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Brown & Brown, Inc. Announces Record Fourth-Quarter Earnings of $42.6 Million

February 01, 2013

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DAYTONA BEACH, FL and TAMPA, FL -- (MARKETWIRE) -- 02/01/13 -- Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the fourth quarter of 2012.

Net income for the fourth quarter of 2012 was $42,637,000, or $0.29 per share, compared with $36,494,000, or $0.25 per share for the same quarter of 2011, an increase of 16.8%. Total revenue for the fourth quarter was $302,830,000, compared with 2011 fourth-quarter revenue of $244,097,000, an increase of 24.1%.

Total revenue for the twelve months ended December 31, 2012 was $1,200,032,000, compared with total revenue for the same period of 2011 of $1,013,542,000, an increase of 18.4%. Net income for the twelve-month period ended December 31, 2012 was $184,045,000, or $1.26 per share, compared with $163,995,000, or $1.13 per share for the same period of 2011, an increase of 12.2%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "The fourth-quarter results were the culmination of the hard work of our 6,300-plus teammates throughout 2012. Two of our most important goals for 2012 -- to grow our revenues organically and to improve each and every quarter -- were accomplished. I am very proud of what we achieved in the fourth quarter and for the year. We will continue to work tirelessly for the benefit of our clients in 2013."

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 fourth quarter of 2012. 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 of 2012 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, 2011, 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.

Brown & Brown, Inc.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
For the
Three Months Ended
December 31,		 For the
Twelve Months Ended
December 31,
2012 2011 2012 2011
REVENUES
Commissions and fees $ 300,296 $ 241,350 $ 1,189,081 $ 1,005,962
Investment income 236 333 797 1,267
Other income, net 2,298 2,414 10,154 6,313
Total revenues 302,830 244,097 1,200,032 1,013,542
EXPENSES
Employee compensation and benefits 158,467 129,389 608,506 508,675
Non-cash stock-based compensation 4,472 2,856 15,865 11,194
Other operating expenses 44,995 34,590 174,389 144,079
Amortization 16,123 13,965 63,573 54,755
Depreciation 3,990 3,116 15,373 12,392
Interest 4,004 3,352 16,097 14,132
Change in estimated acquisition earn-out payables 1,552 (2,862 ) 1,418 (2,206 )
Total expenses 233,603 184,406 895,221 743,021
Income before income taxes 69,227 59,691 304,811 270,521
Income taxes 26,590 23,197 120,766 106,526
Net income $ 42,637 $ 36,494 $ 184,045 $ 163,995
Net income per share:
Basic $ 0.30 $ 0.25 $ 1.28 $ 1.15
Diluted $ 0.29 $ 0.25 $ 1.26 $ 1.13
Weighted average number of shares outstanding:
Basic 139,681 138,796 139,364 138,582
Diluted 142,314 140,547 142,010 140,264
Dividends declared per share $ 0.090 $ 0.0850 $ 0.3450 $ 0.3250
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Organic Commissions and Fees(1)
Three Months Ended December 31, 2012
(in thousands)
(unaudited)
Quarter
Ended
12/31/12		 Quarter
Ended
12/31/11		 Total
Net
Change		 Total
Net
Growth %		 Less
Acquisition
Revenues		 Internal Net
Growth $		 Internal Net
Growth %
Retail(2) $ 153,230 $ 139,257 $ 13,973 10.0 % $ 6,166 $ 7,807 5.6 %
National Programs 64,090 41,057 23,033 56.1 % 22,957 76 0.2 %
Wholesale Brokerage 40,299 35,595 4,704 13.2 % 1,738 2,966 8.3 %
Services 34,398 16,482 17,916 108.7 % 16,106 1,810 11.0 %
Total Core Commissions and Fees (1) $
292,017		 $
232,391		 $
59,626
25.7		 % $
46,967		 $
12,659
5.4		 %
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended December 31, 2012 and 2011
(in thousands)
(unaudited)
Quarter
Ended
12/31/12		 Quarter
Ended
12/31/11
Total core commissions and fees(1) $ 292,017 $ 232,391
Profit-sharing contingent commissions 6,342 4,810
Guaranteed supplemental commissions 1,937 2,459
Divested business - 1,690
Total commissions & fees $ 300,296 $ 241,350

(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)
December 31, 2012 December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents $ 219,821 $ 286,305
Restricted cash and investments 164,564 130,535
Short-term investments 8,183 7,627
Premiums, commissions and fees receivable 302,725 240,257
Deferred income taxes 24,408 19,863
Other current assets 39,811 23,540
Total current assets 759,512 708,127
Fixed assets, net 74,337 61,360
Goodwill 1,711,514 1,323,469
Amortizable intangible assets, net 566,538 496,182
Other assets 16,157 17,873
Total assets $ 3,128,058 $ 2,607,011
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 406,704 $ 327,096
Premium deposits and credits due customers 32,867 30,048
Accounts payable 48,524 22,384
Accrued expenses and other liabilities 79,593 100,865
Current portion of long-term debt 93 1,227
Total current liabilities 567,781 481,620
Long-term debt 450,000 250,033
Deferred income taxes, net 237,630 178,052
Other liabilities 65,314 53,343
Shareholders' equity:
Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 143,878 at 2012 and 143,352 at 2011 14,388 14,335
Additional paid-in capital 335,872 307,059
Retained earnings 1,457,073 1,322,562
Accumulated other comprehensive income - 7
Total shareholders' equity 1,807,333 1,643,963
Total liabilities and shareholders' equity $ 3,128,058 $ 2,607,011

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

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