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Brown & Brown, Inc. Announces Record Quarterly Net Income of $60.1 Million

April 15, 2013

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DAYTONA BEACH, FL and TAMPA, FL -- (Marketwired) -- 04/15/13 -- Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the first quarter of 2013.

Net income for the first quarter of 2013 was $60,131,000, or $0.41 per share, compared with $49,433,000, or $0.34 per share for the same quarter of 2012, an increase of 21.6%. Total revenue for the first quarter was $335,012,000, compared with 2012 first-quarter revenue of $302,486,000, an increase of 10.8%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "We are pleased to have surpassed a quarterly milestone of $60 million of quarterly net income, and to have achieved a quarterly internal growth rate of our core commissions and fees revenue of 10.2%."

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 first 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 first 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 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
March 31,
2013 2012
REVENUES
Commissions and fees $ 333,793 $ 296,533
Investment income 186 135
Other income, net 1,033 5,818
Total revenues 335,012 302,486
EXPENSES
Employee compensation and benefits 159,498 149,596
Non-cash stock-based compensation 3,850 3,747
Other operating expenses 46,339 43,400
Amortization 16,161 15,613
Depreciation 4,167 3,641
Interest 3,984 4,087
Change in estimated acquisition earn-out payables 1,522 (388 )
Total expenses 235,521 219,696
Income before income taxes 99,491 82,790
Income taxes 39,360 33,357
Net income $ 60,131 $ 49,433
Net income per share:
Basic $ 0.42 $ 0.34
Diluted $ 0.41 $ 0.34
Weighted average number of shares outstanding:
Basic 140,796 139,001
Diluted 142,947 141,500
Dividends declared per share $ 0.090 $ 0.0850
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Organic Commissions and Fees(1)
Three Months Ended March 31, 2013
(in thousands)
(unaudited)
Quarter
Ended
03/31/13		 Quarter
Ended
03/31/12		 Total
Net
Change		 Total
Net
Growth % 		Less
Acquisition
Revenues		 Internal
Net
Growth $		 Internal
Net
Growth %
Retail(2) $ 158,950 $ 149,971 $ 8,979 6.0 % $ 7,830 $ 1,149 0.8 %
National Programs 61,706 53,630 8,076 15.1 % 1,483 6,593 12.3 %
Wholesale Brokerage 43,271 38,366 4,905 12.8 % 1,547 3,358 8.8 %
Services 42,605 25,762 16,843 65.4 % 657 16,186 62.8 %
Total Core Commissions and Fees (1) $
306,532		 $
267,729		 $
38,803
14.5		 % $
11,517		 $
27,286
10.2		 %
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended March 31, 2013 and 2012
(in thousands)
(unaudited)
Quarter
Ended
03/31/13		 Quarter
Ended
03/31/12
Total core commissions and fees(1) $ 306,532 $ 267,729
Profit-sharing contingent commissions 25,039 24,221
Guaranteed supplemental commissions 2,222 2,592
Divested business - 1,991
Total commissions & fees $ 333,793 $ 296,533
(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)
March 31, December 31,
2013 2012
ASSETS
Current assets:
Cash and cash equivalents $ 340,206 $ 219,821
Restricted cash and investments 186,768 164,564
Short-term investments 7,228 8,183
Premiums, commissions and fees receivable 303,882 302,725
Deferred income taxes 16,041 24,408
Other current assets 27,488 39,811
Total current assets 881,613 759,512
Fixed assets, net 73,067 74,337
Goodwill 1,709,279 1,711,514
Amortizable intangible assets, net 550,689 566,538
Other assets 15,712 16,157
Total assets $ 3,230,360 $ 3,128,058
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 443,290 $ 406,704
Premium deposits and credits due customers 25,343 32,867
Accounts payable 63,303 48,524
Accrued expenses and other liabilities 85,285 79,593
Current portion of long-term debt 93 93
Total current liabilities 617,314 567,781
Long-term debt 450,000 450,000
Deferred income taxes, net 244,883 237,630
Other liabilities 58,907 65,314
Shareholders' equity:
Common stock, par value $0.10 per share; authorized 280,000 shares; issued and outstanding 143,990 at 2013 and 143,878 at 2012
14,399
14,388
Additional paid-in capital 340,606 335,872
Retained earnings 1,504,251 1,457,073
Total shareholders' equity 1,859,256 1,807,333
Total liabilities and shareholders' equity $ 3,230,360 $ 3,128,058

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

Source: Brown & Brown, Inc.

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