During the three months ended March 31, 2024, Brown & Brown acquired all of the stock of two insurance intermediaries, purchased assets and assumed certain liabilities of three insurance intermediaries, and purchased one book of business (customer accounts) for a total of six acquisitions. Additionally, adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last twelve months as permitted by Accounting Standards Codification Topic 805 — Business Combinations (“ASC 805”).

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.

Total consideration for acquisition activity during the three months ended March 31, 2024, was $87 million and included gross cash paid of $76 million, initial fair value of earnout-out liabilities of $9 million and other payables of $2 million. The Company recorded $66 million of goodwill and $21 million of other identifiable intangible assets in connection with the acquisitions and measurement period adjustments during the three months ended March 31, 2024. The weighted average useful lives for the acquired amortizable intangible assets are 15 years.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Consolidated Financial Statements are provisional and thus subject to further adjustments within the permitted measurement periods, as defined in ASC 805, including balances related to the acquisition of Kentro Capital Limited as of the October 1, 2023 acquisition date, primarily for intangible assets, goodwill, customer contract related balances and tax related balances.

Certain disclosures have not been presented as the effect of the acquisitions were not material to the Company's financial results.

As of March 31, 2024 and 2023, 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, 2024 and 2023, were as follows:


	Three months ended March 31,
(in millions)	2024			2023
Balance as of the beginning of the period	$	249		$	252
Additions to estimated acquisition earn-out payables		9			20
Payments for estimated acquisition earn-out payables		(52	)		(16	)
Subtotal		206			256
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables		(4	)		(4	)
Interest expense accretion		2			2
Net change in earnings from estimated acquisition earn-out payables		(2	)		(2	)
Foreign currency translation adjustments during the year		(1	)		1
Balance as of March 31,	$	203		$	255

Of the $203 million of estimated acquisition earn-out payables as of March 31, 2024, $118 million was recorded as current liabilities within the accounts payable caption in the Company's Consolidated Balance sheets and $85 million was recorded as non-current liabilities within the other liabilities caption in the Company's Consolidated Balance Sheets. Included within 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.

As of March 31, 2024, the maximum future acquisition contingency payments related to all acquisitions was $566 million. Six of the estimated acquisition earn-out payables included provisions with no maximum potential earn-out amount. The amount recorded for these acquisitions as of March 31, 2024 is $5 million. The Company deems a significant increase to this amount to be unlikely.