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Note 16 - Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

16. Stockholders’ Equity:

We have 2,000,000,000 shares of authorized common stock as of December 31, 2020 and 2019. The common shares have rights to any dividend declared by our board of directors, subject to any preferential or other rights of any outstanding preferred stock, and voting rights to elect all eleven members of our board of directors.

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 December 31, 2020.

At December 31, 2020, 2019 and 2018, the adjusted closing price of our common stock was $207.59, $149.34, and $108.28 per share, respectively.

On February 12, 2020, April 29, 2020, July 29, 2020, and October 28, 2020, our board approved a cash dividend of $0.27 per share of common stock issued and outstanding to the holders of record as of March 13, 2020, June 15, 2020, September 15, 2020, and December 15, 2020, respectively. The cash dividends of $43.9 million, $44.0 million, $43.9 million, and $43.9 million were paid on March 31, 2020, June 30, 2020, September 30, 2020, and December 31, 2020 and recorded as a reduction to retained earnings, respectively.

Share Repurchase Program

Since May 2010, we have authorized repurchases of up to $3,800.0 million of our common stock through our Repurchase Program, inclusive of the $500.0 million authorization approved by our board on February 12, 2020. Since the introduction of share repurchase as a feature of our capital management strategies in 2010, we have repurchased shares with an aggregate value of $3,521.2 million. As of December 31, 2020, we had $278.8 million available to repurchase shares. We have no obligation to repurchase stock under this program and intend to use this authorization as a means of offsetting dilution from the issuance of shares under our 2013 Equity Incentive Plan (the "2013 Incentive Plan"), our 2009 Equity Incentive Plan (the “2009 Incentive Plan”), our sharesave plan (“UK Sharesave Plan”), and our employee stock purchase plan ("ESPP") while providing flexibility to repurchase additional shares if warranted. This authorization has no expiration date and may be increased, reduced, suspended, or terminated at any time. Shares that are repurchased under the Repurchase Program will be recorded as treasury stock and will be available for future issuance.

In December 2019, March 2020, June 2020, and September 2020 we entered into Accelerated Share Repurchase ("ASR") agreements to repurchase shares of our common stock for an aggregate purchase price of $50.0 million, $75.0 million, $50.0 million, and $50.0 million, respectively, with HSBC Bank USA, N.A, Bank of America, N.A., and Citibank, N.A. The ASR agreements are each accounted for as a treasury stock transaction and a forward stock purchase agreement indexed to our common stock. The forward stock purchase agreements are each classified as an equity instrument under ASC 815-40, Contracts in Entity's Own Equity ("ASC 815-40") and were deemed to have a fair value of zero at the respective effective date. Upon payments of the aggregate purchase price on January 2, 2020, April 1, 2020, July 1, 2020, and October 1, 2020, we received an aggregate delivery of 267,845, 430,477, 235,018, and 215,855 shares of our common stock at a price of $149.34, $139.38, $170.20, and $185.31, respectively. Upon the final settlement of the ASR agreements in February 2020, June 2020, September 2020, and December 2020, we received additional shares of 40,901, 61,052, 41,272, and 47,042, respectively, as determined by the volume weighted average share price of our common stock during the term of the ASR agreements. The aggregate purchase price was recorded as a reduction to stockholders' equity in our consolidated statements of changes in stockholders' equity for the year ended December 31, 2020. These repurchases of 1,339,462 shares for the year ended December 31, 2020 resulted in a reduction of outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share ("EPS").

During the years ended December 31, 2020 and 2019, we repurchased 2,155,084 and 2,178,151 shares of common stock as part of the Repurchase Program, inclusive of the ASRs, at a weighted average price of $161.84 and $137.73 per share, respectively. We utilized cash from operations and borrowings from our Credit Facility to fund these repurchases.

Treasury Stock

As of December 31, 2020, our treasury stock consisted of 381,185,512 shares of common stock. During the years ended December 31, 2020, 2019 and 2018, we transferred 1,811,046, 1,369,305 and 2,973,947 shares of common stock, under the 2013 Incentive Plan and 2009 Incentive Plan, from the treasury shares at a weighted average price of $10.67, $9.72 and $8.71 per share, respectively.

Earnings Per Share

The following is a reconciliation of the numerators and denominators of our basic and diluted EPS computations for the years ended December 31:

		*2020*				*2019*				*2018*
		(In millions, except for share and per share data)
Numerator used in basic and diluted EPS:
Net income		$	712.7			$	449.9			$	598.7
Denominator:
Weighted average number of common shares used in basic EPS			162,610,586				163,535,438				164,808,110
Effect of dilutive shares:
Potential common stock issuable from stock options and stock awards			2,710,123				3,024,677				3,489,726
Weighted average number of common shares and dilutive potential common shares used in diluted EPS			165,320,709				166,560,115				168,297,836

The potential shares of common stock that were excluded from diluted EPS were 513,137, 674,983 and 496,446 at December 31, 2020, 2019 and 2018, respectively, because the effect of including those potential shares was anti-dilutive.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accumulated Other Comprehensive Losses

The following is a summary of accumulated other comprehensive losses as of December 31:

		*2020*				*2019*
Foreign currency translation adjustment		$	(292.2	)		$	(400.1	)
Pension and postretirement adjustment, net of tax			(83.5	)			(86.8	)
Accumulated other comprehensive losses		$	(375.7	)		$	(486.9	)

The before tax and after tax amounts of other comprehensive income (loss) for the years ended December 31, 2020, 2019 and 2018 are summarized below:

						*Tax Benefit*
		*Before Tax*				*(Expense)*				*After Tax*
December 31, 2020
Foreign currency translation adjustment		$	107.9			$	—			$	107.9
Pension and postretirement adjustment before reclassifications			11.1				(2.9	)			8.2
Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses ⁽¹⁾			(6.7	)			1.8				(4.9	)
Pension and postretirement adjustment			4.4				(1.1	)			3.3
Total other comprehensive income		$	112.3			$	(1.1	)		$	111.2
December 31, 2019
Foreign currency translation adjustment		$	88.4			$	—			$	88.4
Pension and postretirement adjustment before reclassifications			26.7				(6.4	)			20.3
Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses ⁽¹⁾			(4.9	)			1.2				(3.7	)
Pension and postretirement adjustment			21.8				(5.2	)			16.6
Total other comprehensive income		$	110.2			$	(5.2	)		$	105.0
December 31, 2018
Foreign currency translation adjustment		$	(154.1	)		$	—			$	(154.1	)
Pension and postretirement adjustment before reclassifications		(36.7		)			9.1				(27.6	)
Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses ⁽¹⁾			3.7				(0.9	)			2.8
Pension and postretirement adjustment			(33.0	)			8.2				(24.8	)
Total other comprehensive loss		$	(187.1	)		$	8.2			$	(178.9	)

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⁽¹⁾	These accumulated other comprehensive loss components, before tax, are included under “Cost of revenues” and “Selling, general and administrative” in our accompanying consolidated statements of operations. These components are also included in the computation of net periodic (benefit) cost (See Note 18. Pension and Postretirement Benefits for additional details).

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)