Brown & Brown, Inc. (NYSE: BRO) today announced its financial
results for the third quarter of 2011.
Net income for the third quarter of 2011 was $44,173,000, or
$0.30 per share, compared with $44,293,000, or $0.31 per share for
the same quarter of 2010, a decrease of 0.3%. Total revenue for the
third quarter ended September 30, 2011 was $260,401,000, compared
with 2010 third-quarter revenue of $247,616,000, an increase of
5.2%.
Total revenue for the nine months ended September 30, 2011 was
$769,445,000, compared with total revenue for the same period of
2010 of $743,554,000. Net income for the nine-month period ended
September 30, 2011 was $127,501,000, or $0.88 per share, compared
with $129,606,000, or $0.90 per share for the same period of
2010.
J. Powell Brown, President and Chief Executive Officer of Brown
& Brown, Inc., noted, "We continue to swim upstream against a
very difficult economy. We are pleased that our Services, National
Programs and Wholesale Brokerage Divisions achieved positive
internal revenue growth for the third quarter."
In the third quarter of 2011, $2,600,000 was expensed as a
result of a legal claim first raised in 1994 that a subsidiary of
the Company vigorously defended for 17 years until exhausting all
appellate avenues for review. This claim expense reduced the
Company's diluted net income per share for the third quarter of
2011 by $0.01.
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' seventh
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 future financial results and to 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 effects of
legislative and regulatory changes in Florida pertaining to the
insurance industry, including those relating to coastal property
coverages; 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; and the
potential occurrence of a disaster that affects certain areas of
the States of California, Florida, Indiana, Michigan, New Jersey,
New York, Pennsylvania, Texas and/or Washington, where significant
portions of the Company's business are concentrated. 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 For the
Three Months Ended Nine Months Ended
September 30 September 30
-------------------- -------------------
2011 2010 2011 2010
--------- --------- --------- ---------
REVENUES
Commissions and fees $ 257,177 $ 246,102 $ 764,612 $ 737,829
Investment income 317 345 934 1,022
Other income, net 2,907 1,169 3,899 4,703
--------- --------- --------- ---------
Total revenues 260,401 247,616 769,445 743,554
--------- --------- --------- ---------
EXPENSES
Employee compensation and benefits 126,877 122,001 379,286 365,556
Non-cash stock-based compensation 2,856 1,495 8,338 5,230
Other operating expenses 38,434 31,301 109,489 101,256
Amortization 13,725 12,869 40,790 38,072
Depreciation 3,062 3,116 9,276 9,498
Interest 3,565 3,607 10,780 10,847
Change in estimated acquisition
earn-out payables (810) 193 656 (1,036)
--------- --------- --------- ---------
Total expenses 187,709 174,582 558,615 529,423
--------- --------- --------- ---------
Income before income taxes 72,692 73,034 210,830 214,131
Income taxes 28,519 28,741 83,329 84,525
--------- --------- --------- ---------
Net income $ 44,173 $ 44,293 $ 127,501 $ 129,606
========= ========= ========= =========
Net income per share:
Basic $ 0.31 $ 0.31 $ 0.89 $ 0.91
========= ========= ========= =========
Diluted $ 0.30 $ 0.31 $ 0.88 $ 0.90
========= ========= ========= =========
Weighted average number of shares
outstanding:
Basic 138,690 138,093 138,475 137,802
========= ========= ========= =========
Diluted 140,443 139,507 140,120 139,128
========= ========= ========= =========
Dividends declared per share $ 0.0800 $ 0.0775 $ 0.2400 $ 0.2325
========= ========= ========= =========
Brown & Brown, Inc.
INTERNAL GROWTH SCHEDULE
Core Commissions and Fees (1)
Three Months Ended September 30, 2011
(in thousands)
(unaudited)
Total Less
Quarter Quarter Total Net Acquisi- Internal Internal
Ended Ended Net Growth tion Net Net
09/30/11 09/30/10 Change % Revenues Growth $ Growth %
-------- -------- ------- ------ -------- -------- --------
Florida
Retail $ 34,840 $ 34,173 $ 667 2.0% $ 1,674 $ (1,007) (2.9)%
National
Retail 87,307 80,611 6,696 8.3% 10,227 (3,531) (4.4)%
Western
Retail 26,680 25,028 1,652 6.6% 3,539 (1,887) (7.5)%
-------- -------- ------- -------- --------
Total
Retail 148,827 139,812 9,015 6.4% 15,440 (6,425) (4.6)%
-------- -------- ------- -------- --------
Professional
Programs 11,525 11,675 (150) (1.3)% - (150) (1.3)%
Special
Programs 38,637 37,542 1,095 2.9% 675 420 1.1%
-------- -------- ------- -------- --------
Total
National
Programs 50,162 49,217 945 1.9% 675 270 0.5%
-------- -------- ------- -------- --------
Wholesale
Brokerage 34,505 34,369 136 0.4% - 136 0.4%
Services 16,450 11,786 4,664 39.6% 4,352 312 2.6%
-------- -------- ------- -------- --------
Total Core
Commissions
and
Fees (1) $249,944 $235,184 $14,760 6.3% $ 20,467 $ (5,707) (2.4)%
======== ======== ======= ======== ========
Reconciliation of Internal Growth Schedule
to Total Commissions and Fees
Included in the Consolidated Statements of Income
For the Three Months Ended September 30, 2011 and 2010
(in thousands)
(unaudited)
Quarter Quarter
Ended Ended
09/30/11 09/30/10
------------- -------------
Total core commissions and fees (1) $ 249,944 $ 235,184
Contingent commissions 7,233 9,667
Divested business - 1,251
------------- -------------
Total commission & fees $ 257,177 $ 246,102
============= =============
(1) Total core commissions and fees are our total commissions and fees less
(i) profit-sharing 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)
September 30, December 31,
2011 2010
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 334,497 $ 272,984
Restricted cash and investments 146,033 123,594
Short-term investments 7,612 7,678
Premiums, commissions and fees receivable 212,051 214,446
Deferred income taxes 8,837 20,076
Other current assets 23,664 14,031
------------- -------------
Total current assets 732,694 652,809
Fixed assets, net 59,807 59,713
Goodwill 1,268,957 1,194,827
Amortizable intangible assets, net 481,930 481,900
Other assets 17,915 11,565
------------- -------------
Total assets $ 2,561,303 $ 2,400,814
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Premiums payable to insurance companies $ 325,996 $ 311,346
Premium deposits and credits due customers 46,440 28,509
Accounts payable 24,062 33,693
Accrued expenses and other liabilities 90,641 94,947
Current portion of long-term debt 1,142 1,662
------------- -------------
Total current liabilities 488,281 470,157
Long-term debt 250,603 250,067
Deferred income taxes, net 167,074 146,482
Other liabilities 38,784 27,764
Shareholders' equity:
Common stock, par value $0.10 per share;
authorized 280,000 shares; issued and
outstanding 143,382 at 2011 and 142,795 at
2010 14,338 14,279
Additional paid-in capital 303,966 286,997
Retained earnings 1,298,256 1,205,061
Accumulated other comprehensive income 1 7
------------- -------------
Total shareholders' equity 1,616,561 1,506,344
------------- -------------
Total liabilities and shareholders' equity $ 2,561,303 $ 2,400,814
============= =============
Cory T. Walker Chief Financial Officer (386) 239-7250
Brown and Brown (NYSE:BRO)
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