National Financial Partners Corp
National Financial Partners — Q3 2012 Earnings Presentation
18 slides from National Financial Partners's earnings presentation, Oct 31, 2012
Slide 1: Third Quarter 2012 Earnings Call Presentation
THIRD QUARTER 2012 EARNINGS CALL PRESENTATION Exhibit 99.1
Slide 2: Related to Forward-Looking Statements
Related to Forward-Looking Statements Certain items in this presentation and in today’s discussion, including matters relating to revenue, net income, Adjusted EBITDA, cash earnings, cash earnings per diluted share and percentages or calculations using these measures, acquisitions, capital structure
Slide 3: Related to Non-GAAP Financial Information
Related to Non-GAAP Financial Information The Company analyzes its performance using historical and forward-looking non-GAAP financial measures called cash earnings, cash earnings per diluted share, Adjusted EBITDA, and percentages or calculations using these measures. The Company believes these non
Slide 4: Reconciliation: Net Income to Cash Earnings
Reconciliation: Net Income to Cash Earnings (1) Cash earnings is a non-GAAP financial measure, which the Company defines as net income excluding amortization of intangibles; depreciation; the after-tax impact of the impairment of goodwill and intangible assets; the after-tax impact of non-cash inter
Slide 5: Reconciliation: Net Income to Adjusted EBITDA
Corporate Individual Advisor Client Group Client Group Services Group Consolidated Reconciliation: Net Income to Adjusted EBITDA (1) Adjusted EBITDA is a non-GAAP financial measure, which the Company defines as net income excluding income tax expense; interest income; interest expense; gain on early
Slide 6: Benefits, Insurance, Wealth Management
"Benefits Insurance Wealth Management
Slide 7: 3Q12 Highlights
3Q12 Highlights Revenue $252 million Organic revenue declined -1.3% – Corporate Client Group +3.3% – Individual Client Group -5.5% – Advisor Services Group -3.7% Growth in Corporate Client Group continued Corporate Benefits Executive Benefits Property & Casualty Adjusted EBITDA $32 million Adjusted
Slide 8: Recurring Revenue
Quarter-over-Quarter Recurring Revenue Year-over-Year Recurring Revenue Recurring Revenue (1) (1) Recurring revenue includes revenue from corporate and executive benefits, property & casualty, wealth management and asset-based fees and trails. (2) Previously reported as 57.0% for FY10; updated due t
Slide 9: Capital Allocation Update
Capital Allocation Update Strategic acquisitions $88 million YTD through October 28, 2012 – $80 million of primary acquisitions • Includes $30 million of acquisitions where NFP maintained exclusive long-standing relationships – $8 million of management contract buyouts Stock buyback 3Q12 – Repurchas
Slide 10: Benefits, Insurance, Wealth Management
"Benefits Insurance Wealth Management
Slide 11: Business Segments: 3Q12 Revenue $252.0 million
$115.1 45.7% $78.2 31.0% 3Q12 Revenue $252.0 million Business Segments Advisor Services Group Individual Client Group Corporate Client Group ($ in millions) 3Q12 organic revenue growth -1.3% Corporate Client Group +3.3% Individual Client Group -5.5% Advisor Services Group -3.7% $58.7 23.3%
Slide 12: Corporate Client Group
27.3% 52.1% Corporate Client Group 82.5% 9.5% 45.7% Business Segment 3Q12 Overview & Components of Revenue Steady and recurring business Diversification of products and services Health & Welfare Retirement Ancillary & Voluntary Benefits NFP Executive Benefits NFP P&C Strategic acquisitions Managemen
Slide 13: Individual Client Group
27.3% 52.1% Individual Client Group 28.6% 50.6% Business Segment 3Q12 Overview & Components of Revenue % of ICG Revenue 20.8% Life insurance Challenges and uncertainty remain in the market Accelerated actions to reorganize and consolidate NFP Life New leadership Dispositions of certain life operatio
Slide 14: Advisor Services Group
27.3% 52.1% 63.9% Advisor Services Group Asset Based Fees & Trails Commissions & Non-Recurring Fees Business Segment 3Q12 Overview & Components of Revenue % of ASG Revenue 36.1% 23.3% Business drivers New assets Advisor recruitment Asset-based fees AUM $10.5 billion, up 17.2% YOY Fusion acquisition
Slide 15: Benefits, Insurance, Wealth Management
"Benefits Insurance Wealth Management
Slide 16: 3Q12 Consolidated Financial Highlights
$20.2 $22.2 $9.3 $7.4 $105.8 $115.1 $84.8 $78.2 Adjusted EBITDA Margin 3Q11 3Q12 Revenue Adjusted EBITDA & Margin Maintained YOY revenue, Adjusted EBITDA and margin; Continued strength in CCG, offset by market challenges in ASG and life insurance $2.7 $2.8 3Q11 3Q12 $61.0 $58.7 3Q11 3Q12 3Q12 Consol
Slide 17: Total Compensation Ratio by Segment
Corporate Client Group Individual Client Group (Compensation Expense, Employees )+(Fees to Principals) Revenue Total Compensation Ratio = Total Compensation Ratio by Segment 51% 54% 52% 52% 49% 51% 50% Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 50% 50% 48% 49% 51% 52% 52% Q1'11 Q2'11 Q3'11 Q4'11 Q1'1
Slide 18: Operating Cash Flow
3Q12 operating cash flow in line with prior years as acquisition growth offset by challenges in life insurance market Actual As Adjusted (6) (2) (2) (3) 1Q11 2Q11 3Q11 4Q11 Adjusted 1Q12 2Q12 Adjusted 3Q12 Operating Cash Flow (1) ($ in millions) ( 1) The sum of the components may not agree to total
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