and Consolidation. | 23 | ||||
6E.
|
Sale of Assets. | 24 | ||||
6F.
|
Sale of Receivables. | 25 | ||||
6G.
|
Subsidiary Restrictions. | 25 | ||||
6H.
|
Issuance of Stock by Subsidiaries. | 26 | ||||
6I.
|
Guarantees. | 26 | ||||
6J.
|
Sale and Lease Back. | 27 | ||||
6K.
|
Transactions with Affiliates. | 27 | ||||
6L.
|
Nature of Business. | 27 | ||||
6M.
|
Loans, Advances and Investments. | 27 | ||||
|
||||||
7.
|
EVENTS OF DEFAULT. | 29 | ||||
7A.
|
Acceleration. | 29 | ||||
7B.
|
Rescission of Acceleration. | 32 | ||||
7C.
|
Notice of Acceleration or Rescission. | 32 | ||||
7D.
|
Other Remedies. | 32 | ||||
|
||||||
8.
|
REPRESENTATIONS, COVENANTS AND WARRANTIES. | 32 | ||||
8A.
|
Organization. | 32 | ||||
8B.
|
Financial Statements. | 33 | ||||
8C.
|
Actions Pending. | 34 | ||||
8D.
|
Outstanding Debt. | 34 |
ii
8E.
|
Title to Properties. | 34 | ||||
8F.
|
Taxes. | 34 | ||||
8G.
|
Conflicting Agreements and Other Matters. | 34 | ||||
8H.
|
Offering of Notes. | 35 | ||||
8I.
|
Use of Proceeds. | 35 | ||||
8J.
|
ERISA. | 35 | ||||
8K.
|
Governmental Consent. | 36 | ||||
8L.
|
Compliance with Laws. | 36 | ||||
8M.
|
Environmental Compliance. | 36 | ||||
8N.
|
Possession of Material Rights and Intellectual Property. | 37 | ||||
8O.
|
Regulatory Status. | 37 | ||||
8P.
|
Disclosure. | 37 | ||||
|
||||||
9.
|
REPRESENTATIONS OF THE PURCHASERS. | 37 | ||||
|
||||||
10.
|
DEFINITIONS; ACCOUNTING MATTERS. | 40 | ||||
|
||||||
11.
|
MISCELLANEOUS. | 55 |
iii
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
Very truly yours, | ||||
|
||||
INSURANCE SERVICES OFFICE, INC. | ||||
|
||||
|
By: | /s/ Kenneth G. Geraghty | ||
|
||||
|
Name: | Kenneth G. Geraghty | ||
|
Title: | Executive Vice President |
62
The foregoing Agreement is hereby accepted
as of the date first above written. |
||||
|
||||
PRUDENTIAL INVESTMENT MANAGEMENT, INC. | ||||
|
||||
By:
|
/s/ Yvonne Guajardo
|
|||
|
||||
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA | ||||
By:
|
/s/ Yvonne Guajardo
|
|||
|
||||
U.S. PRIVATE PLACEMENT FUND | ||||
By:
|
Prudential Private Placement Investors, | |||
|
L.P. (as Investment Advisor) | |||
By:
|
Prudential Private Placement Investors, Inc. | |||
|
(as its General Partner) | |||
|
|
By: |
/s/ Yvonne Guajardo
|
||||
|
Vice President | |||||
|
||||||
BAYSTATE INVESTMENTS, LLC | ||||||
By: |
Prudential Private Placement Investors,
L.P. (as Investment Advisor) |
|||||
By: |
Prudential Private Placement Investors, Inc.
(as its General Partner) |
|||||
|
||||||
|
By: |
/s/ Yvonne Guajardo
|
||||
|
Vice President | |||||
|
||||||
UNITED OF OMAHA LIFE INSURANCE COMPANY | ||||||
By: |
Prudential Private Placement Investors,
L.P. (as Investment Advisor) |
|||||
By: |
Prudential Private Placement Investors, Inc.
(as its General Partner) |
|||||
|
||||||
|
By: |
/s/ Yvonne Guajardo
|
63
|
As of February 1, 2005 |
2
3
4
5
PRUDENTIAL INVESTMENT
MANAGEMENT, INC. |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
U.S. PRIVATE PLACEMENT FUND | ||||
By: Prudential Private
Placement Investors, L.P.
(as Investment Advisor) By: Prudential Private Placement Investors, Inc. (as its General Partner) |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
BAYSTATE INVESTMENTS, LLC | ||||
By: Prudential Private Placement Investors, L.P.
(as Investment Advisor) By: Prudential Private Placement Investors, Inc. (as its General Partner) |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
UNITED OF OMAHA LIFE INSURANCE
COMPANY |
||||
By: Prudential Private Placement Investors, L.P.
(as Investment Advisor) By: Prudential Private Placement Investors, Inc. (as its General Partner) |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President |
6
PRUCO LIFE INSURANCE COMPANY | ||||
|
||||
|
By: | Yvonne Guajardo | ||
|
||||
|
Asst Vice President | |||
|
||||
PRUDENTIAL RETIREMENT CEDED
BUSINESS TRUST |
||||
By: Prudential Investment Management, Inc., as
Investment Manager |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
PRUDENTIAL RETIREMENT INSURANCE
AND ANNUITY COMPANY |
||||
By: Prudential Investment Management, Inc., as
Investment Manager |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
GIBRALTAR LIFE INSURANCE CO., LTD. | ||||
By: Prudential Investment Management (Japan),
Inc., as Investment Manager By: Prudential Investment Management, Inc., as Sub-Adviser |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY |
||||
By: Prudential
Investment Management, Inc., as
Investment Manager |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President |
7
ING USA ANNUITY AND LIFE INSURANCE
COMPANY |
||||
By: Prudential Private Placement Investors, L.P., as
Investment Advisor By: Prudential Private Placement Investors, Inc., as its General Partner |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
ING LIFE INSURANCE AND ANNUITY
COMPANY |
||||
By: Prudential Private Placement Investors, L.P., as
Investment Advisor By: Prudential Private Placement Investors, Inc., as its General Partner |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President | |||
|
||||
BCBSM, INC. DBA BLUE CROSS AND BLUE
SHIELD OF MINNESOTA |
||||
By: Prudential Private Placement Investors, L.P., as
Investment Advisor By: Prudential Private Placement Investors, Inc., as its General Partner |
||||
|
||||
|
By: | /s/ Yvonne Guajardo | ||
|
||||
|
Vice President |
INSURANCE SERVICES OFFICE, INC. | ||||
|
||||
By:
Name: |
/s/ Kenneth G. Geraghty
|
|||
Title:
|
Executive Vice President and
Chief Financial Officer |
8
2
3
PRUDENTIAL INVESTMENT MANAGEMENT, INC. | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA |
||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
U.S. PRIVATE PLACEMENT FUND | ||||||
By: Prudential Private Placement Investors, L.P. | ||||||
(as Investment Advisor) | ||||||
By: Prudential Private Placement Investors, Inc.(as its General Partner) | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
BAYSTATE INVESTMENTS, LLC | ||||||
By: Prudential Private Placement Investors, L.P. | ||||||
(as Investment Advisor) | ||||||
By: Prudential Private Placement Investors, Inc. (as its General Partner) | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
UNITED OF OMAHA LIFE INSURANCE COMPANY | ||||||
By: Prudential Private Placement Investors, L.P. | ||||||
(as Investment Advisor) | ||||||
By: Prudential Private Placement Investors, Inc. (as its General Partner) | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
4
PRUCO LIFE INSURANCE COMPANY | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
PRUDENTIAL RETIREMENT CEDED
BUSINESS TRUST |
||||||
|
By: Prudential Investment Management, Inc., as Investment Manager | |||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
PRUDENTIAL RETIREMENT INSURANCE
AND ANNUITY COMPANY |
||||||
By: Prudential Investment Management, Inc., as Investment Manager | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
GIBRALTAR LIFE INSURANCE CO., LTD. | ||||||
By: Prudential Investment Management (Japan), Inc., as Investment Manager | ||||||
By: Prudential Investment Management, Inc., as Sub-Adviser | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY |
||||||
By: Prudential Investment Management, Inc., as Investment Manager | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
5
ING USA ANNUITY AND LIFE INSURANCE COMPANY | ||||||
By: Prudential Private Placement Investors, L.P., as Investment Advisor | ||||||
By: Prudential Private Placement Investors, Inc., as its General Partner | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
ING LIFE INSURANCE AND ANNUITY COMPANY | ||||||
By: Prudential Private Placement Investors, L.P., as Investment Advisor | ||||||
By: Prudential Private Placement Investors, Inc., as its General Partner | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
|||||
|
||||||
BCBSM, INC. DBA BLUE CROSS AND BLUE SHIELD OF MINNESOTA | ||||||
By: Prudential Private Placement Investors, L.P., as Investment Advisor | ||||||
By: Prudential Private Placement Investors, Inc., as its General Partner | ||||||
|
||||||
|
By: | /s/ Yvonne Guajardo | ||||
|
|
INSURANCE SERVICES OFFICE, INC.
|
||||
By:
|
/s/ Kenneth G. Geraghty | |||
Name:
|
|
|||
Title:
|
Executive Vice President and Chief Financial Officer |
6
1
2
3
4
5
PRUDENTIAL INVESTMENT MANAGEMENT, INC. | ||||||||
|
||||||||
By: | /s/ Yvonne Guajardo | |||||||
Name: | Yvonne Guajardo | |||||||
Title: | Vice President | |||||||
|
||||||||
THE PRUDENTIAL INSURANCE
COMPANY
OF AMERICA |
||||||||
|
||||||||
By: | /s/ Yvonne Guajardo | |||||||
Name: | Yvonne Guajardo | |||||||
Title: | Vice President | |||||||
|
||||||||
BAYSTATE INVESTMENTS, LLC | ||||||||
By: | Prudential Private Placement Investors, L.P. | |||||||
(as Investment Advisor) | ||||||||
By: | Prudential Private Placement Investors, Inc. | |||||||
(as its General Partner) | ||||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
PRUCO LIFE INSURANCE COMPANY | ||||||||
|
||||||||
By: | /s/ Yvonne Guajardo | |||||||
Name: | Yvonne Guajardo | |||||||
Title: | Assistant Vice President |
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY | ||||||||
|
||||||||
By: | /s/ Yvonne Guajardo | |||||||
Name: | Yvonne Guajardo | |||||||
Title: | Assistant Vice President | |||||||
|
||||||||
PRUDENTIAL RETIREMENT CEDED BUSINESS
TRUST |
||||||||
By: |
Prudential Investment Management, Inc., as
Investment Manager |
|||||||
|
||||||||
By: | /s/ Yvonne Guajardo | |||||||
Name: | Yvonne Guajardo | |||||||
Title: | Vice President | |||||||
|
||||||||
PRUDENTIAL RETIREMENT INSURANCE AND
ANNUITY COMPANY |
||||||||
By: |
Prudential Investment Management, Inc., as
Investment Manager |
|||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
GIBRALTAR LIFE INSURANCE CO., LTD. | ||||||||
By: |
Prudential Investment Management (Japan),
Inc., as Investment Manager |
|||||||
By: |
Prudential Investment Management,
Inc., as
Sub-Adviser |
|||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President |
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY |
||||||||
By: |
Prudential Investment Management, Inc., as
Investment Manager |
|||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
ING USA ANNUITY AND LIFE INSURANCE COMPANY | ||||||||
By: |
Prudential Private Placement Investors,
L.P.,
as Investment Advisor |
|||||||
By: |
Prudential Private Placement Investors,
Inc.,
as its General Partner |
|||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
ING LIFE INSURANCE AND ANNUITY
COMPANY |
||||||||
By: |
Prudential Private Placement Investors,
L.P.,
as Investment Advisor |
|||||||
By: |
Prudential Private Placement Investors,
Inc.,
as its General Partner |
|||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President |
BCBSM, INC. DBA BLUE CROSS AND BLUE
SHIELD OF MINNESOTA |
||||||||
By: |
Prudential Private Placement Investors,
L.P.,
as Investment Advisor |
|||||||
By: |
Prudential Private Placement Investors,
Inc.,
as its General Partner |
|||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
THE PRUDENTIAL LIFE INSURANCE
COMPANY, LTD. |
||||||||
By: |
Prudential Investment Management (Japan),
Inc.,
as Investment Manager |
|||||||
By: |
Prudential Investment Management,
Inc.,
as Sub-Adviser |
|||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
PHYSICIANS MUTUAL INSURANCE COMPANY | ||||||||
By: | Prudential Private Placement Investors, L.P. | |||||||
(as Investment Advisor) | ||||||||
By: | Prudential Private Placement Investors, Inc. | |||||||
(as its General Partner) | ||||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President |
AMERICAN BANKERS INSURANCE
COMPANY OF
FLORIDA, INC. |
||||||||
By: | Prudential Private Placement Investors, L.P. | |||||||
(as Investment Advisor) | ||||||||
By: | Prudential Private Placement Investors, Inc. | |||||||
(as its General Partner) | ||||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
UNION SECURITY INSURANCE
COMPANY |
||||||||
By: | Prudential Private Placement Investors, L.P. | |||||||
(as Investment Advisor) | ||||||||
By: | Prudential Private Placement Investors, Inc. | |||||||
(as its General Partner) | ||||||||
|
||||||||
|
By: | /s/ Yvonne Guajardo | ||||||
|
Name: |
|
||||||
|
Title: | Vice President |
INSURANCE SERVICES OFFICE, INC. | ||||
|
||||
By:
|
/s/ Kenneth G. Geraghty | |||
Name:
|
|
|||
Title:
|
Executive Vice President and Chief Financial Officer |
2
3
4
5
GIBRALTAR LIFE INSURANCE CO., LTD. | ||||||||
By: | Prudential Investment Management (Japan), Inc., as Investment Manager | |||||||
By: | Prudential Investment Management, Inc., as Sub-Adviser | |||||||
|
||||||||
|
By:
Name: |
/s/ Yvonne Guajardo
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
CONNECTICUT GENERAL LIFE INSURANCE COMPANY | ||||||||
By: | Prudential Investment Management, Inc., as Investment Manager | |||||||
|
||||||||
By: | /s/ Yvonne Guajardo | |||||||
Name: | Yvonne Guajardo | |||||||
Title: | Vice President | |||||||
|
||||||||
ING USA ANNUITY AND LIFE INSURANCE COMPANY | ||||||||
By: | Prudential Private Placement Investors, L.P., as Investment Advisor | |||||||
By: | Prudential Private Placement Investors, Inc., as its General Partner | |||||||
|
||||||||
|
By:
Name: |
/s/ Yvonne Guajardo
|
||||||
|
Title: | Vice President | ||||||
|
||||||||
ING LIFE INSURANCE AND ANNUITY COMPANY | ||||||||
By: | Prudential Private Placement Investors, L.P., as Investment Advisor | |||||||
By: | Prudential Private Placement Investors, Inc., as its General Partner | |||||||
|
||||||||
|
By:
Name: |
/s/ Yvonne Guajardo
|
||||||
|
Title: | Vice President |
BCBSM, INC. DBA BLUE CROSS AND BLUE SHIELD OF MINNESOTA | ||||||||
By: | Prudential Private Placement Investors, L.P., as Investment Advisor | |||||||
By: | Prudential Private Placement Investors, Inc., as its General Partner | |||||||
|
||||||||
|
By:
Name: |
/s/ Yvonne Guajardo
|
||||||
|
Title: | Vice President |
By:
Name: |
/s/ Kenneth G. Geraghty
|
|||
Title:
|
Executive Vice President |
1. AUTHORIZATION OF ISSUE OF SHELF NOTES; DELIVERIES AT SIGNING
|
1 | |||
1A. Authorization
|
1 | |||
1B. Deliveries
|
2 | |||
2. PURCHASE AND SALE OF NOTES
|
3 | |||
2A. Purchase and Sale of Shelf Notes
|
3 | |||
2A(1). Facility
|
3 | |||
2A(2). Issuance Period
|
3 | |||
2A(3). Periodic Spread Information
|
4 | |||
2A(4). Request for Purchase
|
4 | |||
2A(5). Rate Quotes
|
6 | |||
2A(6). Acceptance
|
6 | |||
2A(7). Market Disruption
|
7 | |||
2A(8). Facility Closings
|
7 | |||
2A(9). Fees
|
8 | |||
2B. Certain Floating Rate Shelf Note Provisions
|
9 | |||
2B(1). Floating Rate Interest
|
9 | |||
2B(2). Breakage Cost Indemnity
|
11 | |||
2B(3). Reserve Requirement; Change in Circumstances
|
11 | |||
2B(4). Illegality
|
13 | |||
2B(5). Inability to Determine Interest Rate
|
14 | |||
2B(6). Default Rate
|
14 | |||
2B(7). Interest Rate Limitation
|
14 | |||
2B(8). Assignment of Notes under Certain Circumstances
|
15 | |||
2B(9). Time Bar on Compensation Claims
|
15 | |||
2B(10). Adjustment to Interest Rate
|
15 | |||
3. CONDITIONS OF CLOSING
|
16 | |||
3A. Certain Documents
|
16 | |||
3B. Representations and Warranties; No Default
|
17 | |||
3C. Purchase Permitted by Applicable Laws
|
17 | |||
3D. Payment of Fees
|
18 | |||
3E. Proceedings
|
18 | |||
4. PREPAYMENTS
|
18 | |||
4A. Required Prepayments of Shelf Notes
|
18 | |||
4B. Optional Prepayment of Shelf Notes
|
18 | |||
4C. Notice of Optional Prepayment
|
19 | |||
4D. Application of Prepayments
|
19 | |||
5. AFFIRMATIVE COVENANTS
|
20 | |||
5A. Financial Statements; Notice of Defaults
|
20 | |||
5B. Inspection of Property
|
22 | |||
5C. Maintenance of Existence
|
22 | |||
5D. Maintenance of Insurance
|
22 | |||
5E. Maintenance of Properties
|
22 | |||
5F. Compliance with Laws
|
23 | |||
5G. Environmental and Safety Laws
|
23 | |||
5H. Payment of Taxes and Claims
|
23 | |||
5I. ERISA
|
23 | |||
5J. Pari Passu Status
|
24 | |||
5K. Most Favored Lender Status
|
24 |
i
6. NEGATIVE COVENANTS
|
24 | |||
6A. Financial Covenants
|
24 | |||
6B. Priority Debt
|
25 | |||
6C. Limitations on Liens and Encumbrances
|
25 | |||
6D. Merger and Consolidation
|
27 | |||
6E. Sale of Assets
|
28 | |||
6F. Sale of Receivables
|
29 | |||
6G. Subsidiary Restrictions
|
29 | |||
6H. Issuance of Stock by Subsidiaries
|
30 | |||
6I. Guarantees
|
31 | |||
6J. Sale and
Lease-Back
|
31 | |||
6K. Transactions with Affiliates
|
31 | |||
6L. Nature of Business
|
32 | |||
6M. Loans, Advances and Investments
|
32 | |||
6N. Restricted Payments
|
34 | |||
7. EVENTS OF DEFAULT
|
34 | |||
7A. Event of Default
|
34 | |||
7B. Acceleration
|
37 | |||
7C. Rescission of Acceleration
|
37 | |||
7D. Notice of Acceleration or Rescission
|
38 | |||
7E. Other Remedies
|
38 | |||
8. REPRESENTATIONS, COVENANTS, AND WARRANTIES
|
38 | |||
8A. Organization
|
38 | |||
8B. Financial Statements
|
39 | |||
8C. Actions Pending
|
40 | |||
8D. Outstanding Debt
|
40 | |||
8E. Title to Properties
|
40 | |||
8F. Taxes
|
40 | |||
8G. Conflicting Agreements and Other Matters
|
40 | |||
8H. Offering of Notes
|
41 | |||
8I. Use of Proceeds
|
41 | |||
8J. ERISA
|
42 | |||
8K. Governmental Consent
|
42 | |||
8L. Compliance with Laws
|
43 | |||
8M. Environmental Compliance
|
43 | |||
8N. Possession of Material Rights and Intellectual Property
|
43 | |||
8O. Regulatory Status
|
43 | |||
8P. Disclosure
|
44 | |||
8Q. Foreign Assets Control Regulations
|
44 | |||
8R. Plan Documents
|
44 | |||
9. REPRESENTATIONS OF THE PURCHASERS
|
45 | |||
9A. Nature of Purchase
|
45 | |||
9B. Source of Funds
|
45 | |||
10. DEFINITIONS; ACCOUNTING MATTERS
|
47 | |||
10A. Yield-Maintenance Terms
|
47 | |||
10B. Other Terms
|
49 | |||
10C. Accounting Principles, Terms, and Determinations
|
63 | |||
11. MISCELLANEOUS
|
63 | |||
11A. Note Payments
|
63 | |||
11B. Expenses
|
64 | |||
11C. Consent to Amendments
|
64 |
ii
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes
|
65 | |||
11E. Persons Deemed Owners; Participations
|
66 | |||
11F. Survival of Representations and Warranties; Entire Agreement
|
67 | |||
11G. Successors and Assigns
|
67 | |||
11H. Independence of Covenants
|
67 | |||
11I. Notices
|
67 | |||
11J.
Payments Due on Non-Business Days
|
68 | |||
11K. Severability
|
68 | |||
11L. Descriptive Headings
|
68 | |||
11M. Satisfaction Requirement
|
68 | |||
11N. Governing Law
|
68 | |||
11O. Submission to Jurisdiction
|
68 | |||
11P. Severalty of Obligations
|
69 | |||
11Q. Counterparts
|
69 | |||
11R. Confidentiality
|
69 | |||
11S. Binding Agreement
|
71 |
EXHIBIT A-1
|
Fixed Rate Senior Note, Series ___, Due | |||
EXHIBIT A-2
|
Floating Rate Shelf Note, Series ___, Due | |||
EXHIBIT B
|
Request for Purchase | |||
EXHIBIT C
|
Confirmation of Acceptance | |||
EXHIBIT D-1
|
Opinion of Companys Counsel | |||
EXHIBIT D-2
|
Opinion of Chadbourne and Parke LLP, special counsel to Company | |||
EXHIBIT D-3
|
Opinion of Companys Counsel | |||
EXHIBIT D-4
|
Opinion of Chadbourne and Parke LLP, special counsel to Company | |||
EXHIBIT E
|
Agreement of Guaranty | |||
EXHIBIT F
|
Restrictions on Shares and Options | |||
EXHIBIT G
|
Sharing Agreement | |||
|
||||
SCHEDULE 6C
|
Existing Liens | |||
SCHEDULE 6G
|
Existing Restrictions | |||
SCHEDULE 6I
|
Existing Guarantees | |||
SCHEDULE 6M(g)
|
Investment Guidelines | |||
SCHEDULE 6M(k)
|
Existing Investments | |||
SCHEDULE 8A
|
Subsidiaries | |||
SCHEDULE 8D
|
Outstanding Debt | |||
SCHEDULE 8G
|
Conflicts | |||
SCHEDULE 8M
|
Environmental Conditions |
iii
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
Page 33
Page 34
Page 35
Page 36
Page 37
Page 38
Page 39
Page 40
Page 41
Page 42
Page 43
Page 44
Page 45
Page 46
Page 47
Page 48
Page 49
Page 50
Page 51
Page 52
Page 53
Page 54
Page 55
Page 56
Page 57
Page 58
Page 59
Page 60
Page 61
Page 62
Page 63
Page 64
Page 65
Page 66
Page 67
Page 68
Page 69
Page 70
Very truly yours, | ||||||
|
||||||
INSURANCE SERVICES OFFICE, INC. | ||||||
|
||||||
|
By: | /s/ Mark V. Anquillare | ||||
|
Name: |
|
||||
|
Title: | Senior Vice President and Chief Financial Officer |
Page 71
By:
|
/s/ John P. Rafferty | |||
Name:
|
|
|||
Title:
|
Vice President |
Page 72
Licensor | Licensee | Master License Agreements | Date of Master License Agreement | |||
|
||||||
Insurance Services Office, Inc.
|
ACE Insurance Co. | ISO Master License Agreement Insurers | April 1, 2002 | |||
|
||||||
Insurance Services Office, Inc.
|
ACE USA | ISO Master License Agreement Insurers | August 6, 2001 | |||
|
||||||
Insurance Services Office, Inc.
|
Great American Insurance Company | ISO Master License Agreement Insurers, as amended by Amendment No. 1 | November 19, 2001 | |||
|
||||||
Insurance Services Office, Inc.
|
American International Group, Inc. |
ISO Master License Agreement for
Participating Insurers |
June 1, 1998 | |||
|
||||||
Insurance Services Office, Inc.
|
Transatlantic Reinsurance Company |
ISO Master License Agreement for
Participating Insurers |
September 8, 1998 | |||
|
||||||
Insurance Services Office, Inc.
|
American International Group, Inc. | ISO Master License Agreement | November 16, 2000 | |||
|
||||||
Insurance Services Office, Inc.
|
Continental Casualty Company, CNA Financial Corporation and all affiliates and subsidiaries of CNA Financial Corporation who are property/casualty insurers | ISO Master License Agreement for Participating Insurers, as amended by Amendment No. 1, dated December 30, 1998 and Amendment No. 2, dated June 21, 2006 | December 30, 1998 | |||
|
||||||
Insurance Services Office, Inc.
|
The Hartford Group |
ISO Master License Agreement for
Participating Insurers |
December 16, 1998 |
Licensor | Licensee | Master License Agreements | Date of Master License Agreement | |||
|
||||||
Insurance Services Office, Inc.
|
The Hartford Fire Insurance
Company |
ISO Master License Agreement for Participating Insurers, as amended by Amendment No. 1, dated September 23, 1999 and Amendment No. 2, dated June 1, 2006 | September 23, 1999 | |||
|
||||||
Insurance Services Office, Inc.
|
St. Paul Re, Inc. |
ISO Master License Agreement for
Participating Insurers |
August 18, 1998 | |||
|
||||||
Insurance Services Office, Inc.
|
St. Paul Fire and Marine Insurance Company | ISO Master License Agreement for Participating Insurers, as amended by Amendment No. 1, dated November 22, 1999 | November 22, 1999 | |||
|
||||||
Insurance Services Office, Inc.
|
The Travelers Indemnity Company | ISO Master License Agreement for Participating Insurers, as amended by Amendment No. 1, dated December 29, 1999 | December 23, 1999 | |||
|
||||||
Insurance Services Office, Inc.
|
The Travelers Indemnity Company | ISO Master License Agreement Property/Casualty Insurer, as amended by Amendment No. 1, dated December 29, 2006 | December 29, 2006 |
2