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Brown & Brown, Inc. Second Quarter Results Achieve New Records for Revenues and Income

July 18, 2005

DAYTONA BEACH, Fla. and TAMPA, Fla., July 18 /PRNewswire-FirstCall/ -- Brown & Brown, Inc. (NYSE: BRO) announced net income for the second quarter of 2005 of $37,033,000, or $0.53 per share, an increase of 15.2% from the $32,153,000, or $0.46 per share, reported for the quarter ended June 30, 2004. Total revenue for the quarter ended June 30, 2005 was $195,931,000, compared with 2004 second-quarter revenue of $157,942,000, an increase of 24.1%.

Total revenue for the first half of 2005 was $398,305,000, compared with six months ended June 30, 2004 revenue of $323,507,000, up 23.1%. Net income for the first six months of 2005 was $80,051,000, versus $68,501,000 during the comparable 2004 period, an increase of 16.9%. Net income per share for the six months ended June 30, 2005 was $1.15, versus the $0.99 per share posted during the same 2004 period, an increase of 16.2%.

J. Hyatt Brown, Chairman and CEO, noted, "We continue to be quite pleased with the results generated by our outstanding team of insurance professionals. These results are even more impressive given the softening and compression of insurance premium rates in virtually all parts of the country. In some regions, such as Florida, this decline in rates is being slightly offset by an increase in business exposure units, created by an improving economy. We anticipate that we will continue to meet the challenge of these market changes as they arise."

President and Chief Operating Officer Jim W. Henderson added, "We completed two small transactions in the second quarter that increased our annualized acquired revenue to approximately $94 million for the first six months of 2005. We continue to be pleased with the number and quality of acquisition prospects in the pipeline. As the market continues to soften, it requires us to be even more vigilant in evaluating the long-term sustainability of the margins and earning power of each acquisition candidate."

Brown & Brown, Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, third-party administration and managed health care programs. Providing service to business, public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' eighth largest independent insurance intermediary. The Company's Web address is http://www.bbinsurance.com .

This press release may contain certain statements relating to future results which are forward-looking statements, including those relating to continuing our revenue, earnings and operating growth, as well as identifying and consummating attractive acquisition opportunities. 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. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results and condition, as well as its other achievements, are contained in the Company's filings with the Securities and Exchange Commission. Some factors include: general economic conditions around the country; downward commercial property and casualty premium pressures; the competitive environment; 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 of the states of Arizona, California, Florida, Georgia, New Jersey, New York, Pennsylvania and/or Washington, where significant portions of the Company's business are concentrated; the actual costs of resolution of contingent liabilities; those factors relevant to Brown & Brown's consummation and integration of announced acquisitions, including any matters analyzed in the due diligence process, material adverse changes in the customers of the companies whose operations are acquired, and material adverse changes in the business and financial condition of either or both companies and their respective customers; and the cost and impact on the Company of previously disclosed litigation initiated against the Company and regulatory inquiries regarding industry and Company practices with respect to compensation received from insurance carriers. All forward-looking statements made during any conference call or web cast are made only as of the date of such conference call and web cast, and we do not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.



                             Brown & Brown, Inc.
                      CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands, except per share data)
                                 (unaudited)

                                           For the               For the
                                      Three Months Ended    Six Months Ended
                                            June 30              June 30
                                         2005      2004      2005      2004
    REVENUES
    Commissions and fees              $192,738  $156,749  $393,053  $321,063
    Investment income                    1,524       333     2,489     1,021
    Other income, net                    1,669       860     2,763     1,423
        Total revenues                 195,931   157,942   398,305   323,507

    EXPENSES
    Employee compensation and
     benefits                           94,100    76,270   184,484   152,552
    Non-cash stock grant
     compensation                          788       665     1,679     1,510
    Other operating expenses            25,980    19,983    53,122    41,379
    Amortization                         8,357     5,483    15,892    10,300
    Depreciation                         2,527     2,269     4,894     4,423
    Interest                             3,711       743     7,253     1,454
       Total expenses                  135,463   105,413   267,324   211,618

    Income before income taxes          60,468    52,529   130,981   111,889

    Income taxes                        23,435    20,376    50,930    43,388

    Net income                         $37,033   $32,153   $80,051   $68,501

    Net income per share:
      Basic                              $0.54     $0.47     $1.16     $1.00
      Diluted                            $0.53     $0.46     $1.15     $0.99

    Weighted average number of
     shares outstanding:
      Basic                             69,156    68,790    69,159    68,736
      Diluted                           69,738    69,370    69,724    69,283

    Dividends declared per share         $0.08     $0.07     $0.16     $0.14



                             Brown & Brown, Inc.
                           INTERNAL GROWTH SCHEDULE
                         Core Commissions and Fees(1)
                       Three Months Ended June 30, 2005
                                (in thousands)
                                 (unaudited)

                          Quarter  Quarter   Total  Total     Less    Internal
                           Ended    Ended     Net    Net   Acquisition   Net
                          6/30/05  6/30/04  Change Growth % Revenues  Growth %


    Florida Retail        $40,989  $35,928  $5,061   14.1 %   $1,827     9.0 %
    National Retail        51,541   47,225   4,316    9.1 %    4,452    (0.3)%
    Western Retail         25,830   28,802  (2,972) (10.3)%      113   (10.7)%
         Total Retail     118,360  111,955   6,405    5.7 %    6,392     0.0 %

    Professional Programs   9,515   10,087    (572)  (5.7)%       --    (5.7)%
    Special Programs       20,335   14,659   5,676   38.7 %    3,768    13.0 %
         Total Programs    29,850   24,746   5,104   20.6 %    3,768     5.4 %

    Brokerage              34,077    8,322  25,755  309.5 %   24,117    19.7 %

    TPA Services            6,449    6,086     363    6.0 %       --     6.0 %

    Total Core
     Commissions
     and Fees (1)        $188,736 $151,109 $37,627   24.9 %  $34,277     2.2 %



                  Reconciliation of Internal Growth Schedule
                        to Total Commissions and Fees
              Included in the Consolidated Statements of Income
                for the Three Months Ended June 2005 and 2004
                                (in thousands)
                                 (unaudited)

                                                     Quarter         Quarter
                                                      Ended           Ended
                                                     6/30/05         6/30/04
    Total core commissions and fees(1)               $188,736       $151,109
    Contingent commissions                              4,002          3,522
    Divested business                                      --          2,118

    Total commission & fees                          $192,738       $156,749

     (1) Total core commissions and fees are our total commissions and fees
     less (i) contingent commissions (revenue 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), and (ii) divested business (commissions
     and fees generated from offices, books of business or niches sold by the
     Company or terminated).



                             Brown & Brown, Inc.
                         CONSOLIDATED BALANCE SHEETS
                    (in thousands, except per share data)
                                 (unaudited)

                                                        June 30, December 31,
                                                          2005        2004

    ASSETS
    Current assets:
      Cash and cash equivalents                         $42,940     $188,106
      Restricted cash and investments                   236,504      147,483
      Short-term investments                              2,831        3,163
      Premiums, commissions and fees receivable         217,209      172,395
      Other current assets                               24,280       28,819
        Total current assets                            523,764      539,966

    Fixed assets, net                                    38,489       33,438
    Goodwill                                            523,610      360,843
    Amortizable intangible assets, net                  363,543      293,009
    Investments                                           7,940        9,328
    Other assets                                         10,090       12,933
        Total assets                                 $1,467,436   $1,249,517

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
      Premiums payable to insurance companies          $370,431     $242,414
      Premium deposits and credits due customers         24,002       32,273
      Accounts payable                                   20,744       16,257
      Accrued expenses                                   52,994       58,031
      Current portion of long-term debt                  49,699       16,135
        Total current liabilities                       517,870      365,110

    Long-term debt                                      220,246      227,063

    Deferred income taxes, net                           25,555       24,859

    Other liabilities                                     9,078        8,160

    Shareholders' equity:
      Common stock, par value $0.10 per share;
       authorized 280,000 shares; issued and
       outstanding 69,143 at 2005 and 69,159 at
       2004                                               6,914        6,916
      Additional paid-in capital                        189,371      187,280
      Retained earnings                                 494,649      425,662
      Accumulated other comprehensive income              3,753        4,467

        Total shareholders' equity                      694,687      624,325

        Total liabilities and shareholders' equity   $1,467,436   $1,249,517
SOURCE  Brown & Brown, Inc.
    -0-                             07/18/2005
    /CONTACT:  Cory T. Walker, Chief Financial Officer of Brown & Brown, Inc.,
+1-386-239-7250/
    /Web site:  http://www.bbinsurance.com /
    (BRO)

CO:  Brown & Brown, Inc.
ST:  Florida
IN:  INS
SU:  ERN

MR-MD
-- FLM017 --
7837 07/18/2005 16:37 EDT http://www.prnewswire.com

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