A reconciliation of Adjusted EBITDA to its U.S. GAAP counterpart on a consolidated and segment basis for the years ended December 31, 2012, 2011 and 2010 is provided in the tables below. The reconciliation of Adjusted EBITDA per reportable segment does not include the following items, which are not allocated to any of the Company’s reportable segments: income tax expense, interest income, interest expense, gain on early extinguishment of debt and other, net. These items are included in the reconciliation of Adjusted EBITDA to net income on a consolidated basis.
Overview of the year ended December 31, 2012 compared with the year ended December 31, 2011
Compensation expense-employees. Compensation expense-employees increased $0.8 million in 2011. The total compensation expense ratio was 6.4% for the year ended December 31, 2011 compared with 7.1% in the year ended December 31, 2010. Compensation expense-employees increased commensurate with an increase in headcount in 2011, as well as an increase in incentive compensation.
On February 6, 2012, the Board authorized the 2012 Share Repurchase Program. The timing and actual number of shares repurchased under the 2012 Share Repurchase Program will depend on a variety of factors, including the limitations under NFP’s credit facility, capital availability, share price and market conditions. Through December 31, 2012, 830,537 shares were repurchased under this program at an average cost of $14.19 per share and a total cost of approximately $11.8 million. As of December 31, 2012, there remained an aggregate of approximately $38.2 million available for repurchases under the 2012 Share Repurchase Program. The Company currently intends to hold the repurchased shares as treasury stock.
On November 5, 2008, NFP’s Board suspended NFP’s quarterly cash dividend. The declaration and payment of future dividends to holders of NFP’s common stock will be at the discretion of NFP’s Board and will depend upon many factors, including the Company’s financial condition, earnings, legal requirements, and other factors as NFP’s Board deems relevant. Additionally, NFP’s credit facility contains customary covenants that require NFP to meet certain conditions before making restricted payments such as dividends.
actual performance of its business lines against these financial plans. Events or changes in circumstances include, but are not limited to: (i) when a business line experiences a significant deterioration in its Adjusted EBITDA compared to its financial plan or prior year performance, (ii) loss of key personnel, (iii) a change in the extent or manner in which the long-lived asset is being used (including, but not limited to, management contract buyouts) or (iv) a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of before the end of its previously estimated useful life.
The Company has not issued stock-based awards to its principals since the accelerated vesting date in 2010 of RSUs awarded under the Long-Term Equity Incentive Plan. All stock-based awards that were previously issued to the Company’s principals are classified as liability awards, as principals are non-employees. The Company previously measured the fair value of the liability-classified stock-based awards at the earlier of the date at which the performance was completed or when a performance commitment had been reached. The Company’s stock-based awards to principals did not have disincentives for non-performance other than forfeiture of the award by the principals and therefore the Company measured the fair value of the award when the performance was completed by the principal, which was the completion of the vesting period. The Company accounted for liability-classified stock-based awards issued to its principals as part of fees to principals expense in the consolidated statements of income. Liability-classified stock-based compensation was adjusted each reporting period to account for subsequent changes in the fair value of NFP’s common stock. The offsetting entry was to accrued liabilities. As of December 31, 2012, the Company does not have any outstanding liability-classified stock-based awards.