10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2014

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-13619

BROWN & BROWN, INC.

(Exact name of Registrant as specified in its charter)

Florida		59-0864469
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
220 South Ridgewood Avenue, Daytona Beach, FL		32114
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (386) 252-9601

Registrant’s Website: www.bbinsurance.com

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of shares of the Registrant’s common stock, $.10 par value, outstanding as of June 30, 2014 was 144,544,117.

BROWN & BROWN, INC.

INDEX

		PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Statements of Income for the three and six months ended June 30, 2014 and 2013		4
	Condensed Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013		5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and 2013		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		37
Item 4.	Controls and Procedures		37
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		38
Item 1A.	Risk Factors		38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 6.	Exhibits		39
SIGNATURE			40

2

Disclosure Regarding Forward-Looking Statements

Brown & Brown, Inc., together with its subsidiaries (collectively, “we,” “Brown & Brown” or the “Company”), make “forward-looking statements” within the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995, as amended, throughout this report and in the documents we incorporate by reference into this report. You can identify these statements by forward-looking words such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan” and “continue” or similar words. We have based these statements on our current expectations about potential future events. Although we believe the expectations expressed in the forward-looking statements included in this Form 10-Q and the reports, statements, information and announcements incorporated by reference into this report are based on reasonable assumptions within the bounds of our knowledge of our business, a number of factors could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by us or on our behalf. Many of these factors have previously been identified in filings or statements made by us or on our behalf. Important factors which could cause our actual results to differ materially from the forward-looking statements in this report include the following items, in addition to those matters described in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”:

• Projections of revenues, income, losses, cash flows, capital expenditures;

• Future prospects;

• Plans for future operations;

• Expectations of the economic environment;

• Material adverse changes in economic conditions in the markets we serve and in the general economy;

• Future regulatory actions and conditions in the states in which we conduct our business;

• Competition from others in the insurance agency, wholesale brokerage, insurance programs and service business;

• The occurrence of adverse economic conditions, an adverse regulatory climate, or a disaster in California, Florida, Georgia, Illinois, Indiana, Kansas, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, Virginia and Washington, because a significant portion of business written by Brown & Brown is for customers located in these states;

• The integration of our operations with those of businesses or assets we have acquired, including our acquisition of The Wright Insurance Group, LLC (“Wright”), and the failure to realize the expected benefits of such acquisition and integration;

• Exposure units, and premium rates set by insurance companies which have traditionally varied and are difficult to predict;

• Our ability to forecast liquidity needs through at least the end of 2014;

• Our ability to renew or replace expiring leases;

• Outcome of legal proceedings and governmental investigations;

• Policy cancellations which can be unpredictable;

• Potential changes to the tax rate that would affect the value of deferred tax assets and liabilities;

• The inherent uncertainty in making estimates, judgments, and assumptions in the preparation of financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”);

• The performance of acquired businesses and its effect on estimated acquisition earn-out payable; and

• Other risks and uncertainties as may be detailed from time to time in our public announcements and Securities and Exchange Commission (“SEC”) filings.

Assumptions as to any of the foregoing and all statements are not based on historical fact, but rather reflect our current expectations concerning future results and events. Forward-looking statements that we make or that are made by others on our behalf are based on a knowledge of our business and the environment in which we operate, but because of the factors listed above, among others, actual results may differ from those in the forward-looking statements. Consequently, these cautionary statements qualify all of the forward-looking statements we make herein. We cannot assure you that the results or developments anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business or our operations in the way we expect. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of their dates. We assume no obligation to update any of the forward-looking statements.

3

PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED)

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(in thousands, except per share data)	For the three months ended June 30,				For the six months ended June 30,
	2014		2013		2014		2013
REVENUES
Commissions and fees	$	394,690	$	324,150	$	756,697	$	657,943
Investment income		194		239		297		425
Other income, net		2,880		1,403		4,364		2,436
Total revenues		397,764		325,792		761,358		660,804
EXPENSES
Employee compensation and benefits		196,397		163,514		380,507		323,012
Non-cash stock-based compensation		5,994		3,623		13,509		7,473
Other operating expenses		60,546		47,397		113,007		93,736
Amortization		20,623		16,121		38,499		32,282
Depreciation		5,242		4,263		9,882		8,430
Interest		7,004		3,997		11,076		7,981
Change in estimated acquisition earn-out payables		177		656		6,260		2,178
Total expenses		295,983		239,571		572,740		475,092
Income before income taxes		101,781		86,221		188,618		185,712
Income taxes		40,026		34,214		74,448		73,574
Net income	$	61,755	$	52,007	$	114,170	$	112,138
Net income per share:
Basic	$	0.43	$	0.36	$	0.79	$	0.78
Diluted	$	0.42	$	0.36	$	0.78	$	0.77
Dividends declared per share	$	0.1000	$	0.0900	$	0.2000	$	0.1800

See accompanying notes to condensed consolidated financial statements.

4

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except per share data)	June 30, 2014			December 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	309,107		$	202,952
Restricted cash and investments		300,354			250,009
Short-term investments		12,300			10,624
Premiums, commissions and fees receivable		433,113			395,915
Reinsurance recoverable		28,109			—
Prepaid reinsurance premiums		309,020			—
Deferred income taxes		16,312			29,276
Other current assets		50,920			39,260
Total current assets		1,459,235			928,036
Fixed assets, net		86,370			74,733
Goodwill		2,509,280			2,006,173
Amortizable intangible assets, net		828,961			618,888
Investments		19,194			16
Other assets		27,432			21,662
Total assets	$	4,930,472		$	3,649,508
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Premiums payable to insurance companies	$	634,797		$	534,360
Losses and loss adjustment expense		28,109			—
Unearned premiums		309,020			—
Premium deposits and credits due customers		98,532			80,959
Accounts payable		55,856			34,158
Accrued expenses and other liabilities		137,695			157,400
Current portion of long-term debt		6,609			100,000
Total current liabilities		1,270,618			906,877
Long-term debt		1,168,125			380,000
Deferred income taxes, net		337,520			291,704
Other liabilities		72,695			63,786
Shareholders’ Equity:
Common stock, par value $0.10 per share; authorized 280,000 shares; issued 145,389 and outstanding 144,544 at 2014 and issued and outstanding 145,419 at 2013		14,539			14,542
Additional paid-in capital		386,233			371,960
Treasury stock, at cost 845 and 0 shares at 2014 and 2013, respectively		(25,025	)		—
Retained earnings		1,705,767			1,620,639
Total shareholders’ equity		2,081,514			2,007,141
Total liabilities and shareholders’ equity	$	4,930,472		$	3,649,508

See accompanying notes to condensed consolidated financial statements.

5

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the six months ended June 30,
(in thousands)	2014			2013
Cash flows from operating activities:
Net income	$	114,170		$	112,138
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization		38,499			32,282
Depreciation		9,882			8,430
Non-cash stock-based compensation		13,509			7,473
Change in estimated acquisition earn-out payables		6,260			2,178
Deferred income taxes		14,425			20,922
Income tax benefit from exercise of shares from the stock benefit plans		(2,467	)		(307	)
Net gain on sales of investments, fixed assets and customer accounts		(2,804	)		(974	)
Payments on acquisition earn-outs in excess of original estimated payables		(2,539	)		(1,926	)
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
Restricted cash and investments (increase)		(50,345	)		(45,974	)
Premiums, commissions and fees receivable (increase)		(21,396	)		(6,307	)
Reinsurance recoverables (increase)		(2,871	)		—
Prepaid reinsurance premiums (increase)		(20,007	)		—
Other assets (increase)		(14,295	)		(1,386	)
Premiums payable to insurance companies increase		74,646			69,008
Premium deposits and credits due customers increase (decrease)		17,542			(1,651	)
Losses and loss adjustment expense increase		2,871			—
Unearned premiums increase		20,007			—
Accounts payable increase		35,461			6,725
Accrued expenses and other liabilities (decrease) increase		(34,714	)		27,517
Other liabilities (decrease)		(18,232	)		(6,263	)
Net cash provided by operating activities		177,602			221,885
Cash flows from investing activities:
Additions to fixed assets		(12,577	)		(7,123	)
Payments for businesses acquired, net of cash acquired		(694,737	)		(14,384	)
Proceeds from sales of fixed assets and customer accounts		3,207			513
Purchases of investments		(8,515	)		(9,935	)
Proceeds from sales of investments		8,371			5,914
Net cash used in investing activities		(704,251	)		(25,015	)
Cash flows from financing activities:
Proceeds from long-term debt		550,000			—
Payments on long-term debt		(230,000	)		(60	)
Payments on acquisition earn-outs		(8,890	)		(6,153	)
Borrowings on revolving credit facilities		375,000			—
Income tax benefit from exercise of shares from the stock benefit plans		2,467			307
Issuances of common stock for employee stock benefit plans		942			725
Repurchase stock benefit plan shares for employees to fund tax withholdings		(2,648	)		(73	)
Purchase of treasury stock		(25,025	)		—
Cash dividends paid		(29,042	)		(25,912	)
Net cash provided by (used in) financing activities		632,804			(31,166	)
Net increase in cash and cash equivalents		106,155			165,704
Cash and cash equivalents at beginning of period		202,952			219,821
Cash and cash equivalents at end of period	$	309,107		$	385,525

See accompanying notes to condensed consolidated financial statements.

6

BROWN & BROWN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1· Nature of Operations

Brown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and services organization that markets and sells to its customers insurance products and services, primarily in the property and casualty area. Brown & Brown’s business is divided into four reportable segments: the Retail Division, which provides a broad range of insurance products and services to commercial, public entity, professional and individual customers; the National Programs Division, acting as a managing general agent (“MGA”), provides professional liability and related package products for certain professionals, flood coverage, 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 markets; the Wholesale Brokerage Division, which markets and sells excess and surplus commercial insurance and reinsurance, primarily through independent agents and brokers; and the Services Division, 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 catastrophe claims adjusting services. In addition, as the result of our acquisition of the stock of The Wright Insurance Group, LLC (“Wright”), in May 2014, we own a flood insurance carrier that is a Wright subsidiary. This carrier’s business consists of policies written pursuant to the National Flood Insurance Program (“NFIP”), the program administered by the Federal Emergency Management Agency (“FEMA”) and several excess flood insurance policies which are fully reinsured.

NOTE 2· Basis of Financial Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014

NOTE 3· Net Income Per Share

Effective in 2009, the Company adopted new Financial Accounting Standards Board (“FASB”) authoritative guidance that states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share (“EPS”) pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Performance stock shares granted to employees under the Company’s Performance Stock Plan and under the Company’s Stock Incentive Plan are considered participating securities as they receive non-forfeitable dividend equivalents at the same rate as common stock.

7

Basic EPS is computed based on the weighted average number of common shares (including participating securities) issued and outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares issued and outstanding plus equivalent shares, assuming the exercise of stock options. The dilutive effect of stock options is computed by application of the treasury-stock method. The following is a reconciliation between basic and diluted weighted average shares outstanding:

	For the three months ended June 30,						For the six months ended June 30,
(in thousands, except per share data)	2014			2013			2014			2013
Net income	$	61,755		$	52,007		$	114,170		$	112,138
Net income attributable to unvested awarded performance stock		(1,531	)		(1,157	)		(2,915	)		(2,467	)
Net income attributable to common shares	$	60,224		$	50,850		$	111,255		$	109,671
Weighted average number of common shares outstanding – basic		144,840			144,041			145,133			143,984
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic		(3,590	)		(3,205	)		(3,705	)		(3,168	)
Weighted average number of common shares outstanding for basic earnings per common share		141,250			140,836			141,428			140,816
Dilutive effect of stock options		1,782			2,185			1,741			2,122
Weighted average number of shares outstanding – diluted		143,032			143,021			143,169			142,938
Net income per share:
Basic	$	0.43		$	0.36		$	0.79		$	0.78
Diluted	$	0.42		$	0.36		$	0.78		$	0.77

NOTE 4· Business Combinations

Acquisitions in 2014

During the six months ended June 30, 2014, Brown & Brown acquired the assets and assumed certain liabilities of five insurance intermediaries, all of the stock of one insurance intermediary that owns an insurance carrier and a book of business (customer accounts). Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last twelve months as permitted by ASC Topic 805 — Business Combinations (“ASC 805”). The aggregate purchase price of these acquisitions and the miscellaneous adjustments totaled $1,140,408,000 including $720,102,000 of cash payments, the issuance of $125,000 in other payables, the assumption of $407,023,000 of liabilities and $13,158,000 of recorded earn-out payables. All of these acquisitions were acquired primarily to expand Brown & Brown’s core business and to attract and hire high-quality individuals. Acquisition purchase prices are typically based on a multiple of average annual operating profit earned over a one- to three-year period within a minimum and maximum price range. The recorded purchase price for all acquisitions consummated after January 1, 2009 included 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 Statement 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. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC 805. For the six months ended June 30, 2014, several adjustments were made within the permitted measurement period that resulted in an increase in the aggregate purchase price of the affected acquisitions of $33,000 relating to the assumption of certain liabilities.

8

The following table summarizes the aggregate purchase price allocations made as of the date of the acquisitions for the current-year acquisitions and 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
The Wright Insurance Group, LLC.	National Programs	May 1, 2014		610,158		—		—		610,158		—
Pacific Resources Benefits Advisors, LLC	Retail	May 1, 2014	$	90,000	$	—	$	8,819	$	98,819	$	35,000
Axia Strategies, Inc.	Wholesale Brokerage	May 1, 2014		9,870		—		1,824		11,694		5,200
Other	Various	Various		10,074		125		2,515		12,714		6,028
Total			$	720,102	$	125	$	13,158	$	733,385	$	46,228

The following table summarizes the adjustments made to the estimated fair values along with the aggregate assets and liabilities acquired as of the date of each acquisition:

(in thousands)	PacRes			Axia		Wright			Other			Total
Cash	$	—		$	—	$	25,365		$	—		$	25,365
Other current assets		2,383			—		16,768			436			19,587
Fixed assets		53			24		7,445			1,719			9,241
Reinsurance recoverables		—			—		25,238			—			25,238
Prepaid reinsurance premiums		—			—		289,013			—			289,013
Goodwill		70,255			7,377		417,539			7,936			503,107
Purchased customer accounts		26,460			4,252		213,958			2,842			247,512
Non-compete agreements		21			41		1,119			119			1,300
Other assets		—			—		20,045			—			20,045
Total assets acquired		99,172			11,694		1,016,490			13,052			1,140,408
Other current liabilities		(353	)		—		(14,911	)		(338	)		(15,602	)
Losses and loss adjustment expense		—			—		(25,238	)		—			(25,238	)
Unearned premiums		—			—		(289,013	)		—			(289,013	)
Deferred income tax, net		—			—		(44,476	)		—			(44,476	)
Other liabilities		—			—		(32,694	)		—			(32,694	)
Total liabilities assumed		(353	)		—		(406,332	)		(338	)		(407,023	)
Net assets acquired	$	98,819			11,694		610,158		$	12,714		$	733,385

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15.0 years; and non-compete agreements, 3.3 years.

Goodwill of $503,107,000 was allocated to the Retail, National Programs, Wholesale Brokerage, and Services Divisions in the amounts of $78,395,000, $417,539,000, $(239,000), $7,412,000, respectively. Of the total goodwill of $503,107,000, $148,592,000 is currently deductible for income tax purposes and $341,357,000 is non-deductible. The remaining $13,158,000 relates to the recorded earn-out payables and will not be deductible until it is earned and paid.

The results of operations for the acquisitions completed during 2014 have been combined with those of the Company since the acquisition date. The total revenues and income before income taxes from the acquisitions completed through June 30, 2014, included in the Condensed Consolidated Statement of Income for the six months ended June 30, 2014, were $29,796,000 and $1,294,000, respectively. 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.

9

(UNAUDITED)	For the three months ended June 30,				For the six months ended June 30,
(in thousands, except per share data)	2014		2013		2014		2013
Total revenues	$	410,801	$	365,964	$	812,972	$	737,673
Income before income taxes	$	106,186		99,431	$	206,102		211,003
Net income	$	64,427		59,975	$	124,753		127,408
Net income per share:
Basic	$	0.44	$	0.42	$	0.86	$	0.88
Diluted	$	0.44	$	0.41	$	0.85	$	0.87
Weighted average number of shares outstanding:
Basic		141,250		140,836		141,428		140,816
Diluted		143,032		143,021		143,169		142,938

Acquisitions in 2013

During the six months ended June 30, 2013, Brown & Brown acquired the assets and assumed certain liabilities of two insurance intermediaries and a book of business (customer accounts). The aggregate purchase price of these acquisitions was $17,865,000, including $14,366,000 of cash payments, the issuance of $85,000 in other payables, the assumption of $860,000 of liabilities and $2,554,000 of recorded earn-out payables. All of these acquisitions were acquired primarily to expand Brown & Brown’s core businesses and to attract and hire high-quality individuals. Acquisition purchase prices are typically based on a multiple of average annual operating profit earned over a one- to three-year period within a minimum and maximum price range. The recorded purchase price for all acquisitions consummated after January 1, 2009 included 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 statement 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. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC Topic 805 – Business Combinations (“ASC 805”). For the six months ended June 30, 2013, several adjustments were made within the permitted measurement period that resulted in reduction to the aggregate purchase price of the applicable acquisitions of $1,115,000, including $18,000 of cash payments, a reduction of $454,000 in other payables, the assumption of $42,000 of liabilities and the reduction of $721,000 in recorded earn-out payables.

The following table summarizes the aggregate purchase price allocations made as of the date of each acquisition for current year acquisitions and adjustments made during the measurement period for prior year acquisitions:

(in thousands)
Name	Business Segment	Date of Acquisition	Cash Paid		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, 2012	$	—	$	(454	)	$	—		$	(454	)	$	—
Insurcorp & GGM Investments LLC	Retail	May 1, 2012		—		—			(834	)		(834	)		—
Richard W. Endlar Insurance Agency, Inc.	Retail	May 1, 2012		—		—			220			220			—
Texas Security General Insurance Agency, Inc.	Wholesale Brokerage	September 1, 2012		—		—			(107	)		(107	)		—
The Rollins Agency, Inc.	Retail	June 1, 2013		13,792		50			2,256			16,098			4,300
Other	Various	Various		592		35			298			925			448
Total			$	14,384	$	(369	)	$	1,833		$	15,848		$	4,748

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The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period for prior year acquisitions:

(in thousands)	Rollins			Arrowhead			Insurcorp			Endlar		Texas Security			Other			Total
Other current assets	$	—		$	—		$	—		$	—	$	25		$	1,455		$	1,480
Fixed assets		30			—			—			—		—			1			31
Goodwill		13,019			(454	)		(566	)		216		(843	)		(685	)		10,687
Purchased customer accounts		3,876			—			(268	)		4		708			170			4,490
Non-compete agreements		31			—			—			—		—			31			62
Total assets acquired		16,956			(454	)		(834	)		220		(110	)		972			16,750
Other current liabilities		(858	)		—			—			—		3			(47	)		(902	)
Net assets acquired	$	16,098		$	(454	)	$	(834	)	$	220	$	(107	)	$	925		$	15,848

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15.0 years; and non-compete agreements, 5.0 years.

Goodwill of $10,687,000, was allocated to the Retail, National Programs and Wholesale Brokerage Divisions in the amounts of $11,984,000, ($454,000) and ($843,000), respectively. Of the total goodwill of $10,687,000, $9,308,000 is currently deductible for income tax purposes and ($454,000) is non-deductible. The remaining $1,833,000 relates to the earn-out payables and will not be deductible until it is earned and paid.

The results of operations for the acquisitions completed during 2013 have been combined with those of the Company since their respective acquisition dates. The total revenues and income before income taxes from the acquisitions completed through June 30, 2013, included in the Condensed Consolidated Statement of Income for the three and six months ended June 30, 2013, were $627,000 and $142,000, respectively. 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 three months ended June 30,				For the six months ended June 30,
(in thousands, except per share data)	2013		2012		2013		2012
Total revenues	$	326,753	$	292,242	$	663,460	$	596,931
Income before income taxes		86,506		71,528		186,503		154,953
Net income		52,179		42,700		112,616		92,511
Net income per share:
Basic	$	0.36	$	0.30	$	0.78	$	0.65
Diluted	$	0.36	$	0.29	$	0.77	$	0.63
Weighted average number of shares outstanding:
Basic		140,836		139,086		140,816		139,044
Diluted		143,021		141,828		142,938		141,664

As of June 30, 2014, the maximum future contingency payments related to all acquisitions totaled $153,019,000, all of which relates to acquisitions consummated subsequent to January 1, 2009.

ASC 805 is the authoritative guidance requiring an acquirer to recognize 100% of the fair values of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase arrangements) at the acquisition date must be included in the purchase price consideration. As a result, the recorded purchase prices for all acquisitions consummated after January 1, 2009 include an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations will be recorded in the condensed consolidated statement of income when incurred. Potential earn-out obligations are typically based upon future earnings of the acquired entities, usually between one and three years.

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As of June 30, 2014 and 2013, 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). 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 six months ended June 30, 2014 and 2013, were as follows:

	For the three months ended June 30,						For the six months ended June 30,
(in thousands)	2014			2013			2014			2013
Balance as of the beginning of the period	$	48,806		$	49,469		$	43,058		$	52,987
Additions to estimated acquisition earn-out payables		14,527			2,554			14,807			1,833
Payments for estimated acquisition earn-out payables		(10,814	)		(3,761	)		(11,429	)		(8,080	)
Subtotal		52,519			48,262			46,436			46,740
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables		(375	)		159			5,228			1,156
Interest expense accretion		552			497			1,032			1,022
Net change in earnings from estimated acquisition earn-out payables		177			656			6,260			2,178
Balance as of June 30	$	52,696		$	48,918		$	52,696		$	48,918

Of the $52,696,000 estimated acquisition earn-out payables as of June 30, 2014, $20,278,000 was recorded as accounts payable and $32,418,000 was recorded as other non-current liabilities.

NOTE 5· Goodwill

Goodwill is subject to at least an annual assessment for impairment by applying a fair value-based test. Brown & Brown completed its most recent annual assessment as of November 30, 2013, and identified no impairment as a result of the evaluation.

The changes in the carrying value of goodwill by reportable segment for the six months ended June 30, 2014 are as follows:

(in thousands)	Retail		National Programs		Wholesale Brokerage		Services			Total
Balance as of January 1, 2014	$	1,131,257	$	467,144	$	287,242	$	120,530		$	2,006,173
Goodwill of acquired businesses		78,395		417,539		7,412		(239	)		503,107
Balance as of June 30, 2014	$	1,209,652	$	884,683	$	294,654	$	120,291		$	2,509,280

NOTE 6· Amortizable Intangible Assets

Amortizable intangible assets at June 30, 2014 and December 31, 2013, consisted of the following:

	June 30, 2014									December 31, 2013
(in thousands)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Life (Years)(1)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Life (Years)(1)
Purchased customer accounts	$	1,367,293	$	(542,432	)	$	824,861		15.0	$	1,120,719	$	(505,137	)	$	615,582		14.9
Non-compete agreements		29,415		(25,315	)		4,100		6.8		28,115		(24,809	)		3,306		7.0
Total	$	1,396,708	$	(567,747	)	$	828,961			$	1,148,834	$	(529,946	)	$	618,888

(1) Weighted average life calculated as of the date of acquisition.

Amortization expense for amortizable intangible assets for the years ending December 31, 2014, 2015, 2016, 2017 and 2018 is estimated to be $82,503,000, $86,861,000, $82,331,000, $79,377,000, and $73,977,000, respectively.

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NOTE 7· Long-Term Debt

Long-term debt at June 30, 2014 and December 31, 2013, consisted of the following:

(in thousands)	2014			2013
Unsecured senior notes	$	799,734		$	480,000
Revolving credit facilities		375,000			—
Total debt		1,174,734			480,000
Less current portion		(6,609	)		(100,000	)
Long-term debt	$	1,168,125		$	380,000

In July 2004, the Company completed a private placement of $200.0 million of unsecured senior notes (the “Notes”). The $200.0 million was divided into two series: (1) Series A, which closed on September 15, 2004, for $100.0 million due in 2011 and bore interest at 5.57% per year; and (2) Series B, which closed on July 15, 2004, for $100.0 million due in 2014 and bearing interest at 6.08% per year. The Company has used the proceeds from the Notes for general corporate purposes, including acquisitions and repayment of existing debt. On September 15, 2011, the $100.0 million of Series A Notes were redeemed on their normal maturity date through use of funds from the Master Agreement (defined below). As of June 30, 2014 and December 31, 2013, there was an outstanding balance on the Series B Notes of $100.0 million. It is management’s intention to pay off the Series B Notes at the time of maturity with proceeds from the revolving portion of the JPM Credit Facility (as described in Note 13, Subsequent Events).

On December 22, 2006, the Company entered into a Master Shelf and Note Purchase Agreement (the “Master Agreement”) with a national insurance company (the “Purchaser”). On September 30, 2009, the Company and the Purchaser amended the Master Agreement to extend the term of the agreement until August 20, 2012. The Purchaser also purchased Notes issued by the Company in 2004. The Master Agreement provides for a $200.0 million private uncommitted “shelf” facility for the issuance of senior unsecured notes over a three-year period, with interest rates that may be fixed or floating and with such maturity dates, not to exceed ten years, as the parties may determine. The Master Agreement includes various covenants, limitations and events of default similar to the Notes issued in 2004. The initial issuance of notes under the Master Agreement occurred on December 22, 2006, through the issuance of $25.0 million in Series C Senior Notes due December 22, 2016, with a fixed interest rate of 5.66% per year. On February 1, 2008, $25.0 million in Series D Senior Notes due January 15, 2015, with a fixed interest rate of 5.37% per year, were issued. It is management’s intention to pay off the Series D Senior Notes at the time of maturity with proceeds from the revolving portion of the Credit Facility. On September 15, 2011, and pursuant to a Confirmation of Acceptance (the “Confirmation”), dated January 21, 2011, in connection with the Master Agreement, $100.0 million in Series E Senior Notes were issued and are due September 15, 2018, with a fixed interest rate of 4.50% per year. The Series E Senior Notes were issued for the sole purpose of retiring the Series A Senior Notes. As of June 30, 2014, and December 31, 2013, there was an outstanding debt balance issued under the provisions of the Master Agreement of $150.0 million.

On October 12, 2012, the Company entered into a Master Note Facility Agreement (the “New Master Agreement”) with another national insurance company (the “New Purchaser”). The New Purchaser also purchased Senior Notes issued by the Company in 2004. The New Master Agreement provides for a $125.0 million private uncommitted “shelf” facility for the issuance of unsecured senior notes over a three-year period, with interest rates that may be fixed or floating and with such maturity dates, not to exceed ten years, as the parties may determine. The New Master Agreement includes various covenants, limitations and events of default similar to the Master Agreement. At June 30, 2014 and December 31, 2013, there were no borrowings against this facility.

On January 9, 2012, the Company entered into: (1) an amended and restated revolving and term loan credit agreement (the “SunTrust Agreement”) with SunTrust Bank (“SunTrust”) that provides for (a) a $100.0 million term loan (the “SunTrust Term Loan”) and (b) a $50.0 million revolving line of credit (the “SunTrust Revolver”) and (2) a $50.0 million promissory note (the “JPM Note”) in favor of JPMorgan Chase Bank, N.A. (“JPMorgan”), pursuant to a letter agreement executed by JP Morgan (together with the JPM Note, the “JPM Agreement”) that provided for a $50.0 million uncommitted line of credit bridge facility (the “JPM Bridge Facility”). The SunTrust Term Loan, the SunTrust Revolver and the JPM Bridge Facility were each funded on January 9, 2012, and provided the financing for the Arrowhead acquisition. The SunTrust Agreement amended and restated the Prior Loan Agreement. The SunTrust Revolver and JPM Bridge Facility were paid off by the JPM Term Loan (defined below).

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The maturity date for the SunTrust Term Loan and the SunTrust Revolver was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. Both the SunTrust Term Loan and the SunTrust Revolver were able to be increased by up to $50.0 million (bringing the total amount available to $150.0 million for the SunTrust Term Loan and $100.0 million for the SunTrust Revolver) prior to their termination. The calculation of interest and fees for the SunTrust Agreement was generally based on the Company’s funded debt-to-EBITDA ratio. Interest was charged at a rate equal to 1.00% to 1.40% above LIBOR or 1.00% below the Base Rate, each as more fully described in the SunTrust Agreement. Fees included an up-front fee, an availability fee of 0.175% to 0.25%, and a letter of credit margin fee of 1.00% to 1.40%. The obligations under the SunTrust Term Loan and SunTrust Revolver were unsecured and the SunTrust Agreement included various covenants, limitations and events of default that are customary for similar facilities for similar borrowers and that are substantially similar to those contained in the Prior Loan Agreement. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility (as defined below), the SunTrust Term Loan was paid in full using proceeds from the Credit Facility (as defined below) and the SunTrust Revolver was also terminated at that time.

The maturity date for the JPM Bridge Facility was February 3, 2012, at which time all outstanding principal and unpaid interest would have been due. On January 26, 2012, the Company entered into a term loan agreement (the “JPM Agreement”) with JPMorgan that provided for a $100.0 million term loan (the “JPM Term Loan”). The JPM Term Loan was fully funded on January 26, 2012, and provided the financing to fully repay (1) the JPM Bridge Facility and (2) the SunTrust Revolver. As a result of the January 26, 2012 financing and repayments, the JPM Bridge Facility was terminated and the SunTrust Revolver’s amount outstanding was reduced to zero.

The maturity date for the JPM Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. Interest was charged at a rate equal to the Alternative Base Rate or 1.00% above the Adjusted LIBOR Rate, each as more fully described in the JPM Agreement. Fees included an up-front fee. The obligations under the JPM Term Loan were unsecured and the JPM Agreement includes various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility (as defined below), the JPM Term Loan was paid in full and terminated using proceeds from the Credit Facility (as defined below).

On July 1, 2013, in conjunction with the acquisition of Beecher Carlson, the Company entered into: (1) a revolving loan agreement (the “Wells Fargo Agreement”) with Wells Fargo Bank, N.A. that provides for a $50.0 million revolving line of credit (the “Wells Fargo Revolver”) and (2) a term loan agreement (the “Bank of America Agreement”) with Bank of America, N.A. (“Bank of America”) that provided for a $30.0 million term loan (the “Bank of America Term Loan”).

The maturity date for the Wells Fargo Revolver is December 31, 2016, at which time all outstanding principal and unpaid interest will be due. The Wells Fargo Revolver may be increased by up to $50.0 million (bringing the total amount available to $100.0 million). The calculation of interest and fees for the Wells Fargo Agreement is generally based on the Company’s funded debt-to-EBITDA ratio. Interest is charged at a rate equal to 1.00% to 1.40% above LIBOR or 1.00% below the Base Rate, each as more fully described in the Wells Fargo Agreement. Fees include an up-front fee, an availability fee of 0.175% to 0.25%, and a letter of credit margin fee of 1.00% to 1.40%. The obligations under the Wells Fargo Revolver are unsecured and the Wells Fargo Agreement includes various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. The Wells Fargo Revolver was drawn down in the amount of $30.0 million on July 1, 2013. As of April 16, 2014, in connection with the agreement of the Credit Facility (as defined below), an amendment to the agreement was established to reduce the total revolving loan commitment from $50.0 million to $25.0 million. There were no borrowings against the Wells Fargo Revolver as of June 30, 2014 and December 31, 2013.

The maturity date for the Bank of America Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. The calculation of interest for the Bank of America Agreement was generally based on the Company’s fixed charge coverage ratio. Interest was charged at a rate equal to the Alternative Base Rate or 1.00% to 1.40% above the Adjusted LIBOR Rate, each as more fully described in the Bank of America Agreement. Fees included an up-front fee. The obligations under the Bank of America Term Loan were unsecured and the Bank of America Agreement included various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. The Bank of America Term Loan was funded in the amount of $30.0 million on July 1, 2013. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility, the term loan was paid in full using proceeds from the Credit Facility (as defined below).

The 30-day Adjusted LIBOR Rate as of June 30, 2014 was 0.19%.

14

On April 17, 2014, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as co-syndication agents and co-documentation agents (the “Credit Agreement”). The Credit Agreement in the amount of $1,350.0 million provides for an unsecured revolving credit facility in the initial amount of $800.0 million and unsecured term loans in the initial amount of $550.0 million, either or both of which may, subject to lenders’ discretion, potentially be increased by up to $500.0 million. The Credit Facility was funded on May 20, 2014 in conjunction with the closing of the Wright acquisition, with the $550.0 million term loan being funded as well as a drawdown of $375.0 million on the revolving loan facility. Use of these proceeds were to retire existing term loan debt including the JPM Term Loan Agreement, SunTrust Term Loan Agreement and Bank of America Term Loan Agreement in total of $230.0 million (as described above) and to facilitate the closing of the Wright acquisition as well as other acquisitions. The Credit Facility terminates on May 20, 2019, but either or both of the revolving credit facility and the term loans may be extended for two additional one-year periods at the Company’s request and at the discretion of the respective lenders. Interest and facility fees in respect to the Credit Facility are based on the better of the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt rating. Based on the Company’s net debt leverage ratio, the rates of interest for the first two quarters charged on the term loan and revolving loan will be 1.375% and 1.175% respectively and above the adjusted LIBOR rate for outstanding amounts drawn. There are fees included in the facility which include a facility fee based on the revolving credit commitments of the lenders (whether used or unused) at a rate of 0.20% and letter of credit fees based on the amounts of outstanding secured or unsecured letters of credit. The Credit Facility includes various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers. As of June 30, 2014, there was an outstanding debt balance issued under the provisions of the Credit Facility in total of $925.0 million.

The Notes, the Master Agreement and the Credit Facility Agreement all require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of June 30, 2014 and December 31, 2013.

NOTE 8· Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

	For the six months ended June 30,
(in thousands)	2014		2013
Cash paid during the period for:
Interest	$	11,070	$	7,660
Income taxes	$	58,079	$	52,077

Brown & Brown’s significant non-cash investing and financing activities are summarized as follows:

	For the six months ended June 30,
(in thousands)	2014		2013
Other payable issued for purchased customer accounts	$	125	$	257
Estimated acquisition earn-out payables and related charges	$	13,158	$	1,833
Notes received on the sale of fixed assets and customer accounts	$	131	$	614

NOTE 9· Legal and Regulatory Proceedings

The Company is involved in numerous pending or threatened proceedings by or against Brown & Brown, Inc. or one or more of its subsidiaries that arise in the ordinary course of business. The damages that may be claimed against the Company in these various proceedings are in some cases substantial, including in many instances claims for punitive or extraordinary damages. Some of these claims and lawsuits have been resolved, others are in the process of being resolved and others are still in the investigation or discovery phase. The Company will continue to respond appropriately to these claims and lawsuits and to vigorously protect its interests.

Although the ultimate outcome of such matters cannot be ascertained and liabilities in indeterminate amounts may be imposed on Brown & Brown, Inc. or its subsidiaries, on the basis of present information, availability of insurance and legal advice, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse effect on the Company’s condensed consolidated financial position. However, as (i) one or more of the Company’s insurance companies could take the position that portions of these claims are not covered by the Company’s insurance, (ii) to the extent that payments are made to resolve claims and lawsuits, applicable insurance policy limits are eroded, and (iii) the claims and lawsuits relating to these matters are continuing to develop, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by unfavorable resolutions of these matters.

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NOTE 10· Segment Information

Brown & Brown’s business is divided into four reportable segments: the Retail Division, which provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers; the National Programs Division, which provides professional liability and related package products for certain professionals delivered through nationwide networks of independent agents, and markets targeted products and services designed for specific industries, trade groups, public and quasi-public entities, and market niches; the Wholesale Brokerage Division, which markets and sells excess and surplus commercial and personal lines insurance, and reinsurance, primarily through independent agents and brokers; and the Services Division, 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 catastrophe claims adjusting services.

Brown & Brown conducts all of its operations within the United States of America, except for one wholesale brokerage operation based in London, England, and retail operations in Bermuda and the Cayman Islands. These three operations earned $3.8 million and $2.8 million of total revenues for the three months ended June 30, 2014 and 2013, respectively. These operations earned $7.0 million and $5.9 million of total revenues for the six months ended June 30, 2014 and 2013, respectively. Additionally, these operations earned $12.2 million of total revenues for the year ended December 31, 2013. Long-lived assets held outside of the United States during the six months ended June 30, 2014 and 2013 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, 2013. Brown & Brown evaluates the performance of its segments based upon revenues and income before income taxes. Inter-segment revenues are eliminated.

16

Summarized financial information concerning Brown & Brown’s reportable segments is shown in the following table. The “Other” column includes any income and expenses not allocated to reportable segments and corporate-related items, including the inter-company interest expense charge to the reporting segment.

	For the three months ended June 30, 2014
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	210,976	$	90,875	$	60,059	$	35,757	$	97		$	397,764
Investment income	$	16	$	66	$	7	$	—	$	105		$	194
Amortization	$	10,457	$	6,214	$	2,932	$	1,010	$	10		$	20,623
Depreciation	$	1,614	$	1,842	$	670	$	628	$	488		$	5,242
Interest expense	$	11,224	$	12,447	$	523	$	1,971	$	(19,161	)	$	7,004
Income before income taxes	$	49,098	$	9,685	$	17,376	$	5,008	$	20,614		$	101,781
Total assets	$	3,166,802	$	2,406,240	$	990,355	$	278,137	$	(1,911,062	)	$	4,930,472
Capital expenditures	$	1,567	$	5,159	$	517	$	244	$	363		$	7,850
	For the three months ended June 30, 2013
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	171,819	$	68,354	$	54,823	$	30,403	$	393		$	325,792
Investment income	$	23	$	5	$	4	$	—	$	207		$	239
Amortization	$	8,789	$	3,511	$	2,887	$	925	$	9		$	16,121
Depreciation	$	1,371	$	1,326	$	716	$	401	$	449		$	4,263
Interest expense	$	5,649	$	5,590	$	723	$	1,883	$	(9,848	)	$	3,997
Income before income taxes	$	44,482	$	11,226	$	15,760	$	2,589	$	12,164		$	86,221
Total assets	$	2,501,084	$	1,224,175	$	925,901	$	246,235	$	(1,571,075	)	$	3,326,320
Capital expenditures	$	1,488	$	1,420	$	561	$	379	$	328		$	4,176
	For the six months ended June 30, 2014
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	413,667	$	165,045	$	115,079	$	67,399	$	168		$	761,358
Investment income	$	32	$	71	$	11	$	2	$	181		$	297
Amortization	$	20,608	$	9,989	$	5,815	$	2,067	$	20		$	38,499
Depreciation	$	3,198	$	3,309	$	1,320	$	1,091	$	964		$	9,882
Interest expense	$	21,937	$	17,888	$	942	$	3,941	$	(33,632	)	$	11,076
Income before income taxes	$	90,343	$	25,808	$	30,114	$	7,823	$	34,530		$	188,618
Total assets	$	3,166,802	$	2,406,240	$	990,355	$	278,137	$	(1,911,062	)	$	4,930,472
Capital expenditures	$	3,679	$	6,857	$	999	$	535	$	507		$	12,577
	For the six months ended June 30, 2013
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	346,387	$	137,294	$	103,520	$	73,050	$	553		$	660,804
Investment income	$	46	$	10	$	9	$	1	$	359		$	425
Amortization	$	17,600	$	7,030	$	5,784	$	1,849	$	19		$	32,282
Depreciation	$	2,742	$	2,574	$	1,423	$	798	$	893		$	8,430
Interest expense	$	11,849	$	11,284	$	1,478	$	3,804	$	(20,434	)	$	7,981
Income before income taxes	$	90,693	$	25,238	$	26,122	$	16,542	$	27,117		$	185,712
Total assets	$	2,501,084	$	1,224,175	$	925,901	$	246,235	$	(1,571,075	)	$	3,326,320
Capital expenditures	$	2,823	$	2,312	$	1,097	$	498	$	393		$	7,123

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NOTE 11· Investments

Investments at June 30, 2014 and December 31, 2013 consisted of the following:

	June 30, 2014 Carrying Value				December 31,2013 Carrying Value
(in thousands)	Current		Non- Current		Current		Non- Current
Certificates of deposit, U.S. Treasury securities and obligations of U.S. Government agencies, Corporate debt and other securities	$	12,300	$	19,021	$	10,624	$	16

Certificates of deposit and other securities with maturities of less than one year are classified as short-term investments and are carried at fair value, which approximates cost. Fixed maturity securities are classified as available-for-sale and are carried at fair value. The contractual cash flows of the U.S. Treasury Securities and obligations of U.S. Government agencies investments are either guaranteed by the U.S. Government or an agency of the U.S. Government. The corporate securities are highly rated securities with no indicators of potential impairment.

NOTE 12· Reinsurance

The Company protects itself from claims related losses by reinsuring all claims related risk exposure. The only line of insurance the Company writes is flood insurance associated with the Wright acquisition, with all exposure reinsured with the FEMA for basic admitted policies conforming to the NFIP. For excess flood insurance policies, all exposure is reinsured with a reinsurance carrier. Reinsurance does not legally discharge the ceding insurer from the primary liability for the full amount due under the reinsured policies. Reinsurance premiums, commissions, expense reimbursement and related reserves related to ceded business are accounted for on a basis consistent with the accounting for the original policies issued and the terms of reinsurance contracts. Premiums earned and losses and loss adjustment expenses incurred are reported net of reinsurance amounts. Other underwriting expenses are shown net of earned ceding commission income. The liabilities for unpaid losses and loss adjustment expenses and unearned premiums are reported gross of ceded reinsurance recoverable.

Balances due from reinsurers on unpaid losses and loss adjustment expenses, including an estimate of such recoverables related to reserves for incurred but not reported (“IBNR”) losses, are reported as assets and are included in reinsurance recoverable even though amounts due on unpaid loss and loss adjustment expense are not recoverable from the reinsurer until such losses are paid. The Company does not believe it is exposed to any material credit risk through its reinsurance as the reinsurer is the FEMA for basic admitted flood policies and a national reinsurance carrier for excess flood policies, which is rated A+ from AM Best. Historically, no amounts due from reinsurance have been written off as uncollectible.

NOTE 13· Subsequent Events

On July 15, 2014, the Series B Senior Notes totaling $100.0 million matured and the principal plus remaining interest were paid off. In a planned event to retire the notes on the maturity date, the Company borrowed $100.0 million from the revolving portion of the JPM Credit Facility Revolving Loan. The Company has an outstanding balance of $475.0 million of the $800.0 million revolving portion of the JPM Credit Facility Revolving Loan.

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ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

THE FOLLOWING DISCUSSION UPDATES THE MD&A CONTAINED IN THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013, AND THE TWO DISCUSSIONS SHOULD BE READ TOGETHER.

GENERAL

We are a diversified insurance agency, wholesale brokerage, insurance programs and services organization headquartered in Daytona Beach, Florida. As an insurance intermediary, our principal sources of revenue are commissions paid by insurance companies and, to a lesser extent, fees paid directly by customers. Commission revenues generally represent a percentage of the premium paid by an insured and are materially affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including reinsurance rates paid by such insurance companies, none of which we control.

The volume of business from new and existing customers, fluctuations in insurable exposure units and changes in general economic and competitive conditions all affect our revenues. For example, level rates of inflation or a general decline in economic activity could limit increases in the values of insurable exposure units. Conversely, the increasing costs of litigation settlements and awards have caused some customers to seek higher levels of insurance coverage. Historically, our revenues have typically grown as a result of, among other things, our focus on net new business growth and acquisitions.

We attempt to foster a strong, decentralized sales culture with a goal of consistent, sustained profitable growth over the long term.

We increased revenues every year from 1993 to 2013, with the exception of 2009, when our revenues dropped 1.0%. Our revenues grew from $95.6 million in 1993 to $1.4 billion in 2013, reflecting a compound annual growth rate of 14.2%. In the same 20-year period, we increased net income from $8.0 million to $217.1 million in 2013, a compound annual growth rate of 17.9%.

The years 2007 through 2011 posed significant challenges for us and for our industry in the form of a prevailing decline in insurance premium rates, commonly referred to as a “soft market” and increased significant governmental involvement in the Florida insurance marketplace which resulted in a substantial loss of revenues for us. Additionally, beginning in the second half of 2008 and throughout 2011, there was a general decline in insurable exposure units as the consequence of the general weakening of the economy in the United States. As a result, from the first quarter of 2007 through the fourth quarter of 2011 we experienced negative internal revenue growth each quarter. The continued declining exposure units during 2010 and 2011 had a greater negative impact on our commissions and fees revenues than declining insurance premium rates.

Beginning in the first quarter of 2012, many insurance premium rates began to slightly increase. Additionally, in the second quarter of 2012, the general declines in insurable exposure units started to flatten and these exposure units subsequently began to gradually increase during the year. With certain limited exceptions, these trends have continued through 2013 and the second quarter of 2014.

For the three and six-month periods ended June 30, 2014, our consolidated internal revenue growth rates were 3.1% and 0.8%, respectively, but excluding the impact of revenues associated with Hurricane Sandy, our consolidated internal growth rates for the three and six month periods ended June 30, 2014 were 3.8% and 3.9% respectively. Additionally, each of our four divisions recorded positive internal revenue growth for each quarter of 2014. In the event that the gradual increases in insurance premium rates and insurable exposure units that occurred in 2013 and in the first half of 2014 continue for the remainder of 2014, we believe we will continue to see positive quarterly internal revenue growth rates for the remaining six months of 2014.

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We also earn “profit-sharing contingent commissions,” which are profit-sharing commissions based primarily on underwriting results, but which may also reflect considerations for volume, growth and/or retention. These commissions are primarily received in the first and second quarters of each year, based on the aforementioned considerations for the prior year(s). Over the last three years, profit-sharing contingent commissions have averaged approximately 4.4% of the previous year’s total commissions and fees revenue. Profit-sharing contingent commissions are typically included in our total commissions and fees in the Condensed Consolidated Statement of Income in the year received. The term “core commissions and fees” excludes profit-sharing contingent commissions and guaranteed supplemental commissions, and therefore represents the revenues earned directly from specific insurance policies sold, and specific fee-based services rendered. In contrast, the term “core organic commissions and fees” is our core commissions and fees less (i) the core commissions and fees earned for the first twelve months by newly-acquired operations and (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period). “Core organic commissions and fees” are reported in this manner in order to express the current year’s core commissions and fees on a comparable basis with the prior year’s core commissions and fees. The resulting net change reflects the aggregate changes attributable to (i) net new and lost accounts, (ii) net changes in our clients’ exposure units, and (iii) net changes in insurance premium rates. The net changes in each of these three components are determined for each of our customers. Core organic commissions and fees can reflect either “positive” growth with a net increase in revenues, or “negative” growth with a net decrease in revenues.

Beginning a few years ago, five to six national insurance companies replaced their loss-ratio based profit-sharing contingent commission agreements with new guaranteed fixed-base agreements, referred to as “Guaranteed Supplemental Commissions” (“GSCs”). For 2013, only four national insurance companies still used GSCs in lieu of loss-ratio based profit-sharing contingent commissions. Since GSCs are not subject to the uncertainty of loss ratios, they are accrued throughout the year based on actual premiums written. As of December 31, 2013, we accrued and earned $8.3 million of GSCs during 2013, most of which were collected in the first quarter of 2014. For the three-month periods ended June 30, 2014 and 2013, we earned $2.1 million and $1.7 million, respectively, from GSCs. For the six-month periods ended June 30, 2014 and 2013, we earned $5.0 million and $3.9 million, respectively, from GSCs.

Fee revenues relate to fees negotiated in lieu of commissions, which are recognized as services are rendered. Fee revenues have historically been generated primarily by: (1) our Services Division, 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 catastrophe claims adjusting services, and (2) our National Programs and Wholesale Brokerage Divisions, which earn fees primarily for the issuance of insurance policies on behalf of insurance companies. These services are provided over a period of time, typically one year. However, in conjunction with our July 1, 2013 acquisition of Beecher Carlson, which has a focus on large customers that generally pay us fees directly, the fee revenues in our Retail Division for 2014 have increased by nearly $39.5 million to $53.8 million. Fee revenues, on a consolidated basis, as a percentage of our total commissions and fees, represented 23.1% in 2013, 21.7% in 2012 and 16.4% in 2011.

Historically, investment income has consisted primarily of interest earnings on premiums and advance premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy is to invest available funds in high-quality, short-term fixed income investment securities. As a result of the bank liquidity and solvency issues in the United States in the last quarter of 2008, we moved substantial amounts of our cash into non-interest-bearing checking accounts so that they would be fully insured by the Federal Deposit Insurance Corporation (“FDIC”) or into money-market investment funds (a portion of which is FDIC insured) of SunTrust and Wells Fargo, two large national banks. Effective January 1, 2013, the FDIC ceased providing insurance guarantees on non-interest-bearing checking accounts and since that time we have invested in both interest bearing and non-interest-bearing checking accounts. Investment income also includes gains and losses realized from the sale of investments. Other income primarily reflects net gains on sales of customer accounts and fixed assets, but also includes sub-rental income, legal settlements and other miscellaneous income.

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Company Overview — Second Quarter of 2014

We continued the trend that began in the first quarter of 2012, of achieving a quarterly positive growth rate of our core organic commissions and fees in the second quarter of 2014. When the revenues associated with Hurricane Sandy reported by our Colonial Claims business in our Services Division in the second quarter of 2013 are excluded, we produced a positive growth rate of 3.8% for the second quarter of 2014. This accounted for $11.9 million of new core organic commissions and fees.

Additionally, our profit-sharing contingent commissions and GSCs for the three months ended June 30, 2014 decreased by $4.7 million compared to the second quarter of 2013. A material portion of this decrease was related to reporting the contingent revenues within our FIU business in our Programs Division in the first quarter of the current year versus the second quarter of 2013. Other income increased by $1.5 million primarily as a result of gains on book of business sales.

Income before income taxes in the three month period ended June 30, 2014 increased from the second quarter of 2013 by $15.6 million, primarily as a result of new acquisitions and net new business.

Acquisitions

Approximately 38,500 independent insurance agencies are estimated to be operating currently in the United States. Part of our continuing business strategy is to attract high-quality insurance intermediaries to join our operations. From 1993 through the second quarter of 2014, we acquired 455 insurance intermediary operations, excluding acquired books of business (customer accounts). In the second quarter of 2014, we acquired a flood insurance carrier with business consisting of flood policies written through the National Flood Insurance Program administered by FEMA. For excess flood insurance policies, all exposure is reinsured with a reinsurance carrier.

A summary of our acquisitions and related adjustments to the purchase price of prior acquisitions for the six months ended June 30, 2014 and 2013 are as follows (in millions, except for number of acquisitions):

	Number of Acquisitions				Estimated Annual Revenues		Cash Paid		Note Payable		Other Payable			Liabilities Assumed		Recorded Earn-Out Payable		Aggregate Purchase Price
	Asset		Stock
2014		5		1	$	154.8	$	720.1	$	—	$	0.1		$	407.0	$	13.2	$	1,140.4
2013		2		—	$	6.0	$	14.4	$	—	$	(0.3	)	$	0.9	$	1.8	$	16.8

Critical Accounting Policies

Our Condensed Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We continually evaluate our estimates, which are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates form the basis for our judgments about the carrying values of our assets and liabilities, which values are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue recognition, business acquisitions and purchase price allocations, intangible asset impairments and reserves for litigation. In particular, the accounting for these areas requires significant judgments to be made by management. Different assumptions in the application of these policies could result in material changes in our consolidated financial position or consolidated results of operations. Refer to Note 1 in the “Notes to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2013 on file with the Securities and Exchange Commission (“SEC”) for details regarding our critical and significant accounting policies.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013

The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in conjunction with the accompanying Condensed Consolidated Financial Statements and related Notes.

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Financial information relating to our Condensed Consolidated Financial Results for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except percentages):

	For the three months ended June 30,									For the six months ended June 30,
	2014			2013			% Change			2014			2013			% Change
REVENUES
Core commissions and fees	$	389,850		$	314,571			23.9	%	$	717,177		$	621,103			15.5	%
Profit-sharing contingent commissions		2,756			7,879			(65.0	)%		34,504			32,918			4.8	%
Guaranteed supplemental commissions		2,084			1,700			22.6	%		5,016			3,922			27.9	%
Investment income		194			239			(18.8	)%		297			425			(30.1	)%
Other income, net		2,880			1,403			105.3	%		4,364			2,436			79.1	%
Total revenues		397,764			325,792			22.1	%		761,358			660,804			15.2	%
EXPENSES
Employee compensation and benefits		196,397			163,514			20.1	%		380,507			323,012			17.8	%
Non-cash stock-based compensation		5,994			3,623			65.4	%		13,509			7,473			80.8	%
Other operating expenses		60,546			47,397			27.7	%		113,007			93,736			20.6	%
Amortization		20,623			16,121			27.9	%		38,499			32,282			19.3	%
Depreciation		5,242			4,263			23.0	%		9,882			8,430			17.2	%
Interest		7,004			3,997			75.2	%		11,076			7,981			38.8	%
Change in estimated acquisition earn-out payables		177			656			(73.0	)%		6,260			2,178			NMF	(1)
Total expenses		295,983			239,571			23.5	%		572,740			475,092			20.6	%
Income before income taxes		101,781			86,221			18.0	%		188,618			185,712			1.6	%
Income taxes		40,026			34,214			17.0	%		74,448			73,574			1.2	%
NET INCOME	$	61,755		$	52,007			18.7	%	$	114,170		$	112,138			1.8	%
Net internal growth rate – core organic commissions and fees		3.1	%		7.4	%					0.8	%		8.8	%
Employee compensation and benefits ratio		49.4	%		50.2	%					50.0	%		48.9	%
Other operating expenses ratio		15.2	%		14.5	%					14.8	%		14.2	%
Capital expenditures	$	7,850		$	4,176					$	12,577		$	7,123
Total assets at June 30, 2014 and 2013										$	4,930,472		$	3,326,320

(1) NMF = Not a meaningful figure

Commissions and Fees

Commissions and fees, including profit-sharing contingent commissions and GSCs, for the second quarter of 2014 increased $70.5 million to $394.7 million, or 21.8%, over the same period in 2013. Profit-sharing contingent commissions and GSCs for the second quarter of 2014 decreased $4.7 million, or 49.5%, over the second quarter of 2013. The net decrease of $4.7 million in the second quarter was due largely to timing of certain profit sharing commissions which were recognized in the first quarter of 2014 as compared to the second quarter of 2013. Core commissions and fees revenue for the second quarter of 2014 increased $75.3 million on a net basis, of which approximately $67.2 million represented core commissions and fees from agencies acquired since the second quarter of 2013. After divested business of $1.7 million, the remaining net increase of $9.8 million represented net new business, which reflects an internal growth rate of 3.1% for core organic commissions and fees. The internal growth rate for core organic commissions and fees after adjusting for Colonial Claims’ revenue related to Hurricane Sandy in the second quarter of 2013 was 3.8%.

For the six months ended June 30, 2014 commissions and fees increased $98.8 million to $756.7 million, or 15.0% over the same period in 2013. Profit-sharing contingent commissions and GSCs for the six months ended June 30, 2014 increased $2.7 million, or 7.3%, over the same period in 2013. The net increase of $2.7 million was largely due to activity from acquired businesses. Core commissions and fees revenue for the six months ended June 30, 2014 increased $96.1 million to $717.2 million or 15.5% over the same period in 2013. After net acquired business of $94.7 million and divested business of $ 3.5 million, the remaining increase of $4.9 million represents 0.8% organic growth in core commissions and fees. The internal growth rate for core organic commissions and fees after adjusting for Colonial Claims’ revenue related to Hurricane Sandy in 2013 was 3.9% for the six month period ended June 30, 2014.

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Investment Income

Investment income for the three months ended June 30, 2014, was essentially flat from the same period in 2013. Investment income for the six months ended June 30, 2014, decreased $0.1 million, or 30.1%, from the same period in 2013. This decrease is the result of lower average invested balances in 2014, primarily as a result of increased acquisition activity.

Other Income, net

Other income for the three months ended June 30, 2014, reflected income of $2.9 million, compared with $1.4 million in the same period in 2013. Other income for the six months ended June 30, 2014, reflected income of $4.4 million, compared with $2.4 million in the same period in 2013. Other income consists primarily of gains and losses from the sale and disposition of assets. Although we are not in the business of selling customer accounts, we periodically will sell an office or a book of business (one or more customer accounts) that we believe does not produce reasonable margins or demonstrate a potential for growth, or because doing so is otherwise in the Company’s best interest. The $1.5 million increase for the three months ended June 30, 2014 and the $2.0 million increase for the six months ended June 30, 2014 over the comparable periods of 2013 are primarily due to additional book of business sales.

Employee Compensation and Benefits

Employee compensation and benefits expense as a percentage of total revenues decreased to 49.4% for the three months ended June 30, 2014, from 50.2% for the three months ended June 30, 2013. Employee compensation and benefits for the second quarter of 2014 increased, on a net basis, approximately 20.1%, or $32.9 million, over the same period in 2013. However, that net increase included $29.8 million of compensation costs related to new acquisitions. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same three-month period ended June 30, 2014 and 2013 increased by $3.1 million or 1.9%. The employee compensation and benefits expense increases in these offices were primarily related to an increase in staff salaries.

For the six months ended June 30, 2014 employee compensation and benefits expense as a percentage of total revenues was 50.0% as compared to 48.9% in the same period for 2013. The increase of $57.5 million over the same period in 2013 is principally attributable to new team mates from acquisitions. Employee compensation and benefits expense attributable to those offices that existed in the same six-month period ended June 30, 2014 and 2013 (including the new acquisitions that combined with, or “folded into” those offices) increased 3.3% with approximately $1.0 million of costs incurred in the first quarter of 2014 related to the retirement of the previous CFO as well as additional costs incurred in hiring the new CFO.

Non-Cash Stock-Based Compensation

The Company has an employee stock purchase plan, and grants stock options and non-vested stock awards under other equity-based plans to its employees. Compensation expense for all share-based awards is recognized in the financial statements based upon the grant-date fair value of those awards. Non-cash stock-based compensation expense for the three months ended June 30, 2014 increased $2.4 million, or 65.4%, over the same period in 2013. Non-cash stock-based compensation expense for the six months ended June 30, 2014 increased $6.0 million, or 80.8%, over the same period in 2013. These increases were the result of new non-vested stock awards granted on July 1, 2013 and smaller grants that are issued periodically when approved by the Board of Directors, primarily to a broad-based group of producers, profit center leaders, and senior leaders. Non-cash stock-based compensation will fluctuate based upon actual participation within the plans.

Other Operating Expenses

As a percentage of total revenues, other operating expenses represented 15.2% in the second quarter of 2014, an increase over the 14.5% reported in the second quarter of 2013. The adjusted 2014 and 2013 percentages were 14.2% and 14.6% respectively, after disregarding the effect of new acquisitions that were stand-alone offices (including the Beecher Carlson large accounts business whose revenues are cyclical in nature and whose expense base is relatively stable) and the effect of Colonial Claims due to the effects of Hurricane Sandy on the 2013 margins. Other operating expenses for the second quarter of 2014 increased $13.1 million, or 27.7%, over the same period of 2013, of which $13.5 million related to acquisitions that joined us as stand-alone offices since June 2013. Therefore, other operating expenses from those offices that existed in both the three-month periods ended June 30, 2014 and 2013 (including the new acquisitions that “folded into” those offices) decreased by $0.4 million.

Other operating expenses represented 14.8% of total revenues for the six months ended June 30, 2014, an increase from the 14.2% ratio for the six months ended June 30, 2013. Other operating expenses for the six months ended June 30, 2014 increased $19.3 million, or 20.6%, over the same period of 2013, of which $20.3 million related to acquisitions that joined us as stand-alone offices since the second quarter of 2013. Therefore, other operating expenses from those offices that existed in both the six-month periods ended June 30, 2014 and 2013 (including the new acquisitions that “folded into” those offices) decreased by $1.0 million. The other operating expense decreases in these offices were primarily related to lower E&O and insurance costs.

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Amortization

Amortization expense for the second quarter of 2014 increased $4.5 million, or 27.9%, over the second quarter of 2013. Amortization expense for the six months ended June 30, 2014, increased $6.2 million, or 19.3%, over the six months ended June 30, 2013. These increases are due primarily to the amortization of additional intangible assets as the result of recent acquisitions.

Depreciation

Depreciation expense for the second quarter of 2014 increased $1.0 million, or 23.0%, over the second quarter of 2013. Depreciation expense for the six months ended June 30, 2014, increased $1.5 million, or 17.2%, over the six months ended June 30, 2013. These increases are due primarily to the addition of fixed assets as a result of recent acquisitions.

Interest Expense

Interest expense for the second quarter of 2014 increased $3.0 million, or 75.2%, over the second quarter of 2013. Interest expense for the six months ended June 30, 2014 increased $3.1 million, or 38.8%, over the same period in 2013. These increases are due to the increased borrowings in 2014 associated with the establishment of our Credit Facility related to the Wright acquisition which provides increased financial flexibility and a lower effective interest rate.

Change in Estimated Acquisition Earn-out Payables

Accounting Standards Codification (“ASC”) Topic 805—Business Combinations is the authoritative guidance requiring an acquirer to recognize 100% of the fair values of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase arrangements) at the acquisition date must be included in the purchase price consideration. As a result, the recorded purchase prices for all acquisitions consummated after January 1, 2009 include an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations are required to be recorded in the consolidated statement of income when incurred. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired entities, usually for periods ranging from one to three years.

The net charge or credit to the Condensed Consolidated Statement of Income for the period is the combination of the net change in the estimated acquisition earn-out payables balance, and the interest expense imputed on the outstanding balance of the estimated acquisition earn-out payables.

As of June 30, 2014 and 2013, 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). The resulting net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three and six month periods ended June 30, 2014 and 2013 were as follows:

	For the three months ended June 30,					For the six months ended June 30,
(in thousands)	2014			2013		2014		2013
Change in fair value on estimated acquisition earn-out payables	$	(375	)	$	159	$	5,228	$	1,156
Interest expense accretion		552			497		1,032		1,022
Net change in earnings from estimated acquisition earn-out payables	$	177		$	656	$	6,260	$	2,178

For the three months ended June 30, 2014 and 2013, the fair value of estimated earn-out payables was re-evaluated and decreased by $0.4 million and increased by $0.2 million, respectively, which resulted in a credit and a charge to the Condensed Consolidated Statement of Income. For the six months ended June 30, 2014 and 2013, the fair value of estimated earn-out payables was re-evaluated and increased by $5.2 million and $1.2 million, respectively, which resulted in charges to the Condensed Consolidated Statement of Income. An acquisition is considered to be performing well if its operating profit exceeds the level needed to reach the minimum purchase price. However, a reduction in the estimated acquisition earn-out payable can occur even though the acquisition is performing well, if it is not performing at the level contemplated by our original estimate.

As of June 30, 2014, the estimated acquisition earn-out payables equaled $52,696,000, of which $20,278,000 was recorded as accounts payable and $32,418,000 was recorded as other non-current liability.

Income Taxes

The effective tax rate on income from operations for the three months ended June 30, 2014 and 2013, was 39.3% and 39.7%, respectively. The effective tax rate on income from operations for the six months ended June 30, 2014 and 2013, was 39.5% and 39.6%, respectively. The lower effective annual tax rates were primarily the result of lower average effective state income tax rates.

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RESULTS OF OPERATIONS — SEGMENT INFORMATION

As discussed in Note 10 of the Notes to Condensed Consolidated Financial Statements, we operate four reportable segments or divisions: the Retail, National Programs, Wholesale Brokerage, and Services Divisions. On a divisional basis, increases in amortization, depreciation and interest expenses result from completed acquisitions within a given division in a particular year. Likewise, other income in each division primarily reflects net gains on sales of customer accounts and fixed assets. As such, in evaluating the operational efficiency of a division, management places emphasis on the net internal growth rate of core organic commissions and fees revenue, the gradual improvement of the ratio of total employee compensation and benefits to total revenues, and the gradual improvement of the ratio of other operating expenses to total revenues.

The term “core commissions and fees” excludes profit-sharing contingent commissions and GSCs, and therefore represents the revenues earned directly from specific insurance policies sold, and specific fee-based services rendered. In contrast, the term “core organic commissions and fees” is our core commissions and fees less (i) the core commissions and fees earned for the first twelve months by newly-acquired operations and (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period). Core organic commissions and fees attempts to express the current year’s core commissions and fees on a comparable basis with the prior year’s core commissions and fees. The resulting net change reflects the aggregate changes attributable to (i) net new and lost accounts, (ii) net changes in our clients’ exposure units, and (iii) net changes in insurance premium rates. The net changes in each of these three components can be determined for each of our customers. However, because our agency management accounting systems do not aggregate such data, it is not reportable. Core organic commissions and fees reflect either “positive” growth with a net increase in revenues, or “negative” growth with a net decrease in revenues.

The internal growth rates for our core organic commissions and fees for the three months ended June 30, 2014 and 2013, by Division, are as follows (in thousands, except percentages):

2014	For the three months ended June 30,				Total Net Change		Total Net Growth %			Less Acquisition Revenues		Internal Net Growth $		Internal Net Growth %
	2014		2013
Retail(1)	$	205,887	$	167,315	$	38,572		23.1	%	$	35,157	$	3,415		2.0	%
National Programs		89,814		62,438		27,376		43.8	%		26,027		1,349		2.2	%
Wholesale Brokerage		58,563		52,858		5,705		10.8	%		1,383		4,322		8.2	%
Services		35,586		30,271		5,315		17.6	%		4,609		706		2.3	%
Total core commissions and fees	$	389,850	$	312,882	$	76,968		24.6	%	$	67,176	$	9,792		3.1	%(2)

The reconciliation of the above internal growth schedule to the total Commissions and Fees included in the Condensed Consolidated Statements of Income for the three months ended June 30, 2014, and 2013, is as follows (in thousands):

	For the three months ended June 30,
	2014		2013
Total core commissions and fees	$	389,850	$	312,882
Profit-sharing contingent commissions		2,756		7,879
Guaranteed supplemental commissions		2,084		1,700
Divested business		—		1,689
Total commissions and fees	$	394,690	$	324,150

(1) The Retail Division includes commissions and fees reported in the “Other” column of the Segment Information in Note 10 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.

(2) There would be a 3.8% Internal Net Growth rate when excluding the $2.1 million related to Hurricane Sandy within the Colonial Claims business for the second quarter of 2013.

25

The internal growth rates for our core organic commissions and fees for the three months ended June 30, 2013 and 2012, by Division, are as follows (in thousands, except percentages):

2013	For the three months ended June 30,				Total Net Change		Total Net Growth %			Less Acquisition Revenues		Internal Net Growth $		Internal Net Growth %
	2013		2012
Retail(1)	$	168,582	$	158,035	$	10,547		6.7	%	$	6,922	$	3,625		2.3	%
National Programs		62,860		53,135		9,725		18.3	%		—		9,725		18.3	%
Wholesale Brokerage		52,858		46,286		6,572		14.2	%		1,592		4,980		10.8	%
Services		30,271		27,521		2,750		10.0	%		—		2,750		10.0	%
Total core commissions and fees	$	314,571	$	284,977	$	29,594		10.4	%	$	8,514	$	21,080		7.4	%

The reconciliation of the above internal growth schedule to the total Commissions and Fees included in the Condensed Consolidated Statements of Income for the three months ended June 30, 2013, and 2012, is as follows (in thousands):

	For the three months ended June 30,
	2013		2012
Total core commissions and fees	$	314,571	$	284,977
Profit-sharing contingent commissions		7,879		1,043
Guaranteed supplemental commissions		1,700		2,258
Divested business		—		1,664
Total commissions and fees	$	324,150	$	289,942

(1) The Retail Division includes commissions and fees reported in the “Other” column of the Segment Information in Note 10 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.

The internal growth rates for our core organic commissions and fees for the six months ended June 30, 2014 and 2013, by Division, are as follows (in thousands, except percentages):

2014	For the six months ended June 30,				Total Net Change			Total Net Growth %			Less Acquisition Revenues		Internal Net Growth $			Internal Net Growth %
	2014		2013
Retail(1)	$	387,709	$	324,842	$	62,867			19.4	%	$	55,522	$	7,345			2.3	%
National Programs		154,578		123,710		30,868			25.0	%		28,483		2,385			1.9	%
Wholesale Brokerage		107,794		96,129		11,665			12.1	%		2,241		9,424			9.8	%
Services		67,096		72,876		(5,780	)		(7.9	)%		8,470		(14,250	)		(19.6	)%
Total core commissions and fees	$	717,177	$	617,557	$	99,620			16.1	%	$	94,716	$	4,904			0.8	%(2)

26

The reconciliation of the above internal growth schedule to the total Commissions and Fees included in the Condensed Consolidated Statements of Income for the six months ended June 30, 2014, and 2013, is as follows (in thousands):

	For the six months ended June 30,
	2014		2013
Total core commissions and fees	$	717,177	$	617,557
Profit-sharing contingent commissions		34,504		32,918
Guaranteed supplemental commissions		5,016		3,922
Divested business		—		3,546
Total commissions and fees	$	756,697	$	657,943

(1) The Retail Division includes commissions and fees reported in the “Other” column of the Segment Information in Note 10 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.

(2) There would be a 3.9% Internal Net Growth rate when excluding the $18.3 million related to Hurricane Sandy within the Colonial Claims business for the second quarter of 2013.

The internal growth rates for our core organic commissions and fees for the six months ended June 30, 2013 and 2012, by Division, are as follows (in thousands, except percentages):

2013	For the six months ended June 30,				Total Net Change		Total Net Growth %			Less Acquisition Revenues		Internal Net Growth $		Internal Net Growth %
	2013		2012
Retail(1)	$	327,532	$	308,006	$	19,526		6.3	%	$	14,752	$	4,774		1.5	%
National Programs		124,566		106,765		17,801		16.7	%		1,483		16,318		15.3	%
Wholesale Brokerage		96,129		84,652		11,477		13.6	%		3,139		8,338		9.8	%
Services		72,876		53,283		19,593		36.8	%		657		18,936		35.5	%
Total core commissions and fees	$	621,103	$	552,706	$	68,397		12.4	%	$	20,031	$	48,366		8.8	%

The reconciliation of the above internal growth schedule to the total Commissions and Fees included in the Condensed Consolidated Statements of Income for the six months ended June 30, 2013, and 2012, is as follows (in thousands):

	For the six months ended June 30,
	2013		2012
Total core commissions and fees	$	621,103	$	552,706
Profit-sharing contingent commissions		32,918		25,264
Guaranteed supplemental commissions		3,922		4,850
Divested business		—		3,655
Total commissions and fees	$	657,943	$	586,475

(1) The Retail Division includes commissions and fees reported in the “Other” column of the Segment Information in Note 10 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.

Retail Division

The Retail Division provides a broad range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers. Approximately 87.0% of the Retail Division’s commissions and fees revenue is commission-based. Because most of our other operating expenses do not change as premiums fluctuate, we believe that a portion of any fluctuation in the commissions, net of related compensation, which we receive, will be reflected in our income before income taxes.

27

Financial information relating to Brown & Brown’s Retail Division for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except percentages):

	For the three months ended June 30,									For the six months ended June 30,
	2014			2013			% Change			2014			2013			% Change
REVENUES
Core commissions and fees	$	205,966		$	168,589			22.2	%	$	388,050		$	327,685			18.4	%
Profit-sharing contingent commissions		997			1,003			(0.6	)%		18,406			14,304			28.7	%
Guaranteed supplemental commissions		1,672			1,513			10.5	%		3,931			3,232			21.6	%
Investment income		16			23			(30.4	)%		32			46			(30.4	)%
Other income, net		2,325			691			NMF	(1)		3,248			1,120			NMF	(1)
Total revenues		210,976			171,819			22.8	%		413,667			346,387			19.4	%
EXPENSES
Employee compensation and benefits		102,335			84,484			21.1	%		202,967			168,926			20.2	%
Non-cash stock-based compensation		3,029			1,533			97.6	%		5,831			3,076			89.6	%
Other operating expenses		33,272			26,254			26.7	%		64,672			52,096			24.1	%
Amortization		10,457			8,789			19.0	%		20,608			17,600			17.1	%
Depreciation		1,614			1,371			17.7	%		3,198			2,742			16.6	%
Interest		11,224			5,649			98.7	%		21,937			11,849			85.1	%
Change in estimated acquisition earn-out payables		(53	)		(743	)		(92.9	)%		4,111			(595	)		NMF	(1)
Total expenses		161,878			127,337			27.1	%		323,324			255,694			26.4	%
Income before income taxes	$	49,098		$	44,482			10.4	%	$	90,343		$	90,693			(0.4	)%
Net internal growth rate – core organic commissions and fees		2.0	%		2.3	%					2.3	%		1.5	%
Employee compensation and benefits ratio		48.5	%		49.2	%					49.1	%		48.8	%
Other operating expenses ratio		15.8	%		15.3	%					15.6	%		15.0	%
Capital expenditures	$	1,567		$	1,488					$	3,679		$	2,823
Total assets at June 30, 2014 and 2013										$	3,166,802		$	2,501,084

(1) NMF = Not a meaningful figure

The Retail Division’s total revenue during the three months ended June 30, 2014 increased 22.8%, or $39.2 million, over the same period in 2013, to $211.0 million. The $37.4 million net increase in core commissions and fees revenue resulted from the following factors: (i) an increase of approximately $35.2 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2013; (ii) a net increase of $3.5 million related to net new business; and (iii) an offsetting decrease of $1.3 million related to commissions and fees revenue recorded in the second quarter of 2013 from business since divested. Profit-sharing contingent commissions and GSCs for the second quarter of 2014 increased $0.2 million, or 6.2%, from the second quarter of 2013, to $2.7 million. The Retail Division’s internal growth rate for core organic commissions and fees revenue was 2.0% for the second quarter of 2014, and was driven by revenue from net new business written during the preceding twelve months, modest to no increases in exposure units in most areas of the United States, and a slight contraction in property insurance premium rates.

Income before income taxes for the three months ended June 30, 2014 increased 10.4%, or $4.6 million, from the same period in 2013, to $49.1 million. The primary factors affecting this increase were: (i) total compensation including non-cash stock-based compensation increased by $19.3 million or 22.5%; of the $34.5 million increase in total expenses, $35.6 million related to acquisitions completed in the previous twelve months, largely driven by the seasonality of these new acquisitions where the expenses are relatively stable but the revenue steam is weighted toward the last six months of the year. The remaining $1.1 million expenses decrease reflects incremental margin improvement for the previously existing profit centers; (ii) operating expenses increased by $7.0 million or 26.7%; and (iii) the inter-company interest charge increased by $5.6 million or 98.7%.

28

The Retail Division’s total revenues during the six months ended June 30, 2014, increased 19.4%, or $67.3 million, over the same period in 2013, to $413.7 million. Profit-sharing contingent commissions and GSCs for the first half of 2014 increased $4.8 million, or 27.4%, over the same period of 2013, to $22.3 million. The $60.4 million net increase in core commissions and fees revenue resulted from the following factors: (i) an increase of approximately $55.5 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2013; (ii) a decrease of $2.4 million related to commissions and fees revenues recorded for the first half of 2013 from business since divested; and (iii) the remaining net increase of $7.3 million primarily related to net new business. The Retail Division’s internal growth rate for core organic commissions and fees revenue was 2.3% for the first six months of 2014, and was driven by net new business written during the preceding twelve months, coupled with slightly increasing insurable exposure units in most areas of the United States.

Income before income taxes for the six months ended June 30, 2014, decreased 0.4%, or $0.4 million, over the same period in 2013, to $90.3 million. This slight decrease reflects the seasonality of acquisitions made within the last twelve months. Approximately, 46.8% of annual budgeted revenues for those acquisitions were received to support 50.9% of annual budgeted expenses for a net negative seasonal variance for the first six months of $2.9 million. With total revenues increased by 19.4%, the impact of the higher incremental percentage of expenses associated with those recent acquisitions, are seen in the following: (i) total compensation expenses non-cash stock-based compensation expenses increased $36.8 million or 21.4%; and (ii) other operating expenses increased $12.6 million or 24.1%. Other factors negatively impacting income before income taxes were an inter-company interest expense allocation increase of $10.1 million or 85.1% and an increased expense of $4.7 million due to changes in estimated acquisition earn-out payables.

National Programs Division

The Wright Insurance Group acquisition was completed effective May 1, 2014. With the Wright acquisition completed, the National Programs Division manages over 50 programs consisting of annual aggregated written premium of over $2.5 billion with 40 well-capitalized carrier partners. The National Programs Division now generates approximately $410.0 million in annual revenue and has over 9,000 distribution points of contact. In most cases, the insurance carriers that support the programs have delegated underwriting and, in many instances, claims-handling authority to our programs operations. These programs are generally distributed through nationwide networks of independent agents and offer targeted products and services designed for specific industries, trade groups, professions, public entities and market niches. The National Programs Division operations can be grouped into five broad categories: Commercial Programs, Professional Programs, Arrowhead Insurance Group Programs, Wright Insurance Group and Public Entity-Related Programs. Like the Retail and Wholesale Brokerage Divisions, the National Programs Division’s revenue is primarily commission-based.

29

Financial information relating to our National Programs Division for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except percentages):

	For the three months ended June 30,									For the six months ended June 30,
	2014			2013			% Change			2014			2013			% Change
REVENUES
Core commissions and fees	$	89,814		$	62,860			42.9	%	$	154,578		$	124,566			24.1	%
Profit-sharing contingent commissions		756			5,358			(85.9	)%		10,062			12,202			(17.5	)%
Guaranteed supplemental commissions		5			(173	)		(102.3	)%		7			(59	)		(110.2	)%
Investment income		66			5			NMF	(1)		71			10			NMF	(1)
Other income, net		234			304			(23.0	)%		327			575			(43.1	)%
Total revenues		90,875			68,354			32.9	%		165,045			137,294			20.2	%
EXPENSES
Employee compensation and benefits		40,306			32,535			23.9	%		73,015			64,694			12.9	%
Non-cash stock-based compensation		1,103			953			15.7	%		2,163			1,900			13.8	%
Other operating expenses		19,235			13,162			46.1	%		32,786			25,319			29.5	%
Amortization		6,214			3,511			77.0	%		9,989			7,030			42.1	%
Depreciation		1,842			1,326			38.9	%		3,309			2,574			28.6	%
Interest		12,447			5,590			122.7	%		17,888			11,284			58.5	%
Change in estimated acquisition earn-out payables		43			51			(15.7	)%		87			(745	)		(111.7	)%
Total expenses		81,190			57,128			42.1	%		139,237			112,056			24.3	%
Income before income taxes	$	9,685		$	11,226			(13.7	)%	$	25,808		$	25,238			2.3	%
Net internal growth rate – core organic commissions and fees		2.2	%		18.3	%					1.9	%		15.3	%
Employee compensation and benefits ratio		44.4	%		47.6	%					44.2	%		47.1	%
Other operating expenses ratio		21.2	%		19.3	%					19.9	%		18.4	%
Capital expenditures	$	5,159		$	1,420					$	6,857		$	2,312
Total assets at June 30, 2014 and 2013										$	2,406,240		$	1,224,175

(1) NMF = Not a meaningful figure

National Programs revenue for the three months ended June 30, 2014, increased 32.9%, or $22.5 million, over the same period in 2013, to a total of $90.9 million. Core commissions and fees revenue increased by $27.0 million primarily related to acquisitions completed during the twelve months after the quarter ended June 30, 2013. Profit-sharing contingent commissions and GSCs were $0.8 million for the second quarter of 2014 which is a decrease of $4.4 million from the second quarter of 2013. The decreased contingent commissions of $4.4 million were mainly due to the FIU profit center recording its $5.0 million in contingent income from their carrier partners in the first quarter of 2014, while recording the same contingent commissions in the second quarter of 2013. The National Programs Division’s internal growth rate for commissions and fees revenue was 2.2% for the three months ended June 30, 2014. The primary reason for the 2.2% internal growth in the second quarter of 2014 was due to the new Arrowhead Auto Programs that generated $1.5 million in new revenue, offset by lower performance in other programs.

Income before income taxes for the three months ended June 30, 2014 decreased 13.7%, or $1.5 million, from the same period in 2013, to $9.7 million. The decrease was primarily due to the $2.7 million in increased amortization from the Wright acquisition and from the increase in interest expense related to the Wright acquisition allocated cost of capital.

National Programs revenue for the six months ended June 30, 2014, increased 20.2%, or $27.8 million, over the same period in 2013, to a total $165.0 million. Core commissions and fees revenue increased by $30.0 million primarily related to acquisitions completed during the twelve months after the quarter ended June 30, 2013. Profit-sharing contingent commissions and GSCs were $10.1 million for the first six months of 2014 which is a decrease of $2.1 million from the same period in 2013. This decrease is mainly due to a reduction of $2.6 million in profit sharing contingent commissions received by Proctor Financial, due to a worse loss ratio in the first quarter of 2014 versus the first quarter of 2013 caused by market driven rate reductions and a higher number of claims. The National Programs Division’s internal growth rate for commissions and fees revenue was 1.9% for the first six months of 2014.

30

Income before income taxes for the six months ended June 30, 2014 increased 2.3%, or $0.6 million, from the same period in 2013, to $25.8 million. The increase was primarily related to acquisitions completed during the twelve months after the quarter ended June 30, 2013.

Wholesale Brokerage Division

The Wholesale Brokerage Division markets and sells excess and surplus commercial and personal lines insurance and reinsurance, primarily through independent agents and brokers. Like the Retail and National Programs Divisions, the Wholesale Brokerage Division’s revenues are primarily commission-based.

Financial information relating to our Wholesale Brokerage Division for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except percentages):

	For the three months ended June 30,									For the six months ended June 30,
	2014			2013			% Change			2014			2013			% Change
REVENUES
Core commissions and fees	$	58,563		$	52,858			10.8	%	$	107,794		$	96,129			12.1	%
Profit-sharing contingent commissions		1,002			1,518			(34.0	)%		6,035			6,412			(5.9	)%
Guaranteed supplemental commissions		407			360			13.1	%		1,078			749			43.9	%
Investment income		7			4			75.0	%		11			9			22.2	%
Other income, net		80			83			(3.6	)%		161			221			(27.1	)%
Total revenues		60,059			54,823			9.6	%		115,079			103,520			11.2	%
EXPENSES
Employee compensation and benefits		28,689			25,651			11.8	%		54,989			48,866			12.5	%
Non-cash stock-based compensation		717			356			101.4	%		1,371			713			92.3	%
Other operating expenses		9,058			8,928			1.5	%		18,662			18,682			(0.1	)%
Amortization		2,932			2,887			1.6	%		5,815			5,784			0.5	%
Depreciation		670			716			(6.4	)%		1,320			1,423			(7.2	)%
Interest		523			723			(27.7	)%		942			1,478			(36.3	)%
Change in estimated acquisition earn-out payables		94			(198	)		NMF	(1)		1,866			452			NMF	(1)
Total expenses		42,683			39,063			9.3	%		84,965			77,398			9.8	%
Income before income taxes	$	17,376		$	15,760			10.3	%	$	30,114		$	26,122			15.3	%
Net internal growth rate – core organic commissions and fees		8.2	%		10.8	%					9.8	%		9.8	%
Employee compensation and benefits ratio		47.8	%		46.8	%					47.8	%		47.2	%
Other operating expenses ratio		15.1	%		16.3	%					16.2	%		18.0	%
Capital expenditures	$	517		$	561					$	999		$	1,097
Total assets at June 30, 2014 and 2013										$	990,355		$	925,901

(1) NMF = Not a meaningful figure

31

The Wholesale Brokerage Division’s total revenues for the three months ended June 30, 2014, increased 9.6%, or $5.3 million, over the same period in 2013, to $60.1 million. The $5.7 million net increase in core commissions and fees revenue resulted from the following factors: (i) a net increase of $4.3 million primarily related to net new business; and (ii) the remaining increase of approximately $1.4 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2013. As such, the Wholesale Brokerage Division’s internal growth rate for core organic commissions and fees revenue was 8.2% for the second quarter of 2014. Profit-sharing contingent commissions and GSCs for the second quarter of 2014 decreased $0.5 million, or 25%, over the same quarter of 2013.

Income before income taxes for the three months ended June 30, 2014, increased 10.3%, or $1.6 million, over the same period in 2013, to $17.4 million, primarily due to net new business and net reductions in the inter-company interest expense allocation of $0.2 million, which was partially offset by an increase in estimated acquisition earn-out payables and compensation and benefits for new producers.

The Wholesale Brokerage Division’s total revenues for the six months ended June 30, 2014, increased 11.2%, or $11.6 million, over the same period in 2013, to $115.1 million. Profit-sharing contingent commissions and GSCs for the first six months of 2014 decreased $0.1 million, or 0.7%, over the same period of 2013. The $11.7 million net increase in core commissions and fees revenue resulted from the following factors: (i) an increase of approximately $9.4 million primarily related to net new business; and (ii) the remaining increase of approximately $2.3 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2013.

Income before income taxes for the six months ended June 30, 2014, increased 15.3%, or $4.0 million, over the same period in 2013, to $30.1 million, primarily due to net new business and net reductions in the inter-company interest expense allocation of $0.5 million, which was partially offset by an increase in estimated acquisition earn-out payables and compensation and benefits for new producers.

Services Division

The Services Division provides insurance-related services, including third-party claims administration (“TPA”) and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas. The Services Division also provides Medicare set-aside account services, Social Security disability and Medicare benefits advocacy services, and catastrophe claims adjusting services.

Unlike our other divisions, nearly all of the Services Division’s commissions and fees revenue is generated from fees, which are not significantly affected by fluctuations in general insurance premiums.

32

Financial information relating to our Services Division for the three and six months ended June 30, 2014 and 2013 is as follows (in thousands, except percentages):

	For the three months ended June 30,									For the six months ended June 30,
	2014			2013			% Change			2014			2013			% Change
REVENUES
Core commissions and fees	$	35,586		$	30,271			17.6	%	$	67,096		$	72,876			(7.9	)%
Profit-sharing contingent commissions		1			—			—	%		1			—			—	%
Guaranteed supplemental commissions		—			—			—	%		—			—			—	%
Investment income		—			—			—	%		2			1			100.0	%
Other income, net		170			132			28.8	%		300			173			73.4	%
Total revenues		35,757			30,403			17.6	%		67,399			73,050			(7.7	)%
EXPENSES
Employee compensation and benefits		18,504			15,478			19.6	%		36,102			32,224			12.0	%
Non-cash stock-based compensation		189			166			13.9	%		375			334			12.3	%
Other operating expenses		8,354			7,415			12.7	%		15,804			14,433			9.5	%
Amortization		1,010			925			9.2	%		2,067			1,849			11.8	%
Depreciation		628			401			56.6	%		1,091			798			36.7	%
Interest		1,971			1,883			4.7	%		3,941			3,804			3.6	%
Change in estimated acquisition earn-out payables		93			1,546			(94.0	)%		196			3,066			(93.6	)%
Total expenses		30,749			27,814			10.6	%		59,576			56,508			5.4	%
Income before income taxes	$	5,008		$	2,589			93.4	%	$	7,823		$	16,542			(52.7	)%
Net internal growth rate – core organic commissions and fees		2.3	%		10.0	%					(19.6	)%		35.5	%
Employee compensation and benefits ratio		51.7	%		50.9	%					53.6	%		44.1	%
Other operating expenses ratio		23.4	%		24.4	%					23.4	%		19.8	%
Capital expenditures	$	244		$	379					$	535		$	498
Total assets at June 30, 2014 and 2013										$	278,137		$	246,235

(1) NMF = Not a meaningful figure

The Services Division’s total revenues for the three months ended June 30, 2014 increased 17.6%, or $5.4 million, from the same period in 2013, to $35.8 million. The $5.3 million net increase in commissions and fees revenue resulted from a number of factors (i) the Colonial Claims profit center revenues decreased $2.1 million due to the non-recurring Hurricane Sandy revenues earned in the second quarter of 2013 versus no major weather events in the second quarter of 2014; (ii) organic revenue growth of $2.2 million at our USIS subsidiary related to new business; and (iii) $4.5 million in revenue generated by ICA, which was acquired in December 2013, and therefore had no comparable revenues for 2013. The Services Division’s internal growth rate for core commissions and fees revenue was 2.3% for the second quarter of 2014 and would be 9.9% when excluding the $2.1 million related to Hurricane Sandy within the Colonial Claims business.

Income before income taxes for the three months ended June 30, 2014 increased 93.4%, or $2.4 million, over the same period in 2013, to $5.0 million, primarily due to net new business and reductions in the change in estimated acquisition earn-out payables of $1.5 million where we had an adjustment in 2013 that we did not have in 2014, which was partially offset by an increase in employee compensation and benefits costs.

The Services Division’s total revenues for the six months ended June 30, 2014 decreased 7.7%, or $5.7 million, from the same period in 2013, to $67.4 million. The $5.8 million net decrease in commissions and fees revenue resulted from a number of factors (i) the Colonial Claims profit center revenues decreased $18.3 million due to the non-recurring Hurricane Sandy revenues earned in the second quarter of 2013 versus no major weather events in the second quarter of 2014; (ii) organic revenue growth of $4.2 million at our USIS subsidiary related to new business; and (iii) $8.2 million in revenue generated by ICA, which was acquired in December 2013, and therefore had no comparable revenues for 2013. The Services Division’s internal growth rate for core commissions and fees revenue was negative 19.6% for the first six months of 2014 and would be a positive 7.4 when excluding the $18.3 million related to Hurricane Sandy within the Colonial Claims business.

Income before income taxes for the six months ended June 30, 2014 decreased 52.7%, or $8.7 million, over the same period in 2013, to $7.8 million, primarily due to the loss of income related to Colonial Claims associated with the non-recurring Hurricane Sandy revenue recognized in 2013 versus no significant weather events in the first six months of 2014.

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Other

As discussed in Note 10 of the Notes to Condensed Consolidated Financial Statements, the “Other” column in the Segment Information table includes any income and expenses not allocated to reportable segments, and corporate-related items, including the inter-company interest expense charges to reporting segments.

LIQUIDITY AND CAPITAL RESOURCES

Our cash and cash equivalents of $309.1 million at June 30, 2014, reflected an increase of $106.1 million from the $203.0 million balance at December 31, 2013. For the six-month period ended June 30, 2014, $177.6 million of cash was provided from operating activities. Also during this period, $694.7 million of cash was used for acquisitions, $12.6 million was used for additions to fixed assets, and $29.0 million was used for payment of dividends.

Our ratio of current assets to current liabilities (the “current ratio”) was 1.15 and 1.02 at June 30, 2014 and December 31, 2013, respectively.

Contractual Cash Obligations

As of June 30, 2014, our contractual cash obligations were as follows:

	Payments Due by Period
(in thousands)	Total		Less Than 1 Year		1-3 Years		4-5 Years		After 5 Years
Long-term debt(1)	$	1,174,734	$	131,609	$	114,375	$	928,750	$	—
Other liabilities(2)		91,863		23,480		48,545		5,039		14,799
Operating leases		185,604		37,159		64,703		41,979		41,763
Interest obligations		85,856		20,789		37,506		27,561		—
Unrecognized tax benefits		134		—		134		—		—
Maximum future acquisition contingency payments(3)		153,019		75,628		77,391		—		—
Total contractual cash obligations	$	1,691,210	$	288,665	$	342,654	$	1,003,329	$	56,562

(1) The Company currently expects that the $100.0 million related to the Series B Notes, described below, which is currently due to mature on July 15, 2014, will be repaid and included in the new credit facility (the “Facility”) described below. In addition, other outstanding credit facilities will potentially be repaid with proceeds from the Facility.

(2) Includes the current portion of other long-term liabilities.

(3) Includes $52.7 million of current and non-current estimated earn-out payables resulting from acquisitions consummated after January 1, 2009.

In July 2004, the Company completed a private placement of $200.0 million of unsecured senior notes (the “Notes”). The $200.0 million was divided into two series: (1) Series A, which closed on September 15, 2004, for $100.0 million due in 2011 and bore interest at 5.57% per year; and (2) Series B, which closed on July 15, 2004, for $100.0 million due in 2014 and bearing interest at 6.08% per year. The Company has used the proceeds from the Notes for general corporate purposes, including acquisitions and repayment of existing debt. On September 15, 2011, the $100.0 million of Series A Notes were redeemed on their normal maturity date through use of funds from the Master Agreement (defined below). As of June 30, 2014 and December 31, 2013, there was an outstanding balance on the Series B Notes of $100.0 million. It is management’s intention to pay off the Series B Notes at the time of maturity with proceeds from the revolving portion of the Credit Facility.

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On December 22, 2006, the Company entered into a Master Shelf and Note Purchase Agreement (the “Master Agreement”) with a national insurance company (the “Purchaser”). On September 30, 2009, the Company and the Purchaser amended the Master Agreement to extend the term of the agreement until August 20, 2012. The Purchaser also purchased Notes issued by the Company in 2004. The Master Agreement provides for a $200.0 million private uncommitted “shelf” facility for the issuance of senior unsecured notes over a three-year period, with interest rates that may be fixed or floating and with such maturity dates, not to exceed ten years, as the parties may determine. The Master Agreement includes various covenants, limitations and events of default similar to the Notes issued in 2004. The initial issuance of notes under the Master Agreement occurred on December 22, 2006, through the issuance of $25.0 million in Series C Senior Notes due December 22, 2016, with a fixed interest rate of 5.66% per year. On February 1, 2008, $25.0 million in Series D Senior Notes due January 15, 2015, with a fixed interest rate of 5.37% per year, were issued. It is management’s intention to pay off the Series D Senior Notes at the time of maturity with proceeds from the revolving portion of the credit facility. On September 15, 2011, and pursuant to a Confirmation of Acceptance, dated January 21, 2011 (the “Confirmation”), in connection with the Master Agreement, $100.0 million in Series E Senior Notes were issued and are due September 15, 2018, with a fixed interest rate of 4.50% per year. The Series E Senior Notes were issued for the sole purpose of retiring the Series A Senior Notes. As of June 30, 2014, and December 31, 2013, there was an outstanding debt balance issued under the provisions of the Master Agreement of $150.0 million.

On October 12, 2012, the Company entered into a Master Note Facility Agreement (the “New Master Agreement”) with another national insurance company (the “New Purchaser”). The New Purchaser also purchased Notes issued by the Company in 2004. The New Master Agreement provides for a $125.0 million private uncommitted “shelf” facility for the issuance of unsecured senior notes over a three-year period, with interest rates that may be fixed or floating and with such maturity dates, not to exceed ten years, as the parties may determine. The New Master Agreement includes various covenants, limitations and events of default similar to the Master Agreement. At June 30, 2014 and December 31, 2013, there were no borrowings against this facility.

On January 9, 2012, the Company entered into: (1) an amended and restated revolving and term loan credit agreement (the “SunTrust Agreement”) with SunTrust Bank (“SunTrust”) that provides for (a) a $100.0 million term loan (the “SunTrust Term Loan”) and (b) a $50.0 million revolving line of credit (the “SunTrust Revolver”) and (2) a $50.0 million promissory note (the “JPM Note”) in favor of JPMorgan Chase Bank, N.A. (“JPMorgan”), pursuant to a letter agreement executed by JP Morgan (together with the JPM Note, the “JPM Agreement”) that provided for a $50.0 million uncommitted line of credit bridge facility (the “JPM Bridge Facility”). The SunTrust Term Loan, the SunTrust Revolver and the JPM Bridge Facility were each funded on January 9, 2012, and provided the financing for the Arrowhead acquisition. The SunTrust Agreement amended and restated the Prior Loan Agreement. The SunTrust Revolver and JPM Bridge Facility were paid off by the JPM Term Loan (defined below).

The maturity date for the SunTrust Term Loan and the SunTrust Revolver was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. Both the SunTrust Term Loan and the SunTrust Revolver were able to be increased by up to $50.0 million (bringing the total amount available to $150.0 million for the SunTrust Term Loan and $100.0 million for the SunTrust Revolver) prior to their termination. The calculation of interest and fees for the SunTrust Agreement was generally based on the Company’s funded debt-to-EBITDA ratio. Interest was charged at a rate equal to 1.00% to 1.40% above LIBOR or 1.00% below the Base Rate, each as more fully described in the SunTrust Agreement. Fees included an up-front fee, an availability fee of 0.175% to 0.25%, and a letter of credit margin fee of 1.00% to 1.40%. The obligations under the SunTrust Term Loan and SunTrust Revolver were unsecured and the SunTrust Agreement included various covenants, limitations and events of default that are customary for similar facilities for similar borrowers and that are substantially similar to those contained in the Prior Loan Agreement. On May 20, 2014, in connection with closing the Wright Acquisition and funding of the Credit Facility (as defined below), the SunTrust Term Loan was paid in full using proceeds from the Credit Facility (as defined below) and the SunTrust Revolver was also terminated at that time.

The maturity date for the JPM Bridge Facility was February 3, 2012, at which time all outstanding principal and unpaid interest would have been due. On January 26, 2012, the Company entered into a term loan agreement (the “JPM Agreement”) with JPMorgan that provided for a $100.0 million term loan (the “JPM Term Loan”). The JPM Term Loan was fully funded on January 26, 2012, and provided the financing to fully repay (1) the JPM Bridge Facility and (2) the SunTrust Revolver. As a result of the January 26, 2012 financing and repayments, the JPM Bridge Facility was terminated and the SunTrust Revolver’s amount outstanding was reduced to zero.

The maturity date for the JPM Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. Interest was charged at a rate equal to the Alternative Base Rate or 1.00% above the Adjusted LIBOR Rate, each as more fully described in the JPM Agreement. Fees included an up-front fee. The obligations under the JPM Term Loan were unsecured and the JPM Agreement includes various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. On May 20, 2014, in connection with closing the Wright Acquisition and funding of the Credit Facility (as defined below), the JPM Term Loan was paid in full using proceeds from the Credit Facility (as defined below).

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On July 1, 2013, in conjunction with the acquisition of Beecher Carlson, the Company entered into: (1) a revolving loan agreement (the “Wells Fargo Agreement”) with Wells Fargo Bank, N.A. that provides for a $50.0 million revolving line of credit (the “Wells Fargo Revolver”) and (2) a term loan agreement (the “Bank of America Agreement”) with Bank of America, N.A. (“Bank of America”) that provided for a $30.0 million term loan (the “Bank of America Term Loan”).

The maturity date for the Wells Fargo Revolver is December 31, 2016, at which time all outstanding principal and unpaid interest will be due. The Wells Fargo Revolver may be increased by up to $50.0 million (bringing the total amount available to $100.0 million). The calculation of interest and fees for the Wells Fargo Agreement is generally based on the Company’s funded debt-to-EBITDA ratio. Interest is charged at a rate equal to 1.00% to 1.40% above LIBOR or 1.00% below the Base Rate, each as more fully described in the Wells Fargo Agreement. Fees include an up-front fee, an availability fee of 0.175% to 0.25%, and a letter of credit margin fee of 1.00% to 1.40%. The obligations under the Wells Fargo Revolver are unsecured and the Wells Fargo Agreement includes various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. The Wells Fargo Revolver was drawn down in the amount of $30.0 million on July 1, 2013. As of April 16, 2014, in connection with the agreement of the Credit Facility (as defined below), an amendment to the agreement was established to reduce the total revolving loan commitment from $50.0 million to $25.0 million. There were no borrowings against the Wells Fargo Revolver as of June 30, 2014 and December 31, 2013.

The maturity date for the Bank of America Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. The calculation of interest for the Bank of America Agreement was generally based on the Company’s fixed charge coverage ratio. Interest was charged at a rate equal to the Alternative Base Rate or 1.00% to 1.40% above the Adjusted LIBOR Rate, each as more fully described in the Bank of America Agreement. Fees included an up-front fee. The obligations under the Bank of America Term Loan were unsecured and the Bank of America Agreement included various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. The Bank of America Term Loan was funded in the amount of $30.0 million on July 1, 2013. On May 20, 2014, in connection with closing the Wright Acquisition and funding of the Credit Facility, the term loan was paid in full using proceeds from the Credit Facility (as defined below).

The 30-day Adjusted LIBOR Rate as of June 30, 2014 was 0.19%.

On April 17, 2014, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as co-syndication agents and co-documentation agents (the “Credit Agreement”). The Credit Agreement in the amount of $1,350.0 million provides for an unsecured revolving credit facility in the initial amount of $800.0 million and unsecured term loans in the initial amount of $550.0 million, either or both of which may, subject to lenders’ discretion, potentially be increased by up to $500.0 million (the “ Credit Facility”). The Credit Facility was funded on May 20, 2014 in conjunction with the closing of the Wright Insurance Group acquisition. The $550.0 million term loan proceeds were funded as well as a drawdown of $375.0 million on the revolving loan facility. Use of these proceeds were to retire existing term loan debt including the JPM Term Loan Agreement, SunTrust Term Loan Agreement and Bank of America Term Loan Agreement in total of $230.0 million (as described above) and to facilitate the closing of the Wright Insurance Group Acquisition as well as other acquisitions. The Credit Facility terminates on May 20, 2019, but either or both of the revolving credit facility and the term loans may be extended for two additional one-year periods at the Company’s request and at the discretion of the respective lenders. Interest and facility fees in respect to the Credit Facility are based on the better of the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt rating. Based on the Company’s net debt leverage ratio, the rates of interest for the first two quarters charged on the term loan and revolving loan will be 1.375% and 1.175% respectively and above the adjusted LIBOR rate for outstanding amounts drawn. There are fees included in the facility which include a facility fee based on the revolving credit commitments of the lenders (whether used or unused) at a rate of .20% and letter of credit fees based on the amounts of outstanding secured or unsecured letters of credit. The Credit Facility includes various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers. As of June 30, 2014, there was an outstanding debt balance issued under the provisions of the Credit Facility in total of $925.0 million.

The Notes, the Master Agreement and the Credit Facility Agreement all require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of June 30, 2014 and December 31, 2013.

Neither we nor our subsidiaries has ever incurred off-balance sheet obligations through the use of, or investment in, off-balance sheet derivative financial instruments or structured finance or special purpose entities organized as corporations, partnerships or limited liability companies or trusts.

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We believe that our existing cash, cash equivalents, short-term investment portfolio and funds generated from operations, together with the New Master Agreement, the Wells Fargo Revolver, and Credit Agreement and the Facility, will be sufficient to satisfy our normal liquidity needs through at least the end of 2014. These liquidity needs include the $200.0 million share repurchase program announced in the second quarter of 2014. We currently anticipate financing this repurchase program with cash from operations. We may in the future seek to raise additional capital through either the private or public debt markets to increase our cash and debt capacity. Additionally, we believe that funds generated from future operations will be sufficient to satisfy our normal liquidity needs, including the required annual principal payments on our long-term debt.

Historically, much of our cash generated by operations has been used for acquisitions. If additional acquisition opportunities should become available that exceed our current cash flow, we believe that given our relatively low debt-to-total-capitalization ratio, we would be able to raise additional capital through either the private or public debt markets. This incurrence of additional debt, however, could negatively impact our capital structure and liquidity. In addition, if we are unable to raise as much additional debt as we want, or at all, we could issue additional equity to finance an acquisition which could have a dilutive effect on our current shareholders.

For further discussion of our cash management and risk management policies, see Item 3, “Quantitative and Qualitative Disclosures About Market Risk.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and equity prices. We are exposed to market risk through our investments, revolving credit line and term loan agreements.

Our invested assets are held as cash and cash equivalents, restricted cash and investments, available-for-sale marketable equity securities, non-marketable equity securities certificates of deposit, U.S. Treasury Securities and corporate debt. These investments are subject to interest rate risk and equity price risk. The fair values of our cash and cash equivalents, restricted cash and investments, and certificates of deposit at June 30, 2014 and December 31, 2013, approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material.

We do not actively invest or trade in equity securities. In addition, we generally dispose of any significant equity securities received in conjunction with an acquisition shortly after the acquisition date.

We face risks regarding our flood business because of uncertainties regarding the NFIP.

We participate in the write-your-own (“WYO”) arrangement of the NFIP, which is managed by the Mitigation Division of Federal Emergency Management Agency (“FEMA”) in the U.S. Department of Homeland Security. For WYO participation, we receive an expense allowance for policies written and a servicing fee for claims administered. Under the program, all losses are 100% reinsured by the Federal Government.

In 2012, Congress passed, and the President signed, the Biggert-Waters Flood Insurance Reform Act of 2012 (“Biggert-Waters Act”). The Biggert-Waters Act had two main goals: (i) to extend the NFIP to September 30, 2017; and (ii) to move the program to more market based rates for certain flood policyholders, which would put the program on a more firm financial standing while terminating the process of subsidizing certain rates.

As a result of significant public pressure, on March 21, 2014, the President signed into law the Homeowner Flood Insurance Affordability Act of 2014 (“Flood Affordability Act”). The Flood Affordability Act substantially modifies certain provisions of the Biggert-Waters Act, which among other things, substantially modifies many of the Biggert-Waters Act rate increases.

As a WYO carrier, we are required to follow certain NFIP procedures when administering flood policies and claims. Some of these requirements may be different from our normal business practices and may present a reputational risk to our brand. Insurance companies are regulated by states; however, NFIP is a federal program and there may be instances where requirements placed on WYO carriers by NFIP are not consistent with the regulations of a particular state. Consequently, we have the risk that our regulators’ positions may conflict with NFIP’s position on the same issue.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation (the “Evaluation”) required by Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15 and 15d-15 under the Exchange Act (“Disclosure Controls”) as of June 30, 2014. Based on the Evaluation, our CEO and CFO concluded that the design and operation of our Disclosure Controls were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to our senior management, including our CEO and CFO, to allow timely decisions regarding required disclosures.

Changes in Internal Controls

There has not been any change in our internal control over financial reporting identified in connection with the Evaluation that occurred during the quarter ended June 30, 2014, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Internal Control Over Financial Reporting

Our management, including our CEO and CFO, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

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The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

CEO and CFO Certifications

Exhibits 31.1 and 31.2 are the Certifications of the CEO and the CFO, respectively. The Certifications are supplied in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This Item 4 of Part I of this Quarterly Report on Form 10-Q is the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II

ITEM 1. LEGAL PROCEEDINGS

In Item 3 of Part I of the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2013, certain information concerning certain legal proceedings and other matters was disclosed. Such information was current as of the date of filing. During the Company’s fiscal quarter ended June 30, 2014, no new legal proceedings, or material developments with respect to existing legal proceedings, occurred which require disclosure in this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

There were no material changes in the risk factors previously disclosed in Item 1A, “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about our repurchase of shares of our common stock during the quarter ended June 30, 2014:

	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Value that May Yet be Purchased Under the Plans or Programs (2)
April 1, 2014 to April 30, 2014		157,623	$	29.43		125,127	$	21.3 million
May 1, 2014 to May 31, 2014		719,991		29.63		719,873		—
June 1, 2014 to June 30, 2014		—		N/A		—		—
Total		877,614	$	29.60		845,000	$	—

(1) We purchased 845,000 shares during the quarter ended June 30, 2014 as part of a $25.0 million repurchase program approved by our Board of Directors and announced on February 6, 2014. The program was authorized for a period of up to twenty-four months, however all $25.0 million in repurchases authorized under this program were completed in the quarter ended June 30, 2014. In addition, we purchased 32,614 shares during the quarter ended June 30, 2014 that were not made pursuant to our publicly announced repurchase program, all of which represent shares surrendered by teammates in the exercise of stock options under our equity compensation plans or to cover required tax withholdings on the vesting or exercise of shares in our equity compensation plans.

(2) Announced on July 21, 2014, the Board of Directors has approved the purchasing of up to an additional $200 million worth of the Company’s outstanding shares. The shares will be repurchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors. These repurchases may be carried out through open market purchases, block trades, accelerated repurchases, negotiated private transactions and pursuant to any trading plan that may be adopted in accordance with rule 10b5-1 of the Securities and Exchange Commission. This amount is excluded above from the Maximum Value that May Yet be Purchased Under the Plans or Programs. This brings the cumulative amount that has been authorized to be repurchased under programs approved by the Board of Directors to $225 million.

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ITEM 6. EXHIBITS

The following exhibits are filed as a part of this Report:

3.1	Articles of Amendment to Articles of Incorporation (adopted April 24, 2003) (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 2003), and Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 1999).
3.2	Bylaws (incorporated by reference to Exhibit 3.2 to Form 8-K filed on March 2, 2012).
10.4	Credit Agreement dated as of April 16, 2014, among the Registrant, JPMorgan Chase Bank, N.A., Bank of America, N.A., Royal Bank of Canada and SunTrust Bank (incorporated by reference to Exhibit 10.4 to Form 10-Q for the quarter ended March 31, 2014).
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer of the Registrant.
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer of the Registrant.
32.1	Section 1350 Certification by the Chief Executive Officer of the Registrant.
32.2	Section 1350 Certification by the Chief Financial Officer of the Registrant.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BROWN & BROWN, INC.
	/S/    R. Andrew Watts
Date: August 7, 2014	R. Andrew Watts
	Executive Vice President, Chief Financial Officer and Treasurer
	(duly authorized officer, principal financial officer and principal accounting officer)

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EX-31.1

Exhibit 31.1

Certification by the Chief Executive Officer

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, J. Powell Brown, certify that:

1. I have reviewed this Quarterly Report of Brown & Brown, Inc. (the “Registrant”) on Form 10-Q for the quarter ended June 30, 2014;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 7, 2014

/s/ J. Powell Brown

J. Powell Brown

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification by the Chief Financial Officer

Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002

I, R. Andrew Watts, certify that:

1. I have reviewed this Quarterly Report of Brown & Brown, Inc. (the “Registrant”) on Form 10-Q for the quarter ended June 30, 2014;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 7, 2014

/s/ R. Andrew Watts

R. Andrew Watts

Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 1350 of Title 18 of the United States Code, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Brown & Brown, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, J. Powell Brown, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78m or § 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 7, 2014

/s/ J. Powell Brown

J. Powell Brown

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 1350 of Title 18 of the United States Code, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Brown & Brown, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, R. Andrew Watts, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78m or § 78o(d)); and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 7, 2014

/s/ R. Andrew Watts

R. Andrew Watts

Executive Vice President, Chief Financial Officer and Treasurer

XML

Long-Term Debt - Additional Information (Detail) (USD $)	6 Months Ended				0 Months Ended			0 Months Ended	6 Months Ended	0 Months Ended				6 Months Ended				6 Months Ended		6 Months Ended		6 Months Ended		6 Months Ended								6 Months Ended		6 Months Ended			0 Months Ended	6 Months Ended
	Jun. 30, 2014	Apr. 17, 2014	Apr. 16, 2014	Dec. 31, 2013	May 20, 2014 Agreement [Member]	Jun. 30, 2014 Credit Agreement [Member]	Apr. 17, 2014 Credit Agreement [Member]	Jan. 09, 2012 Sun Trust Term Loan [Member]	Jun. 30, 2014 Sun Trust Term Loan [Member]	Jan. 09, 2012 JPM Bridge Facility [Member]	Jan. 09, 2012 JPMorgan Chase Bank, N.A. [Member]	Jan. 09, 2012 Sun Trust Revolver [Member]	Jun. 30, 2014 Sun Trust Revolver [Member]	Jun. 30, 2014 JPM Term Loan [Member]	Jun. 30, 2014 Wells Fargo Revolver [Member]	Dec. 31, 2013 Wells Fargo Revolver [Member]	Jun. 30, 2013 Wells Fargo Revolver [Member] Beecher Acquisition [Member]	Jun. 30, 2014 Bank Of America Loan Term Loan [Member]	Jun. 30, 2013 Bank Of America Loan Term Loan [Member] Beecher Acquisition [Member]	Jun. 30, 2014 Private Placement [Member] Series B [Member]	Dec. 31, 2013 Private Placement [Member] Series B [Member]	Jun. 30, 2014 Private Placement [Member] Series A [Member]	Jun. 30, 2014 Private Placement [Member] Senior Notes[Member]	Jun. 30, 2014 Line of Credit [Member]	Jun. 30, 2014 Line of Credit [Member] Sun Trust Revolver [Member]	Jun. 30, 2014 Line of Credit [Member] Wells Fargo Revolver [Member]	Jun. 30, 2014 Line of Credit [Member] Bank Of America Loan Term Loan [Member]	Jun. 30, 2014 Term Loan [Member]	May 20, 2014 Term Loan [Member]	Jun. 30, 2014 Revolving Credit Facility [Member]	May 20, 2014 Revolving Credit Facility [Member]	Jun. 30, 2014 Master Agreement [Member]	Dec. 31, 2013 Master Agreement [Member]	Jun. 30, 2014 Master Agreement [Member] Series C [Member]	Jun. 30, 2014 Master Agreement [Member] Series D [Member]	Jun. 30, 2014 Master Agreement [Member] Series E [Member]	Oct. 12, 2012 New Master Agreement [Member]	Jun. 30, 2014 New Master Agreement [Member]	Dec. 31, 2013 New Master Agreement [Member]	Jun. 30, 2014 LIBOR [Member]
Debt Instrument [Line Items]
Unsecured senior notes outstanding	$ 799,734,000			$ 480,000,000																$ 100,000,000	$ 100,000,000	$ 100,000,000	$ 200,000,000									$ 150,000,000	$ 150,000,000	$ 25,000,000	$ 25,000,000	$ 100,000,000		$ 0	$ 0
Debt instrument, issuance date																				Jul. 15, 2004		Sep. 15, 2004												Dec. 22, 2006	Feb. 01, 2008	Sep. 15, 2011
Debt instrument interest rate stated percentage																				6.08%		5.57%												5.66%	5.37%	4.50%
Debt instrument, maturity date									Dec. 31, 2016						Dec. 31, 2016			Dec. 31, 2016		Jul. 15, 2014		Sep. 15, 2011			Dec. 31, 2016									Dec. 22, 2016	Jan. 15, 2015	Sep. 15, 2018
Notes redeemed on maturity date																						100,000,000
Maximum shelf facility capacity																																200,000,000					125,000,000
Length of the issuance period of long-term debt (in years)																																3 years					3 years
Long-term debt maturity, period length, maximum (in years)																																Maturity dates, not to exceed ten years						Maturity dates, not to exceed ten years
Revolving and term loan								100,000,000		50,000,000	50,000,000	50,000,000		100,000,000
Increase in borrowing capacity									50,000,000				50,000,000
Potential increased in line of credit facility		500,000,000							150,000,000				100,000,000		100,000,000
Letter of credit usage fee, minimum																								1.00%		1.00%
Letter of credit usage fee, maximum																								1.40%		1.40%
LIBOR below base rate																								1.00%		1.00%
Availability fees, minimum																								0.175%		0.175%
Availability fees, maximum																								0.25%		0.25%
Interest rate, minimum																								1.00%		1.00%	1.00%
Interest rate, maximum																								1.40%		1.40%	1.40%
Adjusted LIBOR Rate														1.00%
Revolving credit facilities	375,000,000		25,000,000														50,000,000												550,000,000		375,000,000
Revolving and term loan																			30,000,000								30,000,000
Revolving credit facility remaining amount															30,000,000
Borrowings outstanding															0	0
30-day Adjusted LIBOR Rate																																								0.19%
Unsecured revolving credit facility		800,000,000					1,350,000,000
Unsecured term loans		550,000,000
Term Loan Agreement					230,000,000
Line of credit facility interest rate above adjusted LIBOR rate																												1.375%		1.175%
Letter of credit fees	0.20%
Debt balance outstanding						$ 925,000,000

XML

Business Combinations - Results of Operations (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 2014 Acquisitions [Member]	Jun. 30, 2013 2014 Acquisitions [Member]	Jun. 30, 2014 2014 Acquisitions [Member]	Jun. 30, 2013 2014 Acquisitions [Member]	Jun. 30, 2013 2013 Acquisitions [Member]	Jun. 30, 2012 2013 Acquisitions [Member]	Jun. 30, 2013 2013 Acquisitions [Member]	Jun. 30, 2012 2013 Acquisitions [Member]
Business Acquisition, Pro Forma Information [Line Items]
Total revenues					$ 410,801	$ 365,964	$ 812,972	$ 737,673	$ 326,753	$ 292,242	$ 663,460	$ 596,931
Income before income taxes					106,186	99,431	206,102	211,003	86,506	71,528	186,503	154,953
Net income					$ 64,427	$ 59,975	$ 124,753	$ 127,408	$ 52,179	$ 42,700	$ 112,616	$ 92,511
Net income per share:
Basic					$ 0.44	$ 0.42	$ 0.86	$ 0.88	$ 0.36	$ 0.30	$ 0.78	$ 0.65
Diluted					$ 0.44	$ 0.41	$ 0.85	$ 0.87	$ 0.36	$ 0.29	$ 0.77	$ 0.63
Weighted average number of shares outstanding:
Basic	141,250	140,836	141,428	140,816	141,250	140,836	141,428	140,816	140,836	139,086	140,816	139,044
Diluted	143,032	143,021	143,169	142,938	143,032	143,021	143,169	142,938	143,021	141,828	142,938	141,664

XML

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

6 Months Ended

Jun. 30, 2014

Supplemental Cash Flow Elements [Abstract]

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

	For the six months ended June 30,
(in thousands)	2014		2013
Cash paid during the period for:
Interest	$	11,070	$	7,660
Income taxes	$	58,079	$	52,077

Brown & Brown’s significant non-cash investing and financing activities are summarized as follows:

	For the six months ended June 30,
(in thousands)	2014		2013
Other payable issued for purchased customer accounts	$	125	$	257
Estimated acquisition earn-out payables and related charges	$	13,158	$	1,833
Notes received on the sale of fixed assets and customer accounts	$	131	$	614

XML

Segment Information - Summarized Financial Information Reportable Segments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Total revenues	$ 397,764	$ 325,792	$ 761,358	$ 660,804
Investment income	194	239	297	425
Amortization	20,623	16,121	38,499	32,282
Depreciation	5,242	4,263	9,882	8,430
Interest expense	7,004	3,997	11,076	7,981
Income before income taxes	101,781	86,221	188,618	185,712
Total assets	4,930,472	3,326,320	4,930,472	3,326,320	3,649,508
Capital expenditures	7,850	4,176	12,577	7,123
Operating Segments [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Total revenues	210,976	171,819	413,667	346,387
Investment income	16	23	32	46
Amortization	10,457	8,789	20,608	17,600
Depreciation	1,614	1,371	3,198	2,742
Interest expense	11,224	5,649	21,937	11,849
Income before income taxes	49,098	44,482	90,343	90,693
Total assets	3,166,802	2,501,084	3,166,802	2,501,084
Capital expenditures	1,567	1,488	3,679	2,823
Operating Segments [Member] | National Programs [Member]
Segment Reporting Information [Line Items]
Total revenues	90,875	68,354	165,045	137,294
Investment income	66	5	71	10
Amortization	6,214	3,511	9,989	7,030
Depreciation	1,842	1,326	3,309	2,574
Interest expense	12,447	5,590	17,888	11,284
Income before income taxes	9,685	11,226	25,808	25,238
Total assets	2,406,240	1,224,175	2,406,240	1,224,175
Capital expenditures	5,159	1,420	6,857	2,312
Operating Segments [Member] | Wholesale Brokerage [Member]
Segment Reporting Information [Line Items]
Total revenues	60,059	54,823	115,079	103,520
Investment income	7	4	11	9
Amortization	2,932	2,887	5,815	5,784
Depreciation	670	716	1,320	1,423
Interest expense	523	723	942	1,478
Income before income taxes	17,376	15,760	30,114	26,122
Total assets	990,355	925,901	990,355	925,901
Capital expenditures	517	561	999	1,097
Operating Segments [Member] | Services [Member]
Segment Reporting Information [Line Items]
Total revenues	35,757	30,403	67,399	73,050
Investment income			2	1
Amortization	1,010	925	2,067	1,849
Depreciation	628	401	1,091	798
Interest expense	1,971	1,883	3,941	3,804
Income before income taxes	5,008	2,589	7,823	16,542
Total assets	278,137	246,235	278,137	246,235
Capital expenditures	244	379	535	498
Other [Member]
Segment Reporting Information [Line Items]
Total revenues	97	393	168	553
Investment income	105	207	181	359
Amortization	10	9	20	19
Depreciation	488	449	964	893
Interest expense	(19,161)	(9,848)	(33,632)	(20,434)
Income before income taxes	20,614	12,164	34,530	27,117
Total assets	(1,911,062)	(1,571,075)	(1,911,062)	(1,571,075)
Capital expenditures	$ 363	$ 328	$ 507	$ 393

XML

Amortizable Intangible Assets - Additional Information (Detail) (USD $)	Jun. 30, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense estimated, year one (2014)	$ 82,503,000
Amortization expense estimated, year two (2015)	86,861,000
Amortization expense estimated, year three (2016)	82,331,000
Amortization expense estimated, year four (2017)	79,377,000
Amortization expense estimated, year five (2018)	$ 73,977,000

XML

Business Combinations

6 Months Ended

Jun. 30, 2014

Business Combinations [Abstract]

Business Combinations

NOTE 4· Business Combinations

Acquisitions in 2014

During the six months ended June 30, 2014, Brown & Brown acquired the assets and assumed certain liabilities of five insurance intermediaries, all of the stock of one insurance intermediary that owns an insurance carrier and a book of business (customer accounts). Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last twelve months as permitted by ASC Topic 805 — Business Combinations (“ASC 805”). The aggregate purchase price of these acquisitions and the miscellaneous adjustments totaled $1,140,408,000 including $720,102,000 of cash payments, the issuance of $125,000 in other payables, the assumption of $407,023,000 of liabilities and $13,158,000 of recorded earn-out payables. All of these acquisitions were acquired primarily to expand Brown & Brown’s core business and to attract and hire high-quality individuals. Acquisition purchase prices are typically based on a multiple of average annual operating profit earned over a one- to three-year period within a minimum and maximum price range. The recorded purchase price for all acquisitions consummated after January 1, 2009 included 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 Statement 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. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC 805. For the six months ended June 30, 2014, several adjustments were made within the permitted measurement period that resulted in an increase in the aggregate purchase price of the affected acquisitions of $33,000 relating to the assumption of certain liabilities.

The following table summarizes the aggregate purchase price allocations made as of the date of the acquisitions for the current-year acquisitions and 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
The Wright Insurance Group, LLC.	National Programs	May 1, 2014		610,158		—		—		610,158		—
Pacific Resources Benefits Advisors, LLC	Retail	May 1, 2014	$	90,000	$	—	$	8,819	$	98,819	$	35,000
Axia Strategies, Inc.	Wholesale Brokerage	May 1, 2014		9,870		—		1,824		11,694		5,200
Other	Various	Various		10,074		125		2,515		12,714		6,028
Total			$	720,102	$	125	$	13,158	$	733,385	$	46,228

The following table summarizes the adjustments made to the estimated fair values along with the aggregate assets and liabilities acquired as of the date of each acquisition:

(in thousands)	PacRes			Axia		Wright			Other			Total
Cash	$	—		$	—	$	25,365		$	—		$	25,365
Other current assets		2,383			—		16,768			436			19,587
Fixed assets		53			24		7,445			1,719			9,241
Reinsurance recoverable		—			—		25,238			—			25,238
Prepaid reinsurance premiums		—			—		289,013			—			289,013
Goodwill		70,255			7,377		417,539			7,936			503,107
Purchased customer accounts		26,460			4,252		213,958			2,842			247,512
Non-compete agreements		21			41		1,119			119			1,300
Other assets		—			—		20,045			—			20,045
Total assets acquired		99,172			11,694		1,016,490			13,052			1,140,408
Other current liabilities		(353	)		—		(14,911	)		(338	)		(15,602	)
Losses and loss adjustment expense		—			—		(25,238	)		—			(25,238	)
Unearned premiums		—			—		(289,013	)		—			(289,013	)
Deferred income tax, net		—			—		(44,476	)		—			(44,476	)
Other liabilities		—			—		(32,694	)		—			(32,694	)
Total liabilities assumed		(353	)		—		(406,332	)		(338	)		(407,023	)
Net assets acquired	$	98,819			11,694		610,158		$	12,714		$	733,385

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15.0 years; and non-compete agreements, 3.3 years.

Goodwill of $503,107,000 was allocated to the Retail, National Programs, Wholesale Brokerage, and Services Divisions in the amounts of $78,395,000, $417,539,000, $(239,000), $7,412,000, respectively. Of the total goodwill of $503,107,000, $148,592,000 is currently deductible for income tax purposes and $341,357,000 is non-deductible. The remaining $13,158,000 relates to the recorded earn-out payables and will not be deductible until it is earned and paid.

The results of operations for the acquisitions completed during 2014 have been combined with those of the Company since the acquisition date. The total revenues and income before income taxes from the acquisitions completed through June 30, 2014, included in the Condensed Consolidated Statement of Income for the six months ended June 30, 2014, were $29,796,000 and $1,294,000, respectively. 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 three months ended June 30,				For the six months ended June 30,
(in thousands, except per share data)	2014		2013		2014		2013
Total revenues	$	410,801	$	365,964	$	812,972	$	737,673
Income before income taxes	$	106,186		99,431	$	206,102		211,003
Net income	$	64,427		59,975	$	124,753		127,408
Net income per share:
Basic	$	0.44	$	0.42	$	0.86	$	0.88
Diluted	$	0.44	$	0.41	$	0.85	$	0.87
Weighted average number of shares outstanding:
Basic		141,250		140,836		141,428		140,816
Diluted		143,032		143,021		143,169		142,938

Acquisitions in 2013

During the six months ended June 30, 2013, Brown & Brown acquired the assets and assumed certain liabilities of two insurance intermediaries and a book of business (customer accounts). The aggregate purchase price of these acquisitions was $17,865,000, including $14,366,000 of cash payments, the issuance of $85,000 in other payables, the assumption of $860,000 of liabilities and $2,554,000 of recorded earn-out payables. All of these acquisitions were acquired primarily to expand Brown & Brown’s core businesses and to attract and hire high-quality individuals. Acquisition purchase prices are typically based on a multiple of average annual operating profit earned over a one- to three-year period within a minimum and maximum price range. The recorded purchase price for all acquisitions consummated after January 1, 2009 included 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 statement 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. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC Topic 805 – Business Combinations (“ASC 805”). For the six months ended June 30, 2013, several adjustments were made within the permitted measurement period that resulted in reduction to the aggregate purchase price of the applicable acquisitions of $1,115,000, including $18,000 of cash payments, a reduction of $454,000 in other payables, the assumption of $42,000 of liabilities and the reduction of $721,000 in recorded earn-out payables.

The following table summarizes the aggregate purchase price allocations made as of the date of each acquisition for current year acquisitions and 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
Arrowhead General Insurance Agency Superholding Corporation	National Programs; Services	January 9, 2012	$	—	$	(454	)	$	—		$	(454	)	$	—
Insurcorp & GGM Investments LLC	Retail	May 1, 2012		—		—			(834	)		(834	)		—
Richard W. Endlar Insurance Agency, Inc.	Retail	May 1, 2012		—		—			220			220			—
Texas Security General Insurance Agency, Inc.	Wholesale Brokerage	September 1, 2012		—		—			(107	)		(107	)		—
The Rollins Agency, Inc.	Retail	June 1, 2013		13,792		50			2,256			16,098			4,300
Other	Various	Various		592		35			298			925			448
Total			$	14,384	$	(369	)	$	1,833		$	15,848		$	4,748

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period for prior year acquisitions:

(in thousands)	Rollins			Arrowhead			Insurcorp			Endlar		Texas Security			Other			Total
Other current assets	$	—		$	—		$	—		$	—	$	25		$	1,455		$	1,480
Fixed assets		30			—			—			—		—			1			31
Goodwill		13,019			(454	)		(566	)		216		(843	)		(685	)		10,687
Purchased customer accounts		3,876			—			(268	)		4		708			170			4,490
Non-compete agreements		31			—			—			—		—			31			62
Total assets acquired		16,956			(454	)		(834	)		220		(110	)		972			16,750
Other current liabilities		(858	)		—			—			—		3			(47	)		(902	)
Net assets acquired	$	16,098		$	(454	)	$	(834	)	$	220	$	(107	)	$	925		$	15,848

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15.0 years; and non-compete agreements, 5.0 years.

Goodwill of $10,687,000, was allocated to the Retail, National Programs and Wholesale Brokerage Divisions in the amounts of $11,984,000, ($454,000) and ($843,000), respectively. Of the total goodwill of $10,687,000, $9,308,000 is currently deductible for income tax purposes and ($454,000) is non-deductible. The remaining $1,833,000 relates to the earn-out payables and will not be deductible until it is earned and paid.

The results of operations for the acquisitions completed during 2013 have been combined with those of the Company since their respective acquisition dates. The total revenues and income before income taxes from the acquisitions completed through June 30, 2013, included in the Condensed Consolidated Statement of Income for the three and six months ended June 30, 2013, were $627,000 and $142,000, respectively. 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 three months ended June 30,				For the six months ended June 30,
(in thousands, except per share data)	2013		2012		2013		2012
Total revenues	$	326,753	$	292,242	$	663,460	$	596,931
Income before income taxes		86,506		71,528		186,503		154,953
Net income		52,179		42,700		112,616		92,511
Net income per share:
Basic	$	0.36	$	0.30	$	0.78	$	0.65
Diluted	$	0.36	$	0.29	$	0.77	$	0.63
Weighted average number of shares outstanding:
Basic		140,836		139,086		140,816		139,044
Diluted		143,021		141,828		142,938		141,664

As of June 30, 2014, the maximum future contingency payments related to all acquisitions totaled $153,019,000, all of which relates to acquisitions consummated subsequent to January 1, 2009.

ASC 805 is the authoritative guidance requiring an acquirer to recognize 100% of the fair values of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase arrangements) at the acquisition date must be included in the purchase price consideration. As a result, the recorded purchase prices for all acquisitions consummated after January 1, 2009 include an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations will be recorded in the condensed consolidated statement of income when incurred. Potential earn-out obligations are typically based upon future earnings of the acquired entities, usually between one and three years.

As of June 30, 2014 and 2013, 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). 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 six months ended June 30, 2014 and 2013, were as follows:

	For the three months ended June 30,						For the six months ended June 30,
(in thousands)	2014			2013			2014			2013
Balance as of the beginning of the period	$	48,806		$	49,469		$	43,058		$	52,987
Additions to estimated acquisition earn-out payables		14,527			2,554			14,807			1,833
Payments for estimated acquisition earn-out payables		(10,814	)		(3,761	)		(11,429	)		(8,080	)
Subtotal		52,519			48,262			46,436			46,740
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables		(375	)		159			5,228			1,156
Interest expense accretion		552			497			1,032			1,022
Net change in earnings from estimated acquisition earn-out payables		177			656			6,260			2,178
Balance as of June 30	$	52,696		$	48,918		$	52,696		$	48,918

Of the $52,696,000 estimated acquisition earn-out payables as of June 30, 2014, $20,278,000 was recorded as accounts payable and $32,418,000 was recorded as other non-current liabilities.

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Investments - Summary of Investments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Investments Debt And Equity Securities [Abstract]
Certificates of deposit, U.S. Treasury securities and obligations of U.S. Government agencies, Corporate debt and other securities,Current	$ 12,300	$ 10,624
Certificates of deposit, U.S. Treasury securities and obligations of U.S. Government agencies, Corporate debt and other securities,Non-Current	$ 19,021	$ 16

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Net Income Per Share - Reconciliation between Basic and Diluted Weighted Average Shares Outstanding (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]
Net income	$ 61,755	$ 52,007	$ 114,170	$ 112,138
Net income attributable to unvested awarded performance stock	(1,531)	(1,157)	(2,915)	(2,467)
Net income attributable to common shares	$ 60,224	$ 50,850	$ 111,255	$ 109,671
Weighted average number of common shares outstanding - basic	144,840	144,041	145,133	143,984
Less unvested awarded performance stock included in weighted average number of common shares outstanding - basic	(3,590)	(3,205)	(3,705)	(3,168)
Weighted average number of common shares outstanding for basic earnings per common share	141,250	140,836	141,428	140,816
Weighted average number of common shares outstanding for basic earnings per common share	141,250	140,836	141,428	140,816
Dilutive effect of stock options	1,782	2,185	1,741	2,122
Weighted average number of shares outstanding - diluted	143,032	143,021	143,169	142,938
Basic	$ 0.43	$ 0.36	$ 0.79	$ 0.78
Diluted	$ 0.42	$ 0.36	$ 0.78	$ 0.77

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Nature of Operations - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2014 Segment
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of reportable segments	4

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Subsequent Events - Additional Information (Detail) (USD $)					0 Months Ended
	Jun. 30, 2014	Apr. 17, 2014	Apr. 16, 2014	Jul. 15, 2014 Subsequent Event [Member]	Jul. 15, 2014 Subsequent Event [Member] Series B Senior Notes [Member]
Subsequent Event [Line Items]
Series B Senior Notes repaid					$ 100,000,000
Revolving loan facility	375,000,000		25,000,000	100,000,000
Outstanding Balance				475,000,000
Outstanding Amount		$ 500,000,000		$ 800,000,000

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Business Combinations - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Business Acquisition [Line Items]
Aggregate purchase price of acquisitions	$ 17,865,000	$ 1,140,408,000	$ 17,865,000
Cash payment for acquisition		720,102,000	14,366,000
Other payables for acquisition	85,000	125,000	85,000
Assumption of liabilities		407,023,000	860,000
Recorded earn-out payables		13,158,000	2,554,000
Average annual operating profit earned period, minimum (years)		1 year	1 year
Average annual operating profit earned period, maximum (years)		3 years	3 years
Aggregate purchase price of acquisitions		33,000
Total goodwill	10,687,000	503,107,000	10,687,000
Goodwill assigned	10,687,000	503,107,000	10,687,000
Goodwill currently deductible for income tax purposes	9,308,000	148,592,000	9,308,000
Goodwill currently non-deductible for income tax purposes	(454,000)	341,357,000	(454,000)
Goodwill related to the recorded earn-out payables	1,833,000	13,158,000	1,833,000
Total revenues related to acquisitions	627,000	29,796,000	627,000
Income before income taxes related to acquisitions	142,000	1,294,000	142,000
Recorded earn-out payable		13,158,000	1,833,000
Maximum future contingency payments related to acquisitions		153,019,000
Percentage recognition by acquirer of fair value of acquired assets		100.00%
Future earnings of acquired entities, term basis of potential earn-out obligations, minimum (years)		1 year
Future earnings of acquired entities, term basis of potential earn-out obligations, maximum (years)		3 years
Estimated acquisition earn-out payables	48,918,000	52,696,000	48,918,000	48,806,000	43,058,000	49,469,000	52,987,000
Scenario, Adjustment [Member]
Business Acquisition [Line Items]
Aggregate purchase price of acquisitions	1,115,000		1,115,000
Cash payment for acquisition			18,000
Other payables for acquisition	454,000		454,000
Assumption of liabilities			42,000
Recorded earn-out payable			721,000
Accounts Payable [Member]
Business Acquisition [Line Items]
Estimated acquisition earn-out payables		20,278,000
Purchased customer accounts [Member]
Business Acquisition [Line Items]
Weighted average life (years)		15 years	15 years
Non-compete agreements [Member]
Business Acquisition [Line Items]
Weighted average life (years)		3 years 3 months 18 days	5 years
Retail [Member]
Business Acquisition [Line Items]
Goodwill assigned	11,984,000	78,395,000	11,984,000
National Programs [Member]
Business Acquisition [Line Items]
Goodwill assigned	(454,000)	417,539,000	(454,000)
Services [Member]
Business Acquisition [Line Items]
Goodwill assigned		(239,000)
Wholesale Brokerage [Member]
Business Acquisition [Line Items]
Goodwill assigned	(843,000)	7,412,000	(843,000)
Asset Acquisitions [Member]
Business Acquisition [Line Items]
Number of acquisitions		5	2
Stock Acquisitions [Member]
Business Acquisition [Line Items]
Number of acquisitions		1
Other Non-Current Liability [Member]
Business Acquisition [Line Items]
Estimated acquisition earn-out payables		$ 32,418,000

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Business Combinations - Acquisitions Accounted for Business Combinations (Detail) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	$ 720,102,000	$ 14,366,000
Other Payable	125,000	85,000
Net Assets Acquired	733,385,000	15,848,000
The Wright Insurance Group, LLC. [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired	610,158,000
Pacific Resources Benefits Advisors, LLC [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired	98,819,000
Axia Strategies, Inc. [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired	11,694,000
Other Acquisitions [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired	12,714,000	925,000
Arrowhead General Insurance Agency Superholding Corporation [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired		(454,000)
Insurcorp & GGM Investments LLC [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired		(834,000)
Richard W. Endlar Insurance Agency, Inc. [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired		220,000
Texas Security General Insurance Agency, Inc. [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired		(107,000)
The Rollins Agency, Inc. [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Net Assets Acquired		16,098,000
2014 Acquisitions [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	720,102,000
Other Payable	125,000
Recorded Earn-Out Payable	13,158,000
Net Assets Acquired	733,385,000
Maximum Potential Earn-Out Payable	46,228,000
2014 Acquisitions [Member] | The Wright Insurance Group, LLC. [Member] | National Programs Divisions [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition	May 01, 2014
Cash Paid	610,158,000
Net Assets Acquired	610,158,000
2014 Acquisitions [Member] | Pacific Resources Benefits Advisors, LLC [Member] | Retail [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition	May 01, 2014
Cash Paid	90,000,000
Recorded Earn-Out Payable	8,819,000
Net Assets Acquired	98,819,000
Maximum Potential Earn-Out Payable	35,000,000
2014 Acquisitions [Member] | Axia Strategies, Inc. [Member] | Wholesale Brokerage [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition	May 01, 2014
Cash Paid	9,870,000
Recorded Earn-Out Payable	1,824,000
Net Assets Acquired	11,694,000
Maximum Potential Earn-Out Payable	5,200,000
2014 Acquisitions [Member] | Other Acquisitions [Member] | Various [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid	10,074,000
Other Payable	125,000
Recorded Earn-Out Payable	2,515,000
Net Assets Acquired	12,714,000
Maximum Potential Earn-Out Payable	6,028,000
2013 Acquisitions [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid		14,384,000
Other Payable		(369,000)
Recorded Earn-Out Payable		1,833,000
Net Assets Acquired		15,848,000
Maximum Potential Earn-Out Payable		4,748,000
2013 Acquisitions [Member] | Other Acquisitions [Member] | Various [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Cash Paid		592,000
Other Payable		35,000
Recorded Earn-Out Payable		298,000
Net Assets Acquired		925,000
Maximum Potential Earn-Out Payable		448,000
2013 Acquisitions [Member] | Arrowhead General Insurance Agency Superholding Corporation [Member] | National Programs & Services [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition		Jan. 09, 2012
Other Payable		(454,000)
Net Assets Acquired		(454,000)
2013 Acquisitions [Member] | Insurcorp & GGM Investments LLC [Member] | Retail [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition		May 01, 2012
Recorded Earn-Out Payable		(834,000)
Net Assets Acquired		(834,000)
2013 Acquisitions [Member] | Richard W. Endlar Insurance Agency, Inc. [Member] | Retail [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition		May 01, 2012
Recorded Earn-Out Payable		220,000
Net Assets Acquired		220,000
2013 Acquisitions [Member] | Texas Security General Insurance Agency, Inc. [Member] | Wholesale Brokerage [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition		Sep. 01, 2012
Recorded Earn-Out Payable		(107,000)
Net Assets Acquired		(107,000)
2013 Acquisitions [Member] | The Rollins Agency, Inc. [Member] | Retail [Member]
Business Combination, Separately Recognized Transactions [Line Items]
Effective Date of Acquisition		Jun. 01, 2013
Cash Paid		13,792,000
Other Payable		50,000
Recorded Earn-Out Payable		2,256,000
Net Assets Acquired		16,098,000
Maximum Potential Earn-Out Payable		$ 4,300,000

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Net Income Per Share

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Net Income Per Share

NOTE 3· Net Income Per Share

Effective in 2009, the Company adopted new Financial Accounting Standards Board (“FASB”) authoritative guidance that states that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents are participating securities and, therefore, are included in computing earnings per share (“EPS”) pursuant to the two-class method. The two-class method determines EPS for each class of common stock and participating securities according to dividends or dividend equivalents and their respective participation rights in undistributed earnings. Performance stock shares granted to employees under the Company’s Performance Stock Plan and under the Company’s Stock Incentive Plan are considered participating securities as they receive non-forfeitable dividend equivalents at the same rate as common stock.

Basic EPS is computed based on the weighted average number of common shares (including participating securities) issued and outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares issued and outstanding plus equivalent shares, assuming the exercise of stock options. The dilutive effect of stock options is computed by application of the treasury-stock method. The following is a reconciliation between basic and diluted weighted average shares outstanding:

	For the three months ended June 30,						For the six months ended June 30,
(in thousands, except per share data)	2014			2013			2014			2013
Net income	$	61,755		$	52,007		$	114,170		$	112,138
Net income attributable to unvested awarded performance stock		(1,531	)		(1,157	)		(2,915	)		(2,467	)
Net income attributable to common shares	$	60,224		$	50,850		$	111,255		$	109,671
Weighted average number of common shares outstanding – basic		144,840			144,041			145,133			143,984
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic		(3,590	)		(3,205	)		(3,705	)		(3,168	)
Weighted average number of common shares outstanding for basic earnings per common share		141,250			140,836			141,428			140,816
Dilutive effect of stock options		1,782			2,185			1,741			2,122
Weighted average number of shares outstanding – diluted		143,032			143,021			143,169			142,938
Net income per share:
Basic	$	0.43		$	0.36		$	0.79		$	0.78
Diluted	$	0.42		$	0.36		$	0.78		$	0.77

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Business Combinations - Estimated Fair Values of Aggregate Assets and Liabilities Acquired (Detail) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Cash	$ 25,365,000
Other current assets	19,587,000	1,480,000
Fixed assets	9,241,000	31,000
Reinsurance recoverable	25,238,000
Prepaid reinsurance premiums	289,013,000
Goodwill	503,107,000	10,687,000
Purchased customer accounts	247,512,000	4,490,000
Non-compete agreements	1,300,000	62,000
Other assets	20,045,000
Total assets acquired	1,140,408,000	16,750,000
Other current liabilities	(15,602,000)	(902,000)
Losses and loss adjustment expense	(25,238,000)
Unearned premiums	(289,013,000)
Deferred income tax, net	(44,476,000)
Other liabilities	(32,694,000)
Total liabilities assumed	(407,023,000)
Net assets acquired	733,385,000	15,848,000
Pacific Resources Benefits Advisors, LLC [Member]
Other current assets	2,383,000
Fixed assets	53,000
Goodwill	70,255,000
Purchased customer accounts	26,460,000
Non-compete agreements	21,000
Total assets acquired	99,172,000
Other current liabilities	(353,000)
Total liabilities assumed	(353,000)
Net assets acquired	98,819,000
Axia Strategies, Inc. [Member]
Fixed assets	24,000
Goodwill	7,377,000
Purchased customer accounts	4,252,000
Non-compete agreements	41,000
Total assets acquired	11,694,000
Net assets acquired	11,694,000
The Wright Insurance Group, LLC. [Member]
Cash	25,365,000
Other current assets	16,768,000
Fixed assets	7,445,000
Reinsurance recoverable	25,238,000
Prepaid reinsurance premiums	289,013,000
Goodwill	417,539,000
Purchased customer accounts	213,958,000
Non-compete agreements	1,119,000
Other assets	20,045,000
Total assets acquired	1,016,490,000
Other current liabilities	(14,911,000)
Losses and loss adjustment expense	(25,238,000)
Unearned premiums	(289,013,000)
Deferred income tax, net	(44,476,000)
Other liabilities	(32,694,000)
Total liabilities assumed	(406,332,000)
Net assets acquired	610,158,000
Other Acquisitions [Member]
Other current assets	436,000	1,455,000
Fixed assets	1,719,000	1,000
Goodwill	7,936,000	(685,000)
Purchased customer accounts	2,842,000	170,000
Non-compete agreements	119,000	31,000
Total assets acquired	13,052,000	972,000
Other current liabilities	(338,000)	(47,000)
Total liabilities assumed	(338,000)
Net assets acquired	12,714,000	925,000
The Rollins Agency, Inc. [Member]
Fixed assets		30,000
Goodwill		13,019,000
Purchased customer accounts		3,876,000
Non-compete agreements		31,000
Total assets acquired		16,956,000
Other current liabilities		(858,000)
Net assets acquired		16,098,000
Arrowhead General Insurance Agency Superholding Corporation [Member]
Goodwill		(454,000)
Total assets acquired		(454,000)
Net assets acquired		(454,000)
Insurcorp & GGM Investments LLC [Member]
Goodwill		(566,000)
Purchased customer accounts		(268,000)
Total assets acquired		(834,000)
Net assets acquired		(834,000)
Richard W. Endlar Insurance Agency, Inc. [Member]
Goodwill		216,000
Purchased customer accounts		4,000
Total assets acquired		220,000
Net assets acquired		220,000
Texas Security General Insurance Agency, Inc. [Member]
Other current assets		25,000
Goodwill		(843,000)
Purchased customer accounts		708,000
Total assets acquired		(110,000)
Other current liabilities		3,000
Net assets acquired		$ (107,000)

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Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities - Significant Non-Cash Investing and Financing Activities (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Supplemental Cash Flow Elements [Abstract]
Interest	$ 11,070	$ 7,660
Income taxes	58,079	52,077
Other payable issued for purchased customer accounts	125	257
Estimated acquisition earn-out payables and related charges	13,158	1,833
Notes received on the sale of fixed assets and customer accounts	$ 131	$ 614

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
REVENUES
Commissions and fees	$ 394,690	$ 324,150	$ 756,697	$ 657,943
Investment income	194	239	297	425
Other income, net	2,880	1,403	4,364	2,436
Total revenues	397,764	325,792	761,358	660,804
EXPENSES
Employee compensation and benefits	196,397	163,514	380,507	323,012
Non-cash stock-based compensation	5,994	3,623	13,509	7,473
Other operating expenses	60,546	47,397	113,007	93,736
Amortization	20,623	16,121	38,499	32,282
Depreciation	5,242	4,263	9,882	8,430
Interest	7,004	3,997	11,076	7,981
Change in estimated acquisition earn-out payables	177	656	6,260	2,178
Total expenses	295,983	239,571	572,740	475,092
Income before income taxes	101,781	86,221	188,618	185,712
Income taxes	40,026	34,214	74,448	73,574
Net income	$ 61,755	$ 52,007	$ 114,170	$ 112,138
Net income per share:
Basic	$ 0.43	$ 0.36	$ 0.79	$ 0.78
Diluted	$ 0.42	$ 0.36	$ 0.78	$ 0.77
Dividends declared per share	$ 0.1000	$ 0.0900	$ 0.2000	$ 0.1800

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Nature of Operations

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Nature of Operations

Brown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and services organization that markets and sells to its customers insurance products and services, primarily in the property and casualty area. Brown & Brown’s business is divided into four reportable segments: the Retail Division, which provides a broad range of insurance products and services to commercial, public entity, professional and individual customers; the National Programs Division, acting as a managing general agent (“MGA”), provides professional liability and related package products for certain professionals, flood coverage, 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 markets; the Wholesale Brokerage Division, which markets and sells excess and surplus commercial insurance and reinsurance, primarily through independent agents and brokers; and the Services Division, 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 catastrophe claims adjusting services. In addition, as the result of our acquisition of the stock of The Wright Insurance Group, LLC (“Wright”), in May 2014, we own a flood insurance carrier that is a Wright subsidiary. This carrier’s business consists of policies written pursuant to the National Flood Insurance Program (“NFIP”), the program administered by the Federal Emergency Management Agency (“FEMA”) and several excess flood insurance policies which are fully reinsured.

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Goodwill - Changes in Carrying Value of Goodwill by Operating Segment (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014
Goodwill [Line Items]
Beginning balance	$ 2,006,173
Goodwill of acquired businesses	503,107
Ending balance	2,509,280
Retail [Member]
Goodwill [Line Items]
Beginning balance	1,131,257
Goodwill of acquired businesses	78,395
Ending balance	1,209,652
National Programs [Member]
Goodwill [Line Items]
Beginning balance	467,144
Goodwill of acquired businesses	417,539
Ending balance	884,683
Wholesale Brokerage [Member]
Goodwill [Line Items]
Beginning balance	287,242
Goodwill of acquired businesses	7,412
Ending balance	294,654
Services [Member]
Goodwill [Line Items]
Beginning balance	120,530
Goodwill of acquired businesses	(239)
Ending balance	$ 120,291

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Changes in Carrying Value of Goodwill by Operating Segment

The changes in the carrying value of goodwill by reportable segment for the six months ended June 30, 2014 are as follows:

(in thousands)	Retail		National Programs		Wholesale Brokerage		Services			Total
Balance as of January 1, 2014	$	1,131,257	$	467,144	$	287,242	$	120,530		$	2,006,173
Goodwill of acquired businesses		78,395		417,539		7,412		(239	)		503,107
Balance as of June 30, 2014	$	1,209,652	$	884,683	$	294,654	$	120,291		$	2,509,280

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Amortizable Intangible Assets - Amortizable Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,396,708	$ 1,148,834
Accumulated Amortization	(567,747)	(529,946)
Net Carrying Value	828,961	618,888
Purchased customer accounts [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1,367,293	1,120,719
Accumulated Amortization	(542,432)	(505,137)
Net Carrying Value	824,861	615,582
Weighted Average Life (Years)	15 years	14 years 10 months 24 days
Non-compete agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	29,415	28,115
Accumulated Amortization	(25,315)	(24,809)
Net Carrying Value	$ 4,100	$ 3,306
Weighted Average Life (Years)	6 years 9 months 18 days	7 years

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Long-Term Debt Instrument

Long-term debt at June 30, 2014 and December 31, 2013, consisted of the following:

(in thousands)	2014			2013
Unsecured senior notes	$	799,734		$	480,000
Revolving credit facilities		375,000			—
Total debt		1,174,734			480,000
Less current portion		(6,609	)		(100,000	)
Long-term debt	$	1,168,125		$	380,000

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Basis of Financial Reporting

6 Months Ended

Jun. 30, 2014

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Basis of Financial Reporting

NOTE 2· Basis of Financial Reporting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current Assets:
Cash and cash equivalents	$ 309,107	$ 202,952
Restricted cash and investments	300,354	250,009
Short-term investments	12,300	10,624
Premiums, commissions and fees receivable	433,113	395,915
Reinsurance recoverable	28,109
Prepaid reinsurance premiums	309,020
Deferred income taxes	16,312	29,276
Other current assets	50,920	39,260
Total current assets	1,459,235	928,036
Fixed assets, net	86,370	74,733
Goodwill	2,509,280	2,006,173
Amortizable intangible assets, net	828,961	618,888
Investments	19,194	16
Other assets	27,432	21,662
Total assets	4,930,472	3,649,508
Current Liabilities:
Premiums payable to insurance companies	634,797	534,360
Losses and loss adjustment expense	28,109
Unearned premiums	309,020
Premium deposits and credits due customers	98,532	80,959
Accounts payable	55,856	34,158
Accrued expenses and other liabilities	137,695	157,400
Current portion of long-term debt	6,609	100,000
Total current liabilities	1,270,618	906,877
Long-term debt	1,168,125	380,000
Deferred income taxes, net	337,520	291,704
Other liabilities	72,695	63,786
Shareholders' Equity:
Common stock, par value $0.10 per share; authorized 280,000 shares; issued 145,389 and outstanding 144,544 at 2014 and issued and outstanding 145,419 at 2013	14,539	14,542
Additional paid-in capital	386,233	371,960
Treasury stock, at cost 845 and 0 shares at 2014 and 2013, respectively	(25,025)
Retained earnings	1,705,767	1,620,639
Total shareholders' equity	2,081,514	2,007,141
Total liabilities and shareholders' equity	$ 4,930,472	$ 3,649,508

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Reinsurance

6 Months Ended

Jun. 30, 2014

Insurance [Abstract]

Reinsurance

NOTE 12· Reinsurance

The Company protects itself from claims related losses by reinsuring all claims related risk exposure. The only line of insurance the Company writes is flood insurance associated with the Wright acquisition, with all exposure reinsured with the FEMA for basic admitted policies conforming to the NFIP. For excess flood insurance policies, all exposure is reinsured with a reinsurance carrier. Reinsurance does not legally discharge the ceding insurer from the primary liability for the full amount due under the reinsured policies. Reinsurance premiums, commissions, expense reimbursement and related reserves related to ceded business are accounted for on a basis consistent with the accounting for the original policies issued and the terms of reinsurance contracts. Premiums earned and losses and loss adjustment expenses incurred are reported net of reinsurance amounts. Other underwriting expenses are shown net of earned ceding commission income. The liabilities for unpaid losses and loss adjustment expenses and unearned premiums are reported gross of ceded reinsurance recoverable.

Balances due from reinsurers on unpaid losses and loss adjustment expenses, including an estimate of such recoverables related to reserves for incurred but not reported (“IBNR”) losses, are reported as assets and are included in reinsurance recoverable even though amounts due on unpaid loss and loss adjustment expense are not recoverable from the reinsurer until such losses are paid. The Company does not believe it is exposed to any material credit risk through its reinsurance as the reinsurer is the FEMA for basic admitted flood policies and a national reinsurance carrier for excess flood policies, which is rated A+ from AM Best. Historically, no amounts due from reinsurance have been written off as uncollectible.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Trading Symbol	BRO
Entity Registrant Name	BROWN & BROWN INC
Entity Central Index Key	0000079282
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	144,544,117

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Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events

NOTE 13· Subsequent Events

On July 15, 2014, the Series B Senior Notes totaling $100.0 million matured and the principal plus remaining interest were paid off. In a planned event to retire the notes on the maturity date, the Company borrowed $100.0 million from the revolving portion of the Credit Facility Revolving Loan. The Company has an outstanding balance of $475.0 million of the $800.0 million revolving portion of the Credit Facility Revolving Loan.

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.1	$ 0.1
Common stock, shares authorized	280,000	280,000
Common stock, shares issued	145,389	145,419
Common stock, shares outstanding	144,544	145,419
Treasury stock shares	840	0

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Long-Term Debt

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Long-Term Debt

NOTE 7· Long-Term Debt

Long-term debt at June 30, 2014 and December 31, 2013, consisted of the following:

(in thousands)	2014			2013
Unsecured senior notes	$	799,734		$	480,000
Revolving credit facilities		375,000			—
Total debt		1,174,734			480,000
Less current portion		(6,609	)		(100,000	)
Long-term debt	$	1,168,125		$	380,000

In July 2004, the Company completed a private placement of $200.0 million of unsecured senior notes (the “Notes”). The $200.0 million was divided into two series: (1) Series A, which closed on September 15, 2004, for $100.0 million due in 2011 and bore interest at 5.57% per year; and (2) Series B, which closed on July 15, 2004, for $100.0 million due in 2014 and bearing interest at 6.08% per year. The Company has used the proceeds from the Notes for general corporate purposes, including acquisitions and repayment of existing debt. On September 15, 2011, the $100.0 million of Series A Notes were redeemed on their normal maturity date through use of funds from the Master Agreement (defined below). As of June 30, 2014 and December 31, 2013, there was an outstanding balance on the Series B Notes of $100.0 million. It is management’s intention to pay off the Series B Notes at the time of maturity with proceeds from the revolving portion of the JPM Credit Facility (as described in Note 13, Subsequent Events).

On December 22, 2006, the Company entered into a Master Shelf and Note Purchase Agreement (the “Master Agreement”) with a national insurance company (the “Purchaser”). On September 30, 2009, the Company and the Purchaser amended the Master Agreement to extend the term of the agreement until August 20, 2012. The Purchaser also purchased Notes issued by the Company in 2004. The Master Agreement provides for a $200.0 million private uncommitted “shelf” facility for the issuance of senior unsecured notes over a three-year period, with interest rates that may be fixed or floating and with such maturity dates, not to exceed ten years, as the parties may determine. The Master Agreement includes various covenants, limitations and events of default similar to the Notes issued in 2004. The initial issuance of notes under the Master Agreement occurred on December 22, 2006, through the issuance of $25.0 million in Series C Senior Notes due December 22, 2016, with a fixed interest rate of 5.66% per year. On February 1, 2008, $25.0 million in Series D Senior Notes due January 15, 2015, with a fixed interest rate of 5.37% per year, were issued. It is managements intention to pay off the Series D Senior Notes at the time of maturity with proceeds from the revolving portion of the Credit Facility. On September 15, 2011, and pursuant to a Confirmation of Acceptance (the “Confirmation”), dated January 21, 2011, in connection with the Master Agreement, $100.0 million in Series E Senior Notes were issued and are due September 15, 2018, with a fixed interest rate of 4.50% per year. The Series E Senior Notes were issued for the sole purpose of retiring the Series A Senior Notes. As of June 30, 2014, and December 31, 2013, there was an outstanding debt balance issued under the provisions of the Master Agreement of $150.0 million.

On October 12, 2012, the Company entered into a Master Note Facility Agreement (the “New Master Agreement”) with another national insurance company (the “New Purchaser”). The New Purchaser also purchased Senior Notes issued by the Company in 2004. The New Master Agreement provides for a $125.0 million private uncommitted “shelf” facility for the issuance of unsecured senior notes over a three-year period, with interest rates that may be fixed or floating and with such maturity dates, not to exceed ten years, as the parties may determine. The New Master Agreement includes various covenants, limitations and events of default similar to the Master Agreement. At June 30, 2014 and December 31, 2013, there were no borrowings against this facility.

On January 9, 2012, the Company entered into: (1) an amended and restated revolving and term loan credit agreement (the “SunTrust Agreement”) with SunTrust Bank (“SunTrust”) that provides for (a) a $100.0 million term loan (the “SunTrust Term Loan”) and (b) a $50.0 million revolving line of credit (the “SunTrust Revolver”) and (2) a $50.0 million promissory note (the “JPM Note”) in favor of JPMorgan Chase Bank, N.A. (“JPMorgan”), pursuant to a letter agreement executed by JP Morgan (together with the JPM Note, the “JPM Agreement”) that provided for a $50.0 million uncommitted line of credit bridge facility (the “JPM Bridge Facility”). The SunTrust Term Loan, the SunTrust Revolver and the JPM Bridge Facility were each funded on January 9, 2012, and provided the financing for the Arrowhead acquisition. The SunTrust Agreement amended and restated the Prior Loan Agreement. The SunTrust Revolver and JPM Bridge Facility were paid off by the JPM Term Loan (defined below).

The maturity date for the SunTrust Term Loan and the SunTrust Revolver was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. Both the SunTrust Term Loan and the SunTrust Revolver were able to be increased by up to $50.0 million (bringing the total amount available to $150.0 million for the SunTrust Term Loan and $100.0 million for the SunTrust Revolver) prior to their termination. The calculation of interest and fees for the SunTrust Agreement was generally based on the Company’s funded debt-to-EBITDA ratio. Interest was charged at a rate equal to 1.00% to 1.40% above LIBOR or 1.00% below the Base Rate, each as more fully described in the SunTrust Agreement. Fees included an up-front fee, an availability fee of 0.175% to 0.25%, and a letter of credit margin fee of 1.00% to 1.40%. The obligations under the SunTrust Term Loan and SunTrust Revolver were unsecured and the SunTrust Agreement included various covenants, limitations and events of default that are customary for similar facilities for similar borrowers and that are substantially similar to those contained in the Prior Loan Agreement. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility (as defined below), the SunTrust Term Loan was paid in full using proceeds from the Credit Facility (as defined below) and the SunTrust Revolver was also terminated at that time.

The maturity date for the JPM Bridge Facility was February 3, 2012, at which time all outstanding principal and unpaid interest would have been due. On January 26, 2012, the Company entered into a term loan agreement (the “JPM Agreement”) with JPMorgan that provided for a $100.0 million term loan (the “JPM Term Loan”). The JPM Term Loan was fully funded on January 26, 2012, and provided the financing to fully repay (1) the JPM Bridge Facility and (2) the SunTrust Revolver. As a result of the January 26, 2012 financing and repayments, the JPM Bridge Facility was terminated and the SunTrust Revolver’s amount outstanding was reduced to zero.

The maturity date for the JPM Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. Interest was charged at a rate equal to the Alternative Base Rate or 1.00% above the Adjusted LIBOR Rate, each as more fully described in the JPM Agreement. Fees included an up-front fee. The obligations under the JPM Term Loan were unsecured and the JPM Agreement includes various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility (as defined below), the JPM Term Loan was paid in full and terminated using proceeds from the Credit Facility (as defined below).

On July 1, 2013, in conjunction with the acquisition of Beecher Carlson, the Company entered into: (1) a revolving loan agreement (the “Wells Fargo Agreement”) with Wells Fargo Bank, N.A. that provides for a $50.0 million revolving line of credit (the “Wells Fargo Revolver”) and (2) a term loan agreement (the “Bank of America Agreement”) with Bank of America, N.A. (“Bank of America”) that provided for a $30.0 million term loan (the “Bank of America Term Loan”).

The maturity date for the Wells Fargo Revolver is December 31, 2016, at which time all outstanding principal and unpaid interest will be due. The Wells Fargo Revolver may be increased by up to $50.0 million (bringing the total amount available to $100.0 million). The calculation of interest and fees for the Wells Fargo Agreement is generally based on the Company’s funded debt-to-EBITDA ratio. Interest is charged at a rate equal to 1.00% to 1.40% above LIBOR or 1.00% below the Base Rate, each as more fully described in the Wells Fargo Agreement. Fees include an up-front fee, an availability fee of 0.175% to 0.25%, and a letter of credit margin fee of 1.00% to 1.40%. The obligations under the Wells Fargo Revolver are unsecured and the Wells Fargo Agreement includes various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. The Wells Fargo Revolver was drawn down in the amount of $30.0 million on July 1, 2013. As of April 16, 2014, in connection with the agreement of the Credit Facility (as defined below), an amendment to the agreement was established to reduce the total revolving loan commitment from $50.0 million to $25.0 million. There were no borrowings against the Wells Fargo Revolver as of June 30, 2014 and December 31, 2013.

The maturity date for the Bank of America Term Loan was December 31, 2016, at which time all outstanding principal and unpaid interest would have been due. The calculation of interest for the Bank of America Agreement was generally based on the Company’s fixed charge coverage ratio. Interest was charged at a rate equal to the Alternative Base Rate or 1.00% to 1.40% above the Adjusted LIBOR Rate, each as more fully described in the Bank of America Agreement. Fees included an up-front fee. The obligations under the Bank of America Term Loan were unsecured and the Bank of America Agreement included various covenants, limitations and events of default that are customary for similar facilities for similar borrowers. The Bank of America Term Loan was funded in the amount of $30.0 million on July 1, 2013. On May 20, 2014, in connection with closing the Wright acquisition and funding of the Credit Facility, the term loan was paid in full using proceeds from the Credit Facility (as defined below).

The 30-day Adjusted LIBOR Rate as of June 30, 2014 was 0.19%.

On April 17, 2014, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as co-syndication agents and co-documentation agents (the “Credit Agreement”). The Credit Agreement in the amount of $1,350.0 million provides for an unsecured revolving credit facility in the initial amount of $800.0 million and unsecured term loans in the initial amount of $550.0 million, either or both of which may, subject to lenders’ discretion, potentially be increased by up to $500.0 million. The Credit Facility was funded on May 20, 2014 in conjunction with the closing of the Wright acquisition, with the $550.0 million term loan being funded as well as a drawdown of $375.0 million on the revolving loan facility. Use of these proceeds were to retire existing term loan debt including the JPM Term Loan Agreement, SunTrust Term Loan Agreement and Bank of America Term Loan Agreement in total of $230.0 million (as described above) and to facilitate the closing of the Wright acquisition as well as other acquisitions. The Credit Facility terminates on May 20, 2019, but either or both of the revolving credit facility and the term loans may be extended for two additional one-year periods at the Company’s request and at the discretion of the respective lenders. Interest and facility fees in respect to the Credit Facility are based on the better of the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt rating. Based on the Company’s net debt leverage ratio, the rates of interest for the first two quarters charged on the term loan and revolving loan will be 1.375% and 1.175% respectively and above the adjusted LIBOR rate for outstanding amounts drawn. There are fees included in the facility which include a facility fee based on the revolving credit commitments of the lenders (whether used or unused) at a rate of 0.20% and letter of credit fees based on the amounts of outstanding secured or unsecured letters of credit. The Credit Facility includes various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers. As of June 30, 2014, there was an outstanding debt balance issued under the provisions of the Credit Facility in total of $925.0 million.

The Notes, the Master Agreement and the Credit Facility Agreement all require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of June 30, 2014 and December 31, 2013.

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Amortizable Intangible Assets

6 Months Ended

Jun. 30, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Amortizable Intangible Assets

NOTE 6· Amortizable Intangible Assets

Amortizable intangible assets at June 30, 2014 and December 31, 2013, consisted of the following:

	June 30, 2014									December 31, 2013
(in thousands)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Life (Years)(1)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Life (Years)(1)
Purchased customer accounts	$	1,367,293	$	(542,432	)	$	824,861		15.0	$	1,120,719	$	(505,137	)	$	615,582		14.9
Non-compete agreements		29,415		(25,315	)		4,100		6.8		28,115		(24,809	)		3,306		7.0
Total	$	1,396,708	$	(567,747	)	$	828,961			$	1,148,834	$	(529,946	)	$	618,888

(1) Weighted average life calculated as of the date of acquisition.

Amortization expense for amortizable intangible assets for the years ending December 31, 2014, 2015, 2016, 2017 and 2018 is estimated to be $82,503,000, $86,861,000, $82,331,000, $79,377,000, and $73,977,000, respectively.

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Amortizable Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Amortizable Intangible Assets

Amortizable intangible assets at June 30, 2014 and December 31, 2013, consisted of the following:

	June 30, 2014									December 31, 2013
(in thousands)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Life (Years)(1)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Weighted Average Life (Years)(1)
Purchased customer accounts	$	1,367,293	$	(542,432	)	$	824,861		15.0	$	1,120,719	$	(505,137	)	$	615,582		14.9
Non-compete agreements		29,415		(25,315	)		4,100		6.8		28,115		(24,809	)		3,306		7.0
Total	$	1,396,708	$	(567,747	)	$	828,961			$	1,148,834	$	(529,946	)	$	618,888

(1) Weighted average life calculated as of the date of acquisition.

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Nature of Operations (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Nature of Operations

Brown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and services organization that markets and sells to its customers insurance products and services, primarily in the property and casualty area. Brown & Brown’s business is divided into four reportable segments: the Retail Division, which provides a broad range of insurance products and services to commercial, public entity, professional and individual customers; the National Programs Division, acting as a managing general agent (“MGA”), provides professional liability and related package products for certain professionals, flood coverage, 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 markets; the Wholesale Brokerage Division, which markets and sells excess and surplus commercial insurance and reinsurance, primarily through independent agents and brokers; and the Services Division, 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 catastrophe claims adjusting services. In addition, as the result of our acquisition of the stock of The Wright Insurance Group, LLC (“Wright”), in May 2014, we own a flood insurance carrier that is a Wright subsidiary. This carrier’s business consists of policies written pursuant to the National Flood Insurance Program (“NFIP”), the program administered by the Federal Emergency Management Agency (“FEMA”) and several excess flood insurance policies which are fully reinsured.

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Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

NOTE 10· Segment Information

Brown & Brown’s business is divided into four reportable segments: the Retail Division, which provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers; the National Programs Division, which provides professional liability and related package products for certain professionals delivered through nationwide networks of independent agents, and markets targeted products and services designed for specific industries, trade groups, public and quasi-public entities, and market niches; the Wholesale Brokerage Division, which markets and sells excess and surplus commercial and personal lines insurance, and reinsurance, primarily through independent agents and brokers; and the Services Division, 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 catastrophe claims adjusting services.

Brown & Brown conducts all of its operations within the United States of America, except for one wholesale brokerage operation based in London, England, and retail operations in Bermuda and the Cayman Islands. These three operations earned $3.8 million and $2.8 million of total revenues for the three months ended June 30, 2014 and 2013, respectively. These operations earned $7.0 million and $5.9 million of total revenues for the six months ended June 30, 2014 and 2013, respectively. Additionally, these operations earned $12.2 million of total revenues for the year ended December 31, 2013. Long-lived assets held outside of the United States during the six months ended June 30, 2014 and 2013 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, 2013. Brown & Brown evaluates the performance of its segments based upon revenues and income before income taxes. Inter-segment revenues are eliminated.

Summarized financial information concerning Brown & Brown’s reportable segments is shown in the following table. The “Other” column includes any income and expenses not allocated to reportable segments and corporate-related items, including the inter-company interest expense charge to the reporting segment.

	For the three months ended June 30, 2014
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	210,976	$	90,875	$	60,059	$	35,757	$	97		$	397,764
Investment income	$	16	$	66	$	7	$	—	$	105		$	194
Amortization	$	10,457	$	6,214	$	2,932	$	1,010	$	10		$	20,623
Depreciation	$	1,614	$	1,842	$	670	$	628	$	488		$	5,242
Interest expense	$	11,224	$	12,447	$	523	$	1,971	$	(19,161	)	$	7,004
Income before income taxes	$	49,098	$	9,685	$	17,376	$	5,008	$	20,614		$	101,781
Total assets	$	3,166,802	$	2,406,240	$	990,355	$	278,137	$	(1,911,062	)	$	4,930,472
Capital expenditures	$	1,567	$	5,159	$	517	$	244	$	363		$	7,850
	For the three months ended June 30, 2013
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	171,819	$	68,354	$	54,823	$	30,403	$	393		$	325,792
Investment income	$	23	$	5	$	4	$	—	$	207		$	239
Amortization	$	8,789	$	3,511	$	2,887	$	925	$	9		$	16,121
Depreciation	$	1,371	$	1,326	$	716	$	401	$	449		$	4,263
Interest expense	$	5,649	$	5,590	$	723	$	1,883	$	(9,848	)	$	3,997
Income before income taxes	$	44,482	$	11,226	$	15,760	$	2,589	$	12,164		$	86,221
Total assets	$	2,501,084	$	1,224,175	$	925,901	$	246,235	$	(1,571,075	)	$	3,326,320
Capital expenditures	$	1,488	$	1,420	$	561	$	379	$	328		$	4,176
	For the six months ended June 30, 2014
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	413,667	$	165,045	$	115,079	$	67,399	$	168		$	761,358
Investment income	$	32	$	71	$	11	$	2	$	181		$	297
Amortization	$	20,608	$	9,989	$	5,815	$	2,067	$	20		$	38,499
Depreciation	$	3,198	$	3,309	$	1,320	$	1,091	$	964		$	9,882
Interest expense	$	21,937	$	17,888	$	942	$	3,941	$	(33,632	)	$	11,076
Income before income taxes	$	90,343	$	25,808	$	30,114	$	7,823	$	34,530		$	188,618
Total assets	$	3,166,802	$	2,406,240	$	990,355	$	278,137	$	(1,911,062	)	$	4,930,472
Capital expenditures	$	3,679	$	6,857	$	999	$	535	$	507		$	12,577
	For the six months ended June 30, 2013
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	346,387	$	137,294	$	103,520	$	73,050	$	553		$	660,804
Investment income	$	46	$	10	$	9	$	1	$	359		$	425
Amortization	$	17,600	$	7,030	$	5,784	$	1,849	$	19		$	32,282
Depreciation	$	2,742	$	2,574	$	1,423	$	798	$	893		$	8,430
Interest expense	$	11,849	$	11,284	$	1,478	$	3,804	$	(20,434	)	$	7,981
Income before income taxes	$	90,693	$	25,238	$	26,122	$	16,542	$	27,117		$	185,712
Total assets	$	2,501,084	$	1,224,175	$	925,901	$	246,235	$	(1,571,075	)	$	3,326,320
Capital expenditures	$	2,823	$	2,312	$	1,097	$	498	$	393		$	7,123

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

6 Months Ended

Jun. 30, 2014

Supplemental Cash Flow Elements [Abstract]

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

NOTE 8· Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

	For the six months ended June 30,
(in thousands)	2014		2013
Cash paid during the period for:
Interest	$	11,070	$	7,660
Income taxes	$	58,079	$	52,077

Brown & Brown’s significant non-cash investing and financing activities are summarized as follows:

	For the six months ended June 30,
(in thousands)	2014		2013
Other payable issued for purchased customer accounts	$	125	$	257
Estimated acquisition earn-out payables and related charges	$	13,158	$	1,833
Notes received on the sale of fixed assets and customer accounts	$	131	$	614

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Legal and Regulatory Proceedings

6 Months Ended

Jun. 30, 2014

Commitments And Contingencies Disclosure [Abstract]

Legal and Regulatory Proceedings

NOTE 9· Legal and Regulatory Proceedings

The Company is involved in numerous pending or threatened proceedings by or against Brown & Brown, Inc. or one or more of its subsidiaries that arise in the ordinary course of business. The damages that may be claimed against the Company in these various proceedings are in some cases substantial, including in many instances claims for punitive or extraordinary damages. Some of these claims and lawsuits have been resolved, others are in the process of being resolved and others are still in the investigation or discovery phase. The Company will continue to respond appropriately to these claims and lawsuits and to vigorously protect its interests.

Although the ultimate outcome of such matters cannot be ascertained and liabilities in indeterminate amounts may be imposed on Brown & Brown, Inc. or its subsidiaries, on the basis of present information, availability of insurance and legal advice, it is the opinion of management that the disposition or ultimate determination of such claims will not have a material adverse effect on the Company’s condensed consolidated financial position. However, as (i) one or more of the Company’s insurance companies could take the position that portions of these claims are not covered by the Company’s insurance, (ii) to the extent that payments are made to resolve claims and lawsuits, applicable insurance policy limits are eroded, and (iii) the claims and lawsuits relating to these matters are continuing to develop, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by unfavorable resolutions of these matters.

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Investments

6 Months Ended

Jun. 30, 2014

Investments Debt And Equity Securities [Abstract]

Investments

NOTE 11· Investments

Investments at June 30, 2014 and December 31, 2013 consisted of the following:

	June 30, 2014 Carrying Value				December 31,2013  Carrying Value
(in thousands)	Current		Non- Current		Current		Non- Current
Certificates of deposit, U.S. Treasury securities and obligations of U.S. Government agencies, Corporate debt and other securities	$	12,300	$	19,021	$	10,624	$	16

Certificates of deposit and other securities with maturities of less than one year are classified as short-term investments and are carried at fair value, which approximates cost. Fixed maturity securities are classified as available-for-sale and are carried at fair value. The contractual cash flows of the U.S. Treasury Securities and obligations of U.S. Government agencies investments are either guaranteed by the U.S. Government or an agency of the U.S. Government. The corporate securities are highly rated securities with no indicators of potential impairment.

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Business Combinations - Additions, Payments, and Net Changes, as well as Interest Expense Accretion on Estimated Acquisition Earn-Out Payables (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Business Combinations [Abstract]
Beginning balance	$ 48,806,000	$ 49,469,000	$ 43,058,000	$ 52,987,000
Additions to estimated acquisition earn-out payables	14,527,000	2,554,000	14,807,000	1,833,000
Payments for estimated acquisition earn-out payables	(10,814,000)	(3,761,000)	(11,429,000)	(8,080,000)
Subtotal	52,519,000	48,262,000	46,436,000	46,740,000
Change in fair value on estimated acquisition earn-out payables	(375,000)	159,000	5,228,000	1,156,000
Interest expense accretion	552,000	497,000	1,032,000	1,022,000
Net change in earnings from estimated acquisition earn-out payables	177,000	656,000	6,260,000	2,178,000
Ending balance	$ 52,696,000	$ 48,918,000	$ 52,696,000	$ 48,918,000

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Business Combinations (Tables)

6 Months Ended

Jun. 30, 2014

2014 Acquisitions [Member]

Acquisitions Accounted for Business Combinations

The following table summarizes the aggregate purchase price allocations made as of the date of the acquisitions for the current-year acquisitions and 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
The Wright Insurance Group, LLC.	National Programs	May 1, 2014		610,158		—		—		610,158		—
Pacific Resources Benefits Advisors, LLC	Retail	May 1, 2014	$	90,000	$	—	$	8,819	$	98,819	$	35,000
Axia Strategies, Inc.	Wholesale Brokerage	May 1, 2014		9,870		—		1,824		11,694		5,200
Other	Various	Various		10,074		125		2,515		12,714		6,028
Total			$	720,102	$	125	$	13,158	$	733,385	$	46,228

Estimated Fair Values of Aggregate Assets and Liabilities Acquired

The following table summarizes the adjustments made to the estimated fair values along with the aggregate assets and liabilities acquired as of the date of each acquisition:

(in thousands)	PacRes			Axia		Wright			Other			Total
Cash	$	—		$	—	$	25,365		$	—		$	25,365
Other current assets		2,383			—		16,768			436			19,587
Fixed assets		53			24		7,445			1,719			9,241
Reinsurance recoverable		—			—		25,238			—			25,238
Prepaid reinsurance premiums		—			—		289,013			—			289,013
Goodwill		70,255			7,377		417,539			7,936			503,107
Purchased customer accounts		26,460			4,252		213,958			2,842			247,512
Non-compete agreements		21			41		1,119			119			1,300
Other assets		—			—		20,045			—			20,045
Total assets acquired		99,172			11,694		1,016,490			13,052			1,140,408
Other current liabilities		(353	)		—		(14,911	)		(338	)		(15,602	)
Losses and loss adjustment expense		—			—		(25,238	)		—			(25,238	)
Unearned premiums		—			—		(289,013	)		—			(289,013	)
Deferred income tax, net		—			—		(44,476	)		—			(44,476	)
Other liabilities		—			—		(32,694	)		—			(32,694	)
Total liabilities assumed		(353	)		—		(406,332	)		(338	)		(407,023	)
Net assets acquired	$	98,819			11,694		610,158		$	12,714		$	733,385

Results of Operations

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 June 30,				For the six months ended June 30,
(in thousands, except per share data)	2014		2013		2014		2013
Total revenues	$	410,801	$	365,964	$	812,972	$	737,673
Income before income taxes	$	106,186		99,431	$	206,102		211,003
Net income	$	64,427		59,975	$	124,753		127,408
Net income per share:
Basic	$	0.44	$	0.42	$	0.86	$	0.88
Diluted	$	0.44	$	0.41	$	0.85	$	0.87
Weighted average number of shares outstanding:
Basic		141,250		140,836		141,428		140,816
Diluted		143,032		143,021		143,169		142,938

2013 Acquisitions [Member]

Acquisitions Accounted for Business Combinations

The following table summarizes the aggregate purchase price allocations made as of the date of each acquisition for current year acquisitions and 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
Arrowhead General Insurance Agency Superholding Corporation	National Programs; Services	January 9, 2012	$	—	$	(454	)	$	—		$	(454	)	$	—
Insurcorp & GGM Investments LLC	Retail	May 1, 2012		—		—			(834	)		(834	)		—
Richard W. Endlar Insurance Agency, Inc.	Retail	May 1, 2012		—		—			220			220			—
Texas Security General Insurance Agency, Inc.	Wholesale Brokerage	September 1, 2012		—		—			(107	)		(107	)		—
The Rollins Agency, Inc.	Retail	June 1, 2013		13,792		50			2,256			16,098			4,300
Other	Various	Various		592		35			298			925			448
Total			$	14,384	$	(369	)	$	1,833		$	15,848		$	4,748

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 and adjustments made during the measurement period for prior year acquisitions:

(in thousands)	Rollins			Arrowhead			Insurcorp			Endlar		Texas Security			Other			Total
Other current assets	$	—		$	—		$	—		$	—	$	25		$	1,455		$	1,480
Fixed assets		30			—			—			—		—			1			31
Goodwill		13,019			(454	)		(566	)		216		(843	)		(685	)		10,687
Purchased customer accounts		3,876			—			(268	)		4		708			170			4,490
Non-compete agreements		31			—			—			—		—			31			62
Total assets acquired		16,956			(454	)		(834	)		220		(110	)		972			16,750
Other current liabilities		(858	)		—			—			—		3			(47	)		(902	)
Net assets acquired	$	16,098		$	(454	)	$	(834	)	$	220	$	(107	)	$	925		$	15,848

Results of Operations

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 June 30,				For the six months ended June 30,
(in thousands, except per share data)	2013		2012		2013		2012
Total revenues	$	326,753	$	292,242	$	663,460	$	596,931
Income before income taxes		86,506		71,528		186,503		154,953
Net income		52,179		42,700		112,616		92,511
Net income per share:
Basic	$	0.36	$	0.30	$	0.78	$	0.65
Diluted	$	0.36	$	0.29	$	0.77	$	0.63
Weighted average number of shares outstanding:
Basic		140,836		139,086		140,816		139,044
Diluted		143,021		141,828		142,938		141,664

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 six months ended June 30, 2014 and 2013, were as follows:

	For the three months ended June 30,						For the six months ended June 30,
(in thousands)	2014			2013			2014			2013
Balance as of the beginning of the period	$	48,806		$	49,469		$	43,058		$	52,987
Additions to estimated acquisition earn-out payables		14,527			2,554			14,807			1,833
Payments for estimated acquisition earn-out payables		(10,814	)		(3,761	)		(11,429	)		(8,080	)
Subtotal		52,519			48,262			46,436			46,740
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables		(375	)		159			5,228			1,156
Interest expense accretion		552			497			1,032			1,022
Net change in earnings from estimated acquisition earn-out payables		177			656			6,260			2,178
Balance as of June 30	$	52,696		$	48,918		$	52,696		$	48,918

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Summarized Financial Information Reportable Segments

Summarized financial information concerning Brown & Brown’s reportable segments is shown in the following table. The “Other” column includes any income and expenses not allocated to reportable segments and corporate-related items, including the inter-company interest expense charge to the reporting segment.

	For the three months ended June 30, 2014
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	210,976	$	90,875	$	60,059	$	35,757	$	97		$	397,764
Investment income	$	16	$	66	$	7	$	—	$	105		$	194
Amortization	$	10,457	$	6,214	$	2,932	$	1,010	$	10		$	20,623
Depreciation	$	1,614	$	1,842	$	670	$	628	$	488		$	5,242
Interest expense	$	11,224	$	12,447	$	523	$	1,971	$	(19,161	)	$	7,004
Income before income taxes	$	49,098	$	9,685	$	17,376	$	5,008	$	20,614		$	101,781
Total assets	$	3,166,802	$	2,406,240	$	990,355	$	278,137	$	(1,911,062	)	$	4,930,472
Capital expenditures	$	1,567	$	5,159	$	517	$	244	$	363		$	7,850
	For the three months ended June 30, 2013
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	171,819	$	68,354	$	54,823	$	30,403	$	393		$	325,792
Investment income	$	23	$	5	$	4	$	—	$	207		$	239
Amortization	$	8,789	$	3,511	$	2,887	$	925	$	9		$	16,121
Depreciation	$	1,371	$	1,326	$	716	$	401	$	449		$	4,263
Interest expense	$	5,649	$	5,590	$	723	$	1,883	$	(9,848	)	$	3,997
Income before income taxes	$	44,482	$	11,226	$	15,760	$	2,589	$	12,164		$	86,221
Total assets	$	2,501,084	$	1,224,175	$	925,901	$	246,235	$	(1,571,075	)	$	3,326,320
Capital expenditures	$	1,488	$	1,420	$	561	$	379	$	328		$	4,176
	For the six months ended June 30, 2014
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	413,667	$	165,045	$	115,079	$	67,399	$	168		$	761,358
Investment income	$	32	$	71	$	11	$	2	$	181		$	297
Amortization	$	20,608	$	9,989	$	5,815	$	2,067	$	20		$	38,499
Depreciation	$	3,198	$	3,309	$	1,320	$	1,091	$	964		$	9,882
Interest expense	$	21,937	$	17,888	$	942	$	3,941	$	(33,632	)	$	11,076
Income before income taxes	$	90,343	$	25,808	$	30,114	$	7,823	$	34,530		$	188,618
Total assets	$	3,166,802	$	2,406,240	$	990,355	$	278,137	$	(1,911,062	)	$	4,930,472
Capital expenditures	$	3,679	$	6,857	$	999	$	535	$	507		$	12,577
	For the six months ended June 30, 2013
(in thousands)	Retail		National Programs		Wholesale Brokerage		Services		Other			Total
Total revenues	$	346,387	$	137,294	$	103,520	$	73,050	$	553		$	660,804
Investment income	$	46	$	10	$	9	$	1	$	359		$	425
Amortization	$	17,600	$	7,030	$	5,784	$	1,849	$	19		$	32,282
Depreciation	$	2,742	$	2,574	$	1,423	$	798	$	893		$	8,430
Interest expense	$	11,849	$	11,284	$	1,478	$	3,804	$	(20,434	)	$	7,981
Income before income taxes	$	90,693	$	25,238	$	26,122	$	16,542	$	27,117		$	185,712
Total assets	$	2,501,084	$	1,224,175	$	925,901	$	246,235	$	(1,571,075	)	$	3,326,320
Capital expenditures	$	2,823	$	2,312	$	1,097	$	498	$	393		$	7,123

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Segment Information - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Number of reportable segments			4
Total revenues	$ 397,764	$ 325,792	$ 761,358	$ 660,804
London, Bermuda and Cayman Islands [Member]
Segment Reporting Information [Line Items]
Total revenues	$ 3,800	$ 2,800	$ 7,000	$ 5,900	$ 12,200

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income	$ 114,170	$ 112,138
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization	38,499	32,282
Depreciation	9,882	8,430
Non-cash stock-based compensation	13,509	7,473
Change in estimated acquisition earn-out payables	6,260	2,178
Deferred income taxes	14,425	20,922
Income tax benefit from exercise of shares from the stock benefit plans	(2,467)	(307)
Net gain on sales of investments, fixed assets and customer accounts	(2,804)	(974)
Payments on acquisition earn-outs in excess of original estimated payables	(2,539)	(1,926)
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
Restricted cash and investments (increase)	(50,345)	(45,974)
Premiums, commissions and fees receivable (increase)	(21,396)	(6,307)
Reinsurance recoverables (increase)	(2,871)
Prepaid reinsurance premiums (increase)	(20,007)
Other assets (increase)	(37,173)	(1,386)
Premiums payable to insurance companies increase	74,646	69,008
Premium deposits and credits due customers increase (decrease)	17,542	(1,651)
Losses and loss adjustment expense increase	2,871
Unearned premiums increase	20,007
Accounts payable increase	35,461	6,725
Accrued expenses and other liabilities (decrease) increase	(34,714)	27,517
Other liabilities (decrease)	(18,232)	(6,263)
Net cash provided by operating activities	177,602	221,885
Cash flows from investing activities:
Additions to fixed assets	(12,577)	(7,123)
Payments for businesses acquired, net of cash acquired	(694,737)	(14,384)
Proceeds from sales of fixed assets and customer accounts	3,207	513
Purchases of investments	(8,515)	(9,935)
Proceeds from sales of investments	8,371	5,914
Net cash used in investing activities	(704,251)	(25,015)
Cash flows from financing activities:
Proceeds from long-term debt	550,000
Payments on long-term debt	(230,000)	(60)
Payments on acquisition earn-outs	(8,890)	(6,153)
Borrowings on revolving credit facilities	375,000
Income tax benefit from exercise of shares from the stock benefit plans	2,467	307
Issuances of common stock for employee stock benefit plans	942	725
Repurchase stock benefit plan shares for employees to fund tax withholdings	(2,648)	(73)
Purchase of treasury stock	(25,025)
Cash dividends paid	(29,042)	(25,912)
Net cash provided by (used in) financing activities	632,804	(31,166)
Net increase in cash and cash equivalents	106,155	165,704
Cash and cash equivalents at beginning of period	202,952	219,821
Cash and cash equivalents at end of period	$ 309,107	$ 385,525

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Goodwill

6 Months Ended

Jun. 30, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill

NOTE 5· Goodwill

Goodwill is subject to at least an annual assessment for impairment by applying a fair value-based test. Brown & Brown completed its most recent annual assessment as of November 30, 2013, and identified no impairment as a result of the evaluation.

The changes in the carrying value of goodwill by reportable segment for the six months ended June 30, 2014 are as follows:

(in thousands)	Retail		National Programs		Wholesale Brokerage		Services			Total
Balance as of January 1, 2014	$	1,131,257	$	467,144	$	287,242	$	120,530		$	2,006,173
Goodwill of acquired businesses		78,395		417,539		7,412		(239	)		503,107
Balance as of June 30, 2014	$	1,209,652	$	884,683	$	294,654	$	120,291		$	2,509,280

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Investments (Tables)

6 Months Ended

Jun. 30, 2014

Investments Debt And Equity Securities [Abstract]

Summary of Investments

Investments at June 30, 2014 and December 31, 2013 consisted of the following:

	June 30, 2014 Carrying Value				December 31,2013  Carrying Value
(in thousands)	Current		Non- Current		Current		Non- Current
Certificates of deposit, U.S. Treasury securities and obligations of U.S. Government agencies, Corporate debt and other securities	$	12,300	$	19,021	$	10,624	$	16

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Long-Term Debt - Long-Term Debt Instrument (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Apr. 16, 2014	Dec. 31, 2013
Debt Disclosure [Abstract]
Unsecured senior notes	$ 799,734		$ 480,000
Revolving credit facilities	375,000	25,000
Total debt	1,174,734		480,000
Less current portion	(6,609)		(100,000)
Long-term debt	1,168,125		380,000
Total debt	$ 1,174,734		$ 480,000

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Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Reconciliation between Basic and Diluted Weighted Average Shares Outstanding

The following is a reconciliation between basic and diluted weighted average shares outstanding:

	For the three months ended June 30,						For the six months ended June 30,
(in thousands, except per share data)	2014			2013			2014			2013
Net income	$	61,755		$	52,007		$	114,170		$	112,138
Net income attributable to unvested awarded performance stock		(1,531	)		(1,157	)		(2,915	)		(2,467	)
Net income attributable to common shares	$	60,224		$	50,850		$	111,255		$	109,671
Weighted average number of common shares outstanding – basic		144,840			144,041			145,133			143,984
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic		(3,590	)		(3,205	)		(3,705	)		(3,168	)
Weighted average number of common shares outstanding for basic earnings per common share		141,250			140,836			141,428			140,816
Dilutive effect of stock options		1,782			2,185			1,741			2,122
Weighted average number of shares outstanding – diluted		143,032			143,021			143,169			142,938
Net income per share:
Basic	$	0.43		$	0.36		$	0.79		$	0.78
Diluted	$	0.42		$	0.36		$	0.78		$	0.77