Usi Corporation · TWSE:1304
Usi — Merrill Lynch Insurance Conference 2003
29 slides from Usi's conference presentation, Feb 14, 2003
Slide 1: U.S.I. Holdings Corporation: USI Takes Flight
U.S.I. Holdings Corporation “USI Takes Flight” Merrill Lynch Insurance Conference February 2003
Slide 2: About Forward-Looking Statements
About Forward-Looking Statements This document and the related oral presentation include forward ooking stataments that are subject to a number of risks. and uncertainties, many of which are beyond the control of US. Holdings Comoration, which may include statamants about: + its business strateoy; +
Slide 3: Market Data
Market Data Shares Outstanding: 52 Week Range: Implied Market Capitalization: Ticker / Listing: Dividend: Analyst Research: 44,630,000 $9.60 — $11.90 per share $428 — $531 million “USIH” / NASDAQ None Jay Cohen Merrill Lynch Hugh Warns JPMorgan Charlie Gates CSFB. John Balkin Fox-Pitt
Slide 4: USI Profile
USI Profile * Leading provider of P&C insurance and financial products and services to middle market companies in the U.S. = sti largest US. Broker = Leading Benefits Broker (represents 46% of 2001 total revenues) * Company built both organically and through over 90 acquisitions from 1994 to 1999 *
Slide 5: Investment Highlights
Investment Highlights Consistent organic growth through all market cycles — Diversified revenue mix — Proven, proactive cross-selling capability — Strategic partnerships = Goal is 8-10% growth annually over long-term Hard P&C market continuing current growth momentum but it is not the sole driver =
Slide 6: Post-IPO Highlights
Post-IPO Highlights. Offering price of $10.00/share Positioned to deliver consistent earnings Improved balance sheet Improved cash flow Employee Equity — employees have 11% potential ownership
Slide 7: Financial Overview
U.S.I. Holdings Corporation Financial Overview
Slide 8: Six Year Revenue Growth Trend
Six Year Revenue Growth Trend , ches 3 $312 $328 @ in millions) $254 $208 $149 — 1997 1998 1999 2000 2001 2002 Wote’ Reverie figures for 2000 exclicie $8 milion of hon-recuiring Yevenues th 2000 received fam strategic partners 8
Slide 9: Organic Revenue Growth - Lower Volatility
Organic Revenue Growth - Lower Volatility 2.0% 4 3.1% 9.0% 9.0% 5.0% 4.0% 43% 2.0% 2.0% 1998 1999 2000 Soft Market Strong Economy 2001 2002 Hard Market Weak Economy
Slide 10: Six Year EBITDA Growth Trend
Six Year EBITDA Growth Trend (in millians) GR Pd CR $58 $48 —7 $32 $28 $35 $20 1997 1998 1999 2000 2001 2002 re
Slide 11: Strategic Plan For Margin Expansion Is Clear
Strategic Plan For Margin Expansion Is Clear 40.0% eon 37.0% 35.0% ft) £ £ HRH B 30.0% 271% 26.8% = 25.7% a & 25.0% 23.9% 2 28.0% 23.5% vai a E 249% 25.0% 172% 200% 8 220% Ww 21.4% 15.0% 10.2% 10.0% T T T T T T 1 1997 1998 1999 2000 2001 2002 2003 Analyst est. Calendar Years "
Slide 12: USI Balance Sheet
USI Balance Sheet (in thousands) Assets Operating Cash Other Current Assets Intangible Assets Other Assets Liabilities Current Liabilities Long Term Debt Other Stockholders’ Equity (includes redeemable cammon stock) 2002 21,374 254,461 280,130 23,541 ‘Year Ended 2001 30,882 266,055 282,189 51,784 26
Slide 13: Capitalization
Capitalization ___December 31, (in thousands) 2002 2001 Deb Term Loan 25,621 112,500 Revolving credit facility 56,075 73,475 Seller nates and other debt 51,299 64,061 Total Debt 136,835 250,036 Stockholders’ Equity (includes redeemable cammon equity) 204,101 124,471 Total Capitalization 340,936 374,
Slide 14: Experienced Senior Management Team
Experienced Senior Management Team Industry Position Experience David Eslick Chairman, President and CEO 22 44 Tom O'Neil Chief Operating Officer 23 45 Jeff Jones Chief Marketing Officer 25 48 Bab Schneider EVP Finance and Administration a7 49 Ed Bowler Senior VP and CFO. 13 46 Ernest Newborn Senior
Slide 15: National Company With Regional Focus
National Company With Regional Focus usi West Coast 25 Wole; Percentage riaures represen! 2002 reveriies “& Corporate usI Southwest 10% © Insurance Brokerage Ofices 15 usI Northeast 43% us! Southeast 16% © Specialized Benefits Offices
Slide 16: Consistent Growth From Diversified Revenue Mix
Consistent Growth From Diversified Revenue Mix Leadership in currently attractive P&C market complemented by sizable and growing presence in benefits business Group Employee Benefits Property and Casualty Total 2002 Revenues = $328 MM :
Slide 17: Product & Service Diversification
Product & Service Diversification Property and Casualt + General Commercial Liabilty + Workers’ Compensation + Fidelity and Surety Bonds + Professional Liability Group Employee Benefits * Personal Lines (Auto, Home, etc.) + Affinity Marketing Core Benefits Enrollment and Communication Group Health G
Slide 18: Attractive Middle Market Customer Base
Attractive Middle Market Customer Base e Very large market opportunity — Approximately 1.1 million middle market businesses in the U.S.* — USI has less than 2% market penetration — Primary competitors are local and regional brokers e Customers value the USI model — Buying decisions made by CEO and C
Slide 19: Proactive Cross-Selling Sales Culture
Proactive Cross-Selling| Sales Culture Single distribution point for multiple products and services — Integrated team of sales professionals and product specialists Compensation practices reinforce cross-selling culture — Sales professionals — Referrals, Retention, & Pinnacle — Management team — Bon
Slide 20: Proven Strategy and Opportunity
Proven Strategy and Opportunity erat Busnes Ponty Casa Eolas Benes | Retemest | Eells uu Baris SRT" mange cl_umonts aut ont: | wat _us wow | vunty | RES uy cumuy cose ap ov - - - . . |). =|! . 8 rn . . ee ee | s/o =m 8 - 1 . . . . - sees . e jes . o-8 a] a [4 om a4 . . . . oe ow 8 . . | . .
Slide 21: Cross Selling Success
Cross Selling Success * Top 15 Clients — 53% have 3 or more broad categories — 73% have 2 or more broad categories e Top 400 Clients — 43% have 2 or more broad categories e 20% of total gross new business Is derived from cross selling broad categories — <5% four years ago an
Slide 22: Sophisticated Sales Management Technology
Sophisticated Sales Management Technology e Proactively manage sales behavior, real-time monitoring and forecasting - Reinforces sales behavior to align with business plan -— New sales opportunities = Pipeline forecasting = Flexibility for changing needs and geographic and demographic diversity e Sa
Slide 23: Unique Strategic Partnerships
Unique Strategic Partnerships Strategic Partner Start Partnership CERIDIAN 12/01 | P&C and benefits to Ceridian clients CERIDIAN 12/01 Payroll services to USI clients ¢ Sovereign Bancorp: 12/01 P&C and benefits to Sovereign clients S&S 1998 Benefits and voluntary products UNUM. @ 1998 P&C for not-fo
Slide 24: USI and Ceridian Strategic Partnership
| usive Ceridian Strategic Partnership ENROLLMENT & ELIGIBILITY FLEXIBLE SPENDING ACCOUNTS TUITION REIMBURSEMENT (401}K ADMINISTRATION DEFINED BENEFITS COBRA, HIPAA Goro TRANSIT HEALTH & WELFARE CONS ENROLLMENT BAW ANA TERE RISK MANAGEMENT WORKERS COMPENSATION BUSINESS PACKAGE & LIABILIT WORKILIFE S
Slide 25: Organic Growth Augmented by Acquisitions
Organic Growth Augmented by Acquisitions e Proven expertise in originating, completing and integrating acquisitions e Highly fragmented industry with over 30,000 agencies — P&C, employee benefits, worksite marketing, etc. e Criteria - NO auctions = Current footprint - “Fold ins” - Desire to grow bey
Slide 26: Acquisitions — Why USI vs. peers?
Acquisitions — Why USl\vs. peers? Fully integrated product and sales capabilities Growth opportunities for the business, clients, and employees — Fully integrated sales opportunities Structured entrepreneurial focus Young Company — 8 years old — Opportunity to participate and drive strategy Attracti
Slide 27: Motivated Management Team
Motivated Management Team * Management's net worth is tied to long-term success of the company and shareholder value * 5 year performance options with cliff vesting — Accelerated vesting based on achieving performance targets: 2003 = $1.02 cash EPS/normalized tax provision 2004 = $1.22 cash EPS/norm
Slide 28: Summary
summary 8" Largest U.S. Broker — Revenue diversity = Middle Market focus Sales and Marketing Company = Cross Selling — proven and proactive — Sales management and technology — Cash and equity incentives — Strategic Partners Structured Entrepreneurial focus Experienced and motivated management team P
Slide 29: U.S.I. Holdings Corporation: USI Takes Flight
U.S.I. Holdings Corporation “USI Takes Flight” February 2003
USI Holdings — Merrill Lynch Insurance Conference 2003 on 6ix