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Brown & Brown, Inc. Announces a 14.7% Increase in Earnings per Share

October 14, 2013

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DAYTONA BEACH, FL and TAMPA, FL -- (Marketwired) -- 10/14/13 -- Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the third quarter of 2013.

Net income for the third quarter of 2013 was $57,749,000, or $0.39 per share, compared with $49,504,000, or $0.34 per share for the same quarter of 2012, an increase of 14.7%. Total revenue for the third quarter was $359,310,000, compared with 2012 third-quarter revenue of $303,800,000, an increase of 18.3%.

Total revenue for the nine months ended September 30, 2013 was $1,020,114,000, compared with total revenue for the same period of 2012 of $897,202,000, an increase of 13.7%. Net income for the nine-month period ended September 30, 2013 was $169,887,000, or $1.16 per share, compared with $141,408,000, or $0.97 per share for the same period of 2012, an increase of 19.6%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "The third quarter wrapped up with $0.39 earnings per share, however one-time, non-recurring acquisition-related expenses accounted for $0.01 per share. Additionally, all four of our business divisions enjoyed strong quarterly organic revenue growth rates, most notably our Wholesale Brokerage Division, with a growth rate of 15.8%."

Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third-party administration, and other services. Serving business, public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' seventh largest independent insurance intermediary. The Company's Web address is www.bbinsurance.com.

This press release may contain certain statements relating to future results which are forward-looking statements, including those relating to the Company's anticipated financial results for the third quarter of 2013. These statements are not historical facts, but instead represent only the Company's current belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that the Company's actual results, financial condition and achievements may differ, possibly materially, from the anticipated results, financial condition and achievements contemplated by these forward-looking statements. These risks and uncertainties include, but are not limited to, the Company's determination as it finalizes its financial results for the third quarter of 2013 that its financial results differ from the current preliminary unaudited numbers set forth herein, other factors that the Company may not have currently identified or quantified, and other risks, relevant factors and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, and the Company's other subsequent filings with the Securities and Exchange Commission. All forward-looking statements made herein are made only as of the date of this release, and the Company does not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which the Company hereafter becomes aware.

Brown & Brown, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
For the
Three Months Ended
September 30,		 For the
Nine Months Ended
September 30,
2013 2012 2013 2012
REVENUES
Commissions and fees $ 358,196 $ 302,310 $ 1,016,139 $ 888,785
Investment income 85 239 510 561
Other income, net 1,029 1,251 3,465 7,856
Total revenues 359,310 303,800 1,020,114 897,202
EXPENSES
Employee compensation and benefits 180,528 149,691 503,540 450,039
Non-cash stock-based compensation 7,431 3,908 14,904 11,393
Other operating expenses 50,102 43,774 143,838 129,394
Amortization 17,858 15,956 50,140 47,450
Depreciation 4,466 3,958 12,896 11,383
Interest 4,135 4,006 12,116 12,093
Change in estimated acquisition earn-out payables (665 ) 858 1,513 (134 )
Total expenses 263,855 222,151 738,947 661,618
Income before income taxes 95,455 81,649 281,167 235,584
Income taxes 37,706 32,145 111,280 94,176
Net income $ 57,749 $ 49,504 $ 169,887 $ 141,408
Net income per share:
Basic $ 0.40 $ 0.34 $ 1.18 $ 0.99
Diluted $ 0.39 $ 0.34 $ 1.16 $ 0.97
Weighted average number of shares outstanding:
Basic 141,139 139,465 140,925 139,185
Diluted 142,789 142,097 142,476 141,769
Dividends declared per share $ 0.0900 $ 0.0850 $ 0.2700 $ 0.2550
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Organic Commissions and Fees(1)
Three Months Ended September 30, 2013
(in thousands)
(unaudited)
Quarter
Ended
09/30/13		 Quarter
Ended
09/30/12		 Total
Net
Change		 Total
Net
Growth %		 Less
Acquisition
Revenues		 Internal
Net
Growth $		 Internal
Net
Growth %
Retail(2) $ 187,043 $ 152,109 $ 34,934 23.0 % $ 31,078 $ 3,856 2.5 %
National Programs 73,678 62,406 11,272 18.1 % 2,522 8,750 14.0 %
Wholesale Brokerage 51,234 43,200 8,034 18.6 % 1,193 6,841 15.8 %
Services 29,884 28,566 1,318 4.6 % - 1,318 4.6 %
Total Core Commissions and Fees (1) $
341,839		 $
286,281		 $
55,558
19.4		 % $
34,793		 $
20,765
7.3		 %
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended September 30, 2013 and 2012
(in thousands)
(unaudited)
Quarter
Ended
09/30/13		 Quarter
Ended
09/30/12
Total core commissions and fees(1) $ 341,839 $ 286,281
Profit-sharing contingent commissions 13,951 12,077
Guaranteed supplemental commissions 2,406 2,359
Divested business - 1,593
Total commissions & fees $ 358,196 $ 302,310

(1) Total core commissions and fees are our total commissions and fees less (i) profit-sharing contingent commissions (revenues derived from special revenue-sharing commissions from insurance companies based upon the volume and the growth and/or profitability of the business placed with such companies during the prior year), (ii) guaranteed supplemental commissions (GSC) (revenues derived from special revenue-sharing commissions from insurance companies based solely upon the volume of the business placed with such companies during the current year),and (iii) divested business (commissions and fees generated from offices, books of business or niches sold by the Company or terminated).

(2) The Retail segment includes commissions and fees reported in the "Other" column of the Segment Information, which includes corporate and consolidation items.

Brown & Brown, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
September 30, December 31,
2013 2012
ASSETS
Current assets:
Cash and cash equivalents $ 170,965 $ 219,821
Restricted cash and investments 247,315 164,564
Short-term investments 11,693 8,183
Premiums, commissions and fees receivable 314,634 302,725
Deferred income taxes 21,268 24,408
Other current assets 26,802 39,811
Total current assets 792,677 759,512
Fixed assets, net 74,482 74,337
Goodwill 1,990,940 1,711,514
Amortizable intangible assets, net 625,298 566,538
Other assets 20,320 16,157
Total assets $ 3,503,717 $ 3,128,058
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 466,773 $ 406,704
Premium deposits and credits due customers 57,331 32,867
Accounts payable 42,460 48,524
Accrued expenses and other liabilities 144,154 79,593
Current portion of long-term debt 100,000 93
Total current liabilities 810,718 567,781
Long-term debt 380,000 450,000
Deferred income taxes, net 284,257 237,630
Other liabilities 63,958 65,314
Shareholders' equity:
Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 145,441 at 2013 and 143,878 at 2012 14,544
14,388
Additional paid-in capital 362,293 335,872
Retained earnings 1,587,947 1,457,073
Total shareholders' equity 1,964,784 1,807,333
Total liabilities and shareholders' equity $ 3,503,717 $ 3,128,058

Cory T. Walker
Chief Financial Officer
(386) 239-7250

Source: Brown & Brown, Inc.

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