Business Combinations (Tables)

9 Months Ended

Sep. 30, 2018

Purchase price allocation for current year acquisitions and adjustments made for prior year acquisitions



(in thousands)
Name	Business segment	Effective date of acquisition	Cash paid		Other payable		Recorded earn-out payable		Net assets acquired		Maximum potential earn- out payable
Opus Advisory Group, LLC (Opus)	Retail	February 1, 2018	$	20,400	$	200	$	2,384	$	22,984	$	3,600
Kerxton Insurance Agency, Inc. (Kerxton)	Retail	March 1, 2018	13,177		1,490		2,080		16,747		2,920
Automotive Development Group, LLC (ADG)	Retail	May 1, 2018	29,471		559		17,545		47,575		20,000
Servco Pacific, Inc. (Servco)	Retail	June 1, 2018	76,551		—		916		77,467		7,000
Tower Hill Prime Insurance Company (Tower Hill)	National Programs	July 1, 2018	20,300		—		2,628		22,928		7,700
Health Special Risk, Inc. (HSR)	National Programs	July 1, 2018	20,132		—		1,991		22,123		9,000
Professional Disability Associates, LLC (PDA)	Services	July 1, 2018	15,025		—		9,818		24,843		17,975
Finance & Insurance Resources, Inc. (F&I)	Retail	September 1, 2018	44,940		410		9,121		54,471		19,500
Other	Various	Various	25,894		680		5,234		31,808		10,200
Total			$	265,890	$	3,339	$	51,717	$	320,946	$	97,895

Estimated fair values of aggregate assets and liabilities acquired

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period of the prior year acquisitions.



(in thousands)	Opus		Kerxton			ADG		Servco			Tower Hill		HSR			PDA			F&I		Other			Total
Cash	$	—	$	—		$	—	$	8,189		$	—	$	3,114		$	—		$	—	$	—		$	11,303
Other current assets	—		—			1,500		8,075			—		818			1,762			999		253			13,407
Fixed assets	11		10			67		178			$	—	$	124		$	309		$	34	$	99		$	832
Goodwill	17,944		13,417			36,236		53,901			—		18,737			17,273			36,806		20,245			214,559
Purchased customer accounts	5,008		4,712			9,751		16,902			22,928		5,516			7,700			16,611		12,653			101,781
Non-compete agreements	21		22			21		1			—		65			82			21		273			506
Other assets	—		—			—		1,528			—		21			(787		)	—		—			762
Total assets acquired	22,984		18,161			47,575		88,774			22,928		28,395			26,339			54,471		33,523			343,150
Other current liabilities	—		(1,414		)	—		(11,307		)	—		(5,930		)	(1,273		)	—		(1,715		)	(21,639		)
Other liabilities	—		—			—		—			—		(342		)	(223		)	—		—			(565		)
Total liabilities assumed	—		(1,414		)	—		(11,307		)	—		(6,272		)	(1,496		)	—		(1,715		)	(22,204		)
Net assets acquired	$	22,984	$	16,747		$	47,575	$	77,467		$	22,928	$	22,123		$	24,843		$	54,471	$	31,808		$	320,946

Unaudited pro forma results

These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods.



(UNAUDITED)	Three months ended September 30,				Nine months ended September 30,
(in thousands, except per share data)	2018		2017		2018		2017
Total revenues	$	533,038	$	499,846	$	1,547,556	$	1,477,640
Income before income taxes	$	143,402	$	130,171	$	372,204	$	360,034
Net income	$	106,742	$	79,422	$	278,551	$	222,407
Net income per share:
Basic	$	0.38	$	0.28	$	1.01	$	0.79
Diluted	$	0.38	$	0.28	$	0.99	$	0.78
Weighted average number of shares outstanding:
Basic	271,008		272,692		270,423		273,184
Diluted	275,282		277,786		275,614		278,022

Additions, payments, and net changes, as well as interest expense accretion on estimated acquisition earn-out payables

The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three and nine months ended September 30, 2018 and 2017, were as follows:



	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2018			2017			2018			2017
Balance as of the beginning of the period	$	52,540		$	57,943		$	36,175		$	63,821
Additions to estimated acquisition earn-out payables	29,646			1,050			51,717			1,332
Payments for estimated acquisition earn-out payables	(16,521		)	(23,511		)	(25,112		)	(39,288		)
Subtotal	65,665			35,482			62,780			25,865
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables	(928		)	(1,784		)	945			6,402
Interest expense accretion	571			476			1,583			1,907
Net change in earnings from estimated acquisition earn-out payables	(357		)	(1,308		)	2,528			8,309
Balance as of September 30,	$	65,308		$	34,174		$	65,308		$	34,174