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

9 Months Ended

Sep. 30, 2024

Supplemental Cash Flow Elements [Abstract]

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

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

During the nine months ended September 30, 2024, the Company had an impact of $45 million from foreign exchange rate changes on cash and cash equivalents inclusive of fiduciary cash reported on its Condensed Consolidated Statements of Cash Flows due to the change in currency exchange rates primarily for British pounds.

Pursuant to the sale of certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023, the Company is entitled to future consideration payments upon achievement of certain conditions in accordance with the terms of the sale agreement. During the second quarter of 2024, the Company received $57 million from the settlement of two of the contingent payments.

As of September 30, 2024, the Company has accrued for and deferred approximately $50 million related to our third quarter federal income tax payment due to Hurricane Debby tax relief, which was announced by the Internal Revenue Service on August 9, 2024. In addition, the Internal Revenue Service announced on October 11, 2024, that as a result of Hurricane Milton, the fourth quarter federal income taxes are also permissible to be deferred. The deadline to pay these deferred tax payments is May 1, 2025.

During 2023, the Company accrued for and deferred $91 million related to certain federal income tax payments. This deferral was allowed under Hurricane Idalia tax relief, which was announced by the Internal Revenue Service on August 30, 2023. These deferred income tax payments were paid by the deadline of February 15, 2024. On March 15, 2023, the Company paid $31 million of accrued federal income tax payments originally due in the fourth quarter of 2022, which was deferred under a similar tax deferral announced by the Internal Revenue Service associated with Hurricane Ian which was announced on September 29, 2022. During the first quarter of 2024, the Company also made tax payments of approximately $30 million associated with the gain on disposal of certain third-party claims administration and adjusting services businesses sold in the fourth quarter of 2023.

Cash paid during the period for interest and income taxes are summarized as follows:

	Nine months ended September 30,
(in millions)	2024		2023
Cash paid during the period for:
Interest	$	162	$	167
Income taxes, net of refunds	$	289	$	183

Significant non-cash investing and financing activities are summarized as follows:

	Nine months ended September 30,
(in millions)	2024		2023
Other payables issued for agency acquisitions and purchased customer accounts	$	14	$	5
Estimated acquisition earn-out payables issued for agency acquisitions	$	28	$	51

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 September 30, 2024 and 2023.

(in millions)	September 30, 2024		December 31, 2023
Table to reconcile restricted and non-restricted fiduciary cash
Restricted fiduciary cash	$	1,457	$	1,412
Non-restricted fiduciary cash		287		191
Total restricted and non-restricted fiduciary cash at the end of the period	$	1,744	$	1,603

The Company's fiduciary cash increased as of September 30, 2024 compared to December 31, 2023 due to growth in the business, normal seasonality and acquisition activity during 2024.

	Balance as of September 30,
(in millions)	2024		2023
Table to reconcile cash and cash equivalents inclusive of fiduciary cash
Cash and cash equivalents	$	957	$	756
Fiduciary cash		1,744		1,515
Total cash and cash equivalents inclusive of restricted cash at the end of the period	$	2,701	$	2,271