Verisk Analytics (VRSK) 10-K risk factor changes: FY2023 vs FY2022

For the fiscal year ended December 31, [removed: 2022][added: 2023]

As of June 30, [removed: 2022,] [added: 2023,] the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was [removed: $26,458,185,993] [added: $31,913,567,495] based on the closing price reported on the NASDAQ Global Select Market on such date.

As of February [removed: 24, 2023,] [added: 16, 2024,] there were [removed: 154,695,842] [added: 143,389,884] shares outstanding of the registrant's Common Stock, par value $.001.

Certain information required by Part III of this annual report on Form 10-K is incorporated by reference to our definitive Proxy Statement for our [removed: 2022] [added: 2023] Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, [removed: 2022.][added: 2023.]

| | Item 1A. | [Risk Factors](#i1a) | [removed: [16](#i1a)] [added: [15](#i1a)] |

| | Item 1B. | [Unresolved Staff Comments](#i1b) | [removed: [26](#i1b)] [added: [24](#i1b)] |

| | Item 2. | [Properties](#i2) | [removed: [26](#i2)] [added: [25](#i2)] |

| | Item 3. | [Legal Proceedings](#i3) | [removed: [26](#i3)] [added: [25](#i3)] |

| | Item 4. | [Mine Safety Disclosures](#i4) | [removed: [26](#i4)] [added: [25](#i4)] |

| | Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i5) | [removed: [27](#i5)] [added: [26](#i5)] |

| | Item 6. | [\[Reserved\]](#i6) | [removed: [29](#i6)] [added: [28](#i6)] |

| | Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#i7) | [removed: [30](#i7)] [added: [29](#i7)] |

| | Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#i7a) | [removed: [47](#i7a)] [added: [46](#i7a)] |

| | Item 8. | [Consolidated Financial Statements and Supplementary Data](#i8) | [removed: [47](#i8)] [added: [46](#i8)] |

| | | [Consolidated Balance Sheets](#cbs) | [removed: [56](#cbs)] [added: [55](#cbs)] |

| | | [Consolidated Statements of Operations](#cso) | [removed: [57](#cso)] [added: [56](#cso)] |

| | | [Consolidated Statements of Comprehensive Income](#cci) | [removed: [58](#cci)] [added: [57](#cci)] |

| | | [Consolidated Statements of Changes in Stockholders' Equity](#csse) | [removed: [59](#csse)] [added: [58](#csse)] |

| | | [Consolidated Statements of Cash Flows](#ccf) | [removed: [60](#ccf)] [added: [59](#ccf)] |

| | | [Notes to Consolidated Financial Statements](#notes) | [removed: [62](#notes)] [added: [61](#notes)] |

| | Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i9) | [removed: [47](#i9)] [added: [46](#i9)] |

| | Item 9A. | [Controls and Procedures](#i9a) | [removed: [48](#i9a)] [added: [47](#i9a)] |

| | Item 9B. | [Other Information](#i9b) | [removed: [51](#i9b)] [added: [50](#i9b)] |

| | Item 10. | [Directors, Executive Officers and Corporate Governance](#i10) | [removed: [51](#i10)] [added: [50](#i10)] |

| | Item 11. | [Executive Compensation](#i11) | [removed: [51](#i11)] [added: [50](#i11)] |

| | Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i12) | [removed: [51](#i12)] [added: [50](#i12)] |

| | Item 13. | [Certain Relationships and Related Transactions and Director Independence](#i13) | [removed: [51](#i13)] [added: [50](#i13)] |

| | Item 14. | [Principal Accounting Fees and Services](#i14) | [removed: [51](#i14)] [added: [50](#i14)] |

| | Item 15. | [Exhibits and Financial Statement Schedule](#i15) | [removed: [52](#i15)] [added: [51](#i15)] |

| | Item 16. | [Form 10-K Summary](#i16) | [removed: [52](#i16)] [added: [51](#i16)] |

[removed: Verisk is a leading data analytics provider serving customers in the insurance and energy market until] [added: On] February 1, [removed: 2023 when] [added: 2023,] we completed the sale of our [removed: energy] [added: Energy] business.

Using advanced technologies to collect and analyze billions of records, we draw on unique data assets and deep domain expertise to provide innovations that may be integrated into [removed: customer] [added: client] workflows.

We offer predictive analytics and decision support solutions to [removed: customers] [added: clients] in rating, underwriting, claims, catastrophe, weather risk, and many other fields.

In the [removed: United States ("U.S.")] [added: U.S.,] and around the world, we help [removed: customers] [added: clients] protect people, property, and financial assets.

Our [removed: customers] [added: clients] use our solutions to make better decisions about risk and opportunities with greater efficiency and discipline.

We refer to these products and services as solutions due to the integration among our services and the flexibility that enables our [removed: customers] [added: clients] to purchase components or a comprehensive package.

These solutions take various forms, including proprietary data assets, expert industry insight, statistical models, tailored analytic [removed: object,] [added: objects,] and robust software platforms all designed to allow our [removed: customers] [added: clients] to make more informed risk decisions.

We believe our solutions for analyzing risk have a positive impact on our [removed: customers’] [added: clients’] revenues and help them better manage their costs.

In [removed: 2022,] [added: 2023,] our [removed: customers] [added: clients] included all of the top 100 property and casualty ("P&C") insurance providers in the U.S. for the lines of P&C services we offer.

We believe that our commitment to our [removed: customers] [added: clients] and the embedded nature of our solutions serve to strengthen and extend our relationships.

| | Item 1C. | [Cybersecurity](#Item_1C_Cybersecurity) | [24](#i1b) |

Verisk is a leading data, analytics, and technology provider serving clients in the insurance ecosystem.

Using advanced technologies to collect and analyze billions of records, we draw on unique data assets, insurance industry knowledge, and technological expertise to provide valuable solutions that are integrated into client workflows.

In the United States (“U.S.”) and around the world, we help clients protect individuals, communities, and businesses.

Our clients use our solutions to make better decisions about risk and improve operating efficiency.

We believe that Verisk is uniquely positioned with a series of competitive advantages including:

- _Long-standing Industry Relationships_ – Our early beginnings as an insurance rating bureau have established us as a trusted partner for the industry as well as a source of insights for our clients; and

- _Scale to Drive Broad Distribution of Innovation_ – Our scale advantage enables us to innovate on behalf of the insurance industry and deliver solutions that strive to solve our clients’ biggest challenges.

Our vision is to be the leading strategic data, analytics, and technology partner to the global insurance industry by delivering value to our clients through knowledge, expertise, and scale.

Our business aims to build upon our competitive advantages and capitalizing on our scale and position within the industry.

- Drive Consistent & Predictable Growth. With our clear focus on insurance, integrated organization and our client-centric and results-oriented culture, we strive to deliver consistent and predictable growth.

We are leveraging our strong client relationships to extend our reach within insurance.

We are modernizing and advancing the capabilities of our core solutions using cloud technology and advanced analytical methods including machine learning and artificial intelligence ("AI") while also augmenting our solutions through the addition of new data assets and sources.

In addition, we are working on building leadership positions in adjacent markets including life insurance, marketing, specialty business solutions, and resilience and sustainability.

With the client at the center of all we do, we are driving innovation across our portfolio and partnering with our clients to help solve the insurance industries greatest challenges with a focus on rapidly changing technology, growing regulatory focus, and value creation;

- Drive Operating Efficiency and Profitability. Our subscription business model as well as our ability to build solutions that serve the insurance industry at large helps drive core operating leverage.

In addition, we strive to deliver productivity enhancements and operating efficiency through the use of advanced technology and a global talent workforce.

We seek to balance this with high return on capital investment into the business to continue to drive growth and profitability; and

- Ensure Disciplined Capital Allocation. We are focused on generating strong cash flow and ensuring that we are disciplined in how we allocate that capital with a focus on directing capital to the highest return investments.

First, we prioritize organic reinvestment in the business, which can produce high internal returns.

Second, we look for selective, strategic acquisitions that can expand our data assets, augment our capabilities, and expand our reach within the insurance industry while also creating value by leveraging our capabilities and resources.

Finally, we expect to return excess capital to shareholders while also maintaining a strong balance sheet.

We believe we are well positioned to increase our penetration of the global insurance industry because of our proprietary data assets, long-standing industry relationships, deep insurance industry expertise, and our scale to drive broad distribution of our new innovations.

Powered by proprietary and contributory data and advanced analytics and technologies, we offer a full suite of solutions to support our P&C clients across the insurance policy lifecycle.

This support spans their product development, marketing, new and renewal underwriting, risk selection and segmentation, pricing, and straight through to policy binding and issuance.

We continued to grow our presence internationally and expand our capabilities into new markets, such as life insurance and annuities, and into new workflows, such as marketing and customer acquisition.

_Forms, Rules, and Loss Costs_

In response to the challenges faced by our clients to reduce operating complexity and improve their speed to market, we are undertaking an extensive modernization of our core lines product.

This “reimagine” of our forms, rules, loss costs and related solutions is designed to deliver increased value to our customers.

The Reimagine program will include significant enhancements to our existing solutions; new digital workflow tools, insights, and analytics; and an enhanced content delivery platform.

_Underwriting Data and Analytics Solutions_

Our auto solutions are powered by a mix of third-party and proprietary data ranging from 2 billion traffic court records to 500 billion miles of connected car telematics data and we have characteristics on more than 270 million insured drivers and 280 million registered vehicles with access to expansive industry databases on loss costs and claims.

_Extreme Event Solutions_

Finally, we offer global risk intelligence providing insight into sustainability, resilience, and environmental, social, and governance (ESG) issues, underpinned by geospatial data and analytics.

We provide intelligence on sustainability, resilience, human rights, sovereign and political risk, and ESG—stitching together these disparate issues into an interconnected global view built upon objective insight and data.

_Life Insurance Solutions_

In recent years we have expanded our offerings to also serve the life insurance and annuities markets through our 2019 acquisition of FAST.

Life Insurance Solutions enable new approaches across the policy life cycle through no-code technology, data analytics, and modeling.

We have developed a suite of solutions that apply advanced analytics, automation, and machine learning to existing and emerging data sources.

Our solutions are designed to help transform current workflows in life insurance underwriting, claim insights, policy administration, unclaimed property/equity, compliance and fraud detection, and actuarial and portfolio modeling.

| | |

| | | |

We believe that Verisk is uniquely positioned because of the set of Distinctives or competitive advantages we cultivate and continue to expand, as indicated below.

Our existing businesses, in addition to new product innovations, integrate the following four singular qualities into the foundation of our strategy.

Our Distinctives

We understand that different verticals require different approaches, and our deep domain expertise adds value to our analytics in the markets we serve.

- Steady Stream of First-to-Market Innovations - We move quickly to be the first to market with new solutions.

Typically, the marketplace assumes that those who are first to market are superior to the competition and better positioned to succeed.

- Deep Integration into Customer Workflows - By embedding our solutions into customer workflows, we help our customers better manage risk and optimize their bottom line.

We achieve this goal by remaining closely connected to our customers at all times and serving their distinct needs.

Additionally, we have expanded into the markets of life insurance and annuities via our December 2019 acquisition of FAST and marketing via our acquisitions, which are known collectively as Marketing Solutions, of Jornaya in 2020, Contact State in 2021, and Infutor in 2022.

FAST enables the transformation of the industry across the policy lifecycle through no-code technology, data analytics, and modeling, and Marketing Solutions focuses on differentiated data that helps insurers drive top-line growth and marketing budget savings through more personalized, timely interactions with prospects and customers.

Our solutions span a wide range of P&C insurance, encompassing personal and commercial lines of coverage that protect private residences, private and commercial vehicles, and businesses.

In addition to property data and solutions, customers benefit from decision and benchmarking analytics using firmographic, technographic, and business intelligence, and proprietary management competency scores.

We also offer solutions to help the P&C industry comply with the federal Medicare Secondary Payer ("MSP") Statute, which mandates claims data reporting, conditional payments liabilities repayment, and ongoing protection of the Medicare Trust Fund.

Our solutions include highly accurate Medicare reporting customized to the way insurers, self-insured employers, and third-party administrators ("TPAs") do business.

We also provide integrated conditional payment processing and a full range of Medicare Set-Aside ("MSA") services.

In addition to full compliance support-including First Report of Injury ("FROI")/Subsequent Report of Injury ("SROI") and other Electronic Data Interchange ("EDI") reporting-claims professionals can also access robust analytic solutions for workers' compensation and liability claims and leverage litigation analytics for improved claim results.

The program allows our customers to manually sketch floor, roof, and wall framing plans based upon their own measurements and automatically calculates material and labor quantities for all desired construction or repairs to the structure.

For each line item, we report time and material pricing, and improve our reported pricing data by several methods, including direct market surveys and an analysis of the actual claim experiences of our customers.

We differentiated our solutions in the market by continuously gathering and managing proprietary information, insight, and analysis on thousands of oil and gas assets, wind turbines and solar assets, mines, refineries, and other assets, as well as detailed assessments of the market fundamentals across each value chain.

These market insights helped our customers achieve operational excellence, increase profitability and optimize business performance.

And our experts applied the data and worked directly with customers to address their business challenges.

Over the past five years, we have grown our revenues through the successful execution of our business plan.

Those results reflect strong organic revenue growth, new product development, and acquisitions.

We have made, and continue to make, investments in people, data sets, analytic solutions, technology, and complementary businesses.

_Increase Solution Penetration with Customers._ We expect to expand the application of our solutions in customers’ internal processes.

Building on our deep knowledge of and embedded position in, various industries, we expect to sell more solutions to existing customers tailored to individual market segments.

By increasing the breadth and relevance of our offerings, we believe that we can strengthen our relationships with customers and increase our value to their decision making in critical ways.

We have opportunities to expand solution penetration to our insurance customers.

_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 more than five decades of intellectual property in risk management.

We believe we can continue to expand the use of our intellectual capital profitably and apply our analytic methods in new insurance-related markets where significant opportunities for long-term growth exist.

We also continue to pursue growth through targeted international expansion.

_Pursue Strategic Acquisitions That Complement Our Leadership Positions._ We will continue to expand our data and analytics capabilities.

While we expect this will occur primarily through organic growth, we have acquired 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 believe that no single competitor currently offers the same scope of services and market coverage we provide.

| Verisk Analytics, Inc. Consolidated Financial Statements as of December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] and for the Years Ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020.] [added: 2021.] | |

| [Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)](#report) | [removed: [54](#report)] [added: [53](#report)] |

| [Consolidated Balance Sheets](#cbs) | [removed: [56](#cbs)] [added: [55](#cbs)] |

| [Consolidated Statements of Operations](#cso) | [removed: [57](#cso)] [added: [56](#cso)] |

| [Consolidated Statements of Comprehensive Income](#cci) | [removed: [58](#cci)] [added: [57](#cci)] |

| [Consolidated Statements of Changes in Stockholders' Equity](#csse) | [removed: [59](#csse)] [added: [58](#csse)] |

| [Consolidated Statements of Cash Flows](#ccf) | [removed: [60](#ccf)] [added: [59](#ccf)] |

| [Notes to Consolidated Financial Statements](#notes) | [removed: [62](#notes)] [added: [61](#notes)] |

We have audited the accompanying consolidated balance sheets of Verisk Analytics, Inc. and subsidiaries (the "Company") as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in _Internal [removed: Control - Integrated] [added: Control_ — _Integrated] Framework (2013)_ issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 28, 2023,] [added: 21, 2024,] expressed an unqualified opinion on the Company's internal control over financial reporting.

[removed: Goodwill - Energy and Specialized Markets] [added: Goodwill – Insurance] Reportable Segment - Refer to Notes 2 and 12 to the financial statements

Changes in [removed: these] [added: the] assumptions [added: utilized] could have a significant impact on [removed: either the] fair [removed: value, the amount of any goodwill impairment charge, or both.][added: value.]

The goodwill balance was [removed: $3,812.3] [added: $1,761] million as of December 31, [removed: 2022 of] [added: 2023] which [removed: $2,136.3 million] was [removed: classified as held for sale] [added: fully] attributable to the [removed: Energy and Specialized Markets] [added: Insurance] reportable segment.

[removed: February 28, 2023][added: | | | _February 1, 2023_ | | | | _December 31, 2022_ | | |]

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021][added: 2022]

| | | [added: _2023_ | | | |] _2022_ | | | | _2021_ | | |

| Cash and cash equivalents | | $ | [removed: 112.5] [added: 302.7] | | | $ | [removed: 111.9] [added: 112.5] | |

| Accounts receivable, net | | | [removed: 290.1] [added: 334.2] | | | | [removed: 299.9] [added: 290.1] | |

| Prepaid expenses | | | [removed: 83.7] [added: 84.5] | | | | [removed: 87.8] [added: 83.7] | |

| Income taxes receivable | | | [removed: 44.2] [added: 23.5] | | | | [removed: 41.4] [added: 44.2] | |

| Other current assets | | | [removed: 32.0] [added: 65.2] | | | | [removed: 31.4] [added: 32.0] | |

| Current assets held-for-sale | | | [removed: 362.6] [added: \-] | | | | [removed: 335.0] [added: 362.6] | |

| Total current assets | | | [removed: 925.1] [added: 810.1] | | | | [removed: 907.4] [added: 925.1] | |

| Fixed assets, net | | | [removed: 541.5] [added: 604.9] | | | | [removed: 531.4] [added: 541.5] | |

| Operating lease right-of-use assets, net | | | [removed: 182.0] [added: 191.7] | | | | [removed: 224.0] [added: 182.0] | |

| Intangible assets, net | | | [removed: 504.8] [added: 471.7] | | | | [removed: 482.3] [added: 504.8] | |

| Goodwill | | | [removed: 1,676.0] [added: 1,760.8] | | | | [removed: 2,047.6] [added: 1,676.0] | |

| Deferred income tax assets | | | [removed: 31.7] [added: 30.8] | | | | [removed: 1.8] [added: 31.7] | |

| Other noncurrent assets | | | [removed: 371.4] [added: 496.1] | | | | [removed: 409.4] [added: 371.4] | |

| Noncurrent assets held for sale | | | [removed: 2,728.6] [added: \-] | | | | [removed: 3,204.2] [added: 2,728.6] | |

| Total assets | | $ | [removed: 6,961.1] [added: 4,366.1] | | | $ | [removed: 7,808.1] [added: 6,961.1] | |

| Accounts payable and accrued liabilities | | $ | [removed: 292.8] [added: 340.8] | | | $ | [removed: 262.1] [added: 292.8] | |

| Short-term debt and current portion of long-term debt | | | [removed: 1,392.9] [added: 14.5] | | | | [removed: 971.3] [added: 1,392.9] | |

| Deferred revenues | | | [removed: 321.7] [added: 375.1] | | | | [removed: 347.8] [added: 321.7] | |

| Operating lease liabilities | | | [removed: 29.5] [added: 33.1] | | | | [removed: 31.7] [added: 29.5] | |

| Income taxes payable | | | [removed: \-] [added: 7.9] | | | | [removed: 3.0] [added: \-] | |

| Current liabilities held-for-sale | | | [removed: 282.3] [added: \-] | | | | [removed: 232.1] [added: 282.3] | |

| Total current liabilities | | | [removed: 2,319.2] [added: 771.4] | | | | [removed: 1,848.0] [added: 2,319.2] | |

| Long-term debt | | | [removed: 2,343.2] [added: 2,852.2] | | | | [removed: 2,342.8] [added: 2,343.2] | |

For the year ended December 31, 2023, the Company performed its evaluation of goodwill for impairment using a qualitative assessment or “Step Zero” impairment test to determine whether it is more likely than not that impairment has occurred.

If the Company determines that it is more likely than not that the carrying amount of its’ reporting units exceeds their fair value, the Company would perform a quantitative assessment or “Step One” impairment test and calculate the estimated fair value of the respective reporting unit.

We identified the evaluation of goodwill for impairment of the Insurance reportable segment as a critical audit matter due to significant judgments made by management to determine whether it is more likely than not that impairment of the underlying reporting units has occurred, including management’s judgment as it relates to their evaluation of macroeconomic conditions, industry and market considerations, internal cost factors, and the Company’s overall financial and share price performance, among other factors for the respective reporting units within the Insurance reportable segment.

This required a high degree of auditor judgment and an increased effort, including the need to involve our fair value specialists.

We, along with the assistance from our fair value specialists, evaluated the reasonableness of management’s Step Zero assessment by:

| | ● | Tested the design and operating effectiveness of management's internal controls over their goodwill impairment evaluation, including those over the significant assumptions used in management's qualitative Step Zero test. |

| | ● | Evaluated the Company’s qualitative Step Zero test and inputs, including consideration of macroeconomic factors, industry and market considerations, internal cost factors, and overall financial and share price performance, among other factors that could change discount and growth rates, and key performance indicators, such as projected revenue and EBITDA, and performed sensitivity analysis on the key assumptions. |

| | ● | Performed a retrospective review of current year results compared to the projections used in the most recent quantitative impairment test. |

| | ● | Evaluated historical data used in developing the assumptions to assess whether the data is comparable and consistent with data of the period under audit. |

| | ● | Assessed the headroom between the most recent fair value estimate performed as of June 30, 2022 and the carrying value of each reporting unit. |

| | ● | Held inquires with appropriate management personnel regarding any changes in the Company’s internal structure that could cause its reporting unit determinations to change in the current year. |

| | ● | Held ongoing inquires with management, the board of directors, and the legal department regarding any changes in management strategy or operations during the year that could potentially affect the drivers of the fair value for each reporting unit. |

February 21, 2024

| | | _2023_ | | | | _2022_ | | |

| Net income | | | _\-_ | | | | \- | | | | \- | | | | \- | | | | 614.6 | | | | \- | | | | 614.6 | | | | (0.2 | ) | | | 614.4 | |

| Investment in noncontrolling interests | | | _\-_ | | | | \- | | | | (3.9 | ) | | | \- | | | | \- | | | | (0.6 | ) | | | (4.5 | ) | | | (6.6 | ) | | | (11.1 | ) |

| Treasury stock acquired (12,849,921 shares) | | | _\-_ | | | | \- | | | | 37.5 | | | | (2,838.7 | ) | | | \- | | | | \- | | | | (2,801.2 | ) | | | \- | | | | (2,801.2 | ) |

| Excise tax associated with share repurchases | | | _\-_ | | | | \- | | | | \- | | | | (25.2 | ) | | | \- | | | | \- | | | | (25.2 | ) | | | \- | | | | (25.2 | ) |

| Treasury stock share repurchased not yet settled | | | | | | | | | | | (37.5 | ) | | | 37.5 | | | | \- | | | | \- | | | | \- | | | | | | | | \- | |

| PSUs lapsed (27,771 shares issued from treasury stock) | | | _\-_ | | | | \- | | | | (0.4 | ) | | | 0.4 | | | | \- | | | | \- | | | | \- | | | | \- | | | | \- | |

| Balance as of December 31, 2023 | | | 544,003,038 | | | $ | 0.1 | | | $ | 2,872.3 | | | $ | (9,037.5 | ) | | $ | 6,416.9 | | | $ | 58.2 | | | $ | 310.0 | | | $ | 12.2 | | | $ | 322.2 | |

For The Years Ended December 31, 2023, 2022, and 2021

| Net income | | $ | 614.4 | | | $ | 954.3 | | | $ | 666.3 | |

| Impairment of cost-based investments | | | 6.5 | | | | — | | | | — | |

| Acquisition related liability adjustment | | | (20.0 | ) | | | — | | | | — | |

For The Years Ended December 31, 2023, 2022, and 2021

| Treasury stock shares repurchased not yet settled | | | (37.5 | ) | | | \- | | | | — | |

Verisk Analytics, Inc. is a strategic data analytics and technology partner to the global insurance industry.

We empower clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG (environmental, social, and governance), and political issues.

Through advanced data analytics, software, scientific research, and deep industry knowledge, we help build global resilience for individuals, communities, and businesses.

Our promise to our customer is to provide continuous access to our online portal and to update the content throughout the subscription period.

_61_

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

When evaluating goodwill for impairment, we _may_ decide to _first_ perform a qualitative assessment, or “Step Zero” impairment test, to determine whether it is more likely than _not_ that impairment has occurred.

The qualitative assessment includes a review of macroeconomic conditions, industry and market considerations, internal cost factors, and our own overall financial and share price performance, among other factors.

The Company determines the fair value of its reporting units using the discounted cash flow model and the market approach.

The determination of fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future revenues, EBITDA margins, and the discount rate.

The determination of fair value using the market approach requires management to make significant estimates and assumptions related to the selection of revenue and EBITDA multiples.

Given the significant judgments made by management to estimate the fair value of the Energy and Specialized Markets reportable segment, including management’s judgments in selecting significant assumptions to forecast future revenues, EBITDA margins, and the discount rate, as well as the selection of revenue and EBITDA multiples, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions for the Energy and Specialized Markets reportable segment required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

Our audit procedures related to forecasts of future revenue and EBITDA margins, selection of the discount rate used within the income approach and selection of the revenue and EBITDA multiples used in the market approach for the Energy and Specialized Markets reportable segment included the following, among others:

| | • | We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the Energy and Specialized Markets reportable segment such as controls related to management’s selection of the discount rate, forecasts of future revenue and revenue and EBITDA multiples. |

| | • | We evaluated management’s ability to accurately forecast future revenues and EBITDA margins by comparing actual results to management’s historical forecasts. |

| | • | We evaluated the reasonableness of management’s revenue and EBITDA margin forecasts by comparing the forecasts to: |

| | ◦ | Historical revenues and EBITDA margins. |

| | ◦ | Internal communications to management and the Board of Directors. |

| | ◦ | Forecasted information included in Company press releases, as well as in analyst and industry reports for the Company and certain peer companies. |

| | • | With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodologies (2) revenue and EBITDA multiples and (3) the discount rate by: |

| | ◦ | Evaluating the market approach, including evaluating the reasonableness of the selected guideline public companies and the resulting multiples calculations, as well as benchmarking the selected multiples against these guideline public companies. |

| | ◦ | Assessing the acceptability of the weighting applied to value indications from different valuation techniques. |

| | ◦ | Assessing the acceptability of the implied company-specific risk premium. With respect to the market value of equity, we tested the calculations used in developing the respective market value of equity. |

| | ◦ | Testing the source information underlying the determination of the discount rate, the selection of the revenue and EBITDA multiples and the mathematical accuracy of the calculations. |

| | ◦ | Developing a range of independent estimates and comparing those to the discount rate selected by management. |

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| Balance as of January 1, 2020 | | | 544,003,038 | | | $ | 0.1 | | | $ | 2,369.1 | | | $ | (3,849.9 | ) | | $ | 4,228.4 | | | $ | (486.9 | ) | | $ | 2,260.8 | | | $ | — | | | $ | 2,260.8 | |

| Adjustment to opening retained earnings related to Topic 326 | | | _\-_ | | | | \- | | | | \- | | | | \- | | | | (2.4 | ) | | | \- | | | | (2.4 | ) | | | \- | | | | (2.4 | ) |

| Net income | | | _\-_ | | | | \- | | | | \- | | | | \- | | | | 712.7 | | | | \- | | | | 712.7 | | | | \- | | | | 712.7 | |

| Treasury stock acquired (2,155,084 shares) | | | _\-_ | | | | \- | | | | \- | | | | (348.8 | ) | | | \- | | | | \- | | | | (348.8 | ) | | | \- | | | | (348.8 | ) |

| Repayment of short-term debt with original maturities greater than three months | | | \- | | | | \- | | | | (20.0 | ) |

| Payment of contingent liability related to acquisitions | | | \- | | | | \- | | | | (34.2 | ) |

| Noncash contribution of assets for a nonpublic company | | $ | \- | | | $ | \- | | | $ | 65.9 | |

Verisk Analytics, Inc. is a data analytics provider serving customers in the insurance markets.

Using various technologies to collect and analyze billions of records, we draw on numerous data assets and domain expertise to provide _first_\-to-market innovations that are integrated into customer workflows.

We offer predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, global risk analytics, and many other fields.

Around the world, we help customers protect people, property, and financial assets.

Certain reclassifications, including combining acquisition-related liabilities into the "Accounts payable and accrued liabilities" line in _2021_ (they used to be shown as a separate line item) and moving Atmospheric and Environmental Research ("AER"), an immaterial component, from the Energy and Specialized Markets segment to the underwriting and rating category within the Insurance segment, have been made within our consolidated balance sheets, consolidated statements of operations, consolidated statements of cash flows, and in our notes to conform to our respective _2021_ presentation.

On  _October 28, 2022,_ we entered into an equity purchase agreement to sell our Energy business.

Please refer to [Note _9_](#FN_9_-_Fixed_Assets).

Goodwill and Intangible Assets for more information.

This test compares the carrying value of each reporting unit to its fair value.

[](# "Note 2(s) - Recent Accounting Pronouncements")

| Business Combinations (Topic _805_) In _October 2021,_ the FASB issued Accounting Standards Update "ASU" _No._ _2021_\-_08,_ "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" ("ASU _No._ _2021_\-_08"_) | This amendment requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification "ASC" _606._ At the acquisition date, an acquirer should account for the related revenue contracts in accordance with ASC _606_ as if it had originated the contracts. An acquirer should assess how the acquiree applied ASC _606_ to determine what to record for the acquired revenue contracts. If the acquiree prepared financial statements in accordance with GAAP, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. In circumstances in which the acquirer is unable to assess or rely on how the acquiree applied ASC _606,_ the acquirer should consider the terms of the acquired contracts, such as timing of payment, identify each performance obligation in the contracts, and allocate the total transaction price to each identified performance obligation on a relative standalone selling price basis as of the date the acquiree entered into the contracts to determine what should be recorded at the acquisition date. | Fiscal years beginning after _December 15, 2022_ with early adoption permitted. | We elected to early adopt ASU _No._ _2021_\-_08_ on _January 1, 2022_ on a prospective basis to all business combinations that occurred on or after the date of adoption. The adoption of ASU _No._ _2021_\-_08_ did _not_ have a material impact on our Consolidated Financial Statements. |

| Revenue | | | (2,462.5 | ) |

| Acquisitions | | | 1.8 | |