10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q 

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-13619

BROWN & BROWN, INC.

(Exact name of Registrant as specified in its charter)

Florida		59-0864469
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
220 South Ridgewood Avenue, Daytona Beach, FL		32114
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (386) 252-9601

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 Par Value	BRO	New York Stock Exchange

The number of shares of the Registrant’s common stock, $0.10 par value, outstanding as of May 7, 2019 was 282,042,437.

BROWN & BROWN, INC.

INDEX

		PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Statements of Income for the three months ended March 31, 2019 and 2018	5
	Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018	6
	Condensed Consolidated Statements of Equity for the three months ended March 31, 2019 and 2018	7
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 6.	Exhibits	41
SIGNATURE		42

2

Disclosure Regarding Forward-Looking Statements

Brown & Brown, Inc., together with its subsidiaries (collectively, “we,” “Brown & Brown” or the “Company”), makes “forward-looking statements” within the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995, as amended, throughout this report and in the documents we incorporate by reference into this report. You can identify these statements by forward-looking words such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan” and “continue” or similar words. We have based these statements on our current expectations about potential future events. Although we believe the expectations expressed in the forward-looking statements included in this Quarterly Report on Form 10-Q and the reports, statements, information and announcements incorporated by reference into this report are based upon reasonable assumptions within the bounds of our knowledge of our business, a number of factors could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by us or on our behalf. Many of these factors have previously been identified in filings or statements made by us or on our behalf. Important factors which could cause our actual results to differ materially from the forward-looking statements in this report include but are not limited to the following items, in addition to those matters described in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”:

• Future prospects;

• Premium rates set by insurance companies and insurable exposure units, which have traditionally varied and are difficult to predict;

• Material adverse changes in economic conditions in the markets we serve and in the general economy;

• Future regulatory actions and conditions in the states in which we conduct our business;

• The occurrence of adverse economic conditions, an adverse regulatory climate, or a disaster in Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, Virginia, Washington and Wisconsin, because a significant portion of business written by us is for customers located in these states;

• Our ability to attract, retain and enhance qualified personnel and to maintain our corporate culture;

• Competition from others in or entering into the insurance agency, wholesale brokerage, insurance programs and related service business;

• Disintermediation within the insurance industry, including increased competition from insurance companies, technology companies and the financial services industry, as well as the shift away from traditional insurance markets;

• The integration of our operations with those of businesses or assets we have acquired, including our November 2018 acquisition of The Hays Group, Inc. and certain of its affiliates (collectively, “Hays Companies”), or may acquire in the future and the failure to realize the expected benefits of such integration;

• Risks that could negatively affect our acquisition strategy, including continuing consolidation among insurance intermediaries and the increasing presence of private equity investors driving up valuations;

• Our ability to forecast liquidity needs through at least the end of 2019;

• Our ability to renew or replace expiring leases;

• Outcomes of existing or future legal proceedings and governmental investigations;

• Policy cancellations and renewal terms, which can be unpredictable;

• Potential changes to the tax rate that would affect the value of deferred tax assets and liabilities and the impact on income available for investment or distribution to shareholders;

• The inherent uncertainty in making estimates, judgments, and assumptions in the preparation of financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”);

• Our ability to effectively utilize technology to provide improved value for our customers or carrier partners as well as applying effective internal controls and efficiencies in operations; and

• Other risks and uncertainties as may be detailed from time to time in our public announcements and Securities and Exchange Commission (“SEC”) filings.

3

Assumptions as to any of the foregoing and all statements are not based upon historical fact, but rather reflect our current expectations concerning future results and events. Forward-looking statements that we make or that are made by others on our behalf are based upon a knowledge of our business and the environment in which we operate, but because of the factors listed above, among others, actual results may differ from those in the forward-looking statements. Consequently, these cautionary statements qualify all of the forward-looking statements we make herein. We cannot assure you that the results or developments anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business or our operations in the way we expect. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of their dates. We assume no obligation to update any of the forward-looking statements.

4

PART I — FINANCIAL INFORMATION

ITEM 1 — Financial Statements (Unaudited)

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except per share data)	For the three months   ended March 31,
	2019		2018
REVENUES
Commissions and fees	$	617,463	$	500,338
Investment income	1,081		601
Other income, net	736		522
Total revenues	619,280		501,461
EXPENSES
Employee compensation and benefits	332,837		270,899
Other operating expenses	88,783		76,313
(Gain)/loss on disposal	505		(2,420		)
Amortization	26,192		20,539
Depreciation	6,035		5,552
Interest	15,198		9,671
Change in estimated acquisition earn-out payables	1,210		2,466
Total expenses	470,760		383,020
Income before income taxes	148,520		118,441
Income taxes	34,624		27,613
Net income	$	113,896	$	90,828
Net income per share:
Basic	$	0.41	$	0.33
Diluted	$	0.40	$	0.32
Dividends declared per share	$	0.080	$	0.075

See accompanying Notes to Condensed Consolidated Financial Statements.

5

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except per share data)	March 31, 2019			December 31, 2018
ASSETS
Current Assets:
Cash and cash equivalents	$	322,477		$	438,961
Restricted cash and investments	302,410			338,635
Short-term investments	10,518			12,868
Premiums, commissions and fees receivable	847,132			844,815
Reinsurance recoverable	51,356			65,396
Prepaid reinsurance premiums	314,363			337,920
Other current assets	146,492			128,716
Total current assets	1,994,748			2,167,311
Fixed assets, net	117,364			100,395
Operating lease assets	174,580			—
Goodwill	3,513,218			3,432,786
Amortizable intangible assets, net	907,638			898,807
Investments	17,528			17,394
Other assets	81,213			71,975
Total assets	$	6,806,289		$	6,688,668
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Premiums payable to insurance companies	$	801,475		$	857,559
Losses and loss adjustment reserve	51,356			65,212
Unearned premiums	314,363			337,920
Premium deposits and credits due customers	94,426			105,640
Accounts payable	136,467			87,345
Accrued expenses and other liabilities	193,986			279,310
Current portion of long-term debt	55,000			50,000
Total current liabilities	1,647,073			1,782,986
Long-term debt less unamortized discount and debt issuance costs	1,439,998			1,456,990
Operating lease liabilities	159,823			—
Deferred income taxes, net	300,857			315,732
Other liabilities	160,107			132,392
Shareholders’ Equity:
Common stock, par value $0.10 per share; authorized 560,000 shares; issued 295,845 shares and outstanding 282,048 shares at 2019, issued 293,380 shares and outstanding 279,583 shares at 2018 - in thousands.	29,584			29,338
Additional paid-in capital	621,249			615,180
Treasury stock, at cost at 13,797 shares at 2019 and 2018, respectively - in thousands	(477,572		)	(477,572		)
Retained earnings	2,925,170			2,833,622
Total shareholders’ equity	3,098,431			3,000,568
Total liabilities and shareholders’ equity	$	6,806,289		$	6,688,668

See accompanying Notes to Condensed Consolidated Financial Statements.

6

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

	Common Stock
(in thousands, except per share data)	Shares	Par Value		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Total
Balance at December 31, 2018	293,380	$	29,338	$	615,180		$	(477,572	)	$	2,833,622		$	3,000,568
Net income										113,896			113,896
Net unrealized holding (loss) gain on available-for-sale securities				106									106
Common stock issued for employee stock benefit plans	2,465	246		5,963									6,209
Cash dividends paid ($0.080 per share)										(22,348		)	(22,348		)
Balance at March 31, 2019	295,845	29,584		621,249			(477,572		)	2,925,170			3,098,431
Balance at December 31, 2017	286,895	28,689		483,733			(386,322		)	2,456,599			2,582,699
Adoption of Topic 606 at January 1, 2018										117,515			117,515
Beginning balance after adoption of Topic 606	286,895	28,689		483,733			(386,322		)	2,574,114			2,700,214
Net income										90,828			90,828
Net unrealized holding (loss) gain on available-for-sale securities				(77		)				(55		)	(132		)
Common stock issued for employee stock benefit plans	53	6		(327		)							(321		)
Purchase of treasury stock				11,250			(11,250		)				—
Common stock issued to directors	13	1		699									700
Cash dividends paid ($0.075 per share)										(20,696		)	(20,696		)
Balance at March 31, 2018	286,961	$	28,696	$	495,278		$	(397,572	)	$	2,644,191		$	2,770,593

See accompanying Notes to Condensed Consolidated Financial Statements.

7

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 

	Three months ended   March 31,
(in thousands)	2019			2018
Cash flows from operating activities:
Net income	$	113,896		$	90,828
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization	26,192			20,539
Depreciation	6,035			5,552
Non-cash stock-based compensation	12,994			7,295
Change in estimated acquisition earn-out payables	1,210			2,466
Deferred income taxes	(14,875		)	(12,093		)
Amortization of debt discount and disposal of deferred financing costs	456			407
Accretion of discounts and premiums, investment	(7		)	3
Net gain/(loss) on sales of investments, fixed assets and customer accounts	799			(2,388		)
Payments on acquisition earn-outs in excess of original estimated payables	—			(715		)
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
Premiums, commissions and fees receivable (increase) decrease	(6,484		)	7,667
Reinsurance recoverables (increase) decrease	14,040			329,771
Prepaid reinsurance premiums (increase) decrease	23,557			28,845
Other assets (increase) decrease	(29,521		)	806
Premiums payable to insurance companies increase (decrease)	(61,229		)	(2,691		)
Premium deposits and credits due customers increase (decrease)	(11,362		)	5,910
Losses and loss adjustment reserve increase (decrease)	(13,856		)	(329,874		)
Unearned premiums increase (decrease)	(23,557		)	(28,845		)
Accounts payable increase (decrease)	56,436			52,896
Accrued expenses and other liabilities increase (decrease)	(97,689		)	(94,514		)
Other liabilities increase (decrease)	8,321			(2,384		)
Net cash provided by operating activities	5,356			79,481
Cash flows from investing activities:
Additions to fixed assets	(23,186		)	(9,751		)
Payments for businesses acquired, net of cash acquired	(95,081		)	(33,576		)
Proceeds from sales of fixed assets and customer accounts	32			142
Purchases of investments	(31		)	(6,142		)
Proceeds from sales of investments	2,392			6,531
Net cash used in investing activities	(115,874		)	(42,796		)
Cash flows from financing activities:
Payments on acquisition earn-outs	(579		)	(1,761		)
Proceeds from long-term debt	350,000			—
Payments on long-term debt	(8,750		)	(5,000		)
Deferred debt issuance costs	(3,698		)	—
Payments on revolving credit facilities	(350,000		)	—
Issuances of common stock for employee stock benefit plans	16			720
Repurchase shares to fund tax withholdings for non-cash stock-based compensation	(6,832		)	(7,659		)
Purchase of treasury stock	—			(11,250		)
Settlement (prepayment) of accelerated share repurchase program	—			11,250
Cash dividends paid	(22,348		)	(20,696		)
Net cash provided by (used in) financing activities	(42,191		)	(34,396		)
Net increase (decrease) in cash and cash equivalents inclusive of restricted cash	(152,709		)	2,289
Cash and cash equivalents inclusive of restricted cash at beginning of period	777,596			824,088
Cash and cash equivalents inclusive of restricted cash at end of period	$	624,887		$	826,377

See accompanying Notes to Condensed Consolidated Financial Statements. Refer to Note 10 for the reconciliations of cash and cash equivalents inclusive of restricted cash and investments.

8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1· Nature of Operations

Brown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and service organization that markets and sells insurance products and services, primarily in the property, casualty and employee benefits areas. Brown & Brown’s business is divided into four reportable segments. The Retail Segment provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers. The National Programs Segment, which acts as a managing general agent (“MGA”), provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through a nationwide network of independent agents, including Brown & Brown retail agents. The Wholesale Brokerage Segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents. The Services Segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims adjusting services.

NOTE 2· Basis of Financial Reporting

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which provides guidance for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact of this pronouncement.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates Step 2 of the goodwill impairment test. The updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and will be applied prospectively. The Company is currently evaluating the impact of this guidance on future interim or annual goodwill impairment tests performed.

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“Topic 842”), which provides guidance for accounting for leases. Under Topic 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. Effective as of January 1, 2019, the Company adopted Topic 842, and all related amendments, which established Accounting Standards Codification (“ASC”) Topic 842. The Company adopted these standards by the recognition of right-of-use assets and related lease liabilities on the balance sheet. As permitted by Topic 842, the Company elected the transition practical expedient to adopt as of January 1, 2019, the date of initial application under the modified retrospective approach for leases existing at that date, with an adjustment to retained earnings. As a result, the Consolidated Balance Sheet at December 31, 2018 was not restated and continues to be reported under ASC Topic 840 (“Topic 840”) which did not require the recognition of operating lease liabilities on the balance sheet, and thus is not comparative. For the three months ended March 31, 2019, all of the Company's leases are classified as operating leases, which are primarily real estate leases for office space. The expense recognition for operating leases under Topic

9

842 is substantially consistent with Topic 840, where operating lease charges are recorded entirely in operating expenses. As a result, there is no significant difference in the Company's results of operations presented in the Company's Condensed Consolidated Statements of Income for each period presented.

The adoption of Topic 842 had a significant impact on the Company's balance sheet with the recognition of the operating lease right-of-use asset and the liability for operating leases. Upon adoption, leases that were classified as operating leases under Topic 840 were classified as operating leases under Topic 842. For the adoption of Topic 842, the Company recorded an adjustment of $202.9 million to operating lease right-of-use asset and the related lease liability, with no impact to retained earnings. The lease liability is the present value of the remaining minimum lease payments, determined under Topic 840, discounted using the Company's incremental borrowing rate at the effective date of January 1, 2019. As permitted under Topic 842, the Company elected practical expedient that permit the Company to not reassess whether a contract is or contains a lease, the classification of the Company's existing operating leases, and initial direct costs for any existing leases. The Company did not elect the practical expedient to use hindsight in determining the lease term (when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Company's right-of-use assets. The application of the practical expedient did not have a significant impact on the measurement of the operating lease liability.

The impact of the adoption of Topic 842 on the balance sheet at January 1, 2019 was (in thousands):

(in thousands)	Balance at December 31, 2018	Adjustments due to Topic 842		Balance at January 1, 2019
Balance Sheet
Assets:
Other current assets	128,716	(3,004	)	125,712
Operating lease assets	—	178,304		178,304
Total Assets	6,688,668	175,300		6,863,968
Liabilities:
Accrued expenses and other liabilities	279,310	13,836		293,146
Operating lease liabilities	—	161,464		161,464
Total Liabilities	3,688,100	175,300		3,863,400

For contracts entered into on or after the January 1, 2019, at the inception of a contract the Company assesses whether the contract is, or contains, a lease. This assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019 are accounted for under Topic 840 and were not reassessed. For real estate leases that contain both lease and non-lease components, the Company elected to account the lease components together with non-lease components (e.g., common-area maintenance).

Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, or the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. All of the Company's real estate leases for office space do not meet the definition of a finance lease. The Company's policy is to own, rather than lease, equipment.

For leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, less any lease incentives received. The lease liability is initially measured at the present value of the lease payments under the lease. For the Company's operating leases, the lease payments are discounted using an incremental borrowing rate, which approximates the rate of interest that would be paid on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms.

Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Some of the Company's real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and based on the minimum amount stated in the lease. Lease components are included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate, or payments based on a change in the Company's portion of the operating expenses, including real estate taxes and insurance, are

10

recorded as a period expense when incurred. Lease modifications result in remeasurement of the right-of-use assets and the lease liability.

Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability.

The Company elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a total term of 12 months or less. The effect of short-term leases on the Company's right-of-use asset and lease liability would not be significant.

NOTE 3· Revenues

The following tables present the revenues disaggregated by revenue source:

	Three months ended March 31, 2019
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Base commissions(1)	$	287,200	$	77,178	$	54,173	$	—	$	(12	)	$	418,539
Fees(2)	43,877		30,246		12,510		49,444		(288		)	135,789
Incentive commissions(3)	42,775		919		373		—		111			44,178
Profit-sharing contingent commissions(4)	11,547		860		2,915		—		—			15,322
Guaranteed supplemental commissions(5)	3,240		4		391		—		—			3,635
Investment income(6)	—		316		40		48		677			1,081
Other income, net(7)	592		37		107		—		—			736
Total Revenues	$	389,231	$	109,560	$	70,509	$	49,492	$	488		$	619,280

(1) Base commissions generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which the Company controls.

(2) Fee revenues relate to fees for services other than securing coverage for the Company's customers and fees negotiated in lieu of commissions.

(3) Incentive commissions include additional commissions over base commissions received from insurance carriers based on predetermined production levels mutually agreed upon by both parties.

(4) Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention.

(5) Guaranteed supplemental commissions represent guaranteed fixed-base agreements in lieu of profit-sharing contingent commissions.

(6) Investment income consists primarily of interest on cash and investments.

(7) Other income consists primarily of legal settlements and other miscellaneous income.

Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of March 31, 2019 and December 31, 2018 were as follows:

(in thousands)	March 31, 2019		December 31, 2018
Contract assets	$	311,137	$	265,994
Contract liabilities	$	57,283	$	53,496

Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in the Company's systems and are reflected in premiums, commissions and fee receivable in the Company's Condensed Consolidated Balance Sheet. Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the transfer of a good or service to the customer. Deferred revenue is reflected within accrued expenses and other liabilities for those to be recognized in less than 12 months and in other liabilities for those to be recognized more than twelve months from the date presented in the Company's Condensed Consolidated Balance Sheet.

11

As of March 31, 2019, deferred revenue consisted of $39.6 million as current portion to be recognized within one year and $17.7 million in long term to be recognized beyond one year. As of December 31, 2018, deferred revenue consisted of $37.0 million as current portion to be recognized within one year and $16.5 million in long-term deferred revenue to be recognized beyond one year.

During the three months ended March 31, 2019, the amount of revenue recognized related to performance obligations satisfied in a previous period, inclusive of changes due to estimates, was not significant.

Other Assets and Deferred Cost

Incremental cost to obtain - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans in the Retail Segment, in which the Company pays an incremental amount of compensation on new business. These incremental costs are deferred and amortized over a 15-year period. The cost to obtain balance within the other assets caption in the Company's Condensed Consolidated Balance Sheet was $16.3 million and $13.2 million as of March 31, 2019 and December 31, 2018, respectively. For the three months ended March 31, 2019, the Company deferred $3.4 million of incremental cost to obtain customer contracts. The Company expensed $0.3 million of the incremental cost to obtain customer contracts for the three months ended March 31, 2019.

Cost to fulfill - The Company defers certain costs to fulfill contracts and recognizes these costs as the associated performance obligations are fulfilled. The cost to fulfill balance within the other current assets caption in the Company's Condensed Consolidated Balance Sheet was $62.4 million and $69.8 million as of March 31, 2019 and December 31, 2018, respectively. For the three months ended March 31, 2019, the Company had net expense of $7.4 million related to the release of previously deferred contract fulfillment costs associated with performance obligations that were satisfied in the period, net of current year deferrals for costs incurred that related to performance obligations yet to be fulfilled.

NOTE 4· Net Income Per Share

Basic net income per share is computed based on the weighted average number of common shares (including participating securities) issued and outstanding during the period. Diluted net income per share is computed based on the weighted average number of common shares issued and outstanding plus equivalent shares, assuming the exercise of stock options. The dilutive effect of stock options is computed by application of the treasury-stock method. The following is a reconciliation between basic and diluted weighted average shares outstanding:

	For the three months   ended March 31,
(in thousands, except per share data)	2019			2018
Net income	$	113,896		$	90,828
Net income attributable to unvested awarded performance stock	(3,201		)	(1,902		)
Net income attributable to common shares	$	110,695		$	88,926
Weighted average number of common shares outstanding – basic	280,564			275,952
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic	(7,885		)	(5,780		)
Weighted average number of common shares outstanding for basic net income per common share	272,679			270,172
Dilutive effect of stock options	2,335			5,542
Weighted average number of shares outstanding – diluted	275,014			275,714
Net income per share:
Basic	$	0.41		$	0.33
Diluted	$	0.40		$	0.32

NOTE 5· Business Combinations

During the three months ended March 31, 2019, Brown & Brown acquired the assets and assumed certain liabilities of seven insurance intermediaries and all of the stock of one insurance intermediary. Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 months as permitted by Accounting Standards Codification Topic 805 — Business Combinations (“ASC 805”). Such adjustments are presented in the “Other” category within the following two tables. The recorded purchase price for all acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in the fair value of earn-out obligations will be recorded in the Condensed Consolidated Statements of Income when incurred.

12

The fair value of earn-out obligations is based on the present value of the expected future payments to be made to the sellers of the acquired businesses in accordance with the provisions outlined in the respective purchase agreements. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC 805. For the three months ended March 31, 2019, adjustments were made within the permitted measurement period that resulted in a decrease in the aggregate purchase price of the affected acquisitions of $6.8 million relating to the assumption of certain liabilities. These measurement period adjustments have been reflected as current period adjustments in the three months ended March 31, 2019 in accordance with the guidance in ASU 2015-16 “Business Combinations.” The measurement period adjustments primarily impacted goodwill, with no effect on earnings or cash in the current period.

Cash paid for acquisitions was $98.3 million in the three-month period ended March 31, 2019. The Company completed eight acquisitions (excluding book of business purchases) in the three-month period ended March 31, 2019. The Company completed two acquisitions (excluding book of business purchases) in the three-month period ended March 31, 2018.

The following table summarizes the purchase price allocations made as of the date of each acquisition for current year acquisitions and adjustments made during the measurement period for prior year acquisitions. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

(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
Smith Insurance Associates, Inc. (Smith)	Retail	February 1, 2019	$	20,129	$	—	$	2,704	$	22,833	$	4,550
Donald P. Pipino Company, LTD (Pipino)	Retail	February 1, 2019	16,420		135		9,821		26,376		12,996
Cossio Insurance Agency (Cossio)	Retail	March 1, 2019	13,990		10		1,710		15,710		2,000
Medval LLC (Medval)	Services	March 1, 2019	29,106		—		1,684		30,790		2,500
Other	Various	Various	18,654		463		2,236		21,353		5,475
Total			$	98,299	$	608	$	18,155	$	117,062	$	27,521

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)	Smith			Pipino			Cossio		Medval			Other			Total
Cash	$	—		$	—		$	—	$	3,218		$	—		$	3,218
Other current assets	588			194			—		1,708			(6,835		)	(4,345		)
Fixed assets	40			114			29		50			$	(121	)	$	112
Goodwill	16,031			18,146			11,336		19,008			15,911			80,432
Purchased customer accounts	6,500			11,360			4,324		7,300			6,298			35,782
Non-compete agreements	41			11			21		1			64			138
Other assets	—			—			—		14			302			316
Total assets acquired	23,200			29,825			15,710		31,299			15,619			115,653
Other current liabilities	(367		)	(3,449		)	—		(480		)	5,734			1,438
Other liabilities	—			—			—		(29		)	—			(29		)
Total liabilities assumed	(367		)	(3,449		)	—		(509		)	5,734			1,409
Net assets acquired	$	22,833		$	26,376		$	15,710	$	30,790		$	21,353		$	117,062

13

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; and non-compete agreements, 5 years.

Goodwill of $80.4 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was allocated to the Retail, Wholesale Brokerage and Services Segments in the amounts of $55.1 million, $6.1 million and $19.2 million, respectively. Of the total goodwill of $80.4 million, the amount currently deductible for income tax purposes is $62.2 million and the remaining $18.2 million relates to the recorded earn-out payables and will not be deductible until it is earned and paid.

For the acquisitions completed during 2019, the results of operations since the acquisition dates have been combined with those of the Company. The total revenues from the acquisitions completed through March 31, 2019, included in the Condensed Consolidated Statement of Income for the three months ended March 31, 2019, was $4.8 million. The income before income taxes, including the intercompany cost of capital charge, from the acquisitions completed through March 31, 2019, included in the Condensed Consolidated Statement of Income for the three months ended March 31, 2019, was $1.0 million. If the acquisitions had occurred as of the beginning of the respective periods, the Company’s results of operations would be as shown in the following table. 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   March 31,
(in thousands, except per share data)	2019		2018
Total revenues	$	624,219	$	512,730
Income before income taxes	$	149,863	$	121,469
Net income	$	114,926	$	93,150
Net income per share:
Basic	$	0.41	$	0.34
Diluted	$	0.41	$	0.33
Weighted average number of shares outstanding:
Basic	272,679		270,172
Diluted	275,014		275,714

As of March 31, 2019 and 2018, the fair values of the estimated acquisition earn-out payables were re-evaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three months ended March 31, 2019 and 2018, were as follows:

	Three months ended   March 31,
(in thousands)	2019			2018
Balance as of the beginning of the period	$	89,924		$	36,175
Additions to estimated acquisition earn-out payables	18,155			4,524
Payments for estimated acquisition earn-out payables	(579		)	(2,565		)
Subtotal	107,500			38,134
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables	50			2,062
Interest expense accretion	1,160			404
Net change in earnings from estimated acquisition earn-out payables	1,210			2,466
Balance as of March 31,	$	108,710		$	40,600

Of the $108.7 million estimated acquisition earn-out payables as of March 31, 2019, $25.2 million was recorded as accounts payable and $83.5 million was recorded as other non-current liabilities. As of March 31, 2019, the maximum future acquisition contingency payments related to all acquisitions was $218.2 million, inclusive of the $108.7 million estimated acquisition earn-out payables as of March 31, 2019. Included within the additions to estimated acquisition earn-out payables are any adjustments to opening balance sheet items within the allowable measurement period, which may therefore differ from previously reported amounts.

NOTE 6· Goodwill

Goodwill is subject to at least an annual assessment for impairment by applying a fair value-based test. The Company completed its most recent annual assessment as of November 30, 2018, and identified no impairment as a result of the evaluation.

14

The changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2019 are as follows:

(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Total
Balance as of December 31, 2018	$	2,063,150	$	926,206	$	291,622	$	151,808	$	3,432,786
Goodwill of acquired businesses	55,117		—		6,063		19,252		80,432
Balance as of March 31, 2019	$	2,118,267	$	926,206	$	297,685	$	171,060	$	3,513,218

NOTE 7· Amortizable Intangible Assets

Amortizable intangible assets at March 31, 2019 and December 31, 2018 consisted of the following:

	March 31, 2019								December 31, 2018
(in thousands)	Gross carrying value		Accumulated amortization			Net carrying value		Weighted average life (years)(1)	Gross carrying value		Accumulated amortization			Net carrying value		Weighted average life (years)(1)
Purchased customer accounts	$	1,838,732	$	(934,756	)	$	903,976	14.9	$	1,804,404	$	(909,415	)	$	894,989	14.9
Non-compete agreements	33,607		(29,945		)	3,662		4.5	33,469		(29,651		)	3,818		4.5
Total	$	1,872,339	$	(964,701	)	$	907,638		$	1,837,873	$	(939,066	)	$	898,807

(1) Weighted average life calculated as of the date of acquisition.

Amortization expense for amortizable intangible assets for the years ending December 31, 2019, 2020, 2021, 2022 and 2023 is estimated to be $102.5 million, $95.4 million, $91.8 million, $87.3 million, and $80.3 million, respectively.

NOTE 8· Long-Term Debt

Long-term debt at March 31, 2019 and December 31, 2018 consisted of the following: 

(in thousands)	March 31, 2019			December 31, 2018
Current portion of long-term debt:
Current portion of 5-year term loan facility expires 2022	$	40,000		$	35,000
Current portion of 5-year term loan facility expires 2023	15,000			15,000
Total current portion of long-term debt	55,000			50,000
Long-term debt:
Note agreements:
4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2024	$	499,140		$	499,101
4.500% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2029	349,443			—
Total notes	848,583			499,101
Credit agreements:
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires June 28, 2022	320,000			330,000
5-year revolving-loan facility, periodic interest payments, LIBOR plus up to 1.500%, plus commitment fees up to 0.250%, expires June 28, 2022	—			350,000
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires December 21, 2023	281,250			285,000
Total credit agreements	601,250			965,000
Debt issuance costs (contra)	(9,835		)	(7,111		)
Total long-term debt less unamortized discount and debt issuance costs	1,439,998			1,456,990
Current portion of long-term debt	55,000			50,000
Total debt	$	1,494,998		$	1,506,990

15

On June 28, 2017, the Company entered into an amended and restated credit agreement (the “Amended and Restated Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as co-syndication agents and co-documentation agents. The Amended and Restated Credit Agreement amended and restated the credit agreement dated April 17, 2014, among such parties (the “Original Credit Agreement”). The Amended and Restated Credit Agreement extends the applicable maturity date of the existing revolving credit facility (the “Revolving Credit Facility”) of $800.0 million to June 28, 2022 and re-evidences unsecured term loans at $400.0 million while also extending the applicable maturity date to June 28, 2022. The quarterly term loan principal amortization schedule was reset. At the time of the execution of the Amended and Restated Credit Agreement, $67.5 million of principal from the original unsecured term loans was repaid using operating cash balances, and the Company added an additional $2.8 million in debt issuance costs related to the Revolving Credit Facility to the Condensed Consolidated Balance Sheet. The Company also expensed to the Condensed Consolidated Statements of Income $0.2 million of debt issuance costs related to the Original Credit Agreement due to certain lenders exiting prior to execution of the Amended and Restated Credit Agreement. The Company also carried forward $1.6 million on the Condensed Consolidated Balance Sheet the remaining unamortized portion of the Original Credit Agreement debt issuance costs, which will be amortized over the term of the Amended and Restated Credit Agreement. On March 31, 2019, the Company made a scheduled principal payment of $5.0 million per the terms of the Amended and Restated Credit Agreement. As of March 31, 2019, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit Agreement of $360.0 million with no borrowings outstanding against the Revolving Credit Facility. As of December 31, 2018, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit Agreement of $365.0 million with $350.0 million in borrowings outstanding against the Revolving Credit Facility. The Company had borrowed approximately $600.0 million under its Revolving Credit Facility on November 15, 2018 in connection with the closing of the acquisition of certain assets and assumption of certain liabilities of the Hays Companies. Per the terms of the Amended and Restated Credit Agreement, a scheduled principal payment of $10.0 million was due March 31, 2019.

On September 18, 2014, the Company issued $500.0 million of 4.200% unsecured Senior Notes due in 2024. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions and regulations which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay the outstanding balance of $475.0 million on the Revolving Credit Facility and for other general corporate purposes. As of March 31, 2019 and December 31, 2018, there was an outstanding debt balance of $500.0 million exclusive of the associated discount balance.

On December 21, 2018, the Company entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with the lenders named therein, Wells Fargo Bank, National Association, as administrative agent, and certain other banks as co-syndication agents and as joint lead arrangers and joint bookrunners. The Term Loan Credit Agreement provides for an unsecured term loan in the initial amount of $300.0 million, which may, subject to lenders’ discretion, potentially be increased up to an aggregate amount of $450.0 million (the “Term Loan”). The Term Loan is repayable over the five-year term from the effective date of the Term Loan Credit Agreement, which was December 21, 2018. Based on the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt rating as determined by Moody’s Investor Service and Standard & Poor’s Rating Service, the rates of interest charged on the term loan are 1.00% to 1.75%, above the adjusted 1-Month LIBOR rate. On December 21, 2018, the Company borrowed $300.0 million under the Term Loan Credit Agreement and used $250.0 million of the proceeds to reduce indebtedness under the Company’s Amended and Restated Credit Agreement, dated June 28, 2017, with the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, and certain other banks as co-syndication agents and co-documentation agents (the “Revolving Credit Facility”). As of March 31, 2019, there was an outstanding debt balance issued under the Term Loan of $296.3 million. As of December 31, 2018, there was an outstanding debt balance issued under the Term Loan of $300.0 million. Per the terms of the Term Loan Credit Agreement, a scheduled principal payment of $3.8 million is due June 30, 2019.

On March 11, 2019, the Company completed the issuance of $350.0 million aggregate principal amount of the Company's 4.500% Senior Notes due 2029. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount, which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay a portion of the outstanding balance of $350.0 million on the Revolving Credit Facility, utilized in connection with financing related to the Hays Companies acquisition and for other general corporate purposes. As of March 31, 2019, there was an outstanding debt balance of $350.0 million exclusive of the associated discount balance.

The Amended and Restated Credit Agreement and Term Loan Credit Agreement require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of March 31, 2019 and December 31, 2018.

The 30-day Adjusted LIBOR Rate as of March 31, 2019 was 2.500%.

NOTE 9· Leases

Substantially all of the Company's operating lease right-of-use assets and operating lease liabilities represent real estate leases for office space used to conduct the Company's business.

16

The balances and classification of operating lease right-of-use assets and operating lease liabilities within the Condensed Consolidated Balance Sheet is as follows (in thousands):

(in thousands)		March 31, 2019
Balance Sheet
Assets:
Operating lease right-of-use assets	Operating lease assets	$	174,580
Total Assets		174,580
Liabilities:
Current operating lease liabilities	Accrued expenses and other liabilities	39,015
Non-current operating lease liabilities	Operating lease liabilities	159,823
Total Liabilities		$	198,838

The components of lease cost for operating leases for the three months ended March 31, 2019 were (in thousands):

Operating leases:
Lease cost	$	12,088
Variable lease cost	713
Operating lease expense	$	12,801

The weighted average remaining lease term and the weighted average discount rate for operating leases as of March 31, 2019 were:

Weighted-average remaining lease term	5.73
Weighted-average discount rate	3.81

Maturities of the operating lease liabilities by fiscal year at March 31, 2019 for the Company's operating leases are as follows (in thousands):

	Operating Leases
2019 (Remainder)	$	33,577
2020	44,573
2021	36,998
2022	29,940
2023	23,184
Thereafter	55,084
Total undiscounted lease payments	223,356
Less: Imputed interest	24,518
Present value of lease payments	$	198,838

At December 31, 2018, the aggregate future minimum lease payments under all non-cancelable lease agreements were as follows:

	December 31, 2018
2019	$	48,292
2020	43,517
2021	34,836
2022	27,035
2023	19,981
Thereafter	36,349
Total minimum future lease payments	$	210,010

17

Supplemental cash flow information for operating leases (in thousands):

Cash paid for amounts included in measurement of liabilities
Operating cash flows from operating leases	$	12,311
Right-of-use assets obtained in exchange for new operating liabilities	$	2,439

NOTE 10· Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

Brown & Brown's cash paid during the period for interest and income taxes are summarized as follows: 

	Three months ended   March 31,
(in thousands)	2019		2018
Cash paid during the period for:
Interest	$	20,127	$	14,472
Income taxes	$	3,120	$	3,179

Brown & Brown’s significant non-cash investing and financing activities are summarized as follows:

	Three months ended   March 31,
(in thousands)	2019		2018
Other payable issued for purchased customer accounts	$	608	$	1,690
Estimated acquisition earn-out payables and related charges	$	18,155	$	4,524

The Company's restricted cash balance is composed of funds held in separate premium trust accounts as required by state law or, in some cases, by agreement with carrier partners. The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of March 31, 2019 and 2018.

	Balance as of March 31,
(in thousands)	2019		2018
Table to reconcile cash and cash equivalents inclusive of restricted cash
Cash and cash equivalents	$	322,477	$	558,248
Restricted cash	302,410		268,129
Total cash and cash equivalents inclusive of restricted cash at the end of the period	$	624,887	$	826,377

The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of December 31, 2018 and 2017.

	Balance as of December 31,
(in thousands)	2018		2017
Table to reconcile cash and cash equivalents inclusive of restricted cash
Cash and cash equivalents	$	438,961	$	573,383
Restricted cash	338,635		250,705
Total cash and cash equivalents inclusive of restricted cash at the end of the period	$	777,596	$	824,088

In the preparation of the Statement of Cash Flows in this Quarterly Report on Form 10-Q, beginning balance sheet balances for 2018 were adjusted to reflect the modified retrospective adoption of Accounting Standards Update No.2014-09, “Revenue from Contracts with Customers” and Accounting Standards Codification Topic 340 - Other Assets and Deferred Cost, thereby reflecting in the Statement of Cash Flows the change in operating assets and liabilities for the period, excluding the initial impact of adoption of these new accounting standards.

NOTE 11· Legal and Regulatory Proceedings

The Company is involved in numerous pending or threatened proceedings by or against Brown & Brown, Inc. or one or more of its subsidiaries that arise in the ordinary course of business. The damages that may be claimed against the Company in these various proceedings are in some cases substantial, including in certain instances claims for punitive or extraordinary damages. Some of these claims and lawsuits have been resolved; others are in the process of being resolved and others are still in the investigation or discovery phase. The Company will continue to respond appropriately to these claims and lawsuits and to vigorously protect its interests.

18

The Company continues to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could adversely impact the Company’s operating results, cash flows and overall liquidity. The Company maintains third-party insurance policies to provide coverage for certain legal claims, in an effort to mitigate its overall exposure to unanticipated claims or adverse decisions. However, as (i) one or more of the Company’s insurance carriers could take the position that portions of these claims are not covered by the Company’s insurance, (ii) to the extent that payments are made to resolve claims and lawsuits, applicable insurance policy limits are eroded and (iii) the claims and lawsuits relating to these matters are continuing to develop, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by unfavorable resolutions of these matters. Based upon the AM Best Company ratings of these third-party insurers, management does not believe there is a substantial risk of an insurer’s material non-performance related to any current insured claims.

On the basis of current information, the availability of insurance and legal advice, in management’s opinion, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, would have a material adverse effect on its financial condition, operations and/or cash flows.

NOTE 12· Segment Information

Brown & Brown’s business is divided into four reportable segments: (1) the Retail Segment, which provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers, (2) the National Programs Segment, which acts as an MGA, provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through nationwide networks of independent agents, and Brown & Brown retail agents, (3) the Wholesale Brokerage Segment, which markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents, and (4) the Services Segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims adjusting services.

Brown & Brown conducts all of its operations within the United States of America, except for a wholesale brokerage operation based in London, England, retail operations in Bermuda and the Cayman Islands, and a national programs operation in Canada. These operations earned $3.4 million and $3.3 million of total revenues for the three months ended March 31, 2019 and 2018, respectively. Long-lived assets held outside of the United States as of March 31, 2019 and 2018 were not material.

The accounting policies of the reportable segments are the same as those described in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company evaluates the performance of its segments based upon revenues and income before income taxes. Inter-segment revenues are eliminated.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables. The “Other” column includes any income and expenses not allocated to reportable segments, corporate-related items, including the intercompany interest expense charge to the reporting segment.

	Three months ended March 31, 2019
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	389,231	$	109,560	$	70,509	$	49,492	$	488		$	619,280
Investment income	$	—	$	316	$	40	$	48	$	677		$	1,081
Amortization	$	15,444	$	6,596	$	2,849	$	1,303	$	—		$	26,192
Depreciation	$	1,624	$	1,590	$	404	$	284	$	2,133		$	6,035
Interest expense	$	21,153	$	5,354	$	1,327	$	872	$	(13,508	)	$	15,198
Income before income taxes	$	93,841	$	19,316	$	15,569	$	9,177	$	10,617		$	148,520
Total assets	$	5,773,290	$	2,852,824	$	1,292,406	$	480,108	$	(3,592,339	)	$	6,806,289
Capital expenditures	$	3,136	$	4,568	$	1,189	$	109	$	14,184		$	23,186

19

	Three months ended March 31, 2018
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	278,402	$	112,475	$	66,148	$	44,066	$	370		$	501,461
Investment income	$	1	$	114	$	—	$	73	$	413		$	601
Amortization	$	10,242	$	6,323	$	2,837	$	1,137	$	—		$	20,539
Depreciation	$	1,237	$	1,387	$	427	$	411	$	2,090		$	5,552
Interest expense	$	6,797	$	7,496	$	1,435	$	594	$	(6,651	)	$	9,671
Income before income taxes	$	70,399	$	20,778	$	11,383	$	8,816	$	7,065		$	118,441
Total assets	$	4,687,456	$	3,009,147	$	1,323,046	$	432,920	$	(3,837,486	)	$	5,615,083
Capital expenditures	$	2,407	$	2,678	$	420	$	285	$	3,961		$	9,751

NOTE 13· Investments

At March 31, 2019, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows: 

(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	20,241	$	51	$	(134	)	$	20,158
Corporate debt	233		6		—			239
Total	$	20,474	$	57	$	(134	)	$	20,397

At March 31, 2019, the Company held $20.2 million in fixed income securities composed of U.S. Treasury securities, securities issued by U.S. Government agencies and municipalities, and $0.2 million issued by corporations with investment grade ratings. Of that total, $2.9 million is classified as short-term investments on the Condensed Consolidated Balance Sheet as maturities are less than one-year, which also includes $7.6 million that is related to time deposits held with various financial institutions.

For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2019:

	Less than 12 Months				12 Months or More					Total
(in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	—	$	—	$	11,456	$	(134	)	$	11,456	$	(134	)
Total	$	—	$	—	$	11,456	$	(134	)	$	11,456	$	(134	)

The unrealized losses were caused by interest rate increases. At March 31, 2019, the Company had 9 securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at March 31, 2019.

At December 31, 2018, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	21,729	$	7	$	(222	)	$	21,514
Corporate debt	623		—		—			623
Total	$	22,352	$	7	$	(222	)	$	22,137

20

At December 31, 2018, the Company held $21.5 million in fixed income securities composed of U.S. Treasury securities, securities issued by U.S. Government agencies and municipalities, and $0.6 million issued by corporations with investment grade ratings. Of that total, $4.8 million is classified as short-term investments on the Condensed Consolidated Balance Sheet as maturities are less than one-year, which also includes $8.1 million that is related to time deposits held with various financial institutions.

For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018:

	Less than 12 Months					12 Months or More					Total
(in thousands)	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	5,866	$	(6	)	$	12,634	$	(216	)	$	18,500	$	(222	)
Corporate debt	457		—			100		—			557		—
Total	$	6,323	$	(6	)	$	12,734	$	(216	)	$	19,057	$	(222	)

The unrealized losses from corporate issuers were caused by interest rate increases. At December 31, 2018, the Company had 20 securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at December 31, 2018.

The amortized cost and estimated fair value of the fixed maturity securities at March 31, 2019 by contractual maturity are set forth below:

(in thousands)	Amortized cost		Fair value
Years to maturity:
Due in one year or less	$	2,880	$	2,868
Due after one year through five years	17,594		17,529
Due after five years	—		—
Total	$	20,474	$	20,397

The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2018 by contractual maturity are set forth below:

(in thousands)	Amortized cost		Fair value
Years to maturity:
Due in one year or less	$	4,768	$	4,743
Due after one year through five years	17,584		17,394
Due after five years	—		—
Total	$	22,352	$	22,137

The expected maturities in the foregoing table may differ from the contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalty.

Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities were $1.9 million. This along with maturing time deposits yielded total cash proceeds from the sale of investments of $2.4 million in the period of January 1, 2019 to March 31, 2019. These proceeds were used to purchase additional fixed maturity securities and time deposits. The gains and losses realized on those sales for the period from January 1, 2018 to March 31, 2019 were insignificant.

Realized gains and losses are reported on the Condensed Consolidated Statements of Income, with the cost of securities sold determined on a specific identification basis.

At March 31, 2019, investments with a fair value of approximately $4.1 million were on deposit with state insurance departments to satisfy regulatory requirements.

21

NOTE 14· Reinsurance

Although the reinsurers are liable to the Company for amounts reinsured, our subsidiary, Wright National Flood Insurance Company (“Wright Flood”) remains primarily liable to its policyholders for the full amount of the policies written whether or not the reinsurers meet their obligations to the Company when they become due. The effects of reinsurance on premiums written and earned are as follows:

	Period from January 1, 2019 to March 31, 2019
(in thousands)	Written			Earned
Direct premiums	$	133,319		$	156,876
Ceded premiums	(133,317		)	(156,874		)
Net premiums	$	2		$	2

All premiums written by Wright Flood under the National Flood Insurance Program are 100% ceded to the Federal Emergency Management Agency, or FEMA, for which Wright Flood received a 30.0% expense allowance from January 1, 2019 through March 31, 2019. For the period from January 1, 2019 through March 31, 2019, the Company ceded $132.9 million of written premiums.

Effective April 1, 2014, Wright Flood is also a party to a quota share agreement whereby it cedes 100% of its gross excess flood premiums, excluding fees, to Arch Reinsurance Company and receives a 30.5% commission. Wright Flood ceded $0.4 million for the period from January 1, 2019 through March 31, 2019. As of March 31, 2019, no loss data exists on this agreement.

Wright Flood also ceded 100% of the homeowners, private passenger auto liability, and other liability occurrence to Stillwater Insurance Company, formerly known as Fidelity National Insurance Company. This business is in runoff. Therefore, only loss data exists on this business. As of March 31, 2019, no ceded unpaid losses and loss adjustment expenses or incurred but not reported expenses for homeowners, private passenger auto liability and other liability occurrence existed.

As of March 31, 2019 the Condensed Consolidated Balance Sheet contained reinsurance recoverable of $51.4 million and prepaid reinsurance premiums of $314.4 million. There was no net activity in the reserve for losses and loss adjustment expense during the period January 1, 2019 through March 31, 2019, as Wright Flood’s direct premiums written were 100% ceded to two reinsurers. The balance of the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable, as of March 31, 2019 was $51.4 million.

NOTE 15· Statutory Financial Data

Wright Flood maintains capital in excess of the minimum statutory amount of $7.5 million as required by regulatory authorities. The unaudited statutory capital and surplus of Wright Flood was $20.0 million at March 31, 2019 and $19.4 million as of December 31, 2018. For the period from January 1, 2019 through March 31, 2019, Wright Flood generated statutory net income of $0.2 million. For the period from January 1, 2018 through December 31, 2018, Wright Flood generated statutory net income of $4.5 million.

NOTE 16· Subsidiary Dividend Restrictions

Under the insurance regulations of Texas, where Wright Flood is incorporated, the maximum amount of ordinary dividends that Wright Flood can pay to shareholders in a rolling twelve-month period is limited to the greater of 10% of statutory adjusted capital and surplus as shown on Wright Flood’s last annual statement on file with the superintendent of the Texas Department of Insurance or 100% of adjusted net income. There was no dividend payout in 2018 and the maximum dividend payout that may be made in 2019 without prior approval is $4.5 million.

NOTE 17· Shareholders’ Equity

On December 12, 2018, the Company entered into accelerated share repurchase agreement ("ASR") with an investment bank to purchase an aggregate $100.0 million of the Company’s common stock. As part of the ASR, the Company received an initial share delivery of 2,910,150 shares of the Company’s common stock with a fair market value of $80.0 million. Upon maturity of the program, the Company will receive the remaining balance of $20.0 million at settlement.

Under the authorization from the Company’s Board of Directors, shares may be purchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors. These purchases may be carried out through open market purchases, block trades, accelerated share repurchase plans of up to $100.0 million each (unless otherwise approved by the Board of Directors), negotiated private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. At March 31, 2019, the remaining amount authorized by the Company's Board of Directors for shares repurchases was $147.5 million.

22

On May 1, 2019, the Company's Board of Directors authorized the purchasing of up to an additional $372.5 million of the Company's outstanding common stock. With this authorization, the Company will now have outstanding approval to purchase up to approximately $500.0 million, in the aggregate, of the Company's outstanding common stock, after giving effect to the final settlement of shares in connection with the ASR entered into on December 12, 2018.

ITEM 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion updates the MD&A contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and the two discussions should be read together.

GENERAL

Company Overview — First Quarter of 2019

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related Notes to those Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. In addition, please see “Information Regarding Non-GAAP Financial Measures” below regarding important information on non-GAAP financial measures contained in our discussion and analysis.

We are a diversified insurance agency, wholesale brokerage, insurance programs and services organization headquartered in Daytona Beach, Florida. As an insurance intermediary, our principal sources of revenue are commissions paid by insurance companies and, to a lesser extent, fees paid directly by customers. Commission revenues generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control.

The volume of business from new and existing customers, fluctuations in insurable exposure units, changes in premium rate levels, changes in general economic and competitive conditions, and the occurrence of catastrophic weather events all affect our revenues. For example, level rates of inflation or a general decline in economic activity could limit increases in the values of insurable exposure units. Conversely, increasing costs of litigation settlements and awards could cause some customers to seek higher levels of insurance coverage. Historically, our revenues have typically grown as a result of our focus on net new business growth and acquisitions. We foster a strong, decentralized sales and service culture with the goal of consistent, sustained growth over the long-term.

The term “Organic Revenue,” a non-GAAP measure, is our core commissions and fees less (i) the core commissions and fees earned for the first 12 months by newly-acquired operations and (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period) and for the Organic Revenue growth in 2018 only (iii) the impact of the adoption of Accounting Standards Update No.2014-09, “Revenue from Contracts with Customers (Topic 606)” and Accounting Standards Codification Topic 340 – Other Assets and Deferred Cost (the “New Revenue Standard”) so as to be on a comparable basis with 2017. The term “core commissions and fees” excludes profit-sharing contingent commissions and guaranteed supplemental commissions, and therefore represents the revenues earned directly from specific insurance policies sold, and specific fee-based services rendered. “Organic Revenue” is reported in this manner in order to express the current year’s core commissions and fees on a comparable basis with the prior year’s core commissions and fees. The resulting net change reflects the aggregate changes attributable to: (i) net new and lost accounts, (ii) net changes in our customers’ exposure units, (iii) net changes in insurance premium rates or the commission rate paid to us by our carrier partners, and (iv) the net change in fees paid to us by our customers. Organic Revenue is reported in “Results of Operations” and in “Results of Operations - Segment Information” of this Quarterly Report on Form 10-Q.

We also earn “profit-sharing contingent commissions,” which are commissions based primarily on underwriting results, but which may also reflect considerations for volume, growth and/or retention. These commissions which are included in our commissions and fees in the Condensed Consolidated Statements of Income, are accrued throughout the year based on actual premiums written and are primarily received in the first and second quarters of each year, based upon the aforementioned considerations for the prior year(s). Prior to the adoption of the New Revenue Standard, these commissions were recorded to income when received. Over the last three years, profit-sharing contingent commissions have averaged approximately 3.1% of commissions and fees revenue. For the three-month period ended March 31, 2019, profit-sharing contingent commissions were up $3.6 million as compared to the same period of the prior year driven by activity associated with acquisitions completed over the last 12 months and instances where final cash settlements were slightly higher than the amounts accrued in 2018.

Certain insurance companies offer guaranteed fixed-base agreements, referred to as “Guaranteed Supplemental Commissions” (“GSCs”) in lieu of profit-sharing contingent commissions. GSCs are accrued throughout the year based on actual premiums written. For the twelve-month period ending December 31, 2018, we had earned $10.0 million of GSCs, of which $8.9 million remained accrued at December 31, 2018, the balance of which is typically collected over the first and second quarters. For the three-month periods ended March 31, 2019 and 2018, we earned and accrued $3.6 million and $3.0 million, respectively, from GSCs.

23

Combined, our profit-sharing contingent commissions and GSCs for the three months ended March 31, 2019 increased by $4.3 million compared to the first quarter of 2019.

Fee revenues primarily relate to services other than securing coverage for our customers, as well as fees negotiated in lieu of commissions, and are recognized as performance obligations are satisfied. Fee revenues have historically been generated primarily by: (1) our Services Segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services, and claims adjusting services; (2) our National Programs and Wholesale Brokerage Segments, which earn fees primarily for the issuance of insurance policies on behalf of insurance companies; and to a lesser extent (3) our Retail Segment in our large-account customer base. Fee revenues, on a consolidated basis, as a percentage of our total commissions and fees, represented 26.3% in 2018, 31.5% in 2017 and 31.3% in 2016.

For the three-month period ended March 31, 2019, our total commissions and fees growth rate was 23.4%, and our consolidated Organic Revenue growth rate was 2.0%. In the event that the gradual increases in insurable exposure units that have occurred in the past few years continue through 2019 and premium rate changes are similar to 2018, we believe we will see positive Organic Revenue growth for the full year of 2019.

Historically, investment income has consisted primarily of interest earnings on operating cash and where permitted, on premiums and advance premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy is to invest available funds in high-quality, short-term fixed income investment securities. Investment income also includes gains and losses realized from the sale of investments. Other income primarily reflects legal settlements and other miscellaneous income.

Income before income taxes for the three-month period ended March 31, 2019 increased from the first quarter of 2018 by $30.1 million, primarily as a result of net new business and acquisitions completed in the past 12 months in addition to leveraging expenses, partially offset by additional interest expense associated with the acquisition of Hays Companies.

Information Regarding Non-GAAP Measures

In the discussion and analysis of our results of operations, in addition to reporting financial results in accordance with generally accepted accounting principles (“GAAP”), we provide references to the following non-GAAP financial measures as defined in Regulation G of SEC rules: Organic Revenue, Organic Revenue growth, EBITDAC and EBITDAC Margin. We view these non-GAAP financial measures as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our segments because they allow us to determine a more comparable, but non-GAAP, measurement of revenue growth and operating performance that is associated with the revenue sources that were a part of our business in both the current and prior year. We believe that Organic Revenue provides a meaningful representation of our operating performance and view Organic Revenue growth as an important indicator when assessing and evaluating the performance of our four segments. Organic Revenue can be expressed as a dollar amount or a percentage rate when describing Organic Revenue growth. We also use Organic Revenue growth and EBITDAC Margin for incentive compensation determinations for executive officers and other key employees. We view EBITDAC and EBITDAC Margin as important indicators of operating performance, because they allow us to determine more comparable, but non-GAAP, measurements of our operating margins in a meaningful and consistent manner by removing the significant non-cash items of depreciation, amortization and the change in estimated acquisition earn-out payables, and also interest expense and taxes, which are reflective of investment and financing activities, not operating performance.

These measures are not in accordance with, or an alternative to the GAAP information provided in this Quarterly Report on Form 10-Q. We present such non-GAAP supplemental financial information because we believe such information is of interest to the investment community and because we believe they provide additional meaningful methods of evaluating certain aspects of the Company’s operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. We believe these non-GAAP financial measures improve the comparability of results between periods by eliminating the impact of certain items that have a high degree of variability. Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments. This supplemental financial information should be considered in addition to, not in lieu of, our Condensed Consolidated Financial Statements.

Tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in this Quarterly Report on Form 10-Q under “Results of Operation - Segment Information.”

Acquisitions

Part of our continuing business strategy is to attract high-quality insurance intermediaries to join our operations. From 1993 through the first quarter of 2019, we acquired 521 insurance intermediary operations, excluding acquired books of business (customer accounts).

24

Critical Accounting Policies

We have had no changes to our Critical Accounting Policies as described in our most recent Form 10-K for the year ended December 31, 2018. We believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue recognition, business combinations and purchase price allocations, intangible asset impairments, non-cash stock-based compensation and reserves for litigation. In particular, the accounting for these areas requires significant use of judgment to be made by management. Different assumptions in the application of these policies could result in material changes in our consolidated financial position or consolidated results of operations. Refer to Note 1 in the “Notes to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2018 on file with the Securities and Exchange Commission for details regarding our critical and significant accounting policies.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in conjunction with the accompanying Condensed Consolidated Financial Statements and related Notes.

Financial information relating to our condensed consolidated financial results for the three months ended March 31, 2019 and 2018 is as follows: 

	Three months ended   March 31,
(in thousands, except percentages)	2019			2018			% Change
REVENUES
Core commissions and fees	$	598,506		$	485,674		23.2	%
Profit-sharing contingent commissions	15,322			11,684			31.1	%
Guaranteed supplemental commissions	3,635			2,980			22.0	%
Investment income	1,081			601			79.9	%
Other income, net	736			522			41.0	%
Total revenues	619,280			501,461			23.5	%
EXPENSES
Employee compensation and benefits	332,837			270,899			22.9	%
Other operating expenses	88,783			76,313			16.3	%
(Gain)/loss on disposal	505			(2,420		)	NMF
Amortization	26,192			20,539			27.5	%
Depreciation	6,035			5,552			8.7	%
Interest	15,198			9,671			57.2	%
Change in estimated acquisition earn-out payables	1,210			2,466			(50.9	)%
Total expenses	470,760			383,020			22.9	%
Income before income taxes	148,520			118,441			25.4	%
Income taxes	34,624			27,613			25.4	%
NET INCOME	$	113,896		$	90,828		25.4	%
Income Before Income Taxes Margin (1)	24.0		%	23.6		%
EBITDAC (1)	$	197,155		$	156,669		25.8	%
EBITDAC Margin (1)	31.8		%	31.2		%
Organic Revenue growth rate (1)	2.0		%	5.7		%
Employee compensation and benefits relative to total revenues	53.7		%	54.0		%
Other operating expenses relative to total revenues	14.3		%	15.2		%
Capital expenditures	$	23,186		$	9,751		137.8	%
Total assets at March 31	$	6,806,289		$	5,615,083		21.2	%

(1) A non-GAAP financial measure

NMF = Not a meaningful figure

25

Commissions and Fees

Commissions and fees, including profit-sharing contingent commissions and GSCs, for the three months ended March 31, 2019 increased $117.1 million to $617.5 million, or 23.4%, over the same period in 2018. Core commissions and fees revenue for the first quarter of 2019 increased $112.8 million, of which $103.8 million represented core commissions and fees from acquisitions that had no comparable revenues in the same period of 2018; approximately $9.5 million represented net new and renewal business, offset by $0.5 million related to commissions and fees revenue from businesses divested in 2018 and 2019, which reflects an Organic Revenue growth rate of 2.0%. Profit-sharing contingent commissions and GSCs for the first quarter of 2019 increased by $4.3 million, or 29.3%, compared to the same period in 2018. The net increase of $4.3 million in the first quarter of 2019 was driven by activity associated with acquisitions completed over the last 12 months and instances where final cash settlements were slightly higher than the amounts accrued in 2018.

Investment Income

Investment income for the three months ended March 31, 2019 increased $0.5 million, or 79.9%, over the same period in 2018. The increase was primarily driven by higher interest rates and cash management activities to earn a higher yield on excess cash balances.

Other Income, net

Other income for the three months ended March 31, 2019 was $0.7 million, compared with $0.5 million in the same period in 2018. Other income consists primarily of legal settlements and other miscellaneous income.

Employee Compensation and Benefits

Employee compensation and benefits expense as a percentage of total revenues decreased to 53.7% for the three months ended March 31, 2019, from 54.0% for the three months ended March 31, 2018. Employee compensation and benefits for the first quarter of 2019 increased approximately 22.9%, or $61.9 million, over the same period in 2018. This net increase included: (i) $50.7 million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2018; (ii) an increase in staff salaries attributable to salary inflation and higher volumes in portions of our business; (iii) an increase in non-cash stock-based compensation expense due to the better-than-expected Company performance related to our equity compensation plan and teammate retention; (iv) increased producer commissions due to higher revenue; and (v) the increase in the value of corporate-owned life insurance policies associated with our deferred compensation plan, which was substantially offset by other operating expenses.

Other Operating Expenses

As a percentage of total revenues, other operating expenses represented 14.3% in the first quarter of 2019, versus 15.2% reported in the first quarter of 2018. Other operating expenses for the first quarter of 2019 increased $12.5 million, or 16.3%, over the same period of 2018. The net increase included: (i) $16.3 million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2018; (ii) increased expenses associated with information technology items related to data processing and value-added consulting services; partially offset by (iii) the increase in the value of corporate-owned life insurance policies associated with our deferred compensation plan, which was substantially offset by employee compensation and benefits.

(Gain)/Loss on Disposal

Loss on disposal for the first quarter of 2019 increased $2.9 million from the first quarter of 2018 when we had a gain of $2.4 million due to an earn-out related to a business we sold in 2015. Changes to the (gain)/loss on disposal are due to activity associated with book of business sales. Although we are not in the business of selling customer accounts or businesses, we periodically sell an office or a book of business (one or more customer accounts) because we believe doing so is in the Company’s best interest.

Amortization

Amortization expense for the first quarter of 2019 increased $5.7 million, or 27.5%, from the first quarter of 2018. This increase reflects the amortization of new intangibles from recently acquired businesses, partially offset by certain intangible assets becoming fully amortized.

Depreciation

Depreciation expense for the first quarter of 2019 increased $0.5 million, or 8.7%, compared to the first quarter of 2018. This increase is due primarily to the addition of fixed assets resulting from capital projects related to our multi-year technology investment

program and other business initiatives.

Interest Expense

Interest expense for the first quarter of 2019 increased $5.5 million, or 57.2%, compared to the first quarter of 2018. This increase is primarily due to the incremental debt issued as a result of the Hays Companies acquisition as well as rise in interest rates associated with our outstanding floating rate debt balances.

26

Change in Estimated Acquisition Earn-Out Payables

Accounting Standards Codification (“ASC”) Topic 805-Business Combinations is the authoritative guidance requiring an acquiring entity to recognize 100% of the fair value of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase price arrangements) at the acquisition date must be included in the purchase price consideration. As a result, the recorded purchase prices for all acquisitions consummated after January 1, 2009 include an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations are required to be recorded in the Condensed Consolidated Statements of Income when incurred or reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years.

The net charge or credit to the Condensed Consolidated Statements of Income for the period is the combination of the net change in the estimated acquisition earn-out payables balance, and the interest expense imputed on the outstanding balance of the estimated acquisition earn-out payables.

As of March 31, 2019 and 2018, the fair values of the estimated acquisition earn-out payables were re-evaluated based upon projected operating results and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three-month periods ended March 31, 2019 and 2018 were as follows:

	Three months ended   March 31,
(in thousands)	2019		2018
Change in fair value of estimated acquisition earn-out payables	$	50	$	2,062
Interest expense accretion	1,160		404
Net change in earnings from estimated acquisition earn-out payables	$	1,210	$	2,466

For the three months ended March 31, 2019 and 2018, the fair value of estimated earn-out payables was re-evaluated and increased by $50.0 thousand and by $2.1 million, respectively, which resulted in charges to the Condensed Consolidated Statements of Income.

As of March 31, 2019, estimated acquisition earn-out payables totaled $108.7 million, of which $25.2 million was recorded as accounts payable and $83.5 million was recorded as other non-current liabilities.

Income Taxes

The effective tax rate on income from operations for the three months ended March 31, 2019 and 2018 was 23.3%.

RESULTS OF OPERATIONS — SEGMENT INFORMATION

As discussed in Note 12 to the Condensed Consolidated Financial Statements, we operate four reportable segments: Retail, National Programs, Wholesale Brokerage, and Services. On a segmented basis, changes in amortization, depreciation and interest expenses generally result from activity associated with acquisitions. Likewise, other income in each segment reflects net gains primarily from legal settlements and miscellaneous income. As such, in evaluating the operational efficiency of a segment, management focuses upon the Organic Revenue growth rate of core commissions and fees revenue, the ratio of total employee compensation and benefits to total revenues, and the ratio of other operating expenses to total revenues.

The reconciliation of commissions and fees, included in the Condensed Consolidated Statements of Income, to Organic Revenue for the three months ended March 31, 2019 and 2018 is as follows:

	Three months ended   March 31,
(in thousands)	2019			2018
Commissions and fees	$	617,463		$	500,338
Profit-sharing contingent commissions	(15,322		)	(11,684		)
Guaranteed supplemental commissions	(3,635		)	(2,980		)
Core commissions and fees	598,506			485,674
Acquisitions	(103,817		)	—
Dispositions	—			(472		)
Organic Revenue	$	494,689		$	485,202

27

The growth rates for Organic Revenue, a non-GAAP financial measure, for the three months ended March 31, 2019, by segment, are as follows:

2019	Retail(1)						National Programs						Wholesale Brokerage						Services					Total
(in thousands, except percentages)	2019			2018			2019			2018			2019			2018			2019			2018		2019			2018
Commissions and fees	$	388,450		$	278,095		$	109,207		$	112,332		$	70,362		$	65,918		$	49,444		$	43,993	$	617,463		$	500,338
Total change	$	110,355					$	(3,125	)				$	4,444					$	5,451				$	117,125
Total growth %	39.7		%				(2.8		)%				6.7		%				12.4		%			23.4		%
Profit-sharing contingent commissions	(11,547		)	(6,130		)	(860		)	(3,982		)	(2,915		)	(1,572		)	—			—		(15,322		)	(11,684		)
GSCs	(3,240		)	(2,522		)	(4		)	(15		)	(391		)	(443		)	—			—		(3,635		)	(2,980		)
Core commissions and fees	$	373,663		$	269,443		$	108,343		$	108,335		$	67,056		$	63,903		$	49,444		$	43,993	$	598,506		$	485,674
Acquisitions	(94,582		)	—			(2,589		)	—			(1,399		)	—			(5,247		)	—		(103,817		)	—
Dispositions	—			(34		)	—			(112		)	—			(326		)	—			—		—			(472		)
Organic Revenue(2)	$	279,081		$	269,409		$	105,754		$	108,223		$	65,657		$	63,577		$	44,197		$	43,993	$	494,689		$	485,202
Organic Revenue growth(2)	$	9,672					$	(2,469	)				$	2,080					$	204				$	9,487
Organic Revenue growth %(2)	3.6		%				(2.3		)%				3.3		%				0.5		%			2.0		%

(1) The Retail Segment includes commissions and fees reported in the “Other” column of the Segment Information in Note 12 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.

(2) A non-GAAP financial measure.

The reconciliation of commissions and fees, included in the Condensed Consolidated Statements of Income, to Organic Revenue for the three months ended March 31, 2018 and 2017 is as follows:

	Three months ended   March 31,
(in thousands)	2018			2017
Commissions and fees	$	500,338		$	444,566
Profit-sharing contingent commissions	(11,684		)	(30,012		)
Guaranteed supplemental commissions	(2,980		)	(2,678		)
Core commissions and fees	485,674			411,876
New Revenue Standard impact on core commissions and fees	(45,592		)	—
Acquisitions	(5,380		)	—
Dispositions	—			(430		)
Organic Revenue	$	434,702		$	411,446

28

The growth rates for Organic Revenue, a non-GAAP financial measure, for the three months ended March 31, 2018, by segment, are as follows:

2018	Retail(1)						National Programs						Wholesale Brokerage						Services					Total
(in thousands, except percentages)	2018			2017			2018			2017			2018			2017			2018			2017		2018			2017
Commissions and fees	$	278,095		$	239,055		$	112,332		$	101,080		$	65,918		$	65,185		$	43,993		$	39,246	$	500,338		$	444,566
Total change	$	39,040					$	11,252					$	733					$	4,747				$	55,772
Total growth %	16.3		%				11.1		%				1.1		%				12.1		%			12.5		%
Profit-sharing contingent commissions	(6,130		)	(19,517		)	(3,982		)	(5,714		)	(1,572		)	(4,781		)	—			—		(11,684		)	(30,012		)
GSCs	(2,522		)	(2,268		)	(15		)	(3		)	(443		)	(407		)	—			—		(2,980		)	(2,678		)
Core commissions and fees	$	269,443		$	217,270		$	108,335		$	95,363		$	63,903		$	59,997		$	43,993		$	39,246	$	485,674		$	411,876
New Revenue Standard	(43,889		)	—			(106		)	—			(118		)	—			(1,479		)	—		(45,592		)	—
Acquisition revenues	(4,333		)	—			(926		)	—			(121		)	—			—			—		(5,380		)	—
Divested business	—			(431		)	—			1			—			—			—			—		—			(430		)
Organic Revenue(2)	$	221,221		$	216,839		$	107,303		$	95,364		$	63,664		$	59,997		$	42,514		$	39,246	$	434,702		$	411,446
Organic Revenue growth(2)	$	4,382					$	11,939					$	3,667					$	3,268				$	23,256
Organic Revenue growth %(2)	2.0		%				12.5		%				6.1		%				8.3		%			5.7		%

(1) The Retail Segment includes commissions and fees reported in the “Other” column of the Segment Information in Note 12 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.

(2) A non-GAAP financial measure.

The reconciliation of income before incomes taxes, included in the Condensed Consolidated Statement of Income, to EBITDAC, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, for the three months ended March 31, 2019, is as follows:

(in thousands)	Retail			National Programs			Wholesale Brokerage			Services			Other			Total
Income before income taxes	$	93,841		$	19,316		$	15,569		$	9,177		$	10,617		$	148,520
Income Before Income Taxes Margin	24.1		%	17.6		%	22.1		%	18.5		%	NMF			24.0		%
Amortization	15,444			6,596			2,849			1,303			—			26,192
Depreciation	1,624			1,590			404			284			2,133			6,035
Interest	21,153			5,354			1,327			872			(13,508		)	15,198
Change in estimated acquisition earn-out payables	1,028			42			41			99			—			1,210
EBITDAC	$	133,090		$	32,898		$	20,190		$	11,735		$	(758	)	$	197,155
EBITDAC Margin	34.2		%	30.0		%	28.6		%	23.7		%	NMF			31.8		%

NMF = Not a meaningful figure

29

The reconciliation of income before incomes taxes, included in the Condensed Consolidated Statement of Income, to EBITDAC, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, for the three months ended March 31, 2018, is as follows:

(in thousands)	Retail			National Programs			Wholesale Brokerage			Services			Other			Total
Income before income taxes	$	70,399		$	20,778		$	11,383		$	8,816		$	7,065		$	118,441
Income Before Income Taxes Margin	25.3		%	18.5		%	17.2		%	20.0		%	NMF			23.6		%
Amortization	10,242			6,323			2,837			1,137			—			20,539
Depreciation	1,237			1,387			427			411			2,090			5,552
Interest	6,797			7,496			1,435			594			(6,651		)	9,671
Change in estimated acquisition earn-out payables	835			68			1,563			—			—			2,466
EBITDAC	$	89,510		$	36,052		$	17,645		$	10,958		$	2,504		$	156,669
EBITDAC Margin	32.2		%	32.1		%	26.7		%	24.9		%	NMF			31.2		%

NMF = Not a meaningful figure

30

Retail Segment

The Retail Segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers. Approximately 89% of the Retail Segment’s commissions and fees revenue is commission based. Because most of our other operating expenses are not correlated to changes in commissions on insurance premiums, a significant portion of any fluctuation in the commissions we receive, net of related producer compensation and cost to fulfill expense deferrals and releases as required by the New Revenue Standard, will result in a similar fluctuation in our income before income taxes, unless we make incremental investments or modifications to the costs in the organization.

Financial information relating to our Retail Segment for the three months ended March 31, 2019 and 2018 is as follows:

	Three months ended   March 31,
(in thousands, except percentages)	2019			2018			% Change
REVENUES
Core commissions and fees	$	373,852		$	269,544		38.7	%
Profit-sharing contingent commissions	11,547			6,130			88.4	%
Guaranteed supplemental commissions	3,240			2,522			28.5	%
Investment income	—			1			(100.0	)%
Other income, net	592			205			188.8	%
Total revenues	389,231			278,402			39.8	%
EXPENSES
Employee compensation and benefits	199,699			149,444			33.6	%
Other operating expenses	55,937			39,395			42.0	%
(Gain)/loss on disposal	505			53			NMF
Amortization	15,444			10,242			50.8	%
Depreciation	1,624			1,237			31.3	%
Interest	21,153			6,797			NMF
Change in estimated acquisition earn-out payables	1,028			835			23.1	%
Total expenses	295,390			208,003			42.0	%
Income before income taxes	$	93,841		$	70,399		33.3	%
Income Before Income Taxes Margin (1)	24.1		%	25.3		%
EBITDAC (1)	$	133,090		$	89,510		48.7	%
EBITDAC Margin (1)	34.2		%	32.2		%
Organic Revenue growth rate (1)	3.6		%	2.0		%
Employee compensation and benefits relative to total revenues	51.3		%	53.7		%
Other operating expenses relative to total revenues	14.4		%	14.2		%
Capital expenditures	$	3,136		$	2,407		30.3	%
Total assets at March 31	$	5,773,290		$	4,687,456		23.2	%

(1) A non-GAAP financial measure.

NMF = Not a meaningful figure

 The Retail Segment’s total revenues during the three months ended March 31, 2019 increased 39.8%, or $110.8 million, from the same period in 2018, to $389.2 million. The $104.3 million increase in core commissions and fees revenue was driven by: (i) approximately $94.6 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2018; and (ii) an increase of $9.7 million related to net new and renewal business. Profit-sharing contingent commissions and GSCs for the first quarter of 2019 increased 70.9%, or $6.1 million, from the same period in 2018, to $14.8 million. The Retail Segment’s total commissions and fees increased by 39.7%, and the Organic Revenue growth rate was 3.6% for the first quarter of 2019. The Organic Revenue growth rate was driven by revenue from net new business written during the preceding 12 months and growth on renewals of existing customers. New business was impacted by modest increases in commercial auto rates and employee benefits, partially offset by continued premium rate reductions in workers compensation. Organic Revenue growth was driven by most lines of business.

31

Income before income taxes for the three months ended March 31, 2019 increased 33.3%, or $23.4 million, from the same period in 2018, to $93.8 million. The primary factors affecting this increase were: (i) the profit associated with the net increase in revenue as described above, partially offset by (ii) an increase in intercompany interest charges and amortization associated with new acquisitions.

EBITDAC for the three months ended March 31, 2019 increased 48.7%, or $43.6 million, from the same period in 2018, to $133.1 million. EBITDAC Margin for the three months ended March 31, 2019 increased to 34.2% from 32.2% in the same period in 2018. The increase in EBITDAC Margin was primarily driven by: (i) the net increase in revenue of $110.8 million; (ii) higher profit-sharing contingent commissions and supplemental commissions; (iii) acquisition performance; and (iv) leveraging the Retail Segment’s cost base and realizing some benefits from previous investments.

32

National Programs Segment

The National Programs Segment manages over 40 programs supported by approximately 100 well-capitalized carrier partners. In most cases, the insurance carriers that support the programs have delegated underwriting and, in many instances, claims-handling authority to our programs operations. These programs are generally distributed through a nationwide network of independent agents and Brown & Brown retail agents, and offer targeted products and services designed for specific industries, trade groups, professions, public entities and market niches. The National Programs Segment operations can be grouped into five broad categories: Professional Programs, Personal Lines Programs, Commercial Programs, Public Entity-Related Programs and the National Flood Program. The National Programs Segment’s revenue is primarily commission based.

Financial information relating to our National Programs Segment for the three months ended March 31, 2019 and 2018 is as follows:

	Three months ended   March 31,
(in thousands, except percentages)	2019			2018			% Change
REVENUES
Core commissions and fees	$	108,343		$	108,335		—	%
Profit-sharing contingent commissions	860			3,982			(78.4	)%
Guaranteed supplemental commissions	4			15			(73.3	)%
Investment income	316			114			177.2	%
Other income, net	37			29			27.6	%
Total revenues	109,560			112,475			(2.6	)%
EXPENSES
Employee compensation and benefits	52,744			53,535			(1.5	)%
Other operating expenses	23,918			22,888			4.5	%
(Gain)/loss on disposal	—			—			—	%
Amortization	6,596			6,323			4.3	%
Depreciation	1,590			1,387			14.6	%
Interest	5,354			7,496			(28.6	)%
Change in estimated acquisition earn-out payables	42			68			(38.2	)%
Total expenses	90,244			91,697			(1.6	)%
Income before income taxes	$	19,316		$	20,778		(7.0	)%
Income Before Income Taxes Margin (1)	17.6		%	18.5		%
EBITDAC (1)	32,898			36,052			(8.7	)%
EBITDAC Margin (1)	30.0		%	32.1		%
Organic Revenue growth rate (1)	(2.3		)%	12.5		%
Employee compensation and benefits relative to total revenues	48.1		%	47.6		%
Other operating expenses relative to total revenues	21.8		%	20.3		%
Capital expenditures	$	4,568		$	2,678		70.6	%
Total assets at March 31	$	2,852,824		$	3,009,147		(5.2	)%

(1) A non-GAAP financial measure.

NMF = Not a meaningful figure

The National Programs Segment’s revenue for the three months ended March 31, 2019 decreased 2.6%, or $2.9 million, from the same period in 2018, to $109.6 million. Core commissions and fees revenue was flat and was driven by: (i) approximately $2.6 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2018; (ii) an offsetting decrease of $2.5 million related to net new and renewal business, primarily driven by lower claims processing activity associated with our flood business versus the prior year; and (iii) $0.1 million decrease related to commissions and fees recorded in 2018 from businesses since divested. Profit-sharing contingent commissions and GSCs were $0.9 million for the first quarter of 2019, which was a decrease of $3.1 million from the first quarter of 2018, primarily driven by lower weather-related claims activity.

33

The National Programs Segment’s total commissions and fees declined 2.8%, and Organic Revenue declined 2.3%, for the three months ended March 31, 2019. The Organic Revenue decline was primarily due to lower flood claims processing revenues as compared to the first quarter of 2018, as well as a decline in our lender placement business due to the continued improving economy and some bank consolidations that are impacting our customers.

Income before income taxes for the three months ended March 31, 2019 decreased 7.0%, or $1.5 million, from the same period in 2018, to $19.3 million. The decrease was due to lower profit-sharing contingent commission of $3.1 million due to lower weather-related claims activity and the lower profit associated with declining revenues, with a partial offset by lower intercompany interest charges of $2.1 million.

EBITDAC for the three months ended March 31, 2019 decreased 8.7%, or $3.2 million, from the same period in 2018, to $32.9 million. EBITDAC Margin for the three months ended March 31, 2019 decreased to 30.0% from 32.1% in the same period in 2018. The decrease in EBITDAC Margin was related to lower profit-sharing contingent commissions of $3.1 million due to lower weather-related claims activity.

34

Wholesale Brokerage Segment

The Wholesale Brokerage Segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, including Brown & Brown retail agents. Like the Retail and National Programs Segments, the Wholesale Brokerage Segment’s revenues are primarily commission based.

Financial information relating to our Wholesale Brokerage Segment for the three months ended March 31, 2019 and 2018 is as follows:

	Three months ended   March 31,
(in thousands, except percentages)	2019			2018			% Change
REVENUES
Core commissions and fees	$	67,056		$	63,903		4.9	%
Profit-sharing contingent commissions	2,915			1,572			85.4	%
Guaranteed supplemental commissions	391			443			(11.7	)%
Investment income	40			—			—	%
Other income, net	107			230			(53.5	)%
Total revenues	70,509			66,148			6.6	%
EXPENSES
Employee compensation and benefits	37,510			36,618			2.4	%
Other operating expenses	12,809			11,885			7.8	%
(Gain)/loss on disposal	—			—			—	%
Amortization	2,849			2,837			0.4	%
Depreciation	404			427			(5.4	)%
Interest	1,327			1,435			(7.5	)%
Change in estimated acquisition earn-out payables	41			1,563			(97.4	)%
Total expenses	54,940			54,765			0.3	%
Income before income taxes	$	15,569		$	11,383		36.8	%
Income Before Income Taxes Margin (1)	22.1		%	17.2		%
EBITDAC (1)	20,190			17,645			14.4	%
EBITDAC Margin (1)	28.6		%	26.7		%
Organic Revenue growth rate (1)	3.3		%	6.1		%
Employee compensation and benefits relative to total revenues	53.2		%	55.4		%
Other operating expenses relative to total revenues	18.2		%	18.0		%
Capital expenditures	$	1,189		$	420		183.1	%
Total assets at March 31	$	1,292,406		$	1,323,046		(2.3	)%

(1) A non-GAAP financial measure.

NMF = Not a meaningful figure

The Wholesale Brokerage Segment’s total revenues for the three months ended March 31, 2019 increased 6.6%, or $4.4 million, from the same period in 2018, to $70.5 million. The $3.2 million net increase in core commissions and fees revenue was driven primarily by: (i) $2.1 million related to net new and renewal business; (ii) $1.4 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2018; and (iii) an offsetting $0.3 million decrease related to commissions and fees recorded in 2018 from businesses since divested. Profit-sharing contingent commissions and GSCs for the first quarter of 2019 increased approximately $1.3 million compared to the first quarter of 2018. The Wholesale Brokerage Segment’s growth rate for total commissions and fees was 6.7%, and the Organic Revenue growth rate was 3.3% for the first quarter of 2019. The Organic Revenue growth rate was driven by net new business, some rate increases for coastal property accounts and casualty business, with modest increases in exposure units, all partially offset by the timing of renewals on certain accounts that renewed in the first quarter of the prior year which are expected to renew in the second and third quarters of the current year.

35

Income before income taxes for the three months ended March 31, 2019 increased 36.8%, or $4.2 million from the same period in 2018, to $15.6 million. The increase was due to (i) the profit from increased core commissions and fees of $5.3 million; (ii) an increase in profit-sharing contingent commissions of $1.3 million; (iii) a decrease in estimated acquisition earnouts of $1.5 million; partially offset by (iv) an increase in employee compensation and benefits of $0.9 million due to increased producer compensation driven by to increased core commissions and fees revenue; and (v) an increase of $1.0 million in other operating expenses attributable to higher expenses associated with technology, professional fees, and rent.

EBITDAC for the three months ended March 31, 2019 increased 14.4%, or $2.5 million from the same period in 2018, to $20.2 million. EBITDAC Margin for the three months ended March 31, 2019 increased to 28.6% from 26.7% in the same period in 2018. The increase in EBITDAC Margin was primarily driven by: (i) increased core commissions and fees of $5.3 million; (ii) and an increase in profit-sharing contingent commissions of $1.3 million; partially offset by (iii) an increase in employee compensation and benefits of $0.9 million due to increased producer compensation driven by increased core commissions and fees revenue; and (iv) an increase of $1.0 million in other operating expenses attributable to higher expenses associated with technology, professional fees, and rent.

36

Services Segment

The Services Segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas. The Services Segment also provides Medicare Set-aside account services, Social Security disability and Medicare benefits advocacy services, and claims adjusting services.

Unlike the other segments, nearly all of the Services Segment’s revenue is generated from fees, which are not significantly affected by fluctuations in general insurance premiums.

Financial information relating to our Services Segment for the three months ended March 31, 2019 and 2018 is as follows:

	Three months ended   March 31,
(in thousands, except percentages)	2019			2018			% Change
REVENUES
Core commissions and fees	$	49,444		$	43,993		12.4	%
Profit-sharing contingent commissions	—			—			—	%
Guaranteed supplemental commissions	—			—			—	%
Investment income	48			73			(34.2	)%
Other income, net	—			—			—	%
Total revenues	49,492			44,066			12.3	%
EXPENSES
Employee compensation and benefits	22,427			20,519			9.3	%
Other operating expenses	15,330			15,062			1.8	%
(Gain)/loss on disposal	—			(2,473		)	(100.0	)%
Amortization	1,303			1,137			14.6	%
Depreciation	284			411			(30.9	)%
Interest	872			594			46.8	%
Change in estimated acquisition earn-out payables	99			—			—	%
Total expenses	40,315			35,250			14.4	%
Income before income taxes	$	9,177		$	8,816		4.1	%
Income Before Income Taxes Margin (1)	18.5		%	20.0		%
EBITDAC (1)	11,735			10,958			7.1	%
EBITDAC Margin (1)	23.7		%	24.9		%
Organic Revenue growth rate (1)	0.5		%	8.3		%
Employee compensation and benefits relative to total revenues	45.3		%	46.6		%
Other operating expenses relative to total revenues	31.0		%	34.2		%
Capital expenditures	$	109		$	285		(61.8	)%
Total assets at March 31	$	480,108		$	432,920		10.9	%

(1) A non-GAAP financial measure.

NMF = Not a meaningful figure

The Services Segment’s total revenues for the three months ended March 31, 2019 increased 12.3%, or $5.4 million, over the same period in 2018, to $49.5 million. The $5.5 million net increase in core commissions and fees revenue was driven primarily by: (i) $5.3 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2017; and (ii) $0.2 million related to net new and renewal business. The Services Segment’s growth rate for total commissions and fees was 12.4%, and the Organic Revenue growth rate was 0.5% for the first quarter of 2019. The Organic Revenue growth rate was impacted by lower claims in our Social Security advocacy business due to the prior year completion of advocacy work on a book of business substantially offsetting Organic Revenue growth in other businesses.

Income before income taxes for the three months ended March 31, 2019 increased 4.1%, or $0.4 million, from the same period in 2018, to $9.2 million as a result of the growth in total revenue and the leveraging of our expense base, partially offset by a gain on disposal recorded in the prior year and higher intercompany interest charges associated with acquisitions.

37

EBITDAC for the three months ended March 31, 2019 increased 7.1%, or $0.8 million, from the same period in 2018, to $11.7 million. EBITDAC Margin for the three months ended March 31, 2019 decreased to 23.7% from 24.9% in the same period in 2018. The decrease in EBITDAC Margin was entirely driven by a gain on disposal recorded in the prior year.

Other

As discussed in Note 12 of the Notes to Condensed Consolidated Financial Statements, the “Other” column in the Segment Information table includes any income and expenses not allocated to reportable segments, and corporate-related items, including the intercompany interest expense charges to reporting segments.

LIQUIDITY AND CAPITAL RESOURCES

The Company seeks to maintain a conservative balance sheet and liquidity profile. Our capital requirements to operate as an insurance intermediary are low and we have been able to grow and invest in our business principally through cash that has been generated from operations. We have the ability to utilize our revolving credit facility (the “Facility”), which provides up to $800.0 million in available cash, and we believe that we have access to additional funds, if needed, through the capital markets to obtain further debt financing under the current market conditions. The Company believes that its existing cash, cash equivalents, short-term investment portfolio and funds generated from operations, together with the funds available under the Revolving Credit Facility, will be sufficient to satisfy our normal liquidity needs, including principal payments on our long-term debt, for at least the next 12 months.

Contractual Cash Obligations

As of March 31, 2019, our contractual cash obligations were as follows:

	Payments Due by Period
(in thousands)	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-term debt	$	1,506,250	$	55,000	$	128,750	$	472,500	$	850,000
Other liabilities(1)	62,206		3,383		5,615		3,621		49,587
Operating leases	223,356		33,577		111,511		40,241		38,027
Interest obligations	358,165		62,407		118,098		89,941		87,719
Unrecognized tax benefits	1,839		—		1,839		—		—
Maximum future acquisition contingency payments(2)	218,228		46,431		154,896		9,620		7,281
Total contractual cash obligations	$	2,370,044	$	200,798	$	520,709	$	615,923	$	1,032,614

(1) Includes the current portion of other long-term liabilities.

(2) Includes $108.7 million of current and non-current estimated earn-out payables.

Debt

Total debt at March 31, 2019 was $1,495.0 million net of unamortized discount and debt issuance costs, which was a decrease of $12.0 million compared to December 31, 2018. The decrease includes the repayment of the principal balance of $8.8 million for scheduled principal amortization balances related to our various existing floating rate debt term notes, as well as an additional contra liability for discount to par and aggregate debt issuance costs in total of $3.6 million related to the issuance of the Company's 4.500% Senior Notes due 2029 as of March 31, 2019, net of the amortization of discounted debt related to our various unsecured Senior Notes, and debt issuance cost amortization of $0.4 million.

On March 11, 2019, the Company completed the issuance of $350.0 million aggregate principal amount of the Company's 4.500% Senior Notes due 2029. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions which are customary for credit-rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay a portion of the outstanding balance of $350.0 million on the Revolving Credit Facility, utilized in connection with financing related to the Hays Companies acquisition, and for other general corporate purposes. As of March 31, 2019, there was an outstanding debt balance of $350.0 million exclusive of the associated discount balance.

38

Off-Balance Sheet Arrangements

Neither we nor our subsidiaries have ever incurred off-balance sheet obligations through the use of, or investment in, off-balance sheet derivative financial instruments or structured finance or special purpose entities organized as corporations, partnerships or limited liability companies or trusts.

For further discussion of our cash management and risk management policies, see “Quantitative and Qualitative Disclosures About Market Risk.”

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates, foreign exchange rates and equity prices. We are exposed to market risk through our investments, revolving credit line, term loan agreements and international operations.

Our invested assets are held primarily as cash and cash equivalents, restricted cash, available-for-sale marketable debt securities, non-marketable debt securities, certificates of deposit, U.S. treasury securities, and professionally managed short duration fixed income funds. These investments are subject to interest rate risk. The fair values of our invested assets at March 31, 2019 and December 31, 2018, approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material.

We do not actively invest or trade in equity securities. In addition, we generally dispose of any significant equity securities received in conjunction with an acquisition shortly after the acquisition date.

As of March 31, 2019, we had $656.3 million of borrowings outstanding under our various term loans, which bear interest on a floating basis tied to the London Interbank Offered Rate (“LIBOR”) and therefore can result in changes to our associated interest expense. The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our Condensed Consolidated Financial Statements.

We are subject to exchange rate risk primarily in our U.K.-based wholesale brokerage business that has a cost base principally denominated in British pounds and a revenue base in several other currencies, but principally in U.S. dollars. Based upon our foreign currency rate exposure as of March 31, 2019, an immediate 10% hypothetical change of foreign currency exchange rates would not have a material effect on our Condensed Consolidated Financial Statements.

ITEM 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation (the “Evaluation”) required by Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15 and 15d-15 under the Exchange Act (“Disclosure Controls”) as of March 31, 2019. Based upon the Evaluation, our CEO and CFO concluded that the design and operation of our Disclosure Controls were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to our senior management, including our CEO and CFO, to allow timely decisions regarding required disclosures.

Changes in Internal Controls

There has not been any change in our internal control over financial reporting identified in connection with the Evaluation that occurred during the quarter ended March 31, 2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Internal Control Over Financial Reporting

Our management, including our CEO and CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

39

CEO and CFO Certifications

Exhibits 31.1 and 31.2 are the Certifications of the CEO and the CFO, respectively. The Certifications are supplied in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This Item 4 of Part I of this Quarterly Report on Form 10-Q contains the information concerning the evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II

ITEM 1. Legal Proceedings

In Item 3 of Part I of the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2018, certain information concerning litigation claims arising in the ordinary course of business was disclosed. Such information was current as of the date of filing. During the Company’s fiscal quarter ended March 31, 2019, no new legal proceedings, or material developments with respect to existing legal proceedings, occurred which require disclosure in this Quarterly Report on Form 10-Q.

ITEM 1A. Risk Factors

There were no material changes in the risk factors previously disclosed in Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about our repurchase of shares of our common stock during the three months ended March 31, 2019:

	Total number of shares purchased(1)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum value that may yet be purchased under the plans or programs(2)
January 1, 2019 to January 31, 2019	200,832	$	27.73	—	$	147,453,029
February 1, 2019 to February 28, 2019	23,836	29.30		—	147,453,029
March 1, 2019 to March 31, 2019	18,483	28.88		—	147,453,029
Total	243,151	$	27.97	—	$	147,453,029

(1) We purchased 243,151 shares during the quarter ended March 31, 2019, which were acquired from our employees to cover required tax withholdings on the vesting of shares in our equity compensation plans.

(2) On July 21, 2014, our Board of Directors approved the repurchase of up to $200.0 million of the Company’s outstanding common stock. On July 20, 2015, the Board of Directors authorized the repurchase of up to an additional $400.0 million of the Company's outstanding common stock. As of March 31, 2019, the Company’s outstanding Board-approved share repurchase authorization was approximately $147.5 million. On May 1, 2019, the Board of Directors approved an additional repurchase authorization amount of $372.5 million to bring the total available share repurchase authorization to approximately $500.0 million. Between the first quarter of 2014 and March 31, 2019, the Company repurchased a total of approximately 13.8 million shares for an aggregate cost of approximately $477.5 million.

40

ITEM 6. Exhibits

The following exhibits are filed as a part of this Report:

3.1	Articles of Amendment to the Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed on March 29, 2018),  Articles of Amendment to Articles of Incorporation (adopted April 24, 2003) (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 2003) and Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 1999).
3.2	Bylaws (incorporated by reference to Exhibit 3.2 to Form 8-K filed on October 12, 2016).
4.1	Second Supplemental Indenture, dated as of March 11, 2019, between Brown & Brown, Inc. and U.S. Bank National Association (incorporated by reference to Exhibit 4.2 to Form 8-K filed March 12, 2019).
4.2	Form of Brown & Brown, Inc.'s 4.500% Notes due 2029 (incorporated by reference to Exhibit 4.3 to Form 8-K filed March 12, 2019).
10.1	Underwriting Agreement, dated as of March 4, 2019, among Brown & Brown, Inc. and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and SunTrust Robinson Humphrey, Inc., as representatives of the several underwriters named therein (incorporated by reference to Exhibit 1.1 to Form 8-K filed March 8, 2019).
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer of the Registrant.
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer of the Registrant.
32.1	Section 1350 Certification by the Chief Executive Officer of the Registrant.
32.2	Section 1350 Certification by the Chief Financial Officer of the Registrant.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

41

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BROWN & BROWN, INC.
	/s/ R. Andrew Watts
Date: May 9, 2019	R. Andrew Watts
	Executive Vice President, Chief Financial Officer and Treasurer
	(duly authorized officer, principal financial officer and principal accounting officer)

42

EX-31.1

Exhibit 31.1

Certification by the Chief Executive Officer

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, J. Powell Brown, certify that:

1. I have reviewed this Quarterly Report of Brown & Brown, Inc. (the “Registrant”) on Form 10-Q for the quarter ended March 31, 2019;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 9, 2019

/s/ J. Powell Brown

J. Powell Brown

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification by the Chief Financial Officer

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, R. Andrew Watts, certify that:

1. I have reviewed this Quarterly Report of Brown & Brown, Inc. (the “Registrant”) on Form 10-Q for the quarter ended March 31, 2019;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: May 9, 2019

/s/ R. Andrew Watts

R. Andrew Watts

Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 1350 of Title 18 of the United States Code, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Brown & Brown, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, J. Powell Brown, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78m or § 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2019

/s/ J. Powell Brown

J. Powell Brown

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 1350 of Title 18 of the United States Code, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Brown & Brown, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, R. Andrew Watts, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78m or § 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2019

/s/ R. Andrew Watts

R. Andrew Watts

Executive Vice President, Chief Financial Officer and Treasurer

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 07, 2019
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	BRO
Entity Registrant Name	BROWN & BROWN, INC.
Entity Central Index Key	0000079282
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		282,042,437

XML

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
REVENUES
Commissions and fees	$ 617,463	$ 500,338
Investment income	1,081	601
Other income, net	736	522
Total revenues	619,280	501,461
EXPENSES
Employee compensation and benefits	332,837	270,899
Other operating expenses	88,783	76,313
(Gain)/loss on disposal	505	(2,420)
Amortization	26,192	20,539
Depreciation	6,035	5,552
Interest	15,198	9,671
Change in estimated acquisition earn-out payables	1,210	2,466
Total expenses	470,760	383,020
Income before income taxes	148,520	118,441
Income taxes	34,624	27,613
Net income	$ 113,896	$ 90,828
Net income per share:
Basic (in dollars per share)	$ 0.41	$ 0.33
Diluted (in dollars per share)	0.40	0.32
Dividends declared per share (in dollars per share)	$ 0.080	$ 0.075

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 322,477		$ 438,961	$ 558,248	$ 573,383
Restricted cash and investments	302,410		338,635
Short-term investments	10,518		12,868
Premiums, commissions and fees receivable	847,132		844,815
Reinsurance recoverable	51,356		65,396
Prepaid reinsurance premiums	314,363		337,920
Other current assets	146,492	$ 125,712	128,716
Total current assets	1,994,748		2,167,311
Fixed assets, net	117,364		100,395
Operating Lease, Right-of-Use Asset	174,580	178,304	0
Goodwill	3,513,218		3,432,786
Amortizable intangible assets, net	907,638		898,807
Investments	17,528		17,394
Other assets	81,213		71,975
Total assets	6,806,289	6,863,968	6,688,668	5,615,083
Current Liabilities:
Premiums payable to insurance companies	801,475		857,559
Losses and loss adjustment reserve	51,356		65,212
Unearned premiums	314,363		337,920
Premium deposits and credits due customers	94,426		105,640
Accounts payable	136,467		87,345
Accrued expenses and other liabilities	193,986	293,146	279,310
Current portion of long-term debt	55,000		50,000
Total current liabilities	1,647,073		1,782,986
Long-term debt less unamortized discount and debt issuance costs	1,439,998		1,456,990
Operating Lease, Liability	159,823	$ 161,464	0
Deferred income taxes, net	300,857		315,732
Other liabilities	160,107		132,392
Shareholders’ Equity:
Common stock, par value $0.10 per share; authorized 560,000 shares; issued 286,961 shares and outstanding 276,074 shares at 2018, issued 286,929 shares and outstanding 276,210 shares at 2017 - in thousands. 2017 share amounts restated for the 2-for-1 stock split effective March 28, 2018	29,584		29,338
Additional paid-in capital	621,249		615,180
Treasury stock, at cost at 10,887 shares at 2018 and 10,719 shares at 2017, respectively - in thousands.	(477,572)		(477,572)
Retained earnings	2,925,170		2,833,622
Total shareholders’ equity	3,098,431		3,000,568	$ 2,770,593	$ 2,582,699
Total liabilities and shareholders’ equity	$ 6,806,289		$ 6,688,668

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Dec. 31, 2018	Sep. 30, 2018
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	560,000,000	560,000,000
Common stock, shares issued (in shares)	293,379,702	295,844,557
Common stock, shares outstanding (in shares)	279,583,006	282,047,861
Treasury stock shares (in shares)	13,796,696	13,796,696

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash and Cash Equivalents [Line Items]
Repayments of Lines of Credit	$ 350,000	$ 0
Document Period End Date	Mar. 31, 2019
Payments of Debt Issuance Costs	$ (3,698)	0
Cash, Cash Equivalents and Restricted Cash	624,887	826,377
Cash flows from operating activities:
Net income	113,896	90,828
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization	26,192	20,539
Depreciation	6,035	5,552
Non-cash stock-based compensation	12,994	7,295
Change in estimated acquisition earn-out payables	1,210	2,466
Deferred income taxes	(14,875)	(12,093)
Amortization of debt discount	456	407
Accretion (Amortization) of Discounts and Premiums, Investments	(7)	3
Payments On Acquisition Earn Outs In Excess Of Original Estimated Payables	0	(715)
Net gain on sales of investments, fixed assets and customer accounts	799	(2,388)
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
Premiums, commissions and fees receivable decrease	(6,484)	7,667
Reinsurance recoverables decrease	14,040	329,771
Prepaid reinsurance premiums decrease	23,557	28,845
Other assets decrease	(29,521)	806
Premiums payable to insurance companies (decrease)	(61,229)	(2,691)
Premium deposits and credits due customers increase	(11,362)	5,910
Losses and loss adjustment reserve (decrease)	(13,856)	(329,874)
Unearned premiums (decrease)	(23,557)	(28,845)
Accounts payable increase	56,436	52,896
Accrued expenses and other liabilities (decrease)	(97,689)	(94,514)
Other liabilities (decrease)	8,321	(2,384)
Net cash provided by operating activities	5,356	79,481
Cash flows from investing activities:
Additions to fixed assets	(23,186)	(9,751)
Payments for businesses acquired, net of cash acquired	(95,081)	(33,576)
Proceeds from sales of fixed assets and customer accounts	32	142
Purchases of investments	(31)	(6,142)
Proceeds from Sale, Maturity and Collection of Investments	2,392	6,531
Net cash used in investing activities	(115,874)	(42,796)
Cash flows from financing activities:
Payments on acquisition earn-outs	(579)	(1,761)
Proceeds from Issuance of Long-term Debt	350,000	0
Payments on long-term debt	(8,750)	(5,000)
Issuances of common stock for employee stock benefit plans	16	720
Repurchase Of Stock Benefit Plan Shares For Employees To Fund Tax Withholdings	(6,832)	(7,659)
Purchase of treasury stock	0	(11,250)
Settlement (prepayment) of accelerated share repurchase program	0	11,250
Cash dividends paid	(22,348)	(20,696)
Net cash used in financing activities	(42,191)	(34,396)
Cash and cash equivalents inclusive of restricted cash at end of period	322,477	558,248
Cash and Cash Equivalents inclusive of Restricted Cash [Member]
Cash flows from financing activities:
Net increase in cash and cash equivalents inclusive of restricted cash	(152,709)	2,289
Cash and cash equivalents inclusive of restricted cash at end of period	$ 624,887	$ 826,377

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY Statement - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]
Common Stock, Shares, Outstanding		286,895
Stockholders' Equity Attributable to Parent	$ 2,582,699	$ 28,689	$ 483,733	$ (386,322)	$ 2,456,599
Net Income (Loss) Attributable to Parent	90,828				90,828
Stock Issued During Period, Shares, Employee Benefit Plan		53
Stock Issued During Period, Value, Employee Benefit Plan	(321)	$ 6	(327)
Treasury Stock, Value, Acquired, Cost Method	$ 0		$ 11,250	(11,250)
Common Stock Issued to Directors Shares		13
Common Stock Issued to Directors	700,000	1,000	699,000
Dividends, Cash	$ (20,696)				(20,696)
Common Stock, Shares, Outstanding		286,961
Stockholders' Equity Attributable to Parent	2,770,593	$ 28,696	$ 495,278	(397,572)	2,644,191
Net Unrealized Holding Gain on Available for Sale Securities	$ (132)		(77)		(55)
Common Stock, Shares, Outstanding	279,583,006	293,380
Common Stock, Shares, Outstanding | Accounting Standards Update 2014-09 [Member]		286,895
Stockholders' Equity Attributable to Parent	$ 3,000,568	$ 29,338	615,180	(477,572)	2,833,622
Stockholders' Equity Attributable to Parent | Accounting Standards Update 2014-09 [Member]	2,700,214	$ 28,689	483,733	(386,322)	2,574,114
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2014-09 [Member]					117,515
Net Income (Loss) Attributable to Parent	113,896				113,896
Stock Issued During Period, Shares, Employee Benefit Plan		2,465
Stock Issued During Period, Value, Employee Benefit Plan	6,209	$ 246	5,963
Dividends, Cash	(22,348)				(22,348)
Common Stock, Shares, Outstanding		295,845
Stockholders' Equity Attributable to Parent	3,098,431	$ 29,584	621,249	$ (477,572)	$ 2,925,170
Net Unrealized Holding Gain on Available for Sale Securities	$ 106		$ 106

XML

Nature of Operations	3 Months Ended
	Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	Nature of OperationsBrown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and service organization that markets and sells insurance products and services, primarily in the property, casualty and employee benefits areas. Brown & Brown’s business is divided into four reportable segments. The Retail Segment provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers. The National Programs Segment, which acts as a managing general agent (“MGA”), provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through a nationwide network of independent agents, including Brown & Brown retail agents. The Wholesale Brokerage Segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents. The Services Segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims adjusting services.

XML

Basis of Financial Reporting

3 Months Ended

Mar. 31, 2019

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Basis of Financial Reporting

Basis of Financial Reporting

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which provides guidance for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact of this pronouncement.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates Step 2 of the goodwill impairment test. The updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and will be applied prospectively. The Company is currently evaluating the impact of this guidance on future interim or annual goodwill impairment tests performed.

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“Topic 842”), which provides guidance for accounting for leases. Under Topic 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. Effective as of January 1, 2019, the Company adopted Topic 842, and all related amendments, which established Accounting Standards Codification (“ASC”) Topic 842. The Company adopted these standards by the recognition of right-of-use assets and related lease liabilities on the balance sheet. As permitted by Topic 842, the Company elected the transition practical expedient to adopt as of January 1, 2019, the date of initial application under the modified retrospective approach for leases existing at that date, with an adjustment to retained earnings. As a result, the Consolidated Balance Sheet at December 31, 2018 was not restated and continues to be reported under ASC Topic 840 (“Topic 840”) which did not require the recognition of operating lease liabilities on the balance sheet, and thus is not comparative. For the three months ended March 31, 2019, all of the Company's leases are classified as operating leases, which are primarily real estate leases for office space. The expense recognition for operating leases under Topic

842 is substantially consistent with Topic 840, where operating lease charges are recorded entirely in operating expenses. As a result, there is no significant difference in the Company's results of operations presented in the Company's Condensed Consolidated Statements of Income for each period presented.

The adoption of Topic 842 had a significant impact on the Company's balance sheet with the recognition of the operating lease right-of-use asset and the liability for operating leases. Upon adoption, leases that were classified as operating leases under Topic 840 were classified as operating leases under Topic 842. For the adoption of Topic 842, the Company recorded an adjustment of $202.9 million to operating lease right-of-use asset and the related lease liability, with no impact to retained earnings. The lease liability is the present value of the remaining minimum lease payments, determined under Topic 840, discounted using the Company's incremental borrowing rate at the effective date of January 1, 2019. As permitted under Topic 842, the Company elected practical expedient that permit the Company to not reassess whether a contract is or contains a lease, the classification of the Company's existing operating leases, and initial direct costs for any existing leases. The Company did not elect the practical expedient to use hindsight in determining the lease term (when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Company's right-of-use assets. The application of the practical expedient did not have a significant impact on the measurement of the operating lease liability.

The impact of the adoption of Topic 842 on the balance sheet at January 1, 2019 was (in thousands):

(in thousands)	Balance at December 31, 2018	Adjustments due to Topic 842		Balance at January 1, 2019
Balance Sheet
Assets:
Other current assets	128,716	(3,004	)	125,712
Operating lease assets	—	178,304		178,304
Total Assets	6,688,668	175,300		6,863,968
Liabilities:
Accrued expenses and other liabilities	279,310	13,836		293,146
Operating lease liabilities	—	161,464		161,464
Total Liabilities	3,688,100	175,300		3,863,400

For contracts entered into on or after the January 1, 2019, at the inception of a contract the Company assesses whether the contract is, or contains, a lease. This assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019 are accounted for under Topic 840 and were not reassessed. For real estate leases that contain both lease and non-lease components, the Company elected to account the lease components together with non-lease components (e.g., common-area maintenance).

Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, or the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. All of the Company's real estate leases for office space do not meet the definition of a finance lease. The Company's policy is to own, rather than lease, equipment.

For leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, less any lease incentives received. The lease liability is initially measured at the present value of the lease payments under the lease. For the Company's operating leases, the lease payments are discounted using an incremental borrowing rate, which approximates the rate of interest that would be paid on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms.

Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Some of the Company's real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and based on the minimum amount stated in the lease. Lease components are included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate, or payments based on a change in the Company's portion of the operating expenses, including real estate taxes and insurance, are

recorded as a period expense when incurred. Lease modifications result in remeasurement of the right-of-use assets and the lease liability.

Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability.

The Company elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a total term of 12 months or less. The effect of short-term leases on the Company's right-of-use asset and lease liability would not be significant.

XML

Revenues (Notes)

3 Months Ended

Mar. 31, 2019

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue [Table Text Block]

The following tables present the revenues disaggregated by revenue source:

	Three months ended March 31, 2019
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Base commissions(1)	$	287,200	$	77,178	$	54,173	$	—	$	(12	)	$	418,539
Fees(2)	43,877		30,246		12,510		49,444		(288		)	135,789
Incentive commissions(3)	42,775		919		373		—		111			44,178
Profit-sharing contingent commissions(4)	11,547		860		2,915		—		—			15,322
Guaranteed supplemental commissions(5)	3,240		4		391		—		—			3,635
Investment income(6)	—		316		40		48		677			1,081
Other income, net(7)	592		37		107		—		—			736
Total Revenues	$	389,231	$	109,560	$	70,509	$	49,492	$	488		$	619,280

(1) Base commissions generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which the Company controls.

(2) Fee revenues relate to fees for services other than securing coverage for the Company's customers and fees negotiated in lieu of commissions.

(3) Incentive commissions include additional commissions over base commissions received from insurance carriers based on predetermined production levels mutually agreed upon by both parties.

(4) Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention.

(5) Guaranteed supplemental commissions represent guaranteed fixed-base agreements in lieu of profit-sharing contingent commissions.

(6) Investment income consists primarily of interest on cash and investments.

(7) Other income consists primarily of legal settlements and other miscellaneous income.

Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of March 31, 2019 and December 31, 2018 were as follows:

(in thousands)	March 31, 2019		December 31, 2018
Contract assets	$	311,137	$	265,994
Contract liabilities	$	57,283	$	53,496

Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in the Company's systems and are reflected in premiums, commissions and fee receivable in the Company's Condensed Consolidated Balance Sheet. Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the transfer of a good or service to the customer. Deferred revenue is reflected within accrued expenses and other liabilities for those to be recognized in less than 12 months and in other liabilities for those to be recognized more than twelve months from the date presented in the Company's Condensed Consolidated Balance Sheet.

As of March 31, 2019, deferred revenue consisted of $39.6 million as current portion to be recognized within one year and $17.7 million in long term to be recognized beyond one year. As of December 31, 2018, deferred revenue consisted of $37.0 million as current portion to be recognized within one year and $16.5 million in long-term deferred revenue to be recognized beyond one year.

During the three months ended March 31, 2019, the amount of revenue recognized related to performance obligations satisfied in a previous period, inclusive of changes due to estimates, was not significant.

Other Assets and Deferred Cost

Incremental cost to obtain - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans in the Retail Segment, in which the Company pays an incremental amount of compensation on new business. These incremental costs are deferred and amortized over a 15-year period. The cost to obtain balance within the other assets caption in the Company's Condensed Consolidated Balance Sheet was $16.3 million and $13.2 million as of March 31, 2019 and December 31, 2018, respectively. For the three months ended March 31, 2019, the Company deferred $3.4 million of incremental cost to obtain customer contracts. The Company expensed $0.3 million of the incremental cost to obtain customer contracts for the three months ended March 31, 2019.

Cost to fulfill - The Company defers certain costs to fulfill contracts and recognizes these costs as the associated performance obligations are fulfilled. The cost to fulfill balance within the other current assets caption in the Company's Condensed Consolidated Balance Sheet was $62.4 million and $69.8 million as of March 31, 2019 and December 31, 2018, respectively. For the three months ended March 31, 2019, the Company had net expense of $7.4 million related to the release of previously deferred contract fulfillment costs associated with performance obligations that were satisfied in the period, net of current year deferrals for costs incurred that related to performance obligations yet to be fulfilled.

XML

Net Income Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Net Income Per Share

Net Income Per ShareBasic net income per share is computed based on the weighted average number of common shares (including participating securities) issued and outstanding during the period. Diluted net income per share is computed based on the weighted average number of common shares issued and outstanding plus equivalent shares, assuming the exercise of stock options. The dilutive effect of stock options is computed by application of the treasury-stock method. The following is a reconciliation between basic and diluted weighted average shares outstanding:

	For the three months   ended March 31,
(in thousands, except per share data)	2019			2018
Net income	$	113,896		$	90,828
Net income attributable to unvested awarded performance stock	(3,201		)	(1,902		)
Net income attributable to common shares	$	110,695		$	88,926
Weighted average number of common shares outstanding – basic	280,564			275,952
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic	(7,885		)	(5,780		)
Weighted average number of common shares outstanding for basic net income per common share	272,679			270,172
Dilutive effect of stock options	2,335			5,542
Weighted average number of shares outstanding – diluted	275,014			275,714
Net income per share:
Basic	$	0.41		$	0.33
Diluted	$	0.40		$	0.32

XML

Business Combinations

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Business Combinations

Business Combinations

During the three months ended March 31, 2019, Brown & Brown acquired the assets and assumed certain liabilities of seven insurance intermediaries and all of the stock of one insurance intermediary. Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 months as permitted by Accounting Standards Codification Topic 805 — Business Combinations (“ASC 805”). Such adjustments are presented in the “Other” category within the following two tables. The recorded purchase price for all acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in the fair value of earn-out obligations will be recorded in the Condensed Consolidated Statements of Income when incurred.

The fair value of earn-out obligations is based on the present value of the expected future payments to be made to the sellers of the acquired businesses in accordance with the provisions outlined in the respective purchase agreements. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC 805. For the three months ended March 31, 2019, adjustments were made within the permitted measurement period that resulted in a decrease in the aggregate purchase price of the affected acquisitions of $6.8 million relating to the assumption of certain liabilities. These measurement period adjustments have been reflected as current period adjustments in the three months ended March 31, 2019 in accordance with the guidance in ASU 2015-16 “Business Combinations.” The measurement period adjustments primarily impacted goodwill, with no effect on earnings or cash in the current period.

Cash paid for acquisitions was $98.3 million in the three-month period ended March 31, 2019. The Company completed eight acquisitions (excluding book of business purchases) in the three-month period ended March 31, 2019. The Company completed two acquisitions (excluding book of business purchases) in the three-month period ended March 31, 2018.

The following table summarizes the purchase price allocations made as of the date of each acquisition for current year acquisitions and adjustments made during the measurement period for prior year acquisitions. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

(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
Smith Insurance Associates, Inc. (Smith)	Retail	February 1, 2019	$	20,129	$	—	$	2,704	$	22,833	$	4,550
Donald P. Pipino Company, LTD (Pipino)	Retail	February 1, 2019	16,420		135		9,821		26,376		12,996
Cossio Insurance Agency (Cossio)	Retail	March 1, 2019	13,990		10		1,710		15,710		2,000
Medval LLC (Medval)	Services	March 1, 2019	29,106		—		1,684		30,790		2,500
Other	Various	Various	18,654		463		2,236		21,353		5,475
Total			$	98,299	$	608	$	18,155	$	117,062	$	27,521

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)	Smith			Pipino			Cossio		Medval			Other			Total
Cash	$	—		$	—		$	—	$	3,218		$	—		$	3,218
Other current assets	588			194			—		1,708			(6,835		)	(4,345		)
Fixed assets	40			114			29		50			$	(121	)	$	112
Goodwill	16,031			18,146			11,336		19,008			15,911			80,432
Purchased customer accounts	6,500			11,360			4,324		7,300			6,298			35,782
Non-compete agreements	41			11			21		1			64			138
Other assets	—			—			—		14			302			316
Total assets acquired	23,200			29,825			15,710		31,299			15,619			115,653
Other current liabilities	(367		)	(3,449		)	—		(480		)	5,734			1,438
Other liabilities	—			—			—		(29		)	—			(29		)
Total liabilities assumed	(367		)	(3,449		)	—		(509		)	5,734			1,409
Net assets acquired	$	22,833		$	26,376		$	15,710	$	30,790		$	21,353		$	117,062

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; and non-compete agreements, 5 years.

Goodwill of $80.4 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was allocated to the Retail, Wholesale Brokerage and Services Segments in the amounts of $55.1 million, $6.1 million and $19.2 million, respectively. Of the total goodwill of $80.4 million, the amount currently deductible for income tax purposes is $62.2 million and the remaining $18.2 million relates to the recorded earn-out payables and will not be deductible until it is earned and paid.

For the acquisitions completed during 2019, the results of operations since the acquisition dates have been combined with those of the Company. The total revenues from the acquisitions completed through March 31, 2019, included in the Condensed Consolidated Statement of Income for the three months ended March 31, 2019, was $4.8 million. The income before income taxes, including the intercompany cost of capital charge, from the acquisitions completed through March 31, 2019, included in the Condensed Consolidated Statement of Income for the three months ended March 31, 2019, was $1.0 million. If the acquisitions had occurred as of the beginning of the respective periods, the Company’s results of operations would be as shown in the following table. 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   March 31,
(in thousands, except per share data)	2019		2018
Total revenues	$	624,219	$	512,730
Income before income taxes	$	149,863	$	121,469
Net income	$	114,926	$	93,150
Net income per share:
Basic	$	0.41	$	0.34
Diluted	$	0.41	$	0.33
Weighted average number of shares outstanding:
Basic	272,679		270,172
Diluted	275,014		275,714

As of March 31, 2019 and 2018, the fair values of the estimated acquisition earn-out payables were re-evaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three months ended March 31, 2019 and 2018, were as follows:

	Three months ended   March 31,
(in thousands)	2019			2018
Balance as of the beginning of the period	$	89,924		$	36,175
Additions to estimated acquisition earn-out payables	18,155			4,524
Payments for estimated acquisition earn-out payables	(579		)	(2,565		)
Subtotal	107,500			38,134
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables	50			2,062
Interest expense accretion	1,160			404
Net change in earnings from estimated acquisition earn-out payables	1,210			2,466
Balance as of March 31,	$	108,710		$	40,600

Of the $108.7 million estimated acquisition earn-out payables as of March 31, 2019, $25.2 million was recorded as accounts payable and $83.5 million was recorded as other non-current liabilities. As of March 31, 2019, the maximum future acquisition contingency payments related to all acquisitions was $218.2 million, inclusive of the $108.7 million estimated acquisition earn-out payables as of March 31, 2019. Included within the additions to estimated acquisition earn-out payables are any adjustments to opening balance sheet items within the allowable measurement period, which may therefore differ from previously reported amounts.

XML

Goodwill

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

Goodwill is subject to at least an annual assessment for impairment by applying a fair value-based test. The Company completed its most recent annual assessment as of November 30, 2018, and identified no impairment as a result of the evaluation.

The changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2019 are as follows:

(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Total
Balance as of December 31, 2018	$	2,063,150	$	926,206	$	291,622	$	151,808	$	3,432,786
Goodwill of acquired businesses	55,117		—		6,063		19,252		80,432
Balance as of March 31, 2019	$	2,118,267	$	926,206	$	297,685	$	171,060	$	3,513,218

XML

Amortizable Intangible Assets

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Amortizable Intangible Assets

Amortizable Intangible Assets

Amortizable intangible assets at March 31, 2019 and December 31, 2018 consisted of the following:

	March 31, 2019								December 31, 2018
(in thousands)	Gross carrying value		Accumulated amortization			Net carrying value		Weighted average life (years)(1)	Gross carrying value		Accumulated amortization			Net carrying value		Weighted average life (years)(1)
Purchased customer accounts	$	1,838,732	$	(934,756	)	$	903,976	14.9	$	1,804,404	$	(909,415	)	$	894,989	14.9
Non-compete agreements	33,607		(29,945		)	3,662		4.5	33,469		(29,651		)	3,818		4.5
Total	$	1,872,339	$	(964,701	)	$	907,638		$	1,837,873	$	(939,066	)	$	898,807

(1) Weighted average life calculated as of the date of acquisition.

Amortization expense for amortizable intangible assets for the years ending December 31, 2019, 2020, 2021, 2022 and 2023 is estimated to be $102.5 million, $95.4 million, $91.8 million, $87.3 million, and $80.3 million, respectively.

XML

Long-Term Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt at March 31, 2019 and December 31, 2018 consisted of the following: 

(in thousands)	March 31, 2019			December 31, 2018
Current portion of long-term debt:
Current portion of 5-year term loan facility expires 2022	$	40,000		$	35,000
Current portion of 5-year term loan facility expires 2023	15,000			15,000
Total current portion of long-term debt	55,000			50,000
Long-term debt:
Note agreements:
4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2024	$	499,140		$	499,101
4.500% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2029	349,443			—
Total notes	848,583			499,101
Credit agreements:
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires June 28, 2022	320,000			330,000
5-year revolving-loan facility, periodic interest payments, LIBOR plus up to 1.500%, plus commitment fees up to 0.250%, expires June 28, 2022	—			350,000
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires December 21, 2023	281,250			285,000
Total credit agreements	601,250			965,000
Debt issuance costs (contra)	(9,835		)	(7,111		)
Total long-term debt less unamortized discount and debt issuance costs	1,439,998			1,456,990
Current portion of long-term debt	55,000			50,000
Total debt	$	1,494,998		$	1,506,990

On June 28, 2017, the Company entered into an amended and restated credit agreement (the “Amended and Restated Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as co-syndication agents and co-documentation agents. The Amended and Restated Credit Agreement amended and restated the credit agreement dated April 17, 2014, among such parties (the “Original Credit Agreement”). The Amended and Restated Credit Agreement extends the applicable maturity date of the existing revolving credit facility (the “Revolving Credit Facility”) of $800.0 million to June 28, 2022 and re-evidences unsecured term loans at $400.0 million while also extending the applicable maturity date to June 28, 2022. The quarterly term loan principal amortization schedule was reset. At the time of the execution of the Amended and Restated Credit Agreement, $67.5 million of principal from the original unsecured term loans was repaid using operating cash balances, and the Company added an additional $2.8 million in debt issuance costs related to the Revolving Credit Facility to the Condensed Consolidated Balance Sheet. The Company also expensed to the Condensed Consolidated Statements of Income $0.2 million of debt issuance costs related to the Original Credit Agreement due to certain lenders exiting prior to execution of the Amended and Restated Credit Agreement. The Company also carried forward $1.6 million on the Condensed Consolidated Balance Sheet the remaining unamortized portion of the Original Credit Agreement debt issuance costs, which will be amortized over the term of the Amended and Restated Credit Agreement. On March 31, 2019, the Company made a scheduled principal payment of $5.0 million per the terms of the Amended and Restated Credit Agreement. As of March 31, 2019, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit Agreement of $360.0 million with no borrowings outstanding against the Revolving Credit Facility. As of December 31, 2018, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit Agreement of $365.0 million with $350.0 million in borrowings outstanding against the Revolving Credit Facility. The Company had borrowed approximately $600.0 million under its Revolving Credit Facility on November 15, 2018 in connection with the closing of the acquisition of certain assets and assumption of certain liabilities of the Hays Companies. Per the terms of the Amended and Restated Credit Agreement, a scheduled principal payment of $10.0 million was due March 31, 2019.

On September 18, 2014, the Company issued $500.0 million of 4.200% unsecured Senior Notes due in 2024. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions and regulations which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay the outstanding balance of $475.0 million on the Revolving Credit Facility and for other general corporate purposes. As of March 31, 2019 and December 31, 2018, there was an outstanding debt balance of $500.0 million exclusive of the associated discount balance.

On December 21, 2018, the Company entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with the lenders named therein, Wells Fargo Bank, National Association, as administrative agent, and certain other banks as co-syndication agents and as joint lead arrangers and joint bookrunners. The Term Loan Credit Agreement provides for an unsecured term loan in the initial amount of $300.0 million, which may, subject to lenders’ discretion, potentially be increased up to an aggregate amount of $450.0 million (the “Term Loan”). The Term Loan is repayable over the five-year term from the effective date of the Term Loan Credit Agreement, which was December 21, 2018. Based on the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt rating as determined by Moody’s Investor Service and Standard & Poor’s Rating Service, the rates of interest charged on the term loan are 1.00% to 1.75%, above the adjusted 1-Month LIBOR rate. On December 21, 2018, the Company borrowed $300.0 million under the Term Loan Credit Agreement and used $250.0 million of the proceeds to reduce indebtedness under the Company’s Amended and Restated Credit Agreement, dated June 28, 2017, with the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, and certain other banks as co-syndication agents and co-documentation agents (the “Revolving Credit Facility”). As of March 31, 2019, there was an outstanding debt balance issued under the Term Loan of $296.3 million. As of December 31, 2018, there was an outstanding debt balance issued under the Term Loan of $300.0 million. Per the terms of the Term Loan Credit Agreement, a scheduled principal payment of $3.8 million is due June 30, 2019.

On March 11, 2019, the Company completed the issuance of $350.0 million aggregate principal amount of the Company's 4.500% Senior Notes due 2029. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount, which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay a portion of the outstanding balance of $350.0 million on the Revolving Credit Facility, utilized in connection with financing related to the Hays Companies acquisition and for other general corporate purposes. As of March 31, 2019, there was an outstanding debt balance of $350.0 million exclusive of the associated discount balance.

The Amended and Restated Credit Agreement and Term Loan Credit Agreement require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of March 31, 2019 and December 31, 2018.

The 30-day Adjusted LIBOR Rate as of March 31, 2019 was 2.500%.

XML

Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

3 Months Ended

Mar. 31, 2019

Supplemental Cash Flow Elements [Abstract]

Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

Brown & Brown's cash paid during the period for interest and income taxes are summarized as follows: 

	Three months ended   March 31,
(in thousands)	2019		2018
Cash paid during the period for:
Interest	$	20,127	$	14,472
Income taxes	$	3,120	$	3,179

Brown & Brown’s significant non-cash investing and financing activities are summarized as follows:

	Three months ended   March 31,
(in thousands)	2019		2018
Other payable issued for purchased customer accounts	$	608	$	1,690
Estimated acquisition earn-out payables and related charges	$	18,155	$	4,524

The Company's restricted cash balance is composed of funds held in separate premium trust accounts as required by state law or, in some cases, by agreement with carrier partners. The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of March 31, 2019 and 2018.

	Balance as of March 31,
(in thousands)	2019		2018
Table to reconcile cash and cash equivalents inclusive of restricted cash
Cash and cash equivalents	$	322,477	$	558,248
Restricted cash	302,410		268,129
Total cash and cash equivalents inclusive of restricted cash at the end of the period	$	624,887	$	826,377

The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of December 31, 2018 and 2017.

	Balance as of December 31,
(in thousands)	2018		2017
Table to reconcile cash and cash equivalents inclusive of restricted cash
Cash and cash equivalents	$	438,961	$	573,383
Restricted cash	338,635		250,705
Total cash and cash equivalents inclusive of restricted cash at the end of the period	$	777,596	$	824,088

In the preparation of the Statement of Cash Flows in this Quarterly Report on Form 10-Q, beginning balance sheet balances for 2018 were adjusted to reflect the modified retrospective adoption of Accounting Standards Update No.2014-09, “Revenue from Contracts with Customers” and Accounting Standards Codification Topic 340 - Other Assets and Deferred Cost, thereby reflecting in the Statement of Cash Flows the change in operating assets and liabilities for the period, excluding the initial impact of adoption of these new accounting standards.

XML

Legal and Regulatory Proceedings

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Legal and Regulatory Proceedings

Legal and Regulatory Proceedings

The Company is involved in numerous pending or threatened proceedings by or against Brown & Brown, Inc. or one or more of its subsidiaries that arise in the ordinary course of business. The damages that may be claimed against the Company in these various proceedings are in some cases substantial, including in certain instances claims for punitive or extraordinary damages. Some of these claims and lawsuits have been resolved; others are in the process of being resolved and others are still in the investigation or discovery phase. The Company will continue to respond appropriately to these claims and lawsuits and to vigorously protect its interests.

The Company continues to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could adversely impact the Company’s operating results, cash flows and overall liquidity. The Company maintains third-party insurance policies to provide coverage for certain legal claims, in an effort to mitigate its overall exposure to unanticipated claims or adverse decisions. However, as (i) one or more of the Company’s insurance carriers could take the position that portions of these claims are not covered by the Company’s insurance, (ii) to the extent that payments are made to resolve claims and lawsuits, applicable insurance policy limits are eroded and (iii) the claims and lawsuits relating to these matters are continuing to develop, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by unfavorable resolutions of these matters. Based upon the AM Best Company ratings of these third-party insurers, management does not believe there is a substantial risk of an insurer’s material non-performance related to any current insured claims.

On the basis of current information, the availability of insurance and legal advice, in management’s opinion, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, would have a material adverse effect on its financial condition, operations and/or cash flows.

XML

Segment Information

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

Brown & Brown’s business is divided into four reportable segments: (1) the Retail Segment, which provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers, (2) the National Programs Segment, which acts as an MGA, provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through nationwide networks of independent agents, and Brown & Brown retail agents, (3) the Wholesale Brokerage Segment, which markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents, and (4) the Services Segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims adjusting services.

Brown & Brown conducts all of its operations within the United States of America, except for a wholesale brokerage operation based in London, England, retail operations in Bermuda and the Cayman Islands, and a national programs operation in Canada. These operations earned $3.4 million and $3.3 million of total revenues for the three months ended March 31, 2019 and 2018, respectively. Long-lived assets held outside of the United States as of March 31, 2019 and 2018 were not material.

The accounting policies of the reportable segments are the same as those described in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company evaluates the performance of its segments based upon revenues and income before income taxes. Inter-segment revenues are eliminated.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables. The “Other” column includes any income and expenses not allocated to reportable segments, corporate-related items, including the intercompany interest expense charge to the reporting segment.

	Three months ended March 31, 2019
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	389,231	$	109,560	$	70,509	$	49,492	$	488		$	619,280
Investment income	$	—	$	316	$	40	$	48	$	677		$	1,081
Amortization	$	15,444	$	6,596	$	2,849	$	1,303	$	—		$	26,192
Depreciation	$	1,624	$	1,590	$	404	$	284	$	2,133		$	6,035
Interest expense	$	21,153	$	5,354	$	1,327	$	872	$	(13,508	)	$	15,198
Income before income taxes	$	93,841	$	19,316	$	15,569	$	9,177	$	10,617		$	148,520
Total assets	$	5,773,290	$	2,852,824	$	1,292,406	$	480,108	$	(3,592,339	)	$	6,806,289
Capital expenditures	$	3,136	$	4,568	$	1,189	$	109	$	14,184		$	23,186

	Three months ended March 31, 2018
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	278,402	$	112,475	$	66,148	$	44,066	$	370		$	501,461
Investment income	$	1	$	114	$	—	$	73	$	413		$	601
Amortization	$	10,242	$	6,323	$	2,837	$	1,137	$	—		$	20,539
Depreciation	$	1,237	$	1,387	$	427	$	411	$	2,090		$	5,552
Interest expense	$	6,797	$	7,496	$	1,435	$	594	$	(6,651	)	$	9,671
Income before income taxes	$	70,399	$	20,778	$	11,383	$	8,816	$	7,065		$	118,441
Total assets	$	4,687,456	$	3,009,147	$	1,323,046	$	432,920	$	(3,837,486	)	$	5,615,083
Capital expenditures	$	2,407	$	2,678	$	420	$	285	$	3,961		$	9,751

XML

Investments

3 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

At March 31, 2019, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows: 

(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	20,241	$	51	$	(134	)	$	20,158
Corporate debt	233		6		—			239
Total	$	20,474	$	57	$	(134	)	$	20,397

At March 31, 2019, the Company held $20.2 million in fixed income securities composed of U.S. Treasury securities, securities issued by U.S. Government agencies and municipalities, and $0.2 million issued by corporations with investment grade ratings. Of that total, $2.9 million is classified as short-term investments on the Condensed Consolidated Balance Sheet as maturities are less than one-year, which also includes $7.6 million that is related to time deposits held with various financial institutions.

For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2019:

	Less than 12 Months				12 Months or More					Total
(in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	—	$	—	$	11,456	$	(134	)	$	11,456	$	(134	)
Total	$	—	$	—	$	11,456	$	(134	)	$	11,456	$	(134	)

The unrealized losses were caused by interest rate increases. At March 31, 2019, the Company had 9 securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at March 31, 2019.

At December 31, 2018, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	21,729	$	7	$	(222	)	$	21,514
Corporate debt	623		—		—			623
Total	$	22,352	$	7	$	(222	)	$	22,137

At December 31, 2018, the Company held $21.5 million in fixed income securities composed of U.S. Treasury securities, securities issued by U.S. Government agencies and municipalities, and $0.6 million issued by corporations with investment grade ratings. Of that total, $4.8 million is classified as short-term investments on the Condensed Consolidated Balance Sheet as maturities are less than one-year, which also includes $8.1 million that is related to time deposits held with various financial institutions.

For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018:

	Less than 12 Months					12 Months or More					Total
(in thousands)	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	5,866	$	(6	)	$	12,634	$	(216	)	$	18,500	$	(222	)
Corporate debt	457		—			100		—			557		—
Total	$	6,323	$	(6	)	$	12,734	$	(216	)	$	19,057	$	(222	)

The unrealized losses from corporate issuers were caused by interest rate increases. At December 31, 2018, the Company had 20 securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at December 31, 2018.

The amortized cost and estimated fair value of the fixed maturity securities at March 31, 2019 by contractual maturity are set forth below:

(in thousands)	Amortized cost		Fair value
Years to maturity:
Due in one year or less	$	2,880	$	2,868
Due after one year through five years	17,594		17,529
Due after five years	—		—
Total	$	20,474	$	20,397

The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2018 by contractual maturity are set forth below:

(in thousands)	Amortized cost		Fair value
Years to maturity:
Due in one year or less	$	4,768	$	4,743
Due after one year through five years	17,584		17,394
Due after five years	—		—
Total	$	22,352	$	22,137

The expected maturities in the foregoing table may differ from the contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalty.

Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities were $1.9 million. This along with maturing time deposits yielded total cash proceeds from the sale of investments of $2.4 million in the period of January 1, 2019 to March 31, 2019. These proceeds were used to purchase additional fixed maturity securities and time deposits. The gains and losses realized on those sales for the period from January 1, 2018 to March 31, 2019 were insignificant.

Realized gains and losses are reported on the Condensed Consolidated Statements of Income, with the cost of securities sold determined on a specific identification basis.

At March 31, 2019, investments with a fair value of approximately $4.1 million were on deposit with state insurance departments to satisfy regulatory requirements.

XML

Losses and Loss Adjustment Reserve

3 Months Ended

Mar. 31, 2019

Reinsurance Disclosures [Abstract]

Losses and Loss Adjustment Reserve

Although the reinsurers are liable to the Company for amounts reinsured, our subsidiary, Wright National Flood Insurance Company (“Wright Flood”) remains primarily liable to its policyholders for the full amount of the policies written whether or not the reinsurers meet their obligations to the Company when they become due. The effects of reinsurance on premiums written and earned are as follows:

	Period from January 1, 2019 to March 31, 2019
(in thousands)	Written			Earned
Direct premiums	$	133,319		$	156,876
Ceded premiums	(133,317		)	(156,874		)
Net premiums	$	2		$	2

All premiums written by Wright Flood under the National Flood Insurance Program are 100% ceded to the Federal Emergency Management Agency, or FEMA, for which Wright Flood received a 30.0% expense allowance from January 1, 2019 through March 31, 2019. For the period from January 1, 2019 through March 31, 2019, the Company ceded $132.9 million of written premiums.

Effective April 1, 2014, Wright Flood is also a party to a quota share agreement whereby it cedes 100% of its gross excess flood premiums, excluding fees, to Arch Reinsurance Company and receives a 30.5% commission. Wright Flood ceded $0.4 million for the period from January 1, 2019 through March 31, 2019. As of March 31, 2019, no loss data exists on this agreement.

Wright Flood also ceded 100% of the homeowners, private passenger auto liability, and other liability occurrence to Stillwater Insurance Company, formerly known as Fidelity National Insurance Company. This business is in runoff. Therefore, only loss data exists on this business. As of March 31, 2019, no ceded unpaid losses and loss adjustment expenses or incurred but not reported expenses for homeowners, private passenger auto liability and other liability occurrence existed.

As of March 31, 2019 the Condensed Consolidated Balance Sheet contained reinsurance recoverable of $51.4 million and prepaid reinsurance premiums of $314.4 million. There was no net activity in the reserve for losses and loss adjustment expense during the period January 1, 2019 through March 31, 2019, as Wright Flood’s direct premiums written were 100% ceded to two reinsurers. The balance of the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable, as of March 31, 2019 was $51.4 million.

XML

Statutory Financial Information	3 Months Ended
	Mar. 31, 2019
Statutory Accounting Practices [Abstract]
Statutory Financial Information	Statutory Financial DataWright Flood maintains capital in excess of the minimum statutory amount of $7.5 million as required by regulatory authorities. The unaudited statutory capital and surplus of Wright Flood was $20.0 million at March 31, 2019 and $19.4 million as of December 31, 2018. For the period from January 1, 2019 through March 31, 2019, Wright Flood generated statutory net income of $0.2 million. For the period from January 1, 2018 through December 31, 2018, Wright Flood generated statutory net income of $4.5 million.

XML

Subsidiary Dividend Restrictions	3 Months Ended
	Mar. 31, 2019
Dividend Restrictions [Line Items]
Subsidiary Dividend Restrictions	Under the insurance regulations of Texas, where Wright Flood is incorporated, the maximum amount of ordinary dividends that Wright Flood can pay to shareholders in a rolling twelve-month period is limited to the greater of 10% of statutory adjusted capital and surplus as shown on Wright Flood’s last annual statement on file with the superintendent of the Texas Department of Insurance or 100% of adjusted net income. There was no dividend payout in 2018 and the maximum dividend payout that may be made in 2019 without prior approval is $4.5 million.

XML

Shareholders' Equity

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

On December 12, 2018, the Company entered into accelerated share repurchase agreement ("ASR") with an investment bank to purchase an aggregate $100.0 million of the Company’s common stock. As part of the ASR, the Company received an initial share delivery of 2,910,150 shares of the Company’s common stock with a fair market value of $80.0 million. Upon maturity of the program, the Company will receive the remaining balance of $20.0 million at settlement.

Under the authorization from the Company’s Board of Directors, shares may be purchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors. These purchases may be carried out through open market purchases, block trades, accelerated share repurchase plans of up to $100.0 million each (unless otherwise approved by the Board of Directors), negotiated private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. At March 31, 2019, the remaining amount authorized by the Company's Board of Directors for shares repurchases was $147.5 million.

On May 1, 2019, the Company's Board of Directors authorized the purchasing of up to an additional $372.5 million of the Company's outstanding common stock. With this authorization, the Company will now have outstanding approval to purchase up to approximately $500.0 million, in the aggregate, of the Company's outstanding common stock, after giving effect to the final settlement of shares in connection with the ASR entered into on December 12, 2018.

XML

Income Taxes (Notes)

3 Months Ended

Mar. 31, 2019

Income Tax Policy [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Shareholders’ Equity

On December 12, 2018, the Company entered into accelerated share repurchase agreement ("ASR") with an investment bank to purchase an aggregate $100.0 million of the Company’s common stock. As part of the ASR, the Company received an initial share delivery of 2,910,150 shares of the Company’s common stock with a fair market value of $80.0 million. Upon maturity of the program, the Company will receive the remaining balance of $20.0 million at settlement.

Under the authorization from the Company’s Board of Directors, shares may be purchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors. These purchases may be carried out through open market purchases, block trades, accelerated share repurchase plans of up to $100.0 million each (unless otherwise approved by the Board of Directors), negotiated private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. At March 31, 2019, the remaining amount authorized by the Company's Board of Directors for shares repurchases was $147.5 million.

On May 1, 2019, the Company's Board of Directors authorized the purchasing of up to an additional $372.5 million of the Company's outstanding common stock. With this authorization, the Company will now have outstanding approval to purchase up to approximately $500.0 million, in the aggregate, of the Company's outstanding common stock, after giving effect to the final settlement of shares in connection with the ASR entered into on December 12, 2018.

XML

Leases (Notes)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lessee, Operating Leases [Text Block]

NOTE 9· Leases

Substantially all of the Company's operating lease right-of-use assets and operating lease liabilities represent real estate leases for office space used to conduct the Company's business.

The balances and classification of operating lease right-of-use assets and operating lease liabilities within the Condensed Consolidated Balance Sheet is as follows (in thousands):

(in thousands)		March 31, 2019
Balance Sheet
Assets:
Operating lease right-of-use assets	Operating lease assets	$	174,580
Total Assets		174,580
Liabilities:
Current operating lease liabilities	Accrued expenses and other liabilities	39,015
Non-current operating lease liabilities	Operating lease liabilities	159,823
Total Liabilities		$	198,838

The components of lease cost for operating leases for the three months ended March 31, 2019 were (in thousands):

Operating leases:
Lease cost	$	12,088
Variable lease cost	713
Operating lease expense	$	12,801

The weighted average remaining lease term and the weighted average discount rate for operating leases as of March 31, 2019 were:

Weighted-average remaining lease term	5.73
Weighted-average discount rate	3.81

Maturities of the operating lease liabilities by fiscal year at March 31, 2019 for the Company's operating leases are as follows (in thousands):

	Operating Leases
2019 (Remainder)	$	33,577
2020	44,573
2021	36,998
2022	29,940
2023	23,184
Thereafter	55,084
Total undiscounted lease payments	223,356
Less: Imputed interest	24,518
Present value of lease payments	$	198,838

At December 31, 2018, the aggregate future minimum lease payments under all non-cancelable lease agreements were as follows:

	December 31, 2018
2019	$	48,292
2020	43,517
2021	34,836
2022	27,035
2023	19,981
Thereafter	36,349
Total minimum future lease payments	$	210,010

Supplemental cash flow information for operating leases (in thousands):

Cash paid for amounts included in measurement of liabilities
Operating cash flows from operating leases	$	12,311
Right-of-use assets obtained in exchange for new operating liabilities	$	2,439

XML

Nature of Operations (Policies)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which provides guidance for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact of this pronouncement.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates Step 2 of the goodwill impairment test. The updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and will be applied prospectively. The Company is currently evaluating the impact of this guidance on future interim or annual goodwill impairment tests performed.

XML

Basis of Financial Reporting Recently Adopted Accounting Standards (Policies)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“Topic 842”), which provides guidance for accounting for leases. Under Topic 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. Effective as of January 1, 2019, the Company adopted Topic 842, and all related amendments, which established Accounting Standards Codification (“ASC”) Topic 842. The Company adopted these standards by the recognition of right-of-use assets and related lease liabilities on the balance sheet. As permitted by Topic 842, the Company elected the transition practical expedient to adopt as of January 1, 2019, the date of initial application under the modified retrospective approach for leases existing at that date, with an adjustment to retained earnings. As a result, the Consolidated Balance Sheet at December 31, 2018 was not restated and continues to be reported under ASC Topic 840 (“Topic 840”) which did not require the recognition of operating lease liabilities on the balance sheet, and thus is not comparative. For the three months ended March 31, 2019, all of the Company's leases are classified as operating leases, which are primarily real estate leases for office space. The expense recognition for operating leases under Topic

842 is substantially consistent with Topic 840, where operating lease charges are recorded entirely in operating expenses. As a result, there is no significant difference in the Company's results of operations presented in the Company's Condensed Consolidated Statements of Income for each period presented.

The adoption of Topic 842 had a significant impact on the Company's balance sheet with the recognition of the operating lease right-of-use asset and the liability for operating leases. Upon adoption, leases that were classified as operating leases under Topic 840 were classified as operating leases under Topic 842. For the adoption of Topic 842, the Company recorded an adjustment of $202.9 million to operating lease right-of-use asset and the related lease liability, with no impact to retained earnings. The lease liability is the present value of the remaining minimum lease payments, determined under Topic 840, discounted using the Company's incremental borrowing rate at the effective date of January 1, 2019. As permitted under Topic 842, the Company elected practical expedient that permit the Company to not reassess whether a contract is or contains a lease, the classification of the Company's existing operating leases, and initial direct costs for any existing leases. The Company did not elect the practical expedient to use hindsight in determining the lease term (when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Company's right-of-use assets. The application of the practical expedient did not have a significant impact on the measurement of the operating lease liability.

The impact of the adoption of Topic 842 on the balance sheet at January 1, 2019 was (in thousands):

(in thousands)	Balance at December 31, 2018	Adjustments due to Topic 842		Balance at January 1, 2019
Balance Sheet
Assets:
Other current assets	128,716	(3,004	)	125,712
Operating lease assets	—	178,304		178,304
Total Assets	6,688,668	175,300		6,863,968
Liabilities:
Accrued expenses and other liabilities	279,310	13,836		293,146
Operating lease liabilities	—	161,464		161,464
Total Liabilities	3,688,100	175,300		3,863,400

For contracts entered into on or after the January 1, 2019, at the inception of a contract the Company assesses whether the contract is, or contains, a lease. This assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019 are accounted for under Topic 840 and were not reassessed. For real estate leases that contain both lease and non-lease components, the Company elected to account the lease components together with non-lease components (e.g., common-area maintenance).

Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, or the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. All of the Company's real estate leases for office space do not meet the definition of a finance lease. The Company's policy is to own, rather than lease, equipment.

For leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, less any lease incentives received. The lease liability is initially measured at the present value of the lease payments under the lease. For the Company's operating leases, the lease payments are discounted using an incremental borrowing rate, which approximates the rate of interest that would be paid on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms.

Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Some of the Company's real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and based on the minimum amount stated in the lease. Lease components are included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate, or payments based on a change in the Company's portion of the operating expenses, including real estate taxes and insurance, are

recorded as a period expense when incurred. Lease modifications result in remeasurement of the right-of-use assets and the lease liability.

Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability.

The Company elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a total term of 12 months or less. The effect of short-term leases on the Company's right-of-use asset and lease liability would not be significant.

XML

Net Income Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Reconciliation between Basic and Diluted Weighted Average Shares Outstanding

	For the three months   ended March 31,
(in thousands, except per share data)	2019			2018
Net income	$	113,896		$	90,828
Net income attributable to unvested awarded performance stock	(3,201		)	(1,902		)
Net income attributable to common shares	$	110,695		$	88,926
Weighted average number of common shares outstanding – basic	280,564			275,952
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic	(7,885		)	(5,780		)
Weighted average number of common shares outstanding for basic net income per common share	272,679			270,172
Dilutive effect of stock options	2,335			5,542
Weighted average number of shares outstanding – diluted	275,014			275,714
Net income per share:
Basic	$	0.41		$	0.33
Diluted	$	0.40		$	0.32

XML

Business Combinations (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

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
Smith Insurance Associates, Inc. (Smith)	Retail	February 1, 2019	$	20,129	$	—	$	2,704	$	22,833	$	4,550
Donald P. Pipino Company, LTD (Pipino)	Retail	February 1, 2019	16,420		135		9,821		26,376		12,996
Cossio Insurance Agency (Cossio)	Retail	March 1, 2019	13,990		10		1,710		15,710		2,000
Medval LLC (Medval)	Services	March 1, 2019	29,106		—		1,684		30,790		2,500
Other	Various	Various	18,654		463		2,236		21,353		5,475
Total			$	98,299	$	608	$	18,155	$	117,062	$	27,521

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)	Smith			Pipino			Cossio		Medval			Other			Total
Cash	$	—		$	—		$	—	$	3,218		$	—		$	3,218
Other current assets	588			194			—		1,708			(6,835		)	(4,345		)
Fixed assets	40			114			29		50			$	(121	)	$	112
Goodwill	16,031			18,146			11,336		19,008			15,911			80,432
Purchased customer accounts	6,500			11,360			4,324		7,300			6,298			35,782
Non-compete agreements	41			11			21		1			64			138
Other assets	—			—			—		14			302			316
Total assets acquired	23,200			29,825			15,710		31,299			15,619			115,653
Other current liabilities	(367		)	(3,449		)	—		(480		)	5,734			1,438
Other liabilities	—			—			—		(29		)	—			(29		)
Total liabilities assumed	(367		)	(3,449		)	—		(509		)	5,734			1,409
Net assets acquired	$	22,833		$	26,376		$	15,710	$	30,790		$	21,353		$	117,062

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   March 31,
(in thousands, except per share data)	2019		2018
Total revenues	$	624,219	$	512,730
Income before income taxes	$	149,863	$	121,469
Net income	$	114,926	$	93,150
Net income per share:
Basic	$	0.41	$	0.34
Diluted	$	0.41	$	0.33
Weighted average number of shares outstanding:
Basic	272,679		270,172
Diluted	275,014		275,714

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 months ended March 31, 2019 and 2018, were as follows:

	Three months ended   March 31,
(in thousands)	2019			2018
Balance as of the beginning of the period	$	89,924		$	36,175
Additions to estimated acquisition earn-out payables	18,155			4,524
Payments for estimated acquisition earn-out payables	(579		)	(2,565		)
Subtotal	107,500			38,134
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables	50			2,062
Interest expense accretion	1,160			404
Net change in earnings from estimated acquisition earn-out payables	1,210			2,466
Balance as of March 31,	$	108,710		$	40,600

XML

Goodwill (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Changes in Carrying Value of Goodwill by Operating Segment

three months ended March 31, 2019 are as follows:

(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Total
Balance as of December 31, 2018	$	2,063,150	$	926,206	$	291,622	$	151,808	$	3,432,786
Goodwill of acquired businesses	55,117		—		6,063		19,252		80,432
Balance as of March 31, 2019	$	2,118,267	$	926,206	$	297,685	$	171,060	$	3,513,218

XML

Amortizable Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Amortizable Intangible Assets

Amortizable intangible assets at March 31, 2019 and December 31, 2018 consisted of the following:

	March 31, 2019								December 31, 2018
(in thousands)	Gross carrying value		Accumulated amortization			Net carrying value		Weighted average life (years)(1)	Gross carrying value		Accumulated amortization			Net carrying value		Weighted average life (years)(1)
Purchased customer accounts	$	1,838,732	$	(934,756	)	$	903,976	14.9	$	1,804,404	$	(909,415	)	$	894,989	14.9
Non-compete agreements	33,607		(29,945		)	3,662		4.5	33,469		(29,651		)	3,818		4.5
Total	$	1,872,339	$	(964,701	)	$	907,638		$	1,837,873	$	(939,066	)	$	898,807

(1)

Weighted average life calculated as of the date of acquisition.

XML

Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Long-Term Debt Instrument

Long-term debt at March 31, 2019 and December 31, 2018 consisted of the following: 

(in thousands)	March 31, 2019			December 31, 2018
Current portion of long-term debt:
Current portion of 5-year term loan facility expires 2022	$	40,000		$	35,000
Current portion of 5-year term loan facility expires 2023	15,000			15,000
Total current portion of long-term debt	55,000			50,000
Long-term debt:
Note agreements:
4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2024	$	499,140		$	499,101
4.500% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2029	349,443			—
Total notes	848,583			499,101
Credit agreements:
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires June 28, 2022	320,000			330,000
5-year revolving-loan facility, periodic interest payments, LIBOR plus up to 1.500%, plus commitment fees up to 0.250%, expires June 28, 2022	—			350,000
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires December 21, 2023	281,250			285,000
Total credit agreements	601,250			965,000
Debt issuance costs (contra)	(9,835		)	(7,111		)
Total long-term debt less unamortized discount and debt issuance costs	1,439,998			1,456,990
Current portion of long-term debt	55,000			50,000
Total debt	$	1,494,998		$	1,506,990

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting Information [Line Items]

Segment Information

Segment Information

Brown & Brown’s business is divided into four reportable segments: (1) the Retail Segment, which provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers, (2) the National Programs Segment, which acts as an MGA, provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through nationwide networks of independent agents, and Brown & Brown retail agents, (3) the Wholesale Brokerage Segment, which markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents, and (4) the Services Segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims adjusting services.

Brown & Brown conducts all of its operations within the United States of America, except for a wholesale brokerage operation based in London, England, retail operations in Bermuda and the Cayman Islands, and a national programs operation in Canada. These operations earned $3.4 million and $3.3 million of total revenues for the three months ended March 31, 2019 and 2018, respectively. Long-lived assets held outside of the United States as of March 31, 2019 and 2018 were not material.

The accounting policies of the reportable segments are the same as those described in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company evaluates the performance of its segments based upon revenues and income before income taxes. Inter-segment revenues are eliminated.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables. The “Other” column includes any income and expenses not allocated to reportable segments, corporate-related items, including the intercompany interest expense charge to the reporting segment.

	Three months ended March 31, 2019
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	389,231	$	109,560	$	70,509	$	49,492	$	488		$	619,280
Investment income	$	—	$	316	$	40	$	48	$	677		$	1,081
Amortization	$	15,444	$	6,596	$	2,849	$	1,303	$	—		$	26,192
Depreciation	$	1,624	$	1,590	$	404	$	284	$	2,133		$	6,035
Interest expense	$	21,153	$	5,354	$	1,327	$	872	$	(13,508	)	$	15,198
Income before income taxes	$	93,841	$	19,316	$	15,569	$	9,177	$	10,617		$	148,520
Total assets	$	5,773,290	$	2,852,824	$	1,292,406	$	480,108	$	(3,592,339	)	$	6,806,289
Capital expenditures	$	3,136	$	4,568	$	1,189	$	109	$	14,184		$	23,186

	Three months ended March 31, 2018
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	278,402	$	112,475	$	66,148	$	44,066	$	370		$	501,461
Investment income	$	1	$	114	$	—	$	73	$	413		$	601
Amortization	$	10,242	$	6,323	$	2,837	$	1,137	$	—		$	20,539
Depreciation	$	1,237	$	1,387	$	427	$	411	$	2,090		$	5,552
Interest expense	$	6,797	$	7,496	$	1,435	$	594	$	(6,651	)	$	9,671
Income before income taxes	$	70,399	$	20,778	$	11,383	$	8,816	$	7,065		$	118,441
Total assets	$	4,687,456	$	3,009,147	$	1,323,046	$	432,920	$	(3,837,486	)	$	5,615,083
Capital expenditures	$	2,407	$	2,678	$	420	$	285	$	3,961		$	9,751

XML

Investments (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2019

Dec. 31, 2018

Schedule of Held-to-maturity Securities [Line Items]

Schedule of Unrealized Loss on Investments [Table Text Block]

he following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2019:

	Less than 12 Months				12 Months or More					Total
(in thousands)	Fair value		Unrealized losses		Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	—	$	—	$	11,456	$	(134	)	$	11,456	$	(134	)
Total	$	—	$	—	$	11,456	$	(134	)	$	11,456	$	(134	)

December 31, 2018:

	Less than 12 Months					12 Months or More					Total
(in thousands)	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	5,866	$	(6	)	$	12,634	$	(216	)	$	18,500	$	(222	)
Corporate debt	457		—			100		—			557		—
Total	$	6,323	$	(6	)	$	12,734	$	(216	)	$	19,057	$	(222	)

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

At March 31, 2019, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows: 

(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	20,241	$	51	$	(134	)	$	20,158
Corporate debt	233		6		—			239
Total	$	20,474	$	57	$	(134	)	$	20,397

At December 31, 2018, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities	$	21,729	$	7	$	(222	)	$	21,514
Corporate debt	623		—		—			623
Total	$	22,352	$	7	$	(222	)	$	22,137

Amortized Cost and Fair Value of Fixed Maturity Securities by Contractual Maturity

The amortized cost and estimated fair value of the fixed maturity securities at March 31, 2019 by contractual maturity are set forth below:

(in thousands)	Amortized cost		Fair value
Years to maturity:
Due in one year or less	$	2,880	$	2,868
Due after one year through five years	17,594		17,529
Due after five years	—		—
Total	$	20,474	$	20,397

The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2018 by contractual maturity are set forth below:

(in thousands)	Amortized cost		Fair value
Years to maturity:
Due in one year or less	$	4,768	$	4,743
Due after one year through five years	17,584		17,394
Due after five years	—		—
Total	$	22,352	$	22,137

XML

Losses and Loss Adjustment Reserve (Tables)

3 Months Ended

Mar. 31, 2019

Reinsurance Disclosures [Abstract]

Effects of Reinsurance on Premiums Written and Earned

The effects of reinsurance on premiums written and earned are as follows:

	Period from January 1, 2019 to March 31, 2019
(in thousands)	Written			Earned
Direct premiums	$	133,319		$	156,876
Ceded premiums	(133,317		)	(156,874		)
Net premiums	$	2		$	2

XML

Nature of Operations - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments	4

XML

Basis of Financial Reporting Adopted Guidance (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash and Cash Equivalents, at Carrying Value	$ 322,477	$ 558,248		$ 438,961	$ 573,383
Assets	6,806,289	5,615,083	$ 6,863,968	6,688,668
Premiums Commissions And Fees Receivable	847,132			844,815
Other Assets, Current	146,492		125,712	128,716
Insurance Commissions and Fees	617,463	500,338
Retained Earnings (Accumulated Deficit)	2,925,170			2,833,622
Premiums Payable To Insurance Companies	801,475			857,559
Accounts Payable, Current	136,467			87,345
Accrued Liabilities, Current	193,986		293,146	279,310
Deferred Tax Liabilities, Net, Noncurrent	300,857			315,732
Employee Compensation And Benefits	332,837	270,899
Other Cost and Expense, Operating	88,783	76,313
Income Tax Expense (Benefit)	34,624	27,613
Net Income (Loss) Attributable to Parent	113,896	90,828
Operating Lease, Liability, Noncurrent	159,823		161,464	0
Liabilities			3,863,400	3,688,100
Investment Income, Nonoperating	1,081	601
Other Income	736	522
Revenues	619,280	501,461
Gain (Loss) on Disposition of Assets	(505)	2,420
Amortization	26,192	20,539
Depreciation	6,035	5,552
Interest Expense	15,198	9,671
Change In Estimated Acquisition Earn Out Payable	1,210	2,466
Operating Expenses	470,760	383,020
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	$ 148,520	$ 118,441
Earnings Per Share, Basic	$ 0.41	$ 0.33
Earnings Per Share, Diluted	0.40	0.32
Common Stock, Dividends, Per Share, Declared	$ 0.080	$ 0.075
Restricted Cash and Investments, Current	$ 302,410			338,635
Short-term Investments	10,518			12,868
Reinsurance Recoverables, Gross	51,356			65,396
Prepaid Reinsurance Premiums	314,363			337,920
Assets, Current	1,994,748			2,167,311
Property, Plant and Equipment, Net	117,364			100,395
Goodwill	3,513,218			3,432,786
Intangible Assets, Net (Excluding Goodwill)	907,638			898,807
Investments	17,528			17,394
Other Assets, Noncurrent	81,213			71,975
Liability for Claims and Claims Adjustment Expense	51,356			65,212
Unearned Premiums	314,363			337,920
Premium Deposits And Credits Due Customers	94,426			105,640
Long-term Debt, Current Maturities	55,000			50,000
Liabilities, Current	1,647,073			1,782,986
Long-term Debt, Excluding Current Maturities	1,439,998			1,456,990
Other Liabilities, Noncurrent	160,107			132,392
Common Stock, Value, Issued	29,584			29,338
Additional Paid in Capital, Common Stock	621,249			615,180
Treasury Stock, Value	477,572			477,572
Stockholders' Equity Attributable to Parent	3,098,431	$ 2,770,593		3,000,568	$ 2,582,699
Liabilities and Equity	$ 6,806,289			$ 6,688,668
Accounting Standards Update 2016-02 [Member]
Assets			175,300
Other Assets, Current			(3,004)
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification			202,900
Accrued Liabilities, Current			13,836
Operating Lease, Liability, Noncurrent			161,464
Liabilities			$ 175,300

XML

Basis of Financial Reporting Text Block (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash and Cash Equivalents, at Carrying Value	$ 322,477	$ 558,248		$ 438,961	$ 573,383
Insurance Commissions and Fees	617,463	500,338
Other Assets, Current	146,492		$ 125,712	128,716
Operating Lease, Right-of-Use Asset	174,580		178,304	0
Assets	6,806,289	5,615,083	6,863,968	6,688,668
Accrued Liabilities, Current	193,986		293,146	279,310
Operating Lease, Liability, Noncurrent	159,823		161,464	0
Liabilities			3,863,400	3,688,100
Investment Income, Nonoperating	1,081	601
Other Income	736	522
Revenues	619,280	501,461
Employee Compensation And Benefits	332,837	270,899
Other Cost and Expense, Operating	88,783	76,313
Gain (Loss) on Disposition of Assets	(505)	2,420
Amortization	26,192	20,539
Depreciation	6,035	5,552
Interest Expense	15,198	9,671
Change In Estimated Acquisition Earn Out Payable	1,210	2,466
Operating Expenses	470,760	383,020
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	148,520	118,441
Income Tax Expense (Benefit)	34,624	27,613
Net Income (Loss) Attributable to Parent	$ 113,896	$ 90,828
Earnings Per Share, Basic	$ 0.41	$ 0.33
Earnings Per Share, Diluted	0.40	0.32
Common Stock, Dividends, Per Share, Declared	$ 0.080	$ 0.075
Restricted Cash and Investments, Current	$ 302,410			338,635
Short-term Investments	10,518			12,868
Premiums Commissions And Fees Receivable	847,132			844,815
Reinsurance Recoverables, Gross	51,356			65,396
Prepaid Reinsurance Premiums	314,363			337,920
Assets, Current	1,994,748			2,167,311
Property, Plant and Equipment, Net	117,364			100,395
Goodwill	3,513,218			3,432,786
Intangible Assets, Net (Excluding Goodwill)	907,638			898,807
Investments	17,528			17,394
Other Assets, Noncurrent	81,213			71,975
Premiums Payable To Insurance Companies	801,475			857,559
Liability for Claims and Claims Adjustment Expense	51,356			65,212
Unearned Premiums	314,363			337,920
Premium Deposits And Credits Due Customers	94,426			105,640
Accounts Payable, Current	136,467			87,345
Long-term Debt, Current Maturities	55,000			50,000
Liabilities, Current	1,647,073			1,782,986
Long-term Debt, Excluding Current Maturities	1,439,998			1,456,990
Deferred Tax Liabilities, Net, Noncurrent	300,857			315,732
Other Liabilities, Noncurrent	160,107			132,392
Common Stock, Value, Issued	29,584			29,338
Additional Paid in Capital, Common Stock	621,249			615,180
Treasury Stock, Value	477,572			477,572
Retained Earnings (Accumulated Deficit)	2,925,170			2,833,622
Stockholders' Equity Attributable to Parent	3,098,431	$ 2,770,593		3,000,568	$ 2,582,699
Liabilities and Equity	6,806,289			$ 6,688,668
Share-based Compensation	$ 12,994	$ 7,295
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other Assets, Current			(3,004)
Cumulative Effect of New Accounting Principle in Period of Adoption			202,900
Operating Lease, Right-of-Use Asset			178,304
Assets			175,300
Accrued Liabilities, Current			13,836
Operating Lease, Liability, Noncurrent			161,464
Liabilities			$ 175,300

XML

Revenues (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Segment Reporting Information [Line Items]
Document Period End Date	Mar. 31, 2019
Investment Income, Nonoperating	$ 1,081,000	$ 601,000
Other Income	736,000	522,000
Revenues	619,280,000	501,461,000
Contract with Customer, Asset and Liability [Table Text Block]	311,137,000		$ 265,994,000
Contract with Customer, Liability	39,600,000		37,000,000.0
Contract with Customer, Liability, Noncurrent	17,700,000		16,500,000
Contract with Customer, Liability	$ 57,283,000		53,496,000
Deferred Revenue, Revenue Recognized	not significant
Deferred Costs	$ 16,300,000		13,200,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Investment Income, Nonoperating	677,000
Other Income	0
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Investment Income, Nonoperating	677,000	413,000
Revenues	488,000	370,000
Retail [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Investment Income, Nonoperating	0	1,000
Other Income	592,000
Revenues	389,231,000	278,402,000
National Programs [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Investment Income, Nonoperating	316,000	114,000
Other Income	37,000
Revenues	109,560,000	112,475,000
Wholesale Brokerage [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Investment Income, Nonoperating	40,000	0
Other Income	107,000
Revenues	70,509,000	66,148,000
Services [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Investment Income, Nonoperating	48,000	73,000
Other Income	0
Revenues	49,492,000	$ 44,066,000
Core Commission Revenue [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	418,539,000
Core Commission Revenue [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	287,200,000
Core Commission Revenue [Member] | National Programs [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	77,178,000
Core Commission Revenue [Member] | Wholesale Brokerage [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	54,173,000
Core Commission Revenue [Member] | Services [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	0
Core Commission Revenue [Member] | Other Segments [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	(12,000)
Fee Revenue [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	135,789,000
Fee Revenue [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	43,877,000
Fee Revenue [Member] | National Programs [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	30,246,000
Fee Revenue [Member] | Wholesale Brokerage [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	12,510,000
Fee Revenue [Member] | Services [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	49,444,000
Fee Revenue [Member] | Other Segments [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	(288,000)
Incentive Commission Revenue [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	44,178,000
Incentive Commission Revenue [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	42,775,000
Incentive Commission Revenue [Member] | National Programs [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	919,000
Incentive Commission Revenue [Member] | Wholesale Brokerage [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	373,000
Incentive Commission Revenue [Member] | Services [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	0
Incentive Commission Revenue [Member] | Other Segments [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	111,000
Profit-Sharing Contingent Commission Revenue [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	15,322,000
Profit-Sharing Contingent Commission Revenue [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	11,547,000
Profit-Sharing Contingent Commission Revenue [Member] | National Programs [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	860,000
Profit-Sharing Contingent Commission Revenue [Member] | Wholesale Brokerage [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	2,915,000
Profit-Sharing Contingent Commission Revenue [Member] | Services [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	0
Profit-Sharing Contingent Commission Revenue [Member] | Other Segments [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	0
Guaranteed Supplemental Commission Revenue [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	3,635,000
Guaranteed Supplemental Commission Revenue [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	3,240,000
Guaranteed Supplemental Commission Revenue [Member] | National Programs [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	4,000
Guaranteed Supplemental Commission Revenue [Member] | Wholesale Brokerage [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	391,000
Guaranteed Supplemental Commission Revenue [Member] | Services [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	0
Guaranteed Supplemental Commission Revenue [Member] | Other Segments [Member]
Segment Reporting Information [Line Items]
Fees and Commissions, Other	0
Cost to Obtain [Member]
Segment Reporting Information [Line Items]
Deferred Costs	3,400,000
Capitalized Contract Cost, Amortization	300,000
Cost to Fulfill [Member]
Segment Reporting Information [Line Items]
Deferred Costs	62,400,000		$ 69,800,000
Capitalized Contract Cost, Amortization	$ 7,400,000

XML

Net Income Per Share - Reconciliation between Basic and Diluted Weighted Average Shares Outstanding (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net income	$ 113,896	$ 90,828
Net income attributable to unvested awarded performance stock	(3,201)	(1,902)
Net income attributable to common shares	$ 110,695	$ 88,926
Weighted average number of common shares outstanding - basic (in shares)	280,564	275,952
Less unvested awarded performance stock included in weighted average number of common shares outstanding - basic (in shares)	(7,885)	(5,780)
Weighted average number of common shares outstanding for basic earnings per common share (in shares)	272,679	270,172
Dilutive effect of stock options (in shares)	2,335	5,542
Weighted average number of shares outstanding - diluted (in shares)	275,014	275,714
Basic (in dollars per share)	$ 0.41	$ 0.33
Diluted (in dollars per share)	$ 0.40	$ 0.32

XML

Business Combinations - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($) acquisition	Mar. 31, 2018 USD ($) acquisition	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	$ 115,653,000
Number of acquisitions | acquisition	8	2
Aggregate purchase price of acquisitions	$ (6,800,000)
Payments to Acquire Businesses, Gross	$ 98,299,000
Document Period End Date	Mar. 31, 2019
Goodwill, Acquired During Period	$ 80,432,000
Goodwill assigned	80,432,000
Goodwill currently deductible for income tax purposes	62,200,000
Goodwill related to the recorded earn-out payables	18,200,000
Total revenues related to acquisitions	4,800,000
Income before income taxes related to acquisitions	1,000,000.0
Estimated acquisition earn-out payables	108,710,000	$ 40,600,000	$ 89,924,000	$ 36,175,000
Maximum Future Contingency payments Acquisitions	218,200,000
Accounts payable
Business Acquisition [Line Items]
Estimated acquisition earn-out payables	$ 25,200,000
Purchased customer accounts
Business Acquisition [Line Items]
Weighted average life (years)	15 years
Non-compete agreements
Business Acquisition [Line Items]
Weighted average life (years)	5 years
Services
Business Acquisition [Line Items]
Goodwill, Acquired During Period	$ 55,117,000
Goodwill assigned	55,100,000
National Programs
Business Acquisition [Line Items]
Goodwill, Acquired During Period	0
Wholesale Brokerage
Business Acquisition [Line Items]
Goodwill, Acquired During Period	6,063,000
Goodwill assigned	6,100,000
Services [Member]
Business Acquisition [Line Items]
Goodwill, Acquired During Period	19,252,000
Goodwill assigned	19,200,000
Other non-current liability
Business Acquisition [Line Items]
Estimated acquisition earn-out payables	$ 83,500,000
Business Combinations - Asset Deals [Member]
Business Acquisition [Line Items]
Number of acquisitions | acquisition	7
Other Acquisitions [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	$ 15,619,000
Goodwill assigned	$ 15,911,000
Business Combinations - Stock Deals [Member]
Business Acquisition [Line Items]
Number of acquisitions | acquisition	1

XML

Business Combinations - Acquisitions Accounted for Business Combinations (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Business Combination, Separately Recognized Transactions [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	$ 3,218
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	(4,345)
Cash Paid	98,299
Other Payable	608
Recorded Earn-Out Payable	18,155
Net Assets Acquired	117,062
Maximum Potential Earn- Out Payable	27,521
Fixed assets	112
Goodwill	80,432
Purchased customer accounts	35,782
Non-compete agreements	138
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	316
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	115,653
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	$ 1,438
Document Period End Date	Mar. 31, 2019
Business Acquisition Purchase Price Allocation Other Liabilities Assumed	$ (29)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	(1,409)
Services [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Goodwill	19,200
Services
Business Combination, Separately Recognized Transactions [Line Items]
Goodwill	55,100
Wholesale Brokerage
Business Combination, Separately Recognized Transactions [Line Items]
Goodwill	6,100
Opus Advisory Group, LLC [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	588
Net Assets Acquired	22,833
Fixed assets	40
Goodwill	16,031
Purchased customer accounts	6,500
Non-compete agreements	41
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	23,200
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	(367)
Business Acquisition Purchase Price Allocation Other Liabilities Assumed	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	367
Opus Advisory Group, LLC [Member] | Services
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	20,129
Other Payable	0
Recorded Earn-Out Payable	2,704
Net Assets Acquired	22,833
Maximum Potential Earn- Out Payable	4,550
Kerxton Insurance Agency, Inc. [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	194
Net Assets Acquired	26,376
Fixed assets	114
Goodwill	18,146
Purchased customer accounts	11,360
Non-compete agreements	11
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	29,825
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	(3,449)
Business Acquisition Purchase Price Allocation Other Liabilities Assumed	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	3,449
Kerxton Insurance Agency, Inc. [Member] | Services
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	16,420
Other Payable	135
Recorded Earn-Out Payable	9,821
Net Assets Acquired	26,376
Maximum Potential Earn- Out Payable	12,996
Automotive Development Group, LLC [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	0
Net Assets Acquired	15,710
Fixed assets	29
Goodwill	11,336
Purchased customer accounts	4,324
Non-compete agreements	21
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	15,710
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	0
Business Acquisition Purchase Price Allocation Other Liabilities Assumed	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	0
Automotive Development Group, LLC [Member] | Services
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	13,990
Other Payable	10
Recorded Earn-Out Payable	1,710
Net Assets Acquired	15,710
Maximum Potential Earn- Out Payable	2,000
Servco Pacific, Inc. [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	3,218
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	1,708
Net Assets Acquired	30,790
Fixed assets	50
Goodwill	19,008
Purchased customer accounts	7,300
Non-compete agreements	1
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	14
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	31,299
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	(480)
Business Acquisition Purchase Price Allocation Other Liabilities Assumed	(29)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	509
Servco Pacific, Inc. [Member] | Services [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	29,106
Other Payable	0
Recorded Earn-Out Payable	1,684
Net Assets Acquired	30,790
Maximum Potential Earn- Out Payable	2,500
Other Acquisitions [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	(6,835)
Net Assets Acquired	21,353
Fixed assets	(121)
Goodwill	15,911
Purchased customer accounts	6,298
Non-compete agreements	64
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	302
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	15,619
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	5,734
Business Acquisition Purchase Price Allocation Other Liabilities Assumed	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities	(5,734)
Other Acquisitions [Member] | Various
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	18,654
Other Payable	463
Recorded Earn-Out Payable	2,236
Net Assets Acquired	21,353
Maximum Potential Earn- Out Payable	$ 5,475

XML

Business Combinations - Estimated Fair Values of Aggregate Assets and Liabilities Acquired (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Fair Value Of Assets And Liabilities Statement [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	$ 3,218
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	(4,345)
Payments to Acquire Businesses, Gross	98,299
Recorded Earn-Out Payable	18,155
Fixed assets	112
Goodwill	80,432
Purchased customer accounts	35,782
Non-compete agreements	138
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	316
Total assets acquired	115,653
Other current liabilities	1,438
Total liabilities assumed	1,409
Net assets acquired	117,062
Maximum Potential Earn- Out Payable	27,521
Other Acquisitions [Member]
Fair Value Of Assets And Liabilities Statement [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	(6,835)
Fixed assets	(121)
Goodwill	15,911
Purchased customer accounts	6,298
Non-compete agreements	64
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	302
Total assets acquired	15,619
Other current liabilities	5,734
Total liabilities assumed	5,734
Net assets acquired	21,353
Opus Advisory Group, LLC [Member]
Fair Value Of Assets And Liabilities Statement [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	588
Fixed assets	40
Goodwill	16,031
Purchased customer accounts	6,500
Non-compete agreements	41
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	0
Total assets acquired	23,200
Other current liabilities	(367)
Total liabilities assumed	(367)
Net assets acquired	22,833
Kerxton Insurance Agency, Inc. [Member]
Fair Value Of Assets And Liabilities Statement [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	194
Fixed assets	114
Goodwill	18,146
Purchased customer accounts	11,360
Non-compete agreements	11
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	0
Total assets acquired	29,825
Other current liabilities	(3,449)
Total liabilities assumed	(3,449)
Net assets acquired	26,376
Automotive Development Group, LLC [Member]
Fair Value Of Assets And Liabilities Statement [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	0
Fixed assets	29
Goodwill	11,336
Purchased customer accounts	4,324
Non-compete agreements	21
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	0
Total assets acquired	15,710
Other current liabilities	0
Total liabilities assumed	0
Net assets acquired	15,710
Servco Pacific, Inc. [Member]
Fair Value Of Assets And Liabilities Statement [Line Items]
Business Acquisitions Purchase Price Allocation Current Assets Cash And Cash Equivalents	3,218
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets	1,708
Fixed assets	50
Goodwill	19,008
Purchased customer accounts	7,300
Non-compete agreements	1
Business Acquisitions Purchase Price Allocation Other Noncurrent Assets	14
Total assets acquired	31,299
Other current liabilities	(480)
Total liabilities assumed	(509)
Net assets acquired	30,790
Wholesale Brokerage
Fair Value Of Assets And Liabilities Statement [Line Items]
Goodwill	6,100
Services [Member]
Fair Value Of Assets And Liabilities Statement [Line Items]
Goodwill	19,200
Services [Member] | Servco Pacific, Inc. [Member]
Fair Value Of Assets And Liabilities Statement [Line Items]
Payments to Acquire Businesses, Gross	29,106
Recorded Earn-Out Payable	1,684
Net assets acquired	30,790
Maximum Potential Earn- Out Payable	$ 2,500

XML

Business Combinations - Results of Operations (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Document Period End Date	Mar. 31, 2019
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual	$ 4,800
Business Combination Pro Forma Information Income Loss Before Income Taxes Of Acquiree Since Acquisition Date Actual	1,000
Total revenues	624,219	$ 512,730
Income before income taxes	149,863	121,469
Net income	$ 114,926	$ 93,150
Net income per share:
Basic (in dollars per share)	$ 0.41	$ 0.34
Diluted (in dollars per share)	$ 0.41	$ 0.33
Weighted Average Basic Shares Outstanding, Pro Forma	272,679	270,172
Weighted average number of shares outstanding:
Pro Forma Weighted Average Shares Outstanding, Diluted	275,014	275,714

XML

Business Combinations - Additions, Payments, and Net Changes, as well as Interest Expense Accretion on Estimated Acquisition Earn-Out Payables (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Business Combinations [Abstract]
Document Period End Date	Mar. 31, 2019
Beginning balance	$ 89,924	$ 36,175
Additions to estimated acquisition earn-out payables	18,155	4,524
Payments for estimated acquisition earn-out payables	(579)	(2,565)
Subtotal	107,500	38,134
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables	50	2,062
Interest expense accretion	1,160	404
Net change in earnings from estimated acquisition earn-out payables	1,210	2,466
Ending balance	$ 108,710	$ 40,600

XML

Goodwill - Changes in Carrying Value of Goodwill by Operating Segment (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 3,432,786
Goodwill of acquired businesses	80,432
Ending balance	$ 3,513,218
Document Period End Date	Mar. 31, 2019
Services
Goodwill [Roll Forward]
Beginning balance	$ 2,063,150
Goodwill of acquired businesses	55,117
Ending balance	2,118,267
National Programs
Goodwill [Roll Forward]
Beginning balance	926,206
Goodwill of acquired businesses	0
Ending balance	926,206
Wholesale Brokerage
Goodwill [Roll Forward]
Beginning balance	291,622
Goodwill of acquired businesses	6,063
Ending balance	297,685
Services
Goodwill [Roll Forward]
Beginning balance	151,808
Goodwill of acquired businesses	19,252
Ending balance	$ 171,060

XML

Amortizable Intangible Assets - Amortizable Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,872,339	$ 1,837,873
Accumulated Amortization	(964,701)	(939,066)
Net Carrying Value	907,638	898,807
Purchased customer accounts
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1,838,732	1,804,404
Accumulated Amortization	(934,756)	(909,415)
Net Carrying Value	$ 903,976	$ 894,989
Weighted Average Life (Years)	14 years 10 months 24 days	14 years 10 months 24 days
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 33,607	$ 33,469
Accumulated Amortization	(29,945)	(29,651)
Net Carrying Value	$ 3,662	$ 3,818
Weighted Average Life (Years)	4 years 6 months	4 years 6 months

XML

Amortizable Intangible Assets - Additional Information (Detail) $ in Millions	Mar. 31, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense estimated, year one (2015)	$ 102.5
Amortization expense estimated, year two (2016)	95.4
Amortization expense estimated, year three (2017)	91.8
Amortization expense estimated, year four (2018)	87.3
Amortization expense estimated, year five (2019)	$ 80.3

XML

Long-Term Debt - Long-Term Debt Instrument (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 11, 2019	Dec. 31, 2018	Sep. 18, 2014
Debt Instrument [Line Items]
Document Period End Date	Mar. 31, 2019
Total current portion of long-term debt	$ 55,000		$ 50,000
Total notes	848,583		499,101
Long-term credit agreements	601,250		965,000
Debt Issuance Costs, Gross	(9,835)		(7,111)
Total long-term debt	1,439,998		1,456,990
Current portion of long-term debt	55,000		50,000
Total debt	1,494,998		1,506,990
Notes Payable, Current	15,000		15,000
4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2024
Debt Instrument [Line Items]
Total notes	499,140		499,101
Four Point Five Zero Zero Percent Senior Notes Due Two Thousand Twenty Nine [Member]
Debt Instrument [Line Items]
Total notes	350,000	$ 350,000
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires June 28, 2022
Debt Instrument [Line Items]
Current portion of loan facility	40,000		35,000
Long-term credit agreements	320,000		330,000
5-year revolving-loan facility, periodic interest payments, LIBOR plus up to 1.500%, plus commitment fees up to 0.250%, expires June 28, 2022
Debt Instrument [Line Items]
Long-term credit agreements	0		350,000
Revolving Credit Loan Expires In Two Thousand Sixteen [Member]
Debt Instrument [Line Items]
Long-term credit agreements	$ 281,250		$ 285,000
Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.00%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term credit agreements				$ 475,000

XML

Long-Term Debt - Long-Term Debt Instrument (Additional Information) (Detail) - USD ($)		3 Months Ended	12 Months Ended
	Dec. 21, 2018	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2019	Mar. 11, 2019	Nov. 15, 2018	Jun. 28, 2017	Sep. 18, 2014	Apr. 17, 2014	Sep. 15, 2011
Debt Instrument [Line Items]
Unsecured Revolving Credit Facility		$ 10,000,000.0	$ 350,000,000.0			$ 600,000,000.0	$ 400,000,000.0		$ 800,000,000.0
Unsecured Long-term Debt, Noncurrent		360,000,000.0
Debt Instrument, Periodic Payment	$ 250,000,000.0
Debt Instrument, Annual Principal Payment		1,494,998,000	1,506,990,000
Senior Notes		$ 848,583,000	$ 499,101,000
4.500% senior notes, Series E, quarterly interest payments, balloon due 2018
Debt Instrument [Line Items]
Debt instrument maturity year		2029	2029
Unsecured Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage					4.50%			4.20%
Debt Instrument, Annual Principal Payment		$ 350,000,000.0	$ 500,000,000.0
4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2024
Debt Instrument [Line Items]
Debt instrument maturity year		2024	2024
Senior Notes		$ 499,140,000	$ 499,101,000
5-year term-loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires June 28, 2022
Debt Instrument [Line Items]
Line of credit facility, expiration period		5 years	5 years
Line of credit facility, expiration date		Jun. 28, 2022	Jun. 28, 2022
Five Year Term Loan Facility Expires In Two Thousand Ninteen Current [Member]
Debt Instrument [Line Items]
Debt instrument maturity year		2022	2022
5-year revolving-loan facility, periodic interest payments, LIBOR plus up to 1.500%, plus commitment fees up to 0.250%, expires June 28, 2022
Debt Instrument [Line Items]
Line of credit facility, expiration period		5 years	5 years
Line of credit facility, expiration date		Jun. 28, 2022	Jun. 28, 2022
Four Point Five Zero Zero Percent Senior Notes Due Two Thousand Twenty Nine [Member]
Debt Instrument [Line Items]
Senior Notes		$ 350,000,000.0			$ 350,000,000.0
Maximum
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.75%
Maximum | Term Loan [Member] | LIBOR
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.75%	1.75%
Minimum [Member]
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.00%
Revolving Credit Facility [Member] | Maximum
Debt Instrument [Line Items]
Line of Credit Facility, Commitment Fee Percentage		0.25%	0.25%
Revolving Credit Facility [Member] | Maximum | LIBOR
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.50%	1.50%
Term Loan [Member]
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	300,000,000.0		$ 300,000,000.0
Term Loan [Member] | Maximum
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	450,000,000.0
Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Unsecured Long-term Debt, Noncurrent	$ 300,000,000.0
Series E [Member] | Master Agreement [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate, stated percentage										4.50%
Subsequent Event [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Year Two				$ 3,800,000

XML

Long-Term Debt - Narrative (Detail) - USD ($)		3 Months Ended			12 Months Ended
	Dec. 21, 2018	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2018	Jun. 30, 2019	Mar. 11, 2019	Nov. 15, 2018	Jun. 28, 2017	Sep. 18, 2014	Apr. 17, 2014	Sep. 15, 2011
Debt Instrument [Line Items]
Document Period End Date		Mar. 31, 2019
Credit facility, outstanding amount		$ 601,250,000	$ 965,000,000		$ 965,000,000
Unsecured revolving credit facility		10,000,000.0	350,000,000.0		350,000,000.0			$ 600,000,000.0	$ 400,000,000.0		$ 800,000,000.0
Write off of Deferred Debt Issuance Cost			200,000
Debt Issuance Costs, Noncurrent, Net									$ 1,600,000
Debt Instrument, Periodic Payment, Principal			365,000,000.0	$ 5,000,000.0
Proceeds from Issuance of Debt			2,800,000
Unsecured term loans		360,000,000.0
Senior Notes		848,583,000	499,101,000		499,101,000
Debt Instrument, Periodic Payment	$ 250,000,000.0
Outstanding debt balance		1,494,998,000	1,506,990,000		1,506,990,000
Unsecured Senior Notes
Debt Instrument [Line Items]
Debt instrument interest rate stated percentage							4.50%			4.20%
Debt instrument, face amount										$ 500,000,000.0
Outstanding debt balance		350,000,000.0	500,000,000.0		500,000,000.0
Four Point Five Zero Zero Percent Senior Notes Due Two Thousand Twenty Nine [Member]
Debt Instrument [Line Items]
Senior Notes		$ 350,000,000.0					$ 350,000,000.0
Term Loan
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment, Principal			67,500,000
Unsecured term loans	300,000,000.0		$ 300,000,000.0		$ 300,000,000.0
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Credit facility, outstanding amount										$ 475,000,000.0
Master Agreement | Series E
Debt Instrument [Line Items]
Debt instrument interest rate stated percentage												4.50%
LIBOR
Debt Instrument [Line Items]
30-day Adjusted LIBOR Rate		2.50%
Maximum
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.75%
Maximum | Term Loan
Debt Instrument [Line Items]
Unsecured term loans	450,000,000.0
Maximum | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Facility fee		0.25%			0.25%
Maximum | LIBOR | Term Loan
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.75%			1.75%
Maximum | LIBOR | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.50%			1.50%
Minimum [Member]
Debt Instrument [Line Items]
Debt instrument, variable interest rate		1.00%
Minimum [Member] | Term Loan
Debt Instrument [Line Items]
Unsecured term loans	$ 300,000,000.0
Subsequent Event [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Year Two						$ 3,800,000

XML

Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities - Significant Non-Cash Investing and Financing Activities (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Restricted Cash and Cash Equivalents Items [Line Items]
Document Period End Date	Mar. 31, 2019
Cash and cash equivalents	$ 322,477,000	$ 558,248,000	$ 438,961,000	$ 573,383,000
Restricted Cash and Cash Equivalents	302,410,000	268,129,000	338,635,000	250,705,000
Cash paid during the period for:
Interest	20,127,000	14,472,000
Income taxes	3,120,000	3,179,000
Significant non-cash investing and financing activities
Other payable issued for purchased customer accounts	608,000	1,690,000
Estimated acquisition earn-out payables and related charges	18,155,000	4,524,000
Cash and Cash Equivalents inclusive of Restricted Cash [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and Cash Equivalents, Period Increase (Decrease)	(152,709,000)	2,289,000
Cash and cash equivalents	$ 624,887,000	$ 826,377,000	$ 777,596,000	$ 824,088,000

XML

Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities Restricted Cash (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Cash and cash equivalents	$ 322,477,000	$ 558,248,000	$ 438,961,000	$ 573,383,000
Cash and Cash Equivalents, at Carrying Value	624,887,000	826,377,000	777,596,000	824,088,000
Restricted Cash and Cash Equivalents	302,410,000	268,129,000	338,635,000	250,705,000
Cash and Cash Equivalents inclusive of Restricted Cash [Member]
Cash and Cash Equivalents, Period Increase (Decrease)	(152,709,000)	2,289,000
Cash and cash equivalents	$ 624,887,000	$ 826,377,000	$ 777,596,000	$ 824,088,000

XML

Segment Information - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) Segment	Mar. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | Segment	4
Total revenues	$ 619,280	$ 501,461
Document Period End Date	Mar. 31, 2019
London, Bermuda and Cayman Islands
Segment Reporting Information [Line Items]
Total revenues	$ 3,400	$ 3,300

XML

Segment Information - Summarized Financial Information Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total revenues	$ 619,280	$ 501,461
Investment income	1,081	601
Amortization	26,192	20,539
Depreciation	6,035	5,552
Interest Expense	15,198	9,671
Income before income taxes	148,520	118,441
Total assets	6,806,289	5,615,083	$ 6,863,968	$ 6,688,668
Capital expenditures	23,186	9,751
Operating Segments
Segment Reporting Information [Line Items]
Investment income	677
Operating Segments | Services
Segment Reporting Information [Line Items]
Total revenues	389,231	278,402
Investment income	0	1
Amortization	15,444	10,242
Depreciation	1,624	1,237
Interest Expense	21,153	6,797
Income before income taxes	93,841	70,399
Total assets	5,773,290	4,687,456
Capital expenditures	3,136	2,407
Operating Segments | National Programs
Segment Reporting Information [Line Items]
Total revenues	109,560	112,475
Investment income	316	114
Amortization	6,596	6,323
Depreciation	1,590	1,387
Interest Expense	5,354	7,496
Income before income taxes	19,316	20,778
Total assets	2,852,824	3,009,147
Capital expenditures	4,568	2,678
Operating Segments | Wholesale Brokerage
Segment Reporting Information [Line Items]
Total revenues	70,509	66,148
Investment income	40	0
Amortization	2,849	2,837
Depreciation	404	427
Interest Expense	1,327	1,435
Income before income taxes	15,569	11,383
Total assets	1,292,406	1,323,046
Capital expenditures	1,189	420
Operating Segments | Services
Segment Reporting Information [Line Items]
Total revenues	49,492	44,066
Investment income	48	73
Amortization	1,303	1,137
Depreciation	284	411
Interest Expense	872	594
Income before income taxes	9,177	8,816
Total assets	480,108	432,920
Capital expenditures	109	285
Other
Segment Reporting Information [Line Items]
Total revenues	488	370
Investment income	677	413
Amortization	0	0
Depreciation	2,133	2,090
Interest Expense	(13,508)	(6,651)
Income before income taxes	10,617	7,065
Total assets	(3,592,339)	(3,837,486)
Capital expenditures	$ 14,184	$ 3,961

XML

Investments - Schedule of Investments in Fixed Maturity Securities (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Debt Maturities, Single Maturity Date	$ 7,600	$ 8,100
Cost	20,474	22,352
Gross Unrealized Gains	57	7
Gross Unrealized Losses	(134)	(222)
Fair Value	20,397	22,137
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities
Schedule of Available-for-sale Securities [Line Items]
Cost	20,241	21,729
Gross Unrealized Gains	51	7
Gross Unrealized Losses	(134)	(222)
Fair Value	20,158	21,514
Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Cost	233	623
Gross Unrealized Gains	6	0
Gross Unrealized Losses	0	0
Fair Value	$ 239	$ 623

XML

Investments - Summary of Unrealized Loss Position (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	$ 0	$ 6,323
Unrealized Losses, Less than 12 Months	0	(6)
Fair Value, 12 Months or More	11,456	12,734
Unrealized Losses, 12 Months or More	(134)	(216)
Fair Value	11,456	19,057
Unrealized Losses	(134)	(222)
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	0	5,866
Unrealized Losses, Less than 12 Months	0	(6)
Fair Value, 12 Months or More	11,456	12,634
Unrealized Losses, 12 Months or More	(134)	(216)
Fair Value	11,456	18,500
Unrealized Losses	$ (134)	(222)
Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months		457
Unrealized Losses, Less than 12 Months		0
Fair Value, 12 Months or More		100
Unrealized Losses, 12 Months or More		0
Fair Value		557
Unrealized Losses		$ 0

XML

Investments - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) Securities	Sep. 30, 2018 Securities
Schedule of Available-for-sale Securities [Line Items]
Document Period End Date	Mar. 31, 2019
Available-for-sale Securities	$ 20,397	$ 22,137
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Fair Value	2,868	$ 4,743
Number of securities in unrealized loss position | Securities		20	9
Proceeds from sale of investment in fixed maturity securities	1,900
Proceeds from Sale of Other Investments	$ 2,400
Investment security maturity date, start	Jan. 01, 2019
Investment security maturity date, End	Mar. 31, 2019
Gross realized gains and losses of securities	insignificant
Investments on deposit with the state insurance department	$ 4,100
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	20,158	$ 21,514
Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities	$ 239	$ 623

XML

Investments - Amortized Cost and Fair Value of Fixed Maturity Securities by Contractual Maturity (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Amortized Cost
Due in one year or less	$ 2,880	$ 4,768
Due after one year through five years	17,594	17,584
Due after five years	0	0
Amortized Cost, Total	20,474	22,352
Fair Value
Due in one year or less	2,868	4,743
Due after one year through five years	17,529	17,394
Due after five years	0	0
Fair Value, Total	$ 20,397	$ 22,137

XML

Losses and Loss Adjustment Reserve - Effects of Reinsurance on Premiums Written and Earned (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Written
Direct premiums	$ 133,319
Ceded premiums	(133,317)
Net premiums	2
Earned
Direct premiums	156,876
Ceded premiums	(156,874)
Net premiums	$ 2

XML

Losses and Loss Adjustment Reserve - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) Reinsurer	Dec. 31, 2018 USD ($)
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded rate of premiums under insurance program	100.00%
Document Period End Date	Mar. 31, 2019
Premiums written net	$ 133,317
Ceded unpaid loss	51,400
Prepaid reinsurance premiums	314,363	$ 337,920
Reserve for losses and loss adjustment expense	$ 51,400
Number of reinsurers | Reinsurer	2
Wright National Flood Insurance Company [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded rate of premiums under insurance program	100.00%
Expenses and allowance rate received in premiums	30.00%
Premiums written net	$ 132,900
Wright National Flood Insurance Company [Member] | Quota Share Agreement
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Effective cedes rate under quota share agreement	100.00%
Commission rate, percent of ceded written premiums	30.50%
Ceded amount	$ 400

XML

Statutory Financial Information - Additional Information (Detail) - Wright Flood - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Statutory Accounting Practices [Line Items]
Statutory capital and surplus required	$ 7,500,000
Statutory capital and surplus	20,000,000.0	$ 19,400,000
Statutory net Income	$ 200,000	$ 4,500,000

XML

Subsidiary Dividend Restrictions - Additional Information (Detail) - Wright Flood $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Dividend Restrictions [Line Items]
Dividend rate as a percentage of net income	100.00%
Maximum dividend payout that may be made without prior approval	$ 4.5
Maximum
Dividend Restrictions [Line Items]
Dividend rate as a percentage of net income	10.00%

XML

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	Dec. 12, 2018	May 01, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018
Accelerated Share Repurchases [Line Items]
Shares repurchased, authorized amount			$ 147,500	$ 100,000
Shares repurchased, number of shares received initially (in shares)				13,796,696	13,796,696
Fair value of common stock repurchased			477,572	$ 477,572
Accelerated Share Repurchases, Settlement (Payment) or Receipt				$ 20,000
Common Stock, Shares, Outstanding				279,583,006	282,047,861
Common Stock, Shares Authorized				560,000,000	560,000,000
Common Stock, Par or Stated Value Per Share				$ 0.10	$ 0.10
Accelerated Share Repurchase Agreement [Member]
Accelerated Share Repurchases [Line Items]
Fair value of common stock repurchased				$ 80,000
Treasury Stock, Shares, Acquired	2,910,150
Repurchase Agreements [Member]
Accelerated Share Repurchases [Line Items]
Shares repurchased, authorized amount			$ 100,000
Subsequent Event [Member] | Third Accelerated Share Repurchase Agreement [Member]
Accelerated Share Repurchases [Line Items]
Shares repurchased, authorized amount		$ 372,500
Shares repurchased, number of shares received initially (in shares)		500,000,000.0

XML

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Investments, Owned, Federal Income Tax Note [Line Items]
Income Tax Expense (Benefit)	$ (34,624)	$ (27,613)
Document Period End Date	Mar. 31, 2019

XML

Subsequent Event (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Subsequent Event [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net	$ 117,062
Payments to Acquire Businesses, Gross	98,299
Business Acquisition Cost Of Acquired Entity Other Payable	608
Business Acquisition Earn Out Payables	$ 27,521

XML

Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases, Operating [Abstract]
Operating Lease, Payments	$ 12,311
Operating Lease, Weighted Average Remaining Lease Term	5 years 8 months 23 days
Operating Lease, Weighted Average Discount Rate, Percent	381.00%
Operating Lease, Cost	$ 12,088
Operating Lease, Right-of-Use Asset	174,580	$ 178,304	$ 0
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	33,577		48,292
Lessee, Operating Lease, Liability, Payments, Due Year Two	44,573		43,517
Lessee, Operating Lease, Liability, Payments, Due Year Three	36,998		34,836
Lessee, Operating Lease, Liability, Payments, Due Year Four	29,940		27,035
Lessee, Operating Lease, Liability, Payments, Due Year Five	23,184		19,981
Finance Lease, Liability, Payments, Due after Year Five	55,084		36,349
Lessee, Operating Lease, Liability, Payments, Due	223,356
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	24,518
Operating Lease, Liability	198,838		210,010
Operating Lease, Liability, Current	39,015
Operating Lease, Liability, Noncurrent	159,823	$ 161,464	$ 0
Variable Lease, Cost	713
Lease, Cost	12,801
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 2,439