UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): July 18, 2011

 

BROWN & BROWN, INC.

(Exact name of registrant as specified in its charter)

 

Florida

0-7201

59-0864469

(State or other jurisdiction

(Commission File Number)

(IRS Employer

of incorporation)

 

Identification No.)

 

220 South Ridgewood Avenue, Florida 32114

(Address of principal executive offices)    (Zip Code)

 

Registrant's telephone number, including area code:     (386) 252-9601

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 


Item 2.02

Results of Operations and Financial Condition.

 

On July 18, 2011, Brown & Brown, Inc. issued a press release announcing its results of operations for the second quarter ended June 30, 2011.  A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

 

The information furnished herewith pursuant to Item 2.02 of this Current Report shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.  The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

                                                            BROWN & BROWN, INC.

                                                            (Registrant)

                                                                    /S/ CORY T. WALKER

                                                            By:                                                                 

                                                                 Cory T. Walker, Chief Financial Officer

Date: July 18,2011

 

                                                     News Release

                                                                     Cory T. Walker

            July 18, 2011                                                                      Chief Financial Officer

                                                                                                       (386) 239-7250

 

 

 

BROWN & BROWN, INC. 

ANNOUNCES

SECOND-QUARTER FINANCIAL RESULTS

 

(Daytona Beach and Tampa, Florida) . . . 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. 

 

# # #

 

 

-2-

 

Brown & Brown, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

 

 

 

For the
Three Months Ended
June 30

 

For the
Six Months Ended
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

 

======

======

 

======

======

 

 

 

 

 

 

 

-3-

 

Brown & Brown, Inc.

INTERNAL GROWTH SCHEDULE

Core Commissions and Fees(1)

Three Months Ended June 30, 2011

  (in thousands)

(unaudited)

 

 

Quarter
Ended
06/30/11

Quarter
Ended
06/30/10

Total
Net
Change

Total
Net
Growth %

Less
Acquisition
Revenues

Internal
Net
Growth $

Internal
Net
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
Ended
06/30/11

Quarter
Ended
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).

 

 

-4-

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

 

========

========

 

-5-