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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Brown and Brown Inc | NYSE:BRO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 81.54 | 0 | 09:00:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Florida
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59-0864469
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(State or other jurisdiction of
incorporation or organization)
|
|
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(I.R.S. Employer
Identification Number)
|
|
220 South Ridgewood Avenue,
Daytona Beach, FL
|
|
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32114
|
|
(Address of principal executive offices)
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|
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(Zip Code)
|
|
Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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PAGE
NO.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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||
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Item 1.
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||
Item 1A.
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||
Item 2.
|
||
Item 6.
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||
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|
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•
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Future prospects;
|
•
|
Material adverse changes in economic conditions in the markets we serve and in the general economy;
|
•
|
Downward commercial property and casualty premium pressures;
|
•
|
Future regulatory actions and conditions in the states in which we conduct our business;
|
•
|
The occurrence of adverse economic conditions, an adverse regulatory climate, or a disaster in California, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, Virginia and Washington, because a significant portion of business written by us is for customers located in these states;
|
•
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Our ability to attract, retain and enhance qualified personnel;
|
•
|
Competition from others in or entering into the insurance agency, wholesale brokerage, insurance programs and service business;
|
•
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The integration of our operations with those of businesses or assets we have acquired or may acquire in the future and the failure to realize the expected benefits of such integration;
|
•
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Risks that could negatively affect our acquisition strategy, including continuing consolidation among insurance intermediaries and the increasing presence of private equity investors driving up valuations;
|
•
|
Exposure units, and premium rates set by insurance companies which have traditionally varied and are difficult to predict;
|
•
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Our ability to forecast liquidity needs through at least the end of 2016;
|
•
|
Our ability to renew or replace expiring leases;
|
•
|
Outcomes of existing or future legal proceedings and governmental investigations;
|
•
|
Policy cancellations and renewal terms, which can be unpredictable;
|
•
|
Potential changes to the tax rate that would affect the value of deferred tax assets and liabilities and the impact on income available for investment or distributable to shareholders;
|
•
|
The inherent uncertainty in making estimates, judgments, and assumptions in the preparation of financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”);
|
•
|
Our ability to effectively apply technology in providing improved value for our customers as well as applying effective internal controls and efficiencies in operations; and
|
•
|
Other risks and uncertainties as may be detailed from time to time in our public announcements and Securities and Exchange Commission filings.
|
(in thousands, except per share data)
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
||||||||
Commissions and fees
|
$
|
445,662
|
|
|
$
|
417,244
|
|
|
$
|
867,997
|
|
|
$
|
821,025
|
|
Investment income
|
502
|
|
|
260
|
|
|
920
|
|
|
480
|
|
||||
Other income, net
|
354
|
|
|
1,943
|
|
|
1,774
|
|
|
2,240
|
|
||||
Total revenues
|
446,518
|
|
|
419,447
|
|
|
870,691
|
|
|
823,745
|
|
||||
EXPENSES
|
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits
|
231,102
|
|
|
217,601
|
|
|
455,161
|
|
|
429,263
|
|
||||
Other operating expenses
|
66,291
|
|
|
64,377
|
|
|
129,896
|
|
|
125,470
|
|
||||
Gain on disposal
|
(810
|
)
|
|
(348
|
)
|
|
(2,854
|
)
|
|
(605
|
)
|
||||
Amortization
|
21,610
|
|
|
21,623
|
|
|
43,220
|
|
|
43,248
|
|
||||
Depreciation
|
5,354
|
|
|
5,237
|
|
|
10,672
|
|
|
10,420
|
|
||||
Interest
|
9,837
|
|
|
9,671
|
|
|
19,734
|
|
|
19,522
|
|
||||
Change in estimated acquisition earn-out payables
|
4,057
|
|
|
372
|
|
|
3,236
|
|
|
1,735
|
|
||||
Total expenses
|
337,441
|
|
|
318,533
|
|
|
659,065
|
|
|
629,053
|
|
||||
Income before income taxes
|
109,077
|
|
|
100,914
|
|
|
211,626
|
|
|
194,692
|
|
||||
Income taxes
|
42,827
|
|
|
39,909
|
|
|
83,306
|
|
|
76,736
|
|
||||
Net income
|
$
|
66,250
|
|
|
$
|
61,005
|
|
|
$
|
128,320
|
|
|
$
|
117,956
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.47
|
|
|
$
|
0.43
|
|
|
$
|
0.92
|
|
|
$
|
0.83
|
|
Diluted
|
$
|
0.47
|
|
|
$
|
0.43
|
|
|
$
|
0.91
|
|
|
$
|
0.82
|
|
Dividends declared per share
|
$
|
0.12
|
|
|
$
|
0.11
|
|
|
$
|
0.25
|
|
|
$
|
0.22
|
|
(in thousands, except per share data)
|
June 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
453,939
|
|
|
$
|
443,420
|
|
Restricted cash and investments
|
277,646
|
|
|
229,753
|
|
||
Short-term investments
|
16,077
|
|
|
13,734
|
|
||
Premiums, commissions and fees receivable
|
472,227
|
|
|
433,885
|
|
||
Reinsurance recoverable
|
60,812
|
|
|
31,968
|
|
||
Prepaid reinsurance premiums
|
298,907
|
|
|
309,643
|
|
||
Deferred income taxes
|
15,552
|
|
|
24,635
|
|
||
Other current assets
|
52,107
|
|
|
50,351
|
|
||
Total current assets
|
1,647,267
|
|
|
1,537,389
|
|
||
Fixed assets, net
|
80,488
|
|
|
81,753
|
|
||
Goodwill
|
2,665,347
|
|
|
2,586,683
|
|
||
Amortizable intangible assets, net
|
745,352
|
|
|
744,680
|
|
||
Investments
|
22,992
|
|
|
18,092
|
|
||
Other assets
|
45,431
|
|
|
35,882
|
|
||
Total assets
|
$
|
5,206,877
|
|
|
$
|
5,004,479
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Premiums payable to insurance companies
|
$
|
667,180
|
|
|
$
|
574,736
|
|
Losses and loss adjustment reserve
|
60,812
|
|
|
31,968
|
|
||
Unearned premiums
|
298,907
|
|
|
309,643
|
|
||
Premium deposits and credits due customers
|
95,147
|
|
|
83,098
|
|
||
Accounts payable
|
91,594
|
|
|
63,910
|
|
||
Accrued expenses and other liabilities
|
163,523
|
|
|
192,067
|
|
||
Current portion of long-term debt
|
80,492
|
|
|
73,125
|
|
||
Total current liabilities
|
1,457,655
|
|
|
1,328,547
|
|
||
Long-term debt less unamortized discount and debt issuance costs
|
1,045,004
|
|
|
1,071,618
|
|
||
Deferred income taxes, net
|
371,099
|
|
|
360,949
|
|
||
Other liabilities
|
80,872
|
|
|
93,589
|
|
||
Shareholders’ Equity:
|
|
|
|
||||
Common stock, par value $0.10 per share; authorized 280,000 shares; issued 147,694 shares and outstanding 139,900 shares at 2016, issued 146,415 shares and outstanding 138,985 shares at 2015
|
14,769
|
|
|
14,642
|
|
||
Additional paid-in capital
|
445,901
|
|
|
426,498
|
|
||
Treasury stock, at cost 7,794 and 7,430 shares at 2016 and 2015, respectively
|
(250,025
|
)
|
|
(238,775
|
)
|
||
Retained earnings
|
2,041,602
|
|
|
1,947,411
|
|
||
Total shareholders’ equity
|
2,252,247
|
|
|
2,149,776
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,206,877
|
|
|
$
|
5,004,479
|
|
|
For the six months
ended June 30, |
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
128,320
|
|
|
$
|
117,956
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization
|
43,220
|
|
|
43,248
|
|
||
Depreciation
|
10,672
|
|
|
10,420
|
|
||
Non-cash stock-based compensation
|
6,674
|
|
|
12,459
|
|
||
Change in estimated acquisition earn-out payables
|
3,236
|
|
|
1,735
|
|
||
Deferred income taxes
|
15,907
|
|
|
10,745
|
|
||
Amortization of debt discount
|
79
|
|
|
79
|
|
||
Amortization and disposal of deferred financing costs
|
807
|
|
|
804
|
|
||
Accretion of discounts, investment
|
47
|
|
|
—
|
|
||
Income tax benefit from exercise of shares from the stock benefit plans
|
(6,816
|
)
|
|
(1,827
|
)
|
||
Net gain on sales of investments, fixed assets and customer accounts
|
(2,700
|
)
|
|
(478
|
)
|
||
Payments on acquisition earn-outs in excess of original estimated payables
|
(3,550
|
)
|
|
(2,778
|
)
|
||
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
|
|
|
|
||||
Restricted cash and investments (increase) decrease
|
(47,893
|
)
|
|
13,876
|
|
||
Premiums, commissions and fees receivable (increase) decrease
|
(34,099
|
)
|
|
11,109
|
|
||
Reinsurance recoverables (increase)
|
(28,844
|
)
|
|
(66,174
|
)
|
||
Prepaid reinsurance premiums decrease
|
10,736
|
|
|
18,008
|
|
||
Other assets (increase)
|
(11,272
|
)
|
|
(20,872
|
)
|
||
Premiums payable to insurance companies increase
|
90,068
|
|
|
36,851
|
|
||
Premium deposits and credits due customers increase
|
12,049
|
|
|
2,211
|
|
||
Losses and loss adjustment reserve increase
|
28,844
|
|
|
66,174
|
|
||
Unearned premiums (decrease)
|
(10,736
|
)
|
|
(18,008
|
)
|
||
Accounts payable increase
|
34,156
|
|
|
16,375
|
|
||
Accrued expenses and other liabilities (decrease)
|
(29,765
|
)
|
|
(21,935
|
)
|
||
Other liabilities (decrease)
|
(18,346
|
)
|
|
(2,594
|
)
|
||
Net cash provided by operating activities
|
190,794
|
|
|
227,384
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to fixed assets
|
(8,944
|
)
|
|
(8,597
|
)
|
||
Payments for businesses acquired, net of cash acquired
|
(107,290
|
)
|
|
(105,056
|
)
|
||
Proceeds from sales of fixed assets and customer accounts
|
3,291
|
|
|
3,998
|
|
||
Purchases and proceeds from sales of investments
|
(7,026
|
)
|
|
(913
|
)
|
||
Net cash used in investing activities
|
(119,969
|
)
|
|
(110,568
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Payments on acquisition earn-outs
|
(7,012
|
)
|
|
(11,261
|
)
|
||
Payments on long-term debt
|
(20,625
|
)
|
|
(31,875
|
)
|
||
Income tax benefit from exercise of shares from the stock benefit plans
|
6,816
|
|
|
1,827
|
|
||
Issuances of common stock for employee stock benefit plans
|
916
|
|
|
500
|
|
||
Repurchase stock benefit plan shares for employees to fund tax withholdings
|
(6,273
|
)
|
|
(2,168
|
)
|
||
Purchase of treasury stock
|
(11,250
|
)
|
|
(85,000
|
)
|
||
Settlement (Prepayment) of accelerated share repurchase program
|
11,250
|
|
|
(15,000
|
)
|
||
Cash dividends paid
|
(34,128
|
)
|
|
(31,280
|
)
|
||
Net cash (used in) financing activities
|
(60,306
|
)
|
|
(174,257
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
10,519
|
|
|
(57,441
|
)
|
||
Cash and cash equivalents at beginning of period
|
443,420
|
|
|
470,048
|
|
||
Cash and cash equivalents at end of period
|
$
|
453,939
|
|
|
$
|
412,607
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||
(in thousands, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
$
|
66,250
|
|
|
$
|
61,005
|
|
|
$
|
128,320
|
|
|
$
|
117,956
|
|
Net income attributable to unvested awarded performance stock
|
(1,896
|
)
|
|
(1,439
|
)
|
|
(3,337
|
)
|
|
(2,802
|
)
|
||||
Net income attributable to common shares
|
$
|
64,354
|
|
|
$
|
59,566
|
|
|
$
|
124,983
|
|
|
$
|
115,154
|
|
Weighted average number of common shares outstanding – basic
|
139,998
|
|
|
140,839
|
|
|
139,395
|
|
|
141,803
|
|
||||
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic
|
(4,006
|
)
|
|
(3,321
|
)
|
|
(3,625
|
)
|
|
(3,369
|
)
|
||||
Weighted average number of common shares outstanding for basic earnings per common share
|
135,992
|
|
|
137,518
|
|
|
135,770
|
|
|
138,434
|
|
||||
Dilutive effect of stock options
|
1,589
|
|
|
2,310
|
|
|
1,490
|
|
|
2,213
|
|
||||
Weighted average number of shares outstanding – diluted
|
137,581
|
|
|
139,828
|
|
|
137,260
|
|
|
140,647
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.47
|
|
|
$
|
0.43
|
|
|
$
|
0.92
|
|
|
$
|
0.83
|
|
Diluted
|
$
|
0.47
|
|
|
$
|
0.43
|
|
|
$
|
0.91
|
|
|
$
|
0.82
|
|
(in thousands)
|
SSAD
|
|
Morstan
|
|
Other
|
|
Total
|
||||||||
Cash
|
$
|
2,094
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,094
|
|
Other current assets
|
1,042
|
|
|
2,482
|
|
|
753
|
|
|
4,277
|
|
||||
Fixed assets
|
307
|
|
|
300
|
|
|
42
|
|
|
649
|
|
||||
Goodwill
|
22,321
|
|
|
49,954
|
|
|
6,389
|
|
|
78,664
|
|
||||
Purchased customer accounts
|
13,069
|
|
|
26,775
|
|
|
4,291
|
|
|
44,135
|
|
||||
Non-compete agreements
|
72
|
|
|
39
|
|
|
73
|
|
|
184
|
|
||||
Total assets acquired
|
38,905
|
|
|
79,550
|
|
|
11,548
|
|
|
130,003
|
|
||||
Other current liabilities
|
(1,686
|
)
|
|
(1,415
|
)
|
|
(903
|
)
|
|
(4,004
|
)
|
||||
Deferred income tax, net
|
(3,230
|
)
|
|
—
|
|
|
—
|
|
|
(3,230
|
)
|
||||
Total liabilities assumed
|
(4,916
|
)
|
|
(1,415
|
)
|
|
(903
|
)
|
|
(7,234
|
)
|
||||
Net assets acquired
|
$
|
33,989
|
|
|
$
|
78,135
|
|
|
$
|
10,645
|
|
|
$
|
122,769
|
|
(UNAUDITED)
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||
(in thousands, except per share data)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Total revenues
|
$
|
452,240
|
|
|
$
|
432,324
|
|
|
$
|
885,956
|
|
|
$
|
848,183
|
|
Income before income taxes
|
$
|
110,064
|
|
|
$
|
103,442
|
|
|
$
|
214,403
|
|
|
$
|
199,568
|
|
Net income
|
$
|
66,849
|
|
|
$
|
62,533
|
|
|
$
|
130,004
|
|
|
$
|
120,910
|
|
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.48
|
|
|
$
|
0.44
|
|
|
$
|
0.93
|
|
|
$
|
0.85
|
|
Diluted
|
$
|
0.47
|
|
|
$
|
0.44
|
|
|
$
|
0.92
|
|
|
$
|
0.84
|
|
Weighted average number of shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
135,992
|
|
|
137,518
|
|
|
135,770
|
|
|
138,434
|
|
||||
Diluted
|
137,581
|
|
|
139,828
|
|
|
137,260
|
|
|
140,647
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Balance as of the beginning of the period
|
$
|
69,095
|
|
|
$
|
77,709
|
|
|
$
|
78,387
|
|
|
$
|
75,283
|
|
Additions to estimated acquisition earn-out payables
|
1,787
|
|
|
21,480
|
|
|
2,393
|
|
|
27,134
|
|
||||
Payments for estimated acquisition earn-out payables
|
(1,485
|
)
|
|
(9,448
|
)
|
|
(10,562
|
)
|
|
(14,039
|
)
|
||||
Subtotal
|
69,397
|
|
|
89,741
|
|
|
70,218
|
|
|
88,378
|
|
||||
Net change in earnings from estimated acquisition earn-out payables:
|
|
|
|
|
|
|
|
||||||||
Change in fair value on estimated acquisition earn-out payables
|
3,385
|
|
|
(342
|
)
|
|
1,822
|
|
|
334
|
|
||||
Interest expense accretion
|
672
|
|
|
714
|
|
|
1,414
|
|
|
1,401
|
|
||||
Net change in earnings from estimated acquisition earn-out payables
|
4,057
|
|
|
372
|
|
|
3,236
|
|
|
1,735
|
|
||||
Balance as of June 30,
|
$
|
73,454
|
|
|
$
|
90,113
|
|
|
$
|
73,454
|
|
|
$
|
90,113
|
|
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Total
|
||||||||||
Balance as of January 1, 2016
|
$
|
1,345,636
|
|
|
$
|
901,866
|
|
|
$
|
226,961
|
|
|
$
|
112,220
|
|
|
$
|
2,586,683
|
|
Goodwill of acquired businesses
|
6,366
|
|
|
(1
|
)
|
|
49,978
|
|
|
22,321
|
|
|
78,664
|
|
|||||
Goodwill of transferred businesses
|
571
|
|
|
(571
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance as of June 30, 2016
|
$
|
1,352,573
|
|
|
$
|
901,294
|
|
|
$
|
276,939
|
|
|
$
|
134,541
|
|
|
$
|
2,665,347
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||
(in thousands)
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
|
Weighted
Average
Life
(Years)(1)
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
|
Weighted
Average
Life
(Years)
(1)
|
||||||||||||
Purchased customer accounts
|
$
|
1,442,512
|
|
|
$
|
(699,252
|
)
|
|
$
|
743,260
|
|
|
15.0
|
|
$
|
1,398,986
|
|
|
$
|
(656,799
|
)
|
|
$
|
742,187
|
|
|
15.0
|
Non-compete agreements
|
29,624
|
|
|
(27,532
|
)
|
|
2,092
|
|
|
6.8
|
|
29,440
|
|
|
(26,947
|
)
|
|
2,493
|
|
|
6.8
|
||||||
Total
|
$
|
1,472,136
|
|
|
$
|
(726,784
|
)
|
|
$
|
745,352
|
|
|
|
|
$
|
1,428,426
|
|
|
$
|
(683,746
|
)
|
|
$
|
744,680
|
|
|
|
(1)
|
Weighted average life calculated as of the date of acquisition.
|
(in thousands)
|
June 30, 2016
|
|
December 31, 2015
|
||||
Current portion of long-term debt:
|
|
|
|
||||
Current portion of 5-year term loan facility expires 2019
|
$
|
55,000
|
|
|
$
|
48,125
|
|
5.660% senior notes, Series C, semi-annual interest payments, balloon due 2016
|
25,000
|
|
|
25,000
|
|
||
Short term promissory note
|
492
|
|
|
—
|
|
||
Total current portion of long-term debt
|
80,492
|
|
|
73,125
|
|
||
Long-term debt:
|
|
|
|
||||
Note agreements:
|
|
|
|
||||
4.500% senior notes, Series E, quarterly interest payments, balloon due 2018
|
100,000
|
|
|
100,000
|
|
||
4.200% senior notes, semi-annual interest payments, balloon due 2024
|
498,707
|
|
|
498,628
|
|
||
Total notes
|
598,707
|
|
|
598,628
|
|
||
Credit agreements:
|
|
|
|
||||
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.75%, expires May 20, 2019
|
453,750
|
|
|
481,250
|
|
||
5-year revolving-loan facility, periodic interest payments, currently LIBOR plus up to 1.50%, plus commitment fees up to 0.25%, expires May 20, 2019
|
—
|
|
|
—
|
|
||
Revolving credit loan, quarterly interest payments, LIBOR plus up to 1.40% and availability fee up to 0.25%, terminated March 14, 2016
|
—
|
|
|
—
|
|
||
Total credit agreements
|
453,750
|
|
|
481,250
|
|
||
Debt issuance costs (contra)
|
(7,453
|
)
|
|
(8,260
|
)
|
||
Total long-term debt less unamortized discount and debt issuance costs
|
1,045,004
|
|
|
1,071,618
|
|
||
Current portion of long-term debt
|
80,492
|
|
|
73,125
|
|
||
Total debt
|
$
|
1,125,496
|
|
|
$
|
1,144,743
|
|
|
For the six months
ended June 30, |
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
18,770
|
|
|
$
|
18,766
|
|
Income taxes
|
$
|
71,466
|
|
|
$
|
67,457
|
|
|
For the six months
ended June 30, |
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Other payable issued for purchased customer accounts
|
$
|
10,500
|
|
|
$
|
905
|
|
Estimated acquisition earn-out payables and related charges
|
$
|
2,393
|
|
|
$
|
27,134
|
|
Notes payable issued or assumed for purchased customer accounts
|
$
|
492
|
|
|
$
|
—
|
|
Notes received on the sale of fixed assets and customer accounts
|
$
|
—
|
|
|
$
|
544
|
|
|
For the three months ended June 30, 2016
|
||||||||||||||||||||||
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Total revenues
|
$
|
234,560
|
|
|
$
|
108,820
|
|
|
$
|
61,287
|
|
|
$
|
41,752
|
|
|
$
|
99
|
|
|
$
|
446,518
|
|
Investment income
|
$
|
7
|
|
|
$
|
239
|
|
|
$
|
1
|
|
|
$
|
83
|
|
|
$
|
172
|
|
|
$
|
502
|
|
Amortization
|
$
|
10,893
|
|
|
$
|
6,982
|
|
|
$
|
2,591
|
|
|
$
|
1,140
|
|
|
$
|
4
|
|
|
$
|
21,610
|
|
Depreciation
|
$
|
1,616
|
|
|
$
|
2,007
|
|
|
$
|
488
|
|
|
$
|
472
|
|
|
$
|
771
|
|
|
$
|
5,354
|
|
Interest expense
|
$
|
9,986
|
|
|
$
|
11,461
|
|
|
$
|
685
|
|
|
$
|
1,327
|
|
|
$
|
(13,622
|
)
|
|
$
|
9,837
|
|
Income before income taxes
|
$
|
49,150
|
|
|
$
|
22,245
|
|
|
$
|
16,287
|
|
|
$
|
6,906
|
|
|
$
|
14,489
|
|
|
$
|
109,077
|
|
Total assets
|
$
|
3,593,733
|
|
|
$
|
2,556,293
|
|
|
$
|
1,018,689
|
|
|
$
|
327,957
|
|
|
$
|
(2,289,795
|
)
|
|
$
|
5,206,877
|
|
Capital expenditures
|
$
|
2,172
|
|
|
$
|
1,314
|
|
|
$
|
322
|
|
|
$
|
276
|
|
|
$
|
608
|
|
|
$
|
4,692
|
|
|
For the three months ended June 30, 2015
|
||||||||||||||||||||||
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Total revenues
|
$
|
222,721
|
|
|
$
|
103,056
|
|
|
$
|
55,417
|
|
|
$
|
38,360
|
|
|
$
|
(107
|
)
|
|
$
|
419,447
|
|
Investment income
|
$
|
21
|
|
|
$
|
56
|
|
|
$
|
73
|
|
|
$
|
1
|
|
|
$
|
109
|
|
|
$
|
260
|
|
Amortization
|
$
|
11,185
|
|
|
$
|
6,975
|
|
|
$
|
2,432
|
|
|
$
|
1,022
|
|
|
$
|
9
|
|
|
$
|
21,623
|
|
Depreciation
|
$
|
1,634
|
|
|
$
|
1,756
|
|
|
$
|
561
|
|
|
$
|
529
|
|
|
$
|
757
|
|
|
$
|
5,237
|
|
Interest expense
|
$
|
10,562
|
|
|
$
|
13,953
|
|
|
$
|
216
|
|
|
$
|
1,596
|
|
|
$
|
(16,656
|
)
|
|
$
|
9,671
|
|
Income before income taxes
|
$
|
48,455
|
|
|
$
|
13,810
|
|
|
$
|
16,390
|
|
|
$
|
5,538
|
|
|
$
|
16,721
|
|
|
$
|
100,914
|
|
Total assets
|
$
|
3,423,263
|
|
|
$
|
2,516,430
|
|
|
$
|
865,000
|
|
|
$
|
283,996
|
|
|
$
|
(2,067,852
|
)
|
|
$
|
5,020,837
|
|
Capital expenditures
|
$
|
1,349
|
|
|
$
|
1,761
|
|
|
$
|
1,211
|
|
|
$
|
301
|
|
|
$
|
248
|
|
|
$
|
4,870
|
|
|
For the six months ended June 30, 2016
|
||||||||||||||||||||||
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Total revenues
|
$
|
466,748
|
|
|
$
|
209,890
|
|
|
$
|
114,701
|
|
|
$
|
78,320
|
|
|
$
|
1,032
|
|
|
$
|
870,691
|
|
Investment income
|
$
|
28
|
|
|
$
|
487
|
|
|
$
|
4
|
|
|
$
|
147
|
|
|
$
|
254
|
|
|
$
|
920
|
|
Amortization
|
$
|
21,882
|
|
|
$
|
14,090
|
|
|
$
|
5,033
|
|
|
$
|
2,205
|
|
|
$
|
10
|
|
|
$
|
43,220
|
|
Depreciation
|
$
|
3,253
|
|
|
$
|
3,936
|
|
|
$
|
984
|
|
|
$
|
959
|
|
|
$
|
1,540
|
|
|
$
|
10,672
|
|
Interest expense
|
$
|
20,389
|
|
|
$
|
24,051
|
|
|
$
|
932
|
|
|
$
|
2,563
|
|
|
$
|
(28,201
|
)
|
|
$
|
19,734
|
|
Income before income taxes
|
$
|
99,602
|
|
|
$
|
36,048
|
|
|
$
|
30,849
|
|
|
$
|
11,958
|
|
|
$
|
33,169
|
|
|
$
|
211,626
|
|
Total assets
|
$
|
3,593,733
|
|
|
$
|
2,556,293
|
|
|
$
|
1,018,689
|
|
|
$
|
327,957
|
|
|
$
|
(2,289,795
|
)
|
|
$
|
5,206,877
|
|
Capital expenditures
|
$
|
3,221
|
|
|
$
|
3,246
|
|
|
$
|
914
|
|
|
$
|
481
|
|
|
$
|
1,082
|
|
|
$
|
8,944
|
|
|
For the six months ended June 30, 2015
|
||||||||||||||||||||||
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Total revenues
|
$
|
441,065
|
|
|
$
|
202,611
|
|
|
$
|
107,245
|
|
|
$
|
73,148
|
|
|
$
|
(324
|
)
|
|
$
|
823,745
|
|
Investment income
|
$
|
43
|
|
|
$
|
101
|
|
|
$
|
145
|
|
|
$
|
1
|
|
|
$
|
190
|
|
|
$
|
480
|
|
Amortization
|
$
|
22,119
|
|
|
$
|
14,210
|
|
|
$
|
4,855
|
|
|
$
|
2,045
|
|
|
$
|
19
|
|
|
$
|
43,248
|
|
Depreciation
|
$
|
3,276
|
|
|
$
|
3,522
|
|
|
$
|
1,124
|
|
|
$
|
1,059
|
|
|
$
|
1,439
|
|
|
$
|
10,420
|
|
Interest expense
|
$
|
20,720
|
|
|
$
|
28,908
|
|
|
$
|
445
|
|
|
$
|
3,195
|
|
|
$
|
(33,746
|
)
|
|
$
|
19,522
|
|
Income before income taxes
|
$
|
95,464
|
|
|
$
|
23,286
|
|
|
$
|
30,874
|
|
|
$
|
10,040
|
|
|
$
|
35,028
|
|
|
$
|
194,692
|
|
Total assets
|
$
|
3,423,263
|
|
|
$
|
2,516,430
|
|
|
$
|
865,000
|
|
|
$
|
283,996
|
|
|
$
|
(2,067,852
|
)
|
|
$
|
5,020,837
|
|
Capital expenditures
|
$
|
2,773
|
|
|
$
|
3,250
|
|
|
$
|
1,662
|
|
|
$
|
541
|
|
|
$
|
371
|
|
|
$
|
8,597
|
|
(in thousands)
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. Treasury securities, obligations of U.S. Government agencies and Municipals
|
$
|
21,806
|
|
|
$
|
190
|
|
|
$
|
—
|
|
|
$
|
21,996
|
|
Corporate debt
|
3,371
|
|
|
41
|
|
|
—
|
|
|
3,412
|
|
||||
Short duration fixed income fund
|
484
|
|
|
12
|
|
|
—
|
|
|
496
|
|
||||
Total
|
$
|
25,661
|
|
|
$
|
243
|
|
|
$
|
—
|
|
|
$
|
25,904
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
(in thousands)
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||||
U.S. Treasury securities, obligations of U.S. Government agencies and Municipals
|
$
|
241
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
241
|
|
|
$
|
—
|
|
Corporate debt
|
382
|
|
|
—
|
|
|
160
|
|
|
—
|
|
|
542
|
|
|
—
|
|
||||||
Total
|
$
|
623
|
|
|
$
|
—
|
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
783
|
|
|
$
|
—
|
|
(in thousands)
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. Treasury securities, obligations of U.S. Government agencies and Municipals
|
$
|
11,876
|
|
|
$
|
6
|
|
|
$
|
(26
|
)
|
|
$
|
11,856
|
|
Foreign government
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||
Corporate debt
|
4,505
|
|
|
7
|
|
|
(16
|
)
|
|
4,496
|
|
||||
Short duration fixed income fund
|
1,663
|
|
|
27
|
|
|
—
|
|
|
1,690
|
|
||||
Total
|
$
|
18,094
|
|
|
$
|
40
|
|
|
$
|
(42
|
)
|
|
$
|
18,092
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
(in thousands)
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
|
Fair Value
|
|
Unrealized
Losses
|
||||||||||||
U.S. Treasury securities, obligations of U.S. Government agencies and Municipals
|
$
|
8,998
|
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,998
|
|
|
$
|
(26
|
)
|
Foreign Government
|
50
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
—
|
|
||||||
Corporate debt
|
2,731
|
|
|
(14
|
)
|
|
284
|
|
|
(2
|
)
|
|
3,015
|
|
|
(16
|
)
|
||||||
Total
|
$
|
11,779
|
|
|
$
|
(40
|
)
|
|
$
|
284
|
|
|
$
|
(2
|
)
|
|
$
|
12,063
|
|
|
$
|
(42
|
)
|
(in thousands)
|
Amortized Cost
|
|
Fair Value
|
||||
Years to maturity:
|
|
|
|
||||
Due in one year or less
|
$
|
2,910
|
|
|
$
|
2,912
|
|
Due after one year through five years
|
22,421
|
|
|
22,638
|
|
||
Due after five years through ten years
|
330
|
|
|
354
|
|
||
Total
|
$
|
25,661
|
|
|
$
|
25,904
|
|
(in thousands)
|
Amortized Cost
|
|
Fair Value
|
||||
Years to maturity:
|
|
|
|
||||
Due in one year or less
|
$
|
5,726
|
|
|
$
|
5,722
|
|
Due after one year through five years
|
12,038
|
|
|
12,041
|
|
||
Due after five years through ten years
|
330
|
|
|
329
|
|
||
Total
|
$
|
18,094
|
|
|
$
|
18,092
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Core commissions and fees
|
$
|
435,462
|
|
|
$
|
411,435
|
|
|
5.8
|
%
|
|
$
|
823,706
|
|
|
$
|
781,905
|
|
|
5.3
|
%
|
Profit-sharing contingent commissions
|
7,358
|
|
|
3,573
|
|
|
105.9
|
%
|
|
38,339
|
|
|
33,528
|
|
|
14.3
|
%
|
||||
Guaranteed supplemental commissions
|
2,842
|
|
|
2,236
|
|
|
27.1
|
%
|
|
5,952
|
|
|
5,592
|
|
|
6.4
|
%
|
||||
Investment income
|
502
|
|
|
260
|
|
|
93.1
|
%
|
|
920
|
|
|
480
|
|
|
91.7
|
%
|
||||
Other income, net
|
354
|
|
|
1,943
|
|
|
(81.8
|
)%
|
|
1,774
|
|
|
2,240
|
|
|
(20.8
|
)%
|
||||
Total revenues
|
446,518
|
|
|
419,447
|
|
|
6.5
|
%
|
|
870,691
|
|
|
823,745
|
|
|
5.7
|
%
|
||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
231,102
|
|
|
217,601
|
|
|
6.2
|
%
|
|
455,161
|
|
|
429,263
|
|
|
6.0
|
%
|
||||
Other operating expenses
|
66,291
|
|
|
64,377
|
|
|
3.0
|
%
|
|
129,896
|
|
|
125,470
|
|
|
3.5
|
%
|
||||
(Gain) loss on disposal
|
(810
|
)
|
|
(348
|
)
|
|
132.8
|
%
|
|
(2,854
|
)
|
|
(605
|
)
|
|
NMF
|
|
||||
Amortization
|
21,610
|
|
|
21,623
|
|
|
(0.1
|
)%
|
|
43,220
|
|
|
43,248
|
|
|
(0.1
|
)%
|
||||
Depreciation
|
5,354
|
|
|
5,237
|
|
|
2.2
|
%
|
|
10,672
|
|
|
10,420
|
|
|
2.4
|
%
|
||||
Interest
|
9,837
|
|
|
9,671
|
|
|
1.7
|
%
|
|
19,734
|
|
|
19,522
|
|
|
1.1
|
%
|
||||
Change in estimated acquisition earn-out payables
|
4,057
|
|
|
372
|
|
|
NMF
|
|
|
3,236
|
|
|
1,735
|
|
|
86.5
|
%
|
||||
Total expenses
|
337,441
|
|
|
318,533
|
|
|
5.9
|
%
|
|
659,065
|
|
|
629,053
|
|
|
4.8
|
%
|
||||
Income before income taxes
|
109,077
|
|
|
100,914
|
|
|
8.1
|
%
|
|
211,626
|
|
|
194,692
|
|
|
8.7
|
%
|
||||
Income taxes
|
42,827
|
|
|
39,909
|
|
|
7.3
|
%
|
|
83,306
|
|
|
76,736
|
|
|
8.6
|
%
|
||||
NET INCOME
|
$
|
66,250
|
|
|
$
|
61,005
|
|
|
8.6
|
%
|
|
$
|
128,320
|
|
|
$
|
117,956
|
|
|
8.8
|
%
|
Net internal growth rate – core organic commissions and fees
|
2.6
|
%
|
|
1.9
|
%
|
|
|
|
2.0
|
%
|
|
2.8
|
%
|
|
|
||||||
Employee compensation and benefits ratio
|
51.8
|
%
|
|
51.9
|
%
|
|
|
|
52.3
|
%
|
|
52.1
|
%
|
|
|
||||||
Other operating expenses ratio
|
14.8
|
%
|
|
15.3
|
%
|
|
|
|
14.9
|
%
|
|
15.2
|
%
|
|
|
||||||
Capital expenditures
|
$
|
4,692
|
|
|
$
|
4,870
|
|
|
|
|
$
|
8,944
|
|
|
$
|
8,597
|
|
|
|
||
Total assets at June 30
|
|
|
|
|
|
|
$
|
5,206,877
|
|
|
$
|
5,020,837
|
|
|
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Change in fair value of estimated acquisition earn-out payables
|
$
|
3,385
|
|
|
$
|
(342
|
)
|
|
$
|
1,822
|
|
|
$
|
334
|
|
Interest expense accretion
|
672
|
|
|
714
|
|
|
1,414
|
|
|
1,401
|
|
||||
Net change in earnings from estimated acquisition earn-out payables
|
$
|
4,057
|
|
|
$
|
372
|
|
|
$
|
3,236
|
|
|
$
|
1,735
|
|
2016
|
For the three months
ended June 30, |
|
Total Net
Change
|
|
Total Net
Growth %
|
|
Less
Acquisition
Revenues
|
|
Internal
Net
Growth $
|
|
Internal
Net
Growth %
|
||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
|||||||||||||||||||||
Retail
(1)
|
$
|
230,528
|
|
|
$
|
216,908
|
|
|
$
|
13,620
|
|
|
6.3
|
%
|
|
$
|
9,743
|
|
|
$
|
3,877
|
|
|
1.8
|
%
|
National Programs
|
104,128
|
|
|
101,475
|
|
|
2,653
|
|
|
2.6
|
%
|
|
414
|
|
|
2,239
|
|
|
2.2
|
%
|
|||||
Wholesale Brokerage
|
59,136
|
|
|
53,894
|
|
|
5,242
|
|
|
9.7
|
%
|
|
3,129
|
|
|
2,113
|
|
|
3.9
|
%
|
|||||
Services
|
41,670
|
|
|
36,715
|
|
|
4,955
|
|
|
13.5
|
%
|
|
2,624
|
|
|
2,331
|
|
|
6.3
|
%
|
|||||
Total core commissions and fees
|
$
|
435,462
|
|
|
$
|
408,992
|
|
|
$
|
26,470
|
|
|
6.5
|
%
|
|
$
|
15,910
|
|
|
$
|
10,560
|
|
|
2.6
|
%
|
|
For the three months
ended June 30, |
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Total core commissions and fees
|
$
|
435,462
|
|
|
$
|
408,992
|
|
Profit-sharing contingent commissions
|
7,358
|
|
|
3,573
|
|
||
Guaranteed supplemental commissions
|
2,842
|
|
|
2,236
|
|
||
Divested business
|
—
|
|
|
2,443
|
|
||
Total commissions and fees
|
$
|
445,662
|
|
|
$
|
417,244
|
|
2015
|
For the three months
ended June 30, |
|
Total Net
Change
|
|
Total Net
Growth %
|
|
Less
Acquisition
Revenues
|
|
Internal
Net
Growth $
|
|
Internal
Net
Growth %
|
||||||||||||||
(in thousands, except percentages)
|
2015
|
|
2014
|
|
|||||||||||||||||||||
Retail
(1)
|
$
|
217,529
|
|
|
$
|
208,077
|
|
|
$
|
9,452
|
|
|
4.5
|
%
|
|
$
|
7,977
|
|
|
$
|
1,475
|
|
|
0.7
|
%
|
National Programs
|
101,653
|
|
|
90,435
|
|
|
11,218
|
|
|
12.4
|
%
|
|
10,708
|
|
|
510
|
|
|
0.6
|
%
|
|||||
Wholesale Brokerage
|
53,894
|
|
|
50,813
|
|
|
3,081
|
|
|
6.1
|
%
|
|
506
|
|
|
2,575
|
|
|
5.1
|
%
|
|||||
Services
|
38,359
|
|
|
35,586
|
|
|
2,773
|
|
|
7.8
|
%
|
|
—
|
|
|
2,773
|
|
|
7.8
|
%
|
|||||
Total core commissions and fees
|
$
|
411,435
|
|
|
$
|
384,911
|
|
|
$
|
26,524
|
|
|
6.9
|
%
|
|
$
|
19,191
|
|
|
$
|
7,333
|
|
|
1.9
|
%
|
|
For the three months
ended June 30, |
||||||
(in thousands)
|
2015
|
|
2014
|
||||
Total core commissions and fees
|
$
|
411,435
|
|
|
$
|
384,911
|
|
Profit-sharing contingent commissions
|
3,573
|
|
|
2,756
|
|
||
Guaranteed supplemental commissions
|
2,236
|
|
|
2,084
|
|
||
Divested business
|
—
|
|
|
4,939
|
|
||
Total commissions and fees
|
$
|
417,244
|
|
|
$
|
394,690
|
|
2016
|
For the six months
ended June 30, |
|
Total Net
Change
|
|
Total Net
Growth %
|
|
Less
Acquisition
Revenues
|
|
Internal
Net
Growth $
|
|
Internal
Net
Growth %
|
||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
|||||||||||||||||||||
Retail
(1)
|
$
|
438,826
|
|
|
$
|
412,756
|
|
|
$
|
26,070
|
|
|
6.3
|
%
|
|
$
|
20,832
|
|
|
$
|
5,238
|
|
|
1.3
|
%
|
National Programs
|
199,685
|
|
|
194,237
|
|
|
$
|
5,448
|
|
|
2.8
|
%
|
|
1,680
|
|
|
$
|
3,768
|
|
|
1.9
|
%
|
|||
Wholesale Brokerage
|
107,022
|
|
|
99,954
|
|
|
$
|
7,068
|
|
|
7.1
|
%
|
|
3,383
|
|
|
$
|
3,685
|
|
|
3.7
|
%
|
|||
Services
|
78,173
|
|
|
71,164
|
|
|
$
|
7,009
|
|
|
9.8
|
%
|
|
4,273
|
|
|
$
|
2,736
|
|
|
3.8
|
%
|
|||
Total core commissions and fees
|
$
|
823,706
|
|
|
$
|
778,111
|
|
|
$
|
45,595
|
|
|
5.9
|
%
|
|
$
|
30,168
|
|
|
$
|
15,427
|
|
|
2.0
|
%
|
|
For the six months
ended June 30, |
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Total core commissions and fees
|
$
|
823,706
|
|
|
$
|
778,111
|
|
Profit-sharing contingent commissions
|
38,339
|
|
|
33,528
|
|
||
Guaranteed supplemental commissions
|
5,952
|
|
|
5,592
|
|
||
Divested business
|
—
|
|
|
3,794
|
|
||
Total commissions and fees
|
$
|
867,997
|
|
|
$
|
821,025
|
|
2015
|
For the six months
ended June 30, |
|
Total Net
Change
|
|
Total Net
Growth %
|
|
Less
Acquisition
Revenues
|
|
Internal
Net
Growth $
|
|
Internal
Net
Growth %
|
||||||||||||||
(in thousands, except percentages)
|
2015
|
|
2014
|
|
|||||||||||||||||||||
Retail
(1)
|
$
|
413,881
|
|
|
$
|
391,356
|
|
|
$
|
22,525
|
|
|
5.8
|
%
|
|
$
|
18,140
|
|
|
$
|
4,385
|
|
|
1.1
|
%
|
National Programs
|
194,907
|
|
|
155,455
|
|
|
39,452
|
|
|
25.4
|
%
|
|
36,106
|
|
|
3,346
|
|
|
2.2
|
%
|
|||||
Wholesale Brokerage
|
99,954
|
|
|
93,302
|
|
|
6,652
|
|
|
7.1
|
%
|
|
991
|
|
|
5,661
|
|
|
6.1
|
%
|
|||||
Services
|
73,163
|
|
|
67,096
|
|
|
6,067
|
|
|
9.0
|
%
|
|
—
|
|
|
6,067
|
|
|
9.0
|
%
|
|||||
Total core commissions and fees
|
$
|
781,905
|
|
|
$
|
707,209
|
|
|
$
|
74,696
|
|
|
10.6
|
%
|
|
$
|
55,237
|
|
|
$
|
19,459
|
|
|
2.8
|
%
|
|
For the six months
ended June 30, |
||||||
(in thousands)
|
2015
|
|
2014
|
||||
Total core commissions and fees
|
$
|
781,905
|
|
|
$
|
707,209
|
|
Profit-sharing contingent commissions
|
33,528
|
|
|
34,504
|
|
||
Guaranteed supplemental commissions
|
5,592
|
|
|
5,016
|
|
||
Divested business
|
—
|
|
|
9,968
|
|
||
Total commissions and fees
|
$
|
821,025
|
|
|
$
|
756,697
|
|
|
(1)
|
The Retail Segment includes commissions and fees reported in the “Other” column of the Segment Information in Note 10 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
%
Change |
|
2016
|
|
2015
|
|
%
Change |
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Core commissions and fees
|
$
|
230,783
|
|
|
$
|
217,745
|
|
|
6.0
|
%
|
|
$
|
439,322
|
|
|
$
|
414,387
|
|
|
6.0
|
%
|
Profit-sharing contingent commissions
|
1,374
|
|
|
1,015
|
|
|
35.4
|
%
|
|
22,136
|
|
|
19,843
|
|
|
11.6
|
%
|
||||
Guaranteed supplemental commissions
|
2,345
|
|
|
1,839
|
|
|
27.5
|
%
|
|
4,972
|
|
|
4,638
|
|
|
7.2
|
%
|
||||
Investment income
|
7
|
|
|
21
|
|
|
(66.7
|
)%
|
|
28
|
|
|
43
|
|
|
(34.9
|
)%
|
||||
Other income, net
|
51
|
|
|
2,101
|
|
|
(97.6
|
)%
|
|
290
|
|
|
2,154
|
|
|
(86.5
|
)%
|
||||
Total revenues
|
234,560
|
|
|
222,721
|
|
|
5.3
|
%
|
|
466,748
|
|
|
441,065
|
|
|
5.8
|
%
|
||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
121,897
|
|
|
115,307
|
|
|
5.7
|
%
|
|
245,934
|
|
|
228,526
|
|
|
7.6
|
%
|
||||
Other operating expenses
|
37,850
|
|
|
35,666
|
|
|
6.1
|
%
|
|
75,424
|
|
|
70,695
|
|
|
6.7
|
%
|
||||
(Gain) loss on disposal
|
(810
|
)
|
|
(339
|
)
|
|
138.9
|
%
|
|
(2,854
|
)
|
|
(678
|
)
|
|
NMF
|
|
||||
Amortization
|
10,893
|
|
|
11,185
|
|
|
(2.6
|
)%
|
|
21,882
|
|
|
22,119
|
|
|
(1.1
|
)%
|
||||
Depreciation
|
1,616
|
|
|
1,634
|
|
|
(1.1
|
)%
|
|
3,253
|
|
|
3,276
|
|
|
(0.7
|
)%
|
||||
Interest
|
9,986
|
|
|
10,562
|
|
|
(5.5
|
)%
|
|
20,389
|
|
|
20,720
|
|
|
(1.6
|
)%
|
||||
Change in estimated acquisition earn-out payables
|
3,978
|
|
|
251
|
|
|
NMF
|
|
|
3,118
|
|
|
943
|
|
|
NMF
|
|
||||
Total expenses
|
185,410
|
|
|
174,266
|
|
|
6.4
|
%
|
|
367,146
|
|
|
345,601
|
|
|
6.2
|
%
|
||||
Income before income taxes
|
$
|
49,150
|
|
|
$
|
48,455
|
|
|
1.4
|
%
|
|
$
|
99,602
|
|
|
$
|
95,464
|
|
|
4.3
|
%
|
Net internal growth rate – core organic commissions and fees
|
1.8
|
%
|
|
0.7
|
%
|
|
|
|
1.3
|
%
|
|
1.1
|
%
|
|
|
||||||
Employee compensation and benefits ratio
|
52.0
|
%
|
|
51.8
|
%
|
|
|
|
52.7
|
%
|
|
51.8
|
%
|
|
|
||||||
Other operating expenses ratio
|
16.1
|
%
|
|
16.0
|
%
|
|
|
|
16.2
|
%
|
|
16.0
|
%
|
|
|
||||||
Capital expenditures
|
$
|
2,172
|
|
|
$
|
1,349
|
|
|
|
|
$
|
3,221
|
|
|
$
|
2,773
|
|
|
|
||
Total assets at June 30
|
|
|
|
|
|
|
$
|
3,593,733
|
|
|
$
|
3,423,263
|
|
|
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
%
Change |
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Core commissions and fees
|
$
|
104,128
|
|
|
$
|
101,653
|
|
|
2.4
|
%
|
|
$
|
199,685
|
|
|
$
|
194,907
|
|
|
2.5
|
%
|
Profit-sharing contingent commissions
|
4,410
|
|
|
1,529
|
|
|
188.4
|
%
|
|
9,654
|
|
|
7,546
|
|
|
27.9
|
%
|
||||
Guaranteed supplemental commissions
|
4
|
|
|
2
|
|
|
100.0
|
%
|
|
10
|
|
|
5
|
|
|
100.0
|
%
|
||||
Investment income
|
239
|
|
|
56
|
|
|
NMF
|
|
|
487
|
|
|
101
|
|
|
NMF
|
|
||||
Other income, net
|
39
|
|
|
(184
|
)
|
|
(121.2
|
)%
|
|
54
|
|
|
52
|
|
|
3.8
|
%
|
||||
Total revenues
|
108,820
|
|
|
103,056
|
|
|
5.6
|
%
|
|
209,890
|
|
|
202,611
|
|
|
3.6
|
%
|
||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
46,714
|
|
|
45,345
|
|
|
3.0
|
%
|
|
93,408
|
|
|
89,331
|
|
|
4.6
|
%
|
||||
Other operating expenses
|
19,359
|
|
|
21,190
|
|
|
(8.6
|
)%
|
|
38,253
|
|
|
42,845
|
|
|
(10.7
|
)%
|
||||
(Gain) loss on disposal
|
—
|
|
|
(9
|
)
|
|
(100.0
|
)%
|
|
—
|
|
|
458
|
|
|
(100.0
|
)%
|
||||
Amortization
|
6,982
|
|
|
6,975
|
|
|
0.1
|
%
|
|
14,090
|
|
|
14,210
|
|
|
(0.8
|
)%
|
||||
Depreciation
|
2,007
|
|
|
1,756
|
|
|
14.3
|
%
|
|
3,936
|
|
|
3,522
|
|
|
11.8
|
%
|
||||
Interest
|
11,461
|
|
|
13,953
|
|
|
(17.9
|
)%
|
|
24,051
|
|
|
28,908
|
|
|
(16.8
|
)%
|
||||
Change in estimated acquisition earn-out payables
|
52
|
|
|
36
|
|
|
44.4
|
%
|
|
104
|
|
|
51
|
|
|
103.9
|
%
|
||||
Total expenses
|
86,575
|
|
|
89,246
|
|
|
(3.0
|
)%
|
|
173,842
|
|
|
179,325
|
|
|
(3.1
|
)%
|
||||
Income before income taxes
|
$
|
22,245
|
|
|
$
|
13,810
|
|
|
61.1
|
%
|
|
$
|
36,048
|
|
|
$
|
23,286
|
|
|
54.8
|
%
|
Net internal growth rate – core organic commissions and fees
|
2.2
|
%
|
|
0.6
|
%
|
|
|
|
1.9
|
%
|
|
2.2
|
%
|
|
|
||||||
Employee compensation and benefits ratio
|
42.9
|
%
|
|
44.0
|
%
|
|
|
|
44.5
|
%
|
|
44.1
|
%
|
|
|
||||||
Other operating expenses ratio
|
17.8
|
%
|
|
20.6
|
%
|
|
|
|
18.2
|
%
|
|
21.1
|
%
|
|
|
||||||
Capital expenditures
|
$
|
1,314
|
|
|
$
|
1,761
|
|
|
|
|
$
|
3,246
|
|
|
$
|
3,250
|
|
|
|
||
Total assets at June 30
|
|
|
|
|
|
|
$
|
2,556,293
|
|
|
$
|
2,516,430
|
|
|
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Core commissions and fees
|
$
|
59,136
|
|
|
$
|
53,894
|
|
|
9.7
|
%
|
|
$
|
107,022
|
|
|
$
|
99,954
|
|
|
7.1
|
%
|
Profit-sharing contingent commissions
|
1,574
|
|
|
1,029
|
|
|
53.0
|
%
|
|
6,549
|
|
|
6,139
|
|
|
6.7
|
%
|
||||
Guaranteed supplemental commissions
|
493
|
|
|
395
|
|
|
24.8
|
%
|
|
970
|
|
|
949
|
|
|
2.2
|
%
|
||||
Investment income
|
1
|
|
|
73
|
|
|
(98.6
|
)%
|
|
4
|
|
|
145
|
|
|
(97.2
|
)%
|
||||
Other income, net
|
83
|
|
|
26
|
|
|
NMF
|
|
|
156
|
|
|
58
|
|
|
169.0
|
%
|
||||
Total revenues
|
61,287
|
|
|
55,417
|
|
|
10.6
|
%
|
|
114,701
|
|
|
107,245
|
|
|
7.0
|
%
|
||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
30,522
|
|
|
27,421
|
|
|
11.3
|
%
|
|
56,912
|
|
|
52,738
|
|
|
7.9
|
%
|
||||
Other operating expenses
|
10,699
|
|
|
8,321
|
|
|
28.6
|
%
|
|
19,966
|
|
|
16,870
|
|
|
18.4
|
%
|
||||
(Gain) loss on disposal
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(385
|
)
|
|
(100.0
|
)%
|
||||
Amortization
|
2,591
|
|
|
2,432
|
|
|
6.5
|
%
|
|
5,033
|
|
|
4,855
|
|
|
3.7
|
%
|
||||
Depreciation
|
488
|
|
|
561
|
|
|
(13.0
|
)%
|
|
984
|
|
|
1,124
|
|
|
(12.5
|
)%
|
||||
Interest
|
685
|
|
|
216
|
|
|
NMF
|
|
|
932
|
|
|
445
|
|
|
109.4
|
%
|
||||
Change in estimated acquisition earn-out payables
|
15
|
|
|
76
|
|
|
(80.3
|
)%
|
|
25
|
|
|
724
|
|
|
(96.5
|
)%
|
||||
Total expenses
|
45,000
|
|
|
39,027
|
|
|
15.3
|
%
|
|
83,852
|
|
|
76,371
|
|
|
9.8
|
%
|
||||
Income before income taxes
|
$
|
16,287
|
|
|
$
|
16,390
|
|
|
(0.6
|
)%
|
|
$
|
30,849
|
|
|
$
|
30,874
|
|
|
(0.1
|
)%
|
Net internal growth rate – core organic commissions and fees
|
3.9
|
%
|
|
5.1
|
%
|
|
|
|
3.7
|
%
|
|
6.1
|
%
|
|
|
||||||
Employee compensation and benefits ratio
|
49.8
|
%
|
|
49.5
|
%
|
|
|
|
49.6
|
%
|
|
49.2
|
%
|
|
|
||||||
Other operating expenses ratio
|
17.5
|
%
|
|
15.0
|
%
|
|
|
|
17.4
|
%
|
|
15.7
|
%
|
|
|
||||||
Capital expenditures
|
$
|
322
|
|
|
$
|
1,211
|
|
|
|
|
$
|
914
|
|
|
$
|
1,662
|
|
|
|
||
Total assets at June 30
|
|
|
|
|
|
|
$
|
1,018,689
|
|
|
$
|
865,000
|
|
|
|
|
For the three months
ended June 30, |
|
For the six months
ended June 30, |
||||||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Core commissions and fees
|
$
|
41,670
|
|
|
$
|
38,359
|
|
|
8.6
|
%
|
|
$
|
78,173
|
|
|
$
|
73,163
|
|
|
6.8
|
%
|
Profit-sharing contingent commissions
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Guaranteed supplemental commissions
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Investment income
|
83
|
|
|
1
|
|
|
NMF
|
|
|
147
|
|
|
1
|
|
|
NMF
|
|
||||
Other income, net
|
(1
|
)
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(16
|
)
|
|
(100.0
|
)%
|
||||
Total revenues
|
41,752
|
|
|
38,360
|
|
|
8.8
|
%
|
|
78,320
|
|
|
73,148
|
|
|
7.1
|
%
|
||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
19,631
|
|
|
19,768
|
|
|
(0.7
|
)%
|
|
38,507
|
|
|
39,038
|
|
|
(1.4
|
)%
|
||||
Other operating expenses
|
12,264
|
|
|
9,898
|
|
|
23.9
|
%
|
|
22,139
|
|
|
17,754
|
|
|
24.7
|
%
|
||||
(Gain) loss on disposal
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||
Amortization
|
1,140
|
|
|
1,022
|
|
|
11.5
|
%
|
|
2,205
|
|
|
2,045
|
|
|
7.8
|
%
|
||||
Depreciation
|
472
|
|
|
529
|
|
|
(10.8
|
)%
|
|
959
|
|
|
1,059
|
|
|
(9.4
|
)%
|
||||
Interest
|
1,327
|
|
|
1,596
|
|
|
(16.9
|
)%
|
|
2,563
|
|
|
3,195
|
|
|
(19.8
|
)%
|
||||
Change in estimated acquisition earn-out payables
|
12
|
|
|
9
|
|
|
33.3
|
%
|
|
(11
|
)
|
|
17
|
|
|
(164.7
|
)%
|
||||
Total expenses
|
34,846
|
|
|
32,822
|
|
|
6.2
|
%
|
|
66,362
|
|
|
63,108
|
|
|
5.2
|
%
|
||||
Income before income taxes
|
$
|
6,906
|
|
|
$
|
5,538
|
|
|
24.7
|
%
|
|
$
|
11,958
|
|
|
$
|
10,040
|
|
|
19.1
|
%
|
Net internal growth rate – core organic commissions and fees
|
6.3
|
%
|
|
7.8
|
%
|
|
|
|
3.8
|
%
|
|
9.0
|
%
|
|
|
||||||
Employee compensation and benefits ratio
|
47.0
|
%
|
|
51.5
|
%
|
|
|
|
49.2
|
%
|
|
53.4
|
%
|
|
|
||||||
Other operating expenses ratio
|
29.4
|
%
|
|
25.8
|
%
|
|
|
|
28.3
|
%
|
|
24.3
|
%
|
|
|
||||||
Capital expenditures
|
$
|
276
|
|
|
$
|
301
|
|
|
|
|
$
|
481
|
|
|
$
|
541
|
|
|
|
||
Total assets at June 30
|
|
|
|
|
|
|
$
|
327,957
|
|
|
$
|
283,996
|
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
After 5
Years
|
||||||||||
Long-term debt
|
$
|
1,134,250
|
|
|
$
|
80,500
|
|
|
$
|
553,750
|
|
|
$
|
—
|
|
|
$
|
500,000
|
|
Other liabilities
(1)
|
69,447
|
|
|
23,477
|
|
|
14,605
|
|
|
1,378
|
|
|
29,987
|
|
|||||
Operating leases
|
204,316
|
|
|
41,721
|
|
|
71,378
|
|
|
49,619
|
|
|
41,598
|
|
|||||
Interest obligations
|
208,620
|
|
|
35,949
|
|
|
63,296
|
|
|
42,000
|
|
|
67,375
|
|
|||||
Unrecognized tax benefits
|
679
|
|
|
—
|
|
|
679
|
|
|
—
|
|
|
—
|
|
|||||
Maximum future acquisition contingency payments
(2)
|
131,603
|
|
|
44,488
|
|
|
84,486
|
|
|
2,629
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
1,748,915
|
|
|
$
|
226,135
|
|
|
$
|
788,194
|
|
|
$
|
95,626
|
|
|
$
|
638,960
|
|
|
(1)
|
Includes the current portion of other long-term liabilities.
|
(2)
|
Includes $73.5 million of current and non-current estimated earn-out payables resulting from acquisitions consummated after January 1, 2009.
|
|
Total Number
of Shares
Purchased
(1)
|
|
Average Price
Paid per Share
|
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
|
|
Maximum Value that
May Yet be Purchased
Under the Plans or
Programs
(2)
|
||||
April 1, 2016 to April 30, 2016
|
126,829
|
|
|
$
|
35.80
|
|
|
—
|
|
|
$ 375.0 million
|
May 1, 2016 to May 31, 2016
|
2,547
|
|
|
35.11
|
|
|
—
|
|
|
375.0 million
|
|
June 1, 2016 to June 30, 2016
|
7,010
|
|
|
36.06
|
|
|
—
|
|
|
375.0 million
|
|
Total
|
136,386
|
|
|
$
|
35.80
|
|
|
—
|
|
|
$ 375.0 million
|
(1)
|
We purchased 136,386 shares during the quarter ended
June 30, 2016
outside of our publicly announced share repurchase program, all of which represent shares surrendered by our teammates in the exercise of stock options under our equity compensation plans or to cover required tax withholdings on the vesting of shares in our equity compensation plans.
|
(2)
|
As announced on July 21, 2014, our Board of Directors approved the purchase of up to $200.0 million of the Company’s outstanding common stock of which $150.0 million have been purchased with the last settlement on August 11, 2015. On July 20, 2015, the Company’s Board of Directors authorized the purchasing of up to an additional $400.0 million of the Company's outstanding common stock. On November 11, 2015, the Company entered into ASR with an investment bank to purchase an aggregate $75.0 million of the Company’s common stock, all of which has been settled with this latest settlement on January 6, 2016 in which the Company received 363,209 shares. After this completion, the Company will now have outstanding approval to purchase up to $375.0 million, in the aggregate, of the Company's outstanding common stock. As of
June 30, 2016
, a total of 7,793,579 shares have been repurchased since the first quarter of 2015.
|
|
|
|
3.1
|
|
Articles of Amendment to Articles of Incorporation (adopted April 24, 2003) (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 2003), and Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 1999).
|
|
|
|
3.2
|
|
Bylaws (incorporated by reference to Exhibit 3.2 to Form 8-K filed on March 2, 2012).
|
|
|
|
10.1
|
|
2010 Stock Incentive Plan, as amended (incorporated by reference to Exhibit 10.1 to Form 8-K filed May 5, 2016).
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer of the Registrant.
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer of the Registrant.
|
|
|
|
32.1
|
|
Section 1350 Certification by the Chief Executive Officer of the Registrant.
|
|
|
|
32.2
|
|
Section 1350 Certification by the Chief Financial Officer of the Registrant.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
BROWN & BROWN, INC.
|
|
|
|
|
|
|
|
|
||
|
|
|
|
/s/ R. Andrew Watts
|
Date: August 5, 2016
|
|
|
|
R. Andrew Watts
|
|
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
|
|
(duly authorized officer, principal financial officer and principal accounting officer)
|
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