Business Combinations (Tables)

9 Months Ended

Sep. 30, 2015

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

The following table summarizes the purchase price allocation made as of the date of each acquisition for current year acquisitions and significant adjustments made during the measurement period 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
Liberty Insurance Brokers, Inc. and Affiliates (Liberty)	Retail	February 1, 2015	$	12,000	$	—	$	2,981	$	14,981	$	3,750
Spain Agency, Inc.	Retail	March 1, 2015	20,706		—		2,617		23,323		9,162
Bellingham Underwriters, Inc.	National Programs	May 1, 2015	9,007		500		3,322		12,829		4,400
Fitness Insurance, LLC	Retail	June 1, 2015	9,455		—		2,386		11,841		3,500
Strategic Benefit Advisors, Inc.	Retail	June 1, 2015	49,600		400		14,441		64,441		26,000
Other	Various	Various	9,158		95		3,749		13,002		6,267
Total			$	109,926	$	995	$	29,496	$	140,417	$	53,079

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. The data included in the ‘Other’ column shows a negative adjustment for purchased customer accounts. This is driven mainly by the final valuation adjustment for the acquisition of Wright.



(in thousands)	Liberty			Spain Agency, Inc.			Bellingham Underwriters, Inc.			Fitness Insurance, LLC		Strategic Benefit Advisors, Inc.		Other			Total
Other current assets	$	2,486		$	—		$	—		$	—	$	—	$	170		$	2,656
Fixed assets	40			50			25			17		41		32			205
Goodwill	10,010			16,036			9,608			8,084		39,865		17,029			100,632
Purchased customer accounts	4,506			7,430			3,223			3,740		24,500		(4,105		)	39,294
Non-compete agreements	24			21			21			—		21		123			210
Other assets	—			—			—			—		14		—			14
Total assets acquired	17,066			23,537			12,877			11,841		64,441		13,249			143,011
Other current liabilities	(42		)	(214		)	(48		)	—		—		(3,458		)	(3,762		)
Deferred income tax, net	—			—			—			—		—		2,576			2,576
Other liabilities	(2,043		)	—			—			—		—		635			(1,408		)
Total liabilities assumed	(2,085		)	(214		)	(48		)	—		—		(247		)	(2,594		)
Net assets acquired	$	14,981		$	23,323		$	12,829		$	11,841	$	64,441	$	13,002		$	140,417

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)	For the three months ended September 30,				For the nine months ended September 30,
(in thousands, except per share data)	2015		2014		2015		2014
Total revenues	$	432,276	$	431,703	$	1,267,812	$	1,212,241
Income before income taxes	$	112,855	$	115,712	$	311,429	$	310,302
Net income	$	67,442	$	70,166	$	187,738	$	187,952
Net income per share:
Basic	$	0.48	$	0.49	$	1.33	$	1.30
Diluted	$	0.47	$	0.48	$	1.31	$	1.28
Weighted average number of shares outstanding:
Basic	137,684		140,915		138,181		141,253
Diluted	140,041		142,964		140,446		143,102

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

The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three and nine months ended September 30, 2015 and 2014, were as follows:



	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2015			2014			2015			2014
Balance as of the beginning of the period	$	90,113		$	52,696		$	75,283		$	43,058
Additions to estimated acquisition earn-out payables	2,363			(221		)	29,496			14,586
Payments for estimated acquisition earn-out payables	(12,899		)	(463		)	(26,937		)	(11,892		)
Subtotal	79,577			52,012			77,842			45,752
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables	(365		)	(247		)	(30		)	4,981
Interest expense accretion	824			561			2,224			1,593
Net change in earnings from estimated acquisition earn-out payables	459			314			2,194			6,574
Balance as of September 30,	$	80,036		$	52,326		$	80,036		$	52,326