Eva F. Huston - Senior Vice President, Head of Corporate Finance, Head of Investor Relations and Treasurer Scott G.

Stephenson - Chief Executive Officer and President Mark V. Anquillare - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Manav Patnaik - Barclays Capital, Research Division Timothy McHugh - William Blair & Company L.L.C., Research Division Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division Andrew C.

Steinerman - JP Morgan Chase & Co, Research Division Suzanne E. Stein - Morgan Stanley, Research Division Eric J.

Boyer - Wells Fargo Securities, LLC, Research Division William Clark - Keefe, Bruyette, & Woods, Inc., Research Division

Thank you, Christie. And good morning to everyone.

We appreciate you joining us today for a discussion of our first quarter 2013 financial results. With me on the call this morning are Scott Stephenson, President and Chief Executive Officer; and Mark Anquillare, Chief Financial Officer.

Following comments by Scott and Mark highlighting some key points about our strategic priorities and financial performance, we will open the call up for your questions. The earnings release referenced on this call, as well as the associated 10-Q, can be found in the Investors section of our website, verisk.com.

The earnings release has also been attached to an 8-K that we have furnished to the SEC. A replay of this call will be available for 30 days, until May 30, 2013, on our website and by dial-in.

Finally, as set forth in more detail in today's earnings release, I will remind everyone that today's call may include forward-looking statements about Verisk's future performance. Actual performance could differ materially from what is suggested by our comments today.

Information about the factors that could affect future performance is summarized at the end of our press release as well as contained in our recent SEC filings. Now I will turn the call over to Scott Stephenson.

Thank you, Eva, and good morning to everyone. In the first quarter of 2013, we delivered strong overall performance, with total revenue growth of over 16% and diluted adjusted EPS growth of about 13%.

Our consolidated organic revenue growth in the first quarter was 6.8%. Our organic revenue growth was 9.5% in the first quarter, excluding our mortgage analytics business, which continues to face some macro challenges, as we've discussed with you before.

Profitability was strong, with an EBITDA margin of over 44% in the quarter, even while we continued to invest in innovation, as we signaled to you last quarter. Our free cash flow growth, adjusted for the timing of a tax benefit that Mark will describe later, was also strong, increasing over 14% in the quarter.

We remain disciplined in our use of capital and we're focused on delivering shareholder returns. We returned capital to our shareholders through repurchases in this quarter of about $22 million.

We remain active and disciplined in looking at M&A. We focus on assets with a genuine strategic fit, a strong financial model and an appropriate valuation in relation to future growth prospects.

Last year, as you know, we spent about $800 million on acquisitions, principally for MediConnect and Argus, and we remain very pleased with last year's acquisitions, both from a strategic as well as a performance perspective. With those high-level results as background, let me just say I'm pleased to continue speaking with you about our strategy, as I've done since our IPO in 2009, but now from the CEO's seat.

We will build on the strong platform developed and led for over a decade by Frank Coyne, who I'm delighted to say, remains with us as the Chairman of our board. These are exciting times for Verisk and our over 6,000 employees who have the task, every day, of creating value for our customers, and as a result, for our shareholders.

I hope that a lot of you were able to attend or listen to our Investor Day presentations in March, where we shared with you the deep industry expertise and the innovative solutions that we deliver daily. As we've done for many years on our journey, we will continue to emphasize 4 things: first, looking for proprietary data sets and analytic methods; second, developing scalable industry-standard solutions; third, repurposing our intellectual property assets for enhanced value for both existing as well as new customers; and fourth, thinking with what we called the N+1 mindset.

We continue to focus on investment opportunities and we're encouraged -- encouraging our teams to bring more forward. As we've discussed, we are funding a number of initiatives in 2013 and we plan to continue to do so into the future.

Our list of investment initiatives in 2013 is very exciting and includes: remote imagery; Touchstone, which is our next-generation platform for catastrophe modeling; the unified health care platform and health care data aggregation; and supply chain innovations. Combining the power of analytics with the creativity of all of our team members, we intend to build on the strong financial results we delivered this quarter.

The ongoing experience, knowledge and dedication of our employees across our enterprise positions us well for the rest of 2013. So with that, let me turn it over to Mark to cover our financial results in more detail.

Thank you, Scott. We are pleased with our performance in the first quarter, in which we delivered both growth and profitability while also investing and planning for the future.

In the first quarter, total revenue grew 16.4% and organic revenue growth, 6.8%. The results reflect continued exceptional revenue performance in health care, even as we cycle past strength from 2012, and good revenue growth in our current solutions.

Mortgage revenue growth remained a headwind to overall growth. Excluding our mortgage analytics business, organic revenue growth in the quarter was 9.5%.

In the first quarter, our Decision Analytics segment delivered 24.4% revenue growth, of which 7.8% was organic, excluding the acquisitions of MediConnect, Argus and Aspect. Next quarter, MediConnect will be part of the organic revenue growth in the health care category.

Within Decision Analytics, our insurance category grew 8.8% in the first quarter and 8.3% organically, excluding the acquisition of Aspect. Our underwriting solutions delivered strong growth and we saw continued double-digit growth in our catastrophe modeling solutions in the quarter.

Our claims solutions, which are well penetrated, also contributed to growth. We continue to innovate in these areas, as well as others, to add to the growth.

In financial services, which includes both Argus and the mortgage analytics business, revenue grew 28.1% in the quarter. Argus is an excellent business, performing very well since the acquisition in third quarter of 2012.

Argus is on track to deliver at least mid-teens growth in 2013, as discussed at the time of the acquisition. The mortgage portion of the financial services revenue declined 19.1% in the first quarter.

Within our mortgage tools area, we are seeing recent trends continuing. Our origination-related revenue continues to grow, while our mortgage revenue declined due to the ongoing normalization of the forensic piece of the business.

In thinking about the mortgage portion of financial services for 2013, we continue to believe the full year 2013 results may mirror the revenue decline of about 11% we saw in the full year 2012. Health care continues to deliver exceptional revenue growth, 93.9% total revenue growth for the first quarter and organic revenue growth of 39%, which exceeded our expectations.

Our total revenue growth benefited from the second quarter 2012 addition of MediConnect, another acquisition that has performed strongly. The performance to date continues to validate our strategy of combining our revenue integrity and HEDIS reporting businesses with MediConnect to create a comprehensive solution, which we call Revenue and Quality Intelligence, or RQI.

Organically, we continue to add and implement new customers and expand our relationships with continuing customers. I think you got a great feel for the strength of the health care opportunity and the growth prospects at our Investor Day in March.

We remain excited about the opportunity. We expect growth to remain well above corporate average from an organic perspective, but percentages, naturally, will be impacted as we grow off of a larger base.

Our specialized markets revenue grew 3.6% in the first quarter, with modest growth from our weather and climate analytics, and from our supply chain solutions due to lower growth from government contracts and customer projects. Turning to Risk Assessment.

For the first quarter, we reported revenue growth of 5.3%, maintaining the value to our long-standing insurance customers. Our industry-standard insurance programs grew 3.6% in the quarter, reflecting our 2013 invoices, which were effective January 1.

Excluding about $1 million of nonrecurring license fee revenue in first quarter of 2012, which we discussed last year, industry-standard growth would have been about 4.4%. As a reminder, beginning in the fourth quarter of 2012, we had included the actuarial services and statistical agency services categories as part of industry-standard programs.

Our property-specific information revenue increased 11.1% in the quarter. This increase was from new sales and higher volumes from certain customers, as well as the incremental revenue contributions due to the expiration of our revenue-sharing agreement with a technology provider in the fourth quarter 2012.

EBITDA for the first quarter was $179.7 million, as outlined in Table 3 of our press release. EBITDA increased 12.6% for the quarter and our EBITDA margin was 44.6%, reflecting good expense management, even as we invested in our businesses, as previously discussed.

Additionally in the quarter, acquisitions mitigated the reported consolidated margin by about 100 basis points. As you know, we have an ESOP in place, which is approaching its final distribution date of December 2013.

We are evaluating the potential for extending the ESOP. If we choose not to do so, we could expect to see a noncash charge of up to $27 million in the year, dependent upon the Verisk stock price.

In that case, we could also report an adjusted EBIT number, as you have seen us do in the past, to help you better understand the underlying performance of the business. The margins in Decision Analytics were 37.3% in the first quarter of 2013 versus 39.3% in first quarter of 2012.

We continue to see a mix shift that impacts margins, as our faster growing businesses, like health care, have not yet scaled to the margins of the more mature businesses. In addition, the margin in the quarter reflects some of the investments that we've previously outlined.

We remain very comfortable with the modest near-term margin impact when we see the opportunity to drive faster and sustainable top line growth into the future. In the quarter, our Risk Assessment margins were 56.4% versus 55.4% first quarter of 2012.

Our business continues to show scalable profitability, even while we continue to invest in developing new solutions. Also, please recall, our invoices in those increases are generally effective first quarter, and our employee compensation increases begin their impact in the second quarter, leading to higher margins in first quarter relative to second.

As noted last quarter, we expect our investments, which are primarily reflected in the Decision Analytics segments, to be weighted more towards the first half of 2013, and could impact the P&L by about $10 million to $15 million in total, which should have the impact of lowering margins. Our investments are in the combination of people, data, hardware and software, some of which flow through the P&L, but some through the balance sheet as CapEx.

As you know, our forecast is about $115 million in CapEx for 2013, including about $20 million related to these investments initiatives. We expect our corporate margin will be impacted by modest full year 2013, as our incremental EBITDA margins from existing solutions offset debt.

Our interest expense is $3.7 million for the first quarter versus the respective period in 2012. This increase was due to the higher debt balances taken on during 2012 related to our acquisitions.

We ended first quarter with total debt of about $1.5 billion and no outstanding revolver borrowings. Our reported tax rate was 36.7% for the quarter.

As discussed last quarter, we've been actively working on our tax planning strategies and were rewarded by the benefits resulting from this effort, as well as an R&D tax credit that benefited us in the first quarter. For 2013, the tax rate will likely fluctuate from quarter to quarter, however, 38% still seems to be about the right level for your models, perhaps, with a modest bias to a slightly lower rate for the full year.

Coming down to the net income line. We focus on adjusted net income, a non-GAAP measure, which we define in the current period as net income plus acquisition-related amortization expense less the income tax effect on that amortization.

Our adjusted net income increased 14.3% to $91.2 million for the quarter. Adjusted EPS on a fully diluted basis was $0.53 for the quarter, an increase of 12.8%.

The average diluted share count was 172.8 million shares for the quarter. On March 31, 2013, our diluted share count was 173.1 million shares.

In the quarter, we purchased about 382,000 shares for about $21.5 million. At quarter end, we had about $122.7 million left under our authorization.

Our share repurchase program has been successful to date, generalizing annualized IRRs of over 20%. For 2013, we continue to anticipate, at a minimum, buying shares to offset dilution.

Turning to our balance sheet. As of December 31, our cash and cash equivalents were $276 million.

Total debt, both the short-term and long-term, totaled $1.5 billion. Today, our total incremental debt capacity is over $850 million and will grow with our EBITDA and cash flow.

Our debt to pro forma EBITDA at March 31 was 2x, at our steady-state target. As we have stated before, we are willing to temporarily go above our long-term target of 2x debt-to-EBITDA to take advantage of unique opportunities, because our free cash flow is strong and allows us to delever quickly, as we've demonstrated since our acquisition of Argus in third quarter of 2012.

In the first quarter, free cash flow, which we've define as cash from operations less capital expenditures, was $162.7 million, a decrease of about $10.9 million or 6.3% versus the first quarter of 2012. Adjusting for the timing of excess tax benefits in the quarter, free cash flow in the quarter was $198.9 million reflecting growth of 14.5% compared to the first quarter of 2012.

Our capital expenditures were 7.1% of revenue in the first quarter, consistent with the incremental investments we discussed last quarter. Free cash flow representing 90.6% of EBITDA for first quarter of 2013, reflecting our strong first quarter cash flow generation based upon the timing of our customer invoice payments.

Adjusting for the timing of the excess tax benefit we mentioned previously, free cash flow represented over 100% of EBITDA. As we think about capital spending for 2013, we're still expecting $115 million for the full year, including this $20 million of investment initiative spending.

As you think about your models for the full year 2013, we anticipate amortization of intangible assets of about $64 million, fixed asset depreciation and amortization of about $74 million, and a tax rate of about 38%, with a modest downward bias. We aim to keep share counts flat through our share repurchase program.

Overall, our business is performing very well. We have a nice mix of growth from multiple verticals, and we continue to invest for the future.

With that, I'll ask the operator to open up the line for questions.

Just on the health care side, obviously, you've continued excellent performance, as you talked about, and I think you had mentioned that it definitely delivered some growth better than your internal expectations. I was just wondering if you could provide a little more color on where they'd be relative to what you guys were expecting?

And also, I think you made a comment on sort of health care as one of the segments that hasn't yet scaled to company margins. Just thinking long term, like, how long and what sort of scale do you anticipate to get before it does get to those set of margins?

To your question, the first part, we -- we're actually very pleased with how the different segments of the business are performing, overall. We see them all as very important to our future opportunities in the vertical.

So it's not so much any one segment, and, as I think you all know, we're working very hard, actually, to find a way to pull together our data assets so that we can -- into a unified platforms, so that we can actually create even more value. And that capability is going to underpin all of our segments going forward.

In terms of the scalability of the business, I mean, you really said it. We haven't yet arrived at a point where the business is fully scaled.

Yet, it's coming along nicely. And we see this as a long-term journey as we continue to try to establish leadership inside of the category.

Mark, I don't know if you want to add anything to that?

No. I think, you're right on.

I mean, it's really about life cycle of products. So there's some mature products inside the insurance space, as an example, but we've kind of achieved some relatively high margins.

Health care, I think, we scale in each passing quarter. And each passing year, we expect to continue to move along that journey.

There's probably some stronger competition in health care than in some of the insurance places where we compete, so that also factors into this space.

Okay. And then, if I could just ask one more around if you could give a little more color on just what you guys see as your acquisition pipeline?

I mean, you guys obviously have a pretty healthy cash balance right now. It seems like one of the highest in a while.

What sort of activity is going on in the back end? Any -- just some color around that?

We are as active as we've ever been. And we are always proceeding from our strategy as it relates to the M&A agenda.

So our case is not really founded so much on sort of the M&A climate overall. It's much more we are proactively in the market, creating relationship and suggesting opportunities.

And we continue to find that we have a very high success rate in terms of engaging with companies that -- where there's at least a belief that there may be a strategic fit. So the work of the team continues just as it has.

I think we said to you in the past that we certainly see health care as one of the places where we certainly anticipate additional M&A activity. And the work we're doing right now is very consistent with that.

So it's really the same picture as it's always been.

First, I want to just ask broadly about the insurance vertical. I know they're not as much your expectations, but I think some people were hoping this year that kind of the lag impact is insurance premiums going up, as well as maybe some easier weather-related comps would help drive a pickup in the growth rate of that business.

And it's more so steady right now, I guess, as we look at the numbers. Is it -- I guess, just trying to get your sense, is that -- is the business performing as you would have expected or were you hope -- is there any hope for kind of a pickup in the growth rate this year, because of those factors?

Well, you've got a couple of things in there, Tim. First of all, on balance, we are pleased with where we are in the insurance vertical right now.

I just want to stress, as a point that we've made consistently, which is we really see -- so the totality of what we do in the vertical. That is really where our strategy lies.

We end up talking about RA and DA, and we're happy to do that. But in reality, the way the business works is that we're trying to knit solutions together.

It's also the case at customers look to deal with us with respect to the full suite that we're providing them. So it's an all-in-all, so we're really tracking our performance in the vertical overall.

So that said, you've referenced weather-related effects, there actually was quietness. There has been quietness recently.

So that does factor in somewhere. But we're really just on the sort of the long march of causing our solutions to be valuable and to be deeply embedded with our customers.

The net effect of all of that is we do believe that as 2013 moves forward, that we will see acceleration in the revenue growth rate of the insurance vertical.

Okay, thanks. And then, on MediConnect, as that rolls into the business, I think you described to us that it had a tough comp in the year ago period.

I know it's not in your numbers, but if we just look -- backed into what it was. But I guess, just going forward, what kind of underlying organic growth rate, as -- just trying to get a sense, if that gets added into the organic growth rate for health care's, does that enhance it or bring it down?

Or is it about the same as the rest of the vertical?

So we don't give specific guidance, but as you correctly observed, the comp was a tough one because of some roll forward in the prior year. We clearly think that the MediConnect inclusion is going to add to the overall corporate organic growth rate.

So happy with that, and I also want to just kind of remind you, when we keep talking about the power of the comprehensive solutions in what we're referring to as RQI, although not direct and explicit, the combined power of the MediConnect acquisition with what was a revenue integrity business, has helped us, on the Revenue Integrity, win business. So it's almost starting to contribute before it's calculated in.

I think we feel very good about the opportunities in MediConnect, and the opportunities for RQI overall. And as I said, from a high-level corporate perspective, it should definitely add to the full corporate growth.

Scott, from a high-level standpoint, your businesses seem to be all performing pretty well, with the obvious exception of mortgage. And it's been multiple quarters now, at least on the forensic side.

Is there -- could you just give us a sense of your strategic thoughts on that business, because there seems to be a disconnect between all of your other assets and mortgage. Do you remain committed to that?

What are your thought processes as we enter '13 now?

Yes, I mean, the context here has to be the seismic changes in the mortgage marketplace that have occurred over the last several years. And so that's just sort of the backdrop here.

And distinguish in your thinking between the automated solutions that we provide, which are aimed at supporting the underwriting process, and the forensic solutions that we provide, which are aimed at supporting the resolution of loans, which have apparently gone bad. And those businesses respond to different things that are going on inside of the mortgage vertical.

And it's the latter part. It's the forensic piece that has been going through an adjustment as underwriting standards change so much.

And as we move through a bubble of a very large volume of loans which were in trouble, as we begin to normalize, the forensic side of that is naturally going to pull back. The automated solutions that we have in support of the origination process, and a suite of other newer solutions that we put together, all of those are actually very promising.

And they're doing very well. And we're very excited about the team that we've got that is leading for us there.

And so our focus is on making a success out of the parts of that business that naturally represent the greatest growth opportunity going forward, while trying to minimize the impacts of the market adjustment with respect to the volume of forensic activity. And obviously, the net effect of all of that is what you saw in the first quarter.

There comes a point where the downward pull of the forensic adjustment is naturally going to work its way through. And our focus is then on a business, at that point, which -- our aim is to see it be advanced, to -- just to run the Verisk playbook, basically.

Newer proprietary forms of data, new analytic methods, a deeper reach into that marketplace. So we're dealing -- our team there is dealing with kind of a once-in-an-economic-lifetime adjustment in the marketplace, and I think they've actually done a very fine job in working their way through that.

So your view continues to be that, at some point, as we get through this normalization process, that mortgage could have an organic revenue growth rate that's consistent with the Verisk corporate average?

That would be our aim.

Okay. And one more, if I may.

You've talked about the potential for better organic revenue growth and insurance as the year goes along here. I assume that will come mostly from DA.

Could you speak specifically about some of the innovations you think that could drive that? Is that part of the early 2013 investment cycle or is this an ongoing process?

And is it within your claims solutions set -- subset? Where do you think that pick up might come from?

Yes, great -- that's a great question. So we're innovating on a number of fronts, but there are a few things that stand up and stand out.

First of all, we're very happy with what's going on in our catastrophe modeling business, which continues to demonstrate leadership in all sorts of ways. And it's a very vibrant category, where there are still lots of country-peril combinations to be modeled.

And there's a whole new wave of software innovation, which is coming into that business, where we feel that we're at the forefront, we're very happy with that and about all of that. Our underwriting solutions continued to advance very nicely.

I think we've described in the past that when you look at the different places where we serve inside of the insurance vertical, we have great strength with respect to the rating, the pricing process for the insurance product, great strength with respect to the claims process and great strength with respect to some of the sort of complex analytics, which wash across all of that, including catastrophe modeling, as I mentioned before, and fraud fighting. In the underwriting category -- so underwriting, not the -- the underwriting, not rating part of the insurance process, we have opportunities to move towards an equivalent leadership position.

We're not there today, but we are actually advancing very nicely. And then, some of the investing that we're doing in first half 2013, we hope and expect will be a part of 2013 results towards the back half of the year.

We're very excited about opportunities to enhance replacement and repair cost estimating with some new data sets that really haven't been brought into that process before in any measurable way. And so we do expect a contribution from that in the latter half of the year.

About MediConnect, I think it was about $17 million in the quarter, and I wanted you to first remind us of seasonality, recalling that there was a third and fourth quarter seasonality. I believe MediConnect was down about 28%, if my math is right, sequentially.

And they just reported first compared to the fourth quarter. I want to know if that is a normal seasonality for MediConnect.

And also, if you're willing to, I want to know if you can give us a pro forma year-over-year growth rate for MediConnect as if it was in place a year ago.

So let me answer the question like we have in the past. I think we think of the business as a whole.

So let's use health care broadly. It is kind of a 40-60 split, with 40 being the first half, 60 being in the second half of the year and that, kind of including all 3 of those categories with health care.

I think, so I guess what I'm trying to focus in on your MediConnect question, just one more time, Andrew, you're talking about growth quarter-to-quarter or are you trying to do year-on-year back in...

So, Mark, I was a little sneaky. I kind of asked both.

My question is first, is the type of sequential decline that I calculated in the first quarter, which was down sequentially about 28% for MediConnect, being $17 million in the quarter, is that a normal sequential decline? Seasonally, I think it might be, but we don't have the history.

And then, I said, secondarily, if you were willing to, could you give us a pro forma growth rate for MediConnect year-over-year as if it was in the quarter a year ago.

Andrew, it's Eva. I just wanted to jump in on your question of sequential.

I think it's hard to look at it that way, because the business overall is growing. And so what the sequential differences between 4Q and 1Q kind of gets blended with the overall growth in the business.

So I would encourage you to look at it as sort of the front half, back half as opposed to the sequential. I think that's more logical.

We had also talked to you last quarter, reminding you that the Q1 '12 MediConnect number, which I believe was the $17 million to $18 million, included $3 million to $4 million of overflow from Q4 of '11. Remember, we have this nature where our customers try to get stuff done in 3 and 4, but sometimes, it goes into January because of the CMS deadline.

So just take those into account when you're thinking about it. And I think if you were to look at the numbers, you can see the growth in Q1.

If you adjust for that $3 million to $4 million, you probably have something like a 15% to 20% growth rate.

And typically, those deadlines for the -- working with CMS is around January 30, and how fast the customers go, whether there's a roll over into the first quarter or everything's done in fourth quarter is sometimes more of a customer-specific requirement.

Right. So if you pull it together, you'd say this was normal seasonality for MediConnect, then?

Yes, but I wouldn't pin that on the percentage number per se, but yes, the seasonality is normal.

Organic growth in specialized markets slipped a little, and you mentioned government as an issue there. Can you talk about how big government is in that segment and what would you expect, as far as organic growth, for the remainder of this year?

So, Suzi, I thought that we were going to give you specifics -- I think we feel a couple of things. There's 2 businesses that are generally in there.

One is more focused on the environmental health and safety. There, I think we continue to feel good about that business, the supply chain, risk management, doing some investing around that.

And I think there's some general excitement. That may have just been a little bit more around timing of the customers and use of products.

So, nothing to change perspectives relative to what happened last year. Inside the other piece of the business, which is the climate risk portion, where we do work on behalf of and with the government.

Two things happening there. First of all, in the quarter, it was more about a government contract that we just had some less volumes, so really more project-oriented from that government.

And that's about 40% of the business. I think the second part of the question, just to kind of give you the furlough and the impact of furloughs on that government-related business, could be something that could affect us.

The numbers aren't big to progress for the rest of the year. That's the only thing that's a little bit on our mind with regard to growth rates inside that portion of specialized.

Okay. Can you give us any more detail on Argus and the performance there?

I guess, what's changed either on the revenue or expense side with the company under the Verisk umbrella?

Let me talk about, sort of generally, how it's -- the Argus team and the Argus assets are working into what we're doing at Verisk. We are delighted to have the Verisk (sic) [Argus] team as our partners in Verisk.

I would say that, if anything, the -- I would say that the business, its performance and its fit with what we're attempting to accomplish, is even better than we had anticipated and our expectations were pretty strong. The leadership team at Argus is actually already providing leadership broadly inside of Verisk as we work to find opportunities to work across verticals.

And we're very encouraged that we've, even in this short period of time since we came together, we've had multiple customers who actually work with Verisk across vertical markets, particularly the insurance and the banking verticals, have actually, specifically, come to us looking for support that we can provide them in optimizing their businesses by taking a look at their books of business across these different categories. And it's just really exciting that the market is responding to what it is that we see there.

Specific to Argus as Argus, apart from these opportunities to build in and with the rest of Verisk, the business continues to perform right on top of where we thought it would be.

I think you recently had your annual user conference. Any broad themes you were hearing from your customers, anything that incrementally changes your view, I guess, on the spending environment of your clients?

Yes. We had a really great session.

And I think you're thinking about with our P&C customers, we had that customer conference last month. We actually engaged with our customers across the different verticals within the verticals.

And so that -- the event that we had last month is far from the only one where we pull together with our customers. But if that's the one that you're speaking about, it was a very positive event.

And I think the themes that certainly struck me from that session were, number one, that I think a lot of the companies are really leaning in to the notion that they can improve their businesses by making yet more intense use of Data Analytics. And I think that the openness to looking to a third-party like ourselves is at least as high as it's ever been.

There's specific and into substantial interest in a few things. One would be the insights derived from weather and climate science.

I mean, it's just, if you listen to the earnings calls of most publicly traded insurance companies, their CEOs within the first 2 or 3 paragraphs are relating the weather to last quarter's results, either positively or negatively. And we actually impaneled some senior executives to -- in a plenary session, and that was -- and when asked the question of them, what do you see as the likeliest surprises in 2013, the answers all reduced to a surprise, climactically, either up or down.

Happily, between our catastrophe modeling and our climate science, we are in a great position to provide leadership on that. I would also say that the predictive modeling theme is very strong, very active.

And then new data sets, which are derived either from telemetry sources or new ways of trying to observe physical assets from a distance, these are 2 themes that are really good. So we feel as if the environment is one in which, if we do our work well and we create good solutions, that the market is very open to what it is that we can do to support them.

Great. And, Mark, on the Risk Assessment margins strengths, it was up year-over-year, I think 100 basis points.

Was that basically due to the lower pension which was reduced by thinking Q2 last year?

The pension change took place last year on March 1. There was very little benefit in first quarter relative to the first quarter of '12 resulting from the pension.

This is just more rampant scale inside the business.

Given the new solutions development investing you've been doing in Decision Analytics, which you kind of previously indicated would be concentrated mostly in the first half of the year, can you just give us a sense of if the 37.3% EBITDA margin in that segment is what we should expect to repeat again in 2Q? Or did more of the investment kind of fall on the first quarter and they will start to see that trend back up a little bit?

So let me start with that. A couple of things to note.

One, I think the factors that contribute to it, yes, investment, clearly, was a part of the 1Q, the margin in DA. The other thing that's important to note is that we talk about the product mix shift.

So as you think about products mix, you have health care growing quickly. The margins there, because it's a less mature business, don't have quite the same current margins as some of those insurance products.

So that draws down or kind of hurts the margins, too, a little bit. I also want to remind you about the seasonality, to the conversation we had earlier, there's a level of fixed cost inside of all of our health care business.

And to the extent that you think about revenue kind of being 40% in the first half of the year and 60% in the second half of the year, that helps for and bolsters some of the margins for health care as you think about 2 -- this 2 half as opposed to the first half. I think all of those are kind of a part of the mix for DA.

Thank you very much. We appreciate your questions today, your interest in our company, and we look forward to speaking with you again next quarter.

Thank you very much, and enjoy your day.