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Brown & Brown, Inc. Announces a 24.1% Increase in Earnings per Share

July 15, 2013

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DAYTONA BEACH, FL and TAMPA, FL -- (Marketwired) -- 07/15/13 -- Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the second quarter of 2013.

Net income for the second quarter of 2013 was $52,007,000, or $0.36 per share, compared with $42,471,000, or $0.29 per share for the same quarter of 2012, an increase of 24.1%. Total revenue for the second quarter was $325,792,000, compared with 2012 second-quarter revenue of $290,916,000, an increase of 12.0%.

Total revenue for the six months ended June 30, 2013 was $660,804,000, compared with total revenue for the same period of 2012 of $593,402,000, an increase of 11.4%. Net income for the six-month period ended June 30, 2013 was $112,138,000, or $0.77 per share, compared with $91,904,000, or $0.63 per share for the same period of 2012, an increase of 22.0%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are very pleased with our quarterly consolidated internal growth rate in core commissions and fees (see the calculation and explanation of this term later in the release) of 7.4%. Our largest Division, Retail, continues to show nice improvements with a quarterly internal growth rate in core commissions and fees of 2.3%, which reflects a gradual, but steady improvement in the middle-market economy. Our other Divisions, National Programs, Wholesale Brokerage, and Services, each had exceptional quarterly internal growth rates in core commissions and fees in excess of 10.0%."

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' sixth 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 second 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 second 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
June 30,		 For the
Six Months Ended
June 30,
2013 2012 2013 2012
REVENUES
Commissions and fees $ 324,150 $ 289,942 $ 657,943 $ 586,475
Investment income 239 187 425 322
Other income, net 1,403 787 2,436 6,605
Total revenues 325,792 290,916 660,804 593,402
EXPENSES
Employee compensation and benefits 163,514 150,752 323,012 300,348
Non-cash stock-based compensation 3,623 3,738 7,473 7,485
Other operating expenses 47,397 42,220 93,736 85,620
Amortization 16,121 15,881 32,282 31,494
Depreciation 4,263 3,784 8,430 7,425
Interest 3,997 4,000 7,981 8,087
Change in estimated acquisition earn-out payables
656
(604		 ) 2,178 (992 )
Total expenses 239,571 219,771 475,092 439,467
Income before income taxes 86,221 71,145 185,712 153,935
Income taxes 34,214 28,674 73,574 62,031
Net income $ 52,007 $ 42,471 $ 112,138 $ 91,904
Net income per share:
Basic $ 0.36 $ 0.30 $ 0.78 $ 0.64
Diluted $ 0.36 $ 0.29 $ 0.77 $ 0.63
Weighted average number of shares outstanding:
Basic 140,836 139,086 140,816 139,044
Diluted 143,021 141,828 142,938 141,664
Dividends declared per share $ 0.09 $ 0.085 $ 0.18 $ 0.17
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Organic Commissions and Fees(1)
Three Months Ended June 30, 2013
(in thousands)
(unaudited)
Quarter
Ended
06/30/13		 Quarter
Ended
06/30/12		 Total
Net
Change		 Total
Net
Growth %		 Less
Acquisition
Revenues		 Internal
Net
Growth $		 Internal
Net
Growth %
Retail(2) $ 168,582 $ 158,035 $ 10,547 6.7 % $ 6,922 $ 3,625 2.3 %
National Programs 62,860 53,135 9,725 18.3 % - 9,725 18.3 %
Wholesale Brokerage 52,858 46,286 6,572 14.2 % 1,592 4,980 10.8 %
Services 30,271 27,521 2,750 10.0 % - 2,750 10.0 %
Total Core Commissions and Fees (1) $
314,571		 $
284,977		 $
29,594
10.4		 % $
8,514		 $
21,080
7.4		 %
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended June 30, 2013 and 2012
(in thousands)
(unaudited)
Quarter
Ended
06/30/13		 Quarter
Ended
06/30/12
Total core commissions and fees(1) $ 314,571 $ 284,977
Profit-sharing contingent commissions 7,879 1,043
Guaranteed supplemental commissions 1,700 2,258
Divested business - 1,664
Total commissions & fees $ 324,150 $ 289,942

(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)
June 30, 2013 December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents $ 385,525 $ 219,821
Restricted cash and investments 210,538 164,564
Short-term investments 12,205 8,183
Premiums, commissions and fees receivable 310,486 302,725
Deferred income taxes 15,051 24,408
Other current assets 38,767 39,811
Total current assets 972,572 759,512
Fixed assets, net 72,929 74,337
Goodwill 1,722,828 1,711,514
Amortizable intangible assets, net 538,767 566,538
Other assets 19,224 16,157
Total assets $ 3,326,320 $ 3,128,058
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 476,529 $ 406,704
Premium deposits and credits due customers 31,216 32,867
Accounts payable 46,884 48,524
Accrued expenses and other liabilities 107,153 79,593
Current portion of long-term debt 33 93
Total current liabilities 661,815 567,781
Long-term debt 450,000 450,000
Deferred income taxes, net 249,195 237,630
Other liabilities 63,252 65,314
Shareholders' equity:
Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 144,045 at 2013 and 143,878 at 2012
14,405
14,388
Additional paid-in capital 344,354 335,872
Retained earnings 1,543,299 1,457,073
Total shareholders' equity 1,902,058 1,807,333
Total liabilities and shareholders' equity $ 3,326,320 $ 3,128,058

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

Source: Brown & Brown, Inc.

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