Usi Corporation · TWSE:1304
Usi — Investor Day (November 2005)
84 slides from Usi's investor day presentation, Nov 10, 2005
Slide 1: Investor Day Presentation November 9, 2005
Investor Day Presentation November 9, 2005 Exhibit 99.1 U.S.I. Holdings Corporation U.S.I. Holdings Corporation Investor Day Presentation November 9, 2005
Slide 2: About Forward-Looking Statements
1 About Forward-Looking Statements This document and the related oral presentation include forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond the control of U.S.I. Holdings Corporation, which may include statements about: its business strateg
Slide 3: Webcast Participant Questions
2 Webcast Participant Questions If you have questions during the webcast, please email to: sandra.usleman@usi.biz Webcast Participant Questions If you have questions during the webcast, please email to: sandra.usleman@usi.biz
Slide 4: Agenda
3 Agenda Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execution People & Culture Financial Overview Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition E
Slide 5: USI Senior Management Team
4 USI Senior Management Team Experience with 200+ acquisitions sourced, completed, and integrated Team has worked together in USI and other brokers for many years Name Position Industry Experience Age David Eslick Chairman, President and CEO 25 46 Jeff Jones Chief Marketing Officer 28 51 Bob Schneid
Slide 6: USI Profile
5 USI Profile A Market Leader 10th largest U.S. Broker based on 2004 revenues (a) Leading Benefits Broker (represents 42% of 2004 total revenues) National Scale with a Local Presence 72 Offices in 19 states 500+ sales professionals More than 60,000 commercial clients Middle Market Focus Approximatel
Slide 7: Historical Perspective
6 Historical Perspective Focus on consolidation and integration efforts while reducing acquisition activity Improved operating and financial reporting standards Strengthened internal controls Standardized technology platforms Reduced staff headcount; restructured select employment agreements Pursued
Slide 8: Earnings Levers
7 Earnings Levers through all market and economic cycles Diversified revenue mix Proven, proactive cross-selling capability Focused strategy for Operating margin expansion Augment growth with accretive acquisitions Management directly aligned with shareholders’ interest Substantial % of personal net
Slide 9: Revenue Diversity
8 Revenue Diversity Diversified Revenue Mix National Scale and Local Presence* Total 2004 Revenues = $407 MM Corporate USI Offices *Pro forma for Summit Global Partners & Patterson Smith acquisitions. Revenue Diversity Revenue Diversity Diversified Revenue Mix National Scale and Local Presence* Prop
Slide 10: Distribution Diversity
9 Distribution Diversity Retail Insurance Brokerage Alternative Distribution & Other Products Property and Casualty General Commercial Liability Workers’ Compensation Fidelity and Surety Bonds Professional Liability Personal Lines (Auto, Home, etc.) Workplace Benefits Core Benefits Voluntary Benefit
Slide 11: Agenda: Organizational Overview
10 Agenda Company Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execution People & Culture Financial Overview Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Executi
Slide 12: USI Field Structure
11 USI Field Structure USI’s field structure will be evolving into three major business segments, with ten Retail Brokerage Regions and three Alternative Distribution “Regions”. Alternative Distribution Northwest OR & WA Northern California Midwest IL & OH Southwest LA, TX & NM Southeast FL & TN Mid
Slide 13: Regional Oversight
12 Regional Oversight Flash Calls – first week of every month CEO Calls – third week of every month Executive Board – every quarter Regional Reviews – every quarter Budgeting – detailed annual planning Policy & Procedures – strict compliance USI’s Corporate Executives oversee the field operations th
Slide 14: Documented Best Practices
13 Documented Best Practices USI has documented the best practices for each functional area of retail brokerage. Documented Best Practices Operating Efficiency Executive Compensation Producer Compensation Ins. Staff Compensation Admin. Staff Compensation Operating Expense Revenue Growth Client Reten
Slide 15: Continual Benchmarking
14 Continual Benchmarking We are continually benchmarking the key business drivers for our Operating Companies and developing specific business plans to improve their performance. Unit OpCo Region Results Driver 1 Driver 2 Driver 3 Driver 4 1 OpCo 1 A % % % % % 2 OpCo 2 B % % % % % 3 OpCo 3 C % % %
Slide 16: Agenda: Revenue Growth
15 Agenda Company Overview Organizational Overview Operational Efficiency Workplace Benefits Overview Acquisition Execution People & Culture Financial Overview Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisitio
Slide 17: Documented Best Practices
16 Documented Best Practices Organic revenue growth will be driven by the ongoing implementation of best practices. Documented Best Practices Operating Efficiency Executive Compensation Producer Compensation Ins. Staff Compensation Admin. Staff Compensation Operating Expense People & Culture Perform
Slide 18: Organic Revenue Growth
17 Organic Revenue Growth Client Retention Client-centric focus Renewal strategies Stewardship process Cross-Selling Continued focus, training, measurement and incentives Increase from 20% of total sales to 30% New business production Standardized bi-weekly sales meetings across all offices New prod
Slide 19: Stewardship Accounts
18 Stewardship Accounts Stewardship clients, accounts with over $50,000+ in revenue make up approximately 1/3 of USI total revenue Predictive client survey for Stewardship accounts Formalized mandatory stewardship process Use of mandatory Best Efforts on all Stewardship accounts (new and existing) S
Slide 20: Stewardship Process
19 Stewardship Process Listen to the Client “What should we keep doing, do more of and do less of ?” Institutionalize the client relationship (“C” level) Develop cross sell opportunities Develop referral opportunities Agree on service plan Stewardship Process Listen to the Client “What should we kee
Slide 21: Cross-Selling Strategy and Benefits
20 Increases Organic Revenue Growth, Improves Client Retention and Perpetuates Revenue Diversification Cross-Selling Strategy and Benefits Single distribution point for multiple products and services Definition of cross-sell must be across five broad product categories Compensation and recognition p
Slide 22: Proven Strategy and Opportunity
21 Proven Strategy and Opportunity Top 15 clients ranked by revenues Cross-Sell / Cross-Service Matrix Sold business or currently being provided to client Proposed and pending Blocked or proposed; did not sell the account Proven Strategy and Opportunity Retirement Core Benefit Enrollment Account Nam
Slide 23: Cross-Selling Success
22 Cross-Selling Success = Increase = Decrease Product Category 2004 Retention 1 92% 2 96% 3 100% 4+ 98% Overall Retention 95% # of Product Categories Sold 2002 2003 2004 2002 2003 2004 1 or more 15 15 15 400 400 400 2+ 10 173 3+ 7 66 4+ 4 25 Top 15 Accounts Top 400 Accounts # of Product Categories
Slide 24: Management of Production Talent
23 Management of Production Talent Manage our producer pipeline similar to our SFA system Management of our bottom quartile producers Up or out process 61 producers termed October YTD Strict qualification process Intensive interviews in the field Testing for sales aptitude and skills Review process
Slide 25: Sales Management
24 Sales Management Proactively manage sales behavior, real-time monitoring Standardized bi-weekly sales meetings across all offices Formalized goal setting and pipeline management process Senior management involvement in the sales process Formalized client stewardship process in all regions Standar
Slide 26: Continual Benchmarking
25 Continual Benchmarking Unit OpCo Region Organic Growth Gross Lost Non Recur Gross New Other Items Renewal Changes 1 OpCo 1 A % % % % % % 2 OpCo 2 B % % % % % % 3 OpCo 3 C % % % % % % 4… OpCo 4 D % % % % % % 30 OpCo 5 E % % % % % % 31 OpCo 6 F % % % % % % 32 OpCo 7 G % % % % % % Organic NCF Growth
Slide 27: Organic Revenue Growth
26 Organic Revenue Growth Client Retention Client-centric focus Renewal strategies Stewardship process Cross-Selling Continued focus, training, measurement and incentives Increase from 20% of total sales to 30% New business production Standardized bi-weekly sales meetings across all offices New prod
Slide 28: Agenda: Operational Efficiency
27 Agenda Company Overview Organizational Overview Revenue Growth Workplace Benefits Overview Acquisition Execution People & Culture Financial Overview Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execut
Slide 29: Documented Best Practices
28 Documented Best Practices Ongoing margin expansion will be driven by final 2005 charges and the ongoing implementation of best practices. Documented Best Practices Operating Efficiency Executive Compensation Producer Compensation Ins. Staff Compensation Admin. Staff Compensation Operating Expense
Slide 30: Margin Expansion
29 Margin Expansion 2004A 40% 0% Insurance Brokerage Specialized Benefits Corporate Segment Operating Income 20% 10% 30% Target Our goal is to achieve a mid-20’s Operating Income margin by driving field margins to 30.0% and corporate expense to 5.0%. Note: 2004 Reporting Segments Note: Depreciation
Slide 31: Traditional Retail Brokerage
30 Traditional Retail Brokerage Traditional retail brokerage operations comprise approximately 2/3 of USI’s revenue and have the most opportunity for margin expansion. Target Note: 2005 forecast; direct expenses only Operating Income 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% A B F E C D G
Slide 32: Compensation Expense
31 Compensation Expense 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% A B C D E F G H Retail Brokerage Regions Compensation Ratios The margin improvement opportunity from compensation expense varies by Region. Note: 2005 Forecast Target Focus Areas Compensation Expense 0.0% 10.0% 20.0% 30.0% 40.0%
Slide 33: Compensation Opportunities
32 Compensation Opportunities USI reviews compensation ratios by type of employee. Some high- level efficiency opportunities are summarized below. Compensation Opportunities Align executives with regions and operating companies Increase focus on “four-wall” accountability Increase focus on performan
Slide 34: OpEx Ratios
33 OpEx Ratios The margin improvement opportunity from operating expense also varies by Region. Note: 2005 Regional Estimates Target Focus Areas Operating Expense 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% A B C D E F G H Retail Brokerage Regions OpEx Ratios
Slide 35: OpEx Opportunities
34 OpEx Opportunities USI reviews operating expense ratios by type of expense. High- level opportunities for increased efficiency are summarized below. OpEx Opportunities Work through remaining legacy / problem leases Drive efficiency levels below 250 square feet per person Reduce length of new leas
Slide 36: Efficiency Initiative Program
35 Efficiency Initiative Program The total efficiency initiative charges represent less than 4.0% of revenue and helped to expand margins by approximately 200 bps YTD in a very challenging market environment. Total Other Severance Producers Real Estate Category Date the action is taken When employee
Slide 37: Continual Benchmarking
36 Continual Benchmarking We benchmark each of our operating companies against the USI average and also against our target levels. Unit OpCo Region Op Income Margin Exec. Comp. Prod. Comp. Insur. Comp. Admin. Comp. Taxes & Benefits Gen. OpEx Dep. 1 OpCo 1 A % % % % % % % % 2 OpCo 2 B % % % % % % % %
Slide 38: Benchmarking Process
37 Benchmarking Process Given the big opportunity for reducing operating expense, we drive into further bench-marketing detail within the OpEx category Unit OpCo Region Total Opex Selling Exp. Building Ocpy Furn & Equip Comm Exp Gen Exp 1 OpCo 1 A % % % % % % 2 OpCo 2 B % % % % % % 3 OpCo 3 C % % %
Slide 39: OpCo Business Plans
38 OpCo Business Plans We compare the metrics for each operating company against prior year and target figures. We then determine what actions are required to drive the required margin improvement by category. OpCo Business Plans Spread vs. Spread vs. Operating Efficiency OpCo Prior Yr. Target Actio
Slide 40: Operating Income Quartile Analysis
39 Operating Income 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 2004 Actual 2005 Forecast 2006 Forecast Year Quartile Analysis The top three quartiles require continual fine tuning, while the bottom quartile requires more significant improvements. Note: 2005 Forecast 17 OpCo’s 26 OpCo’s 32 OpCo’s
Slide 41: Corporate Expense Plans
40 USI Corporate is committed to reducing the corporate expense ratio to achieve our overall efficiency goals. Corporate Expense Plans Corporate Expense Ratio 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 2002A 2003A 2004A 2005F Year Corporate Expense Plans 4.8% 5.7% 6.8% 6.0% Public Company Related Expen
Slide 42: Operations Summary
41 Operations Summary USI’s margin improvement will largely be driven by efficiency gains in traditional retail brokerage. Best practices management has been documented implemented throughout the company. USI’s expense metrics are continually measured and communicated broadly to the field. Detailed
Slide 43: Agenda: Workplace Benefits Overview
42 Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Acquisition Execution People & Culture Financial Overview Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execution P
Slide 44: USI Workplace Benefits Division Overview
43 USI Workplace Benefits Division Overview Core Benefit Communications Core Benefit Enrollment Voluntary Benefits Implementation USI Workplace Benefits Division Overview – Core Benefit Communications – Core Benefit Enrollment – Voluntary Benefits Implementation – – –
Slide 45: Service Model
44 Service Model Electronic Benefit Enrollment and Communication: Data Services and Data Cleansing Electronic Surveys Print Communications Service Model Electronic Benefit Enrollment and Communication: – Core Benefits – Section 125 – Voluntary Benefits – Flexible Spending Accounts – Total Compensati
Slide 46: Target Markets
45 Target Markets Middle Market Employers Large Employers Unions Association Target Markets Middle Market Employers Large Employers Unions Association
Slide 47: Value Proposition
46 Value Proposition Substantially enhance benefit education process for employees: Create a better, more efficient enrollment process Leverage growth in voluntary benefits marketplace Increase the return on benefit investment for employers Value Proposition Substantially enhance benefit education p
Slide 48: Enhancing Benefit Education
47 Enhancing Benefit Education Benefit Communications WorkUSA 2004/2005 Watson Wyatt Study: Effective Employees Drive Financial Results Enhancing Benefit Education Benefit Communications – “A below average benefits package supported by good communication practices has a much stronger, positive corre
Slide 49: Enhancing Benefit Education
48 Enhancing Benefit Education Above-Average Benefits Below-Average Benefits WorkUSA 2004/2005 Watson Wyatt Study: Effective Employees Drive Financial Results Enhancing Benefit Education Effective Communication Ineffective Communication 83.6% 25.7% 22.1% 76.2% Percentage of employees responding favo
Slide 50: Enhancing Benefit Education: Proven Strategy
49 Enhancing Benefit Education USI Workplace Enhances Benefit Education Using a Proven Strategy: Enhancing Benefit Education USI Workplace Enhances Benefit Education Using a Proven Strategy: – Scripted benefit education curriculum – One-to-One Counseling in a private setting via face-to- face or cal
Slide 51: Creating a more efficient enrollment process
50 Creating a more efficient enrollment process Plan Participation will improve Employee Data will be more accurate and complete Data Transfers to HRIS, Payroll and Carriers will be more efficient Creating a more efficient enrollment process Plan Participation will improve – Understanding equals par
Slide 52: Meeting the Needs of a Growing Marketplace: Voluntary Benefits
51 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 $5.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 Meeting the Needs of a Growing Marketplace: Voluntary Benefits Source: 2005 US Worksite Study, Eastbridge Consulting. Total Voluntary Benefit Sales (in billions) Total Voluntary Benefit Sales (in billions) Meetin
Slide 53: Voluntary Benefits
52 Voluntary Benefits USI’s approach: Voluntary Benefits USI’s approach: – Provide diverse benefit choices for employees – Utilize the industry’s leading carriers – Execute a more responsible communication model with salaried benefit counselors – Provide diverse benefit choices for employees – Utili
Slide 54: The Result
53 The Result Utilize voluntary benefit revenue to offset the cost of enhancing our client’s benefit communication strategy Provide a turn-key process that produces a predictable ongoing revenue stream Enhance client persistency The Result Utilize voluntary benefit revenue to offset the cost of enha
Slide 55: Why Do Our Clients Partner with USI Workplace?
54 Why Do Our Clients Partner with USI Workplace? Employees are making uneducated benefit elections Need to improve the efficiency and effectiveness of their open enrollment Making benefit plan design changes, such as the introduction of CDHC and HSA’s Desire to implement Voluntary Benefits using sa
Slide 56: USI Workplace Benefits
55 USI Workplace Benefits Voluntary Benefits is a large and growing market Largest Independent Distributor of Voluntary Products in the Industry Industry’s most recognized proprietary technology platform (ResourceOne) Industry’s largest call center operation Regional Sales Model with national networ
Slide 57: Agenda: Acquisition Execution
56 Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview People & Culture Financial Overview Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execu
Slide 58: Documented Best Practices
57 Documented Best Practices Ongoing margin expansion will be driven by final 2005 charges and the ongoing implementation of best practices. Documented Best Practices Operating Efficiency Executive Compensation Producer Compensation Ins. Staff Compensation Admin. Staff Compensation Operating Expense
Slide 59: Disciplined Acquisition Strategy
58 Disciplined Acquisition Strategy Highly fragmented industry with over 13,000 agencies between $0.5 - $10.0 million in revenue, for a combined $20.0 billion in total revenue USI’ s highly experienced management team has demonstrated its ability to identify, negotiate, consummate and integrate over
Slide 60: Due Diligence and Integration Process
59 Due Diligence and Integration Process Comprehensive due diligence process Financial review Operational review Legal review Human resource review Detailed presentation to our Board of Directors Business overview Investment considerations Historical and forecasted results Cash flow and IRR Impact o
Slide 61: 2003-2004 Acquisitions
60 2003-2004 Acquisitions Agency Revenue Location Guild Agency 2.4 $ Westbury, NY Not for Profit Hastings Tapley 11.8 $ Boston, Mass Entry into Boston market BMI Insurance 4.5 $ Long Beach, CA Property O'Leary-Kientz 4.1 $ Cincinnati, OH Construction Benefits Team 1.9 $ Houston, TX Employee Benefits
Slide 62: 2005 Acquisitions
61 2005 Acquisitions Agency Revenue Location Patterson//Smith 11.0 $ Falls Church, VA Expansion of DC Summit Global Partners 66.0 $ TX, FL, IL, other Expansion Texas and Florida Chase Insurance Agency 3.5 $ New York, NY P&C Humanex 2.5 $ San Francisco, CA Employee Benefits Benefits Unlimited 2.5 $ C
Slide 63: Acquisition Integration Example: Patterson//Smith Associates
62 Acquisition Integration Example Patterson//Smith Associates PSA was founded in 1961 and operates out of a single office in Falls Church, Virginia With approximately $11 million in revenues, PSA was one of the largest independently owned insurance brokerage firms in the Washington Metropolitan mar
Slide 64: Patterson//Smith Associates Integration Update
63 Patterson//Smith Associates Integration Update – Closed 02/01/05 Integration item Target date Field owner Corporate owner Status Management Senior management selected Closing Fulton Eslick Completed prior to Closing Secondary management selected Closing Fulton Eslick Completed prior to Closing Of
Slide 65: Patterson//Smith Associates Integration Update (cont'd)
64 Patterson//Smith Associates Integration Update – Closed 02/01/05 (cont’d) Integration item Target date Field owner Corporate owner Status Finance Develop full year forecast 3/1/2005 Snyder Schneider Completed on 3/1/2005 Begin monthly flash reporting to Corporate 3/1/2005 Snyder Schneider Complet
Slide 66: Acquisition Pipeline
65 Acquisition Pipeline $320 $329 $339 $287 $305 $253 $191 $167 $130 $104 $10 $0 $50 $100 $150 $200 $250 $300 $350 $400 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Acquisition Pipeline
Slide 67: Acquisition Summary
66 Acquisition Summary Acquisitions are the third leg of the strategy, after organic growth and margin expansion Acquisition candidates must subscribe to the USI culture Acquisitions must meet our financial hurdles Immediate integration of acquired businesses Acquisition Summary
Slide 68: Agenda: People & Culture
67 Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execution Financial Overview Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition
Slide 69: Documented Best Practices
68 Documented Best Practices Ongoing margin expansion will be driven by final 2005 charges and the ongoing implementation of best practices. Documented Best Practices Operating Efficiency Executive Compensation Producer Compensation Ins. Staff Compensation Admin. Staff Compensation Operating Expense
Slide 70: Identify, Mentor, Train, and Develop Talent
69 Identify, Mentor, Train, and Develop Talent Performance management program for all associates Expected distribution Bonuses and increases align with performance Common USI leadership competencies and values Field based “talent reviews” Exposure for high-potentials Executive discussion on key tale
Slide 71: Agenda: Financial Overview
70 Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execution People & Culture Wrap-up and Q&A Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Ex
Slide 72: Historical Operating Performance
71 Historical Operating Performance Revenue Operating Income (2) $ in thousands $ in thousands (2) Please see Appendix for definitions of non-GAAP financial measures used throughout this presentation and related reconciliations to GAAP financial measures. (3) 4Q 2004 excludes $12.4mm in Identified 4
Slide 73: Operating Highlights
72 ($ in millions) Fiscal year First 9 months LTM 2001 2002 2003 2004 2004 2005 9/30/05 Operating Revenues (1) $304.5 $321.4 $345.5 $407.2 $291.9 $374.8 $490.0 Total Operating Expenses 272.7 265.7 272.4 337.8 234.4 310.0 413.4 Depreciation 12.7 11.0 9.5 8.7 6.4 7.2 9.5 Operating Income (2) 41.5 54.5
Slide 74: Credit Ratios
73 2.3x 3.3x 5.3x 9.6x 7.9x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 2001 2002 2003 2004 Q305 LTM 2.0x 2.0x 1.8x 2.4x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 5.0x 2002 2003 2004 Q305 LTM Credit Ratios Debt/Total Capitalization Debt/Adjusted PF EBITDA (a) EBITDA (b) /Interest expense (c) (a) Re
Slide 75: USI Summary Income Statement
74 2005 2004 2004 2003 Total Revenues (b) 374,759 $ 291,970 $ 407,198 $ 345,531 $ Operating Income (c) 72,566 51,217 73,402 64,032 Income from Continuing Operations plus Amortzation of Intangibles (c) 44,634 33,745 47,291 40,492 Fully Diluted Shares 56,303 48,995 49,127 46,028 Per Share: Income from
Slide 76: Capitalization
75 ($ thousands) 9/30/2005 12/31/2004 Operating Cash 30,099 $ 2,887 $ Debt: Term loan & revolver (a) 212,050 $ 128,438 $ Seller notes and other debt 25,900 27,887 Total Debt 237,950 156,324 Total Stockholders’ Equity 404,492 327,565 Total Capitalization 642,442 $ 483,889 $ Leverage: Debt/LTM PF EBIT
Slide 77: Financial Summary
76 Financial Summary Strong overall revenue growth (13.5% CAGR since 2001) Continued improvement in Operating Margin from 13.6% in 2001 to 19.3% for the 9-months ended 9/30/05 Strong growth in operating income (24.6% CAGR since 2001) 14.5% Cash EPS growth YTD 2005 Solid capital structure and prudent
Slide 78: Appendix
Appendix USI Holdings Corporation USI Holdings Corporation Appendix
Slide 79: 3Q & YTD 2005 Reconciliation to GAAP
78 3Q & YTD 2005 Reconciliation to GAAP For the Three Months Ended Sept 30, For the Nine Months Ended Sept 30, 2005 As Reported Identified Adjustments 2005 Excluding Identified Adjustments 2005 As Reported Identified Adjustments 2005 Excluding Identified Adjustments Total revenues 127,267 $ 756 $ 12
Slide 80: 2004 Reconciliation to GAAP
79 2004 Reconciliation to GAAP Identified 4th Quarter Expenses: On December 20, 2004, USI announced that its Board of Directors had approved a margin improvement plan in order to reduce ongoing operating expenses. As a result of this action, the Company recorded expenses of $12.4 million in the four
Slide 81: Non-GAAP Financial Measures
80 Non-GAAP Financial Measures Operating Income is defined as revenues, less compensation and employee benefits, stock-based compensation, other operating expenses and depreciation. Compensation and employee benefits and other operating expenses are adjusted to exclude expenses related to USI’s marg
Slide 82: Reconciliation to GAAP Financial Measures
81 Reconciliation to GAAP Financial Measures $ in millions LTM 2001 2002 2003 2004 3Q04 3Q05 3Q05 Total Revenues $304.46 $321.43 $345.53 $407.20 $291.97 $371.83 $487.06 Expenses: Compensation and Employee Benefits 197.36 197.37 195.89 237.27 168.37 226.41 295.30 Equity Based Compensation 3.09 (0.68)
Slide 83: Reconciliation to GAAP Financial Measures (cont'd)
82 Reconciliation to GAAP Financial Measures (cont’d) (1) Includes charges relating to elimination of redundant positions, renegotiating sales professionals’ and executives’ contracts, early termination of lease commitments and relocation of corporate offices from San Francisco to New York (2) Inclu
Slide 84: Wrap-up and Q&A
83 Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition Execution People & Culture Financial Overview Agenda Company Overview Organizational Overview Revenue Growth Operational Efficiency Workplace Benefits Overview Acquisition