v3.24.3
Note 11 - Stockholders' Equity
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

11. Stockholders’ Equity:

 

We have 2,000,000,000 shares of authorized common stock as of  September 30, 2024 and December 31, 2023. Our common shares have rights to any dividend declared by the board of directors (the "Board"), subject to any preferential or other rights of any outstanding preferred stock, and voting rights to elect all current members of the Board. At September 30, 2024 and December 31, 2023, the adjusted closing price of our common stock was $267.96 and $238.86 per share, respectively. 

 

We have 80,000,000 shares of authorized preferred stock, par value $0.001 per share. The preferred shares have preferential rights over the common shares with respect to dividends and net distribution upon liquidation. We did not issue any preferred shares as of September 30, 2024 and December 31, 2023. 

 

On February 14, 2024, April 24, 2024, and  July 24, 2024, our Board approved a cash dividend of $0.39 per share of common stock issued and outstanding to the holders of record as of March 15, 2024, June 15, 2024, and September 15, 2024, respectively. Cash dividends of $166.6 million and $147.9 million were paid during the nine months ended September 30, 2024 and 2023, respectively, and recorded as a reduction to retained earnings.

 

On October 23, 2024, our Board of Directors approved a cash dividend of 39 cents per share of common stock issued and outstanding. The dividend is payable on December 31, 2024, to holders of record as of December 13, 2024.

 

Share Repurchase Program

 

In  December 2023, March 2024, and  June 2024, we entered into Accelerated Share Repurchase ("ASR") agreements (the "December 2023 ASR Agreement", "March 2024 ASR Agreement", and "June 2024 ASR Agreement") to repurchase shares of our common stock for an aggregate purchase price of $250.0 million, $200.0 million, and $150.0 million, with Goldman Sachs & Co. LLC, JPMorgan Chase Bank, N.A., and Citibank, N.A, respectively. All ASR agreements are accounted for as a treasury stock transaction and forward stock purchase agreement indexed to our common stock. The forward stock purchase agreements are classified as equity instruments under ASC 815-40, Contracts in Entity's Own Equity ("ASC 815-40") and deemed to have a fair value of zero at the respective effective date. The aggregate purchase price was recorded as a reduction to stockholder's equity in our condensed consolidated statements of changes in stockholder's equity for the nine months ended September 30, 2024. Upon payment of the aggregate purchase price on December 14, 2023, March 13, 2024, and June 13, 2024, we received initial deliveries of 873,479, 714,046, and 483,761 shares of our common stock, respectively. Upon the final settlement of the December 2023 ASR Agreement, the March 2024 ASR Agreement, and the June 2024 ASR Agreement, in February 2024,  April 2024, and  July 2024, we received 178,227, 148,286, and 68,645 additional shares as determined based on the volume weighted average share price of our common stock, less a discount, of $237.71, $231.93, and $271.54 during the term of the December 2023 ASR Agreement, the March 2024 ASR Agreement, and the June 2024 ASR Agreement, respectively. These repurchases for the nine months ended September 30, 2024 resulted in a reduction of outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share ("EPS").

 

In August 2024, we entered into an additional ASR agreement (the  "August 2024 ASR Agreement") to repurchase shares of our common stock for an aggregate purchase price of $400.0 million with Goldman Sachs & Co. LLC. Upon payment of the aggregate purchase price on August 7, 2024, we received an initial delivery of 1,302,981 shares of our common stock. The initial share delivery reduced our outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted EPS. Upon the final settlement of the August 2024 ASR Agreement in October 2024, we received 212,635 additional shares, as determined based on the volume weighted average share price of our common stock, less a discount, of $263.92 during the term of the  August 2024 ASR Agreement. 

 

We utilized cash received from operations for these repurchases. As of September 30, 2024, we had $891.5 million available on our authorization to repurchase shares.

 

Through the third quarter of 2024, we recorded total excise tax of $30.0 million, which has been included within treasury stock, as part of the cost basis of the stock repurchased, and other current liabilities in our condensed consolidated balance sheet as of September 30, 2024.

 

Treasury Stock

 

As of September 30, 2024, our treasury stock consisted of 402,606,293 shares of common stock, carried at cost. During the nine months ended September 30, 2024, we transferred 983,962 shares of common stock from the treasury shares at a weighted average treasury stock price of $23.25 per share.

 

Earnings Per Share

 

Basic EPS is computed by dividing net income attributable to Verisk by the weighted average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding, using the treasury stock method, if the dilutive potential common shares, including vested and nonvested stock options, nonvested restricted stock awards, nonvested restricted stock units, nonvested performance share units ("PSU"), and nonvested deferred stock units, had been issued.

 

The following is a presentation of the numerators and denominators of the basic and diluted EPS computations for the three and nine months ended September 30, 2024 and 2023:

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Numerator used in basic and diluted EPS:

                

Income from continuing operations

 $220.0  $187.4  $747.2  $586.1 

Less: Net income attributable to noncontrolling interests

  0.1   —   0.6   — 

Loss from discontinued operations, net of tax

  —   —   —   (145.5)

Net income attributable to Verisk

 $220.1  $187.4  $747.8  $440.6 

Denominator:

                

Weighted average number of common shares used in basic EPS

  141,778,551   145,011,020   142,594,074   147,292,590 

Effect of dilutive shares:

                

Potential common shares issuable from stock options and stock awards

  732,925   731,499   665,337   691,396 

Weighted average number of common shares and dilutive potential common shares used in diluted EPS

  142,511,476   145,742,519   143,259,411   147,983,986 

 

The potential shares of common stock that were excluded from diluted EPS were 202,684 and 89,792 for the three months ended  September 30, 2024 and September 30, 2023, and 237,062 and 716,783 for the nine months ended September 30, 2024 and 2023, respectively, because the effect of including those potential shares was anti-dilutive.

 

Accumulated Other Comprehensive Income

 

The following is a summary of accumulated other comprehensive income as of September 30, 2024 and December 31, 2023:

 

  

2024

  

2023

 

Foreign currency translation adjustment

 $161.0  $130.7 

Pension and postretirement adjustment, net of tax

  (70.0)  (72.5)

Accumulated other comprehensive income

 $91.0  $58.2 

 

The before-tax and after-tax amounts of other comprehensive income (loss) income for the three and nine months ended September 30, 2024 and 2023 are summarized below:

 

  

Before Tax

  

Tax (Expense) Benefit

  

After Tax

 

For the Three Months Ended September 30, 2024

            

Foreign currency translation adjustment attributable to Verisk

 $46.9  $—  $46.9 

Foreign currency translation adjustment attributable to noncontrolling interests

  0.2   —   0.2 

Foreign currency translation adjustment

  47.1   —   47.1 

Pension and postretirement adjustment before reclassifications

  1.9   (0.5)  1.4 

Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1)

  (0.9)  0.3   (0.6)

Pension and postretirement adjustment

  1.0   (0.2)  0.8 

Total other comprehensive income

 $48.1  $(0.2) $47.9 

For the Three Months Ended September 30, 2023

            

Foreign currency translation adjustment attributable to Verisk

 $(30.7) $—  $(30.7)

Foreign currency translation adjustment attributable to noncontrolling interests

  (1.1)  —   (1.1)

Foreign currency translation adjustment

  (31.8)  —   (31.8)

Pension and postretirement adjustment before reclassifications

  2.3   (0.5)  1.8 

Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1)

  (1.3)  0.3   (1.0)

Pension and postretirement adjustment

  1.0   (0.2)  0.8 

Total other comprehensive income

 $(30.8) $(0.2) $(31.0)

 

  

Before Tax

  

Tax (Expense) Benefit

  

After Tax

 

For the Nine Months Ended September 30, 2024

            

Foreign currency translation adjustment attributable to Verisk

 $30.3  $—  $30.3 

Foreign currency translation adjustment attributable to noncontrolling interests

  1.1   —   1.1 

Foreign currency translation adjustment

  31.4   —   31.4 

Pension and postretirement adjustment before reclassifications

  6.3   (1.5)  4.8 

Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1)

  (3.1)  0.8   (2.3)

Pension and postretirement adjustment

  3.2   (0.7)  2.5 

Total other comprehensive income

 $34.6  $(0.7) $33.9 

For the Nine Months Ended September 30, 2023

            

Foreign currency translation adjustment attributable to Verisk

 $44.0  $—  $44.0 

Foreign currency translation adjustment attributable to noncontrolling interests

  (1.2)  —   (1.2)

Cumulative translation adjustment recognized upon deconsolidation of the Energy business

  700.6   —   700.6 

Foreign currency translation adjustment

  743.4   —   743.4 

Pension and postretirement adjustment before reclassifications

  7.2   (1.7)  5.5 

Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1)

  (4.1)  1.0   (3.1)

Pension and postretirement adjustment

  3.1   (0.7)  2.4 

Total other comprehensive income

 $746.5  $(0.7) $745.8 

___________

(1)

These accumulated other comprehensive loss components, before tax, are included under "Cost of revenues" and "Selling, general and administrative" in our accompanying condensed consolidated statements of operations. These components are also included in the computation of net periodic (benefit) cost (see Note 13. Pension and Postretirement Benefits for additional details).