Segment Information

9 Months Ended

Sep. 30, 2019

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 $4.4 million and $3.7 million of total revenues for the three months ended September 30, 2019 and 2018, respectively. These operations earned

$12.4 million and $11.3 million of total revenues for the nine months ended September 30, 2019 and 2018, respectively. Long-lived assets held outside of the United States as of September 30, 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 September 30, 2019
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	337,712	$	142,854	$	87,109	$	50,106	$	902		$	618,683
Investment income	$	28	$	375	$	48	$	35	$	1,182		$	1,668
Amortization	$	15,821	$	6,264	$	2,797	$	1,390	$	—		$	26,272
Depreciation	$	1,897	$	1,779	$	422	$	315	$	1,402		$	5,815
Interest expense	$	22,287	$	3,557	$	1,105	$	1,164	$	(11,799	)	$	16,314
Income before income taxes	$	51,133	$	46,629	$	28,908	$	14,775	$	10,393		$	151,838
Total assets	$	6,155,670	$	3,315,656	$	1,406,709	$	469,292	$	(3,666,663	)	$	7,680,664
Capital expenditures	$	2,266	$	1,276	$	768	$	209	$	7,665		$	12,184

	Three months ended September 30, 2018
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	261,087	$	143,519	$	78,009	$	48,105	$	130		$	530,850
Investment income	$	1	$	138	$	44	$	51	$	485		$	719
Amortization	$	10,754	$	6,736	$	2,878	$	1,269	$	—		$	21,637
Depreciation	$	1,236	$	1,346	$	385	$	393	$	1,899		$	5,259
Interest expense	$	7,468	$	6,147	$	1,233	$	846	$	(6,731	)	$	8,963
Income before income taxes	$	61,224	$	46,707	$	23,614	$	6,988	$	3,967		$	142,500
Total assets	$	4,651,080	$	2,933,465	$	1,272,795	$	448,027	$	(3,502,561	)	$	5,802,806
Capital expenditures	$	1,467	$	2,420	$	895	$	366	$	4,321		$	9,469

	Nine months ended September 30, 2019
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	1,037,681	$	384,231	$	238,789	$	150,395	$	2,086		$	1,813,182
Investment income	$	45	$	1,071	$	131	$	117	$	2,910		$	4,274
Amortization	$	46,622	$	19,217	$	8,490	$	4,089	$	—		$	78,418
Depreciation	$	5,440	$	4,990	$	1,251	$	902	$	4,933		$	17,516
Interest expense	$	64,641	$	13,134	$	3,692	$	3,239	$	(36,901	)	$	47,805
Income before income taxes	$	189,191	$	106,188	$	67,421	$	33,220	$	27,860		$	423,880
Total assets	$	6,155,670	$	3,315,656	$	1,406,709	$	469,292	$	(3,666,663	)	$	7,680,664
Capital expenditures	$	7,810	$	7,786	$	2,470	$	540	$	28,752		$	47,358

	Nine months ended September 30, 2018
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	772,806	$	374,434	$	219,725	$	138,038	$	495		$	1,505,498
Investment income	$	2	$	384	$	125	$	160	$	1,380		$	2,051
Amortization	$	31,498	$	19,383	$	8,537	$	3,543	$	—		$	62,961
Depreciation	$	3,746	$	4,087	$	1,238	$	1,183	$	6,156		$	16,410
Interest expense	$	21,377	$	20,019	$	4,039	$	2,023	$	(18,772	)	$	28,686
Income before income taxes	$	175,984	$	91,809	$	55,544	$	23,889	$	14,625		$	361,851
Total assets	$	4,651,080	$	2,933,465	$	1,272,795	$	448,027	$	(3,502,561	)	$	5,802,806
Capital expenditures	$	5,828	$	7,313	$	1,762	$	798	$	13,158		$	28,859