Business Combinations (Tables)

12 Months Ended

Dec. 31, 2012

Acquisitions Accounted for Business Combinations

The acquisitions made in 2012 have been accounted for as business combinations and are as follows:

(in thousands)

Name	Business Segment		2012 Date of Acquisition		Cash Paid		Note Payable		Other Payable		Recorded Earn-out Payable		Net Assets Acquired		Maximum Potential Earn-out Payable
Arrowhead General Insurance Agency Superholding Corporation		National Programs; Services		January 9	$	396,952	$	—	$	22,061	$	3,290	$	422,303	$	5,000
Insurcorp & GGM Investments LLC (d/b/a Maalouf Benefit Resources)		Retail		May 1		15,500		—		900		4,944		21,344		17,000
Richard W. Endlar Insurance Agency, Inc.		Retail		May 1		10,825		—		—		2,598		13,423		5,500
Texas Security General Insurance Agency, Inc.		Wholesale Brokerage		September 1		14,506		—		2,182		2,124		18,812		7,200
Behnke & Associates, Inc.		Retail		December 1		9,213		—		—		1,126		10,339		3,321
Rowlands & Barranca Agency, Inc		Retail		December 1		8,745		—		—		2,401		11,146		4,000
Other		Various		Various		28,192		59		296		4,996		33,543		14,149
Total					$	483,933	$	59	$	25,439	$	21,479	$	530,910	$	56,170

Name	Business Segment		2011 Date of Acquisition		Cash Paid		Note Payable		Recorded Earn-out Payable		Net Assets Acquired		Maximum Potential Earn-out Payable
Balcos Insurance, Inc.		Retail		January 1	$	8,611	$	—	$	1,595	$	10,206	$	5,766
Associated Insurance Service, Inc. et al.		Retail		January 1		12,000		—		1,575		13,575		6,000
United Benefit Services Insurance Agency LLC et al.		Retail		February 1		14,283		—		2,590		16,873		8,442
First Horizon Insurance Group, Inc. et al.		Retail		April 30		25,060		—		—		25,060		—
Fitzharris Agency, Inc. et al.		Retail		May 1		6,159		—		888		7,047		3,832
Corporate Benefit Consultants, LLC		Retail		June 1		9,000		—		2,038		11,038		4,520
Sitzmann, Morris & Lavis Insurance Agency, Inc. et al.		Retail		November 1		40,460		—		6,228		46,688		19,000
Snapper Shuler Kenner, Inc. et al.		Retail		November 1		7,493		—		1,318		8,811		3,988
Industry Consulting Group, Inc.		National Programs		November 1		9,133		—		3,877		13,010		5,794
Colonial Claims Corporation et al.		Services		December 23		9,950		—		4,248		14,198		8,000
Other		Various		Various		25,295		1,194		6,168		32,657		12,865
Total					$	167,444	$	1,194	$	30,525	$	199,163	$	78,207

Name	Business Segment		2010 Date of Acquisition		Cash Paid		Note Payable		Recorded Earn-out Payable		Net Assets Acquired		Maximum Potential Earn-out Payable
DiMartino Associates, Inc.		Retail		March 1	$	7,047	$	—	$	3,402	$	10,449	$	5,637
Stone Insurance Agencies, et al.		Retail		May 1		15,825		—		124		15,949		3,000
Crowe Paradis Holding Company, et al.		Services		September 1		75,000		—		8,665		83,665		15,000
Thomas R Jones, Inc.		Retail		October 1		14,634		—		—		14,634		—
Other		Various		Various		46,130		759		12,899		59,788		30,668
Total					$	158,636	$	759	$	25,090	$	184,485	$	54,305

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:

(in thousands)	Arrowhead			Insurcorp			Endlar			Texas Security			Behnke		Rowlands			Other			Total
Cash	$	61,786		$	—		$	—		$	—		$	—	$	—		$	—		$	61,786
Other current assets		69,051			180			305			1,866			—		—			422			71,824
Fixed assets		4,629			25			25			45			25		30			158			4,937
Goodwill		321,128			14,745			8,044			10,845			6,430		8,363			21,085			390,640
Purchased customer accounts		99,675			6,490			5,230			6,229			3,843		3,367			13,112			137,946
Non-compete agreements		100			22			11			14			41		21			243			452
Other assets		1			—			—			—			—		—			—			1
Total assets acquired		556,370			21,462			13,615			18,999			10,339		11,781			35,020			667,586
Other current liabilities		(107,579	)		(118	)		(192	)		(187	)		—		(635	)		(1,477	)		(110,188	)
Deferred income taxes, net		(26,488	)		—			—			—			—		—			—			(26,488	)
Total liabilities assumed		(134,067	)		(118	)		(192	)		(187	)		—		(635	)		(1,477	)		(136,676	)
Net assets acquired	$	422,303		$	21,344		$	13,423		$	18,812		$	10,339	$	11,146		$	33,543		$	530,910

(in thousands)	Balcos			AIS			United			FHI			FA			CBC
Cash	$	—		$	—		$	—		$	5,170		$	—		$	—
Other current assets		187			252			438			1,640			77			227
Fixed assets		20			100			20			134			60			6
Goodwill		6,486			9,055			10,049			15,254			7,244			6,738
Purchased customer accounts		3,530			4,086			7,045			8,088			3,351			4,046
Non-compete agreements		42			92			45			10			21			21
Other assets		—			—			4			9			—			—
Total assets acquired		10,265			13,585			17,601			30,305			10,753			11,038
Other current liabilities		(59	)		(10	)		(728	)		(3,790	)		(3,706	)		—
Deferred income taxes, net		—			—			—			(1,455	)		—			—
Other liabilities		—			—			—			—			—			—
Total liabilities assumed		(59	)		(10	)		(728	)		(5,245	)		(3,706	)		—
Net assets acquired	$	10,206		$	13,575		$	16,873		$	25,060		$	7,047		$	11,038

(in thousands)	SML			SSK			ICG			CC			Other			Total
Cash	$	—		$	—		$	—		$	—		$	—		$	5,170
Other current assets		1,372			247			336			—			1,059			5,835
Fixed assets		465			45			100			60			65			1,075
Goodwill		31,601			5,818			9,564			8,070			18,465			128,344
Purchased customer accounts		13,995			2,726			7,161			6,094			13,746			73,868
Non-compete agreements		42			12			11			23			187			506
Other assets		4			—			5			—			2			24
Total assets acquired		47,479			8,848			17,177			14,247			33,524			214,822
Other current liabilities		(791	)		(37	)		(1,096	)		(49	)		(867	)		(11,133	)
Deferred income taxes, net		—			—			—			—			—			(1,455	)
Other liabilities		—			—			(3,071	)		—			—			(3,071	)
Total liabilities assumed		(791	)		(37	)		(4,167	)		(49	)		(867	)		(15,659	)
Net assets acquired	$	46,688		$	8,811		$	13,010		$	14,198		$	32,657		$	199,163

(in thousands)	DiMartino		Stone			Crowe		TR Jones			Other			Total
Cash	$	—	$	—		$	1,000	$	—		$	—		$	1,000
Other current assets		137		516			118		259			1,528			2,558
Fixed assets		21		70			500		120			180			891
Goodwill		6,890		11,128			53,573		8,683			36,119			116,393
Purchased customer accounts		3,380		5,172			28,440		5,643			22,841			65,476
Non-compete agreements		21		74			33		—			332			460
Other assets		—		—			1		4			—			5
Total assets acquired		10,449		16,960			83,665		14,709			61,000			186,783
Other current liabilities		—		(1,011	)		—		(75	)		(1,212	)		(2,298	)
Total liabilities assumed		—		(1,011	)		—		(75	)		(1,212	)		(2,298	)
Net assets acquired	$	10,449	$	15,949		$	83,665	$	14,634		$	59,788		$	184,485

Results of Operations

If the acquisitions had occurred as of the beginning of the period, 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)	For the Year Ended December 31,
(in thousands, except per share data)	2012		2011
Total revenues	$	1,230,408	$	1,163,341
Income before income taxes	$	315,051	$	313,706
Net income	$	190,228	$	190,174
Net income per share:
Basic	$	1.33	$	1.33
Diluted	$	1.30	$	1.31
Weighted average number of shares outstanding:
Basic		139,364		138,582
Diluted		142,010		140,264

(UNAUDITED)	For the Year Ended December 31,
(in thousands, except per share data)	2011		2010
Total revenues	$	1,058,142	$	1,059,857
Income before income taxes	$	283,404	$	291,944
Net income	$	171,805	$	177,464
Net income per share:
Basic	$	1.20	$	1.25
Diluted	$	1.19	$	1.23
Weighted average number of shares outstanding:
Basic		138,582		137,924
Diluted		140,264		139,318

(UNAUDITED)	For the Year Ended December 31,
(in thousands, except per share data)	2010		2009
Total revenues	$	1,015,043	$	1,035,286
Income before income taxes	$	278,635	$	274,908
Net income	$	169,373	$	165,420
Net income per share:
Basic	$	1.19	$	1.17
Diluted	$	1.18	$	1.16
Weighted average number of shares outstanding:
Basic		137,924		137,173
Diluted		139,318		137,507

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 years ended December 31, were as follows:

	For the Year Ended December 31,
(in thousands)	2012			2011			2010
Balance as of the beginning of the period	$	47,715		$	29,608		$	7,354
Additions to estimated acquisition earn-out payables		21,479			30,525			25,090
Payments for estimated acquisition earn-out payables		(17,625	)		(10,212	)		(1,162	)
Subtotal		51,569			49,921			31,282
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables		(1,051	)		(4,043	)		(2,606	)
Interest expense accretion		2,469			1,837			932
Net change in earnings from estimated acquisition earn-out payables		1,418			(2,206	)		(1,674	)
Balance as of December 31	$	52,987		$	47,715		$	29,608