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Brown & Brown, Inc. Announces Second-Quarter Financial Results

July 18, 2011

DAYTONA BEACH, FL and TAMPA, FL, Jul 18, 2011 (MARKETWIRE via COMTEX) --

Brown & Brown, Inc. (NYSE: BRO) today announced its financial results for the second quarter of 2011.

Net income for the second quarter of 2011 was $37,035,000, or $0.26 per share, compared with $41,185,000, or $0.29 per share for the same quarter of 2010, a decrease of 10.1%. Total revenue for the second quarter ended June 30, 2011 was $246,816,000, compared with 2010 second-quarter revenue of $243,665,000, an increase of 1.3%.

Total revenue for the six months ended June 30, 2011 was $509,044,000, compared with total revenue for the first half of 2010 of $495,938,000. Net income for the six-month period ended June 30, 2011 was $83,328,000, or $0.57 per share, compared with $85,313,000, or $0.59 per share for the same period of 2010.

J. Powell Brown, President and Chief Executive Officer of Brown & Brown, Inc., noted, "We were challenged this quarter by $4.2 million less in profit-sharing contingency commissions. This is largely a reflection of rising loss ratios of property and casualty insurance carriers across the U.S. We are pleased with the continued incremental improvements in certain segments of our business, most notably the second consecutive quarter of positive internal revenue growth in our Wholesale Brokerage Division."

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 future financial results and to acquisition opportunities. 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. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results and condition, as well as its other achievements, are contained in the Company's filings with the Securities and Exchange Commission. Some factors include: general economic conditions around the country; downward commercial property and casualty premium pressures; the effects of legislative and regulatory changes in Florida pertaining to the insurance industry, including those relating to coastal property coverages; the competitive environment; the integration of the Company's operations with those of businesses or assets the Company has acquired or may acquire in the future and the failure to realize the expected benefits of such integration; and the potential occurrence of a disaster that affects certain areas of the States of California, Florida, Indiana, Michigan, New Jersey, New York, Pennsylvania, Texas and/or Washington, where significant portions of the Company's business are concentrated. 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                    For the
                           Three Months Ended          Six Months Ended
                                June 30                    June 30
                       -------------------------  -------------------------
                           2011          2010         2011          2010
                       ------------  -----------  ------------  -----------
REVENUES
Commissions and fees   $    245,983  $   241,053  $    507,435  $   491,727
Investment income               393          346           617          677
Other income, net               440        2,266           992        3,534
                       ------------  -----------  ------------  -----------
  Total revenues            246,816      243,665       509,044      495,938
                       ------------  -----------  ------------  -----------

EXPENSES
Employee compensation
 and benefits               125,852      121,372       252,409      243,555
Non-cash stock-based
 compensation                 2,709        1,780         5,482        3,735
Other operating
 expenses                    34,979       33,622        71,055       69,955
Amortization                 13,556       12,650        27,065       25,203
Depreciation                  3,079        3,129         6,214        6,382
Interest                      3,608        3,632         7,215        7,240
Change in estimated
 acquisition earn-out
 payables                     1,565         (533)        1,466       (1,229)
                       ------------  -----------  ------------  -----------
  Total expenses            185,348      175,652       370,906      354,841
                       ------------  -----------  ------------  -----------

Income before income
 taxes                       61,468       68,013       138,138      141,097

Income taxes                 24,433       26,828        54,810       55,784
                       ------------  -----------  ------------  -----------

Net income             $     37,035  $    41,185  $     83,328  $    85,313
                       ============  ===========  ============  ===========
Net income per share:
  Basic                $       0.26  $      0.29  $       0.58  $      0.60
                       ============  ===========  ============  ===========
  Diluted              $       0.26  $      0.29  $       0.57  $      0.59
                       ============  ===========  ============  ===========


Weighted average number
 of shares outstanding:
  Basic                     138,379      137,685       138,365      137,654
                       ============  ===========  ============  ===========
  Diluted                   139,942      139,105       140,950      138,937
                       ============  ===========  ============  ===========

Dividends declared per
 share                 $     0.0800  $    0.0775  $     0.1600  $    0.1550
                       ============  ===========  ============  ===========


                            Brown & Brown, Inc.
                         INTERNAL GROWTH SCHEDULE
                       Core Commissions and Fees(1)
                     Three Months Ended June 30, 2011
                              (in thousands)
                                (unaudited)


                                        Total     Less            Internal
              Quarter  Quarter  Total    Net     Acqui-  Internal    Net
               Ended    Ended    Net    Growth   sition    Net     Growth
             06/30/11 06/30/10  Change    %     Revenues Growth $     %
             -------- -------- -------  -----   -------- --------  -------

Florida
 Retail      $ 44,361 $ 42,735 $ 1,626    3.8%  $  2,107 $   (481)    (1.1)%
National
 Retail        83,102   79,359   3,743    4.7%    10,145   (6,402)    (8.1)%
Western
 Retail        24,991   23,334   1,657    7.1%     2,520     (863)    (3.7)%
             -------- -------- -------          -------- --------
Total
 Retail       152,454  145,428   7,026    4.8%    14,772   (7,746)    (5.3)%
             -------- -------- -------          -------- --------

Professional
 Programs       8,839    9,343    (504)  (5.4)%        -     (504)    (5.4)%
Special
 Programs      24,582   27,827  (3,245) (11.7)%       91   (3,336)   (12.0)%
             -------- -------- -------          -------- --------
Total
 National
 Programs      33,421   37,170  (3,749) (10.1)%       91   (3,840)   (10.3)%
             -------- -------- -------          -------- --------

Wholesale
 Brokerage     41,713   41,298     415    1.0%         -      415      1.0%

Services       16,120    9,729   6,391   65.7%     6,468      (77)    (0.8)%
             -------- -------- -------          -------- --------

Total Core
 Commissions
 and Fees(1) $243,708 $233,625 $10,083    4.3%  $ 21,331 $(11,248)    (4.8)%
             ======== ======== =======          ======== ========


             Reconciliation of Internal Growth Schedule
                   to Total Commissions and Fees
         Included in the Consolidated Statements of Income
         For the Three Months Ended June 30, 2011 and 2010
                           (in thousands)
                            (unaudited)

                                         Quarter         Quarter
                                          Ended           Ended
                                        06/30/11        06/30/10
                                     --------------  --------------
Total core commissions and fees(1)   $      243,708  $      233,625
Contingent commissions                        2,275           6,444
Divested business                                 -             984
                                     --------------  --------------

Total commission & fees              $      245,983  $      241,053
                                     ==============  ==============

(1) Total core commissions and fees are our total commissions and fees less (i) profit-sharing contingent commissions (revenue 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), and (ii) divested business (commissions and fees generated from offices, books of business or niches sold by the Company or terminated).


                             Brown & Brown, Inc.
                         CONSOLIDATED BALANCE SHEETS
                    (in thousands, except per share data)
                                 (unaudited)

                                                 June 30,      December 31,
                                                   2011            2010
                                              --------------  --------------

ASSETS
Current assets:
  Cash and cash equivalents                   $      278,866  $      272,984
  Restricted cash and investments                    120,073         123,594
  Short-term investments                               7,737           7,678
  Premiums, commissions and fees receivable          247,718         214,446
  Deferred income taxes                                8,143          20,076
  Other current assets                                34,524          14,031
                                              --------------  --------------
    Total current assets                             697,061         652,809

Fixed assets, net                                     60,039          59,713
Goodwill                                           1,261,627       1,194,827
Amortizable intangible assets, net                   488,367         481,900
Other assets                                          17,778          11,565
                                              --------------  --------------
    Total assets                              $    2,524,872  $    2,400,814
                                              ==============  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Premiums payable to insurance companies     $      358,913  $      311,346
  Premium deposits and credits due customers          24,992          28,509
  Accounts payable                                    31,805          33,693
  Accrued expenses and other liabilities              85,637          94,947
  Current portion of long-term debt                    1,624           1,662
                                              --------------  --------------
    Total current liabilities                        502,971         470,157

Long-term debt                                       250,067         250,067

Deferred income taxes, net                           159,900         146,482

Other liabilities                                     39,003          27,764

Shareholders' equity:
  Common stock, par value $0.10 per share;
   authorized 280,000 shares; issued and
   outstanding 142,924 at 2011 and 142,795 at
   2010                                               14,292          14,279
  Additional paid-in capital                         293,081         286,997
  Retained earnings                                1,265,553       1,205,061
  Accumulated other comprehensive income                   5               7
                                              --------------  --------------

    Total shareholders' equity                     1,572,931       1,506,344
                                              --------------  --------------

    Total liabilities and shareholders' equity$    2,524,872  $    2,400,814
                                              ==============  ==============


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


SOURCE: Brown & Brown, Inc.


  
      

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