News Release

DAYTONA BEACH, FL -- (Marketwired) -- 01/25/16 -- Brown & Brown, Inc.(NYSE: BRO) (the "Company") today announced its unaudited financial results for the fourth quarter of 2015. 

Revenues for the fourth quarter of 2015 under U.S. generally accepted accounting principles ("GAAP") were $404.7 million, increasing $11.6 million, or 3.0%, as compared to the fourth quarter of the prior year, with Organic Revenue (as defined below) increasing by 2.5%. Diluted earnings per share under GAAP were $0.41 and $0.38 on an adjusted basis, an increase of 5.6% as detailed in the schedules below.

Revenues for the twelve months ended December 31, 2015 under GAAP were $1,660.6 million, increasing $84.8 million, or 5.4%, as compared to the same period of 2014, with Organic Revenue (as defined below) increasing by 2.6%. Diluted earnings per share for the twelve months ended December 31, 2015 under GAAP were $1.70 compared to $1.41 for the same period of 2014, representing a 20.6% increase. On an adjusted basis, the earnings per share for the twelve months ended December 31, 2015 were $1.67 as compared to $1.63 for the same period in 2014, an increase of 2.5%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are pleased with the continued improved performance we delivered in the fourth quarter and the outlook for our business moving forward."

In the fourth quarter of 2015, the Company initiated a $75 million accelerated share repurchase program (ASR), which was completed in January 2016. The ASR completed the remainder of the $200 million board-approved repurchase plan announced in July 2014 and was part of the $400 million board-approved repurchase plan announced in July 2015. Following completion of the ASR, the Company had remaining authorization to repurchase up to an additional $375 million of the Company's common stock.

1. "Organic Revenue" is defined as total commissions and fees less (i) the first twelve months of net commission and fee revenues generated from acquisitions accounted for as purchases less (ii) profit-sharing contingent commissions (revenues from insurance companies based upon the volume and the growth and/or profitability of the business placed with such companies during the prior year - "Contingents"), less (iii) guaranteed supplemental commissions (commissions from insurance companies based solely upon the volume of the business placed with such companies during the current year - "GSCs"), and less (iv) divested business (net commissions and fees generated from offices, books of business or niche businesses sold by the Company) with the associated revenue removed from the corresponding period of the prior year.
2. The Retail Segment includes commissions and fees, which will be reported in the "Other" column of the Segment Information in the Notes to the Consolidated Financial Statements on the Company's Form 10-K, which includes corporate and consolidation items.

Due to a pre-tax credit adjustment of $8.1 million on non-cash stock-based compensation and a net change in the change estimated acquisition earn-out payables of $2.6 million, we believe it is appropriate to adjust for the margin impact of these items in order to arrive at results that are more comparable to the prior year. After these adjustments, our diluted Earnings Per Share - Adjusted (as defined below) were $0.38 for the three months ended December 31, 2015, increasing 5.6%. For the twelve months ended December 31, 2015, adjusting for the items noted above Earnings Per Share - Adjusted (as defined below) were $1.67 compared to $1.63 in the prior year after adjusting for a pre-tax loss of $47.4 million associated with the sale of certain assets of Axiom Re, a subsidiary of the Company, a pre-tax credit adjustment of $5.9 million on non-cash stock-based compensation, and the net change in the change estimated acquisition earn-out payables of $7.0 million.

3. Column does not add, due to cumulative effect of rounding on individual items.

In order to provide a better understanding of our business, we evaluate EBITDAC (defined below) performance. EBITDAC for the fourth quarter of 2015 was $133.1 million, an increase of $53.0 million or 66.2%, compared to the fourth quarter of the prior year. The associated EBITDAC Margin (defined below) increased to 32.9%. For the reasons stated above, we believe EBITDAC - Adjusted (as defined below) provides a more appropriate comparison to the prior year. EBITDAC - Adjusted increased 2.8% to $125.0 million for the fourth quarter of 2015 as compared to the fourth quarter of the prior year.

4. "EBITDAC" is defined as income before income taxes less amortization, depreciation, interest, and the change in estimated acquisition earn-out payables.
5. "EBITDAC Margin" is defined as EBITDAC divided by total revenues.

Conference call, webcast and slide presentation
A conference call to discuss the results of the fourth quarter of 2015 will be held on Tuesday, January 26, 2016 at 8:00 AM (EST). The Company may refer to a slide presentation during its conference call. You can access the webcast and the slides from the "Investor Relations" section of the Company's website at www.bbinsurance.com.

About Brown & Brown
Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance 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.

Forward-looking statements
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 fourth quarter and full year of 2015 and those relating to potential repurchases of the Company's common stock. 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 fourth quarter and full year of 2015 that its financial results differ from the current preliminary unaudited numbers set forth herein; fluctuations in the Company's stock's market price; fluctuations in operating results and cash flows; 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 the Company conducts business; competition from others in the insurance agency, wholesale brokerage, insurance programs and service business; 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; the potential occurrence of a disaster that affects certain areas including, but not limited to, the States of California, Florida, Georgia, Illinois, Indiana, Kansas, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, Virginia and/or Washington, where significant portions of the Company's business are conducted; and 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, 2014, and the Company's other 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. 

Non-GAAP supplemental financial information
This press release contains references to non-GAAP financial measures as defined in Regulation G of SEC rules, including Organic Revenue, Earnings Per Share - Adjusted, EBITDAC, EBITDAC - Adjusted and EBITDAC Margin. A reconciliation of this supplemental non-GAAP financial information to the Company's GAAP information is contained in this earnings release. We present such non-GAAP supplemental financial information, as we believe such information is of interest to the investment community because it provides additional meaningful methods of evaluating certain aspects of the Company's operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. This supplemental financial information should be considered in addition to, not in lieu of, the Company's condensed consolidated financial statements.

R. Andrew Watts
Chief Financial Officer
(386) 239-5770

Source: Brown & Brown, Inc.