Brown & Brown

2021 Annual Report

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CHARGE ON

TO $4 BILLION AND BEYOND

CHARGE ONTO $4 BILLION AND BEYOND 
 
 
 
 
 
 
 
 
Committed 
Committed 
to Results
to Results

A Message 

A Message 

From Our CEO

From Our CEO

Brown & Brown Insurance is one of the 
Brown & Brown Insurance is one of the 
industry’s most powerful and influential 
industry’s most powerful and influential 
leaders. We provide risk management 
leaders. We provide risk management 
solutions to help protect and preserve 
solutions to help protect and preserve 
what our customers value most. Our four 
what our customers value most. Our four 
business segments offer a wide range 
business segments offer a wide range 
of insurance solutions and services for 
of insurance solutions and services for 
businesses, government institutions, 
businesses, government institutions, 
professional organizations, trade 
professional organizations, trade 
associations, families and individuals.
associations, families and individuals.

We have a deeply rooted culture that is built 
We have a deeply rooted culture that is built 
on honesty, integrity, innovation, superior 
on honesty, integrity, innovation, superior 
capabilities, discipline and a commitment to 
capabilities, discipline and a commitment to 
always doing what is best for our customers, 
always doing what is best for our customers, 
teammates and communities.
teammates and communities.

With more than 80 years of proven 
With more than 80 years of proven 
success, we consistently provide high-
success, we consistently provide high-
quality solutions and services to our 
quality solutions and services to our 
customers, which deliver strong results 
customers, which deliver strong results 
for our shareholders. Our team continues 
for our shareholders. Our team continues 
to demonstrate grit, hustle and an 
to demonstrate grit, hustle and an 
entrepreneurial spirit as we grow and thrive 
entrepreneurial spirit as we grow and thrive 
in the extremely competitive and constantly 
in the extremely competitive and constantly 
changing insurance industry.
changing insurance industry.

We are A Forever Company.
We are A Forever Company.

Key Facts 
Key Facts 

Key Differentiators 
Key Differentiators 

B U I L T   T O   L A S T
B U I L T   T O   L A S T
Headquartered in 
Headquartered in 
Daytona Beach, Florida
Daytona Beach, Florida

D O G G E D 
D O G G E D 
D I S C I P L I N E
D I S C I P L I N E
Founded in 1939—
Founded in 1939—
82 Years of Dedication
82 Years of Dedication

T E A M M A T E -
T E A M M A T E -
D R I V E N   S U C C E S S
D R I V E N   S U C C E S S
12,000+ Teammates
12,000+ Teammates

L O C A L   P E O P L E , 
L O C A L   P E O P L E , 
P O W E R F U L 
P O W E R F U L 
S O L U T I O N S
S O L U T I O N S
350+ Locations
350+ Locations

O W N E R S H I P 
O W N E R S H I P 
M I N D S E T
M I N D S E T
60+% of Teammates 
60+% of Teammates 
are Shareholders
are Shareholders

D E C E N T R A L I Z E D   S A L E S   A N D 
D E C E N T R A L I Z E D   S A L E S   A N D 
S E R V I C E   M O D E L
S E R V I C E   M O D E L
Local teams empowered to make 
Local teams empowered to make 
decisions that best support their 
decisions that best support their 
customers, backed by the powerful 
customers, backed by the powerful 
solutions, capabilities and carrier 
solutions, capabilities and carrier 
relationships of a top-five brokerage.
relationships of a top-five brokerage.

F I N A N C I A L   P E R F O R M A N C E
F I N A N C I A L   P E R F O R M A N C E
Consistent, industry-leading 
Consistent, industry-leading 
financial metrics and corresponding 
financial metrics and corresponding 
performance.
performance.

C U L T U R E
C U L T U R E
Strong, performance-based culture 
Strong, performance-based culture 
grounded in grit and integrity. 
grounded in grit and integrity. 

Entrepreneurial meritocracy: providing 
Entrepreneurial meritocracy: providing 
long-term opportunities for talented 
long-term opportunities for talented 
leaders and teammates.
leaders and teammates.

C O M M U N I T Y   S E R V I C E
C O M M U N I T Y   S E R V I C E
Long-standing history of service to the 
Long-standing history of service to the 
communities in which our teams live 
communities in which our teams live 
and work.
and work.

Historical
Historical
Revenue
Revenue

EBITDAC  
EBITDAC  
Margin(1)
Margin(1)

$1.9B
$1.9B

$2.0B
$2.0B

$2.4B
$2.4B

$2.6B
$2.6B

$3.1B
$3.1B

32.2%
32.2%

30.6%
30.6%

30.0%
30.0%

31.1%
31.1%

33.5%
33.5%

2 0 17
2 0 17

2 0 18
2 0 18

2 0 19
2 0 19

2 0 20
2 0 20

2 0 2 1
2 0 2 1

EBITDAC Margin is a non-GAAP financial measure and is referenced to provide an additional meaningful method of evaluating our operating performance from period 
EBITDAC Margin is a non-GAAP financial measure and is referenced to provide an additional meaningful method of evaluating our operating performance from period 

(1) 
(1) 
to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC Margin and a reconciliation to the most closely 
to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC Margin and a reconciliation to the most closely 
comparable GAAP measure, refer to pages 16 and 33 of this Annual Report.
comparable GAAP measure, refer to pages 16 and 33 of this Annual Report.

We focus on “getting 

We focus on “getting 

stuff done” (GSD), 

stuff done” (GSD), 

and the results follow. 

and the results follow. 

Collaboration is at the 

Collaboration is at the 

heart of the solutions we 

heart of the solutions we 

offer.

offer.

J. POWELL BROWN

J. POWELL BROWN

Dear Shareholders,

Dear Shareholders,

At Brown & Brown, we believe 

At Brown & Brown, we believe 

putting our talented teammates 

putting our talented teammates 

first enables us to deliver innovative 

first enables us to deliver innovative 

solutions for our customers. We focus 

solutions for our customers. We focus 

on “getting stuff done” (GSD), and 

on “getting stuff done” (GSD), and 

the results follow. Collaboration is at 

the results follow. Collaboration is at 

the heart of the solutions we offer. 2021 was 

the heart of the solutions we offer. 2021 was 

an outstanding year for Brown & Brown. 

an outstanding year for Brown & Brown. 

We crossed the $3 billion annual revenue 

We crossed the $3 billion annual revenue 

threshold, growing our annual revenues 

threshold, growing our annual revenues 

10.4% organically(1) and 16.8% overall. 

10.4% organically(1) and 16.8% overall. 

This was accomplished while materially 

This was accomplished while materially 

improving our margins, and we are on our 

improving our margins, and we are on our 

way to our next intermediate goal of $4 

way to our next intermediate goal of $4 

billion—all made possible by our 12,000+ 

billion—all made possible by our 12,000+ 

teammates’ commitment to our customers. 

teammates’ commitment to our customers. 

We have a strong, decentralized sales and 

We have a strong, decentralized sales and 

service model and a performance-based 

service model and a performance-based 

culture grounded in honesty, integrity and 

culture grounded in honesty, integrity and 

The Power of WE. We also have a deep 

The Power of WE. We also have a deep 

commitment to the communities where we  

commitment to the communities where we  

live and work—our Culture of Caring.

live and work—our Culture of Caring.

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Committed 

Committed 

to Results

to Results

A Message 
A Message 
From Our CEO
From Our CEO

Brown & Brown Insurance is one of the 

Brown & Brown Insurance is one of the 

industry’s most powerful and influential 

industry’s most powerful and influential 

leaders. We provide risk management 

leaders. We provide risk management 

solutions to help protect and preserve 

solutions to help protect and preserve 

what our customers value most. Our four 

what our customers value most. Our four 

business segments offer a wide range 

business segments offer a wide range 

of insurance solutions and services for 

of insurance solutions and services for 

businesses, government institutions, 

businesses, government institutions, 

professional organizations, trade 

professional organizations, trade 

associations, families and individuals.

associations, families and individuals.

We have a deeply rooted culture that is built 

We have a deeply rooted culture that is built 

on honesty, integrity, innovation, superior 

on honesty, integrity, innovation, superior 

capabilities, discipline and a commitment to 

capabilities, discipline and a commitment to 

always doing what is best for our customers, 

always doing what is best for our customers, 

teammates and communities.

teammates and communities.

With more than 80 years of proven 

With more than 80 years of proven 

success, we consistently provide high-

success, we consistently provide high-

quality solutions and services to our 

quality solutions and services to our 

customers, which deliver strong results 

customers, which deliver strong results 

for our shareholders. Our team continues 

for our shareholders. Our team continues 

to demonstrate grit, hustle and an 

to demonstrate grit, hustle and an 

entrepreneurial spirit as we grow and thrive 

entrepreneurial spirit as we grow and thrive 

in the extremely competitive and constantly 

in the extremely competitive and constantly 

changing insurance industry.

changing insurance industry.

We are A Forever Company.

We are A Forever Company.

Key Facts 

Key Facts 

Key Differentiators 

Key Differentiators 

B U I L T   T O   L A S T

B U I L T   T O   L A S T

Headquartered in 

Headquartered in 

Daytona Beach, Florida

Daytona Beach, Florida

D O G G E D 

D O G G E D 

D I S C I P L I N E

D I S C I P L I N E

Founded in 1939—

Founded in 1939—

82 Years of Dedication

82 Years of Dedication

T E A M M A T E -

T E A M M A T E -

D R I V E N   S U C C E S S

D R I V E N   S U C C E S S

12,000+ Teammates

12,000+ Teammates

L O C A L   P E O P L E , 

L O C A L   P E O P L E , 

P O W E R F U L 

P O W E R F U L 

S O L U T I O N S

S O L U T I O N S

350+ Locations

350+ Locations

O W N E R S H I P 

O W N E R S H I P 

M I N D S E T

M I N D S E T

60+% of Teammates 

60+% of Teammates 

are Shareholders

are Shareholders

D E C E N T R A L I Z E D   S A L E S   A N D 

D E C E N T R A L I Z E D   S A L E S   A N D 

S E R V I C E   M O D E L

S E R V I C E   M O D E L

Local teams empowered to make 

Local teams empowered to make 

decisions that best support their 

decisions that best support their 

customers, backed by the powerful 

customers, backed by the powerful 

solutions, capabilities and carrier 

solutions, capabilities and carrier 

relationships of a top-five brokerage.

relationships of a top-five brokerage.

F I N A N C I A L   P E R F O R M A N C E

F I N A N C I A L   P E R F O R M A N C E

Consistent, industry-leading 

Consistent, industry-leading 

financial metrics and corresponding 

financial metrics and corresponding 

performance.

performance.

C U L T U R E

C U L T U R E

Strong, performance-based culture 

Strong, performance-based culture 

grounded in grit and integrity. 

grounded in grit and integrity. 

Entrepreneurial meritocracy: providing 

Entrepreneurial meritocracy: providing 

long-term opportunities for talented 

long-term opportunities for talented 

leaders and teammates.

leaders and teammates.

C O M M U N I T Y   S E R V I C E

C O M M U N I T Y   S E R V I C E

Long-standing history of service to the 

Long-standing history of service to the 

communities in which our teams live 

communities in which our teams live 

and work.

and work.

$1.9B

$1.9B

$2.0B

$2.0B

$2.4B

$2.4B

$2.6B

$2.6B

$3.1B

$3.1B

Historical

Historical

Revenue

Revenue

EBITDAC  

EBITDAC  

Margin(1)

Margin(1)

32.2%

32.2%

30.6%

30.6%

30.0%

30.0%

31.1%

31.1%

33.5%

33.5%

2 0 17

2 0 17

2 0 18

2 0 18

2 0 19

2 0 19

2 0 20

2 0 20

2 0 2 1

2 0 2 1

(1) 

(1) 

EBITDAC Margin is a non-GAAP financial measure and is referenced to provide an additional meaningful method of evaluating our operating performance from period 

EBITDAC Margin is a non-GAAP financial measure and is referenced to provide an additional meaningful method of evaluating our operating performance from period 

to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC Margin and a reconciliation to the most closely 

to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC Margin and a reconciliation to the most closely 

comparable GAAP measure, refer to pages 16 and 33 of this Annual Report.

comparable GAAP measure, refer to pages 16 and 33 of this Annual Report.

We focus on “getting 
We focus on “getting 
stuff done” (GSD), 
stuff done” (GSD), 
and the results follow. 
and the results follow. 
Collaboration is at the 
Collaboration is at the 
heart of the solutions we 
heart of the solutions we 
offer.
offer.
J. POWELL BROWN
J. POWELL BROWN

Dear Shareholders,
Dear Shareholders,

At Brown & Brown, we believe 
At Brown & Brown, we believe 
putting our talented teammates 
putting our talented teammates 
first enables us to deliver innovative 
first enables us to deliver innovative 
solutions for our customers. We focus 
solutions for our customers. We focus 
on “getting stuff done” (GSD), and 
on “getting stuff done” (GSD), and 
the results follow. Collaboration is at 
the results follow. Collaboration is at 
the heart of the solutions we offer. 2021 was 
the heart of the solutions we offer. 2021 was 
an outstanding year for Brown & Brown. 
an outstanding year for Brown & Brown. 
We crossed the $3 billion annual revenue 
We crossed the $3 billion annual revenue 
threshold, growing our annual revenues 
threshold, growing our annual revenues 
10.4% organically(1) and 16.8% overall. 
10.4% organically(1) and 16.8% overall. 
This was accomplished while materially 
This was accomplished while materially 
improving our margins, and we are on our 
improving our margins, and we are on our 
way to our next intermediate goal of $4 
way to our next intermediate goal of $4 
billion—all made possible by our 12,000+ 
billion—all made possible by our 12,000+ 
teammates’ commitment to our customers. 
teammates’ commitment to our customers. 
We have a strong, decentralized sales and 
We have a strong, decentralized sales and 
service model and a performance-based 
service model and a performance-based 
culture grounded in honesty, integrity and 
culture grounded in honesty, integrity and 
The Power of WE. We also have a deep 
The Power of WE. We also have a deep 
commitment to the communities where we  
commitment to the communities where we  
live and work—our Culture of Caring.
live and work—our Culture of Caring.

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$100 invested in Brown & 
$100 invested in Brown & 
Brown stock in 1993 when 
Brown stock in 1993 when 
we began our journey as 
we began our journey as 
a public company would 
a public company would 
be worth $8,228 as of 
be worth $8,228 as of 
December 31, 2021.
December 31, 2021.

$8,228
$8,228

I N   2 0 2 1
I N   2 0 2 1

$100
$100

I N   1 9 9 3
I N   1 9 9 3

Long-Distance 
Long-Distance 
Road Race                                  
Road Race                                  

Life Is Not a Sprint; 

Life Is Not a Sprint; 

It’s a Marathon                                  

It’s a Marathon                                  

The mental health and well-being of our teammates 
The mental health and well-being of our teammates 
and their families have always come first at Brown 
and their families have always come first at Brown 
& Brown—health, family, business—in that order. We 
& Brown—health, family, business—in that order. We 
define health as physical, brain, spiritual and financial 
define health as physical, brain, spiritual and financial 
wellness. By prioritizing these things, our team is 
wellness. By prioritizing these things, our team is 
best positioned to deliver for our customers, fellow 
best positioned to deliver for our customers, fellow 
teammates and carrier partners. We operate as A 
teammates and carrier partners. We operate as A 
Meritocracy, meaning that people rise according to 
Meritocracy, meaning that people rise according to 
their abilities and talents. Successful teammates at 
their abilities and talents. Successful teammates at 
Brown & Brown share several core values: passion, 
Brown & Brown share several core values: passion, 
perseverance, grit, curiosity and discipline. We are very 
perseverance, grit, curiosity and discipline. We are very 
proud of our strong ownership culture, where more 
proud of our strong ownership culture, where more 
than 60% of teammates are also shareholders. Nearly 
than 60% of teammates are also shareholders. Nearly 
a quarter of our company is teammate owned.
a quarter of our company is teammate owned.

We were very pleased with our 10.4% organic revenue(1) 
We were very pleased with our 10.4% organic revenue(1) 
growth last year, and 2021 was arguably the best year 
growth last year, and 2021 was arguably the best year 
in our company’s history. We completed 19 acquisitions 
in our company’s history. We completed 19 acquisitions 
with annual revenues of approximately $132 million, 
with annual revenues of approximately $132 million, 
contributing to the 16.8% overall growth in our total 
contributing to the 16.8% overall growth in our total 
revenues. We also completed our second international 
revenues. We also completed our second international 
acquisition, with O’Leary Insurances, the largest 
acquisition, with O’Leary Insurances, the largest 
independently owned brokerage in Ireland, joining 
independently owned brokerage in Ireland, joining 
the team in January 2021. In addition, our EBITDAC 
the team in January 2021. In addition, our EBITDAC 
margin(1) improved 240 basis points year over year. 
margin(1) improved 240 basis points year over year. 
Driven by these results, our stock performed well, 
Driven by these results, our stock performed well, 
delivering total shareholder returns of 49% in 2021. 
delivering total shareholder returns of 49% in 2021. 
We were pleased to be added to the S&P 500 Index 
We were pleased to be added to the S&P 500 Index 
and then included in the S&P 500 Dividend Aristocrats 
and then included in the S&P 500 Dividend Aristocrats 
Index—a distinguished group of long-time dividend 
Index—a distinguished group of long-time dividend 
payers that have raised their dividend payments for a 
payers that have raised their dividend payments for a 
minimum of 25 consecutive years. Brown & Brown has 
minimum of 25 consecutive years. Brown & Brown has 
increased its dividend for 28 straight years. 
increased its dividend for 28 straight years. 

Source: FactSet
Source: FactSet

I N C R E A S E D 
I N C R E A S E D 
D I V I D E N D S   F O R 
D I V I D E N D S   F O R 

28th
28th

C O N S E C U T I V E 
C O N S E C U T I V E 
Y E A R
Y E A R

(1)    Organic Revenue growth and EBITDAC Margin are non-GAAP financial 
(1)    Organic Revenue growth and EBITDAC Margin are non-GAAP financial 

measures and are referenced to provide additional meaningful methods of 
measures and are referenced to provide additional meaningful methods of 
evaluating our operating performance from period to period on a basis that may 
evaluating our operating performance from period to period on a basis that may 
not be otherwise apparent on a GAAP basis. For other information concerning 
not be otherwise apparent on a GAAP basis. For other information concerning 
Organic Revenue growth and EBITDAC Margin and to reconciliations to the 
Organic Revenue growth and EBITDAC Margin and to reconciliations to the 
most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of 
most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of 
this Annual Report.
this Annual Report.

G R E W 
G R E W 
R E V E N U E S 
R E V E N U E S 

10.4%
10.4%

O R G A N I C A L L Y ( 1 )   T O 
O R G A N I C A L L Y ( 1 )   T O 

$3.1 
$3.1 

B I L L I O N
B I L L I O N

2
2

A Forever Company®, The Power of WE®, Culture of Caring®, A Meritocracy® and Built to Last® are registered trademarks of Brown & Brown, Inc. in the United States.
A Forever Company®, The Power of WE®, Culture of Caring®, A Meritocracy® and Built to Last® are registered trademarks of Brown & Brown, Inc. in the United States.

segment), Tom Kussurelis (National Programs segment) 

segment), Tom Kussurelis (National Programs segment) 

And that is the way we try to do things at Brown & 

And that is the way we try to do things at Brown & 

We grow our business organically and through the 

We grow our business organically and through the 

acquisition of like-minded companies. Our focus on 

acquisition of like-minded companies. Our focus on 

growth and profitability enables us to self-finance 

growth and profitability enables us to self-finance 

many of these transactions. Cultural fit remains the 

many of these transactions. Cultural fit remains the 

most important ingredient to a successful acquisition, 

most important ingredient to a successful acquisition, 

followed by favorable financial terms. Through our 

followed by favorable financial terms. Through our 

acquisition activity and the hard work of our team, 

acquisition activity and the hard work of our team, 

we enhanced our existing capabilities and added 

we enhanced our existing capabilities and added 

a number of new ones to our solution set. We have 

a number of new ones to our solution set. We have 

invested significantly in our company and team over 

invested significantly in our company and team over 

the past five years. These investments include the 

the past five years. These investments include the 

addition of talented new teammates, the enhancement 

addition of talented new teammates, the enhancement 

of social recognition tools and performance 

of social recognition tools and performance 

management processes and equity compensation 

management processes and equity compensation 

that ties our teammates and our goals together. Three 

that ties our teammates and our goals together. Three 

dynamic teammates were also added to our senior 

dynamic teammates were also added to our senior 

leadership team: Anurag Batta (Wholesale Brokerage 

leadership team: Anurag Batta (Wholesale Brokerage 

and Mary Raveling (Retail segment). In addition, 

and Mary Raveling (Retail segment). In addition, 

we continued to invest in technology that will help 

we continued to invest in technology that will help 

us execute more efficiently, improve the customer 

us execute more efficiently, improve the customer 

experience and drive innovation through data and 

experience and drive innovation through data and 

analytics.  

analytics.  

We learned a great deal about the human psyche 

We learned a great deal about the human psyche 

in 2020 and 2021. In response, we narrowed our 

in 2020 and 2021. In response, we narrowed our 

focus on brain health, prioritizing the creation and 

focus on brain health, prioritizing the creation and 

implementation of a Mental Health Guidebook—a 

implementation of a Mental Health Guidebook—a 

robust suite of resources to support teammates 

robust suite of resources to support teammates 

and their families. We also executed an extensive 

and their families. We also executed an extensive 

mental health awareness campaign in May of 2021 

mental health awareness campaign in May of 2021 

and identified a group teammates from across the 

and identified a group teammates from across the 

organization trained to support emotional health and 

organization trained to support emotional health and 

well-being needs, known as Mental Health Allies.

well-being needs, known as Mental Health Allies.

Our Diversity, Inclusion and Belonging (DIB) task 

Our Diversity, Inclusion and Belonging (DIB) task 

force continued to make strides to achieve our goal 

force continued to make strides to achieve our goal 

of further cultivating an inclusive place to work. 

of further cultivating an inclusive place to work. 

In addition, our first Teammate Resource Groups 

In addition, our first Teammate Resource Groups 

(African American, Women, LGBTQ+ and Mental 

(African American, Women, LGBTQ+ and Mental 

Health) were formed to help our workforce continue 

Health) were formed to help our workforce continue 

to evolve and reflect the communities in which we 

to evolve and reflect the communities in which we 

live. We also launched a dedicated DIB page on our 

live. We also launched a dedicated DIB page on our 

website to clearly state our commitment to fostering 

website to clearly state our commitment to fostering 

a more inclusive environment where people from 

a more inclusive environment where people from 

all backgrounds with a variety of experiences and 

all backgrounds with a variety of experiences and 

perspectives can be their true, authentic selves and be 

perspectives can be their true, authentic selves and be 

recognized for their unique contributions and talents. 

recognized for their unique contributions and talents. 

We believe a culture that embraces diversity, inclusion 

We believe a culture that embraces diversity, inclusion 

and belonging helps deliver better outcomes for our 

and belonging helps deliver better outcomes for our 

customers and communities. Visit bbinsurance.com/

customers and communities. Visit bbinsurance.com/

about-us/diversity-inclusion-belonging/ to learn more.  

about-us/diversity-inclusion-belonging/ to learn more.  

T O T A L   S H A R E H O L D E R 

T O T A L   S H A R E H O L D E R 

R E T U R N S  F O R   2 0 2 1   

R E T U R N S  F O R   2 0 2 1   

49%

49%

Finally, I want to acknowledge the loss of Brad Currey, 

Finally, I want to acknowledge the loss of Brad Currey, 

a long-time friend, director and mentor to the entire 

a long-time friend, director and mentor to the entire 

Brown & Brown team. If I were to write a book like 

Brown & Brown team. If I were to write a book like 

Tom Brokaw’s “The Greatest Generation,” Chapter 

Tom Brokaw’s “The Greatest Generation,” Chapter 

One would be about Brad. Upon my appointment as 

One would be about Brad. Upon my appointment as 

CEO in July 2009, Brad sent me a handwritten note 

CEO in July 2009, Brad sent me a handwritten note 

of congratulations with a message similar to this: “You 

of congratulations with a message similar to this: “You 

are the right person for the job. Don’t get a big head.” 

are the right person for the job. Don’t get a big head.” 

Brown—with honesty, integrity, humility, accountability, 

Brown—with honesty, integrity, humility, accountability, 

perseverance and grit.

perseverance and grit.

If you are a shareholder, thank you 

If you are a shareholder, thank you 

for your confidence in our team. If 

for your confidence in our team. If 

you are a teammate, thank you for 

you are a teammate, thank you for 

everything you do for our customers 

everything you do for our customers 

and your fellow teammates. To Brad 

and your fellow teammates. To Brad 

Currey, thank you for everything you 

Currey, thank you for everything you 

did to make us better and for always 

did to make us better and for always 

reminding us that the price of honesty 

reminding us that the price of honesty 

is eternal vigilance. We will continue to 

is eternal vigilance. We will continue to 

live up to your expectations. Onward 

live up to your expectations. Onward 

and upward.

and upward.

Cheers!

Cheers!

J .   P O W E L L   B R O W N ,   C P C U 

J .   P O W E L L   B R O W N ,   C P C U 

P R E S I D E N T   &   C H I E F   E X E C U T I V E   O F F I C E R

P R E S I D E N T   &   C H I E F   E X E C U T I V E   O F F I C E R

T H I S   A N N U A L   R E P O R T   A N D   I T S   T H E M E 

T H I S   A N N U A L   R E P O R T   A N D   I T S   T H E M E 

A R E   D E D I C A T E D   T O   O U R   F R I E N D   A N D 

A R E   D E D I C A T E D   T O   O U R   F R I E N D   A N D 

M E N T O R ,   B R A D   C U R R E Y .

M E N T O R ,   B R A D   C U R R E Y .

T

T

R

R

O

O

P

P

E

E

R

R

L

L

A

A

U

U

N

N

N

N

A

A

1

1

2

2

0

0

2

2

3

3

   
 
 
   
 
 
$100 invested in Brown & 

$100 invested in Brown & 

Brown stock in 1993 when 

Brown stock in 1993 when 

we began our journey as 

we began our journey as 

a public company would 

a public company would 

be worth $8,228 as of 

be worth $8,228 as of 

December 31, 2021.

December 31, 2021.

$8,228

$8,228

I N   2 0 2 1

I N   2 0 2 1

The mental health and well-being of our teammates 

The mental health and well-being of our teammates 

and their families have always come first at Brown 

and their families have always come first at Brown 

& Brown—health, family, business—in that order. We 

& Brown—health, family, business—in that order. We 

define health as physical, brain, spiritual and financial 

define health as physical, brain, spiritual and financial 

wellness. By prioritizing these things, our team is 

wellness. By prioritizing these things, our team is 

best positioned to deliver for our customers, fellow 

best positioned to deliver for our customers, fellow 

teammates and carrier partners. We operate as A 

teammates and carrier partners. We operate as A 

Meritocracy, meaning that people rise according to 

Meritocracy, meaning that people rise according to 

their abilities and talents. Successful teammates at 

their abilities and talents. Successful teammates at 

Brown & Brown share several core values: passion, 

Brown & Brown share several core values: passion, 

perseverance, grit, curiosity and discipline. We are very 

perseverance, grit, curiosity and discipline. We are very 

proud of our strong ownership culture, where more 

proud of our strong ownership culture, where more 

than 60% of teammates are also shareholders. Nearly 

than 60% of teammates are also shareholders. Nearly 

a quarter of our company is teammate owned.

a quarter of our company is teammate owned.

We were very pleased with our 10.4% organic revenue(1) 

We were very pleased with our 10.4% organic revenue(1) 

growth last year, and 2021 was arguably the best year 

growth last year, and 2021 was arguably the best year 

in our company’s history. We completed 19 acquisitions 

in our company’s history. We completed 19 acquisitions 

with annual revenues of approximately $132 million, 

with annual revenues of approximately $132 million, 

contributing to the 16.8% overall growth in our total 

contributing to the 16.8% overall growth in our total 

revenues. We also completed our second international 

revenues. We also completed our second international 

acquisition, with O’Leary Insurances, the largest 

acquisition, with O’Leary Insurances, the largest 

independently owned brokerage in Ireland, joining 

independently owned brokerage in Ireland, joining 

the team in January 2021. In addition, our EBITDAC 

the team in January 2021. In addition, our EBITDAC 

margin(1) improved 240 basis points year over year. 

margin(1) improved 240 basis points year over year. 

Driven by these results, our stock performed well, 

Driven by these results, our stock performed well, 

delivering total shareholder returns of 49% in 2021. 

delivering total shareholder returns of 49% in 2021. 

We were pleased to be added to the S&P 500 Index 

We were pleased to be added to the S&P 500 Index 

and then included in the S&P 500 Dividend Aristocrats 

and then included in the S&P 500 Dividend Aristocrats 

Index—a distinguished group of long-time dividend 

Index—a distinguished group of long-time dividend 

payers that have raised their dividend payments for a 

payers that have raised their dividend payments for a 

minimum of 25 consecutive years. Brown & Brown has 

minimum of 25 consecutive years. Brown & Brown has 

increased its dividend for 28 straight years. 

increased its dividend for 28 straight years. 

$100

$100

I N   1 9 9 3

I N   1 9 9 3

Source: FactSet

Source: FactSet

I N C R E A S E D 

I N C R E A S E D 

D I V I D E N D S   F O R 

D I V I D E N D S   F O R 

28th

28th

C O N S E C U T I V E 

C O N S E C U T I V E 

Y E A R

Y E A R

G R E W 

G R E W 

R E V E N U E S 

R E V E N U E S 

10.4%

10.4%

O R G A N I C A L L Y ( 1 )   T O 

O R G A N I C A L L Y ( 1 )   T O 

$3.1 

$3.1 

B I L L I O N

B I L L I O N

(1)    Organic Revenue growth and EBITDAC Margin are non-GAAP financial 

(1)    Organic Revenue growth and EBITDAC Margin are non-GAAP financial 

measures and are referenced to provide additional meaningful methods of 

measures and are referenced to provide additional meaningful methods of 

evaluating our operating performance from period to period on a basis that may 

evaluating our operating performance from period to period on a basis that may 

not be otherwise apparent on a GAAP basis. For other information concerning 

not be otherwise apparent on a GAAP basis. For other information concerning 

Organic Revenue growth and EBITDAC Margin and to reconciliations to the 

Organic Revenue growth and EBITDAC Margin and to reconciliations to the 

most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of 

most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of 

this Annual Report.

this Annual Report.

2

2

A Forever Company®, The Power of WE®, Culture of Caring®, A Meritocracy® and Built to Last® are registered trademarks of Brown & Brown, Inc. in the United States.

A Forever Company®, The Power of WE®, Culture of Caring®, A Meritocracy® and Built to Last® are registered trademarks of Brown & Brown, Inc. in the United States.

Long-Distance 

Long-Distance 

Road Race                                  

Road Race                                  

Life Is Not a Sprint; 
Life Is Not a Sprint; 
It’s a Marathon                                  
It’s a Marathon                                  

We grow our business organically and through the 
We grow our business organically and through the 
acquisition of like-minded companies. Our focus on 
acquisition of like-minded companies. Our focus on 
growth and profitability enables us to self-finance 
growth and profitability enables us to self-finance 
many of these transactions. Cultural fit remains the 
many of these transactions. Cultural fit remains the 
most important ingredient to a successful acquisition, 
most important ingredient to a successful acquisition, 
followed by favorable financial terms. Through our 
followed by favorable financial terms. Through our 
acquisition activity and the hard work of our team, 
acquisition activity and the hard work of our team, 
we enhanced our existing capabilities and added 
we enhanced our existing capabilities and added 
a number of new ones to our solution set. We have 
a number of new ones to our solution set. We have 
invested significantly in our company and team over 
invested significantly in our company and team over 
the past five years. These investments include the 
the past five years. These investments include the 
addition of talented new teammates, the enhancement 
addition of talented new teammates, the enhancement 
of social recognition tools and performance 
of social recognition tools and performance 
management processes and equity compensation 
management processes and equity compensation 
that ties our teammates and our goals together. Three 
that ties our teammates and our goals together. Three 
dynamic teammates were also added to our senior 
dynamic teammates were also added to our senior 
leadership team: Anurag Batta (Wholesale Brokerage 
leadership team: Anurag Batta (Wholesale Brokerage 
segment), Tom Kussurelis (National Programs segment) 
segment), Tom Kussurelis (National Programs segment) 
and Mary Raveling (Retail segment). In addition, 
and Mary Raveling (Retail segment). In addition, 
we continued to invest in technology that will help 
we continued to invest in technology that will help 
us execute more efficiently, improve the customer 
us execute more efficiently, improve the customer 
experience and drive innovation through data and 
experience and drive innovation through data and 
analytics.  
analytics.  

We learned a great deal about the human psyche 
We learned a great deal about the human psyche 
in 2020 and 2021. In response, we narrowed our 
in 2020 and 2021. In response, we narrowed our 
focus on brain health, prioritizing the creation and 
focus on brain health, prioritizing the creation and 
implementation of a Mental Health Guidebook—a 
implementation of a Mental Health Guidebook—a 
robust suite of resources to support teammates 
robust suite of resources to support teammates 
and their families. We also executed an extensive 
and their families. We also executed an extensive 
mental health awareness campaign in May of 2021 
mental health awareness campaign in May of 2021 
and identified a group teammates from across the 
and identified a group teammates from across the 
organization trained to support emotional health and 
organization trained to support emotional health and 
well-being needs, known as Mental Health Allies.
well-being needs, known as Mental Health Allies.

Our Diversity, Inclusion and Belonging (DIB) task 
Our Diversity, Inclusion and Belonging (DIB) task 
force continued to make strides to achieve our goal 
force continued to make strides to achieve our goal 
of further cultivating an inclusive place to work. 
of further cultivating an inclusive place to work. 
In addition, our first Teammate Resource Groups 
In addition, our first Teammate Resource Groups 
(African American, Women, LGBTQ+ and Mental 
(African American, Women, LGBTQ+ and Mental 
Health) were formed to help our workforce continue 
Health) were formed to help our workforce continue 
to evolve and reflect the communities in which we 
to evolve and reflect the communities in which we 
live. We also launched a dedicated DIB page on our 
live. We also launched a dedicated DIB page on our 
website to clearly state our commitment to fostering 
website to clearly state our commitment to fostering 
a more inclusive environment where people from 
a more inclusive environment where people from 
all backgrounds with a variety of experiences and 
all backgrounds with a variety of experiences and 
perspectives can be their true, authentic selves and be 
perspectives can be their true, authentic selves and be 
recognized for their unique contributions and talents. 
recognized for their unique contributions and talents. 
We believe a culture that embraces diversity, inclusion 
We believe a culture that embraces diversity, inclusion 
and belonging helps deliver better outcomes for our 
and belonging helps deliver better outcomes for our 
customers and communities. Visit bbinsurance.com/
customers and communities. Visit bbinsurance.com/
about-us/diversity-inclusion-belonging/ to learn more.  
about-us/diversity-inclusion-belonging/ to learn more.  

T O T A L   S H A R E H O L D E R 
T O T A L   S H A R E H O L D E R 
R E T U R N S  F O R   2 0 2 1   
R E T U R N S  F O R   2 0 2 1   

49%
49%

Finally, I want to acknowledge the loss of Brad Currey, 
Finally, I want to acknowledge the loss of Brad Currey, 
a long-time friend, director and mentor to the entire 
a long-time friend, director and mentor to the entire 
Brown & Brown team. If I were to write a book like 
Brown & Brown team. If I were to write a book like 
Tom Brokaw’s “The Greatest Generation,” Chapter 
Tom Brokaw’s “The Greatest Generation,” Chapter 
One would be about Brad. Upon my appointment as 
One would be about Brad. Upon my appointment as 
CEO in July 2009, Brad sent me a handwritten note 
CEO in July 2009, Brad sent me a handwritten note 
of congratulations with a message similar to this: “You 
of congratulations with a message similar to this: “You 
are the right person for the job. Don’t get a big head.” 
are the right person for the job. Don’t get a big head.” 
And that is the way we try to do things at Brown & 
And that is the way we try to do things at Brown & 
Brown—with honesty, integrity, humility, accountability, 
Brown—with honesty, integrity, humility, accountability, 
perseverance and grit.
perseverance and grit.

If you are a shareholder, thank you 
If you are a shareholder, thank you 
for your confidence in our team. If 
for your confidence in our team. If 
you are a teammate, thank you for 
you are a teammate, thank you for 
everything you do for our customers 
everything you do for our customers 
and your fellow teammates. To Brad 
and your fellow teammates. To Brad 
Currey, thank you for everything you 
Currey, thank you for everything you 
did to make us better and for always 
did to make us better and for always 
reminding us that the price of honesty 
reminding us that the price of honesty 
is eternal vigilance. We will continue to 
is eternal vigilance. We will continue to 
live up to your expectations. Onward 
live up to your expectations. Onward 
and upward.
and upward.

Cheers!
Cheers!

J .   P O W E L L   B R O W N ,   C P C U 
J .   P O W E L L   B R O W N ,   C P C U 
P R E S I D E N T   &   C H I E F   E X E C U T I V E   O F F I C E R
P R E S I D E N T   &   C H I E F   E X E C U T I V E   O F F I C E R

T H I S   A N N U A L   R E P O R T   A N D   I T S   T H E M E 
T H I S   A N N U A L   R E P O R T   A N D   I T S   T H E M E 
A R E   D E D I C A T E D   T O   O U R   F R I E N D   A N D 
A R E   D E D I C A T E D   T O   O U R   F R I E N D   A N D 
M E N T O R ,   B R A D   C U R R E Y .
M E N T O R ,   B R A D   C U R R E Y .

T
T
R
R
O
O
P
P
E
E
R
R

L
L
A
A
U
U
N
N
N
N
A
A

1
1
2
2
0
0
2
2

3
3

   
 
 
   
 
 
3500
3500

0
0

Our Performance
Our Performance

Every successful team thrives on diversity of talent, thought, character, work ethic and experience, resulting 
Every successful team thrives on diversity of talent, thought, character, work ethic and experience, resulting 
in better outcomes and empowering teammates to make more meaningful contributions to our customers, 
in better outcomes and empowering teammates to make more meaningful contributions to our customers, 
organization and communities. We are proud of our performance and the teammates who drive our success 
organization and communities. We are proud of our performance and the teammates who drive our success 
every day.
every day.

Total Revenues
Total Revenues

( D O L L A R S   I N   M I L L I O N S )
( D O L L A R S   I N   M I L L I O N S )

$1,881
$1,881

$2,014
$2,014

$2,392
$2,392

$2,613
$2,613

$3,051
$3,051

2 0 2 1   

2 0 2 1   

Uses of Cash

Uses of Cash

Uses of Capital

Uses of Capital

Acquisitions

Acquisitions

Our capital management strategy is based on the 

Our capital management strategy is based on the 

We are focused on forever, and our clearly defined growth 

We are focused on forever, and our clearly defined growth 

philosophy of investing to optimize returns and minimize 

philosophy of investing to optimize returns and minimize 

strategy is characterized by a disciplined focus on acquiring 

strategy is characterized by a disciplined focus on acquiring 

debt. We strategically deploy capital to invest internally, 

debt. We strategically deploy capital to invest internally, 

businesses that fit culturally. We remain prepared to deploy 

businesses that fit culturally. We remain prepared to deploy 

acquire firms and return capital to shareholders while 

acquire firms and return capital to shareholders while 

our capital when terms make sense financially. In 2021, 

our capital when terms make sense financially. In 2021, 

maintaining a conservative debt profile.

maintaining a conservative debt profile.

we acquired businesses with approximately $132 million 

we acquired businesses with approximately $132 million 

in annual revenue and added 635 talented teammates 

in annual revenue and added 635 talented teammates 

through acquisitions. Of the 19 acquisitions we completed 

through acquisitions. Of the 19 acquisitions we completed 

in 2021, 15 were acquired within our Retail segment, three 

in 2021, 15 were acquired within our Retail segment, three 

within our Wholesale Brokerage segment and one within 

within our Wholesale Brokerage segment and one within 

our National Programs segment.

our National Programs segment.

12%

12%

7%

7%

16%

16%

S H A RE   R E PU RC H A S E S

S H A RE   R E PU RC H A S E S

C A P IT A L   E X PE N D I T U R E S

C A P IT A L   E X PE N D I T U R E S

D I V I DE N DS

D I V I DE N DS

$132M

$132M

2 0 2 1   A C Q U I R E D   A N N U A L   R E V E N U E

2 0 2 1   A C Q U I R E D   A N N U A L   R E V E N U E

2 01 7
2 01 7

2 0 1 8
2 0 1 8

2 01 9
2 01 9

2 0 20
2 0 20

2 0 21
2 0 21

65%

65%

A C Q U I S I T IO N S

A C Q U I S I T IO N S

2021 Revenue by Segment
2021 Revenue by Segment

( D O L L A R S   I N   M I L L I O N S )
( D O L L A R S   I N   M I L L I O N S )

EBITDAC(1)
EBITDAC(1)

( D O L L A R S   I N   M I L L I O N S )
( D O L L A R S   I N   M I L L I O N S )

1,768
1,768

605
605

615
615

717
717

813
813

1,021
1,021

179
179

403
403

702
702

S ER V I C ES
S ER V I C ES

W H OL ES A LE 
W H OL ES A LE 
B R OK E RA G E
B R OK E RA G E

N AT I O N AL 
N AT I O N AL 
P RO G R A MS
P RO G R A MS

R E TA I L
R E TA I L

2 01 7
2 01 7

2 0 1 8
2 0 1 8

2 01 9
2 01 9

2 0 20
2 0 20

2 0 21
2 0 21

Dividends per Share
Dividends per Share

( D O L L A R S )
( D O L L A R S )

EBITDAC Margin (1)
EBITDAC Margin (1)

( P E R C E N T A G E )
( P E R C E N T A G E )

0.28
0.28

0.31
0.31

0.33
0.33

0.35
0.35

0.38
0.38

32.2
32.2

30.6
30.6

30.0
30.0

31.1
31.1

33.5
33.5

2 01 7
2 01 7

2 0 1 8
2 0 1 8

2 01 9
2 01 9

2 0 20
2 0 20

2 0 21
2 0 21

2 01 7
2 01 7

2 0 1 8
2 0 1 8

2 01 9
2 01 9

2 0 20
2 0 20

2 0 21
2 0 21

Enhancing Our 

Enhancing Our 

Capabilities

Capabilities

In 2021, we continued our pursuit to grow our capabilities 

In 2021, we continued our pursuit to grow our capabilities 

and expand our presence to geographies where we 

and expand our presence to geographies where we 

believe we can be successful. Aligned with this vision, 

believe we can be successful. Aligned with this vision, 

in early 2021, we completed our acquisition of O’Leary 

in early 2021, we completed our acquisition of O’Leary 

Insurances–our first acquisition in Ireland. O’Leary 

Insurances–our first acquisition in Ireland. O’Leary 

Insurances grew from a family-owned business to the 

Insurances grew from a family-owned business to the 

largest independently owned brokerage in Ireland, 

largest independently owned brokerage in Ireland, 

relying on a strong teammate focus and bringing unique 

relying on a strong teammate focus and bringing unique 

risk solutions that meet each customer’s needs. We also 

risk solutions that meet each customer’s needs. We also 

acquired Winston Benefits, a national leader in providing 

acquired Winston Benefits, a national leader in providing 

technology-enabled benefit communication, enrollment 

technology-enabled benefit communication, enrollment 

and administration solutions for employers across the U.S. 

and administration solutions for employers across the U.S. 

This acquisition will allow us to leverage a best-in-class 

This acquisition will allow us to leverage a best-in-class 

T

T

R

R

O

O

P

P

E

E

R

R

L

L

A

A

U

U

N

N

N

N

A

A

1

1

2

2

0

0

2

2

19 

19 

S T R A T E G I C   A C Q U I S I T I O N S

S T R A T E G I C   A C Q U I S I T I O N S

635 

635 

T A L E N T E D   T E A M M A T E S   J O I N E D 

T A L E N T E D   T E A M M A T E S   J O I N E D 

T H R O U G H   A C Q U I S I T I O N

T H R O U G H   A C Q U I S I T I O N

Growing the Brown & Brown Team 

Growing the Brown & Brown Team 

S E L E C T   2 0 2 1   A C Q U I S I T I O N S

S E L E C T   2 0 2 1   A C Q U I S I T I O N S

•  AGIS Network

•  AGIS Network

•  Berkshire Insurance Group

•  Berkshire Insurance Group

•  Corporate Insurance Advisory

•  Corporate Insurance Advisory

•  Dealer Admin. Services

•  Dealer Admin. Services

•  HARCO Insurance Services 

•  HARCO Insurance Services 

•  Heacock Insurance Group

•  Heacock Insurance Group

•  O’Leary Insurances

•  O’Leary Insurances

•  Piper Jordan

•  Piper Jordan

•  Rainmaker Advisory

•  Rainmaker Advisory

EBITDAC and EBITDAC Margin are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our operating 
EBITDAC and EBITDAC Margin are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our operating 

(1) 
(1) 
performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC and EBITDAC Margin and 
performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC and EBITDAC Margin and 
reconciliations to the most closely comparable GAAP measures, refer to pages 16 and 33 of this Annual Report.
reconciliations to the most closely comparable GAAP measures, refer to pages 16 and 33 of this Annual Report.

4
4

benefits administration technology platform to better serve 

benefits administration technology platform to better serve 

•  Remedy Analytics

•  Remedy Analytics

our current and future customers.

our current and future customers.

•  Winston Benefit Services  

•  Winston Benefit Services  

5

5

 
 
 
 
Our Performance

Our Performance

Every successful team thrives on diversity of talent, thought, character, work ethic and experience, resulting 

Every successful team thrives on diversity of talent, thought, character, work ethic and experience, resulting 

in better outcomes and empowering teammates to make more meaningful contributions to our customers, 

in better outcomes and empowering teammates to make more meaningful contributions to our customers, 

organization and communities. We are proud of our performance and the teammates who drive our success 

organization and communities. We are proud of our performance and the teammates who drive our success 

Uses of Capital
Uses of Capital

Acquisitions
Acquisitions

Our capital management strategy is based on the 
Our capital management strategy is based on the 
philosophy of investing to optimize returns and minimize 
philosophy of investing to optimize returns and minimize 
debt. We strategically deploy capital to invest internally, 
debt. We strategically deploy capital to invest internally, 
acquire firms and return capital to shareholders while 
acquire firms and return capital to shareholders while 
maintaining a conservative debt profile.
maintaining a conservative debt profile.

$2,392

$2,392

$2,613

$2,613

$3,051

$3,051

2 0 2 1   
2 0 2 1   

Uses of Cash
Uses of Cash

We are focused on forever, and our clearly defined growth 
We are focused on forever, and our clearly defined growth 
strategy is characterized by a disciplined focus on acquiring 
strategy is characterized by a disciplined focus on acquiring 
businesses that fit culturally. We remain prepared to deploy 
businesses that fit culturally. We remain prepared to deploy 
our capital when terms make sense financially. In 2021, 
our capital when terms make sense financially. In 2021, 
we acquired businesses with approximately $132 million 
we acquired businesses with approximately $132 million 
in annual revenue and added 635 talented teammates 
in annual revenue and added 635 talented teammates 
through acquisitions. Of the 19 acquisitions we completed 
through acquisitions. Of the 19 acquisitions we completed 
in 2021, 15 were acquired within our Retail segment, three 
in 2021, 15 were acquired within our Retail segment, three 
within our Wholesale Brokerage segment and one within 
within our Wholesale Brokerage segment and one within 
our National Programs segment.
our National Programs segment.

12%
12%

7%
7%

16%
16%

S H A RE   R E PU RC H A S E S
S H A RE   R E PU RC H A S E S

C A P IT A L   E X PE N D I T U R E S
C A P IT A L   E X PE N D I T U R E S

D I V I DE N DS
D I V I DE N DS

$132M
$132M

2 0 2 1   A C Q U I R E D   A N N U A L   R E V E N U E
2 0 2 1   A C Q U I R E D   A N N U A L   R E V E N U E

every day.

every day.

Total Revenues

Total Revenues

( D O L L A R S   I N   M I L L I O N S )

( D O L L A R S   I N   M I L L I O N S )

$1,881

$1,881

$2,014

$2,014

3500

3500

0

0

2 01 7

2 01 7

2 0 1 8

2 0 1 8

2 01 9

2 01 9

2 0 20

2 0 20

2 0 21

2 0 21

65%
65%

A C Q U I S I T IO N S
A C Q U I S I T IO N S

2021 Revenue by Segment

2021 Revenue by Segment

( D O L L A R S   I N   M I L L I O N S )

( D O L L A R S   I N   M I L L I O N S )

EBITDAC(1)

EBITDAC(1)

( D O L L A R S   I N   M I L L I O N S )

( D O L L A R S   I N   M I L L I O N S )

1,768

1,768

605

605

615

615

717

717

813

813

1,021

1,021

179

179

403

403

702

702

S ER V I C ES

S ER V I C ES

W H OL ES A LE 

W H OL ES A LE 

B R OK E RA G E

B R OK E RA G E

N AT I O N AL 

N AT I O N AL 

P RO G R A MS

P RO G R A MS

R E TA I L

R E TA I L

2 01 7

2 01 7

2 0 1 8

2 0 1 8

2 01 9

2 01 9

2 0 20

2 0 20

2 0 21

2 0 21

Dividends per Share

Dividends per Share

( D O L L A R S )

( D O L L A R S )

EBITDAC Margin (1)

EBITDAC Margin (1)

( P E R C E N T A G E )

( P E R C E N T A G E )

0.28

0.28

0.31

0.31

0.33

0.33

0.35

0.35

0.38

0.38

32.2

32.2

30.6

30.6

30.0

30.0

31.1

31.1

33.5

33.5

2 01 7

2 01 7

2 0 1 8

2 0 1 8

2 01 9

2 01 9

2 0 20

2 0 20

2 0 21

2 0 21

2 01 7

2 01 7

2 0 1 8

2 0 1 8

2 01 9

2 01 9

2 0 20

2 0 20

2 0 21

2 0 21

(1) 

(1) 

EBITDAC and EBITDAC Margin are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our operating 

EBITDAC and EBITDAC Margin are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our operating 

performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC and EBITDAC Margin and 

performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning EBITDAC and EBITDAC Margin and 

4

4

reconciliations to the most closely comparable GAAP measures, refer to pages 16 and 33 of this Annual Report.

reconciliations to the most closely comparable GAAP measures, refer to pages 16 and 33 of this Annual Report.

Enhancing Our 
Enhancing Our 
Capabilities
Capabilities

In 2021, we continued our pursuit to grow our capabilities 
In 2021, we continued our pursuit to grow our capabilities 
and expand our presence to geographies where we 
and expand our presence to geographies where we 
believe we can be successful. Aligned with this vision, 
believe we can be successful. Aligned with this vision, 
in early 2021, we completed our acquisition of O’Leary 
in early 2021, we completed our acquisition of O’Leary 
Insurances–our first acquisition in Ireland. O’Leary 
Insurances–our first acquisition in Ireland. O’Leary 
Insurances grew from a family-owned business to the 
Insurances grew from a family-owned business to the 
largest independently owned brokerage in Ireland, 
largest independently owned brokerage in Ireland, 
relying on a strong teammate focus and bringing unique 
relying on a strong teammate focus and bringing unique 
risk solutions that meet each customer’s needs. We also 
risk solutions that meet each customer’s needs. We also 
acquired Winston Benefits, a national leader in providing 
acquired Winston Benefits, a national leader in providing 
technology-enabled benefit communication, enrollment 
technology-enabled benefit communication, enrollment 
and administration solutions for employers across the U.S. 
and administration solutions for employers across the U.S. 
This acquisition will allow us to leverage a best-in-class 
This acquisition will allow us to leverage a best-in-class 
benefits administration technology platform to better serve 
benefits administration technology platform to better serve 
our current and future customers.
our current and future customers.

T
T
R
R
O
O
P
P
E
E
R
R

L
L
A
A
U
U
N
N
N
N
A
A

1
1
2
2
0
0
2
2

19 
19 

S T R A T E G I C   A C Q U I S I T I O N S
S T R A T E G I C   A C Q U I S I T I O N S

635 
635 

T A L E N T E D   T E A M M A T E S   J O I N E D 
T A L E N T E D   T E A M M A T E S   J O I N E D 
T H R O U G H   A C Q U I S I T I O N
T H R O U G H   A C Q U I S I T I O N

Growing the Brown & Brown Team 
Growing the Brown & Brown Team 

S E L E C T   2 0 2 1   A C Q U I S I T I O N S
S E L E C T   2 0 2 1   A C Q U I S I T I O N S

•  AGIS Network
•  AGIS Network

•  Berkshire Insurance Group
•  Berkshire Insurance Group

•  Corporate Insurance Advisory
•  Corporate Insurance Advisory

•  Dealer Admin. Services
•  Dealer Admin. Services

•  HARCO Insurance Services 
•  HARCO Insurance Services 

•  Heacock Insurance Group
•  Heacock Insurance Group

•  O’Leary Insurances
•  O’Leary Insurances

•  Piper Jordan
•  Piper Jordan

•  Rainmaker Advisory
•  Rainmaker Advisory

•  Remedy Analytics
•  Remedy Analytics

•  Winston Benefit Services  
•  Winston Benefit Services  

5
5

 
 
 
 
Our Footprint
Our Footprint

C A N A D A
C A N A D A

H A W A I I
H A W A I I

I R E L A N D

I R E L A N D

E N G L A N D

E N G L A N D

T

T

R

R

O

O

P

P

E

E

R

R

L

L

A

A

U

U

N

N

N

N

A

A

1

1

2

2

0

0

2

2

B E R M U D A

B E R M U D A

G R A N D 

G R A N D 

C A Y M A N

C A Y M A N

Retail
Retail

58%
58%

O F   T O T A L   A N N U A L
O F   T O T A L   A N N U A L
R E V E N U E S
R E V E N U E S

6
6

National Programs
National Programs

Wholesale Brokerage

Wholesale Brokerage

23%
23%

O F   T O T A L   A N N U A L
O F   T O T A L   A N N U A L
R E V E N U E S
R E V E N U E S

13%

13%

O F   T O T A L   A N N U A L

O F   T O T A L   A N N U A L

R E V E N U E S

R E V E N U E S

Services

Services

6%

6%

O F   T O T A L   A N N U A L

O F   T O T A L   A N N U A L

R E V E N U E S

R E V E N U E S

7

7

 
 
 
 
Our Footprint

Our Footprint

C A N A D A

C A N A D A

H A W A I I

H A W A I I

I R E L A N D
I R E L A N D

E N G L A N D
E N G L A N D

T
T
R
R
O
O
P
P
E
E
R
R

L
L
A
A
U
U
N
N
N
N
A
A

1
1
2
2
0
0
2
2

B E R M U D A
B E R M U D A

G R A N D 
G R A N D 
C A Y M A N
C A Y M A N

Retail

Retail

58%

58%

O F   T O T A L   A N N U A L

O F   T O T A L   A N N U A L

R E V E N U E S

R E V E N U E S

6

6

National Programs

National Programs

Wholesale Brokerage
Wholesale Brokerage

23%

23%

O F   T O T A L   A N N U A L

O F   T O T A L   A N N U A L

R E V E N U E S

R E V E N U E S

13%
13%

O F   T O T A L   A N N U A L
O F   T O T A L   A N N U A L
R E V E N U E S
R E V E N U E S

Services
Services

6%
6%

O F   T O T A L   A N N U A L
O F   T O T A L   A N N U A L
R E V E N U E S
R E V E N U E S

7
7

 
 
 
 
Performance  
Performance  
by Segment
by Segment

Retail
Retail

National Programs
National Programs

Wholesale Brokerage

Wholesale Brokerage

Services

Services

In 2021, our Retail segment delivered 
In 2021, our Retail segment delivered 
Organic Revenue(1) growth of 11.0%.
Organic Revenue(1) growth of 11.0%.

In 2021, our National Programs segment 
In 2021, our National Programs segment 
delivered Organic Revenue(1) growth of 12.4%.
delivered Organic Revenue(1) growth of 12.4%.

In 2021, our Wholesale Brokerage segment  

In 2021, our Wholesale Brokerage segment  

In 2021, our Services segment delivered 

In 2021, our Services segment delivered 

delivered Organic Revenue(1) growth of 8.1%.

delivered Organic Revenue(1) growth of 8.1%.

Organic Revenue(1) growth of 3.0%.

Organic Revenue(1) growth of 3.0%.

L E A D E R   P. Barrett Brown
L E A D E R   P. Barrett Brown

T E A M M A T E S  6,301
T E A M M A T E S  6,301

L O C A T I O N S   I N   42 states, Ireland, the Cayman 
L O C A T I O N S   I N   42 states, Ireland, the Cayman 
Islands & Bermuda
Islands & Bermuda

L E A D E R   Chris L. Walker
L E A D E R   Chris L. Walker

T E A M M A T E S  2,842
T E A M M A T E S  2,842

L E A D E R   Steve M. Boyd

L E A D E R   Steve M. Boyd

T E A M M A T E S  1,594

T E A M M A T E S  1,594

L O C A T I O N S   I N   20 states & Canada
L O C A T I O N S   I N   20 states & Canada

L O C A T I O N S   I N   22 states & the United Kingdom

L O C A T I O N S   I N   22 states & the United Kingdom

T E A M M A T E S  974

T E A M M A T E S  974

L O C A T I O N S   I N   9 states

L O C A T I O N S   I N   9 states

T

T

R

R

O

O

P

P

E

E

R

R

L

L

A

A

U

U

N

N

N

N

A

A

1

1

2

2

0

0

2

2

S E G M E NT 
S E G M E NT 
T O T A L   R E V E N U ES  
T O T A L   R E V E N U ES  
( I N   M I L L I O N S )
( I N   M I L L I O N S )

C O N T R I B U T I O NS
C O N T R I B U T I O NS

S E G M E NT 
S E G M E NT 
T O T A L   R E V E N U ES  
T O T A L   R E V E N U ES  
( I N   M I L L I O N S)
( I N   M I L L I O N S)

C O N T R I B U T I O NS
C O N T R I B U T I O NS
TO
TO

S E G M E NT 

S E G M E NT 

T O T A L   R E V E N U ES

T O T A L   R E V E N U ES

( I N   M I L L I O N S)

( I N   M I L L I O N S)

C O N T R I B U T I O NS

C O N T R I B U T I O NS

TO

TO

S E G M E NT 

S E G M E NT 

T O T A L   R E V E N U ES

T O T A L   R E V E N U ES

( I N   M I L L I O N S)

( I N   M I L L I O N S)

C O N T R I B U T I O NS

C O N T R I B U T I O NS

8
8
6
6
7
7
,
,
1
1
3 $
3 $
7
7
4
4
,
,
1
1
$
$

7
7
6
6
3
3
,
,
1
1
$
$

58%
58%

O F   TO T A L 
O F   TO T A L 
R E V E N UE
R E V E N UE

2
2
0
0
7
7
$
$

1
1
1
1
6
6
$
$

8
8
1
1
5
5
$
$

4
4
9
9
4
4
$
$

0
0
8
8
4
4
$
$

3
3
4
4
0
0
,
,
1
1
$
$

3
3
4
4
9
9
$
$

54%
54%

E B I TD A C
E B I TD A C

23%
23%

T O T A L 
T O T A L 
R E V E N UE
R E V E N UE

28%
28%

E B I TD A C
E B I TD A C

3

3

0

0

4

4

$

$

3

3

5

5

3

3

$

$

0

0

1

1

3

3

$

$

7

7

8

8

2

2

$

$

2

2

7

7

2

2

$

$

13%

13%

T O T A L 

T O T A L 

R E V E N UE

R E V E N UE

13%

13%

E B I TD A C

E B I TD A C

‘17
‘17

‘18
‘18

‘19
‘19

‘20
‘20

‘21
‘21

‘17
‘17

‘18
‘18

‘19
‘19

‘20
‘20

‘21
‘21

‘17

‘17

‘18

‘18

‘19

‘19

‘20

‘20

‘21

‘21

‘17

‘17

‘18

‘18

‘19

‘19

‘20

‘20

‘21

‘21

9

9

8

8

1

1

$

$

4

4

9

9

1

1

4$

4$

7

7

1

1

$

$

9

9

7

7

1

1

$

$

5

5

6

6

1

1

$

$

TO

TO

6%

6%

T O T A L 

T O T A L 

R E V E N UE

R E V E N UE

4%

4%

E B I TD A C

E B I TD A C

(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 
(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 
operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 
operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 
growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.
growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.

8
8

(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 

(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 

operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 

operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 

growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.

growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.

9

9

We are proud to feature our teammates in this Annual Report.
We are proud to feature our teammates in this Annual Report.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance  

Performance  

by Segment

by Segment

Retail

Retail

National Programs

National Programs

Wholesale Brokerage
Wholesale Brokerage

Services
Services

In 2021, our Retail segment delivered 

In 2021, our Retail segment delivered 

Organic Revenue(1) growth of 11.0%.

Organic Revenue(1) growth of 11.0%.

In 2021, our National Programs segment 

In 2021, our National Programs segment 

delivered Organic Revenue(1) growth of 12.4%.

delivered Organic Revenue(1) growth of 12.4%.

In 2021, our Wholesale Brokerage segment  
In 2021, our Wholesale Brokerage segment  
delivered Organic Revenue(1) growth of 8.1%.
delivered Organic Revenue(1) growth of 8.1%.

In 2021, our Services segment delivered 
In 2021, our Services segment delivered 
Organic Revenue(1) growth of 3.0%.
Organic Revenue(1) growth of 3.0%.

L O C A T I O N S   I N   42 states, Ireland, the Cayman 

L O C A T I O N S   I N   42 states, Ireland, the Cayman 

L O C A T I O N S   I N   20 states & Canada

L O C A T I O N S   I N   20 states & Canada

L O C A T I O N S   I N   22 states & the United Kingdom
L O C A T I O N S   I N   22 states & the United Kingdom

L E A D E R   Chris L. Walker

L E A D E R   Chris L. Walker

T E A M M A T E S  2,842

T E A M M A T E S  2,842

L E A D E R   Steve M. Boyd
L E A D E R   Steve M. Boyd

T E A M M A T E S  1,594
T E A M M A T E S  1,594

L E A D E R   P. Barrett Brown

L E A D E R   P. Barrett Brown

T E A M M A T E S  6,301

T E A M M A T E S  6,301

Islands & Bermuda

Islands & Bermuda

T E A M M A T E S  974
T E A M M A T E S  974

L O C A T I O N S   I N   9 states
L O C A T I O N S   I N   9 states

T
T
R
R
O
O
P
P
E
E
R
R

L
L
A
A
U
U
N
N
N
N
A
A

1
1
2
2
0
0
2
2

S E G M E NT 

S E G M E NT 

T O T A L   R E V E N U ES  

T O T A L   R E V E N U ES  

( I N   M I L L I O N S )

( I N   M I L L I O N S )

C O N T R I B U T I O NS

C O N T R I B U T I O NS

S E G M E NT 

S E G M E NT 

T O T A L   R E V E N U ES  

T O T A L   R E V E N U ES  

( I N   M I L L I O N S)

( I N   M I L L I O N S)

C O N T R I B U T I O NS

C O N T R I B U T I O NS

TO

TO

S E G M E NT 
S E G M E NT 
T O T A L   R E V E N U ES
T O T A L   R E V E N U ES
( I N   M I L L I O N S)
( I N   M I L L I O N S)

C O N T R I B U T I O NS
C O N T R I B U T I O NS
TO
TO

S E G M E NT 
S E G M E NT 
T O T A L   R E V E N U ES
T O T A L   R E V E N U ES
( I N   M I L L I O N S)
( I N   M I L L I O N S)

C O N T R I B U T I O NS
C O N T R I B U T I O NS
TO
TO

8

8

6

6

7

7

,

,

1

1

3 $

3 $

7

7

4

4

,

,

1

1

$

$

7

7

6

6

3

3

,

,

1

1

$

$

58%

58%

O F   TO T A L 

O F   TO T A L 

R E V E N UE

R E V E N UE

2

2

0

0

7

7

$

$

1

1

1

1

6

6

$

$

8

8

1

1

5

5

$

$

4

4

9

9

4

4

$

$

0

0

8

8

4

4

$

$

3

3

4

4

0

0

,

,

1

1

$

$

3

3

4

4

9

9

$

$

54%

54%

E B I TD A C

E B I TD A C

23%

23%

T O T A L 

T O T A L 

R E V E N UE

R E V E N UE

28%

28%

E B I TD A C

E B I TD A C

3
3
0
0
4
4
$
$

3
3
5
5
3
3
$
$

0
0
1
1
3
3
$
$

7
7
8
8
2
2
$
$

2
2
7
7
2
2
$
$

13%
13%

T O T A L 
T O T A L 
R E V E N UE
R E V E N UE

13%
13%

E B I TD A C
E B I TD A C

9
9
8
8
1
1
$
$

4
4
9
9
1
1
4$
4$
7
7
1
1
$
$

9
9
7
7
1
1
$
$

5
5
6
6
1
1
$
$

6%
6%

T O T A L 
T O T A L 
R E V E N UE
R E V E N UE

4%
4%

E B I TD A C
E B I TD A C

‘17

‘17

‘18

‘18

‘19

‘19

‘20

‘20

‘21

‘21

‘17

‘17

‘18

‘18

‘19

‘19

‘20

‘20

‘21

‘21

‘17
‘17

‘18
‘18

‘19
‘19

‘20
‘20

‘21
‘21

‘17
‘17

‘18
‘18

‘19
‘19

‘20
‘20

‘21
‘21

(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 

(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 

operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 

operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 

growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.

growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.

8

8

(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 
(1)  Organic Revenue growth and EBITDAC are non-GAAP financial measures and are referenced to provide additional meaningful methods of evaluating our 
operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 
operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis. For other information concerning Organic Revenue 
growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.
growth and EBITDAC and reconciliations to the most closely comparable GAAP measures, refer to pages 16, 23-24 and 33 of this Annual Report.

9
9

We are proud to feature our teammates in this Annual Report.

We are proud to feature our teammates in this Annual Report.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Our Leadership Team
Our Leadership Team

We thrive under the guidance of our 
We thrive under the guidance of our 
talented, long-tenured leadership 
talented, long-tenured leadership 
team and value their dedication to 
team and value their dedication to 
our Brown & Brown team.
our Brown & Brown team.

J. Powell Brown, CPCU
J. Powell Brown, CPCU
President & Chief Executive Officer 
President & Chief Executive Officer 

T E N U R E   26 years
T E N U R E   26 years

Anurag Batta

Anurag Batta

Senior Vice President

Senior Vice President

James C. Hays

James C. Hays

Vice Chairman

Vice Chairman

Kathy H. Colangelo, CIC, ASLI

Kathy H. Colangelo, CIC, ASLI

Thomas K. Huval, CIC

Thomas K. Huval, CIC

Richard A. Knudson, CIC

Richard A. Knudson, CIC

Mary G. Raveling, CPCU

Mary G. Raveling, CPCU

Senior Vice President & Regional 

Senior Vice President & Regional 

Senior Vice President

Senior Vice President

President – Retail Segment

President – Retail Segment

Senior Vice President

Senior Vice President

John M. Esposito, CIC

John M. Esposito, CIC

Senior Vice President & Regional 

Senior Vice President & Regional 

President – Retail Segment

President – Retail Segment

Joseph S. Failla

Joseph S. Failla

Senior Vice President

Senior Vice President

Senior Vice President & Regional 

Senior Vice President & Regional 

President – Retail Segment

President – Retail Segment

CLU

CLU

Tom Kussurelis, AAI, CPCU, 

Tom Kussurelis, AAI, CPCU, 

Senior Vice President

Senior Vice President

Michael L. Keeby

Michael L. Keeby

President – Retail Segment

President – Retail Segment

Senior Vice President & Regional 

Senior Vice President & Regional 

President – Retail Segment

President – Retail Segment

Senior Vice President & Regional 

Senior Vice President & Regional 

Donald M. McGowan, Jr.

Donald M. McGowan, Jr.

Senior Vice President & Director 

Senior Vice President & Director 

Paul F. Rogers

Paul F. Rogers

Senior Vice President & Regional 

Senior Vice President & Regional 

President – Retail Segment

President – Retail Segment

H. Vaughn Stoll

H. Vaughn Stoll

of Acquisitions

of Acquisitions

R. Andrew Watts 
R. Andrew Watts 
Executive Vice President, 
Executive Vice President, 
Chief Financial Officer & Treasurer
Chief Financial Officer & Treasurer

Steve M. Boyd 
Steve M. Boyd 
Executive Vice President & President – 
Executive Vice President & President – 
Wholesale Brokerage Segment
Wholesale Brokerage Segment

P. Barrett Brown 
P. Barrett Brown 
Executive Vice President & President – 
Executive Vice President & President – 
Retail Segment
Retail Segment

T E N U R E   7 years
T E N U R E   7 years

T E N U R E   26 years*
T E N U R E   26 years*

T E N U R E   18 years
T E N U R E   18 years

Robert W. Lloyd, Esq., CPCU, CIC 
Robert W. Lloyd, Esq., CPCU, CIC 
Executive Vice President, 
Executive Vice President, 
General Counsel & Secretary
General Counsel & Secretary

K. Gray Nester, II 
K. Gray Nester, II 
Executive Vice President &  
Executive Vice President &  
Chief Information Officer
Chief Information Officer

J. Scott Penny, CIC 
J. Scott Penny, CIC 
Executive Vice President & 
Executive Vice President & 
Chief Acquisitions Officer
Chief Acquisitions Officer

T E N U R E   22 years
T E N U R E   22 years

T E N U R E   2 years
T E N U R E   2 years

T E N U R E   32 years
T E N U R E   32 years

Anthony T. Strianese
Anthony T. Strianese
Executive Vice President & Chairman – 
Executive Vice President & Chairman – 
Wholesale Brokerage Segment
Wholesale Brokerage Segment

Julie L. Turpin 
Julie L. Turpin 
Executive Vice President &  
Executive Vice President &  
Chief People Officer
Chief People Officer

Chris L. Walker 
Chris L. Walker 
Executive Vice President & President – 
Executive Vice President & President – 
National Programs Segment
National Programs Segment

T E N U R E   22 years
T E N U R E   22 years

T E N U R E   9 years
T E N U R E   9 years

T E N U R E   18 years*
T E N U R E   18 years*

Wendell S. Reilly 

Wendell S. Reilly 

Managing Partner, 

Managing Partner, 

Grapevine Partners, LLC

Grapevine Partners, LLC

CO   NC

CO   NC

Esq. 

Esq. 

Spalding LLP

Spalding LLP

CO   NC

CO   NC

Chilton D. Varner, 

Chilton D. Varner, 

Samuel P. Bell, III, 

Samuel P. Bell, III, 

CO Compensation

CO Compensation

Senior Counsel, King & 

Senior Counsel, King & 

Director Emeritus 

Director Emeritus 

Esq. 

Esq. 

Former Of Counsel to 

Former Of Counsel to 

the law firm of Buchanan 

the law firm of Buchanan 

Ingersoll & Rooney PC

Ingersoll & Rooney PC

Nominating/ 

Nominating/ 

NC

NC

Corporate Governance

Corporate Governance

Chair

Chair

10
10

Tenure calculated as of December 31, 2021. 
Tenure calculated as of December 31, 2021. 
*Tenure includes service with Arrowhead General Insurance Agency, Inc., which we acquired in 2012. 
*Tenure includes service with Arrowhead General Insurance Agency, Inc., which we acquired in 2012. 

Our Board of Directors 

Our Board of Directors 

J. Hyatt Brown, 

J. Hyatt Brown, 

CPCU, CLU 

CPCU, CLU 

Chairman, 

Chairman, 

Brown & Brown, Inc.

Brown & Brown, Inc.

Hugh M. Brown 

Hugh M. Brown 

Founder and 

Founder and 

former President & 

former President & 

Chief Executive Officer, 

Chief Executive Officer, 

BAMSI, Inc.

BAMSI, Inc.

J. Powell Brown, 

J. Powell Brown, 

CPCU 

CPCU 

President & 

President & 

Chief Executive Officer, 

Chief Executive Officer, 

Brown & Brown, Inc.

Brown & Brown, Inc.

Lawrence L. 

Lawrence L. 

Gellerstedt III 

Gellerstedt III 

Former Chairman of the 

Former Chairman of the 

Board and CEO, Cousins 

Board and CEO, Cousins 

Properties Incorporated

Properties Incorporated

James C. Hays 

James C. Hays 

Vice Chairman, 

Vice Chairman, 

Brown & Brown, Inc.

Brown & Brown, Inc.

AC  

AC  

AC   CO

AC   CO

AC   AU

AC   AU

Theodore J. Hoepner 

Theodore J. Hoepner 

Former Vice Chairman, 

Former Vice Chairman, 

SunTrust Bank Holding 

SunTrust Bank Holding 

James S. Hunt 

James S. Hunt 

Former Executive 

Former Executive 

Vice President & 

Vice President & 

Company

Company

AU   NC

AU   NC

Chief Financial Officer, 

Chief Financial Officer, 

Walt Disney Parks and 

Walt Disney Parks and 

Resorts Worldwide

Resorts Worldwide

AC    AU

AC    AU

CO   NC

CO   NC

Toni Jennings 

Toni Jennings 

Chairman, Jack 

Chairman, Jack 

Timothy R. M. Main 

Timothy R. M. Main 

Global Head of Financial 

Global Head of Financial 

Jennings & Sons; Former 

Jennings & Sons; Former 

Institutions Group, 

Institutions Group, 

Lieutenant Governor, 

Lieutenant Governor, 

Barclays Plc

Barclays Plc

State of Florida

State of Florida

AC

AC

H. Palmer Proctor, Jr. 

H. Palmer Proctor, Jr. 

Lead Independent Director 

Lead Independent Director 

Chief Executive Officer/ 

Chief Executive Officer/ 

Director, Ameris Bancorp 

Director, Ameris Bancorp 

and Chief Executive 

and Chief Executive 

Officer, Ameris Bank

Officer, Ameris Bank

NC

NC

C O M M I T T E E S

C O M M I T T E E S

AC Acquisition

AC Acquisition

AU Audit

AU Audit

T

T

R

R

O

O

P

P

E

E

R

R

L

L

A

A

U

U

N

N

N

N

A

A

1

1

2

2

0

0

2

2

11

11

 
 
 
 
Our Leadership Team

Our Leadership Team

We thrive under the guidance of our 

We thrive under the guidance of our 

talented, long-tenured leadership 

talented, long-tenured leadership 

team and value their dedication to 

team and value their dedication to 

our Brown & Brown team.

our Brown & Brown team.

J. Powell Brown, CPCU

J. Powell Brown, CPCU

President & Chief Executive Officer 

President & Chief Executive Officer 

T E N U R E   26 years

T E N U R E   26 years

Anurag Batta
Anurag Batta
Senior Vice President
Senior Vice President

James C. Hays
James C. Hays
Vice Chairman
Vice Chairman

Kathy H. Colangelo, CIC, ASLI
Kathy H. Colangelo, CIC, ASLI
Senior Vice President
Senior Vice President

John M. Esposito, CIC
John M. Esposito, CIC
Senior Vice President & Regional 
Senior Vice President & Regional 
President – Retail Segment
President – Retail Segment

Joseph S. Failla
Joseph S. Failla
Senior Vice President
Senior Vice President

Thomas K. Huval, CIC
Thomas K. Huval, CIC
Senior Vice President & Regional 
Senior Vice President & Regional 
President – Retail Segment
President – Retail Segment

Michael L. Keeby
Michael L. Keeby
Senior Vice President & Regional 
Senior Vice President & Regional 
President – Retail Segment
President – Retail Segment

Richard A. Knudson, CIC
Richard A. Knudson, CIC
Senior Vice President & Regional 
Senior Vice President & Regional 
President – Retail Segment
President – Retail Segment

Tom Kussurelis, AAI, CPCU, 
Tom Kussurelis, AAI, CPCU, 
CLU
CLU
Senior Vice President
Senior Vice President

Donald M. McGowan, Jr.
Donald M. McGowan, Jr.
Senior Vice President & Regional 
Senior Vice President & Regional 
President – Retail Segment
President – Retail Segment

Mary G. Raveling, CPCU
Mary G. Raveling, CPCU
Senior Vice President
Senior Vice President

Paul F. Rogers
Paul F. Rogers
Senior Vice President & Regional 
Senior Vice President & Regional 
President – Retail Segment
President – Retail Segment

H. Vaughn Stoll
H. Vaughn Stoll
Senior Vice President & Director 
Senior Vice President & Director 
of Acquisitions
of Acquisitions

R. Andrew Watts 

R. Andrew Watts 

Executive Vice President, 

Executive Vice President, 

Steve M. Boyd 

Steve M. Boyd 

P. Barrett Brown 

P. Barrett Brown 

Executive Vice President & President – 

Executive Vice President & President – 

Executive Vice President & President – 

Executive Vice President & President – 

Chief Financial Officer & Treasurer

Chief Financial Officer & Treasurer

Wholesale Brokerage Segment

Wholesale Brokerage Segment

Retail Segment

Retail Segment

T E N U R E   7 years

T E N U R E   7 years

T E N U R E   26 years*

T E N U R E   26 years*

T E N U R E   18 years

T E N U R E   18 years

Our Board of Directors 
Our Board of Directors 

J. Hyatt Brown, 
J. Hyatt Brown, 
CPCU, CLU 
CPCU, CLU 
Chairman, 
Chairman, 
Brown & Brown, Inc.
Brown & Brown, Inc.

Hugh M. Brown 
Hugh M. Brown 
Founder and 
Founder and 
former President & 
former President & 
Chief Executive Officer, 
Chief Executive Officer, 
BAMSI, Inc.
BAMSI, Inc.

J. Powell Brown, 
J. Powell Brown, 
CPCU 
CPCU 
President & 
President & 
Chief Executive Officer, 
Chief Executive Officer, 
Brown & Brown, Inc.
Brown & Brown, Inc.

Lawrence L. 
Lawrence L. 
Gellerstedt III 
Gellerstedt III 
Former Chairman of the 
Former Chairman of the 
Board and CEO, Cousins 
Board and CEO, Cousins 
Properties Incorporated
Properties Incorporated

James C. Hays 
James C. Hays 
Vice Chairman, 
Vice Chairman, 
Brown & Brown, Inc.
Brown & Brown, Inc.

AC  
AC  

AC   CO
AC   CO

AC   AU
AC   AU

Robert W. Lloyd, Esq., CPCU, CIC 

Robert W. Lloyd, Esq., CPCU, CIC 

K. Gray Nester, II 

K. Gray Nester, II 

Executive Vice President, 

Executive Vice President, 

General Counsel & Secretary

General Counsel & Secretary

Executive Vice President &  

Executive Vice President &  

Chief Information Officer

Chief Information Officer

J. Scott Penny, CIC 

J. Scott Penny, CIC 

Executive Vice President & 

Executive Vice President & 

Chief Acquisitions Officer

Chief Acquisitions Officer

T E N U R E   22 years

T E N U R E   22 years

T E N U R E   2 years

T E N U R E   2 years

T E N U R E   32 years

T E N U R E   32 years

Theodore J. Hoepner 
Theodore J. Hoepner 
Former Vice Chairman, 
Former Vice Chairman, 
SunTrust Bank Holding 
SunTrust Bank Holding 
Company
Company

AU   NC
AU   NC

James S. Hunt 
James S. Hunt 
Former Executive 
Former Executive 
Vice President & 
Vice President & 
Chief Financial Officer, 
Chief Financial Officer, 
Walt Disney Parks and 
Walt Disney Parks and 
Resorts Worldwide
Resorts Worldwide

AC    AU
AC    AU

Toni Jennings 
Toni Jennings 
Chairman, Jack 
Chairman, Jack 
Jennings & Sons; Former 
Jennings & Sons; Former 
Lieutenant Governor, 
Lieutenant Governor, 
State of Florida
State of Florida

Timothy R. M. Main 
Timothy R. M. Main 
Global Head of Financial 
Global Head of Financial 
Institutions Group, 
Institutions Group, 
Barclays Plc
Barclays Plc

AC
AC

CO   NC
CO   NC

H. Palmer Proctor, Jr. 
H. Palmer Proctor, Jr. 
Lead Independent Director 
Lead Independent Director 
Chief Executive Officer/ 
Chief Executive Officer/ 
Director, Ameris Bancorp 
Director, Ameris Bancorp 
and Chief Executive 
and Chief Executive 
Officer, Ameris Bank
Officer, Ameris Bank

NC
NC

Anthony T. Strianese

Anthony T. Strianese

Julie L. Turpin 

Julie L. Turpin 

Executive Vice President & Chairman – 

Executive Vice President & Chairman – 

Executive Vice President &  

Executive Vice President &  

Wholesale Brokerage Segment

Wholesale Brokerage Segment

Chief People Officer

Chief People Officer

Chris L. Walker 

Chris L. Walker 

Executive Vice President & President – 

Executive Vice President & President – 

National Programs Segment

National Programs Segment

T E N U R E   22 years

T E N U R E   22 years

T E N U R E   9 years

T E N U R E   9 years

T E N U R E   18 years*

T E N U R E   18 years*

Wendell S. Reilly 
Wendell S. Reilly 
Managing Partner, 
Managing Partner, 
Grapevine Partners, LLC
Grapevine Partners, LLC

CO   NC
CO   NC

Chilton D. Varner, 
Chilton D. Varner, 
Esq. 
Esq. 
Senior Counsel, King & 
Senior Counsel, King & 
Spalding LLP
Spalding LLP

CO   NC
CO   NC

Samuel P. Bell, III, 
Samuel P. Bell, III, 
Esq. 
Esq. 
Director Emeritus 
Director Emeritus 
Former Of Counsel to 
Former Of Counsel to 
the law firm of Buchanan 
the law firm of Buchanan 
Ingersoll & Rooney PC
Ingersoll & Rooney PC

Tenure calculated as of December 31, 2021. 

Tenure calculated as of December 31, 2021. 

10

10

*Tenure includes service with Arrowhead General Insurance Agency, Inc., which we acquired in 2012. 

*Tenure includes service with Arrowhead General Insurance Agency, Inc., which we acquired in 2012. 

C O M M I T T E E S
C O M M I T T E E S

AC Acquisition
AC Acquisition

AU Audit
AU Audit

CO Compensation
CO Compensation

NC
NC

Nominating/ 
Nominating/ 
Corporate Governance
Corporate Governance

Chair
Chair

T
T
R
R
O
O
P
P
E
E
R
R

L
L
A
A
U
U
N
N
N
N
A
A

1
1
2
2
0
0
2
2

11
11

 
 
 
 
ESG Highlights 
ESG Highlights 

Disclosure Regarding Forward-Looking Statements

Disclosure Regarding Forward-Looking Statements

Brown & Brown is Built to Last, as demonstrated by our steadfast focus on customers, teammates and 
Brown & Brown is Built to Last, as demonstrated by our steadfast focus on customers, teammates and 
communities. We are driven to consistently improve and are dedicated to the sustainability of our Company.
communities. We are driven to consistently improve and are dedicated to the sustainability of our Company.

Diversity, Inclusion and Belonging
Diversity, Inclusion and Belonging

We believe that having a diverse team—people from 
We believe that having a diverse team—people from 
different backgrounds who use different thought 
different backgrounds who use different thought 
processes—results in teammate empowerment. An 
processes—results in teammate empowerment. An 
empowered team is what helps to positively impact our 
empowered team is what helps to positively impact our 
customer service and community involvement. As part 
customer service and community involvement. As part 
of our strategy, we continue to evolve and build out 
of our strategy, we continue to evolve and build out 
our Diversity, Inclusion and Belonging (DIB) task force, 
our Diversity, Inclusion and Belonging (DIB) task force, 
which was established in 2020 and is composed of eight 
which was established in 2020 and is composed of eight 
teammates and leaders with different backgrounds, work 
teammates and leaders with different backgrounds, work 
experiences and skill sets. The mission of the task force is 
experiences and skill sets. The mission of the task force is 
to collect ideas, thoughts and stories that will help develop 
to collect ideas, thoughts and stories that will help develop 
a strategic framework promoting diversity, inclusion and 
a strategic framework promoting diversity, inclusion and 
belonging across our teams. The task force is overseen 
belonging across our teams. The task force is overseen 
and guided by our chief people officer and general 
and guided by our chief people officer and general 
counsel.
counsel.

Our DIB task force spent the last year evaluating our 
Our DIB task force spent the last year evaluating our 
Company’s current strengths and opportunities for 
Company’s current strengths and opportunities for 
development by initiating teammate surveys, listening 
development by initiating teammate surveys, listening 
sessions, group focus sessions and training modalities, 
sessions, group focus sessions and training modalities, 

including a course focused on understanding and 
including a course focused on understanding and 
managing unconscious bias that was assigned to all 
managing unconscious bias that was assigned to all 
teammates as a learning opportunity. In 2021, the task 
teammates as a learning opportunity. In 2021, the task 
force appointed a DIB Leader who serves as a dedicated 
force appointed a DIB Leader who serves as a dedicated 
resource for the team and established a DIB motto—The 
resource for the team and established a DIB motto—The 
Power to Be Yourself—which was created and voted upon 
Power to Be Yourself—which was created and voted upon 
by our teammates.
by our teammates.

Teammate Health and Well-Being 
Teammate Health and Well-Being 

Brown & Brown’s top priority is the total well-being of our 
Brown & Brown’s top priority is the total well-being of our 
teammates. Total well-being at Brown & Brown means 
teammates. Total well-being at Brown & Brown means 
physical, emotional, social and financial health and 
physical, emotional, social and financial health and 
wellness. We know that healthy teammates provide better 
wellness. We know that healthy teammates provide better 
support to their families, communities and customers, 
support to their families, communities and customers, 
which results in our continued success as a Company. We 
which results in our continued success as a Company. We 
encourage teammates to stay active, maintain a healthy 
encourage teammates to stay active, maintain a healthy 
work-life balance, volunteer in their local communities 
work-life balance, volunteer in their local communities 
and prioritize their mental and physical health. This 
and prioritize their mental and physical health. This 
includes regular communication with teammates about 
includes regular communication with teammates about 
the pandemic’s impacts and, when necessary, bi-weekly 
the pandemic’s impacts and, when necessary, bi-weekly 
headlines and information focused on physical, mental 
headlines and information focused on physical, mental 
and financial wellness.
and financial wellness.

E S G   R E P O R T   H I G H L I G H T S
E S G   R E P O R T   H I G H L I G H T S

C O M M U N I T Y
C O M M U N I T Y

H U M A N   C A P I T A L
H U M A N   C A P I T A L

We have a long-standing 
We have a long-standing 
history of community service 
history of community service 
and are committed to 
and are committed to 
managing our business and 
managing our business and 
community relationships 
community relationships 
through our Culture of 
through our Culture of 
Caring. 
Caring. 

The cornerstones of our 
The cornerstones of our 
organization's guiding 
organization's guiding 
principles are people, 
principles are people, 
performance, service and 
performance, service and 
innovation. We believe in 
innovation. We believe in 
doing what is best for our 
doing what is best for our 
customers, communities, 
customers, communities, 
teammates, carrier partners 
teammates, carrier partners 
and shareholders—always.
and shareholders—always.

E N V I R O N M E N T 
E N V I R O N M E N T 
We continuously search for 
We continuously search for 
new and innovative ways to 
new and innovative ways to 
further help our customers, 
further help our customers, 
support our teammates 
support our teammates 
and contribute to the world 
and contribute to the world 
around us. This includes our 
around us. This includes our 
commitment to sustainability 
commitment to sustainability 
and the environment. 
and the environment. 

D A T A   S E C U R I T Y
D A T A   S E C U R I T Y

We have invested, and 
We have invested, and 
continue to invest, in 
continue to invest, in 
technology security 
technology security 
initiatives, information 
initiatives, information 
technology policies and 
technology policies and 
resources, and teammate 
resources, and teammate 
training to mitigate the risk of 
training to mitigate the risk of 
improper access to private 
improper access to private 
information.
information.

S O L I C I T I N G 
S O L I C I T I N G 

F E E D B A C K
F E E D B A C K

92% of our teammates say 
92% of our teammates say 
Brown & Brown is a Great 
Brown & Brown is a Great 
Place to Work®.
Place to Work®.

T R A I N I N G   A N D 
T R A I N I N G   A N D 
D E V E L O P M E N T
D E V E L O P M E N T

C U L T U R E   
C U L T U R E   
O F   C A R I N G
O F   C A R I N G

Our teammates completed 
Our teammates completed 
24,000+ hours of training 
24,000+ hours of training 
through Brown & Brown 
through Brown & Brown 
University.
University.

We received $121,000 in 
We received $121,000 in 
donations to our Brown 
donations to our Brown 
& Brown Disaster Relief 
& Brown Disaster Relief 
Foundation.
Foundation.

H E A L T H   
H E A L T H   
A N D   S A F E T Y
A N D   S A F E T Y

The Company had no 
The Company had no 
work-related fatalities and 
work-related fatalities and 
24 injuries or occupational 
24 injuries or occupational 
diseases.*
diseases.*

R E A D   M O R E   A B O U T   B R O W N   &   B R O W N ’ S   E S G   E F F O R T S   I N   O U R   F U L L   2 0 2 2   E S G   R E P O R T — 
R E A D   M O R E   A B O U T   B R O W N   &   B R O W N ’ S   E S G   E F F O R T S   I N   O U R   F U L L   2 0 2 2   E S G   R E P O R T — 
V I S I T   I N V E S T O R . B B I N S U R A N C E . C O M .
V I S I T   I N V E S T O R . B B I N S U R A N C E . C O M .

12
12

* As determined based on the number of claims made under our workers’ compensation policy, excluding claims that were closed and for which no payment was made. 
* As determined based on the number of claims made under our workers’ compensation policy, excluding claims that were closed and for which no payment was made. 

Brown & Brown, Inc., together with its subsidiaries (collectively, “we,” “Brown 

Brown & Brown, Inc., together with its subsidiaries (collectively, “we,” “Brown 

 • The potential adverse effect of certain actual or potential claims, 

 • The potential adverse effect of certain actual or potential claims, 

& Brown” or the “Company”), makes “forward-looking statements” within 

& Brown” or the “Company”), makes “forward-looking statements” within 

regulatory actions or proceedings on our businesses, results of 

regulatory actions or proceedings on our businesses, results of 

the “safe harbor” provision of the Private Securities Litigation Reform Act 

the “safe harbor” provision of the Private Securities Litigation Reform Act 

operations, financial condition or liquidity;

operations, financial condition or liquidity;

of 1995, as amended, throughout this report and in the documents we 

of 1995, as amended, throughout this report and in the documents we 

 • Uncertainty in our business practices and compensation arrangements 

 • Uncertainty in our business practices and compensation arrangements 

incorporate by reference into this report, including those relating to the 

incorporate by reference into this report, including those relating to the 

due to potential changes in regulations;

due to potential changes in regulations;

potential effects of the COVID-19 pandemic (“COVID-19”) on the Company’s 

potential effects of the COVID-19 pandemic (“COVID-19”) on the Company’s 

 • Regulatory changes that could reduce our profitability or growth by 

 • Regulatory changes that could reduce our profitability or growth by 

business, operations, financial performance and prospects. You can identify 

business, operations, financial performance and prospects. You can identify 

increasing compliance costs, technology compliance, restricting the 

increasing compliance costs, technology compliance, restricting the 

these statements by forward-looking words such as “may,” “will,” “should,” 

these statements by forward-looking words such as “may,” “will,” “should,” 

products or services we may sell, the markets we may enter, the 

products or services we may sell, the markets we may enter, the 

“expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan” and “continue” or 

“expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan” and “continue” or 

methods by which we may sell our products and services, or the prices 

methods by which we may sell our products and services, or the prices 

similar words. We have based these statements on our current expectations 

similar words. We have based these statements on our current expectations 

we may charge for our services and the form of compensation we may 

we may charge for our services and the form of compensation we may 

about potential future events. Although we believe the expectations 

about potential future events. Although we believe the expectations 

accept from our customers, carriers and third-parties;

accept from our customers, carriers and third-parties;

expressed in the forward-looking statements included in this Annual Report 

expressed in the forward-looking statements included in this Annual Report 

 • A decrease in demand for liability insurance as a result of tort reform 

 • A decrease in demand for liability insurance as a result of tort reform 

and the reports, statements, information and announcements incorporated 

and the reports, statements, information and announcements incorporated 

legislation;

legislation;

by reference into this report are based upon reasonable assumptions 

by reference into this report are based upon reasonable assumptions 

 • Our failure to comply with any covenants contained in our debt 

 • Our failure to comply with any covenants contained in our debt 

within the bounds of our knowledge of our business, a number of factors 

within the bounds of our knowledge of our business, a number of factors 

agreements;

agreements;

could cause actual results to differ materially from those expressed in any 

could cause actual results to differ materially from those expressed in any 

 • The possibility that covenants in our debt agreements could prevent us 

 • The possibility that covenants in our debt agreements could prevent us 

forward-looking statements, whether oral or written, made by us or on our 

forward-looking statements, whether oral or written, made by us or on our 

from engaging in certain potentially beneficial activities;

from engaging in certain potentially beneficial activities;

behalf. Many of these factors have previously been identified in filings or 

behalf. Many of these factors have previously been identified in filings or 

 • Changes in the U.S.-based credit markets that might adversely affect our 

 • Changes in the U.S.-based credit markets that might adversely affect our 

statements made by us or on our behalf. Important factors which could 

statements made by us or on our behalf. Important factors which could 

business, results of operations and financial condition;

business, results of operations and financial condition;

cause our actual results to differ, possibly materially from the forward-

cause our actual results to differ, possibly materially from the forward-

 • Risks associated with the current interest rate environment, and to the 

 • Risks associated with the current interest rate environment, and to the 

looking statements in this report include but are not limited to the following 

looking statements in this report include but are not limited to the following 

extent we use debt to finance our investments, changes in interest rates 

extent we use debt to finance our investments, changes in interest rates 

items, in addition to those matters described in “Management’s Discussion 

items, in addition to those matters described in “Management’s Discussion 

will affect our cost of capital and net investment income;

will affect our cost of capital and net investment income;

and Analysis of Financial Condition and Results of Operations”:

and Analysis of Financial Condition and Results of Operations”:

 • Disintermediation within the insurance industry, including increased 

 • Disintermediation within the insurance industry, including increased 

 • COVID-19 and the resulting governmental and societal responses, the 

 • COVID-19 and the resulting governmental and societal responses, the 

severity and duration of COVID-19 (including through any new variant 

severity and duration of COVID-19 (including through any new variant 

strains of the underlying virus), the effectiveness of and accessibility to 

strains of the underlying virus), the effectiveness of and accessibility to 

vaccines, the pace and rate at which vaccines are administered, actions 

vaccines, the pace and rate at which vaccines are administered, actions 

taken by governmental authorities in response to COVID-19 and the 

taken by governmental authorities in response to COVID-19 and the 

direct and indirect impact of COVID-19 on the U.S. economy, the global 

direct and indirect impact of COVID-19 on the U.S. economy, the global 

economy and the Company’s business, liquidity, customers, insurance 

economy and the Company’s business, liquidity, customers, insurance 

carriers and third parties;

carriers and third parties;

 • The effects of inflation;

 • The effects of inflation;

competition from insurance companies, technology companies and 

competition from insurance companies, technology companies and 

the financial services industry, as well as the shift away from traditional 

the financial services industry, as well as the shift away from traditional 

insurance markets;

insurance markets;

 • Changes in current U.S. or global economic conditions;

 • Changes in current U.S. or global economic conditions;

 • Effects related to pandemics, epidemics or outbreaks of infectious 

 • Effects related to pandemics, epidemics or outbreaks of infectious 

 • Conditions that result in reduced insurer capacity;

 • Conditions that result in reduced insurer capacity;

 • Quarterly and annual variations in our commissions that result from the 

 • Quarterly and annual variations in our commissions that result from the 

timing of policy renewals and the net effect of new and lost business 

timing of policy renewals and the net effect of new and lost business 

diseases;

diseases;

production;

production;

 • The inability to retain or hire qualified employees, as well as the loss of 

 • The inability to retain or hire qualified employees, as well as the loss of 

 •

 •

Intangible asset risk, including the possibility that our goodwill may 

Intangible asset risk, including the possibility that our goodwill may 

any of our executive officers or other key employees;

any of our executive officers or other key employees;

 • Acquisition-related risks that could negatively affect the success of 

 • Acquisition-related risks that could negatively affect the success of 

our growth strategy, including the possibility that we may not be able 

our growth strategy, including the possibility that we may not be able 

to successfully identify suitable acquisition candidates, complete 

to successfully identify suitable acquisition candidates, complete 

acquisitions, integrate acquired businesses into our operations, and 

acquisitions, integrate acquired businesses into our operations, and 

expand into new markets;

expand into new markets;

 • A cybersecurity attack or any other interruption in information technology 

 • A cybersecurity attack or any other interruption in information technology 

and/or data security and/or outsourcing relationships;

and/or data security and/or outsourcing relationships;

 • The requirement for additional resources and time to adequately 

 • The requirement for additional resources and time to adequately 

respond to dynamics resulting from rapid technological change;

respond to dynamics resulting from rapid technological change;

 • The loss of or significant change to any of our insurance company 

 • The loss of or significant change to any of our insurance company 

become impaired in the future;

become impaired in the future;

 • Other risks and uncertainties as may be detailed from time to time in 

 • Other risks and uncertainties as may be detailed from time to time in 

our public announcements and Securities and Exchange Commission 

our public announcements and Securities and Exchange Commission 

 • Other factors that the Company may not have currently identified 

 • Other factors that the Company may not have currently identified 

(“SEC”) filings; and

(“SEC”) filings; and

or quantified.

or quantified.

Assumptions as to any of the foregoing, and all statements, are not based 

Assumptions as to any of the foregoing, and all statements, are not based 

upon historical fact, but rather reflect our current expectations concerning 

upon historical fact, but rather reflect our current expectations concerning 

future results and events. Forward-looking statements that we make or 

future results and events. Forward-looking statements that we make or 

that are made by others on our behalf are based upon a knowledge of 

that are made by others on our behalf are based upon a knowledge of 

relationships, which could result in additional expense, loss of market 

relationships, which could result in additional expense, loss of market 

our business and the environment in which we operate, but because 

our business and the environment in which we operate, but because 

share or material decrease in our profit-sharing contingent commissions, 

share or material decrease in our profit-sharing contingent commissions, 

of the factors listed above, among others, actual results may differ from 

of the factors listed above, among others, actual results may differ from 

guaranteed supplemental commissions or incentive commissions;

guaranteed supplemental commissions or incentive commissions;

those in the forward-looking statements. Consequently, these cautionary 

those in the forward-looking statements. Consequently, these cautionary 

 • Adverse economic conditions, natural disasters, or regulatory changes in 

 • Adverse economic conditions, natural disasters, or regulatory changes in 

statements qualify all of the forward-looking statements we make herein. 

statements qualify all of the forward-looking statements we make herein. 

states where we have a concentration of our business;

states where we have a concentration of our business;

 • The inability to maintain our culture or a change in management, 

 • The inability to maintain our culture or a change in management, 

management philosophy or our business strategy;

management philosophy or our business strategy;

We cannot assure you that the results or developments anticipated by us 

We cannot assure you that the results or developments anticipated by us 

will be realized or, even if substantially realized, will result in the expected 

will be realized or, even if substantially realized, will result in the expected 

consequences for us or affect us, our business or our operations in the 

consequences for us or affect us, our business or our operations in the 

 • Risks facing us in our Services segment, including our third-party claims 

 • Risks facing us in our Services segment, including our third-party claims 

way we expect. We caution readers not to place undue reliance on these 

way we expect. We caution readers not to place undue reliance on these 

administration operations, that are distinct from hose we face in our 

administration operations, that are distinct from hose we face in our 

forward-looking statements. All forward-looking statements made herein 

forward-looking statements. All forward-looking statements made herein 

insurance intermediary operations;

insurance intermediary operations;

 • The limitations of our system of disclosure and internal controls and 

 • The limitations of our system of disclosure and internal controls and 

are made only as of the date of this filing, the Company does not undertake 

are made only as of the date of this filing, the Company does not undertake 

any obligation to publicly update or correct any forward-looking statements 

any obligation to publicly update or correct any forward-looking statements 

procedures in preventing errors or fraud, or in informing management of 

procedures in preventing errors or fraud, or in informing management of 

to reflect events or circumstances that subsequently occur or of which the 

to reflect events or circumstances that subsequently occur or of which the 

all material information in a timely manner;

all material information in a timely manner;

Company hereafter becomes aware.

Company hereafter becomes aware.

 • The significant control certain existing shareholders have over the 

 • The significant control certain existing shareholders have over the 

Company;

Company;

 • Risks related to our international operations, which result in additional 

 • Risks related to our international operations, which result in additional 

risks and require more management time and expense than our 

risks and require more management time and expense than our 

domestic operations to achieve or maintain profitability;

domestic operations to achieve or maintain profitability;

 • Changes in data privacy and protection laws and regulations or any 

 • Changes in data privacy and protection laws and regulations or any 

failure to comply with such laws and regulations;

failure to comply with such laws and regulations;

 •

 •

Improper disclosure of confidential information;

Improper disclosure of confidential information;

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ESG Highlights 

Disclosure Regarding Forward-Looking Statements

Brown & Brown is Built to Last, as demonstrated by our steadfast focus on customers, teammates and 

communities. We are driven to consistently improve and are dedicated to the sustainability of our Company.

Diversity, Inclusion and Belonging

We believe that having a diverse team—people from 

different backgrounds who use different thought 

processes—results in teammate empowerment. An 

empowered team is what helps to positively impact our 

customer service and community involvement. As part 

of our strategy, we continue to evolve and build out 

our Diversity, Inclusion and Belonging (DIB) task force, 

which was established in 2020 and is composed of eight 

teammates and leaders with different backgrounds, work 

experiences and skill sets. The mission of the task force is 

to collect ideas, thoughts and stories that will help develop 

a strategic framework promoting diversity, inclusion and 

belonging across our teams. The task force is overseen 

and guided by our chief people officer and general 

counsel.

Our DIB task force spent the last year evaluating our 

Company’s current strengths and opportunities for 

development by initiating teammate surveys, listening 

sessions, group focus sessions and training modalities, 

including a course focused on understanding and 

managing unconscious bias that was assigned to all 

teammates as a learning opportunity. In 2021, the task 

force appointed a DIB Leader who serves as a dedicated 

resource for the team and established a DIB motto—The 

Power to Be Yourself—which was created and voted upon 

by our teammates.

Teammate Health and Well-Being 

Brown & Brown’s top priority is the total well-being of our 

teammates. Total well-being at Brown & Brown means 

physical, emotional, social and financial health and 

wellness. We know that healthy teammates provide better 

support to their families, communities and customers, 

which results in our continued success as a Company. We 

encourage teammates to stay active, maintain a healthy 

work-life balance, volunteer in their local communities 

and prioritize their mental and physical health. This 

includes regular communication with teammates about 

the pandemic’s impacts and, when necessary, bi-weekly 

headlines and information focused on physical, mental 

and financial wellness.

E S G   R E P O R T   H I G H L I G H T S

C O M M U N I T Y

H U M A N   C A P I T A L

We have a long-standing 

The cornerstones of our 

history of community service 

and are committed to 

managing our business and 

community relationships 

through our Culture of 

Caring. 

organization's guiding 

principles are people, 

performance, service and 

innovation. We believe in 

doing what is best for our 

customers, communities, 

E N V I R O N M E N T 

We continuously search for 

new and innovative ways to 

further help our customers, 

support our teammates 

D A T A   S E C U R I T Y

We have invested, and 

continue to invest, in 

technology security 

initiatives, information 

and contribute to the world 

technology policies and 

around us. This includes our 

resources, and teammate 

commitment to sustainability 

training to mitigate the risk of 

teammates, carrier partners 

and the environment. 

improper access to private 

and shareholders—always.

information.

S O L I C I T I N G 

F E E D B A C K

92% of our teammates say 

Brown & Brown is a Great 

Place to Work®.

T R A I N I N G   A N D 

D E V E L O P M E N T

C U L T U R E   

O F   C A R I N G

H E A L T H   

A N D   S A F E T Y

Our teammates completed 

24,000+ hours of training 

through Brown & Brown 

University.

We received $121,000 in 

The Company had no 

donations to our Brown 

work-related fatalities and 

& Brown Disaster Relief 

24 injuries or occupational 

Foundation.

diseases.*

R E A D   M O R E   A B O U T   B R O W N   &   B R O W N ’ S   E S G   E F F O R T S   I N   O U R   F U L L   2 0 2 2   E S G   R E P O R T — 

V I S I T   I N V E S T O R . B B I N S U R A N C E . C O M .

12

* As determined based on the number of claims made under our workers’ compensation policy, excluding claims that were closed and for which no payment was made. 

Brown & Brown, Inc., together with its subsidiaries (collectively, “we,” “Brown 
& Brown” or the “Company”), makes “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, including those relating to the 
potential effects of the COVID-19 pandemic (“COVID-19”) on the Company’s 
business, operations, financial performance and prospects. 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 Annual Report 
and the reports, statements, information and announcements incorporated 
by reference into this report are based upon 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, possibly materially from the forward-
looking statements in this report include but are not limited to the following 
items, in addition to those matters described in “Management’s Discussion 
and Analysis of Financial Condition and Results of Operations”:

 • COVID-19 and the resulting governmental and societal responses, the 
severity and duration of COVID-19 (including through any new variant 
strains of the underlying virus), the effectiveness of and accessibility to 
vaccines, the pace and rate at which vaccines are administered, actions 
taken by governmental authorities in response to COVID-19 and the 
direct and indirect impact of COVID-19 on the U.S. economy, the global 
economy and the Company’s business, liquidity, customers, insurance 
carriers and third parties;

 • The effects of inflation;
 • The inability to retain or hire qualified employees, as well as the loss of 

any of our executive officers or other key employees;

 • Acquisition-related risks that could negatively affect the success of 

our growth strategy, including the possibility that we may not be able 
to successfully identify suitable acquisition candidates, complete 
acquisitions, integrate acquired businesses into our operations, and 
expand into new markets;

 • A cybersecurity attack or any other interruption in information technology 

and/or data security and/or outsourcing relationships;

 • The requirement for additional resources and time to adequately 
respond to dynamics resulting from rapid technological change;
 • The loss of or significant change to any of our insurance company 

relationships, which could result in additional expense, loss of market 
share or material decrease in our profit-sharing contingent commissions, 
guaranteed supplemental commissions or incentive commissions;

 • Adverse economic conditions, natural disasters, or regulatory changes in 

states where we have a concentration of our business;

 • The inability to maintain our culture or a change in management, 

management philosophy or our business strategy;

 • Risks facing us in our Services segment, including our third-party claims 
administration operations, that are distinct from hose we face in our 
insurance intermediary operations;

 • The limitations of our system of disclosure and internal controls and 

procedures in preventing errors or fraud, or in informing management of 
all material information in a timely manner;

 • The significant control certain existing shareholders have over the 

Company;

 • Risks related to our international operations, which result in additional 
risks and require more management time and expense than our 
domestic operations to achieve or maintain profitability;

 • Changes in data privacy and protection laws and regulations or any 

failure to comply with such laws and regulations;
Improper disclosure of confidential information;

 •

 • The potential adverse effect of certain actual or potential claims, 
regulatory actions or proceedings on our businesses, results of 
operations, financial condition or liquidity;

 • Uncertainty in our business practices and compensation arrangements 

due to potential changes in regulations;

 • Regulatory changes that could reduce our profitability or growth by 
increasing compliance costs, technology compliance, restricting the 
products or services we may sell, the markets we may enter, the 
methods by which we may sell our products and services, or the prices 
we may charge for our services and the form of compensation we may 
accept from our customers, carriers and third-parties;

 • A decrease in demand for liability insurance as a result of tort reform 

legislation;

 • Our failure to comply with any covenants contained in our debt 

agreements;

 • The possibility that covenants in our debt agreements could prevent us 

from engaging in certain potentially beneficial activities;

 • Changes in the U.S.-based credit markets that might adversely affect our 

business, results of operations and financial condition;

 • Risks associated with the current interest rate environment, and to the 

extent we use debt to finance our investments, changes in interest rates 
will affect our cost of capital and net investment income;

 • Disintermediation within the insurance industry, including increased 
competition from insurance companies, technology companies and 
the financial services industry, as well as the shift away from traditional 
insurance markets;

 • Changes in current U.S. or global economic conditions;
 • Effects related to pandemics, epidemics or outbreaks of infectious 

diseases;

 • Conditions that result in reduced insurer capacity;
 • Quarterly and annual variations in our commissions that result from the 
timing of policy renewals and the net effect of new and lost business 
production;
Intangible asset risk, including the possibility that our goodwill may 
become impaired in the future;

 •

 • Other risks and uncertainties as may be detailed from time to time in 

our public announcements and Securities and Exchange Commission 
(“SEC”) filings; and

 • Other factors that the Company may not have currently identified 

or quantified.

Assumptions as to any of the foregoing, and all statements, are not based 
upon 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 upon 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, 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. All forward-looking statements made herein 
are made only as of the date of this filing, the Company does not undertake 
any obligation to publicly update or correct any forward-looking statements 
to reflect events or circumstances that subsequently occur or of which the 
Company hereafter becomes aware.

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2021  
Financial 
Review

15 Management’s Discussion and 

Analysis of Financial Condition and 
Results of Operations

33 Non-GAAP Reconciliation—Income 

Before Income Taxes to EBITDAC and 
Income Before Income Taxes Margin 
to EBITDAC Margin

35 Consolidated Statements of Income

36 Consolidated Statements of 
Comprehensive Income

37 Consolidated Balance Sheets

38 Consolidated Statements of 
Shareholders’ Equity

39 Consolidated Statements of 

Cash Flows

40 Notes to Consolidated 

Financial Statements

70 Report of Independent Registered 

Public Accounting Firm

73 Management’s Report on Internal 
Control Over Financial Reporting

74 Performance Graph

14

Management’s Discussion and 

Analysis of Financial Condition 

and Results of Operations

General

Company Overview

The following discussion should be read in conjunction with our Consolidated Financial Statements and the related Notes to those 

Financial Statements included elsewhere in this Annual Report. In addition, please see “Information Regarding Non-GAAP Measures” 

below, regarding important information on non-GAAP financial measures contained in our discussion and analysis.

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 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, sales or payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium 

rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none 

of which we control. We also operate a capitalized captive insurance facility (the “Captive”) for the purpose of having additional capacity 

to sell property insurance for earthquake and wind exposed properties. The Captive buys reinsurance, limiting, but not eliminating the 

Company’s exposure to underwriting losses and revenues are recognized as net retained earned premiums over the associated policy 

periods.

We have increased revenues every year from 1993 to 2021, with the exception of 2009, when our revenues declined 1.0%. Our revenues 

grew from $95.6 million in 1993 to $3.1 billion in 2021, reflecting a compound annual growth rate of 13.2%. In the same 28-year period, we 

increased net income from $8.1 million to $587.1 million in 2021, a compound annual growth rate of 16.5%.

The volume of business from new and existing customers, fluctuations in insurable exposure units, changes in premium rate levels, 

changes in general economic and competitive conditions, a health pandemic, and the occurrence of catastrophic weather events 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, increasing costs of litigation settlements and awards could cause some customers to seek higher 

levels of insurance coverage. Historically, we have grown our revenues as a result of our focus on net new business and acquisitions. 

We foster a strong, decentralized sales and service culture which enables responsiveness to changing business conditions and drives 

accountability for results.

The term “Organic Revenue,” a non-GAAP measure, is our core commissions and fees less: (i) the core commissions and fees earned 

for the first 12 months by newly-acquired operations; (ii) divested business (core commissions and fees generated from offices, books 

of business or niches sold or terminated during the comparable period); and (iii) the period over period impact of foreign currency 

translation, which is calculated by applying current year foreign exchange rates to the same period in the prior year. 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. “Organic 

Revenue” is 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 customers’ exposure units; (iii) net changes in insurance premium rates or the commission rate paid 

to us by our carrier partners; and (iv) the net change in fees paid to us by our customers. Organic Revenue is reported in “Results of 

Operations” and in “Results of Operations - Segment Information” of this Annual Report. In connection with the Captive, we will recognize 

revenue starting in 2022 on a net retained earned premiums basis in a manner consistent with core commissions and fees. Beginning 

in 2022 we will no longer exclude guaranteed supplemental commissions from core commissions and fees and therefore they will be a 

component of Organic Revenue. We anticipate presenting certain prior periods accordingly so that the calculation of Organic Revenue 

compares both periods on the same basis. Guaranteed supplemental commissions are a small and increasingly more stable source of 

revenue that are highly correlated to core commissions, so excluding them provides no meaningful incremental value in evaluating our 

revenue performance.

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2021  

Financial 

Review

15 Management’s Discussion and 

Analysis of Financial Condition and 

Results of Operations

33 Non-GAAP Reconciliation—Income 

Before Income Taxes to EBITDAC and 

Income Before Income Taxes Margin 

to EBITDAC Margin

35 Consolidated Statements of Income

36 Consolidated Statements of 

Comprehensive Income

37 Consolidated Balance Sheets

38 Consolidated Statements of 

Shareholders’ Equity

39 Consolidated Statements of 

Cash Flows

40 Notes to Consolidated 

Financial Statements

70 Report of Independent Registered 

Public Accounting Firm

73 Management’s Report on Internal 

Control Over Financial Reporting

74 Performance Graph

14

Management’s Discussion and 
Analysis of Financial Condition 
and Results of Operations

General

Company Overview

The following discussion should be read in conjunction with our Consolidated Financial Statements and the related Notes to those 
Financial Statements included elsewhere in this Annual Report. In addition, please see “Information Regarding Non-GAAP Measures” 
below, regarding important information on non-GAAP financial measures contained in our discussion and analysis.

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 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, sales or payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium 
rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none 
of which we control. We also operate a capitalized captive insurance facility (the “Captive”) for the purpose of having additional capacity 
to sell property insurance for earthquake and wind exposed properties. The Captive buys reinsurance, limiting, but not eliminating the 
Company’s exposure to underwriting losses and revenues are recognized as net retained earned premiums over the associated policy 
periods.

We have increased revenues every year from 1993 to 2021, with the exception of 2009, when our revenues declined 1.0%. Our revenues 
grew from $95.6 million in 1993 to $3.1 billion in 2021, reflecting a compound annual growth rate of 13.2%. In the same 28-year period, we 
increased net income from $8.1 million to $587.1 million in 2021, a compound annual growth rate of 16.5%.

The volume of business from new and existing customers, fluctuations in insurable exposure units, changes in premium rate levels, 
changes in general economic and competitive conditions, a health pandemic, and the occurrence of catastrophic weather events 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, increasing costs of litigation settlements and awards could cause some customers to seek higher 
levels of insurance coverage. Historically, we have grown our revenues as a result of our focus on net new business and acquisitions. 
We foster a strong, decentralized sales and service culture which enables responsiveness to changing business conditions and drives 
accountability for results.

The term “Organic Revenue,” a non-GAAP measure, is our core commissions and fees less: (i) the core commissions and fees earned 
for the first 12 months by newly-acquired operations; (ii) divested business (core commissions and fees generated from offices, books 
of business or niches sold or terminated during the comparable period); and (iii) the period over period impact of foreign currency 
translation, which is calculated by applying current year foreign exchange rates to the same period in the prior year. 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. “Organic 
Revenue” is 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 customers’ exposure units; (iii) net changes in insurance premium rates or the commission rate paid 
to us by our carrier partners; and (iv) the net change in fees paid to us by our customers. Organic Revenue is reported in “Results of 
Operations” and in “Results of Operations - Segment Information” of this Annual Report. In connection with the Captive, we will recognize 
revenue starting in 2022 on a net retained earned premiums basis in a manner consistent with core commissions and fees. Beginning 
in 2022 we will no longer exclude guaranteed supplemental commissions from core commissions and fees and therefore they will be a 
component of Organic Revenue. We anticipate presenting certain prior periods accordingly so that the calculation of Organic Revenue 
compares both periods on the same basis. Guaranteed supplemental commissions are a small and increasingly more stable source of 
revenue that are highly correlated to core commissions, so excluding them provides no meaningful incremental value in evaluating our 
revenue performance.

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We also earn “profit-sharing contingent commissions,” which are commissions based primarily on underwriting results, but which may 
also reflect considerations for volume, growth and/or retention. These commissions, which are included in our commissions and fees in 
the Consolidated Statement of Income, are accrued throughout the year based on actual premiums written and are primarily received 
in the first and second quarters of each subsequent year, based upon the aforementioned considerations for the prior year(s). Over the 
last three years, profit-sharing contingent commissions have averaged approximately 3.0% of commissions and fees revenue.

Certain insurance companies offer guaranteed fixed-base agreements, referred to as “Guaranteed Supplemental Commissions” 
(“GSCs”) in lieu of profit-sharing contingent commissions. GSCs are accrued throughout the year based on actual premiums written. 
Over the last three years, GSCs have averaged less than 1.0% of commissions and fees revenue.

Combined, our profit-sharing contingent commissions and GSCs for the year ended December 31, 2021 increased by $14.1 million over 
2020. This increase was the result of recent acquisitions and qualifying for certain profit-sharing contingent commissions and GSCs in 
2021 that we did not qualify for in the prior year.

Fee revenues primarily relate to services other than securing coverage for our customers, as well as fees negotiated in lieu of 
commissions, and are recognized as performance obligations are satisfied. Fee revenues are generated by: (i) our Services segment, 
which provides insurance-related services, including third-party claims administration and comprehensive medical utilization 
management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social 
Security disability and Medicare benefits advocacy services, and claims adjusting services; (ii) our National Programs and Wholesale 
Brokerage segments, which earn fees primarily for the issuance of insurance policies on behalf of insurance companies; and (iii) our 
Retail segment in our large-account customer base, where we primarily earn fees for securing insurance for our customers, and in 
our automobile dealer services (“F&I”) businesses where we primarily earn fees for assisting our customers with creating and selling 
warranty and service risk management programs. Fee revenues as a percentage of our total commissions and fees, represented 27.4% 
in 2021 and 26.1% in 2020.

For the years ended December 31, 2021 and 2020, our commissions and fees growth rate was 16.9% and 9.3%, respectively, and our 
consolidated Organic Revenue growth rate was 10.4% and 3.8%, respectively.

Investment income consists primarily of interest earnings on operating cash, and where permitted, 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. Investment income also includes gains and losses realized from 
the sale of investments. Other income primarily reflects legal settlements and other miscellaneous revenues.

Income before income taxes for the year ended December 31, 2021 increased by $138.7 million over 2020, as a result of net new 
business, acquisitions we completed since 2020, and management of our expense base, partially offset by an increase in the change 
in estimated acquisition earn-out payables.

Information Regarding Non-GAAP Measures

In the discussion and analysis of our results of operations, in addition to reporting financial results in accordance with generally 
accepted accounting principles (“GAAP”), we provide references to the following non-GAAP financial measures as defined in 
Regulation G of SEC rules: Organic Revenue, Organic Revenue growth, EBITDAC and EBITDAC Margin. EBITDAC is defined as income 
before interest, income taxes, depreciation, amortization, and the change in estimated acquisition earn-out payables (“EBITDAC”). 
EBITDAC Margin is defined as EBITDAC divided by total revenues. We view these non-GAAP financial measures as important indicators 
when assessing and evaluating our performance on a consolidated basis and for each of our segments because they allow us to 
determine a more comparable, but non-GAAP, measurement of revenue growth and operating performance that is associated with 
the revenue sources that were a part of our business in both the current and prior year. We believe that Organic Revenue provides a 
meaningful representation of our operating performance and view Organic Revenue growth as an important indicator when assessing 
and evaluating the performance of our four segments. Organic Revenue can be expressed as a dollar amount or a percentage rate 
when describing Organic Revenue growth. We use Organic Revenue growth in determining incentive cash compensation and as a 
performance measure in our equity incentive grants for our executive officers and other key employees. We use EBITDAC Margin for 
incentive cash compensation determinations for our executive officers. We view EBITDAC and EBITDAC Margin as important indicators 
of operating performance, because they allow us to determine more comparable, but non-GAAP, measurements of our operating 
margins in a meaningful and consistent manner by removing the significant non-cash items of depreciation, amortization, and the 
change in estimated acquisition earn-out payables, as well as interest expense and taxes, which are reflective of investment and 
financing activities, not operating performance.

These measures are not in accordance with, or an alternative to the GAAP information provided in this Annual Report. We present 
such non-GAAP supplemental financial information because we believe such information is of interest to the investment community 
and because we believe they provide additional meaningful methods of evaluating certain aspects of our operating performance 
from period to period on a basis that may not be otherwise apparent on a GAAP basis. We believe these non-GAAP financial 

16

measures improve the comparability of results between periods by eliminating the impact of certain items that have a high degree of 

variability. Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, 

although they may not use the same or comparable terminology and may not make identical adjustments. This supplemental financial 

information should be considered in addition to, not in lieu of, our Consolidated Financial Statements.

Tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in 

this Annual Report under “Results of Operation - Segment Information.”

Acquisitions

Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 

1993 through the fourth quarter of 2021, we acquired 580 insurance intermediary operations.

Critical Accounting Policies

Our Consolidated Financial Statements are prepared in accordance with 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 upon a combination of historical experience and assumptions that we believe to be 

reasonable under the circumstances. These estimates form the basis for our judgments about the recognition of revenues, expenses, 

carrying values of our assets and liabilities, of which values are not readily apparent from other sources. Actual results may differ from 

these estimates.

We believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue 

recognition, business combinations and purchase price allocations, intangible asset impairments, non-cash stock-based compensation 

and reserves for litigation. In particular, the accounting for these areas requires significant use of judgment 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.

Revenue Recognition

The majority of our revenue is commissions derived from our performance as agents and brokers, acting on behalf of insurance 

carriers to sell products to customers that are seeking to transfer risk, and conversely, acting on behalf of those customers in 

negotiating with insurance carriers seeking to acquire risk in exchange for premiums. In the majority of these arrangements, our 

performance obligation is complete upon the effective date of the bound policy, as such, that is when the associated revenue is 

recognized. In some arrangements, where we are compensated through commissions, we also perform other services for our 

customer beyond binding of coverage. In those arrangements we apportion the commission between binding of coverage and other 

services based on their relative fair value and recognize the associated revenue as those performance obligations are satisfied. Where 

the Company’s performance obligations have been completed, but the final amount of compensation is unknown due to variable 

factors, we estimate the amount of such compensation. We refine those estimates upon our receipt of additional information or final 

settlement, whichever occurs first.

To a lesser extent, the Company earns revenues in the form of fees. Like commissions, fees paid to us in lieu of commission, are 

recognized upon the effective date of the bound policy. When we are paid a fee for service, however, the associated revenue is 

recognized over a period of time that coincides with when the customer simultaneously receives and consumes the benefit of our 

work, which characterizes most of our claims processing arrangements and various services performed in our property and casualty, 

and employee benefits practices. Other fees are typically recognized upon the completion of the delivery of the agreed-upon services 

to the customer.

To a much lesser extent, the Company will earn revenues starting in 2022 in the form of net retained earned premiums in connection 

with the Captive, in which the majority of underwriting risk is reinsured and a small portion is retained by the Company. These 

premiums are reported net of the ceded premiums for reinsurance and recognized evenly over the associated policy periods.

Management determines a policy cancellation reserve based upon historical cancellation experience adjusted in accordance with 

Please see Note 2 “Revenues” in the “Notes to Consolidated Financial Statements” for additional information regarding the nature and 

known circumstances.

timing of our revenues.

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We also earn “profit-sharing contingent commissions,” which are commissions based primarily on underwriting results, but which may 

also reflect considerations for volume, growth and/or retention. These commissions, which are included in our commissions and fees in 

the Consolidated Statement of Income, are accrued throughout the year based on actual premiums written and are primarily received 

in the first and second quarters of each subsequent year, based upon the aforementioned considerations for the prior year(s). Over the 

last three years, profit-sharing contingent commissions have averaged approximately 3.0% of commissions and fees revenue.

Certain insurance companies offer guaranteed fixed-base agreements, referred to as “Guaranteed Supplemental Commissions” 

(“GSCs”) in lieu of profit-sharing contingent commissions. GSCs are accrued throughout the year based on actual premiums written. 

Over the last three years, GSCs have averaged less than 1.0% of commissions and fees revenue.

Combined, our profit-sharing contingent commissions and GSCs for the year ended December 31, 2021 increased by $14.1 million over 

2020. This increase was the result of recent acquisitions and qualifying for certain profit-sharing contingent commissions and GSCs in 

2021 that we did not qualify for in the prior year.

Fee revenues primarily relate to services other than securing coverage for our customers, as well as fees negotiated in lieu of 

commissions, and are recognized as performance obligations are satisfied. Fee revenues are generated by: (i) our Services segment, 

which provides insurance-related services, including third-party claims administration and comprehensive medical utilization 

management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social 

Security disability and Medicare benefits advocacy services, and claims adjusting services; (ii) our National Programs and Wholesale 

Brokerage segments, which earn fees primarily for the issuance of insurance policies on behalf of insurance companies; and (iii) our 

Retail segment in our large-account customer base, where we primarily earn fees for securing insurance for our customers, and in 

our automobile dealer services (“F&I”) businesses where we primarily earn fees for assisting our customers with creating and selling 

warranty and service risk management programs. Fee revenues as a percentage of our total commissions and fees, represented 27.4% 

in 2021 and 26.1% in 2020.

For the years ended December 31, 2021 and 2020, our commissions and fees growth rate was 16.9% and 9.3%, respectively, and our 

consolidated Organic Revenue growth rate was 10.4% and 3.8%, respectively.

Investment income consists primarily of interest earnings on operating cash, and where permitted, 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. Investment income also includes gains and losses realized from 

the sale of investments. Other income primarily reflects legal settlements and other miscellaneous revenues.

Income before income taxes for the year ended December 31, 2021 increased by $138.7 million over 2020, as a result of net new 

business, acquisitions we completed since 2020, and management of our expense base, partially offset by an increase in the change 

in estimated acquisition earn-out payables.

Information Regarding Non-GAAP Measures

In the discussion and analysis of our results of operations, in addition to reporting financial results in accordance with generally 

accepted accounting principles (“GAAP”), we provide references to the following non-GAAP financial measures as defined in 

Regulation G of SEC rules: Organic Revenue, Organic Revenue growth, EBITDAC and EBITDAC Margin. EBITDAC is defined as income 

before interest, income taxes, depreciation, amortization, and the change in estimated acquisition earn-out payables (“EBITDAC”). 

EBITDAC Margin is defined as EBITDAC divided by total revenues. We view these non-GAAP financial measures as important indicators 

when assessing and evaluating our performance on a consolidated basis and for each of our segments because they allow us to 

determine a more comparable, but non-GAAP, measurement of revenue growth and operating performance that is associated with 

the revenue sources that were a part of our business in both the current and prior year. We believe that Organic Revenue provides a 

meaningful representation of our operating performance and view Organic Revenue growth as an important indicator when assessing 

and evaluating the performance of our four segments. Organic Revenue can be expressed as a dollar amount or a percentage rate 

when describing Organic Revenue growth. We use Organic Revenue growth in determining incentive cash compensation and as a 

performance measure in our equity incentive grants for our executive officers and other key employees. We use EBITDAC Margin for 

incentive cash compensation determinations for our executive officers. We view EBITDAC and EBITDAC Margin as important indicators 

of operating performance, because they allow us to determine more comparable, but non-GAAP, measurements of our operating 

margins in a meaningful and consistent manner by removing the significant non-cash items of depreciation, amortization, and the 

change in estimated acquisition earn-out payables, as well as interest expense and taxes, which are reflective of investment and 

financing activities, not operating performance.

These measures are not in accordance with, or an alternative to the GAAP information provided in this Annual Report. We present 

such non-GAAP supplemental financial information because we believe such information is of interest to the investment community 

and because we believe they provide additional meaningful methods of evaluating certain aspects of our operating performance 

from period to period on a basis that may not be otherwise apparent on a GAAP basis. We believe these non-GAAP financial 

16

measures improve the comparability of results between periods by eliminating the impact of certain items that have a high degree of 
variability. Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, 
although they may not use the same or comparable terminology and may not make identical adjustments. This supplemental financial 
information should be considered in addition to, not in lieu of, our Consolidated Financial Statements.

Tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in 
this Annual Report under “Results of Operation - Segment Information.”

Acquisitions

Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 
1993 through the fourth quarter of 2021, we acquired 580 insurance intermediary operations.

Critical Accounting Policies

Our Consolidated Financial Statements are prepared in accordance with 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 upon a combination of historical experience and assumptions that we believe to be 
reasonable under the circumstances. These estimates form the basis for our judgments about the recognition of revenues, expenses, 
carrying values of our assets and liabilities, of which values are not readily apparent from other sources. Actual results may differ from 
these estimates.

We believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue 
recognition, business combinations and purchase price allocations, intangible asset impairments, non-cash stock-based compensation 
and reserves for litigation. In particular, the accounting for these areas requires significant use of judgment 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.

Revenue Recognition

The majority of our revenue is commissions derived from our performance as agents and brokers, acting on behalf of insurance 
carriers to sell products to customers that are seeking to transfer risk, and conversely, acting on behalf of those customers in 
negotiating with insurance carriers seeking to acquire risk in exchange for premiums. In the majority of these arrangements, our 
performance obligation is complete upon the effective date of the bound policy, as such, that is when the associated revenue is 
recognized. In some arrangements, where we are compensated through commissions, we also perform other services for our 
customer beyond binding of coverage. In those arrangements we apportion the commission between binding of coverage and other 
services based on their relative fair value and recognize the associated revenue as those performance obligations are satisfied. Where 
the Company’s performance obligations have been completed, but the final amount of compensation is unknown due to variable 
factors, we estimate the amount of such compensation. We refine those estimates upon our receipt of additional information or final 
settlement, whichever occurs first.

To a lesser extent, the Company earns revenues in the form of fees. Like commissions, fees paid to us in lieu of commission, are 
recognized upon the effective date of the bound policy. When we are paid a fee for service, however, the associated revenue is 
recognized over a period of time that coincides with when the customer simultaneously receives and consumes the benefit of our 
work, which characterizes most of our claims processing arrangements and various services performed in our property and casualty, 
and employee benefits practices. Other fees are typically recognized upon the completion of the delivery of the agreed-upon services 
to the customer.

To a much lesser extent, the Company will earn revenues starting in 2022 in the form of net retained earned premiums in connection 
with the Captive, in which the majority of underwriting risk is reinsured and a small portion is retained by the Company. These 
premiums are reported net of the ceded premiums for reinsurance and recognized evenly over the associated policy periods.

Management determines a policy cancellation reserve based upon historical cancellation experience adjusted in accordance with 
known circumstances.

Please see Note 2 “Revenues” in the “Notes to Consolidated Financial Statements” for additional information regarding the nature and 
timing of our revenues.

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Business Combinations and Purchase Price Allocations

Non-Cash Stock-Based Compensation

We have acquired significant intangible assets through acquisitions of businesses. These assets generally consist of purchased 
customer accounts, non-compete agreements, and the excess of purchase prices over the fair value of identifiable net assets acquired 
(goodwill). The determination of estimated useful lives and the allocation of purchase price to intangible assets requires significant 
judgment and affects the amount of future amortization and possible impairment charges.

We grant non-vested stock awards to our employees, with the related compensation expense recognized in the financial statements 

over the associated service period based upon the grant-date fair value of those awards. During the performance measurement 

period, we review the probable outcome of the performance conditions associated with our performance awards and align the 

expense accruals with the expected performance outcome.

In connection with acquisitions, we record the estimated value of the net tangible assets purchased and the value of the identifiable 
intangible assets purchased, which typically consist of purchased customer accounts and non-compete agreements. Purchased 
customer accounts include the right to represent insureds or claimants supported by the physical records and files obtained from 
acquired businesses that contain information about insurance policies, customers and other matters essential to policy renewals of 
delivery of services. Their value primarily represents the present value of the underlying cash flows expected to be received over the 
estimated future duration of the acquired customer relationships. The valuation of purchased customer accounts involves significant 
estimates and assumptions concerning matters such as cancellation frequency, expenses and discount rates. Any change in these 
assumptions could affect the carrying value of purchased customer accounts. Non-compete agreements are valued based upon 
their duration and any unique features of the particular agreements. Purchased customer accounts and non-compete agreements 
are amortized on a straight-line basis over the related estimated lives and contract periods, which typically range from 3 to 15 years. 
The excess of the purchase price of an acquisition over the fair value of the identifiable tangible and intangible assets is assigned to 
goodwill and is not amortized.

The recorded purchase prices for all acquisitions include an estimation of the fair value of liabilities associated with any potential earn-
out provisions, where an earn-out is part of the negotiated transaction. Subsequent changes in the fair value of earn-out obligations are 
recorded in the Consolidated Statement of Income as a result of updated expectations for the performance of the associated business.

The fair value of earn-out obligations is based upon the present value of the expected future payments to be made to the sellers 
of the acquired businesses in accordance with the provisions contained 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 this estimate reflects market participant assumptions regarding revenue growth and/or profitability. The expected future 
payments are estimated based on the earn-out formula and performance targets specified in each purchase agreement compared to 
the associated financial projections. These estimates are then discounted to a present value using a risk-adjusted rate that takes into 
consideration the likelihood that the forecast earn-out payments will be made.

Intangible Assets Impairment

Goodwill is subject to at least an annual assessment for impairment, measured by a fair-value-based test. Amortizable intangible assets 
are amortized over their useful lives and are subject to an impairment review based upon an estimate of the undiscounted future cash 
flows resulting from the use of the assets. To determine if there is potential impairment of goodwill, we compare the fair value of each 
reporting unit with its carrying value. The Company may elect to first perform a qualitative assessment to determine whether it is more 
likely than not that a reporting unit is impaired. If the Company does not perform a qualitative assessment, or if it is determined that it is 
more likely than not that the fair value of a reporting unit exceeds its carrying amount, the Company will calculate the fair value of the 
reporting unit. If the fair value of the reporting unit is less than its carrying value, an impairment loss would be recorded to the extent 
that the fair value of the goodwill within the reporting unit is less than its carrying value. Fair value is estimated based upon multiples of 
EBITDAC, or on a discounted cash flow basis.

Management assesses the recoverability of our goodwill and our amortizable intangibles and other long-lived assets annually and 
whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Any of the 
following factors, if present, may trigger an impairment review: (i) a significant underperformance relative to historical or projected 
future operating results, (ii) a significant negative industry or economic trend, and (iii) a significant decline in our market capitalization. If 
the recoverability of these assets is unlikely because of the existence of one or more of the above-referenced factors, an impairment 
analysis is performed. Management must make assumptions regarding estimated future cash flows and other factors to determine the 
fair value of these assets. If these estimates or related assumptions change in the future, we may be required to revise the assessment 
and, if appropriate, record an impairment charge. We completed our most recent evaluation of impairment for goodwill as of November 
30, 2021 and determined that the fair value of goodwill exceeded the carrying value of such assets. Additionally, there have been no 
impairments recorded for amortizable intangible assets for the years ended December 31, 2021 and 2020.

18

During the first quarter of 2021, the performance conditions for approximately 1.2 million shares of the Company’s common stock 

granted under the Company’s 2010 SIP and approximately 22,000 shares of the Company’s common stock granted under the 

Company’s 2019 SIP were determined by the Compensation Committee to have been satisfied relative to performance-based grants 

issued in 2018 and 2020. These grants had a performance measurement period that concluded on December 31, 2020. The vesting 

condition for these grants requires continuous employment for a period of up to five years from the 2018 grant date and four years 

from the 2020 grant date in order for the awarded shares to become fully vested and nonforfeitable. As a result of the awarding of 

these shares, the grantees will be eligible to receive payments of dividends and exercise voting privileges after the awarding date, 

and the awarded shares will be included as issued and outstanding common stock shares and included in the calculation of basic and 

diluted net income per share.

During the first quarter of 2022, the performance conditions for approximately 1.3 million shares of the Company’s common stock 

granted under the Company’s 2010 SIP and approximately 22,000 shares of the Company’s common stock granted under the 

Company’s 2019 SIP were determined by the Compensation Committee to have been satisfied relative to performance-based grants 

issued in 2019 and 2021. These grants had a performance measurement period that concluded on December 31, 2021. The vesting 

condition for these grants requires continuous employment for a period of up to five years from the 2019 grant date and four years 

from the 2021 grant date in order for the awarded shares to become fully vested and nonforfeitable. As a result of the awarding of 

these shares, the grantees will be eligible to receive payments of dividends and exercise voting privileges after the awarding date, 

and the awarded shares will be included as issued and outstanding common stock shares and included in the calculation of basic and 

diluted net income per share.

Litigation and Claims

We are subject to numerous litigation claims that arise in the ordinary course of business. If it is probable that a liability has been 

incurred at the date of the financial statements and the amount of the loss is estimable, an accrual for the costs to resolve these claims 

is recorded in accrued expenses in the accompanying Consolidated Financial Statements. Professional fees related to these claims 

are included in other operating expenses in the accompanying Consolidated Statement of Income as incurred. Management, with 

the assistance of in-house and outside counsel, determines whether it is probable that a liability has been incurred and estimates the 

amount of loss based upon analysis of individual issues. New developments or changes in settlement strategy in dealing with these 

matters may significantly affect the required reserves and affect our net income.

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Business Combinations and Purchase Price Allocations

Non-Cash Stock-Based Compensation

We have acquired significant intangible assets through acquisitions of businesses. These assets generally consist of purchased 

customer accounts, non-compete agreements, and the excess of purchase prices over the fair value of identifiable net assets acquired 

(goodwill). The determination of estimated useful lives and the allocation of purchase price to intangible assets requires significant 

judgment and affects the amount of future amortization and possible impairment charges.

We grant non-vested stock awards to our employees, with the related compensation expense recognized in the financial statements 
over the associated service period based upon the grant-date fair value of those awards. During the performance measurement 
period, we review the probable outcome of the performance conditions associated with our performance awards and align the 
expense accruals with the expected performance outcome.

In connection with acquisitions, we record the estimated value of the net tangible assets purchased and the value of the identifiable 

intangible assets purchased, which typically consist of purchased customer accounts and non-compete agreements. Purchased 

customer accounts include the right to represent insureds or claimants supported by the physical records and files obtained from 

acquired businesses that contain information about insurance policies, customers and other matters essential to policy renewals of 

delivery of services. Their value primarily represents the present value of the underlying cash flows expected to be received over the 

estimated future duration of the acquired customer relationships. The valuation of purchased customer accounts involves significant 

estimates and assumptions concerning matters such as cancellation frequency, expenses and discount rates. Any change in these 

assumptions could affect the carrying value of purchased customer accounts. Non-compete agreements are valued based upon 

their duration and any unique features of the particular agreements. Purchased customer accounts and non-compete agreements 

are amortized on a straight-line basis over the related estimated lives and contract periods, which typically range from 3 to 15 years. 

The excess of the purchase price of an acquisition over the fair value of the identifiable tangible and intangible assets is assigned to 

goodwill and is not amortized.

The recorded purchase prices for all acquisitions include an estimation of the fair value of liabilities associated with any potential earn-

out provisions, where an earn-out is part of the negotiated transaction. Subsequent changes in the fair value of earn-out obligations are 

recorded in the Consolidated Statement of Income as a result of updated expectations for the performance of the associated business.

The fair value of earn-out obligations is based upon the present value of the expected future payments to be made to the sellers 

of the acquired businesses in accordance with the provisions contained 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 this estimate reflects market participant assumptions regarding revenue growth and/or profitability. The expected future 

payments are estimated based on the earn-out formula and performance targets specified in each purchase agreement compared to 

the associated financial projections. These estimates are then discounted to a present value using a risk-adjusted rate that takes into 

consideration the likelihood that the forecast earn-out payments will be made.

Intangible Assets Impairment

Goodwill is subject to at least an annual assessment for impairment, measured by a fair-value-based test. Amortizable intangible assets 

are amortized over their useful lives and are subject to an impairment review based upon an estimate of the undiscounted future cash 

flows resulting from the use of the assets. To determine if there is potential impairment of goodwill, we compare the fair value of each 

reporting unit with its carrying value. The Company may elect to first perform a qualitative assessment to determine whether it is more 

likely than not that a reporting unit is impaired. If the Company does not perform a qualitative assessment, or if it is determined that it is 

more likely than not that the fair value of a reporting unit exceeds its carrying amount, the Company will calculate the fair value of the 

reporting unit. If the fair value of the reporting unit is less than its carrying value, an impairment loss would be recorded to the extent 

that the fair value of the goodwill within the reporting unit is less than its carrying value. Fair value is estimated based upon multiples of 

EBITDAC, or on a discounted cash flow basis.

Management assesses the recoverability of our goodwill and our amortizable intangibles and other long-lived assets annually and 

whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Any of the 

following factors, if present, may trigger an impairment review: (i) a significant underperformance relative to historical or projected 

future operating results, (ii) a significant negative industry or economic trend, and (iii) a significant decline in our market capitalization. If 

the recoverability of these assets is unlikely because of the existence of one or more of the above-referenced factors, an impairment 

analysis is performed. Management must make assumptions regarding estimated future cash flows and other factors to determine the 

fair value of these assets. If these estimates or related assumptions change in the future, we may be required to revise the assessment 

and, if appropriate, record an impairment charge. We completed our most recent evaluation of impairment for goodwill as of November 

30, 2021 and determined that the fair value of goodwill exceeded the carrying value of such assets. Additionally, there have been no 

impairments recorded for amortizable intangible assets for the years ended December 31, 2021 and 2020.

18

During the first quarter of 2021, the performance conditions for approximately 1.2 million shares of the Company’s common stock 
granted under the Company’s 2010 SIP and approximately 22,000 shares of the Company’s common stock granted under the 
Company’s 2019 SIP were determined by the Compensation Committee to have been satisfied relative to performance-based grants 
issued in 2018 and 2020. These grants had a performance measurement period that concluded on December 31, 2020. The vesting 
condition for these grants requires continuous employment for a period of up to five years from the 2018 grant date and four years 
from the 2020 grant date in order for the awarded shares to become fully vested and nonforfeitable. As a result of the awarding of 
these shares, the grantees will be eligible to receive payments of dividends and exercise voting privileges after the awarding date, 
and the awarded shares will be included as issued and outstanding common stock shares and included in the calculation of basic and 
diluted net income per share.

During the first quarter of 2022, the performance conditions for approximately 1.3 million shares of the Company’s common stock 
granted under the Company’s 2010 SIP and approximately 22,000 shares of the Company’s common stock granted under the 
Company’s 2019 SIP were determined by the Compensation Committee to have been satisfied relative to performance-based grants 
issued in 2019 and 2021. These grants had a performance measurement period that concluded on December 31, 2021. The vesting 
condition for these grants requires continuous employment for a period of up to five years from the 2019 grant date and four years 
from the 2021 grant date in order for the awarded shares to become fully vested and nonforfeitable. As a result of the awarding of 
these shares, the grantees will be eligible to receive payments of dividends and exercise voting privileges after the awarding date, 
and the awarded shares will be included as issued and outstanding common stock shares and included in the calculation of basic and 
diluted net income per share.

Litigation and Claims

We are subject to numerous litigation claims that arise in the ordinary course of business. If it is probable that a liability has been 
incurred at the date of the financial statements and the amount of the loss is estimable, an accrual for the costs to resolve these claims 
is recorded in accrued expenses in the accompanying Consolidated Financial Statements. Professional fees related to these claims 
are included in other operating expenses in the accompanying Consolidated Statement of Income as incurred. Management, with 
the assistance of in-house and outside counsel, determines whether it is probable that a liability has been incurred and estimates the 
amount of loss based upon analysis of individual issues. New developments or changes in settlement strategy in dealing with these 
matters may significantly affect the required reserves and affect our net income.

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Results of Operations for the Years Ended  
December 31, 2021 and 2020

The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in 
conjunction with the accompanying Consolidated Financial Statements and related Notes. For a comparison of our results of operations 
and liquidity and capital resources for the years ended December 31, 2020 and 2019, please see Part II, Item 7 of our Annual Report on 
Form 10-K filed with the Securities and Exchange Commission on February 23, 2021.

Financial information relating to our Consolidated Financial Results is as follows:

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Change in estimated acquisition earn-out payables

Total expenses

Income before income taxes

Income taxes

Net Income

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

Capital expenditures

Total assets at December 31

$2,946,291

82,226

19,005

1,099

2,777

17.0%

15.9%

17.4%

(60.9)%

(37.7)%

$2,518,980

70,934

16,194

2,811

4,456

3,051,398

16.8%

2,613,375

1,636,911

402,941

(9,605)

119,593

33,309

64,981

40,445

2,288,575

762,823

175,719

$587,104

25.0%

14.0%

10.1%

NMF

10.2%

26.8%

10.2%

NMF

15.0%

22.2%

22.4%

22.2%

1,436,377

365,973

(2,388)

108,523

26,276

58,973

(4,458)

1,989,276

624,099

143,616

$480,483

23.9%

$1,021,151

25.5%

$813,413

33.5%

10.4%

53.6%

13.2%

31.1%

3.8%

55.0%

14.0%

$45,045

(36.3)%

$70,700

$9,795,443

9.2%

$8,966,492

(1)  “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues
(2)  A non-GAAP financial measure

NMF = Not a meaningful figure

Amortization

20

Commissions and Fees

Commissions and fees, including profit-sharing contingent commissions and GSCs for 2021, increased $441.4 million to $3,047.5 million, 

or 16.9% over 2020. Core commissions and fees in 2021 increased $427.3 million, composed of (i) $261.3 million of net new and renewal 

business, which reflects an Organic Revenue growth rate of 10.4%; (ii) $170.1 million from acquisitions that had no comparable revenues in the 

same period of 2020; (iii) a positive impact from foreign currency translation of $1.2 million; and  

(iv) an offsetting decrease of $5.3 million related to commissions and fees revenue from business divested in the preceding 12 months. 

Profit-sharing contingent commissions and GSCs for 2021 increased by $14.1 million, or 16.2%, compared to the same period in 2020. This 

increase was the result of recent acquisitions and qualifying for certain profit-sharing contingent commissions and GSCs in 2021 that we did 

Investment income decreased to $1.1 million in 2021, compared with $2.8 million in 2020. The decrease was primarily due to lower 

not qualify for in the prior year.

Investment Income

interest rates as compared to the prior year.

Other Income, Net

other miscellaneous income.

Other income for 2021 was $2.7 million, compared with $4.5 million in 2020. Other income consists primarily of legal settlements and 

Employee Compensation and Benefits

Employee compensation and benefits expense as a percentage of total revenues was 53.6% for the year ended December 31, 2021 

as compared to 55.0% for the year ended December 31, 2020, and increased 14.0%, or $200.5 million. This increase included $70.7 

million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2020. Therefore, 

employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2021 and 2020 

increased by $129.8 million or 9.2%. This underlying employee compensation and benefits expense increase was primarily related to: 

(i) an increase in staff salaries attributable to salary inflation; (ii) an increase in accrued performance bonuses; and (iii) an increase in 

producer compensation associated with revenue growth.

Other Operating Expenses

Other operating expenses represented 13.2% of total revenues for 2021 as compared to 14.0% for the year ended December 31, 2020. 

Other operating expenses for 2021 increased $37.0 million, or 10.1%, from the same period of 2020 growing slower than revenues. The 

net increase included: (i) $40.2 million of other operating expenses related to stand-alone acquisitions that had no comparable costs 

in the same period of 2020; (ii) increased data processing costs as we invest in our business to drive future growth; (iii) slightly higher 

variable operating expenses, including travel and entertainment and meeting-related expenses; partially offset by (iv) non-recurring legal 

costs and the write-off recorded in 2020 of certain receivables in one of our programs where it was determined the collectability was in 

doubt and which did not recur in 2021.

Gain or Loss on Disposal

The Company recognized net gains on disposals of $9.6 million in 2021 and $2.4 million in 2020. The change in the net gain on disposal 

was due to activity associated with sales of businesses or portions of businesses. Although we are not in the business of selling customer 

accounts, we periodically 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 in the Company’s best interest.

Amortization expense for 2021 increased $11.1 million to $119.6 million, or 10.2% over 2020. This increase reflects the amortization of new 

intangibles from businesses acquired within the past 12 months, partially offset by certain intangible assets becoming fully amortized.

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Results of Operations for the Years Ended  

December 31, 2021 and 2020

The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in 

conjunction with the accompanying Consolidated Financial Statements and related Notes. For a comparison of our results of operations 

and liquidity and capital resources for the years ended December 31, 2020 and 2019, please see Part II, Item 7 of our Annual Report on 

Form 10-K filed with the Securities and Exchange Commission on February 23, 2021.

Financial information relating to our Consolidated Financial Results is as follows:

Commissions and Fees

Commissions and fees, including profit-sharing contingent commissions and GSCs for 2021, increased $441.4 million to $3,047.5 million, 
or 16.9% over 2020. Core commissions and fees in 2021 increased $427.3 million, composed of (i) $261.3 million of net new and renewal 
business, which reflects an Organic Revenue growth rate of 10.4%; (ii) $170.1 million from acquisitions that had no comparable revenues in the 
same period of 2020; (iii) a positive impact from foreign currency translation of $1.2 million; and  
(iv) an offsetting decrease of $5.3 million related to commissions and fees revenue from business divested in the preceding 12 months. 
Profit-sharing contingent commissions and GSCs for 2021 increased by $14.1 million, or 16.2%, compared to the same period in 2020. This 
increase was the result of recent acquisitions and qualifying for certain profit-sharing contingent commissions and GSCs in 2021 that we did 
not qualify for in the prior year.

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

Investment Income

$2,946,291

$2,518,980

Investment income decreased to $1.1 million in 2021, compared with $2.8 million in 2020. The decrease was primarily due to lower 
interest rates as compared to the prior year.

3,051,398

16.8%

2,613,375

Other income for 2021 was $2.7 million, compared with $4.5 million in 2020. Other income consists primarily of legal settlements and 
other miscellaneous income.

Other Income, Net

Employee Compensation and Benefits

Employee compensation and benefits expense as a percentage of total revenues was 53.6% for the year ended December 31, 2021 
as compared to 55.0% for the year ended December 31, 2020, and increased 14.0%, or $200.5 million. This increase included $70.7 
million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2020. Therefore, 
employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2021 and 2020 
increased by $129.8 million or 9.2%. This underlying employee compensation and benefits expense increase was primarily related to: 
(i) an increase in staff salaries attributable to salary inflation; (ii) an increase in accrued performance bonuses; and (iii) an increase in 
producer compensation associated with revenue growth.

Other Operating Expenses

Other operating expenses represented 13.2% of total revenues for 2021 as compared to 14.0% for the year ended December 31, 2020. 
Other operating expenses for 2021 increased $37.0 million, or 10.1%, from the same period of 2020 growing slower than revenues. The 
net increase included: (i) $40.2 million of other operating expenses related to stand-alone acquisitions that had no comparable costs 
in the same period of 2020; (ii) increased data processing costs as we invest in our business to drive future growth; (iii) slightly higher 
variable operating expenses, including travel and entertainment and meeting-related expenses; partially offset by (iv) non-recurring legal 
costs and the write-off recorded in 2020 of certain receivables in one of our programs where it was determined the collectability was in 
doubt and which did not recur in 2021.

Gain or Loss on Disposal

(1)  “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

$45,045

(36.3)%

$70,700

$9,795,443

9.2%

$8,966,492

The Company recognized net gains on disposals of $9.6 million in 2021 and $2.4 million in 2020. The change in the net gain on disposal 
was due to activity associated with sales of businesses or portions of businesses. Although we are not in the business of selling customer 
accounts, we periodically 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 in the Company’s best interest.

Amortization

Amortization expense for 2021 increased $11.1 million to $119.6 million, or 10.2% over 2020. This increase reflects the amortization of new 
intangibles from businesses acquired within the past 12 months, partially offset by certain intangible assets becoming fully amortized.

Employee compensation and benefits

1,636,911

1,436,377

82,226

19,005

1,099

2,777

402,941

(9,605)

119,593

33,309

64,981

40,445

2,288,575

762,823

175,719

$587,104

25.0%

33.5%

10.4%

53.6%

13.2%

17.0%

15.9%

17.4%

(60.9)%

(37.7)%

14.0%

10.1%

NMF

10.2%

26.8%

10.2%

NMF

15.0%

22.2%

22.4%

22.2%

70,934

16,194

2,811

4,456

365,973

(2,388)

108,523

26,276

58,973

(4,458)

1,989,276

624,099

143,616

$480,483

23.9%

31.1%

3.8%

55.0%

14.0%

$1,021,151

25.5%

$813,413

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Total expenses

Income taxes

Net Income

Change in estimated acquisition earn-out payables

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

Capital expenditures

Total assets at December 31

(2)  A non-GAAP financial measure

NMF = Not a meaningful figure

20

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Depreciation

Depreciation expense for 2021 increased $7.0 million to $33.3 million, or 26.8% over 2020. Changes in depreciation expense reflect 
the addition of fixed assets resulting from business initiatives, net additions of fixed assets resulting from businesses acquired in the 
past 12 months, partially offset by fixed assets which became fully depreciated.

Interest Expense

Interest expense for 2021 increased $6.0 million to $65.0 million, or 10.2%, from 2020. The increase is due to higher average debt 
balances from increased borrowings associated with the issuance of bonds in September 2020, partially offset by the decrease in 
interest rates associated with our floating rate debt balances.

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 value 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 price arrangements) at the acquisition date must be included in the purchase price consideration. The recorded purchase 
price for acquisitions includes 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 or 
reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations 
or entities, usually for periods ranging from one to three years.

The net charge or credit to the 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 December 31, 2021, the fair values of the estimated acquisition earn-out payables were reevaluated and measured at fair 
value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting 
net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended 
December 31, 2021 and 2020 were as follows:

(IN THOUSANDS)

Change in fair value of estimated acquisition earn-out payables

Interest expense accretion

Net change in earnings from estimated acquisition earn-out payables

2021

2020

$34,209

$(11,814)

6,236

7,356

$40,445

$(4,458)

For the years ended December 31, 2021 and 2020, the fair value of estimated earn-out payables was reevaluated and increased by 
$34.2 million for 2021 and decreased by $11.8 million for 2020, which are charges and credits respectively, net of interest expense 
accretion, to the Consolidated Statement of Income for 2021 and 2020.

As of December 31, 2021, the estimated acquisition earn-out payables equaled $291.0 million, of which $78.4 million was recorded as 
accounts payable and $212.6 million was recorded as other non-current liabilities. As of December 31, 2020, the estimated acquisition 
earn-out payables equaled $258.9 million, of which $79.2 million was recorded as accounts payable and $179.7 million was recorded 
as other non-current liabilities.

Income Taxes

The effective tax rate on income from operations was 23.0% in 2021 and 2020.

Results of Operations — Segment Information

As discussed in Note 16 “Segment Information” of the Notes to Consolidated Financial Statements, we operate four reportable 
segments: Retail, National Programs, Wholesale Brokerage and Services. On a segmented basis, changes in amortization, depreciation 
and interest expenses generally result from activity associated with acquisitions. Likewise, other revenues in each segment reflects 
net gains primarily from legal settlements and miscellaneous income. As such, in evaluating the operational efficiency of a segment, 
management focuses on the Organic Revenue growth rate and EBITDAC margin.

22

The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-

GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2021 

are as follows:

2021

(IN THOUSANDS, EXCEPT 

PERCENTAGES)

Commissions and fees

Total change

Total growth %

GSCs

Acquisitions

Dispositions

Foreign currency translation

Organic Revenue(2)

Organic Revenue growth(2)

Organic Revenue growth rate(2)

RETAIL(1)

NATIONAL  

PROGRAMS

WHOLESALE 

BROKERAGE

SERVICES

TOTAL

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

$1,764,922

$1,470,093

$701,108

$609,842

$402,635

$352,161

$178,857

$174,012

$3,047,522

$2,606,108

$91,266

15.0%

$50,474

14.3%

$4,845

2.8%

$ 441,414

16.9%

$294,829

20.1 %

(38,895)

(16,452)

Profit-sharing contingent commissions

(35,785)

(35,259)

(27,278)

(8,072)

(15,128)

(1,619)

238

(934)

Core commissions and fees

$1,709,575

$1,419,180

$664,230

$582,802

$393,629

$342,986

$178,857

$174,012

$2,946,291

$2,518,980

(7,871)

(1,304)

—

—

—

—

—

(82,226)

(70,934)

(19,005)

(16,194)

—

(170,117)

(364)

—

—

—

—

(5,245)

1,161

(138,968)

(8,151)

—

(22,998)

(4,403)

—

—

—

—

—

—

(478)

1,161

—

—

$1,570,607

$1,414,777

$656,079

$583,485

$370,631

$342,986

$178,857

$173,648

$2,776,174 $2,514,896

$155,830

11.0%

$72,594

12.4%

$27,645

8.1%

$5,209

3.0%

$261,278

10.4%

(1)  The Retail segment includes commissions and fees reported in the “Other” column of the Segment Information table in Note 16 of the Notes to the Consolidated Financial 

Statements, which includes corporate and consolidation items.

(2)  A non-GAAP financial measure.

The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-

GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2020, by 

segment, are as follows:

2020

(IN THOUSANDS, EXCEPT 

PERCENTAGES)

Commissions and fees

Total change

Total growth %

GSCs

Acquisitions

Dispositions

Foreign currency translation

Organic Revenue(2)

Organic Revenue growth(2)

Organic Revenue growth rate(2)

Profit-sharing contingent commissions

RETAIL(1)

NATIONAL  

PROGRAMS

WHOLESALE 

BROKERAGE

SERVICES

TOTAL

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

$1,470,093 $1,364,755

$609,842

$516,915

$352,161

$309,426

$174,012

$193,641

$2,606,108

$2,384,737

$105,338

7.7%

(35,785)

(15,128)

$92,927

18.0%

(34,150)

(27,278)

(17,517)

(11,056)

238

(10,566)

$42,735

13.8%

(7,871)

(1,304)

$(19,629)

(10.1)%

(7,499)

(1,443)

—

—

—

—

—

—

—

—

$221,371

9.3%

(70,934)

(16,194)

—

—

$87,525

3.8%

(59,166)

(23,065)

(12,149)

—

—

—

—

(11,772)

—

—

—

(377)

—

—

—

$1,339,600

$1,307,777

$548,629

$488,455

$317,125

$300,484

$172,528

$193,641

$2,377,882

$2,290,357

$31,823

2.4%

$60,174

12.3 %

$16,641

5.5%

$(21,113)

(10.9)%

Core commissions and fees

$1,419,180

$1,319,549

$582,802

$488,832

$342,986

$300,484

$174,012

$193,641

$2,518,980

$2,302,506

(79,580)

—

(34,173)

—

(25,861)

(1,484)

(141,098)

—

—

—

—

—

—

—

—

—

(1)  The Retail segment includes commissions and fees reported in the “Other” column of the Segment Information table in Note 16 of the Notes to the Consolidated Financial 

Statements, which includes corporate and consolidation items.

(2)  A non-GAAP financial measure.

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The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-
GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2021 
are as follows:

2021

(IN THOUSANDS, EXCEPT 
PERCENTAGES)

Commissions and fees

Total change

Total growth %

Profit-sharing contingent commissions

GSCs

RETAIL(1)

NATIONAL  
PROGRAMS

WHOLESALE 
BROKERAGE

SERVICES

TOTAL

2021

2020

2021

2020

2021

2020

2021

2020

2021

2020

$1,764,922

$1,470,093

$701,108

$609,842

$402,635

$352,161

$178,857

$174,012

$3,047,522

$2,606,108

$294,829

20.1 %

(38,895)

(16,452)

$91,266

15.0%

$50,474

14.3%

(35,785)

(35,259)

(27,278)

(8,072)

(15,128)

(1,619)

238

(934)

(7,871)

(1,304)

$4,845

2.8%

—

—

$ 441,414

16.9%

—

—

(82,226)

(70,934)

(19,005)

(16,194)

Core commissions and fees

$1,709,575

$1,419,180

$664,230

$582,802

$393,629

$342,986

$178,857

$174,012

$2,946,291

$2,518,980

Acquisitions

Dispositions

Foreign currency translation

Organic Revenue(2)
Organic Revenue growth(2)
Organic Revenue growth rate(2)

(138,968)

—

(8,151)

—

(22,998)

—

—

(4,403)

—

—

—

(478)

1,161

—

—

—

—

—

—

—

—

—

(170,117)

(364)

—

—

—

—

(5,245)

1,161

$1,570,607

$1,414,777

$656,079

$583,485

$370,631

$342,986

$178,857

$173,648

$2,776,174 $2,514,896

$155,830

11.0%

$72,594

12.4%

$27,645

8.1%

$5,209

3.0%

$261,278

10.4%

(1)  The Retail segment includes commissions and fees reported in the “Other” column of the Segment Information table in Note 16 of the Notes to the Consolidated Financial 

Statements, which includes corporate and consolidation items.

(2)  A non-GAAP financial measure.

The reconciliation of total commissions and fees included in the Consolidated Statements of Income to Organic Revenue, a non-
GAAP financial measure, including by segment, and the growth rates for Organic Revenue for the year ended December 31, 2020, by 
segment, are as follows:

net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended 

2020

RETAIL(1)

NATIONAL  
PROGRAMS

WHOLESALE 
BROKERAGE

SERVICES

TOTAL

(IN THOUSANDS, EXCEPT 
PERCENTAGES)

Commissions and fees

Total change

Total growth %

Profit-sharing contingent commissions

GSCs

2020

2019

2020

2019

2020

2019

2020

2019

2020

2019

$1,470,093 $1,364,755

$609,842

$516,915

$352,161

$309,426

$174,012

$193,641

$2,606,108

$2,384,737

$105,338

7.7%

(35,785)

(15,128)

$92,927

18.0%

(34,150)

(27,278)

(17,517)

(11,056)

238

(10,566)

$42,735

13.8%

(7,871)

(1,304)

$(19,629)

(10.1)%

—

—

(7,499)

(1,443)

$221,371

9.3%

(70,934)

(16,194)

—

—

(59,166)

(23,065)

Core commissions and fees

$1,419,180

$1,319,549

$582,802

$488,832

$342,986

$300,484

$174,012

$193,641

$2,518,980

$2,302,506

Acquisitions

Dispositions

Foreign currency translation

Organic Revenue(2)
Organic Revenue growth(2)
Organic Revenue growth rate(2)

(79,580)

—

(34,173)

—

(25,861)

—

—

(11,772)

—

—

—

(377)

—

—

—

—

—

—

(1,484)

—

—

—

—

—

(141,098)

—

—

—

(12,149)

—

$1,339,600

$1,307,777

$548,629

$488,455

$317,125

$300,484

$172,528

$193,641

$2,377,882

$2,290,357

$31,823

2.4%

$60,174

12.3 %

$16,641

5.5%

$(21,113)

(10.9)%

$87,525

3.8%

(1)  The Retail segment includes commissions and fees reported in the “Other” column of the Segment Information table in Note 16 of the Notes to the Consolidated Financial 

Statements, which includes corporate and consolidation items.

(2)  A non-GAAP financial measure.

Depreciation expense for 2021 increased $7.0 million to $33.3 million, or 26.8% over 2020. Changes in depreciation expense reflect 

the addition of fixed assets resulting from business initiatives, net additions of fixed assets resulting from businesses acquired in the 

past 12 months, partially offset by fixed assets which became fully depreciated.

Depreciation

Interest Expense

Interest expense for 2021 increased $6.0 million to $65.0 million, or 10.2%, from 2020. The increase is due to higher average debt 

balances from increased borrowings associated with the issuance of bonds in September 2020, partially offset by the decrease in 

interest rates associated with our floating rate debt balances.

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 value 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 price arrangements) at the acquisition date must be included in the purchase price consideration. The recorded purchase 

price for acquisitions includes 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 or 

reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations 

or entities, usually for periods ranging from one to three years.

The net charge or credit to the 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 December 31, 2021, the fair values of the estimated acquisition earn-out payables were reevaluated and measured at fair 

value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting 

December 31, 2021 and 2020 were as follows:

Change in fair value of estimated acquisition earn-out payables

(IN THOUSANDS)

Interest expense accretion

Net change in earnings from estimated acquisition earn-out payables

2021

2020

$34,209

$(11,814)

6,236

7,356

$40,445

$(4,458)

For the years ended December 31, 2021 and 2020, the fair value of estimated earn-out payables was reevaluated and increased by 

$34.2 million for 2021 and decreased by $11.8 million for 2020, which are charges and credits respectively, net of interest expense 

accretion, to the Consolidated Statement of Income for 2021 and 2020.

As of December 31, 2021, the estimated acquisition earn-out payables equaled $291.0 million, of which $78.4 million was recorded as 

accounts payable and $212.6 million was recorded as other non-current liabilities. As of December 31, 2020, the estimated acquisition 

earn-out payables equaled $258.9 million, of which $79.2 million was recorded as accounts payable and $179.7 million was recorded 

as other non-current liabilities.

Income Taxes

The effective tax rate on income from operations was 23.0% in 2021 and 2020.

Results of Operations — Segment Information

As discussed in Note 16 “Segment Information” of the Notes to Consolidated Financial Statements, we operate four reportable 

segments: Retail, National Programs, Wholesale Brokerage and Services. On a segmented basis, changes in amortization, depreciation 

and interest expenses generally result from activity associated with acquisitions. Likewise, other revenues in each segment reflects 

net gains primarily from legal settlements and miscellaneous income. As such, in evaluating the operational efficiency of a segment, 

management focuses on the Organic Revenue growth rate and EBITDAC margin.

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The reconciliation of income before incomes taxes, included in the Consolidated Statement of Income, to EBITDAC, a non-GAAP 
measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, for the year ended December 31, 2021, 
is as follows:

Retail Segment

(IN THOUSANDS)

Income before income taxes

Income Before Income Taxes Margin(2)

Amortization

Depreciation

Interest

Change in estimated acquisition earn-out payables

EBITDAC(2)

EBITDAC Margin(2)

RETAIL

NATIONAL  
PROGRAMS

WHOLESALE 
BROKERAGE

SERVICES

OTHER

TOTAL

$334,377

$242,334

$94,845

$28,257

$63,010

$762,823

Financial information relating to our Retail segment for the 12 months ended December 31, 2021 and 2020 is as follows:

18.9%

77,810

11,194

91,425

40,778

34.5%

27,357

9,839

11,381

(7,652)

23.5%

9,150

2,646

15,990

7,319

15.8%

5,276

1,484

NMF

—

8,146

2,899

(56,714)

—

—

25.0%

119,593

33,309

64,981

40,445

$555,584

$283,259

$129,950

$ 37,916

$14,442

$1,021,151

31.4%

40.4%

32.2%

21.2%

NMF

33.5%

The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional 

and individual insured customers, and non-insurance risk-mitigating products through our automobile dealer services (“F&I”) 

businesses. Approximately 76.4% of the Retail segment’s commissions and fees revenue is commission based.

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)  A non-GAAP financial measure

 NMF = Not a meaningful figure

The reconciliation of income before incomes taxes, included in the Consolidated Statement of Income, to EBITDAC, a non-GAAP 
measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, for the year ended December 31, 2020, 
is as follows:

(IN THOUSANDS)

Income before income taxes

Income Before Income Taxes Margin(2)

Amortization

Depreciation

Interest

Change in estimated acquisition earn-out payables

EBITDAC(2)

EBITDAC Margin(2)

RETAIL

NATIONAL
PROGRAMS

WHOLESALE
BROKERAGE

SERVICES

OTHER

TOTAL

$262,245

$182,892

$93,593

$ 27,994

$57,375

$624,099

17.8%

67,315

9,071

85,968

8,689

30.0%

27,166

8,658

20,597

26.5%

8,481

1,948

10,281

16.1%

5,561

1,424

4,142

NMF

—

5,175

(62,015)

(10,484)

422

(3,085)

—

23.9%

108,523

26,276

58,973

(4,458)

$433,288

$228,829

$114,725

$ 36,036

$535

$813,413

29.4%

37.5%

32.5%

20.7%

NMF

31.1%

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)  A non-GAAP financial measure

 NMF = Not a meaningful figure

24

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Capital expenditures

Total assets at December 31(3)

(2)  A non-GAAP financial measure

the consolidated company

NMF = Not a meaningful figure

Change in estimated acquisition earn-out payables

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

$1,711,320

20.5%

$1,420,439

1,767,938

20.0%

1,472,766

38,895

16,452

278

993

949,351

268,126

(5,123)

77,810

11,194

91,425

40,778

1,433,561

$334,377

18.9%

31.4%

11.0%

53.7%

15.2%

8.7%

8.8%

70.6%

(20.6)%

15.7%

21.1%

114.7%

15.6%

23.4%

6.3%

NMF

18.4%

27.5%

35,785

15,128

163

1,251

820,368

221,496

(2,386)

67,315

9,071

85,968

8,689

1,210,521

$262,245

17.8%

29.4%

2.4%

55.7%

15.0%

555,584

28.2%

433,288

$8,093

(38.6)%

$13,175

$5,040,706

(28.9)%

$7,093,627

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(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

The Retail segment’s total revenues in 2021 increased 20.0%, or $295.2 million, over the same period in 2020, to $1,767.9 million. The 

$290.9 million increase in core commissions and fees was driven by the following: (i) $156.3 million related to net new and renewal 

business; (ii) approximately $139.0 million related to the core commissions and fees from acquisitions that had no comparable revenues 

in the same period of 2020; offset by (iii) a decrease of $4.4 million related to commissions and fees from businesses or books of 

business divested in 2020 and 2021. Profit-sharing contingent commissions and GSCs in 2021 increased 8.7%, or $4.4 million, over 

2020, to $55.3 million primarily from acquisitions completed in 2020 and 2021. The Retail segment’s growth rate for total commissions 

and fees was 20.1% and the Organic Revenue growth rate was 11.0% for 2021. The Organic Revenue growth rate was driven by net new 

business written during the preceding 12 months and growth on renewals of existing customers. Renewal business was impacted by 

rate increases in most lines of business and some modest expansion of exposure units.

 
 
is as follows:

(IN THOUSANDS)

Income before income taxes

Income Before Income Taxes Margin(2)

Amortization

Depreciation

Interest

EBITDAC(2)

EBITDAC Margin(2)

(2)  A non-GAAP financial measure

 NMF = Not a meaningful figure

is as follows:

(IN THOUSANDS)

Income before income taxes

Income Before Income Taxes Margin(2)

Amortization

Depreciation

Interest

EBITDAC(2)

EBITDAC Margin(2)

(2)  A non-GAAP financial measure

 NMF = Not a meaningful figure

RETAIL

NATIONAL  

PROGRAMS

WHOLESALE 

BROKERAGE

SERVICES

OTHER

TOTAL

18.9%

77,810

11,194

91,425

40,778

34.5%

27,357

9,839

11,381

(7,652)

23.5%

9,150

2,646

15,990

7,319

15.8%

5,276

1,484

NMF

—

8,146

2,899

(56,714)

—

—

25.0%

119,593

33,309

64,981

40,445

$555,584

$283,259

$129,950

$ 37,916

$14,442

$1,021,151

31.4%

40.4%

32.2%

21.2%

NMF

33.5%

Change in estimated acquisition earn-out payables

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, for the year ended December 31, 2020, 

RETAIL

NATIONAL

PROGRAMS

WHOLESALE

BROKERAGE

SERVICES

OTHER

TOTAL

$262,245

$182,892

$93,593

$ 27,994

$57,375

$624,099

17.8%

67,315

9,071

85,968

8,689

30.0%

27,166

8,658

20,597

26.5%

8,481

1,948

10,281

16.1%

5,561

1,424

4,142

NMF

—

5,175

(62,015)

23.9%

108,523

26,276

58,973

(4,458)

$433,288

$228,829

$114,725

$ 36,036

$535

$813,413

29.4%

37.5%

32.5%

20.7%

NMF

31.1%

Change in estimated acquisition earn-out payables

(10,484)

422

(3,085)

—

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

The reconciliation of income before incomes taxes, included in the Consolidated Statement of Income, to EBITDAC, a non-GAAP 

measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, for the year ended December 31, 2021, 

Retail Segment

$334,377

$242,334

$94,845

$28,257

$63,010

$762,823

Financial information relating to our Retail segment for the 12 months ended December 31, 2021 and 2020 is as follows:

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional 
and individual insured customers, and non-insurance risk-mitigating products through our automobile dealer services (“F&I”) 
businesses. Approximately 76.4% of the Retail segment’s commissions and fees revenue is commission based.

The reconciliation of income before incomes taxes, included in the Consolidated Statement of Income, to EBITDAC, a non-GAAP 

Employee compensation and benefits

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Change in estimated acquisition earn-out payables

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

Capital expenditures

Total assets at December 31(3)

$1,711,320

20.5%

$1,420,439

38,895

16,452

278

993

8.7%

8.8%

70.6%

(20.6)%

35,785

15,128

163

1,251

1,767,938

20.0%

1,472,766

949,351

268,126

(5,123)

77,810

11,194

91,425

40,778

1,433,561

$334,377

18.9%

15.7%

21.1%

114.7%

15.6%

23.4%

6.3%

NMF

18.4%

27.5%

820,368

221,496

(2,386)

67,315

9,071

85,968

8,689

1,210,521

$262,245

17.8%

555,584

28.2%

433,288

31.4%

11.0%

53.7%

15.2%

29.4%

2.4%

55.7%

15.0%

$8,093

(38.6)%

$13,175

$5,040,706

(28.9)%

$7,093,627

24

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)  A non-GAAP financial measure

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

the consolidated company

NMF = Not a meaningful figure

The Retail segment’s total revenues in 2021 increased 20.0%, or $295.2 million, over the same period in 2020, to $1,767.9 million. The 
$290.9 million increase in core commissions and fees was driven by the following: (i) $156.3 million related to net new and renewal 
business; (ii) approximately $139.0 million related to the core commissions and fees from acquisitions that had no comparable revenues 
in the same period of 2020; offset by (iii) a decrease of $4.4 million related to commissions and fees from businesses or books of 
business divested in 2020 and 2021. Profit-sharing contingent commissions and GSCs in 2021 increased 8.7%, or $4.4 million, over 
2020, to $55.3 million primarily from acquisitions completed in 2020 and 2021. The Retail segment’s growth rate for total commissions 
and fees was 20.1% and the Organic Revenue growth rate was 11.0% for 2021. The Organic Revenue growth rate was driven by net new 
business written during the preceding 12 months and growth on renewals of existing customers. Renewal business was impacted by 
rate increases in most lines of business and some modest expansion of exposure units.

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Income before income taxes for 2021 increased 27.5%, or $72.1 million, over the same period in 2020, to $334.4 million. The primary 
factors driving this increase were: (i) the net increase in revenue as described above, offset by (ii) a 15.7%, or $129.0 million, increase in 
employee compensation and benefits, due primarily to the year-on-year impact of salary inflation and additional employees to support 
revenue growth and acquisitions, (iii) operating expenses which increased by $46.6 million, or 21.1%, due to increased professional 
services to support our customers and acquisitions; (iv) an increase in the change in estimated acquisition earn-out payables of 
$32.1 million, to $40.8 million; and (v) a combined increase in amortization, depreciation and intercompany interest expense of $18.1 
million resulting from our acquisition activity over the past 12 months.

EBITDAC for 2021 increased 28.2%, or $122.3 million, from the same period in 2020, to $555.6 million. EBITDAC Margin for 2021 
increased to 31.4% from 29.4% in the same period in 2020. EBITDAC Margin was impacted by (i) the leveraging of our expense base, 
(ii) higher profit-sharing contingent commissions and GSCs; partially offset by, (iii) increased non-stock cash compensation costs.

National Programs Segment

The National Programs segment manages over 40 programs supported by approximately 100 well-capitalized carrier partners. 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 a nationwide network of independent agents 
and Brown & Brown retail agents, and offer targeted products and services designed for specific industries, trade groups, professions, 
public entities and market niches. The National Programs segment operations can be grouped into five broad categories: Professional 
programs, Personal Lines programs, Commercial programs, Public Entity-Related programs and Specialty programs. Approximately 
75.2% of the National Programs segment’s commissions and fees revenue is commission based.

Financial information relating to our National Programs segment for the 12 months ended December 31, 2021 and 2020 is as follows:

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Change in estimated acquisition earn-out payables

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

Capital expenditures

Total assets at December 31(3)

$664,230

35,259

1,619

550

192

701,850

294,713

128,368

(4,490)

27,357

9,839

11,381

(7,652)

459,516

$242,334

34.5%

283,259

40.4%

12.4%

42.0%

18.3%

14.0%

29.3%

NMF

(27.2)%

NMF

14.9%

13.3%

5.5%

NMF

0.7%

13.6%

(44.7)%

(27.0)%

7.4%

32.5%

23.8%

$582,802

27,278

(238)

756

42

610,640

260,141

121,670

—

27,166

8,658

20,597

(10,484)

427,748

$182,892

30.0%

228,829

37.5%

12.3%

42.6%

19.9%

$13,467

86.8%

$7,208

Other operating expenses relative to total revenues

$2,943,006

(16.2)%

$3,510,983

Capital expenditures

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)  A non-GAAP financial measure

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

the consolidated company

NMF = Not a meaningful figure

26

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

The National Programs segment’s total revenue for 2021 increased 14.9%, or $91.2 million, as compared to the same period in 2020, 

to $701.9 million. The $81.4 million increase in core commissions and fees revenue was driven by: (i) $72.6 million related to net new 

and renewal business; (ii) approximately $8.2 million related to the core commissions and fees revenue from acquisitions that had no 

comparable revenues in 2020; (iii) a positive impact from foreign currency translation of $1.2 million; offset by (iv) a decrease of $0.5 

million related to commissions and fees revenue from business divested in the preceding 12 months.

The National Programs segment’s growth rate for total commissions and fees was 15.0% and the Organic Revenue growth rate was 

12.4% for 2021. The total commissions and fees growth was due to strong Organic Revenue growth across many of our programs along 

with new acquisitions. The Organic Revenue growth was driven by new business, good retention, exposure unit expansion and rate 

increases across many programs.

Income before income taxes for 2021 increased 32.5%, or $59.4 million, from the same period in 2020, to $242.3 million. The increase 

was the result of: (i) strong total revenue growth; (ii) lower intercompany interest expense; (iii) a gain on sale of one of our businesses; 

partially offset by; (iv) an increase in estimated acquisition earn-out payables.

EBITDAC for 2021 increased 23.8%, or $54.4 million, from the same period in 2020, to $283.3 million. EBITDAC Margin for 2021 

increased to 40.4% due to (i) Organic Revenue growth and scaling of a number of our programs; (ii) higher contingent commissions, 

and (iii) a gain on the sale of one of our businesses.

Wholesale Brokerage Segment

The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through 

independent agents and brokers, including Brown & Brown retail agents. Approximately 83.3% of the Wholesale Brokerage segment’s 

commissions and fees revenue is commission based.

Financial information relating to our Wholesale Brokerage segment for the 12 months ended December 31, 2021 and 2020 is as follows:

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

Change in estimated acquisition earn-out payables

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Total assets at December 31(3)

(2)  A non-GAAP financial measure

the consolidated company

NMF = Not a meaningful figure

Employee compensation and benefits relative to total revenues

$393,629

8,072

934

155

627

403,417

212,781

60,686

—

9,150

2,646

15,990

7,319

308,572

$94,845

23.5%

129,950

32.2%

8.1%

52.7%

15.0%

$1,612

14.8%

2.6%

(28.4)%

(15.8)%

38.7%

14.3%

15.4%

13.1%

—

7.9%

35.8%

55.5%

NMF

19.0%

1.3%

13.3%

$342,986

7,871

1,304

184

452

352,797

184,429

53,643

—

8,481

1,948

10,281

422

259,204

$93,593

26.5%

114,725

32.5%

5.5%

52.3%

15.2%

$3,324

$1,154,373

$1,791,717

(51.5)%

(35.6)%

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Income before income taxes for 2021 increased 27.5%, or $72.1 million, over the same period in 2020, to $334.4 million. The primary 

factors driving this increase were: (i) the net increase in revenue as described above, offset by (ii) a 15.7%, or $129.0 million, increase in 

employee compensation and benefits, due primarily to the year-on-year impact of salary inflation and additional employees to support 

revenue growth and acquisitions, (iii) operating expenses which increased by $46.6 million, or 21.1%, due to increased professional 

services to support our customers and acquisitions; (iv) an increase in the change in estimated acquisition earn-out payables of 

$32.1 million, to $40.8 million; and (v) a combined increase in amortization, depreciation and intercompany interest expense of $18.1 

million resulting from our acquisition activity over the past 12 months.

EBITDAC for 2021 increased 28.2%, or $122.3 million, from the same period in 2020, to $555.6 million. EBITDAC Margin for 2021 

increased to 31.4% from 29.4% in the same period in 2020. EBITDAC Margin was impacted by (i) the leveraging of our expense base, 

(ii) higher profit-sharing contingent commissions and GSCs; partially offset by, (iii) increased non-stock cash compensation costs.

National Programs Segment

The National Programs segment manages over 40 programs supported by approximately 100 well-capitalized carrier partners. 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 a nationwide network of independent agents 

and Brown & Brown retail agents, and offer targeted products and services designed for specific industries, trade groups, professions, 

public entities and market niches. The National Programs segment operations can be grouped into five broad categories: Professional 

programs, Personal Lines programs, Commercial programs, Public Entity-Related programs and Specialty programs. Approximately 

75.2% of the National Programs segment’s commissions and fees revenue is commission based.

Financial information relating to our National Programs segment for the 12 months ended December 31, 2021 and 2020 is as follows:

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

The National Programs segment’s total revenue for 2021 increased 14.9%, or $91.2 million, as compared to the same period in 2020, 
to $701.9 million. The $81.4 million increase in core commissions and fees revenue was driven by: (i) $72.6 million related to net new 
and renewal business; (ii) approximately $8.2 million related to the core commissions and fees revenue from acquisitions that had no 
comparable revenues in 2020; (iii) a positive impact from foreign currency translation of $1.2 million; offset by (iv) a decrease of $0.5 
million related to commissions and fees revenue from business divested in the preceding 12 months.

The National Programs segment’s growth rate for total commissions and fees was 15.0% and the Organic Revenue growth rate was 
12.4% for 2021. The total commissions and fees growth was due to strong Organic Revenue growth across many of our programs along 
with new acquisitions. The Organic Revenue growth was driven by new business, good retention, exposure unit expansion and rate 
increases across many programs.

Income before income taxes for 2021 increased 32.5%, or $59.4 million, from the same period in 2020, to $242.3 million. The increase 
was the result of: (i) strong total revenue growth; (ii) lower intercompany interest expense; (iii) a gain on sale of one of our businesses; 
partially offset by; (iv) an increase in estimated acquisition earn-out payables.

EBITDAC for 2021 increased 23.8%, or $54.4 million, from the same period in 2020, to $283.3 million. EBITDAC Margin for 2021 
increased to 40.4% due to (i) Organic Revenue growth and scaling of a number of our programs; (ii) higher contingent commissions, 
and (iii) a gain on the sale of one of our businesses.

Wholesale Brokerage Segment

The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through 
independent agents and brokers, including Brown & Brown retail agents. Approximately 83.3% of the Wholesale Brokerage segment’s 
commissions and fees revenue is commission based.

Financial information relating to our Wholesale Brokerage segment for the 12 months ended December 31, 2021 and 2020 is as follows:

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Change in estimated acquisition earn-out payables

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Employee compensation and benefits relative to total revenues

$13,467

86.8%

$7,208

Other operating expenses relative to total revenues

$2,943,006

(16.2)%

$3,510,983

Capital expenditures

Total assets at December 31(3)

14.8%

2.6%

(28.4)%

(15.8)%

38.7%

14.3%

15.4%

13.1%

—

7.9%

35.8%

55.5%

NMF

19.0%

1.3%

13.3%

$393,629

8,072

934

155

627

403,417

212,781

60,686

—

9,150

2,646

15,990

7,319

308,572

$94,845

23.5%

129,950

32.2%

8.1%

52.7%

15.0%

$1,612
$1,154,373

(51.5)%

(35.6)%

$342,986

7,871

1,304

184

452

352,797

184,429

53,643

—

8,481

1,948

10,281

422

259,204

$93,593

26.5%

114,725

32.5%

5.5%

52.3%

15.2%

$3,324

$1,791,717

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

(2)  A non-GAAP financial measure

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

the consolidated company

NMF = Not a meaningful figure

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Change in estimated acquisition earn-out payables

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

Capital expenditures

Total assets at December 31(3)

(2)  A non-GAAP financial measure

the consolidated company

NMF = Not a meaningful figure

26

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

$664,230

35,259

1,619

550

192

701,850

294,713

128,368

(4,490)

27,357

9,839

11,381

(7,652)

459,516

$242,334

34.5%

283,259

40.4%

12.4%

42.0%

18.3%

14.0%

29.3%

NMF

(27.2)%

NMF

14.9%

13.3%

5.5%

NMF

0.7%

13.6%

(44.7)%

(27.0)%

7.4%

32.5%

23.8%

$582,802

27,278

(238)

756

42

610,640

260,141

121,670

—

27,166

8,658

20,597

(10,484)

427,748

$182,892

30.0%

228,829

37.5%

12.3%

42.6%

19.9%

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The Wholesale Brokerage segment’s total revenues for 2021 increased 14.3%, or $50.6 million, over 2020, to $403.4 million. The 
$50.6 million increase in core commissions and fees was driven by the following: (i) $27.6 million related to net new and renewal 
business and; (ii) $23.0 million related to the core commissions and fees from acquisitions that had no comparable revenues in 2020. 
Profit-sharing contingent commissions and GSCs for 2021 decreased $0.2 million compared to 2020, to $9.0 million. The Wholesale 
Brokerage segment’s growth rate for total commissions and fees was 14.3%, and the Organic Revenue growth rate was 8.1% for 2021. 
The Organic Revenue growth rate was driven by net new business, as well as increased rates seen across most lines of business, 
which was partially offset by shrinking capacity in the catastrophe exposed personal lines market.

Income before income taxes for 2021 increased 1.3%, or $1.3 million, over 2020, to $94.8 million, primarily due to the following: (i) 
the net increase in total revenues as described above, which was offset by; (ii) an increase in amortization expense; (iii) an increase 
in intercompany interest expense; (iv) an increase in employee compensation and benefits of $28.3 million, related to additional 
employees from acquisitions completed in the past 12 months and net additions to support increased transaction volumes, 
compensation increases for existing employees, and additional non-cash stock-based compensation expense; and (v) a net $7.0 million 
increase in other operating expenses, primarily acquisition related.

EBITDAC for 2021 increased 13.3%, or $15.2 million, from the same period in 2020, to $129.9 million. EBITDAC Margin for 2021 
decreased to 32.2% from 32.5% in the same period in 2020. The decrease in EBITDAC Margin was primarily driven by; (i) increased 
employee compensation based on the composition of revenue growth and non-cash stock-based compensation costs, in addition to; 
(ii) a variable expense normalization which was partially offset by; (iii) revenue growth as described above.

Services Segment

The Services segment 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. The Services segment also provides 
Medicare Set-aside account services, Social Security disability and Medicare benefits advocacy services, and claims adjusting services.

Unlike the other segments, nearly all of the Services segment’s revenue is generated from fees which are not significantly affected by 
fluctuations in general insurance premiums.

28

Financial information relating to our Services segment for the 12 months ended December 31, 2021 and 2020 is as follows:

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Capital expenditures

Total assets at December 31(3)

(2)  A non-GAAP financial measure

the consolidated company

NMF = Not a meaningful figure

$178,857

2.8%

$174,012

178,860

2.8%

174,012

—

—

3

—

89,723

51,212

9

5,276

1,484

2,899

150,603

$28,257

15.8%

37,916

21.2%

3.0%

50.2%

28.6%

—

—

—

—

1.1%

4.1%

—

(5.1)%

4.2%

(30.0)%

3.1%

0.9%

5.2%

—

—

—

—

88,787

49,191

(2)

5,561

1,424

4,142

146,018

$27,994

16.1%

36,036

20.7%

(10.9)%

51.0%

28.3%

$1,424

$1,609

13.0%

$299,185

(37.7)%

$480,440

Change in estimated acquisition earn-out payables

—

(100.0)%

(3,085)

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

The Services segment’s total revenues for 2021 increased 2.8%, or $4.8 million, from 2020, to $178.9 million. The $4.8 million increase 

in core commissions and fees, was driven by; (i) specialized claims handling in our advisory business; (ii) expansion of existing 

programs; (iii) partially offset by continued pressure in our advocacy space (iii) and reduction in workers’ compensation severity claims. 

Total commissions and fees increased 2.8%, and Organic Revenue increased 3.0% in 2021, both as compared to 2020.

Income before income taxes for 2021 increased 0.9%, or $0.3 million, from 2020, to $28.3 million due to a combination of: (i) lower 

intercompany interest; (ii) drivers of EBITDAC described below and; (iii) partially offset by the earn-out liability credit recorded in prior 

EBITDAC for 2021 increased 5.2%, or $1.9 million, from the same period in 2020, to $37.9 million. EBITDAC Margin for 2021 increased 

to 21.2% from 20.7% in the same period in 2020. The increase in EBITDAC and EBITDAC Margin were driven primarily by leveraging 

our expense base with higher Organic Revenue growth and lower variable expenses in response to COVID-19.

year.

Other

As discussed in Note 16 of the Notes to 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 intercompany 

interest expense charges to reporting segments.

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$50.6 million increase in core commissions and fees was driven by the following: (i) $27.6 million related to net new and renewal 

Profit-sharing contingent commissions and GSCs for 2021 decreased $0.2 million compared to 2020, to $9.0 million. The Wholesale 

Brokerage segment’s growth rate for total commissions and fees was 14.3%, and the Organic Revenue growth rate was 8.1% for 2021. 

The Organic Revenue growth rate was driven by net new business, as well as increased rates seen across most lines of business, 

which was partially offset by shrinking capacity in the catastrophe exposed personal lines market.

Income before income taxes for 2021 increased 1.3%, or $1.3 million, over 2020, to $94.8 million, primarily due to the following: (i) 

the net increase in total revenues as described above, which was offset by; (ii) an increase in amortization expense; (iii) an increase 

in intercompany interest expense; (iv) an increase in employee compensation and benefits of $28.3 million, related to additional 

employees from acquisitions completed in the past 12 months and net additions to support increased transaction volumes, 

compensation increases for existing employees, and additional non-cash stock-based compensation expense; and (v) a net $7.0 million 

increase in other operating expenses, primarily acquisition related.

EBITDAC for 2021 increased 13.3%, or $15.2 million, from the same period in 2020, to $129.9 million. EBITDAC Margin for 2021 

decreased to 32.2% from 32.5% in the same period in 2020. The decrease in EBITDAC Margin was primarily driven by; (i) increased 

employee compensation based on the composition of revenue growth and non-cash stock-based compensation costs, in addition to; 

(ii) a variable expense normalization which was partially offset by; (iii) revenue growth as described above.

Services Segment

The Services segment 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. The Services segment also provides 

Medicare Set-aside account services, Social Security disability and Medicare benefits advocacy services, and claims adjusting services.

Unlike the other segments, nearly all of the Services segment’s revenue is generated from fees which are not significantly affected by 

fluctuations in general insurance premiums.

28

The Wholesale Brokerage segment’s total revenues for 2021 increased 14.3%, or $50.6 million, over 2020, to $403.4 million. The 

Financial information relating to our Services segment for the 12 months ended December 31, 2021 and 2020 is as follows:

business and; (ii) $23.0 million related to the core commissions and fees from acquisitions that had no comparable revenues in 2020. 

(IN THOUSANDS, EXCEPT PERCENTAGES)

2021

% CHANGE

2020

R E V E N U E S

Core commissions and fees

Profit-sharing contingent commissions

Guaranteed supplemental commissions

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

$178,857

2.8%

$174,012

—

—

3

—

—

—

—

—

—

—

—

—

178,860

2.8%

174,012

89,723

51,212

9

5,276

1,484

2,899

1.1%

4.1%

—

(5.1)%

4.2%

(30.0)%

88,787

49,191

(2)

5,561

1,424

4,142

Change in estimated acquisition earn-out payables

—

(100.0)%

(3,085)

Total expenses

Income before income taxes

Income Before Income Taxes Margin(1)

EBITDAC(2)

EBITDAC Margin(2)

Organic Revenue growth rate(2)

Employee compensation and benefits relative to total revenues

Other operating expenses relative to total revenues

Capital expenditures

Total assets at December 31(3)

3.1%

0.9%

5.2%

150,603

$28,257

15.8%

37,916

21.2%

3.0%

50.2%

28.6%

$1,609

13.0%

146,018

$27,994

16.1%

36,036

20.7%

(10.9)%

51.0%

28.3%

$1,424

$299,185

(37.7)%

$480,440

(1) 

“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues

(2)  A non-GAAP financial measure

(3)  As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by Corporate reducing the total assets at the segment level with no effect on 

the consolidated company

NMF = Not a meaningful figure

The Services segment’s total revenues for 2021 increased 2.8%, or $4.8 million, from 2020, to $178.9 million. The $4.8 million increase 
in core commissions and fees, was driven by; (i) specialized claims handling in our advisory business; (ii) expansion of existing 
programs; (iii) partially offset by continued pressure in our advocacy space (iii) and reduction in workers’ compensation severity claims. 
Total commissions and fees increased 2.8%, and Organic Revenue increased 3.0% in 2021, both as compared to 2020.

Income before income taxes for 2021 increased 0.9%, or $0.3 million, from 2020, to $28.3 million due to a combination of: (i) lower 
intercompany interest; (ii) drivers of EBITDAC described below and; (iii) partially offset by the earn-out liability credit recorded in prior 
year.

EBITDAC for 2021 increased 5.2%, or $1.9 million, from the same period in 2020, to $37.9 million. EBITDAC Margin for 2021 increased 
to 21.2% from 20.7% in the same period in 2020. The increase in EBITDAC and EBITDAC Margin were driven primarily by leveraging 
our expense base with higher Organic Revenue growth and lower variable expenses in response to COVID-19.

Other

As discussed in Note 16 of the Notes to 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 intercompany 
interest expense charges to reporting segments.

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Liquidity and Capital Resources

Debt

The Company seeks to maintain a conservative balance sheet and liquidity profile. Our capital requirements to operate as an 
insurance intermediary are low and we have been able to grow and invest in our business principally through cash that has been 
generated from operations. We have the ability to utilize our revolving credit facility, which as of December 31, 2021 provided access 
to up to $800.0 million in available cash. We believe that we have access to additional funds, if needed, through the capital markets or 
private placements to obtain further debt financing under the current market conditions. The Company believes that its existing cash, 
cash equivalents, short-term investment portfolio and funds generated from operations, together with the funds available under the 
revolving credit facility, will be sufficient to satisfy our normal liquidity needs, including principal payments on our long-term debt, for at 
least the next 12 months.

The revolving credit facility contains an expansion for up to an additional $500.0 million of borrowing capacity, subject to the 
approval of participating lenders. In addition, under the term loan credit agreement, the unsecured term loan in the initial amount of 
$300.0 million may be increased by up to $150.0 million, subject to the approval of participating lenders. Including the expansion 
options under all existing credit agreements, the Company has access to up to $1.5 billion of incremental borrowing capacity as of 
December 31, 2021.

Our cash and cash equivalents of $887.0 million at December 31, 2021, of which $245.6 million was held in a fiduciary capacity, 
reflected an increase of $69.6 million from the $817.4 million balance at December 31, 2020. During 2021, $942.5 million of cash was 
generated from operating activities, representing an increase of 30.6%. During this period, $366.8 million of cash was used for new 
acquisitions, $89.1 million was used for acquisition earn-out payments, $45.0 million was used to purchase additional fixed assets, 
$107.2 million was used for payment of dividends, $82.6 million was used for share repurchases and $73.1 million was used to pay 
outstanding principal balances owed on long-term debt.

We hold approximately $66.4 million in cash outside of the U.S., which we currently have no plans to repatriate in the near future.

Our cash and cash equivalents of $817.4 million at December 31, 2020, of which $211.9 million was held in a fiduciary capacity, 
reflected an increase of $275.2 million from the $542.2 million balance at December 31, 2019. During 2020, $721.6 million of cash was 
generated from operating activities, representing an increase of 6.4%. During this period, $694.8 million of cash was used for new 
acquisitions, $29.5 million was used for acquisition earn-out payments, $70.7 million was used to purchase additional fixed assets, 
$100.6 million was used for payment of dividends, $55.1 million was used for share repurchases and $55.0 million was used to pay 
outstanding principal balances owed on long-term debt.

Our ratio of current assets to current liabilities (the “current ratio”) was 1.25 and 1.26 for December 31, 2021 and December 31, 2020, 
respectively.

Contractual Cash Obligations

As of December 31, 2021, our contractual cash obligations were as follows:

(IN THOUSANDS)

Long-term debt

Other liabilities(1)

Operating leases(2)

Interest obligations

Unrecognized tax benefits

PAYMENTS DUE BY PERIOD

TOTAL

LESS THAN
1 YEAR

1-3 YEARS

4-5 YEARS

AFTER 5
YEARS

$2,036,875

$42,500

$750,625

$193,750

$1,050,000

178,299

260,801

349,233

917

38,816

49,529

61,157

—

18,621

87,355

111,940

917

11,237

58,928

71,391

—

—

109,625

64,989

104,745

—

—

Maximum future acquisition contingency payments(3)

484,815

116,033

368,782

Total contractual cash obligations(4)

$3,310,940

$308,035

$1,338,240

$335,306

$1,329,359

(1) 

(2) 

(3) 

Includes the current portion of other long-term liabilities, and approximately $15.6 million of remaining deferred employer-only payroll tax payments related to the CARES Act 
which are expected to be paid in December 2022. The Company paid the first installment of $15.6 million in December 2021.

Includes $18.8 million of future lease commitments expected to commence in 2022.

Includes $291.0 million of current and non-current estimated earn-out payables. $25.0 million of this balance is not subject to any further contingency as a result of the 
Amendment dated as of July 27, 2020 by and among the Company, The Hays Group, Inc., and certain of its affiliates, to the Asset Purchase Agreement, dated as of 
October 22, 2018.

(4)  Does not include approximately $28.9 million of current liability for a dividend of $0.1025 per share approved by the board of directors on January 20, 2022.

30

Total debt at December 31, 2021 was $2,022.9 million net of unamortized discount and debt issuance costs, which was an decrease 

of $73.0 million compared to December 31, 2020. The decrease includes: (i) the repayment of the principal balance of $73.1 million 

for scheduled principal amortization balances related to our various existing floating rate debt term notes; (ii) an additional $2.7 

million including debt issuance costs related to the Company’s refinanced credit facility, the Second Amended and Restated Credit 

Agreement (as defined below), on October 27, 2021; offset by (iii) net of the amortization of discounted debt related to our various 

unsecured Senior Notes, and debt issuance cost amortization of $2.8 million.

On October 27, 2021, the Company entered into an amended and restated credit agreement (the “Second Amended and Restated 

Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist 

Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S. Bank National Association, Fifth Third Bank, National Association, 

Wells Fargo Bank, National Association, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc. and Citizens Bank, N.A. 

as co-documentation agents. The Second Amended and Restated Credit Agreement amended and restated the credit agreement 

dated April 17, 2014, among certain of such parties, as amended by that certain amended and restated credit agreement dated June 

28, 2017 (the “Original Credit Agreement”). The Second Amended and Restated Credit Agreement, among other certain terms, 

extended the maturity of the revolving credit facility of $800.0 million and unsecured term loans associated with the agreement of 

$250.0 million to October 27, 2026. At the time of the renewal, the Company added an additional $2.7 million in debt issuance costs 

related to the transaction. The Company carried forward $0.6 million of existing debt issuance costs related to the previous credit 

facility agreements while expensing $0.1 million in debt issuance costs due to certain lenders exiting the renewed facility agreement.

During the 12 months ended December 31, 2021, the Company has repaid $30.0 million of principal related to the amended and 

restated credit agreement term loan through quarterly scheduled amortized principal payments each equaling $10.0 million on March 

31, 2021, June 30, 2021, September 30, 2021 and on October 27, 2021 in conjunction with the closing of the Second Amended and 

Restated Credit Agreement, the Company repaid an additional $10.0 million of outstanding principal related to the term loan under 

the amended and restated credit agreement. On December 31, 2021, the Company repaid $3.1 million under the Second Amended 

and Restated Credit Agreement as part of a scheduled amortized principal payment/ The Second Amended and Restated Credit 

Agreement term loan had an outstanding balance of $246.9 million as of December 31, 2021. The Company’s next scheduled 

amortized principal payment is due March 31, 2022 and is equal to $3.1 million.

During the 12 months ended December 31, 2021, the Company has repaid $30.0 million of principal related to the term loan credit 

agreement through quarterly scheduled amortized principal payments each equaling $7.5 million on March 31, 2021, June 30, 2021, 

September 30, 2021 and December 31, 2021. The term loan credit agreement had an outstanding balance of $240.0 million as of 

December 31, 2021. The Company’s next scheduled amortized principal payment is due March 31, 2021 and is equal to $7.5 million.

Total debt at December 31, 2020 was $2,095.9 million net of unamortized discount and debt issuance costs, which was an increase 

of $540.6 million compared to December 31, 2019. The increase includes: (i) incremental borrowings of $700.0 million related to the 

Company’s 2.375% Senior Notes due 2031 issued on September 24, 2020; (ii) net of the amortization of discounted debt related to 

our various unsecured Senior Notes, and debt issuance cost amortization of $2.3 million; offset by (iii) the repayment of the principal 

balance of $55.0 million for scheduled principal amortization balances related to our various existing floating rate debt term notes; (iv) 

the net repayment of $100.0 million under the revolving credit facility; and (v) an additional $6.7 million including debt issuance costs 

and the portion of discount applied to the proceeds issued under the incremental borrowings related to the Company’s 2.375% Senior 

Notes due 2031 issued on September 24, 2020.

On September 24, 2020, the Company completed the issuance of $700.0 million aggregate principal amount of the Company’s 

2.375% Senior Notes due 2031. The Senior Notes were given investment grade ratings of BBB- stable outlook and Baa3 positive 

outlook. The notes are subject to certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, 

the proceeds were offered at a discount of the original note amount, which also excluded an underwriting fee discount. The net 

proceeds received from the issuance were used to repay a portion of the outstanding balance of $200.0 million on the revolving credit 

facility, to pay a portion of the purchase price in connection with the acquisitions of LP Insurance Services, LLP and CKP Insurance, 

LLC and for other general corporate purposes. As of December 31, 2020, there was an outstanding debt balance of $700.0 million 

exclusive of the associated discount balance.

During the 12 months ended December 31, 2020, the Company has repaid $40.0 million of principal related to the amended and 

restated credit agreement term loan through quarterly scheduled amortized principal payments each equaling $10.0 million on March 

31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020. The amended and restated credit agreement term loan had 

an outstanding balance of $290.0 million as of December 31, 2020. The Company’s next scheduled amortized principal payment is 

due March 31, 2021 and is equal to $10.0 million.

During the 12 months ended December 31, 2020, the Company has repaid $15.0 million of principal related to the term loan credit 

agreement through quarterly scheduled amortized principal payments each equaling $3.8 million on March 31, 2020, June 30, 2020, 

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Liquidity and Capital Resources

Debt

The Company seeks to maintain a conservative balance sheet and liquidity profile. Our capital requirements to operate as an 

insurance intermediary are low and we have been able to grow and invest in our business principally through cash that has been 

generated from operations. We have the ability to utilize our revolving credit facility, which as of December 31, 2021 provided access 

to up to $800.0 million in available cash. We believe that we have access to additional funds, if needed, through the capital markets or 

private placements to obtain further debt financing under the current market conditions. The Company believes that its existing cash, 

cash equivalents, short-term investment portfolio and funds generated from operations, together with the funds available under the 

revolving credit facility, will be sufficient to satisfy our normal liquidity needs, including principal payments on our long-term debt, for at 

least the next 12 months.

The revolving credit facility contains an expansion for up to an additional $500.0 million of borrowing capacity, subject to the 

approval of participating lenders. In addition, under the term loan credit agreement, the unsecured term loan in the initial amount of 

$300.0 million may be increased by up to $150.0 million, subject to the approval of participating lenders. Including the expansion 

options under all existing credit agreements, the Company has access to up to $1.5 billion of incremental borrowing capacity as of 

December 31, 2021.

Our cash and cash equivalents of $887.0 million at December 31, 2021, of which $245.6 million was held in a fiduciary capacity, 

reflected an increase of $69.6 million from the $817.4 million balance at December 31, 2020. During 2021, $942.5 million of cash was 

generated from operating activities, representing an increase of 30.6%. During this period, $366.8 million of cash was used for new 

acquisitions, $89.1 million was used for acquisition earn-out payments, $45.0 million was used to purchase additional fixed assets, 

$107.2 million was used for payment of dividends, $82.6 million was used for share repurchases and $73.1 million was used to pay 

outstanding principal balances owed on long-term debt.

We hold approximately $66.4 million in cash outside of the U.S., which we currently have no plans to repatriate in the near future.

Our cash and cash equivalents of $817.4 million at December 31, 2020, of which $211.9 million was held in a fiduciary capacity, 

reflected an increase of $275.2 million from the $542.2 million balance at December 31, 2019. During 2020, $721.6 million of cash was 

generated from operating activities, representing an increase of 6.4%. During this period, $694.8 million of cash was used for new 

acquisitions, $29.5 million was used for acquisition earn-out payments, $70.7 million was used to purchase additional fixed assets, 

$100.6 million was used for payment of dividends, $55.1 million was used for share repurchases and $55.0 million was used to pay 

outstanding principal balances owed on long-term debt.

Our ratio of current assets to current liabilities (the “current ratio”) was 1.25 and 1.26 for December 31, 2021 and December 31, 2020, 

respectively.

Contractual Cash Obligations

As of December 31, 2021, our contractual cash obligations were as follows:

(IN THOUSANDS)

Long-term debt

Other liabilities(1)

Operating leases(2)

Interest obligations

Unrecognized tax benefits

PAYMENTS DUE BY PERIOD

TOTAL

LESS THAN

1 YEAR

1-3 YEARS

4-5 YEARS

$2,036,875

$42,500

$750,625

$193,750

$1,050,000

178,299

260,801

349,233

917

38,816

49,529

61,157

—

18,621

87,355

111,940

917

AFTER 5

YEARS

109,625

64,989

104,745

—

—

11,237

58,928

71,391

—

—

Maximum future acquisition contingency payments(3)

484,815

116,033

368,782

Total contractual cash obligations(4)

$3,310,940

$308,035

$1,338,240

$335,306

$1,329,359

(1) 

Includes the current portion of other long-term liabilities, and approximately $15.6 million of remaining deferred employer-only payroll tax payments related to the CARES Act 

which are expected to be paid in December 2022. The Company paid the first installment of $15.6 million in December 2021.

Includes $18.8 million of future lease commitments expected to commence in 2022.

Includes $291.0 million of current and non-current estimated earn-out payables. $25.0 million of this balance is not subject to any further contingency as a result of the 

Amendment dated as of July 27, 2020 by and among the Company, The Hays Group, Inc., and certain of its affiliates, to the Asset Purchase Agreement, dated as of 

(2) 

(3) 

October 22, 2018.

(4)  Does not include approximately $28.9 million of current liability for a dividend of $0.1025 per share approved by the board of directors on January 20, 2022.

30

Total debt at December 31, 2021 was $2,022.9 million net of unamortized discount and debt issuance costs, which was an decrease 
of $73.0 million compared to December 31, 2020. The decrease includes: (i) the repayment of the principal balance of $73.1 million 
for scheduled principal amortization balances related to our various existing floating rate debt term notes; (ii) an additional $2.7 
million including debt issuance costs related to the Company’s refinanced credit facility, the Second Amended and Restated Credit 
Agreement (as defined below), on October 27, 2021; offset by (iii) net of the amortization of discounted debt related to our various 
unsecured Senior Notes, and debt issuance cost amortization of $2.8 million.

On October 27, 2021, the Company entered into an amended and restated credit agreement (the “Second Amended and Restated 
Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist 
Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S. Bank National Association, Fifth Third Bank, National Association, 
Wells Fargo Bank, National Association, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc. and Citizens Bank, N.A. 
as co-documentation agents. The Second Amended and Restated Credit Agreement amended and restated the credit agreement 
dated April 17, 2014, among certain of such parties, as amended by that certain amended and restated credit agreement dated June 
28, 2017 (the “Original Credit Agreement”). The Second Amended and Restated Credit Agreement, among other certain terms, 
extended the maturity of the revolving credit facility of $800.0 million and unsecured term loans associated with the agreement of 
$250.0 million to October 27, 2026. At the time of the renewal, the Company added an additional $2.7 million in debt issuance costs 
related to the transaction. The Company carried forward $0.6 million of existing debt issuance costs related to the previous credit 
facility agreements while expensing $0.1 million in debt issuance costs due to certain lenders exiting the renewed facility agreement.

During the 12 months ended December 31, 2021, the Company has repaid $30.0 million of principal related to the amended and 
restated credit agreement term loan through quarterly scheduled amortized principal payments each equaling $10.0 million on March 
31, 2021, June 30, 2021, September 30, 2021 and on October 27, 2021 in conjunction with the closing of the Second Amended and 
Restated Credit Agreement, the Company repaid an additional $10.0 million of outstanding principal related to the term loan under 
the amended and restated credit agreement. On December 31, 2021, the Company repaid $3.1 million under the Second Amended 
and Restated Credit Agreement as part of a scheduled amortized principal payment/ The Second Amended and Restated Credit 
Agreement term loan had an outstanding balance of $246.9 million as of December 31, 2021. The Company’s next scheduled 
amortized principal payment is due March 31, 2022 and is equal to $3.1 million.

During the 12 months ended December 31, 2021, the Company has repaid $30.0 million of principal related to the term loan credit 
agreement through quarterly scheduled amortized principal payments each equaling $7.5 million on March 31, 2021, June 30, 2021, 
September 30, 2021 and December 31, 2021. The term loan credit agreement had an outstanding balance of $240.0 million as of 
December 31, 2021. The Company’s next scheduled amortized principal payment is due March 31, 2021 and is equal to $7.5 million.

Total debt at December 31, 2020 was $2,095.9 million net of unamortized discount and debt issuance costs, which was an increase 
of $540.6 million compared to December 31, 2019. The increase includes: (i) incremental borrowings of $700.0 million related to the 
Company’s 2.375% Senior Notes due 2031 issued on September 24, 2020; (ii) net of the amortization of discounted debt related to 
our various unsecured Senior Notes, and debt issuance cost amortization of $2.3 million; offset by (iii) the repayment of the principal 
balance of $55.0 million for scheduled principal amortization balances related to our various existing floating rate debt term notes; (iv) 
the net repayment of $100.0 million under the revolving credit facility; and (v) an additional $6.7 million including debt issuance costs 
and the portion of discount applied to the proceeds issued under the incremental borrowings related to the Company’s 2.375% Senior 
Notes due 2031 issued on September 24, 2020.

On September 24, 2020, the Company completed the issuance of $700.0 million aggregate principal amount of the Company’s 
2.375% Senior Notes due 2031. The Senior Notes were given investment grade ratings of BBB- stable outlook and Baa3 positive 
outlook. The notes are subject to certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, 
the proceeds were offered at a discount of the original note amount, which also excluded an underwriting fee discount. The net 
proceeds received from the issuance were used to repay a portion of the outstanding balance of $200.0 million on the revolving credit 
facility, to pay a portion of the purchase price in connection with the acquisitions of LP Insurance Services, LLP and CKP Insurance, 
LLC and for other general corporate purposes. As of December 31, 2020, there was an outstanding debt balance of $700.0 million 
exclusive of the associated discount balance.

During the 12 months ended December 31, 2020, the Company has repaid $40.0 million of principal related to the amended and 
restated credit agreement term loan through quarterly scheduled amortized principal payments each equaling $10.0 million on March 
31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020. The amended and restated credit agreement term loan had 
an outstanding balance of $290.0 million as of December 31, 2020. The Company’s next scheduled amortized principal payment is 
due March 31, 2021 and is equal to $10.0 million.

During the 12 months ended December 31, 2020, the Company has repaid $15.0 million of principal related to the term loan credit 
agreement through quarterly scheduled amortized principal payments each equaling $3.8 million on March 31, 2020, June 30, 2020, 

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September 30, 2020 and December 31, 2020. The term loan credit agreement had an outstanding balance of $270.0 million as of 
December 31, 2020. The Company’s next scheduled amortized principal payment is due March 31, 2021 and is equal to $7.5 million.

On April 30, 2020, the Company borrowed $250.0 million under the revolving credit facility. The proceeds were used in conjunction 
with the payment of the purchase price for the previously announced acquisition of LP Insurance Services LLC and for additional 
liquidity to further strengthen the Company’s financial position and balance sheet in the event cash receipts from customers or carrier 
partners are delayed due to the COVID-19 pandemic. On June 30, 2020, the Company repaid $150.0 million on the revolving credit 
facility. On September 24, 2020, the Company repaid the total outstanding borrowings under the revolving credit facility of $200.0 
million using the proceeds received from the borrowings under the Company’s 2.375% Senior Notes due 2031.

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, foreign exchange 
rates and equity prices. We are exposed to market risk through our investments, revolving credit line, term loan agreements and 
international operations.

Our invested assets are held primarily as cash and cash equivalents, restricted cash, available-for-sale marketable debt securities, 
non-marketable debt securities, certificates of deposit, U.S. treasury securities, and professionally managed short duration fixed 
income funds. These investments are subject to interest rate risk. The fair values of our invested assets at December 31, 2021 and 
December 31, 2020, approximated their respective carrying values due to their short-term duration and therefore, such market risk is 
not considered to be material.

Non-GAAP Reconciliation

INCOME BEFORE INCOME TAXES TO EBITDAC(1) AND INCOME BEFORE INCOME TAXES MARGIN(2) TO EBITDAC 

MARGIN(3)

TOTAL

Total Revenues

  Amortization

  Depreciation

Interest

EBITDAC

EBITDAC Margin

  Change in estimated acquisition  

  earn-out payables

Income before income taxes

762,823

624,099

525,929

462,462

449,722

Income before income taxes margin

25.0%

23.9%

22.0%

2021

2020

2019

2018

2017

3,051,398

$2,613,375

$2,392,171

$2,014,246

$1,881,347

119,593

108,523

105,298

33,309

64,981

26,276

58,973

23,417

63,660 

23.0%

86,544

22,834

40,580

23.9%

85,446

22,698

38,316

40,445

(4,458)

(1,366)

2,969

9,200

1,021,151

$813,413

$716,938

$615,389

$605,382

33.5%

31.1%

30.0%

30.6%

32.2%

(1) 

“EBITDAC,” a non-GAAP measure, is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables.

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.

(2)  “Income before income taxes margin” is defined as income before income taxes divided by total revenues.

(3)  “EBITDAC Margin,” a non-GAAP measure, is defined as EBITDAC divided by total revenues.

As of December 31, 2021, we had $486.9 million of borrowings outstanding under our various credit agreements, all of which bear 
interest on a floating basis tied to London Inter-bank Offered Rate (“LIBOR”) and is therefore subject to changes in the associated 
interest expense. The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our 
Consolidated Financial Statements. As of July 2017, the UK Financial Conduct Authority (“FCA”) has urged banks and institutions to 
discontinue their use of the LIBOR benchmark rate for floating rate debt, and other financial instruments tied to the rate after 2021. 
The Alternative Reference Rates Committee (“ARRC”) have recommended the Secured Overnight Financing Rate (“SOFR”) as the best 
alternative rate to LIBOR post discontinuance and has proposed a transition plan and timeline designed to encourage the adoption of 
SOFR from LIBOR. On March 5, 2021 the ICE Benchmark Administration, which administrators LIBOR, and the FCA announced that all 
LIBOR settings will either cease to be provided by any administrator or no longer be represented immediately after December 31, 2021 
for all non-U.S. dollar LIBOR settings and one-week and two-month U.S. dollar LIBOR settings and immediately after June 30, 2023 for 
the remaining U.S. dollar LIBOR settings.

On October 27, 2021 the Company entered into the Second Amended and Restated Credit Agreement. The Second Amended and 
Restated Credit Agreement includes provisions regarding transition from LIBOR to SOFR in preparation of the LIBOR cessation. 
Management will continue to actively assess the related opportunities and risks associated with the transition as well as monitor 
related proposals, guidance and other alternative-rate initiatives, with an expectation that the Company will be prepared for a 
termination of LIBOR benchmarks prior to June 30, 2023 when typical rate settings will no longer be available.

We are subject to operational exchange rate risk primarily in our U.K.-based wholesale brokerage business that has a cost base 
principally denominated in British pounds and a revenue base in several other currencies, but principally in U.S. dollars, and in our 
Canadian MGA business that has substantially all of its revenues and cost base denominated in Canadian dollars. As of January 14, 
2021, the Company announced the completion of the acquisition of O’Leary Insurances, an Ireland based retail brokerage business 
which has substantially all of its revenue and cost base in euros.

Based upon our foreign currency rate exposure as of December 31, 2021, an immediate 10% hypothetical change of foreign currency 
exchange rates would not have a material effect on our Consolidated Financial Statements.

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Income before income taxes margin

25.0%

23.9%

22.0%

23.0%

86,544

22,834

40,580

23.9%

85,446

22,698

38,316

119,593

108,523

105,298

33,309

64,981

26,276

58,973

23,417

63,660 

  Amortization

  Depreciation

Interest

  Change in estimated acquisition  

  earn-out payables

EBITDAC

EBITDAC Margin

Non-GAAP Reconciliation

INCOME BEFORE INCOME TAXES TO EBITDAC(1) AND INCOME BEFORE INCOME TAXES MARGIN(2) TO EBITDAC 
MARGIN(3)

TOTAL

Total Revenues

2021

2020

2019

2018

2017

3,051,398

$2,613,375

$2,392,171

$2,014,246

$1,881,347

Income before income taxes

762,823

624,099

525,929

462,462

449,722

September 30, 2020 and December 31, 2020. The term loan credit agreement had an outstanding balance of $270.0 million as of 

December 31, 2020. The Company’s next scheduled amortized principal payment is due March 31, 2021 and is equal to $7.5 million.

On April 30, 2020, the Company borrowed $250.0 million under the revolving credit facility. The proceeds were used in conjunction 

with the payment of the purchase price for the previously announced acquisition of LP Insurance Services LLC and for additional 

liquidity to further strengthen the Company’s financial position and balance sheet in the event cash receipts from customers or carrier 

partners are delayed due to the COVID-19 pandemic. On June 30, 2020, the Company repaid $150.0 million on the revolving credit 

facility. On September 24, 2020, the Company repaid the total outstanding borrowings under the revolving credit facility of $200.0 

million using the proceeds received from the borrowings under the Company’s 2.375% Senior Notes due 2031.

Quantitative and Qualitative Disclosures About 

Market Risk

international operations.

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates, foreign exchange 

rates and equity prices. We are exposed to market risk through our investments, revolving credit line, term loan agreements and 

Our invested assets are held primarily as cash and cash equivalents, restricted cash, available-for-sale marketable debt securities, 

non-marketable debt securities, certificates of deposit, U.S. treasury securities, and professionally managed short duration fixed 

income funds. These investments are subject to interest rate risk. The fair values of our invested assets at December 31, 2021 and 

December 31, 2020, approximated their respective carrying values due to their short-term duration and therefore, such market risk is 

not considered to be material.

As of December 31, 2021, we had $486.9 million of borrowings outstanding under our various credit agreements, all of which bear 

interest on a floating basis tied to London Inter-bank Offered Rate (“LIBOR”) and is therefore subject to changes in the associated 

interest expense. The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our 

Consolidated Financial Statements. As of July 2017, the UK Financial Conduct Authority (“FCA”) has urged banks and institutions to 

discontinue their use of the LIBOR benchmark rate for floating rate debt, and other financial instruments tied to the rate after 2021. 

The Alternative Reference Rates Committee (“ARRC”) have recommended the Secured Overnight Financing Rate (“SOFR”) as the best 

alternative rate to LIBOR post discontinuance and has proposed a transition plan and timeline designed to encourage the adoption of 

SOFR from LIBOR. On March 5, 2021 the ICE Benchmark Administration, which administrators LIBOR, and the FCA announced that all 

LIBOR settings will either cease to be provided by any administrator or no longer be represented immediately after December 31, 2021 

for all non-U.S. dollar LIBOR settings and one-week and two-month U.S. dollar LIBOR settings and immediately after June 30, 2023 for 

the remaining U.S. dollar LIBOR settings.

On October 27, 2021 the Company entered into the Second Amended and Restated Credit Agreement. The Second Amended and 

Restated Credit Agreement includes provisions regarding transition from LIBOR to SOFR in preparation of the LIBOR cessation. 

Management will continue to actively assess the related opportunities and risks associated with the transition as well as monitor 

related proposals, guidance and other alternative-rate initiatives, with an expectation that the Company will be prepared for a 

termination of LIBOR benchmarks prior to June 30, 2023 when typical rate settings will no longer be available.

We are subject to operational exchange rate risk primarily in our U.K.-based wholesale brokerage business that has a cost base 

principally denominated in British pounds and a revenue base in several other currencies, but principally in U.S. dollars, and in our 

Canadian MGA business that has substantially all of its revenues and cost base denominated in Canadian dollars. As of January 14, 

2021, the Company announced the completion of the acquisition of O’Leary Insurances, an Ireland based retail brokerage business 

which has substantially all of its revenue and cost base in euros.

Based upon our foreign currency rate exposure as of December 31, 2021, an immediate 10% hypothetical change of foreign currency 

exchange rates would not have a material effect on our Consolidated Financial Statements.

32

We do not actively invest or trade in equity securities. In addition, we generally dispose of any significant equity securities received in 

(2)  “Income before income taxes margin” is defined as income before income taxes divided by total revenues.

conjunction with an acquisition shortly after the acquisition date.

(3)  “EBITDAC Margin,” a non-GAAP measure, is defined as EBITDAC divided by total revenues.

(1) 

“EBITDAC,” a non-GAAP measure, is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables.

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40,445

(4,458)

(1,366)

2,969

9,200

1,021,151

$813,413

$716,938

$615,389

$605,382

33.5%

31.1%

30.0%

30.6%

32.2%

 
 
 
 
Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019

Notes to Consolidated Financial Statements for the years ended December 31, 2021, 2020 and 2019

Note 1: Summary of Significant Accounting Policies

Note 2: Revenues

Note 3: Business Combinations

Note 4: Goodwill

Note 5: Amortizable Intangible Assets

Note 6: Investments

Note 7: Fixed Assets

Note 8: Accrued Expenses and Other Liabilities

Note 9: Long-Term Debt

Note 10: Income Taxes

Note 11: Employee Savings Plan

Note 12: Stock-Based Compensation

Note 13: Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

Note 14: Commitments and Contingencies

Note 15: Leases

Note 16: Segment Information

Note 17: Insurance Company WNFIC

Note 18: Shareholders’ Equity

Report of Independent Registered Public Accounting Firm

Brown & Brown, Inc. 

Consolidated Statements 

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70

of Income

(IN THOUSANDS, EXCEPT PER SHARE DATA)

R E V E N U E S

Commissions and fees

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Total expenses

Income before income taxes

Income taxes

Net income

Net income per share:

Basic

Diluted

Dividends declared per share

Change in estimated acquisition earn-out payables

See accompanying notes to Consolidated Financial Statements.

FOR THE YEAR ENDED DECEMBER 31,

2021

2020

2019

$3,047,522

$2,606,108

$2,384,737

1,099

2,777

2,811

4,456

5,780

1,654

3,051,398

2,613,375

2,392,171

1,636,911

1,436,377

1,308,165

402,941

365,973

(9,605)

(2,388)

119,593

108,523

33,309

64,981

40,445

26,276

58,973

(4,458)

377,089

(10,021)

105,298

23,417

63,660

(1,366)

2,288,575

1,989,276

1,866,242

762,823

175,719

624,099

143,616

525,929

127,415

$587,104

$480,483

$398,514

$2.08

$2.07

$0.38

$1.70

$1.69

$0.35

$1.42

$1.40

$0.33

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Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2021, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019

Notes to Consolidated Financial Statements for the years ended December 31, 2021, 2020 and 2019

Note 1: Summary of Significant Accounting Policies

Note 2: Revenues

Note 3: Business Combinations

Note 4: Goodwill

Note 5: Amortizable Intangible Assets

Note 6: Investments

Note 7: Fixed Assets

Note 9: Long-Term Debt

Note 10: Income Taxes

Note 11: Employee Savings Plan

Note 12: Stock-Based Compensation

Note 8: Accrued Expenses and Other Liabilities

Note 14: Commitments and Contingencies

Note 15: Leases

Note 16: Segment Information

Note 17: Insurance Company WNFIC

Note 18: Shareholders’ Equity

Report of Independent Registered Public Accounting Firm

Note 13: Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

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Brown & Brown, Inc. 
Consolidated Statements 
of Income

(IN THOUSANDS, EXCEPT PER SHARE DATA)

R E V E N U E S

Commissions and fees

Investment income

Other income, net

Total revenues

E X P E N S E S

Employee compensation and benefits

Other operating expenses

(Gain)/loss on disposal

Amortization

Depreciation

Interest

Change in estimated acquisition earn-out payables

Total expenses

Income before income taxes

Income taxes

Net income

Net income per share:

Basic

Diluted

Dividends declared per share

See accompanying notes to Consolidated Financial Statements.

FOR THE YEAR ENDED DECEMBER 31,

2021

2020

2019

$3,047,522

$2,606,108

$2,384,737

1,099

2,777

2,811

4,456

5,780

1,654

3,051,398

2,613,375

2,392,171

1,636,911

1,436,377

1,308,165

402,941

365,973

(9,605)

(2,388)

119,593

108,523

33,309

64,981

40,445

26,276

58,973

(4,458)

377,089

(10,021)

105,298

23,417

63,660

(1,366)

2,288,575

1,989,276

1,866,242

762,823

175,719

624,099

143,616

525,929

127,415

$587,104

$480,483

$398,514

$2.08

$2.07

$0.38

$1.70

$1.69

$0.35

$1.42

$1.40

$0.33

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Brown & Brown, Inc. 
Consolidated Statements of 
Comprehensive Income

Brown & Brown, Inc. 

Consolidated Balance Sheets

(IN THOUSANDS, EXCEPT PER SHARE DATA)

DECEMBER 31, 2021

DECEMBER 31, 2020

(IN THOUSANDS)

Net income

Foreign currency translation

Unrealized loss on available-for-sale debt securities, net of tax

Comprehensive income

YEAR ENDED DECEMBER 31,

2021

2020

2019

$587,104

$480,483

$398,514

(9,287)

(122)

—

—

—

—

$577,695

$480,483

$398,514

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Common stock, par value $0.10 per share; authorized 560,000 shares; issued 300,993  

 shares and outstanding 282,496 at 2021, issued 299,689 shares and outstanding 

Treasury stock, at cost at 18,497 at 2021 and 16,685 shares at 2020, respectively - in  

283,004 shares at 2020 - in thousands.

Additional paid-in capital

thousands

Accumulated other comprehensive loss

Retained earnings

Total shareholders’ equity

Total liabilities and shareholders’ equity

30,099

849,424

(673,902)

(9,409)

4,000,681

4,196,893

$9,795,443

29,969

794,909

(591,338)

—

3,520,683

3,754,223

$8,966,492

See accompanying notes to Consolidated Financial Statements.

A S S E T S

Current Assets:

Cash and cash equivalents

Restricted cash and investments

Short-term investments

Premiums, commissions and fees receivable

Reinsurance recoverable

Prepaid reinsurance premiums

Other current assets

Total current assets

Fixed assets, net

Operating lease assets

Goodwill

Amortizable intangible assets, net

Investments

Other assets

Total assets

Current Liabilities:

L I A B I L I T I E S   A N D   S H A R E H O L D E R S ’   E Q U I T Y

Premiums payable to insurance companies

Losses and loss adjustment reserve

Unearned premiums

Premium deposits and credits due customers

Accounts payable

Accrued expenses and other liabilities

Current portion of long-term debt

Total current liabilities

Long-term debt less unamortized discount and debt issuance costs

Operating lease liabilities

Deferred income taxes, net

Other liabilities

Shareholders’ Equity:

$887,009

583,247

12,891

1,216,188

63,106

392,222

175,621

3,330,284

212,033

197,035

4,736,828

1,081,465

30,970

206,828

63,106

392,222

122,447

206,370

456,159

42,500

2,667,366

1,980,437

179,976

386,794

383,977

$817,398

454,517

18,332

1,099,248

43,469

377,615

147,670

2,958,249

201,115

186,998

4,395,918

1,049,660

24,971

149,581

43,469

377,615

102,505

190,497

371,737

70,000

2,354,352

2,025,906

172,935

344,222

314,854

$9,795,443

$8,966,492

$1,384,562

$1,198,529

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37

 
 
 
 
Brown & Brown, Inc. 

Consolidated Statements of 

Comprehensive Income

Brown & Brown, Inc. 
Consolidated Balance Sheets

(IN THOUSANDS, EXCEPT PER SHARE DATA)

DECEMBER 31, 2021

DECEMBER 31, 2020

(IN THOUSANDS)

Net income

Foreign currency translation

Comprehensive income

Unrealized loss on available-for-sale debt securities, net of tax

YEAR ENDED DECEMBER 31,

2021

2020

2019

$587,104

$480,483

$398,514

(9,287)

(122)

—

—

—

—

$577,695

$480,483

$398,514

36

A S S E T S

Current Assets:

Cash and cash equivalents

Restricted cash and investments

Short-term investments

Premiums, commissions and fees receivable

Reinsurance recoverable

Prepaid reinsurance premiums

Other current assets

Total current assets

Fixed assets, net

Operating lease assets

Goodwill

Amortizable intangible assets, net

Investments

Other assets

Total assets

L I A B I L I T I E S   A N D   S H A R E H O L D E R S ’   E Q U I T Y

Current Liabilities:

Premiums payable to insurance companies

Losses and loss adjustment reserve

Unearned premiums

Premium deposits and credits due customers

Accounts payable

Accrued expenses and other liabilities

Current portion of long-term debt

Total current liabilities

Long-term debt less unamortized discount and debt issuance costs

Operating lease liabilities

Deferred income taxes, net

Other liabilities

Shareholders’ Equity:

Common stock, par value $0.10 per share; authorized 560,000 shares; issued 300,993  
 shares and outstanding 282,496 at 2021, issued 299,689 shares and outstanding 
283,004 shares at 2020 - in thousands.

Additional paid-in capital

Treasury stock, at cost at 18,497 at 2021 and 16,685 shares at 2020, respectively - in  

thousands

Accumulated other comprehensive loss

Retained earnings

Total shareholders’ equity

Total liabilities and shareholders’ equity

See accompanying notes to Consolidated Financial Statements.

$887,009

583,247

12,891

1,216,188

63,106

392,222

175,621

3,330,284

212,033

197,035

4,736,828

1,081,465

30,970

206,828

$817,398

454,517

18,332

1,099,248

43,469

377,615

147,670

2,958,249

201,115

186,998

4,395,918

1,049,660

24,971

149,581

$9,795,443

$8,966,492

$1,384,562

$1,198,529

63,106

392,222

122,447

206,370

456,159

42,500

2,667,366

1,980,437

179,976

386,794

383,977

30,099

849,424

(673,902)

(9,409)

4,000,681

4,196,893

$9,795,443

43,469

377,615

102,505

190,497

371,737

70,000

2,354,352

2,025,906

172,935

344,222

314,854

29,969

794,909

(591,338)

—

3,520,683

3,754,223

$8,966,492

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37

 
 
 
 
Brown & Brown, Inc. 
Consolidated Statements of 
Shareholders’ Equity

Brown & Brown, Inc. 

Consolidated Statements of 

Cash Flows

COMMON STOCK

SHARES
OUTSTANDING

PAR
VALUE

ADDITIONAL
PAID-IN
CAPITAL

TREASURY
STOCK

ACCUMULATED
OTHER
COMPREHENSIVE
LOSS

RETAINED
EARNINGS

TOTAL

279,583

$29,338

$615,180

$(477,572)

$—

$2,833,622

$3,000,568

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Balance at January 1, 2019

Net Income

Net unrealized holding (loss) gain on 
available-for-sale securities

Shares issued - employee stock compensation plans

Employee stock purchase plan

Stock incentive plans

Agency acquisition

Directors

976

2,519

569

28

98

252

57

3

182

30,453

40,311

19,943

877

Repurchase shares to fund tax withholdings for non-cash  
  stock-based compensation

Purchase of treasury stock Cash dividends paid ($0.33 
per share)

(366)

(37)

(10,897)

(1,654)

20,000

(58,671)

398,514

398,514

(30)

152

30,551

40,563

20,000

880

(10,934)

(38,671)

(91,344)

(91,344)

Cash dividends paid ($0.33 per share)

Balance at December 31, 2019

Net Income

Net unrealized holding (loss) gain on 
available-for-sale securities

Shares issued - employee stock compensation plans

Employee stock purchase plan

Stock incentive plans

Agency acquisition

Directors

Repurchase shares to fund tax withholdings for non-cash 
stock-based compensation

Purchase of treasury stock

Cash dividends paid ($0.35 per share)

Balance at December 31, 2020

Net Income

Net unrealized holding (loss) gain on 
available-for-sale securities

Foreign currency translation

281,655

29,711

716,049

(536,243)

—

3,140,762

3,350,279

466

38,047

50,934

30,048

585

96

189

72

2

(101)

(41,220)

(55,095)

962

1,895

723

16

(1,013)

(1,234)

480,483

480,483

30

496

38,143

51,123

30,120

587

(41,321)

(55,095)

283,004

29,969

794,909

(591,338)

—

3,520,683

3,754,223

(100,592)

(100,592)

587,104

587,104

Shares issued - employee stock compensation plans

Employee stock purchase plan

Stock incentive plans

Agency acquisition

Directors

Repurchase shares to fund tax withholdings for non-cash 
stock-based compensation

Purchase of treasury stock

Cash dividends paid ($0.38 per share)

851

1,313

184

17

(1,061)

(1,812)

(508)

42,800

51,129

9,873

897

85

131

19

2

(107)

(49,676)

(82,564)

(122)

(9,287)

123

(630)

(9,164)

42,885

51,260

9,892

899

(49,783)

(82,564)

(107,229)

(107,229)

Effect of foreign exchange rate cash changes

Balance at December 31, 2021

282,496

$30,099

$849,424

$(673,902)

$(9,409)

$4,000,681

$4,196,893

Net increase (decrease) in cash and cash equivalents inclusive of restricted cash

See accompanying notes to Consolidated Financial Statements.

38

Cash and cash equivalents inclusive of restricted cash at beginning of period

Cash and cash equivalents inclusive of restricted cash at end of period

$1,470,256

$1,271,915

$962,975

See accompanying notes to Consolidated Financial Statements. Refer to Note 13 for reconciliation of cash and cash equivalents inclusive 

of restricted cash.

(IN THOUSANDS)

Cash flows from operating activities:

Net income

Amortization

Depreciation

Adjustments to reconcile net income to net cash provided by operating activities:

Non-cash stock-based compensation

Change in estimated acquisition earn-out payables

Deferred income taxes

Amortization of debt discount and disposal of deferred financing costs

Accretion of discounts and premiums, investments

(Gain)/loss on sales of investments, fixed assets and customer accounts

Payments on acquisition earn-outs in excess of original estimated payables

Effect of changes in foreign exchange rate changes

Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:

Premiums, commissions and fees receivable (increase) decrease

Reinsurance recoverables (increase) decrease

Prepaid reinsurance premiums (increase) decrease

Other assets (increase) decrease

Premiums payable to insurance companies (increase) decrease

Premium deposits and credits due customers increase (decrease)

Losses and loss adjustment reserve increase (decrease)

Unearned premiums increase (decrease)

Accounts payable increase (decrease)

Accrued expenses and other liabilities increase (decrease)

Other liabilities increase (decrease)

Net cash provided by operating activities

Cash flows from investing activities:

Additions to fixed assets

Payments for businesses acquired, net of cash acquired

Proceeds from sales of fixed assets and customer accounts

Purchases of investments

Proceeds from sales of investments

Net cash used in investing activities

Cash flows from financing activities:

Payments on acquisition earn-outs

Proceeds from long-term debt

Payments on long-term debt

Deferred debt issuance costs

Borrowings on revolving credit facilities

Payments on revolving credit facilities

Issuances of common stock for employee stock benefit plans

Repurchase of stock benefit plan shares for employees to fund tax withholdings

Purchase of treasury stock

Settlement of accelerated share repurchase program

Cash dividends paid

Net cash (used in) provided by financing activities

YEAR ENDED DECEMBER 31,

2021

2020

2019

$587,104

$480,483

$398,514

119,593

108,523

105,298

33,309

61,018

40,445

33,616

2,839

171

(7,096)

(21,060)

494

(72,843)

(19,637)

(14,607)

(53,746)

127,991

19,581

19,637

14,607

51,404

66,782

(47,133)

942,469

(45,045)

(366,780)

16,735

(12,375)

10,785

(62,521)

(73,125)

(2,683)

34,026

(49,783)

(82,564)

—

—

—

—

(107,229)

(343,879)

(3,569)

198,341

1,271,915

26,276

59,749

(4,458)

15,943

2,319

48

(831)

(4,532)

—

(135,367)

15,036

(11,594)

(42,731)

158,775

(12,886)

(15,036)

11,594

107,754

34,716

(72,134)

721,647

(24,977)

700,000

(55,000)

(6,756)

250,000

30,104

(41,321)

(55,095)

(100,592)

346,363

—

—

308,940

962,975

23,417

46,994

(1,366)

12,383

2,054

(5)

(9,550)

(351)

—

(86,778)

6,891

(28,101)

(46,520)

148,658

7,820

(6,707)

28,101

17,800

43,330

16,298

678,180

(9,566)

350,000

(50,000)

(3,701)

100,000

24,999

(10,933)

(58,671)

20,000

(91,344)

(79,216)

—

185,379

777,596

(350,000)

(350,000)

(70,700)

(73,108)

(694,842)

(353,043)

9,615

(14,168)

11,025

21,592

(17,520)

8,494

(396,680)

(759,070)

(413,585)

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39

 
 
Brown & Brown, Inc. 

Consolidated Statements of 

Shareholders’ Equity

Brown & Brown, Inc. 
Consolidated Statements of 
Cash Flows

COMMON STOCK

ACCUMULATED

SHARES

OUTSTANDING

PAR

VALUE

ADDITIONAL

PAID-IN

CAPITAL

TREASURY

COMPREHENSIVE

STOCK

OTHER

LOSS

279,583

$29,338

$615,180

$(477,572)

$—

$2,833,622

$3,000,568

RETAINED

EARNINGS

TOTAL

398,514

398,514

(30)

152

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Balance at January 1, 2019

Net Income

Net unrealized holding (loss) gain on 

available-for-sale securities

Employee stock purchase plan

Stock incentive plans

Agency acquisition

Directors

Shares issued - employee stock compensation plans

976

2,519

569

28

98

252

57

3

182

30,453

40,311

19,943

877

Repurchase shares to fund tax withholdings for non-cash  

  stock-based compensation

(366)

(37)

(10,897)

Purchase of treasury stock Cash dividends paid ($0.33 

(1,654)

20,000

(58,671)

281,655

29,711

716,049

(536,243)

—

3,140,762

3,350,279

(91,344)

480,483

480,483

30

496

Shares issued - employee stock compensation plans

Repurchase shares to fund tax withholdings for non-cash 

per share)

Net Income

Cash dividends paid ($0.33 per share)

Balance at December 31, 2019

Net unrealized holding (loss) gain on 

available-for-sale securities

Employee stock purchase plan

Stock incentive plans

Agency acquisition

Directors

stock-based compensation

Purchase of treasury stock

Cash dividends paid ($0.35 per share)

Balance at December 31, 2020

Net Income

Net unrealized holding (loss) gain on 

available-for-sale securities

Foreign currency translation

Employee stock purchase plan

Stock incentive plans

Agency acquisition

Directors

Shares issued - employee stock compensation plans

466

38,047

50,934

30,048

585

96

189

72

2

(101)

(41,220)

(55,095)

(508)

42,800

51,129

9,873

897

85

131

19

2

962

1,895

723

16

(1,013)

(1,234)

851

1,313

184

17

(1,061)

(1,812)

Repurchase shares to fund tax withholdings for non-cash 

stock-based compensation

Purchase of treasury stock

Cash dividends paid ($0.38 per share)

(107)

(49,676)

(82,564)

283,004

29,969

794,909

(591,338)

—

3,520,683

3,754,223

(100,592)

(100,592)

587,104

587,104

(122)

(9,287)

123

30,551

40,563

20,000

880

(10,934)

(38,671)

(91,344)

38,143

51,123

30,120

587

(41,321)

(55,095)

(630)

(9,164)

42,885

51,260

9,892

899

(49,783)

(82,564)

(IN THOUSANDS)

Cash flows from operating activities:

Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Amortization
Depreciation
Non-cash stock-based compensation
Change in estimated acquisition earn-out payables
Deferred income taxes
Amortization of debt discount and disposal of deferred financing costs
Accretion of discounts and premiums, investments
(Gain)/loss on sales of investments, fixed assets and customer accounts
Payments on acquisition earn-outs in excess of original estimated payables
Effect of changes in foreign exchange rate changes

Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:

Premiums, commissions and fees receivable (increase) decrease
Reinsurance recoverables (increase) decrease
Prepaid reinsurance premiums (increase) decrease
Other assets (increase) decrease
Premiums payable to insurance companies (increase) decrease
Premium deposits and credits due customers increase (decrease)
Losses and loss adjustment reserve increase (decrease)
Unearned premiums increase (decrease)
Accounts payable increase (decrease)
Accrued expenses and other liabilities increase (decrease)
Other liabilities increase (decrease)

Net cash provided by operating activities

Cash flows from investing activities:
Additions to fixed assets
Payments for businesses acquired, net of cash acquired
Proceeds from sales of fixed assets and customer accounts
Purchases of investments
Proceeds from sales of investments

Net cash used in investing activities

Cash flows from financing activities:
Payments on acquisition earn-outs
Proceeds from long-term debt
Payments on long-term debt
Deferred debt issuance costs
Borrowings on revolving credit facilities
Payments on revolving credit facilities
Issuances of common stock for employee stock benefit plans
Repurchase of stock benefit plan shares for employees to fund tax withholdings
Purchase of treasury stock
Settlement of accelerated share repurchase program
Cash dividends paid

Net cash (used in) provided by financing activities

Balance at December 31, 2021

282,496

$30,099

$849,424

$(673,902)

$(9,409)

$4,000,681

$4,196,893

Net increase (decrease) in cash and cash equivalents inclusive of restricted cash

(107,229)

(107,229)

Effect of foreign exchange rate cash changes

See accompanying notes to Consolidated Financial Statements.

Cash and cash equivalents inclusive of restricted cash at beginning of period

Cash and cash equivalents inclusive of restricted cash at end of period

T
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2

YEAR ENDED DECEMBER 31,

2021

2020

2019

$587,104

$480,483

$398,514

119,593
33,309
61,018
40,445
33,616
2,839
171
(7,096)
(21,060)
494

(72,843)
(19,637)
(14,607)
(53,746)
127,991
19,581
19,637
14,607
51,404
66,782
(47,133)
942,469

(45,045)
(366,780)
16,735
(12,375)
10,785
(396,680)

(62,521)
—
(73,125)
(2,683)
—
—
34,026
(49,783)
(82,564)
—
(107,229)
(343,879)
(3,569)
198,341
1,271,915
$1,470,256

108,523
26,276
59,749
(4,458)
15,943
2,319
48
(831)
(4,532)
—

(135,367)
15,036
(11,594)
(42,731)
158,775
(12,886)
(15,036)
11,594
107,754
34,716
(72,134)
721,647

(70,700)
(694,842)
9,615
(14,168)
11,025
(759,070)

(24,977)
700,000
(55,000)
(6,756)
250,000
(350,000)
30,104
(41,321)
(55,095)
—
(100,592)
346,363
—
308,940
962,975
$1,271,915

105,298
23,417
46,994
(1,366)
12,383
2,054
(5)
(9,550)
(351)
—

(86,778)
6,891
(28,101)
(46,520)
148,658
7,820
(6,707)
28,101
17,800
43,330
16,298
678,180

(73,108)
(353,043)
21,592
(17,520)
8,494
(413,585)

(9,566)
350,000
(50,000)
(3,701)
100,000
(350,000)
24,999
(10,933)
(58,671)
20,000
(91,344)
(79,216)
—
185,379
777,596
$962,975

38

See accompanying notes to Consolidated Financial Statements. Refer to Note 13 for reconciliation of cash and cash equivalents inclusive 
of restricted cash.

39

 
 
Notes to Consolidated 
Financial Statements

NOTE 1. Summary of Significant Accounting Policies

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 service organization that markets and sells insurance products and services, 
primarily in the property, casualty and employee benefits areas. Brown & Brown’s business is divided into four reportable segments. 
The Retail Segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional 
and individual insured customers, and non-insurance risk-mitigating products through our automobile dealer services (“F&I”) businesses. 
The National Programs Segment, which acts as a managing general agent (“MGA”), provides professional liability and related package 
products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services 
designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through a nationwide 
network of independent agents, including Brown & Brown retail agents. The Wholesale Brokerage Segment markets and sells excess 
and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown 
retail agents. The Services Segment provides insurance-related services, including third-party claims administration and comprehensive 
medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside 
services, Social Security disability and Medicare benefits advocacy services and claims adjusting services.

Recently Issued Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): 
Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendment requires an acquirer in a 
business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards 
Codification (“ASC”) Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is 
permitted. While the Company is continuing to assess the timing of adoption and the potential impacts of ASU 2021-08, it does not 
expect ASU 2021-08 to have a material effect on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform 
on Financial Reporting.” The amendments provide optional guidance for a limited time to ease the potential burden in accounting 
for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging 
relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts 
and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”), or another reference rate expected to be 
discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract 
modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating 
our contracts and the available expedients provided by the new standard; however, the Company can assert there is no impact to any 
carrying value of assets or liabilities aside from our floating-rate debt instruments that are indexed to LIBOR and are carried at amortized 
cost. Any further impact of adoption will be in determining the new periodic floating interest rate indexed to our floating-rate debt 
instruments with no impact on the balance sheet upon adoption.

Recently Adopted Accounting Standards

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard 
removes specific exceptions in the current rules and eliminates the need for an organization to analyze whether the following apply in a 
given period: (a) exception to the incremental approach for intra-period tax allocation; (b) exceptions to accounting for basis differences 
when there are ownership changes in foreign investments and (c) exception in interim period income tax accounting for year-to-date 
losses that exceed anticipated losses. The standard also is designed to improve financial statement preparers’ application of income 
tax-related guidance and simplify GAAP for (a) franchise taxes that are partially based on income; (b) transactions with a government 
that result in a step-up in the tax basis of goodwill; (c) separate financial statements of legal entities that are not subject to tax and (d) 
enacted changes in tax laws in interim periods. The Company adopted ASU 2019-12 effective January 1, 2021. The impact of adopting this 
standard was not material to the presentation of the Consolidated Financial Statements.

40

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): 

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which 

provides guidance for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the 

requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements 

that include an internal-use software license). ASU 2018-15 became effective for public companies for fiscal years, and interim 

periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2018-15 effective January 1, 

2020. The impact of adoption of this standard on our consolidated financial statements, including accounting policies, processes 

and systems, was not material.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill 

Impairment.” The new guidance eliminates Step 2 of the goodwill impairment test. The updated guidance requires an entity to 

perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and 

recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value 

with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 became effective for public 

companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and will be applied 

prospectively. The Company adopted ASU 2017-04 effective January 1, 2020, with interim or annual goodwill impairment tests now 

comparing the fair value of a reporting unit with its carrying value and no longer performing Step 2 of the goodwill impairment test. 

There was no impact from adopting ASU 2017-04 as there were no impairments recorded.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on 

Financial Instruments”. The new guidance adds an impairment model, known as the current expected credit loss (CECL) model that 

is based on expected losses rather than incurred losses. These amendments require the measurement of all expected credit losses 

for financial assets held at the reporting date based on historical experience, current conditions and reasonable forward-looking 

information, which is intended to result in more timely recognition of such losses. All related guidance has been codified into, and 

is now known as, ASC 326 – Financial Instruments—Credit Losses. The new standard is effective for public companies for annual 

reporting periods beginning after December 15, 2019, and interim periods therein. The Company adopted ASU 2016-13 effective 

January 1, 2020 and determined there was not a material impact on the Company’s Financial Statements given that historical trend 

analysis and assessments for forward-looking qualitative analysis are already integrated into financial assessments for the Company.

The accompanying Consolidated Financial Statements include the accounts of Brown & Brown, Inc. and its subsidiaries. All significant 

intercompany account balances and transactions have been eliminated in the Consolidated Financial Statements.

Principles of Consolidation

Revenue Recognition

The Company earns commissions paid by insurance carriers for the binding of insurance coverage. Commissions are earned at a point 

in time upon the effective date of bound insurance coverage, as no performance obligation exists after coverage is bound. If there 

are other services within the contract, the Company estimates the stand-alone selling price for each separate performance obligation, 

and the corresponding apportioned revenue is recognized over a period of time as the performance obligations are fulfilled. The 

Company earns fee revenue by receiving negotiated fees in lieu of a commission and from services other than securing insurance 

coverage. Fee revenues from certain agreements are recognized depending on when the services within the contract are satisfied 

and when we have transferred control of the related services to the customer. In situations where multiple performance obligations 

exist within a fee contract, in some instances the use of estimates is required to allocate the transaction price on a relative stand-alone 

selling price basis to each separate performance obligation. Incentive commissions represent a form of variable consideration which 

includes additional commissions over base commissions received from insurance carriers based on predetermined production levels 

mutually agreed upon by both parties. Profit-sharing contingent commissions represent a form of variable consideration associated 

with the placement of coverage, for which we earn commissions. Profit-sharing contingent commissions and incentive commissions 

are estimated with a constraint applied and accrued relative to the recognition of the corresponding core commissions based on 

the amount of consideration that will be received in the coming year such that a significant reversal of revenue is not probable. 

Guaranteed supplemental commissions, a form of variable consideration, represent guaranteed fixed-base agreements.

Management determines the policy cancellation reserve based upon historical cancellation experience adjusted for any known 

circumstances.

Use of Estimates

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The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United 

States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets 

and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Consolidated Financial Statements, and the 

reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

41

 
 
Notes to Consolidated 

Financial Statements

NOTE 1. Summary of Significant Accounting Policies

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 service organization that markets and sells insurance products and services, 

primarily in the property, casualty and employee benefits areas. Brown & Brown’s business is divided into four reportable segments. 

The Retail Segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional 

and individual insured customers, and non-insurance risk-mitigating products through our automobile dealer services (“F&I”) businesses. 

The National Programs Segment, which acts as a managing general agent (“MGA”), provides professional liability and related package 

products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services 

designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through a nationwide 

network of independent agents, including Brown & Brown retail agents. The Wholesale Brokerage Segment markets and sells excess 

and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown 

retail agents. The Services Segment provides insurance-related services, including third-party claims administration and comprehensive 

medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside 

services, Social Security disability and Medicare benefits advocacy services and claims adjusting services.

Recently Issued Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-08, Business Combinations (Topic 805): 

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendment requires an acquirer in a 

business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards 

Codification (“ASC”) Topic 606. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022 and early adoption is 

permitted. While the Company is continuing to assess the timing of adoption and the potential impacts of ASU 2021-08, it does not 

expect ASU 2021-08 to have a material effect on its consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform 

on Financial Reporting.” The amendments provide optional guidance for a limited time to ease the potential burden in accounting 

for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging 

relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts 

and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”), or another reference rate expected to be 

discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract 

modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating 

our contracts and the available expedients provided by the new standard; however, the Company can assert there is no impact to any 

carrying value of assets or liabilities aside from our floating-rate debt instruments that are indexed to LIBOR and are carried at amortized 

cost. Any further impact of adoption will be in determining the new periodic floating interest rate indexed to our floating-rate debt 

instruments with no impact on the balance sheet upon adoption.

Recently Adopted Accounting Standards

In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard 

removes specific exceptions in the current rules and eliminates the need for an organization to analyze whether the following apply in a 

given period: (a) exception to the incremental approach for intra-period tax allocation; (b) exceptions to accounting for basis differences 

when there are ownership changes in foreign investments and (c) exception in interim period income tax accounting for year-to-date 

losses that exceed anticipated losses. The standard also is designed to improve financial statement preparers’ application of income 

tax-related guidance and simplify GAAP for (a) franchise taxes that are partially based on income; (b) transactions with a government 

that result in a step-up in the tax basis of goodwill; (c) separate financial statements of legal entities that are not subject to tax and (d) 

enacted changes in tax laws in interim periods. The Company adopted ASU 2019-12 effective January 1, 2021. The impact of adopting this 

standard was not material to the presentation of the Consolidated Financial Statements.

40

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): 
Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which 
provides guidance for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the 
requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements 
that include an internal-use software license). ASU 2018-15 became effective for public companies for fiscal years, and interim 
periods within those fiscal years, beginning after December 15, 2019. The Company adopted ASU 2018-15 effective January 1, 
2020. The impact of adoption of this standard on our consolidated financial statements, including accounting policies, processes 
and systems, was not material.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill 
Impairment.” The new guidance eliminates Step 2 of the goodwill impairment test. The updated guidance requires an entity to 
perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and 
recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value 
with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 became effective for public 
companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and will be applied 
prospectively. The Company adopted ASU 2017-04 effective January 1, 2020, with interim or annual goodwill impairment tests now 
comparing the fair value of a reporting unit with its carrying value and no longer performing Step 2 of the goodwill impairment test. 
There was no impact from adopting ASU 2017-04 as there were no impairments recorded.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on 
Financial Instruments”. The new guidance adds an impairment model, known as the current expected credit loss (CECL) model that 
is based on expected losses rather than incurred losses. These amendments require the measurement of all expected credit losses 
for financial assets held at the reporting date based on historical experience, current conditions and reasonable forward-looking 
information, which is intended to result in more timely recognition of such losses. All related guidance has been codified into, and 
is now known as, ASC 326 – Financial Instruments—Credit Losses. The new standard is effective for public companies for annual 
reporting periods beginning after December 15, 2019, and interim periods therein. The Company adopted ASU 2016-13 effective 
January 1, 2020 and determined there was not a material impact on the Company’s Financial Statements given that historical trend 
analysis and assessments for forward-looking qualitative analysis are already integrated into financial assessments for the Company.

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of Brown & Brown, Inc. and its subsidiaries. All significant 
intercompany account balances and transactions have been eliminated in the Consolidated Financial Statements.

Revenue Recognition

The Company earns commissions paid by insurance carriers for the binding of insurance coverage. Commissions are earned at a point 
in time upon the effective date of bound insurance coverage, as no performance obligation exists after coverage is bound. If there 
are other services within the contract, the Company estimates the stand-alone selling price for each separate performance obligation, 
and the corresponding apportioned revenue is recognized over a period of time as the performance obligations are fulfilled. The 
Company earns fee revenue by receiving negotiated fees in lieu of a commission and from services other than securing insurance 
coverage. Fee revenues from certain agreements are recognized depending on when the services within the contract are satisfied 
and when we have transferred control of the related services to the customer. In situations where multiple performance obligations 
exist within a fee contract, in some instances the use of estimates is required to allocate the transaction price on a relative stand-alone 
selling price basis to each separate performance obligation. Incentive commissions represent a form of variable consideration which 
includes additional commissions over base commissions received from insurance carriers based on predetermined production levels 
mutually agreed upon by both parties. Profit-sharing contingent commissions represent a form of variable consideration associated 
with the placement of coverage, for which we earn commissions. Profit-sharing contingent commissions and incentive commissions 
are estimated with a constraint applied and accrued relative to the recognition of the corresponding core commissions based on 
the amount of consideration that will be received in the coming year such that a significant reversal of revenue is not probable. 
Guaranteed supplemental commissions, a form of variable consideration, represent guaranteed fixed-base agreements.

Management determines the policy cancellation reserve based upon historical cancellation experience adjusted for any known 
circumstances.

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1
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Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United 
States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets 
and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Consolidated Financial Statements, and the 
reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

41

 
 
Amortizable intangible assets are stated at cost, less accumulated amortization, and consist of purchased customer accounts and 

non-compete agreements. Purchased customer accounts and non-compete agreements are amortized on a straight-line basis over 

the related estimated lives and contract periods, which typically range from 3 to 15 years. Purchased customer accounts represent 

the value of the customer relationship, but also consist of records and files that contain information about insurance policies and the 

related insured parties that are essential to policy renewals.

The excess of the purchase price of an acquisition over the fair value of the identifiable tangible and amortizable intangible assets 

is assigned to goodwill. While goodwill is not amortizable, it is subject to assessment at least annually, and more frequently in the 

presence of certain circumstances, for impairment by application of a fair value-based test. The Company compares the fair value of 

each reporting unit with its carrying amount to determine if there is potential impairment of goodwill. The Company may elect to first 

perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If the Company does 

not perform a qualitative assessment, or if it is determined that it is more likely than not that the fair value of a reporting unit exceeds 

its carrying amount, the Company will calculate the fair value of the reporting unit. If the fair value of the reporting unit is less than its 

carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than its 

carrying value. Fair value is estimated based upon multiples of earnings before interest, income taxes, depreciation, amortization and 

change in estimated acquisition earn-out payables (“EBITDAC”), or on a discounted cash flow basis. The Company completed its most 

recent annual assessment as of November 30, 2021 and determined that the fair value of goodwill significantly exceeded the carrying 

value of such assets. In addition, as of December 31, 2021, there are no accumulated impairment losses.

The carrying value of amortizable intangible assets attributable to each business or asset group comprising the Company is 

periodically reviewed by management to determine if there are events or changes in circumstances that would indicate that its carrying 

amount may not be recoverable. Accordingly, if there are any such changes in circumstances during the year, the Company assesses 

the carrying value of its amortizable intangible assets by considering the estimated future undiscounted cash flows generated by the 

corresponding business or asset group. Any impairment identified through this assessment may require that the carrying value of 

related amortizable intangible assets be adjusted after determining the fair value of the amortizable intangible assets. There were no 

impairments recorded for the years ended December 31, 2021, 2020 and 2019.

Cash and Cash Equivalents

Cash and cash equivalents principally consist of demand deposits with financial institutions and highly liquid investments with quoted 
market prices having maturities of three months or less when purchased. Included in cash and cash equivalents are unrestricted 
premium from insureds and prefunded claims from carriers held in a fiduciary capacity.

Restricted Cash and Investments, and Premiums,  
Commissions and Fees Receivable

In our capacity as an insurance agent or broker, the Company typically collects premiums from insureds and, after deducting the 
authorized commissions, remits the net premiums to the appropriate insurance company or companies. Accordingly, premiums that 
are receivable from insureds are reported within Premiums, commissions, and fees receivable in the Consolidated Balance Sheets. 
Unremitted net insurance premiums are held in a fiduciary capacity until the Company disburses them, and the use of such funds is 
restricted by laws in certain jurisdictions in which our subsidiaries operate, or restricted due to our contracts with a certain insurance 
company or companies in which we hold premiums in a fiduciary capacity. Where allowed by law, the Company invests these 
unremitted funds only in cash, money market accounts, tax-free variable-rate demand bonds and commercial paper held for a short-
term. In certain states in which the Company operates, the use and investment alternatives for these funds are regulated and restricted 
by various state laws and agencies. These restricted funds are reported as restricted cash and investments on the Consolidated 
Balance Sheets. The interest income earned on these unremitted funds, where allowed by state law, is reported as investment income 
in the Consolidated Statement of Income.

In other circumstances, the insurance companies collect the premiums directly from the insureds and remit the applicable commissions 
to the Company. Accordingly, as reported in the Consolidated Balance Sheets, commissions are receivables from insurance 
companies. Fees are primarily receivables due from customers.

Investments

Income Taxes

Certificates of deposit, and other securities, having maturities of more than three months when purchased are reported at cost and 
are adjusted for other-than-temporary market value declines. The Company’s investment holdings include U.S. Government securities, 
municipal bonds, domestic corporate and foreign corporate bonds as well as short-duration fixed income funds. Investments within the 
portfolio or funds are held as available-for-sale and are carried at their fair value. Any gain/loss applicable from the fair value change is 
recorded, net of tax, as other comprehensive income within the equity section of the Consolidated Balance Sheets. Realized gains and 
losses are reported as investment income on the Consolidated Statement of Income, with the cost of securities sold determined on a 
specific identification basis.

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this 

method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between 

the financial statement carrying values and the income tax bases of the Company’s assets and liabilities.

The Company files a consolidated federal income tax return and has elected to file consolidated returns in certain states. Deferred 

income taxes are provided for in the Consolidated Financial Statements and relate principally to expenses charged to income for 

financial reporting purposes in one period and deducted for income tax purposes in other periods.

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2

Fixed Assets

Net Income Per Share

Fixed assets, including leasehold improvements, are carried at cost, less accumulated depreciation and amortization. Expenditures for 
improvements are capitalized, and expenditures for maintenance and repairs are expensed to operations as incurred. Upon sale or 
retirement, the cost and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or 
loss, if any, is reflected in other income. Depreciation has been determined using the straight-line method over the estimated useful 
lives of the related assets, which range from 3 to 40 years. Leasehold improvements are amortized on the straight-line method over 
the shorter of the useful life of the improvement or the term of the related lease.

Goodwill and Amortizable Intangible Assets

All of our business combinations are accounted for using the acquisition method. Acquisition purchase prices are typically based 
upon a multiple of average annual EBITDAC (defined below), and/or revenue earned over a period of 3 years within a minimum and 
maximum price range. The recorded purchase prices for acquisitions include 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 are recorded in the Consolidated 
Statement of Income when incurred.

The fair value of earn-out obligations is based upon the present value of the expected future payments to be made to the sellers of the 
acquired businesses in accordance with the provisions contained in the respective purchase agreements. In determining fair value, the 
acquired business’ future performance is estimated using financial projections developed by management for the acquired business 
and this estimate 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 estimates are then discounted to present value using a risk-adjusted rate that takes into 
consideration the likelihood that the forecast earn-out payments will be made.

42

  common share

Dilutive effect of stock options

Net income per share:

Basic

Diluted

Basic net income per share is computed based on the weighted average number of common shares (including participating securities) 

issued and outstanding during the period. Diluted net income per share 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 years ended December 31:

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net income

Net income attributable to unvested awarded performance stock

Net income attributable to common shares

2021

2020

2019

$587,104

(12,942 )

$480,483

$398,514

(15,197)

(12,873)

$574,162

$465,286

$385,641

Weighted average number of common shares outstanding – basic

282,246

283,294

281,566

Less unvested awarded performance stock included in weighted average number 

of common shares outstanding – basic

(6,222)

(8,960)

(9,095)

Weighted average number of common shares outstanding for basic earnings per  

Weighted average number of shares outstanding – diluted

277,414

275,867

274,616

276,024

1,390

274,334

272,471

1,533

2,145

$2.08

$2.07

$1.70

$1.69

$1.42

$1.40

43

 
 
Cash and Cash Equivalents

Cash and cash equivalents principally consist of demand deposits with financial institutions and highly liquid investments with quoted 

market prices having maturities of three months or less when purchased. Included in cash and cash equivalents are unrestricted 

premium from insureds and prefunded claims from carriers held in a fiduciary capacity.

Restricted Cash and Investments, and Premiums,  

Commissions and Fees Receivable

In our capacity as an insurance agent or broker, the Company typically collects premiums from insureds and, after deducting the 

authorized commissions, remits the net premiums to the appropriate insurance company or companies. Accordingly, premiums that 

are receivable from insureds are reported within Premiums, commissions, and fees receivable in the Consolidated Balance Sheets. 

Unremitted net insurance premiums are held in a fiduciary capacity until the Company disburses them, and the use of such funds is 

restricted by laws in certain jurisdictions in which our subsidiaries operate, or restricted due to our contracts with a certain insurance 

company or companies in which we hold premiums in a fiduciary capacity. Where allowed by law, the Company invests these 

unremitted funds only in cash, money market accounts, tax-free variable-rate demand bonds and commercial paper held for a short-

term. In certain states in which the Company operates, the use and investment alternatives for these funds are regulated and restricted 

by various state laws and agencies. These restricted funds are reported as restricted cash and investments on the Consolidated 

Balance Sheets. The interest income earned on these unremitted funds, where allowed by state law, is reported as investment income 

in the Consolidated Statement of Income.

In other circumstances, the insurance companies collect the premiums directly from the insureds and remit the applicable commissions 

to the Company. Accordingly, as reported in the Consolidated Balance Sheets, commissions are receivables from insurance 

companies. Fees are primarily receivables due from customers.

Certificates of deposit, and other securities, having maturities of more than three months when purchased are reported at cost and 

are adjusted for other-than-temporary market value declines. The Company’s investment holdings include U.S. Government securities, 

municipal bonds, domestic corporate and foreign corporate bonds as well as short-duration fixed income funds. Investments within the 

portfolio or funds are held as available-for-sale and are carried at their fair value. Any gain/loss applicable from the fair value change is 

recorded, net of tax, as other comprehensive income within the equity section of the Consolidated Balance Sheets. Realized gains and 

losses are reported as investment income on the Consolidated Statement of Income, with the cost of securities sold determined on a 

Investments

specific identification basis.

Fixed Assets

Fixed assets, including leasehold improvements, are carried at cost, less accumulated depreciation and amortization. Expenditures for 

improvements are capitalized, and expenditures for maintenance and repairs are expensed to operations as incurred. Upon sale or 

retirement, the cost and related accumulated depreciation and amortization are removed from the accounts and the resulting gain or 

loss, if any, is reflected in other income. Depreciation has been determined using the straight-line method over the estimated useful 

lives of the related assets, which range from 3 to 40 years. Leasehold improvements are amortized on the straight-line method over 

the shorter of the useful life of the improvement or the term of the related lease.

Goodwill and Amortizable Intangible Assets

All of our business combinations are accounted for using the acquisition method. Acquisition purchase prices are typically based 

upon a multiple of average annual EBITDAC (defined below), and/or revenue earned over a period of 3 years within a minimum and 

maximum price range. The recorded purchase prices for acquisitions include 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 are recorded in the Consolidated 

Statement of Income when incurred.

The fair value of earn-out obligations is based upon the present value of the expected future payments to be made to the sellers of the 

acquired businesses in accordance with the provisions contained in the respective purchase agreements. In determining fair value, the 

acquired business’ future performance is estimated using financial projections developed by management for the acquired business 

and this estimate 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 estimates are then discounted to present value using a risk-adjusted rate that takes into 

42

consideration the likelihood that the forecast earn-out payments will be made.

Amortizable intangible assets are stated at cost, less accumulated amortization, and consist of purchased customer accounts and 
non-compete agreements. Purchased customer accounts and non-compete agreements are amortized on a straight-line basis over 
the related estimated lives and contract periods, which typically range from 3 to 15 years. Purchased customer accounts represent 
the value of the customer relationship, but also consist of records and files that contain information about insurance policies and the 
related insured parties that are essential to policy renewals.

The excess of the purchase price of an acquisition over the fair value of the identifiable tangible and amortizable intangible assets 
is assigned to goodwill. While goodwill is not amortizable, it is subject to assessment at least annually, and more frequently in the 
presence of certain circumstances, for impairment by application of a fair value-based test. The Company compares the fair value of 
each reporting unit with its carrying amount to determine if there is potential impairment of goodwill. The Company may elect to first 
perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If the Company does 
not perform a qualitative assessment, or if it is determined that it is more likely than not that the fair value of a reporting unit exceeds 
its carrying amount, the Company will calculate the fair value of the reporting unit. If the fair value of the reporting unit is less than its 
carrying value, an impairment loss is recorded to the extent that the fair value of the goodwill within the reporting unit is less than its 
carrying value. Fair value is estimated based upon multiples of earnings before interest, income taxes, depreciation, amortization and 
change in estimated acquisition earn-out payables (“EBITDAC”), or on a discounted cash flow basis. The Company completed its most 
recent annual assessment as of November 30, 2021 and determined that the fair value of goodwill significantly exceeded the carrying 
value of such assets. In addition, as of December 31, 2021, there are no accumulated impairment losses.

The carrying value of amortizable intangible assets attributable to each business or asset group comprising the Company is 
periodically reviewed by management to determine if there are events or changes in circumstances that would indicate that its carrying 
amount may not be recoverable. Accordingly, if there are any such changes in circumstances during the year, the Company assesses 
the carrying value of its amortizable intangible assets by considering the estimated future undiscounted cash flows generated by the 
corresponding business or asset group. Any impairment identified through this assessment may require that the carrying value of 
related amortizable intangible assets be adjusted after determining the fair value of the amortizable intangible assets. There were no 
impairments recorded for the years ended December 31, 2021, 2020 and 2019.

Income Taxes

The Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this 
method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between 
the financial statement carrying values and the income tax bases of the Company’s assets and liabilities.

The Company files a consolidated federal income tax return and has elected to file consolidated returns in certain states. Deferred 
income taxes are provided for in the Consolidated Financial Statements and relate principally to expenses charged to income for 
financial reporting purposes in one period and deducted for income tax purposes in other periods.

Net Income Per Share

Basic net income per share is computed based on the weighted average number of common shares (including participating securities) 
issued and outstanding during the period. Diluted net income per share 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 years ended December 31:

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Net income

Net income attributable to unvested awarded performance stock

Net income attributable to common shares

2021

2020

2019

$587,104

(12,942 )

$480,483

$398,514

(15,197)

(12,873)

$574,162

$465,286

$385,641

Weighted average number of common shares outstanding – basic

282,246

283,294

281,566

Less unvested awarded performance stock included in weighted average number 

of common shares outstanding – basic

(6,222)

(8,960)

(9,095)

Weighted average number of common shares outstanding for basic earnings per  
  common share

Dilutive effect of stock options

276,024

1,390

274,334

272,471

1,533

2,145

Weighted average number of shares outstanding – diluted

277,414

275,867

274,616

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1
2
0
2

Net income per share:

Basic

Diluted

$2.08

$2.07

$1.70

$1.69

$1.42

$1.40

43

 
 
Fair Value of Financial Instruments

Unpaid Losses and Loss Adjustment Reserve

The carrying amounts of the Company’s financial assets and liabilities, including cash and cash equivalents; restricted cash and short-
term investments; investments; premiums, commissions and fees receivable; reinsurance recoverable; prepaid reinsurance premiums; 
premiums payable to insurance companies; losses and loss adjustment reserve; unearned premium; premium deposits and credits 
due customers and accounts payable, at December 31, 2021 and 2020, approximate fair value because of the short-term maturity of 
these instruments. The carrying amount of the Company’s long-term debt approximates fair value at December 31, 2021 and 2020 
as our fixed-rate borrowings of $1,548.5 million approximate their values using market quotes of notes with the similar terms as ours, 
which we deem a close approximation of current market rates. The estimated fair value of our variable floating rate debt agreements 
is $486.9 million which approximates the carrying value due to the variable interest rate based upon adjusted LIBOR. See Note 3 to 
our Consolidated Financial Statements for the fair values related to the establishment of intangible assets and the establishment and 
adjustment of earn-out payables. See Note 6 for information on the fair value of investments and Note 9 for information on the fair 
value of long-term debt.

Non-Cash Stock-Based Compensation

The Company has stock-based compensation plans that provide for grants of restricted stock, restricted stock units, stock options 
and other stock-based awards to employees and non-employee directors of the Company. In addition, the Company has an 
Employee Stock Purchase Plan which allows employees to purchase shares in the Company. The Company expenses stock-based 
compensation, which is included in Employee compensation and benefits in the Consolidated Statements of Income over the requisite 
service period. The significant assumptions underlying our expense calculations include the fair value of the award on the date of 
grant, the estimated achievement of any performance targets and estimated forfeiture rates.

The Company uses the Black-Scholes valuation model for valuing all stock options and shares purchased under the Employee Stock 
Purchase Plan (the “ESPP”). Compensation for non-vested stock awards is measured at fair value on the grant date based upon the 
number of shares expected to vest. Compensation cost for all awards is recognized in earnings, net of estimated forfeitures, on a 
straight-line basis over the requisite service period.

Reinsurance

The Company acts in a risk-bearing capacity for flood insurance associated with the Wright National Flood Insurance Company 
(“WNFIC”), which is part of our National Programs Segment. The Company protects itself from claims-related losses by reinsuring 
all claims risk exposure. However, for basic admitted policies conforming to the National Flood Insurance Program all exposure is 
reinsured with the Federal Emergency Management Agency (“FEMA”). For excess flood insurance policies, all exposure is reinsured 
with a reinsurance carrier with an AM Best Company rating of “A” or better. 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 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 FEMA for basic admitted 
flood policies and national reinsurance carriers for private flood policies, which has an AM Best Company rating of “A” or better. 
Historically, no amounts due from reinsurance carriers have been written off as uncollectible.

The Company also operates a capitalized captive insurance facility (the “Captive”), which started in December 2021, for the purpose 
of having additional capacity to sell property insurance for earthquake and wind exposed properties. The Captive buys reinsurance, 
limiting, but not completely eliminating the Company’s exposure to underwriting losses. The operations of the Captive were not 
material to the Consolidated Financial Statements for the year ended December 31, 2021.

44

45

Unpaid losses and loss adjustment reserve include amounts determined on individual claims and other estimates based upon the 

past experience of WNFIC, the Captive and the policyholders for IBNR claims, less anticipated salvage and subrogation recoverable. 

The methods of making such estimates and for establishing the resulting reserves are continually reviewed and updated, and any 

adjustments resulting therefrom are reflected in operations currently.

The Company engages the services of outside actuarial consulting firms (the “Actuaries”) to assist on an annual basis to render an 

opinion on the sufficiency of the Company’s estimates for unpaid losses and related loss adjustment reserve. The Actuaries utilize 

both industry experience and the Company’s own experience to develop estimates of those amounts as of year-end. These estimated 

liabilities are subject to the impact of future changes in claim severity, frequency and other factors. In spite of the variability inherent in 

such estimates, management believes that the liabilities for unpaid losses and related loss adjustment reserve are adequate.

Premiums are recognized as income over the coverage period of the related policies. Unearned premiums represent the portion of 

premiums written that relate to the unexpired terms of the policies in force and are determined on a daily pro rata basis. The income is 

recorded to the commissions and fees line of the Consolidated Statement of Income.

NOTE 2. Revenues

The following tables present the revenues disaggregated by revenue source:

Profit-sharing contingent commissions(4)

Guaranteed supplemental commissions(5)

(IN THOUSANDS)

Base commissions(1)

Fees(2)

Incentive commissions(3)

Investment income(6)

Other income, net(7)

Total Revenues

(IN THOUSANDS)

Base commissions(1)

Fees(2)

Incentive commissions(3)

Investment income(6)

Other income, net(7)

Total Revenues

Profit-sharing contingent commissions(4)

Guaranteed supplemental commissions(5)

833,030

103,249

82,226

19,005

1,099

2,777

—

—

—

113

965

T

R

O

P

E

R

L

A

U

N

N

A

1

2

0

2

FOR THE YEAR ENDED DECEMBER 31, 2021

RETAIL

NATIONAL

PROGRAMS

WHOLESALE

BROKERAGE

SERVICES OTHER(8)

TOTAL

$1,198,129

$488,787

$323,054

$—

$42

$2,010,012

414,937

173,790

67,233

178,857

(1,787)

$ 1,767,938

$701,850

$403,417

$178,860

$(667)

$ 3,051,398

FOR THE YEAR ENDED DECEMBER 31, 2020

RETAIL

NATIONAL

PROGRAMS

WHOLESALE

BROKERAGE

SERVICES OTHER(8)

TOTAL

$1,054,619

$422,916

$273,878

$—

$1

$1,751,414

275,900

159,337

66,051

174,012

(1,291)

674,009

98,254

38,895

16,452

278

993

1,653

35,259

1,619

550

192

89,920

35,785

15,128

163

1,251

549

27,278

(238)

756

42

3,342

8,072

934

155

627

3,057

7,871

1,304

184

452

—

—

—

3

—

—

—

—

—

—

31

—

—

1,708

2,711

93,557

70,934

16,194

2,811

4,456

$1,472,766

$610,640

$352,797

$174,012

$3,160

$2,613,375

(1)  Base commissions generally represent a percentage of the premium paid by an insured and are 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 loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control.

(2)  Fee revenues relate to fees for services other than securing coverage for our customers, fees negotiated in lieu of commissions, and F&I products and services.

(3) 

Incentive commissions include additional commissions over base commissions received from insurance carriers based on predetermined production levels mutually agreed 

upon by both parties.

(4)  Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention.

(5)  Guaranteed supplemental commissions represent guaranteed fixed-base agreements.

(6) 

Investment income consists primarily of interest on cash and investments.

(7)  Other income consists primarily of legal settlements and other miscellaneous income.

(8)  Fees within other reflects the elimination of intercompany revenues.

 
 
Fair Value of Financial Instruments

Unpaid Losses and Loss Adjustment Reserve

Unpaid losses and loss adjustment reserve include amounts determined on individual claims and other estimates based upon the 
past experience of WNFIC, the Captive and the policyholders for IBNR claims, less anticipated salvage and subrogation recoverable. 
The methods of making such estimates and for establishing the resulting reserves are continually reviewed and updated, and any 
adjustments resulting therefrom are reflected in operations currently.

The Company engages the services of outside actuarial consulting firms (the “Actuaries”) to assist on an annual basis to render an 
opinion on the sufficiency of the Company’s estimates for unpaid losses and related loss adjustment reserve. The Actuaries utilize 
both industry experience and the Company’s own experience to develop estimates of those amounts as of year-end. These estimated 
liabilities are subject to the impact of future changes in claim severity, frequency and other factors. In spite of the variability inherent in 
such estimates, management believes that the liabilities for unpaid losses and related loss adjustment reserve are adequate.

Premiums are recognized as income over the coverage period of the related policies. Unearned premiums represent the portion of 
premiums written that relate to the unexpired terms of the policies in force and are determined on a daily pro rata basis. The income is 
recorded to the commissions and fees line of the Consolidated Statement of Income.

NOTE 2. Revenues

The following tables present the revenues disaggregated by revenue source:

(IN THOUSANDS)

Base commissions(1)

Fees(2)

Incentive commissions(3)

Profit-sharing contingent commissions(4)

Guaranteed supplemental commissions(5)

Investment income(6)

Other income, net(7)

Total Revenues

(IN THOUSANDS)

Base commissions(1)

Fees(2)

Balances due from reinsurers on unpaid losses and loss adjustment expenses, including an estimate of such recoverables related to 

Incentive commissions(3)

Profit-sharing contingent commissions(4)

Guaranteed supplemental commissions(5)

Investment income(6)

Other income, net(7)

Total Revenues

FOR THE YEAR ENDED DECEMBER 31, 2021

RETAIL

NATIONAL
PROGRAMS

WHOLESALE
BROKERAGE

SERVICES OTHER(8)

TOTAL

$1,198,129

$488,787

$323,054

$—

$42

$2,010,012

414,937

173,790

67,233

178,857

(1,787)

98,254

38,895

16,452

278

993

1,653

35,259

1,619

550

192

3,342

8,072

934

155

627

—

—

—

3

—

—

—

—

113

965

833,030

103,249

82,226

19,005

1,099

2,777

$ 1,767,938

$701,850

$403,417

$178,860

$(667)

$ 3,051,398

FOR THE YEAR ENDED DECEMBER 31, 2020

RETAIL

NATIONAL
PROGRAMS

WHOLESALE
BROKERAGE

SERVICES OTHER(8)

TOTAL

$1,054,619

$422,916

$273,878

$—

$1

$1,751,414

275,900

159,337

66,051

174,012

(1,291)

674,009

89,920

35,785

15,128

163

1,251

549

27,278

(238)

756

42

3,057

7,871

1,304

184

452

—

—

—

—

—

31

—

—

1,708

2,711

93,557

70,934

16,194

2,811

4,456

$1,472,766

$610,640

$352,797

$174,012

$3,160

$2,613,375

(1)  Base commissions generally represent a percentage of the premium paid by an insured and are 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 loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control.

(2)  Fee revenues relate to fees for services other than securing coverage for our customers, fees negotiated in lieu of commissions, and F&I products and services.

(3) 

Incentive commissions include additional commissions over base commissions received from insurance carriers based on predetermined production levels mutually agreed 
upon by both parties.

(4)  Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention.

(5)  Guaranteed supplemental commissions represent guaranteed fixed-base agreements.

(6) 

Investment income consists primarily of interest on cash and investments.

(7)  Other income consists primarily of legal settlements and other miscellaneous income.

(8)  Fees within other reflects the elimination of intercompany revenues.

T
R
O
P
E
R

L
A
U
N
N
A

1
2
0
2

45

The carrying amounts of the Company’s financial assets and liabilities, including cash and cash equivalents; restricted cash and short-

term investments; investments; premiums, commissions and fees receivable; reinsurance recoverable; prepaid reinsurance premiums; 

premiums payable to insurance companies; losses and loss adjustment reserve; unearned premium; premium deposits and credits 

due customers and accounts payable, at December 31, 2021 and 2020, approximate fair value because of the short-term maturity of 

these instruments. The carrying amount of the Company’s long-term debt approximates fair value at December 31, 2021 and 2020 

as our fixed-rate borrowings of $1,548.5 million approximate their values using market quotes of notes with the similar terms as ours, 

which we deem a close approximation of current market rates. The estimated fair value of our variable floating rate debt agreements 

is $486.9 million which approximates the carrying value due to the variable interest rate based upon adjusted LIBOR. See Note 3 to 

our Consolidated Financial Statements for the fair values related to the establishment of intangible assets and the establishment and 

adjustment of earn-out payables. See Note 6 for information on the fair value of investments and Note 9 for information on the fair 

value of long-term debt.

Non-Cash Stock-Based Compensation

The Company has stock-based compensation plans that provide for grants of restricted stock, restricted stock units, stock options 

and other stock-based awards to employees and non-employee directors of the Company. In addition, the Company has an 

Employee Stock Purchase Plan which allows employees to purchase shares in the Company. The Company expenses stock-based 

compensation, which is included in Employee compensation and benefits in the Consolidated Statements of Income over the requisite 

service period. The significant assumptions underlying our expense calculations include the fair value of the award on the date of 

grant, the estimated achievement of any performance targets and estimated forfeiture rates.

The Company uses the Black-Scholes valuation model for valuing all stock options and shares purchased under the Employee Stock 

Purchase Plan (the “ESPP”). Compensation for non-vested stock awards is measured at fair value on the grant date based upon the 

number of shares expected to vest. Compensation cost for all awards is recognized in earnings, net of estimated forfeitures, on a 

straight-line basis over the requisite service period.

Reinsurance

The Company acts in a risk-bearing capacity for flood insurance associated with the Wright National Flood Insurance Company 

(“WNFIC”), which is part of our National Programs Segment. The Company protects itself from claims-related losses by reinsuring 

all claims risk exposure. However, for basic admitted policies conforming to the National Flood Insurance Program all exposure is 

reinsured with the Federal Emergency Management Agency (“FEMA”). For excess flood insurance policies, all exposure is reinsured 

with a reinsurance carrier with an AM Best Company rating of “A” or better. 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 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.

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 FEMA for basic admitted 

flood policies and national reinsurance carriers for private flood policies, which has an AM Best Company rating of “A” or better. 

Historically, no amounts due from reinsurance carriers have been written off as uncollectible.

The Company also operates a capitalized captive insurance facility (the “Captive”), which started in December 2021, for the purpose 

of having additional capacity to sell property insurance for earthquake and wind exposed properties. The Captive buys reinsurance, 

limiting, but not completely eliminating the Company’s exposure to underwriting losses. The operations of the Captive were not 

material to the Consolidated Financial Statements for the year ended December 31, 2021.

44

 
 
Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of December 31, 2021 and 2020 were 
as follows:

The fair value of earn-out obligations is based upon 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 

(IN THOUSANDS)

Contract assets

Contract liabilities

DECEMBER 31, 2021

DECEMBER 31, 2020

financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the 

$ 361,834

$97,933

$ 308,755

$80,997

likelihood that the forecast earn-out payments will be made.

Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in our 
systems. Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the 
transfer of a good or service to the customer.

As of December 31, 2021, deferred revenue (recorded within the accrued expenses and other liabilities caption in the Company’s Consolidated 
Balance Sheets) consisted of $67.4 million as current portion to be recognized within one year and $30.5 million in long-term (recorded within the 
other liabilities caption in the Company’s Consolidated Balance Sheets) to be recognized beyond one year. As of December 31, 2020, deferred 
revenue consisted of $54.0 million as current portion to be recognized within one year and $27.0 million in long-term deferred revenue to be 
recognized beyond one year.

Contract assets and contract liabilities arising from acquisitions in 2021 were approximately $5.5 million and $1.2 million, respectively. Contract 
assets and contract liabilities arising from acquisitions in 2020 were approximately $11.5 million and $20.0 million, respectively.

During the 12 months ended December 31, 2021 and 2020, the amount of revenue recognized related to performance obligations satisfied in 
a previous period, inclusive of changes due to estimates, was approximately $23.3 million and $8.9 million, respectively. The $23.3 million for 
2021 consists of additional variable consideration received on our incentive and profit-sharing contingent commissions. The $8.9 million for 
2020 consists of $18.1 million of additional variable consideration received on our incentive and profit-sharing contingent commissions, offset 
by $7.1 million of revised estimates related to variable consideration on policies where the exposure units were expected to be impacted by the 
COVID-19 pandemic (“COVID-19”) and $2.1 million of other adjustments.

Other Assets and Deferred Cost

Incremental cost to obtain – The Company defers certain costs to obtain customer contracts primarily as they relate to commission-
based compensation plans in the Retail Segment, in which the Company pays an incremental amount of compensation on new 
business. These incremental costs are deferred and amortized over a 15-year period. The cost to obtain balance within the Other 
assets caption in the Company’s Consolidated Balance Sheets was $58.2 million and $42.2 million as of December 31, 2021 and 
December 31, 2020, respectively. For the 12 months ended December 31, 2021 and December 31, 2020, the Company deferred $19.8 
million and $17.8 million of incremental cost to obtain customer contracts, respectively. The Company expensed $3.8 million and $2.5 
million of the incremental cost to obtain customer contracts for the 12 months ended December 31, 2021 and December 31, 2020, 
respectively.

Cost to fulfill - The Company defers certain costs to fulfill contracts and recognizes these costs as the associated performance 
obligations are fulfilled. The cost to fulfill balance within the Other current assets caption in the Company’s Consolidated Balance Sheets 
was $89.3 million, which is inclusive of deferrals from businesses acquired in the current year of $9.9 million. The cost to fulfill balance as 
of December 31, 2020 was $77.8 million. For the 12 months ended December 31, 2021 and 2020, the Company had net deferrals of $1.6 
million and $3.3 million related to current year deferrals for costs incurred that relate to performance obligations yet to be fulfilled, net of 
the expense of previously deferred contract fulfillment costs associated with performance obligations that were satisfied in the period, 
respectively.

NOTE 3. Business Combinations

During the year ended December 31, 2021, the Company acquired the assets and assumed certain liabilities of 13 insurance 
intermediaries, all of the share capital of 1 insurance intermediary, all the stock of 2 insurance intermediaries, and 3 books of businesses 
(customer accounts). Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions 
completed within the last 12 months as permitted by ASC Topic 805 - Business Combinations (“ASC 805”). Such adjustments are 
presented in the “Other” category within the following two tables. The recorded purchase price for all acquisitions includes an estimation 
of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in the fair value of earn-out obligations 
will be recorded in the Consolidated Statement of Income when incurred.

46

Based upon the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s 

Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as 

defined in ASC 805. For the year ended December 31, 2021, adjustments were made within the permitted measurement period that resulted 

in a decrease in the aggregate purchase price of the affected acquisitions of $0.5 million relating to the assumption of certain liabilities on 

acquisitions completed in 2020. These measurement period adjustments have been reflected as current period adjustments for the year 

ended December 31, 2021. The measurement period adjustments impacted goodwill, with no effect on earnings or cash in the current period.

Gross cash paid for acquisitions was $424.6 million and $722.5 million in the years ended December 31, 2021 and 2020, respectively. 

We completed 19 acquisitions (including book of business purchases) during the year ended December 31, 2021. We completed 

25 acquisitions (including book of business purchases) during the year ended December 31, 2020. The following table summarizes the 

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. During the measurement periods, the Company will adjust assets or liabilities if new information 

is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those 

assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period 

income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

(IN THOUSANDS)

NAME

BUSINESS

SEGMENT

COMMON

CASH

PAID

STOCK 

ISSUED

OTHER

PAYABLE

RECORDED

EARN-OUT

NET 

POTENTIAL

ASSETS

EARN-OUT 

PAYABLE

ACQUIRED

PAYABLE

MAXIMUM

O'Leary Insurances (O'Leary)

Retail

2021 $117,408

$4,892

$—

$15,348

$137,648

$30,575

Piper Jordan LLC (Piper)

Retail

43,428

1,397

9,854

54,679

15,000

Berkshire Insurance Group, Inc.  

(Berkshire)

Retail

1, 2021

41,500

—

—

41,500

—

AGIS Network, Inc. (AGIS)(1)

Retail

1, 2021

11,203

24,114

739

36,056

12,289

Winston Financial Services, Inc.  

(Winston)

Retail

79,461

5,000

7,724

16,427

108,612

29,000

Remedy Analytics, Inc. (Remedy)

Retail

2021

40,762

473

7,364

48,599

25,000

Retail

2021

18,248

455

1,900

20,603

6,000

Heacock Insurance Group, LLC  

(Heacock)

L.L.C. (CIA)

Corporate Insurance Advisors, 

Rainmaker Advisory, LLC (Rainmaker)

HARCO Insurance Services, Inc.  

(HARCO)

Other

Total

Retail

Retail

Retail

Various

15,314

14,174

24,266

18,849

181

6,542

22,037

14,000

776

5,937

20,887

10,000

1,000

3,066

4,423

7,227

29,689

29,142

7,350

13,118

$424,613

$9,892 $39,186

$75,761

$549,452

$162,332

EFFECTIVE

DATE OF

ACQUISITION

January 1, 

May 1, 

2021

September 

September 

October 1, 

2021

October 1, 

October 1, 

December 

1, 2021

December 

1, 2021

December 

31, 2021

Various

—

—

—

—

—

—

—

—

—

(1)  Amount in the “other payable” column relates to additional contingent consideration expected to be paid within 12 months.

T

R

O

P

E

R

L

A

U

N

N

A

1

2

0

2

47

 
 
Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of December 31, 2021 and 2020 were 

as follows:

(IN THOUSANDS)

Contract assets

Contract liabilities

DECEMBER 31, 2021

DECEMBER 31, 2020

$ 361,834

$97,933

$ 308,755

$80,997

Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in our 

systems. Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the 

transfer of a good or service to the customer.

As of December 31, 2021, deferred revenue (recorded within the accrued expenses and other liabilities caption in the Company’s Consolidated 

Balance Sheets) consisted of $67.4 million as current portion to be recognized within one year and $30.5 million in long-term (recorded within the 

other liabilities caption in the Company’s Consolidated Balance Sheets) to be recognized beyond one year. As of December 31, 2020, deferred 

revenue consisted of $54.0 million as current portion to be recognized within one year and $27.0 million in long-term deferred revenue to be 

recognized beyond one year.

Contract assets and contract liabilities arising from acquisitions in 2021 were approximately $5.5 million and $1.2 million, respectively. Contract 

assets and contract liabilities arising from acquisitions in 2020 were approximately $11.5 million and $20.0 million, respectively.

During the 12 months ended December 31, 2021 and 2020, the amount of revenue recognized related to performance obligations satisfied in 

a previous period, inclusive of changes due to estimates, was approximately $23.3 million and $8.9 million, respectively. The $23.3 million for 

2021 consists of additional variable consideration received on our incentive and profit-sharing contingent commissions. The $8.9 million for 

2020 consists of $18.1 million of additional variable consideration received on our incentive and profit-sharing contingent commissions, offset 

by $7.1 million of revised estimates related to variable consideration on policies where the exposure units were expected to be impacted by the 

COVID-19 pandemic (“COVID-19”) and $2.1 million of other adjustments.

Other Assets and Deferred Cost

Incremental cost to obtain – The Company defers certain costs to obtain customer contracts primarily as they relate to commission-

based compensation plans in the Retail Segment, in which the Company pays an incremental amount of compensation on new 

business. These incremental costs are deferred and amortized over a 15-year period. The cost to obtain balance within the Other 

assets caption in the Company’s Consolidated Balance Sheets was $58.2 million and $42.2 million as of December 31, 2021 and 

December 31, 2020, respectively. For the 12 months ended December 31, 2021 and December 31, 2020, the Company deferred $19.8 

million and $17.8 million of incremental cost to obtain customer contracts, respectively. The Company expensed $3.8 million and $2.5 

million of the incremental cost to obtain customer contracts for the 12 months ended December 31, 2021 and December 31, 2020, 

respectively.

respectively.

Cost to fulfill - The Company defers certain costs to fulfill contracts and recognizes these costs as the associated performance 

obligations are fulfilled. The cost to fulfill balance within the Other current assets caption in the Company’s Consolidated Balance Sheets 

was $89.3 million, which is inclusive of deferrals from businesses acquired in the current year of $9.9 million. The cost to fulfill balance as 

of December 31, 2020 was $77.8 million. For the 12 months ended December 31, 2021 and 2020, the Company had net deferrals of $1.6 

million and $3.3 million related to current year deferrals for costs incurred that relate to performance obligations yet to be fulfilled, net of 

the expense of previously deferred contract fulfillment costs associated with performance obligations that were satisfied in the period, 

NOTE 3. Business Combinations

During the year ended December 31, 2021, the Company acquired the assets and assumed certain liabilities of 13 insurance 

intermediaries, all of the share capital of 1 insurance intermediary, all the stock of 2 insurance intermediaries, and 3 books of businesses 

(customer accounts). Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions 

completed within the last 12 months as permitted by ASC Topic 805 - Business Combinations (“ASC 805”). Such adjustments are 

presented in the “Other” category within the following two tables. The recorded purchase price for all acquisitions includes an estimation 

of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in the fair value of earn-out obligations 

will be recorded in the Consolidated Statement of Income when incurred.

46

The fair value of earn-out obligations is based upon 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 forecast earn-out payments will be made.

Based upon the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s 
Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as 
defined in ASC 805. For the year ended December 31, 2021, adjustments were made within the permitted measurement period that resulted 
in a decrease in the aggregate purchase price of the affected acquisitions of $0.5 million relating to the assumption of certain liabilities on 
acquisitions completed in 2020. These measurement period adjustments have been reflected as current period adjustments for the year 
ended December 31, 2021. The measurement period adjustments impacted goodwill, with no effect on earnings or cash in the current period.

Gross cash paid for acquisitions was $424.6 million and $722.5 million in the years ended December 31, 2021 and 2020, respectively. 
We completed 19 acquisitions (including book of business purchases) during the year ended December 31, 2021. We completed 
25 acquisitions (including book of business purchases) during the year ended December 31, 2020. The following table summarizes the 
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. During the measurement periods, the Company will adjust assets or liabilities if new information 
is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those 
assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period 
income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

(IN THOUSANDS)

NAME

O'Leary Insurances (O'Leary)

Piper Jordan LLC (Piper)

Berkshire Insurance Group, Inc.  
(Berkshire)

AGIS Network, Inc. (AGIS)(1)

Winston Financial Services, Inc.  
(Winston)

Remedy Analytics, Inc. (Remedy)

Heacock Insurance Group, LLC  
(Heacock)

Corporate Insurance Advisors, 
L.L.C. (CIA)

Rainmaker Advisory, LLC (Rainmaker)

HARCO Insurance Services, Inc.  
(HARCO)

Other

Total

BUSINESS
SEGMENT

EFFECTIVE
DATE OF
ACQUISITION

January 1, 

CASH
PAID

COMMON
STOCK 
ISSUED

OTHER
PAYABLE

RECORDED
EARN-OUT
PAYABLE

NET 
ASSETS
ACQUIRED

MAXIMUM
POTENTIAL
EARN-OUT 
PAYABLE

Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail

Retail
Various

11,203

79,461

41,500

43,428

2021 $117,408
May 1, 
2021
September 
1, 2021
September 
1, 2021
October 1, 
2021
October 1, 
2021
October 1, 
2021
December 
1, 2021
December 
1, 2021
December 
31, 2021
Various

18,248

40,762

18,849

15,314

14,174

24,266

$4,892

$—

$15,348

$137,648

$30,575

—

—

—

1,397

9,854

54,679

15,000

—

—

41,500

—

24,114

739

36,056

12,289

5,000

7,724

16,427

108,612

29,000

—

—

—

—

—

—

473

7,364

48,599

25,000

455

1,900

20,603

6,000

181

6,542

22,037

14,000

776

5,937

20,887

10,000

1,000

3,066

4,423

7,227

29,689

29,142

7,350

13,118

$424,613

$9,892 $39,186

$75,761

$549,452

$162,332

(1)  Amount in the “other payable” column relates to additional contingent consideration expected to be paid within 12 months.

T
R
O
P
E
R

L
A
U
N
N
A

1
2
0
2

47

 
 
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 of the prior year acquisitions.

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer accounts

Non-compete agreements

Other assets

Total assets acquired

Other current liabilities

Deferred income tax, net

Other liabilities

Total liabilities assumed

Net assets acquired

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer accounts

Non-compete agreements

Other assets

Total assets acquired

Other current liabilities

Deferred income tax, net

Other liabilities

Total liabilities assumed

Net assets acquired

O'LEARY

PIPER

BERKSHIRE

AGIS

WINSTON

REMEDY

capital charge, from the acquisitions completed through December 31, 2021 included in the Consolidated Statement of Income for the 

$45,441

$—

$—

$—

$5,024

$6,675

43,350

2,397

1,621

13,693

544

9

9

20

84,619

40,019

27,059

8,715

40,459

12,233

12,313

13,577

819

135

21

—

11

504

51

—

7,527

1,185

74,441

25,006

872

27

215,367

54,679

41,517

36,056

114,082

(72,649)

(5,057)

(13)

(77,719)

—

—

—

—

(17)

—

—

(17)

—

—

—

—

(5,470)

—

—

1,786

151

33,255

13,697

508

1,354

57,426

(5,233)

(3,594)

—

(5,470)

(8,827)

Weighted average number of shares outstanding:

$137,648

$54,679

$41,500

$36,056

$108,612

$48,599

RAINMAKER

HARCO

OTHER

TOTAL

HEACOCK

$—

738

39

CIA

$—

32

11

$—

—

8

$—

737

63

13,910

17,310

15,029

20,609

5,800

4,781

5,838

8,183

31

382

11

278

12

—

32

493

$692

5,060

14

15,007

11,735

150

259

$57,832

76,941

2,053

349,973

153,622

2,518

3,432

During the year ended December 31, 2020, the Company acquired the assets and assumed certain liabilities of 20 insurance 

intermediaries, all the stock of 1 F&I administrative services company and 4 book of business (customer accounts). Additionally, 

miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 

months as permitted by ASC 805. Such adjustments are presented in the “Other” category within the following two tables.

For the year ended December 31, 2020, several adjustments were made within the permitted measurement period that resulted in an 

increase in the aggregate purchase price of the affected acquisitions of $3.5 million, relating to the assumption of certain liabilities.

20,900

22,423

20,887

30,117

32,917

646,371

(297)

(386)

—

—

—

—

(297)

(386)

—

—

—

—

(428)

(3,775)

(88,255)

—

—

—

—

(8,651)

(13)

(428)

(3,775)

(96,919)

$20,603

$22,037

$20,887

$29,689

$29,142

$549,452

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; 
and non-compete agreements, 5 years.

Goodwill of $350.0 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was 
allocated to the Retail, National Programs, and Wholesale Brokerage Segments in the amounts of $346.0 million, ($1.3) million, and  
$5.3 million, respectively. Of the total goodwill of $350.0 million, the amount currently deductible for income tax purposes is $179.1 million, 
$117.9 million is non-deductible related to the O’Leary and Remedy acquisitions and the remaining $53.0 million relates to the recorded 
earn-out payables and will not be deductible until it is earned and paid.

48

For the acquisitions completed during 2021, the results of operations since the acquisition dates have been combined with those of the 

Company. The total revenues from the acquisitions completed through December 31, 2021 included in the Consolidated Statement of 

Income for the year ended December 31, 2021 were $63.8 million. The income before income taxes, including the intercompany cost of 

year ended December 31, 2021 was a loss of $10.6 million. If the acquisitions had occurred as of the beginning of the respective periods, 

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)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Total revenues

Income before income taxes

Net income

Net income per share:

Basic

Diluted

Basic

Diluted

Acquisitions in 2020

YEAR ENDED DECEMBER 31,

2021

2020

$3,128,530

$2,751,167

$779,533

$653,270

$599,964

$502,942

$2.13

$2.12

$1.78

$1.77

276,024

277,414

274,334

275,867

T

R

O

P

E

R

L

A

U

N

N

A

1

2

0

2

49

 
 
For the acquisitions completed during 2021, the results of operations since the acquisition dates have been combined with those of the 
Company. The total revenues from the acquisitions completed through December 31, 2021 included in the Consolidated Statement of 
Income for the year ended December 31, 2021 were $63.8 million. The income before income taxes, including the intercompany cost of 
capital charge, from the acquisitions completed through December 31, 2021 included in the Consolidated Statement of Income for the 
year ended December 31, 2021 was a loss of $10.6 million. If the acquisitions had occurred as of the beginning of the respective periods, 
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)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Total revenues

Income before income taxes

Net income

Net income per share:

Basic

Diluted

(5,470)

(8,827)

Weighted average number of shares outstanding:

$137,648

$54,679

$41,500

$36,056

$108,612

$48,599

HEACOCK

RAINMAKER

HARCO

OTHER

TOTAL

Basic

Diluted

Acquisitions in 2020

YEAR ENDED DECEMBER 31,

2021

2020

$3,128,530

$2,751,167

$779,533

$653,270

$599,964

$502,942

$2.13

$2.12

$1.78

$1.77

276,024

277,414

274,334

275,867

During the year ended December 31, 2020, the Company acquired the assets and assumed certain liabilities of 20 insurance 
intermediaries, all the stock of 1 F&I administrative services company and 4 book of business (customer accounts). Additionally, 
miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 
months as permitted by ASC 805. Such adjustments are presented in the “Other” category within the following two tables.

For the year ended December 31, 2020, several adjustments were made within the permitted measurement period that resulted in an 
increase in the aggregate purchase price of the affected acquisitions of $3.5 million, relating to the assumption of certain liabilities.

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 of the prior year acquisitions.

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer accounts

Non-compete agreements

Other assets

Total assets acquired

Other current liabilities

Deferred income tax, net

Other liabilities

Total liabilities assumed

Net assets acquired

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer accounts

Non-compete agreements

Other assets

Total assets acquired

Other current liabilities

Deferred income tax, net

Other liabilities

Total liabilities assumed

Net assets acquired

O'LEARY

PIPER

BERKSHIRE

AGIS

WINSTON

REMEDY

$45,441

$—

$—

$—

$5,024

$6,675

43,350

2,397

1,621

13,693

544

9

9

20

84,619

40,019

27,059

8,715

40,459

12,233

12,313

13,577

215,367

54,679

41,517

36,056

114,082

7,527

1,185

74,441

25,006

872

27

(5,470)

—

—

$692

5,060

14

15,007

11,735

150

259

1,786

151

33,255

13,697

508

1,354

57,426

(5,233)

(3,594)

—

$57,832

76,941

2,053

349,973

153,622

2,518

3,432

—

—

(8,651)

(13)

51

—

—

—

—

—

$—

737

63

32

493

—

—

11

504

(17)

—

—

(17)

$—

—

8

12

—

—

—

—

—

13,910

17,310

15,029

20,609

5,800

4,781

5,838

8,183

20,900

22,423

20,887

30,117

32,917

646,371

(297)

(386)

(428)

(3,775)

(88,255)

(297)

(386)

(428)

(3,775)

(96,919)

$20,603

$22,037

$20,887

$29,689

$29,142

$549,452

819

135

(72,649)

(5,057)

(13)

(77,719)

$—

738

39

31

382

—

—

21

—

—

—

—

—

CIA

$—

32

11

11

278

—

—

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; 

and non-compete agreements, 5 years.

Goodwill of $350.0 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was 

allocated to the Retail, National Programs, and Wholesale Brokerage Segments in the amounts of $346.0 million, ($1.3) million, and  

$5.3 million, respectively. Of the total goodwill of $350.0 million, the amount currently deductible for income tax purposes is $179.1 million, 

$117.9 million is non-deductible related to the O’Leary and Remedy acquisitions and the remaining $53.0 million relates to the recorded 

earn-out payables and will not be deductible until it is earned and paid.

T
R
O
P
E
R

L
A
U
N
N
A

1
2
0
2

49

48

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

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 of the prior year acquisitions.

(IN THOUSANDS)

NAME

Special Risk Insurance Managers Ltd. 
(Special Risk)

Texas All Risk General Agency,  
Inc. et al (Texas Risk)

BUSINESS
SEGMENT

National 
Programs

Wholesale  
Brokerage

The Colonial Group, Inc. et al (Colonial) Wholesale  
Brokerage

RLA Insurance Intermediaries,  
LLC (RLA)

Dealer Financial Services of N.C.,  
LLC d/b/a The Sterling Group (Sterling)

LP Insurance Services, LLC (LP)

Wholesale  
Brokerage

Retail

National 
Programs

First Resource, Inc. (First)

Buiten & Associates, LLC (Buiten)

Amity Insurance, Inc. (Amity)

Frank E. Neal & Co., Inc. (Neal)

BrookStone Insurance Group, LLC  
(BrookStone)

VAS GenPar, LLC (VAS)

Bright & Associates, Inc. (Bright)

Retail

Retail

Retail

Retail

Retail

Retail

Retail

J.E. Brown & Associates Insurance  
Services, Inc. (J.E. Brown)

Wholesale  
Brokerage

EFFECTIVE
DATE OF
ACQUISITION

COMMON
STOCK
ISSUED

CASH
PAID

OTHER
PAYABLE

RECORDED
EARN-OUT
PAYABLE

NET ASSETS
ACQUIRED

MAXIMUM
POTENTIAL
EARN-OUT 
PAYABLE

January 1, 
2020

January 1, 
2020

March 1, 
2020

March 1, 
2020

April 1,  
2020

May 1,  
2020

July 1,  
2020

August 1, 
2020

August 1, 
2020

September 1,  
2020

September 1,  
2020

October 1, 
2020

October 1, 
2020

October 1, 
2020

$70,156

$—

$—

$9,859

$80,015

$14,650

10,511

29,037

42,496

19,341

—

—

—

—

159

310

10,980

1,150

527

7,577

37,141

10,150

786

11,687

54,969

22,500

300

4,129

23,770

5,400

115,948

10,000

318

23,394

149,660

75,850

Other liabilities

—

—

—

—

—

10,700

—

450

3,776

14,926

5,800

38,225

— 1,175

7,448

46,848

14,175

14,820

2,000

200

1,860

18,880

4,060

32,589

3,120

345

5,732

41,786

10,325

12,030

—

114,249

15,000

—

—

1,058

13,088

1,878

23,274

152,523

48,000

12,528

— 1,257

3,854

17,639

5,775

33,331

— 1,030

5,947

40,308

10,425

(IN THOUSANDS)

RISK TEXAS RISK COLONIAL

RLA STERLING

FIRST

BUITEN

AMITY

NEAL

SPECIAL 

$—

2,477

345

$—

446

27

$—

1,344

59

$—

—

55

LP

$—

3,162

$—

612

16

1,877

$—

302

1

$—

2,595

43

$—

653

58

$—

2,337

46

63,087

8,940

27,845

53,567

17,339

99,983

9,523

33,641

15,454

28,929

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer 

accounts

14,286

3,222

9,205

12,309

5,962

44,801

5,095

11,323

5,614

13,225

Non-compete agreements

Other assets

136

—

25

—

43

—

481

—

21

—

Total assets acquired

80,331

12,660

38,496

66,412

23,950 149,854

14,942

47,693

21,800

44,842

Other current liabilities

(316)

(1,680)

(1,355)

(11,443)

(180)

31

—

(10)

(184)

(194)

91

—

21

—

31

274

(845)

(2,920)

(3,056)

—

—

—

(845)

(2,920)

(3,056)

Total liabilities assumed

(316)

(1,680)

(1,355)

(11,443)

(180)

Net assets acquired

$80,015

$10,980

$37,141 $54,969 $23,770 149,660 $14,926 $46,848 $18,880

$41,786

BROOK 

STONE

VAS

BRIGHT

BROWN

MAJ

WESTERN

BERRY

OTHER

TOTAL

J.E.  

COVER  

HOUND

SOUTH &  

$—

$27,673

527

22

5,486

138

$—

402

23

$—

375

6,441

$—

413

—

—$

—

30

$— $27,673

912

22,043

25

9,387

8,585

100,826

12,218

31,476

19,524

13,003

63,128

29,702

11,325

648,095

21

—

(16)

—

(16)

—$

—

149

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer 

accounts

3,689

48,188

5,055

9,479

3,678

8,034

18,513

9,701

8,582

239,961

Non-compete agreements

Other assets

21

290

101

—

42

—

—

—

11

—

21

—

11

—

64

3,088

1,213

3,652

Total assets acquired

13,134

182,412

17,740

41,028

30,018

21,461

81,811

39,444

23,996

952,024

Other current liabilities

(46)

(3,760)

(101)

(720 )

(1,823)

(83)

(3,651)

(424)

(120)

(32,549)

$—

—

32

41

—

CoverHound, Inc. and CyberPolicy,  
Inc. (CoverHound)

MAJ Companies, Ltd. (MAJ)

Retail

Retail

November 1, 
2020

December 1, 
2020

27,595

19,072

—

—

600

—

28,195

—

Other liabilities

—

(26,129)

—

—

—

—

—

— (26,313)

300

2,006

21,378

6,475

Total liabilities assumed

(46)

(29,889)

(101)

(720 )

(1,823)

(83)

(3,651)

(424)

(120)

(58,862)

Net assets acquired

$13,088

$152,523

$17,639 $40,308 $28,195 $21,378 $78,160 $39,020 $23,876 $893,162

South & Western General Agency,  
Inc. (South & Western)

Wholesale  
Brokerage

December 1, 
2020

69,673

— 1,193

7,294

78,160

18,000

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; 

Berry Insurance Group, Inc. (Berry)

Other

Total

Retail December 31,  
2020

35,326

Various

Various

14,888

—

—

—

3,694

39,020

6,500

and non-compete agreements, 5 years.

490

8,498

23,876

12,337

allocated to the Retail, National Programs, Wholesale Brokerage and Services Segments in the amounts of $300.0 million, $163.1 million, 

Goodwill of $648.1 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was 

$722,515

$30,120 $9,130

$131,397 $893,162

$273,450

$185.0 million and $0.1 million, respectively. Of the total goodwill of $648.1 million, the amount currently deductible for income tax 

purposes is $516.7 million and the remaining $131.4 million relates to the recorded earn-out payables and will not be deductible until it is 

earned and paid.

50

For the acquisitions completed during 2020, the results of operations since the acquisition dates have been combined with those of 

the Company. The total revenues from the acquisitions completed through December 31, 2020 included in the Consolidated Statement 

of Income for the year ended December 31, 2020 were $93.9 million. The income before income taxes, including the intercompany 

cost of capital charge, from the acquisitions completed through December 31, 2020 included in the Consolidated Statement of Income 

for the year ended December 31, 2020 was $7.5 million. If the acquisitions had occurred as of the beginning of the respective periods, 

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.

T

R

O

P

E

R

L

A

U

N

N

A

1

2

0

2

51

 
 
The following table summarizes the purchase price allocation made as of the date of each acquisition for current year acquisitions and 

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

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 of the prior year acquisitions.

$—

612

16

1,877

LP

$—

3,162

(IN THOUSANDS)

RISK TEXAS RISK COLONIAL

RLA STERLING

SPECIAL 

$—

2,477

345

$—

446

27

$—

1,344

59

$—

—

55

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer 
accounts

FIRST

BUITEN

AMITY

NEAL

$—

302

1

$—

2,595

43

$—

653

58

$—

2,337

46

63,087

8,940

27,845

53,567

17,339

99,983

9,523

33,641

15,454

28,929

14,286

3,222

9,205

12,309

5,962

44,801

5,095

11,323

5,614

13,225

Special Risk Insurance Managers Ltd. 

January 1, 

$70,156

$—

$—

$9,859

$80,015

$14,650

EFFECTIVE

DATE OF

ACQUISITION

COMMON

RECORDED

CASH

PAID

STOCK

OTHER

EARN-OUT

NET ASSETS

EARN-OUT 

ISSUED

PAYABLE

PAYABLE

ACQUIRED

PAYABLE

MAXIMUM

POTENTIAL

January 1, 

10,511

159

310

10,980

1,150

The Colonial Group, Inc. et al (Colonial) Wholesale  

March 1, 

29,037

527

7,577

37,141

10,150

(IN THOUSANDS)

NAME

(Special Risk)

Texas All Risk General Agency,  

Inc. et al (Texas Risk)

RLA Insurance Intermediaries,  

LLC (RLA)

Dealer Financial Services of N.C.,  

LLC d/b/a The Sterling Group (Sterling)

BUSINESS

SEGMENT

National 

Programs

Wholesale  

Brokerage

Brokerage

Wholesale  

Brokerage

Retail

National 

Programs

Retail

First Resource, Inc. (First)

10,700

—

450

3,776

14,926

5,800

Buiten & Associates, LLC (Buiten)

Retail

August 1, 

38,225

— 1,175

7,448

46,848

14,175

Amity Insurance, Inc. (Amity)

Retail

August 1, 

14,820

2,000

200

1,860

18,880

4,060

Frank E. Neal & Co., Inc. (Neal)

Retail

September 1,  

32,589

3,120

345

5,732

41,786

10,325

BrookStone Insurance Group, LLC  

Retail

September 1,  

12,030

—

1,058

13,088

1,878

(BrookStone)

VAS GenPar, LLC (VAS)

Retail

October 1, 

114,249

15,000

23,274

152,523

48,000

—

—

Bright & Associates, Inc. (Bright)

Retail

October 1, 

12,528

— 1,257

3,854

17,639

5,775

J.E. Brown & Associates Insurance  

Services, Inc. (J.E. Brown)

Wholesale  

Brokerage

October 1, 

33,331

— 1,030

5,947

40,308

10,425

Inc. (CoverHound)

MAJ Companies, Ltd. (MAJ)

Retail

December 1, 

19,072

300

2,006

21,378

6,475

South & Western General Agency,  

Wholesale  

December 1, 

69,673

— 1,193

7,294

78,160

18,000

Inc. (South & Western)

Brokerage

Berry Insurance Group, Inc. (Berry)

Retail December 31,  

35,326

—

3,694

39,020

6,500

Other

Total

Various

Various

14,888

490

8,498

23,876

12,337

$722,515

$30,120 $9,130

$131,397 $893,162

$273,450

2020

2020

2020

2020

April 1,  

2020

2020

July 1,  

2020

2020

2020

2020

2020

2020

2020

2020

2020

2020

2020

2020

—

—

—

—

—

—

—

—

50

March 1, 

42,496

786

11,687

54,969

22,500

19,341

300

4,129

23,770

5,400

Non-compete agreements

Other assets

136

—

25

—

43

—

481

—

21

—

31

—

21

—

91

—

21

—

31

274

Total assets acquired

80,331

12,660

38,496

66,412

23,950 149,854

14,942

47,693

21,800

44,842

LP Insurance Services, LLC (LP)

May 1,  

115,948

10,000

318

23,394

149,660

75,850

Other liabilities

—

—

—

—

—

Other current liabilities

(316)

(1,680)

(1,355)

(11,443)

(180)

Total liabilities assumed

(316)

(1,680)

(1,355)

(11,443)

(180)

(10)

(184)

(194)

(16)

—

(16)

(845)

(2,920)

(3,056)

—

—

—

(845)

(2,920)

(3,056)

Net assets acquired

$80,015

$10,980

$37,141 $54,969 $23,770 149,660 $14,926 $46,848 $18,880

$41,786

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer 
accounts

BROOK 
STONE

VAS

BRIGHT

J.E.  
BROWN

COVER  
HOUND

$—

$27,673

527

22

5,486

138

$—

402

23

$—

—

32

$—

375

6,441

SOUTH &  
WESTERN

BERRY

OTHER

TOTAL

—$

—

149

—$

—

30

$— $27,673

912

22,043

25

9,387

MAJ

$—

413

—

8,585

100,826

12,218

31,476

19,524

13,003

63,128

29,702

11,325

648,095

3,689

48,188

5,055

9,479

3,678

8,034

18,513

9,701

8,582

239,961

Non-compete agreements

Other assets

21

290

101

—

42

—

41

—

—

—

11

—

21

—

11

—

64

3,088

1,213

3,652

Total assets acquired

13,134

182,412

17,740

41,028

30,018

21,461

81,811

39,444

23,996

952,024

Other current liabilities

(46)

(3,760)

(101)

(720 )

(1,823)

(83)

(3,651)

(424)

(120)

(32,549)

CoverHound, Inc. and CyberPolicy,  

Retail

November 1, 

27,595

600

—

28,195

—

Other liabilities

—

(26,129)

—

—

—

—

—

— (26,313)

Total liabilities assumed

(46)

(29,889)

(101)

(720 )

(1,823)

(83)

(3,651)

(424)

(120)

(58,862)

Net assets acquired

$13,088

$152,523

$17,639 $40,308 $28,195 $21,378 $78,160 $39,020 $23,876 $893,162

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; 
and non-compete agreements, 5 years.

Goodwill of $648.1 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was 
allocated to the Retail, National Programs, Wholesale Brokerage and Services Segments in the amounts of $300.0 million, $163.1 million, 
$185.0 million and $0.1 million, respectively. Of the total goodwill of $648.1 million, the amount currently deductible for income tax 
purposes is $516.7 million and the remaining $131.4 million relates to the recorded earn-out payables and will not be deductible until it is 
earned and paid.

For the acquisitions completed during 2020, the results of operations since the acquisition dates have been combined with those of 
the Company. The total revenues from the acquisitions completed through December 31, 2020 included in the Consolidated Statement 
of Income for the year ended December 31, 2020 were $93.9 million. The income before income taxes, including the intercompany 
cost of capital charge, from the acquisitions completed through December 31, 2020 included in the Consolidated Statement of Income 
for the year ended December 31, 2020 was $7.5 million. If the acquisitions had occurred as of the beginning of the respective periods, 
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.

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(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Total revenues

Income before income taxes

Net income

Net income per share:

Basic

Diluted

Weighted average number of shares outstanding:

Basic

Diluted

Acquisitions in 2019

YEAR ENDED DECEMBER 31,

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition.

2020

2019

(IN THOUSANDS)

SMITH

PIPINO COSSIO MEDVAL UNITED TWINBROOK

WBR

YOZELL

$2,714,314

$2,579,075

Cash

$650,618

$576,355

$500,900

$436,722

$1.77

$1.76

$1.55

$1.54

274,334

275,867

272,471

274,616

During the year ended December 31, 2019, the Company acquired the assets and assumed certain liabilities of 22 insurance 
intermediaries, all the stock of 1 insurance intermediary and 4 book of business (customer accounts). Additionally, miscellaneous 
adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 months as permitted 
by ASC 805. Such adjustments are presented in the “Other” category within the following two tables.

For the year ended December 31, 2019, several adjustments were made within the permitted measurement period that resulted in a 
decrease in the aggregate purchase price of the affected acquisitions of $4.1 million, relating to the assumption of certain liabilities.

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

Purchased customer accounts

6,500

11,360

4,403

7,300

7,065

8,557

8,800

4,022

3,550

32,274

16,042

16,765

10,010

19,108

15,111

18,935

24,938

9,096

8,904

110,495

Other current assets

Fixed assets

Goodwill

Non-compete agreements

Other assets

$—

680

39

41

—

$—

819

112

11

772

Other current liabilities

(469)

(3,463 )

Deferred income tax, net

—

—

Total liabilities assumed

(469)

(3,463 )

$— $3,217

236

1,708

29

50

21

—

(3)

—

(3)

1

15

(480)

(29)

(509)

$—

477

20

11

—

(41)

—

(41)

IRS

$—

1,375

11

$—

919

85

12

—

11

—

(292)

(126)

—

—

(292)

(126)

CKP

$—

$—

1,781

9,170

12

193

21

—

—

—

—

21

—

(870)

—

(870)

$—

449

10

34

—

(166)

(378)

(544)

Total assets acquired

23,302

29,839

14,699

31,399

22,684

28,508

35,135

13,611

14,268

152,153

Net assets acquired

$22,833 $26,376 $14,696 $30,890 $22,643

$28,216 $35,009 $13,067 $14,268 $151,283

(IN THOUSANDS)

NAME

Smith Insurance Associates, 
Inc. (Smith)

Donald P. Pipino Company, 
LTD (Pipino)

AGA Enterprises, LLC d/b/a Cossio 
Insurance Agency (Cossio)

Retail

Retail

Retail

February 1, 
2019

February 1, 
2019

March 1, 
2019

March 1, 
2019

16,420

13,990

29,106

Medval, LLC (Medval)

Services

United Development Systems, Inc. 
(United)

Twinbrook Insurance Brokerage, 
Inc. (Twinbrook)

Retail May 1, 2019

18,987

Retail

June 1, 2019

26,251

Innovative Risk Solutions, Inc. (IRS)

Retail

July 1, 2019

26,435

WBR Insurance Agency, LLC 
et al (WBR)

West Ridge Insurance Agency, Inc. 
d/b/a Yozell Associates (Yozell)

CKP Insurance, LLC (CKP)

Poole Professional Ltd. Insurance 
Agents and Brokers et al (Poole)

VerHagen Glendenning & Walker 
LLP (VGW)

Retail

Retail

Retail

Retail

Retail

August 1, 
2019

August 1, 
2019

August 1, 
2019

October 1, 
2019

October 1, 
2019

10,667

13,030

32,358

23,032

Various

Various

36,665

—

—

—

—

—

—

—

—

135

9,821

26,376

12,996

10

100

388

400

696

14,696

2,000

1,684

30,890

2,500

3,268

22,643

8,625

1,565

28,216

5,073

2,465

203

6,109

2,197

35,009

13,067

9,000

4,575

470

768

14,268

6,730

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; 

and non-compete agreements, 5 years.

Goodwill of $328.5 million was allocated to the Retail, National Programs, Wholesale Brokerage and Services Segments in the amounts 

of $302.6 million, $0.1 million, $6.5 million and $19.3 million, respectively. Of the total goodwill of $328.5 million, $245.6 million is currently 

deductible for income tax purposes. The remaining $82.9 million relates to the recorded earn-out payables and will not be deductible 

until it is earned and paid.

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer accounts

Non-compete agreements

Other assets

Total assets acquired

Other current liabilities

Other liabilities

Total liabilities assumed

Net assets acquired

POOLE

VGW OTHER

TOTAL

$—

938

4

$—

$—

$3,217

1,190

(6,786)

12,956

20

(130)

455

28,233

16,595

34,314

328,546

10,359

9,092

15,020

128,302

33

—

34

—

161

(732)

412

55

39,567

26,931

41,847

473,943

(2,578)

(16)

6,235

(2,269)

—

—

—

(407)

(2,578)

(16)

6,235

(2,676)

$36,989 $26,915 $48,082 $471,267

T

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—

—

—

75

4,556

36,989

6,850

1,498

2,385

26,915

8,170

2,391

9,026

48,082

14,454

89,190

20,000

4,000

38,093

151,283

76,500

BUSINESS 
SEGMENT

EFFECTIVE 
DATE OF 
ACQUISITION

CASH 
PAID

COMMON 
STOCK 
ISSUED

OTHER 
PAYABLE

RECORDED 
EARN-OUT 
PAYABLE

NET 
ASSETS 
ACQUIRED

MAXIMUM 
POTENTIAL 
EARN-OUT 
PAYABLE

$20,129

$—

$0

$2,704

$22,833

$4,550

Other

52

Total

$356,260

$20,000 $12,135

$82,872

$471,267

$162,023

 
 
(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Total revenues

Income before income taxes

Net income

Net income per share:

Basic

Diluted

Basic

Diluted

Acquisitions in 2019

Weighted average number of shares outstanding:

$650,618

$576,355

$500,900

$436,722

$1.77

$1.76

$1.55

$1.54

274,334

275,867

272,471

274,616

During the year ended December 31, 2019, the Company acquired the assets and assumed certain liabilities of 22 insurance 

intermediaries, all the stock of 1 insurance intermediary and 4 book of business (customer accounts). Additionally, miscellaneous 

adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 months as permitted 

by ASC 805. Such adjustments are presented in the “Other” category within the following two tables.

For the year ended December 31, 2019, several adjustments were made within the permitted measurement period that resulted in a 

decrease in the aggregate purchase price of the affected acquisitions of $4.1 million, relating to the assumption of certain liabilities.

The following table summarizes the purchase price allocation made as of the date of each acquisition for current year acquisitions and 

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

(IN THOUSANDS)

NAME

Inc. (Smith)

LTD (Pipino)

(United)

Inc. (Twinbrook)

et al (WBR)

EFFECTIVE 

DATE OF 

BUSINESS 

SEGMENT

ACQUISITION

CASH 

PAID

COMMON 

STOCK 

ISSUED

RECORDED 

NET 

POTENTIAL 

OTHER 

EARN-OUT 

ASSETS 

EARN-OUT 

PAYABLE

PAYABLE

ACQUIRED

PAYABLE

MAXIMUM 

Smith Insurance Associates, 

Retail

February 1, 

$20,129

$—

$0

$2,704

$22,833

$4,550

Donald P. Pipino Company, 

Retail

February 1, 

16,420

135

9,821

26,376

12,996

AGA Enterprises, LLC d/b/a Cossio 

Retail

March 1, 

13,990

696

14,696

2,000

Insurance Agency (Cossio)

Medval, LLC (Medval)

Services

March 1, 

29,106

1,684

30,890

2,500

United Development Systems, Inc. 

Retail May 1, 2019

18,987

3,268

22,643

8,625

Twinbrook Insurance Brokerage, 

Retail

June 1, 2019

26,251

1,565

28,216

5,073

10

100

388

400

Innovative Risk Solutions, Inc. (IRS)

Retail

July 1, 2019

26,435

WBR Insurance Agency, LLC 

Retail

August 1, 

10,667

2,465

203

6,109

2,197

35,009

13,067

9,000

4,575

West Ridge Insurance Agency, Inc. 

Retail

August 1, 

13,030

470

768

14,268

6,730

CKP Insurance, LLC (CKP)

Retail

August 1, 

89,190

20,000

4,000

38,093

151,283

76,500

VerHagen Glendenning & Walker 

Retail

October 1, 

23,032

1,498

2,385

26,915

8,170

Retail

October 1, 

32,358

75

4,556

36,989

6,850

2019

2019

2019

2019

2019

2019

2019

2019

2019

—

—

—

—

—

—

—

—

—

—

—

Various

Various

36,665

2,391

9,026

48,082

14,454

$356,260

$20,000 $12,135

$82,872

$471,267

$162,023

d/b/a Yozell Associates (Yozell)

Poole Professional Ltd. Insurance 

Agents and Brokers et al (Poole)

LLP (VGW)

Other

52

Total

YEAR ENDED DECEMBER 31,

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition.

2020

2019

(IN THOUSANDS)

SMITH

PIPINO COSSIO MEDVAL UNITED TWINBROOK

WBR

YOZELL

$2,714,314

$2,579,075

Cash

Other current assets

Fixed assets

Goodwill

$—

680

39

$—

819

112

$— $3,217

236

1,708

29

50

$—

477

20

$—

919

85

IRS

$—

1,375

11

CKP

$—

$—

1,781

9,170

12

193

$—

449

10

16,042

16,765

10,010

19,108

15,111

18,935

24,938

9,096

8,904

110,495

Purchased customer accounts

6,500

11,360

4,403

7,300

7,065

8,557

8,800

4,022

3,550

32,274

Non-compete agreements

Other assets

41

—

11

772

21

—

1

15

11

—

12

—

11

—

34

—

21

—

21

—

Total assets acquired

23,302

29,839

14,699

31,399

22,684

28,508

35,135

13,611

14,268

152,153

Other current liabilities

(469)

(3,463 )

Deferred income tax, net

—

—

Total liabilities assumed

(469)

(3,463 )

(3)

—

(3)

(480)

(29)

(509)

(41)

—

(41)

(292)

(126)

—

—

(292)

(126)

(166)

(378)

(544)

—

—

—

(870)

—

(870)

Net assets acquired

$22,833 $26,376 $14,696 $30,890 $22,643

$28,216 $35,009 $13,067 $14,268 $151,283

(IN THOUSANDS)

Cash

Other current assets

Fixed assets

Goodwill

Purchased customer accounts

Non-compete agreements

Other assets

Total assets acquired

Other current liabilities

Other liabilities

Total liabilities assumed

Net assets acquired

POOLE

VGW OTHER

TOTAL

$—

938

4

$—

$—

$3,217

1,190

(6,786)

12,956

20

(130)

455

28,233

16,595

34,314

328,546

10,359

9,092

15,020

128,302

33

—

34

—

161

(732)

412

55

39,567

26,931

41,847

473,943

(2,578)

(16)

6,235

(2,269)

—

—

—

(407)

(2,578)

(16)

6,235

(2,676)

$36,989 $26,915 $48,082 $471,267

The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; 
and non-compete agreements, 5 years.

Goodwill of $328.5 million was allocated to the Retail, National Programs, Wholesale Brokerage and Services Segments in the amounts 
of $302.6 million, $0.1 million, $6.5 million and $19.3 million, respectively. Of the total goodwill of $328.5 million, $245.6 million is currently 
deductible for income tax purposes. The remaining $82.9 million relates to the recorded earn-out payables and will not be deductible 
until it is earned and paid.

T
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For the acquisitions completed during 2019, the results of operations since the acquisition dates have been combined with those of the 
Company. The total revenues from the acquisitions completed through December 31, 2019 included in the Consolidated Statement of 
Income for the year ended December 31, 2019 were $49.1 million. The income before income taxes, including the intercompany cost of 
capital charge, from the acquisitions completed through December 31, 2019 included in the Consolidated Statement of Income for the year 
ended December 31, 2019 was $3.4 million. If the acquisitions had occurred as of the beginning of the respective periods, 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)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Total revenues

Income before income taxes

Net income

Net income per share:

Basic

Diluted

Weighted average number of shares outstanding:

Basic

Diluted

YEAR ENDED DECEMBER 31,

2019

$2,447,401

$545,182

$412,974

$1.47

$1.46

272,471

274,616

As of December 31, 2021, the maximum future contingency payments related to all acquisitions totaled $484.8 million.

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 acquisitions 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 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 December 31, 2021, the fair values of the estimated acquisition earn-out payables were re-evaluated and measured at fair value on 
a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting additions, payments 
and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended 
December 31, 2021, 2020 and 2019 were as follows:

(IN THOUSANDS)

Balance as of the beginning of the period

Additions to estimated acquisition earn-out payables from new acquisitions

Payments for estimated acquisition earn-out payables

Subtotal

Net change in earnings from estimated acquisition earn-out payables:

Change in fair value on estimated acquisition earn-out payables

Interest expense accretion

Net change in earnings from estimated acquisition earn-out payables

Foreign currency translation adjustments during the year

Balance as of December 31,

YEAR ENDED DECEMBER 31,

2021

2020

2019

$258,943

$161,513

$89,924

75,761

131,397

(83,581)

251,123

(29,509)

263,401

82,872

(9,917)

162,879

34,209

6,236

40,445

(521)

(11,814)

7,356

(4,458)

—

(7,298)

5,932

(1,366)

—

$291,047

$258,943

$161,513

Of the $291.0 million of estimated acquisition earn-out payables as of December 31, 2021, $78.4 million was recorded as current liabilities 
within the accounts payable caption in the Company’s Consolidated Balance Sheets, and $212.6 million was recorded as non-current liabilities 
within the other liabilities caption in the Company’s Consolidated Balance Sheets. Included within additions to estimated acquisition earn-out 
payables are any adjustments to opening balance sheet items before the first anniversary date of the acquisition and may therefore differ 
from previously reported amounts. Of the $258.9 million of estimated acquisition earn-out payables as of December 31, 2020, $79.2 million 
was recorded as accounts payable, and $179.7 million was recorded as other liabilities. Of the $161.5 million of estimated acquisition earn-out 
payables as of December 31, 2019, $17.9 million was recorded as accounts payable, and $143.6 million was recorded as other liabilities.

54

NOTE 4. Goodwill

The changes in the carrying value of goodwill by reportable segment for the years ended December 31, are as follows:

(IN THOUSANDS)

Balance as of January 1, 2020

Goodwill of acquired businesses

RETAIL

NATIONAL 

PROGRAMS

WHOLESALE

BROKERAGE

SERVICES

TOTAL

$2,351,291

$925,541

$298,101

$171,161

$3,746,094

299,961

163,070

184,956

108

648,095

Goodwill disposed of relating to sales of businesses

Foreign currency translation adjustments during the year

(782)

—

—

2,511

Balance as of December 31, 2020

$2,650,470

$1,091,122

$483,057

$171,269

$4,395,918

Goodwill of acquired businesses

(1,337)

5,349

Goodwill disposed of relating to sales of businesses

Foreign currency translation adjustments during the 

year

345,961

(3,050)

(6,135)

—

122

—

—

—

—

—

—

—

—

—

(782)

2,511

349,973

(3,050)

(6,013)

Balance as of December 31, 2021

$2,987,246

$1,089,907

$488,406

$171,269

$4,736,828

NOTE 5. Amortizable Intangible Assets

Amortizable intangible assets at December 31, 2021 and 2020 consisted of the following:

(IN THOUSANDS)

GROSS

NET

GROSS

CARRYING

ACCUMULATED

CARRYING

VALUE

AMORTIZATION

VALUE

CARRYING

ACCUMULATED

VALUE

AMORTIZATION

WEIGHTED

AVERAGE

LIFE IN

YEARS(1)

NET

CARRYING

VALUE

WEIGHTED

AVERAGE

LIFE IN

YEARS(1)

DECEMBER 31, 2021

DECEMBER 31, 2020

Purchased customer accounts

$2,311,605

$(1,235,261)

$1,076,344

14.9

$2,164,968

$(1,118,316)

$1,046,652

Non-compete agreements

37,587

(32,466)

5,121

4.5

35,093

(32,085)

3,008

Total

$2,349,192

$(1,267,727)

$1,081,465

$2,200,061

$(1,150,401)

$1,049,660

T

R

O

P

E

R

L

A

U

N

N

A

1

2

0

2

15.0

4.6

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

Amortization expense for amortizable intangible assets for the years ending December 31, 2022, 2023, 2024, 2025 and 2026 

is estimated to be $122.4 million, $115.5 million, $111.3 million, $108.9 million and $102.9 million, respectively.

NOTE 6. Investments

At December 31, 2021, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

U.S. Treasury securities, obligations of U.S. Government agencies 

$30,232

COST

8,259

$38,491

GROSS

GROSS

UNREALIZED

UNREALIZED

GAINS

$152

108

$260

LOSSES

FAIR VALUE

$(363)

$30,021

(62)

8,305

$(425)

$38,326

At December 31, 2021, the Company held $30.0 million in fixed income securities composed of U.S Treasury securities, securities 

issued by U.S. Government agencies and municipalities, and $8.3 million issued by corporations with investment-grade ratings. Of the 

total, $7.4 million is classified as short-term investments on the Consolidated Balance Sheets as maturities are less than one year in 

duration. Additionally, the Company holds $5.5 million in short-term investments, which are related to time deposits held with various 

(IN THOUSANDS)

and Municipalities

Corporate debt

Total

financial institutions.

55

 
 
For the acquisitions completed during 2019, the results of operations since the acquisition dates have been combined with those of the 

Company. The total revenues from the acquisitions completed through December 31, 2019 included in the Consolidated Statement of 

Income for the year ended December 31, 2019 were $49.1 million. The income before income taxes, including the intercompany cost of 

capital charge, from the acquisitions completed through December 31, 2019 included in the Consolidated Statement of Income for the year 

ended December 31, 2019 was $3.4 million. If the acquisitions had occurred as of the beginning of the respective periods, 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)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

Total revenues

Income before income taxes

Net income

Net income per share:

Basic

Diluted

Basic

Diluted

Weighted average number of shares outstanding:

NOTE 4. Goodwill

The changes in the carrying value of goodwill by reportable segment for the years ended December 31, are as follows:

(IN THOUSANDS)

Balance as of January 1, 2020

Goodwill of acquired businesses

RETAIL

NATIONAL 
PROGRAMS

WHOLESALE
BROKERAGE

SERVICES

TOTAL

$2,351,291

$925,541

$298,101

$171,161

$3,746,094

299,961

163,070

184,956

108

648,095

Goodwill disposed of relating to sales of businesses

Foreign currency translation adjustments during the year

(782)

—

—

2,511

—

—

—

—

(782)

2,511

Balance as of December 31, 2020

$2,650,470

$1,091,122

$483,057

$171,269

$4,395,918

Goodwill of acquired businesses

Goodwill disposed of relating to sales of businesses

Foreign currency translation adjustments during the 
year

345,961

(3,050)

(6,135)

(1,337)

5,349

—

122

—

—

—

—

—

349,973

(3,050)

(6,013)

Balance as of December 31, 2021

$2,987,246

$1,089,907

$488,406

$171,269

$4,736,828

NOTE 5. Amortizable Intangible Assets

Amortizable intangible assets at December 31, 2021 and 2020 consisted of the following:

YEAR ENDED DECEMBER 31,

2019

$2,447,401

$545,182

$412,974

$1.47

$1.46

272,471

274,616

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 acquisitions include an estimation of the fair value of liabilities associated with any 

(IN THOUSANDS)

DECEMBER 31, 2021

DECEMBER 31, 2020

GROSS
CARRYING
VALUE

ACCUMULATED
AMORTIZATION

NET
CARRYING
VALUE

WEIGHTED
AVERAGE
LIFE IN
YEARS(1)

GROSS
CARRYING
VALUE

ACCUMULATED
AMORTIZATION

NET
CARRYING
VALUE

WEIGHTED
AVERAGE
LIFE IN
YEARS(1)

Purchased customer accounts

$2,311,605

$(1,235,261)

$1,076,344

14.9

$2,164,968

$(1,118,316)

$1,046,652

Non-compete agreements

37,587

(32,466)

5,121

4.5

35,093

(32,085)

3,008

Total

$2,349,192

$(1,267,727)

$1,081,465

$2,200,061

$(1,150,401)

$1,049,660

15.0

4.6

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

Amortization expense for amortizable intangible assets for the years ending December 31, 2022, 2023, 2024, 2025 and 2026 
is estimated to be $122.4 million, $115.5 million, $111.3 million, $108.9 million and $102.9 million, respectively.

NOTE 6. Investments

At December 31, 2021, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

(IN THOUSANDS)

U.S. Treasury securities, obligations of U.S. Government agencies 
and Municipalities

Corporate debt

Total

COST

$30,232

8,259

$38,491

GROSS
UNREALIZED
GAINS

GROSS
UNREALIZED
LOSSES

FAIR VALUE

$152

$(363)

$30,021

108

$260

(62)

8,305

$(425)

$38,326

At December 31, 2021, the Company held $30.0 million in fixed income securities composed of U.S Treasury securities, securities 
issued by U.S. Government agencies and municipalities, and $8.3 million issued by corporations with investment-grade ratings. Of the 
total, $7.4 million is classified as short-term investments on the Consolidated Balance Sheets as maturities are less than one year in 
duration. Additionally, the Company holds $5.5 million in short-term investments, which are related to time deposits held with various 
financial institutions.

As of December 31, 2021, the maximum future contingency payments related to all acquisitions totaled $484.8 million.

potential earn-out provisions. Subsequent changes in these earn-out obligations will be recorded in the 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 December 31, 2021, the fair values of the estimated acquisition earn-out payables were re-evaluated and measured at fair value on 

a recurring basis using unobservable inputs (Level 3) as defined in ASC 820-Fair Value Measurement. The resulting additions, payments 

and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the years ended 

December 31, 2021, 2020 and 2019 were as follows:

(IN THOUSANDS)

Balance as of the beginning of the period

Additions to estimated acquisition earn-out payables from new acquisitions

Payments for estimated acquisition earn-out payables

Subtotal

Net change in earnings from estimated acquisition earn-out payables:

Change in fair value on estimated acquisition earn-out payables

Interest expense accretion

Net change in earnings from estimated acquisition earn-out payables

Foreign currency translation adjustments during the year

Balance as of December 31,

YEAR ENDED DECEMBER 31,

2021

2020

2019

$258,943

$161,513

$89,924

75,761

131,397

(83,581)

251,123

(29,509)

263,401

82,872

(9,917)

162,879

34,209

6,236

40,445

(521)

(11,814)

7,356

(4,458)

—

(7,298)

5,932

(1,366)

—

$291,047

$258,943

$161,513

Of the $291.0 million of estimated acquisition earn-out payables as of December 31, 2021, $78.4 million was recorded as current liabilities 

within the accounts payable caption in the Company’s Consolidated Balance Sheets, and $212.6 million was recorded as non-current liabilities 

within the other liabilities caption in the Company’s Consolidated Balance Sheets. Included within additions to estimated acquisition earn-out 

payables are any adjustments to opening balance sheet items before the first anniversary date of the acquisition and may therefore differ 

from previously reported amounts. Of the $258.9 million of estimated acquisition earn-out payables as of December 31, 2020, $79.2 million 

was recorded as accounts payable, and $179.7 million was recorded as other liabilities. Of the $161.5 million of estimated acquisition earn-out 

payables as of December 31, 2019, $17.9 million was recorded as accounts payable, and $143.6 million was recorded as other liabilities.

54

T
R
O
P
E
R

L
A
U
N
N
A

1
2
0
2

55

 
 
For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment 
category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2021:

The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2020 by contractual maturity are set forth below:

$(363)

(62)

$(425)

$16,792

$(322)

$959

$(41)

$17,751

(IN THOUSANDS)

U.S. Treasury securities, obligations of U.S. 
Government agencies and Municipalities

Corporate debt

Total

3,920

(62)

—

—

3,920

$20,712

$(384)

$959

$(41)

$21,671

LESS THAN 12 MONTHS

12 MONTHS OR MORE

TOTAL

FAIR 
VALUE

UNREALIZED
LOSSES

FAIR 
VALUE

UNREALIZED
LOSSES

FAIR 
VALUE

UNREALIZED
LOSSES

(IN THOUSANDS)

Years to maturity:

The unrealized losses from corporate issuers were caused by interest rate increases. At December 31, 2021, the Company had 23 
securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. 
Based upon the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds 
were not considered to be other-than-temporarily impaired at December 31, 2021.

At December 31, 2020, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

(IN THOUSANDS)

U.S. Treasury securities, obligations of U.S. Government agencies  
and Municipalities

Corporate debt

Total

COST

$28,372

7,190

$35,562

GROSS
UNREALIZED
GAINS

GROSS
UNREALIZED
LOSSES

FAIR 
VALUE

$464

239

$703

$(5)

$28,831

the period of January 1, 2020 to December 31, 2020. These proceeds were used to purchase an additional $14.2 million of fixed maturity 

securities and to fund certain general corporate purposes. The gains and losses realized on those sales for the period from January 1, 

(6)

7,423

$(11)

$36,254

2020 to December 31, 2020 were insignificant.

Realized gains and losses are reported on the Consolidated Statement of Income, with the cost of securities sold determined on a 

The following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time 
that individual securities have been in a continuous unrealized loss position as of December 31, 2020:

At December 31, 2021, investments with a fair value of approximately $4.1 million were on deposit with state insurance departments to 

(IN THOUSANDS)

LESS THAN 12 MONTHS

12 MONTHS OR MORE

TOTAL

FAIR 
VALUE

UNREALIZED
LOSSES

FAIR 
VALUE

UNREALIZED
LOSSES

FAIR 
VALUE

UNREALIZED
LOSSES

U.S. Treasury securities, obligations of U.S. 
Government agencies and Municipalities

$1,995

$(5)

Corporate debt

Total

808

$2,803

(6)

$(11)

$—

—

$—

$—

$1,995

—

$—

808

$2,803

$(5)

(6)

$(11)

The unrealized losses in the Company’s investments in U.S. Treasury Securities and obligations of U.S. Government Agencies and bonds 
from corporate issuers were caused by interest rate increases. At December 31, 2020, the Company had 3 securities in an unrealized 
loss position. The contractual cash flows of the U.S. Treasury Securities and obligations of the U.S. Government agencies investments are 
either guaranteed by the U.S. Government or an agency of the U.S. Government. Accordingly, it is expected that the securities would not 
be settled at a price less than the amortized cost of the Company’s investment. The corporate securities are highly rated securities with 
no indicators of potential impairment. Based upon the ability and intent of the Company to hold these investments until recovery of fair 
value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at December 31, 2020.

The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2021 by contractual maturity are set forth below:

Depreciation expense for fixed assets amounted to $33.3 million in 2021, $26.3 million in 2020 and $23.4 million in 2019.

(IN THOUSANDS)

Years to maturity:

Due in one year or less

Due after one year through five years

Due after five years through ten years

Total

56

AMORTIZED 
COST

FAIR VALUE

$7,298

30,193

1,000

$7,356

30,011

959

$38,491

$38,326

Construction in progress primarily reflects expenditures related to the construction of the new headquarters in Daytona Beach, Florida 

which was placed into service in January 2021.

AMORTIZED 

COST

FAIR VALUE

$11,214

$11,283

23,348

1,000

23,976

995

$35,562

$36,254

Due in one year or less

Due after one year through five years

Due after five years through ten years

Total

The expected maturities in the foregoing table may differ from the contractual maturities because certain borrowers have the right to call 

or prepay obligations with or without penalty.

Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities were $9.2 million. This along with maturing 

time deposits yielded total cash proceeds from the sale of investments of $10.8 million in the period of January 1, 2021 to December 31, 

2021. These proceeds, along with other sources of cash were used to purchase an additional $12.4 million of fixed maturity securities 

and to fund certain general corporate purposes. The gains and losses realized on those sales for the period from January 1, 2021 to 

December 31, 2021 were insignificant.

Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities were $8.6 million for the year ended 

December 31, 2020. This along with maturing time deposits yielded total cash proceeds from the sale of investments of $11.0 million in 

specific identification basis.

satisfy regulatory requirements.

NOTE 7. Fixed Assets

Fixed assets at December 31 consisted of the following:

(IN THOUSANDS)

Furniture, fixtures, equipment and software

Leasehold improvements

Construction in progress

Land, buildings and improvements

Less accumulated depreciation and amortization

Total cost

Total

2021

2020

$259,081

$259,524

52,142

—

97,200

42,261

81,736

8,428

408,423

391,949

(196,390)

(190,834)

$212,033

$201,115

T

R

O

P

E

R

L

A

U

N

N

A

1

2

0

2

57

 
 
For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment 

The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2020 by contractual maturity are set forth below:

(IN THOUSANDS)

Years to maturity:

Due in one year or less

Due after one year through five years

Due after five years through ten years

Total

AMORTIZED 
COST

FAIR VALUE

$11,214

$11,283

23,348

1,000

23,976

995

$35,562

$36,254

The expected maturities in the foregoing table may differ from the contractual maturities because certain borrowers have the right to call 
or prepay obligations with or without penalty.

Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities were $9.2 million. This along with maturing 
time deposits yielded total cash proceeds from the sale of investments of $10.8 million in the period of January 1, 2021 to December 31, 
2021. These proceeds, along with other sources of cash were used to purchase an additional $12.4 million of fixed maturity securities 
and to fund certain general corporate purposes. The gains and losses realized on those sales for the period from January 1, 2021 to 
December 31, 2021 were insignificant.

Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities were $8.6 million for the year ended 
December 31, 2020. This along with maturing time deposits yielded total cash proceeds from the sale of investments of $11.0 million in 
the period of January 1, 2020 to December 31, 2020. These proceeds were used to purchase an additional $14.2 million of fixed maturity 
securities and to fund certain general corporate purposes. The gains and losses realized on those sales for the period from January 1, 
2020 to December 31, 2020 were insignificant.

Realized gains and losses are reported on the Consolidated Statement of Income, with the cost of securities sold determined on a 
specific identification basis.

At December 31, 2021, investments with a fair value of approximately $4.1 million were on deposit with state insurance departments to 
satisfy regulatory requirements.

NOTE 7. Fixed Assets

Fixed assets at December 31 consisted of the following:

(IN THOUSANDS)

Furniture, fixtures, equipment and software

Leasehold improvements

Construction in progress

Land, buildings and improvements

Total cost

Less accumulated depreciation and amortization

Total

2021

2020

$259,081

$259,524

52,142

—

97,200

42,261

81,736

8,428

408,423

391,949

(196,390)

(190,834)

$212,033

$201,115

The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2021 by contractual maturity are set forth below:

Depreciation expense for fixed assets amounted to $33.3 million in 2021, $26.3 million in 2020 and $23.4 million in 2019.

AMORTIZED 

COST

FAIR VALUE

Construction in progress primarily reflects expenditures related to the construction of the new headquarters in Daytona Beach, Florida 
which was placed into service in January 2021.

category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2021:

LESS THAN 12 MONTHS

12 MONTHS OR MORE

TOTAL

FAIR 

VALUE

UNREALIZED

LOSSES

FAIR 

VALUE

UNREALIZED

LOSSES

FAIR 

VALUE

(IN THOUSANDS)

Corporate debt

Total

U.S. Treasury securities, obligations of U.S. 

$16,792

$(322)

$959

$(41)

$17,751

Government agencies and Municipalities

3,920

(62)

—

—

3,920

$20,712

$(384)

$959

$(41)

$21,671

UNREALIZED

LOSSES

$(363)

(62)

$(425)

The unrealized losses from corporate issuers were caused by interest rate increases. At December 31, 2021, the Company had 23 

securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. 

Based upon the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds 

were not considered to be other-than-temporarily impaired at December 31, 2021.

At December 31, 2020, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

(IN THOUSANDS)

and Municipalities

Corporate debt

Total

(IN THOUSANDS)

Corporate debt

Total

U.S. Treasury securities, obligations of U.S. Government agencies  

GROSS

GROSS

UNREALIZED

UNREALIZED

COST

$28,372

7,190

$35,562

GAINS

$464

239

$703

LOSSES

FAIR 

VALUE

$(5)

$28,831

(6)

7,423

$(11)

$36,254

The following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time 

that individual securities have been in a continuous unrealized loss position as of December 31, 2020:

LESS THAN 12 MONTHS

12 MONTHS OR MORE

TOTAL

FAIR 

VALUE

UNREALIZED

LOSSES

FAIR 

VALUE

UNREALIZED

LOSSES

FAIR 

VALUE

UNREALIZED

LOSSES

U.S. Treasury securities, obligations of U.S. 

$1,995

$(5)

$—

$1,995

Government agencies and Municipalities

808

$2,803

(6)

$(11)

—

$—

808

$2,803

$—

—

$—

$(5)

(6)

$(11)

The unrealized losses in the Company’s investments in U.S. Treasury Securities and obligations of U.S. Government Agencies and bonds 

from corporate issuers were caused by interest rate increases. At December 31, 2020, the Company had 3 securities in an unrealized 

loss position. The contractual cash flows of the U.S. Treasury Securities and obligations of the U.S. Government agencies investments are 

either guaranteed by the U.S. Government or an agency of the U.S. Government. Accordingly, it is expected that the securities would not 

be settled at a price less than the amortized cost of the Company’s investment. The corporate securities are highly rated securities with 

no indicators of potential impairment. Based upon the ability and intent of the Company to hold these investments until recovery of fair 

value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at December 31, 2020.

(IN THOUSANDS)

Years to maturity:

Due in one year or less

Due after one year through five years

Due after five years through ten years

Total

56

$7,298

30,193

1,000

$7,356

30,011

959

$38,491

$38,326

T
R
O
P
E
R

L
A
U
N
N
A

1
2
0
2

57

 
 
NOTE 8. Accrued Expenses and Other Liabilities

Accrued expenses and other current liabilities at December 31 consisted of the following:

(IN THOUSANDS)

Accrued incentive compensation

Accrued compensation and benefits

Lease liability(1)

Deferred revenue

Reserve for policy cancellations

Accrued interest

Accrued rent and vendor expenses

Other

Total

2021

2020

$216,721

$159,356

53,547

43,441

67,450

29,213

15,871

7,552

22,364

41,550

43,542

53,956

31,081

15,260

6,682

20,310

$456,159

$371,737

(1)	 The Lease liability is the current portion of the Operating lease liabilities as reflected in the Consolidated Balance Sheets as of December 31, 2021 and 2020.

NOTE 9. Long-Term Debt

Long-term debt at December 31, 2021 and 2020 consisted of the following:

(IN THOUSANDS)

Current portion of long-term debt:

Current portion of 5-year term loan facility expires 2026

Current portion of 5-year term loan facility expires 2022

Current portion of 5-year term loan credit agreement expires 2023

Total current portion of long-term debt

Long-term debt:

Note agreements:

4.200% Senior Notes, semi-annual interest payments, balloon due 2024

4.500% Senior Notes, semi-annual interest payments, balloon due 2029

2.375% Senior Note due 2031, semi-annual interest payments, balloon due 2031

Total notes

Credit agreements:

DECEMBER 31, 
2021

DECEMBER 31, 
2020

$12,500

—

30,000

42,500

$—

40,000

30,000

70,000

499,574

349,596

699,325

499,416

349,540

699,252

1,548,495

1,548,208

5-year term loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires 
October 27, 2026

234,375

—

5-year term loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires 
June 28, 2022

5-year revolving loan facility, periodic interest payments, currently LIBOR plus up to 1.500%, plus 
commitment fees up to 0.225%, expires October 27, 2026

5-year revolving loan facility, periodic interest payments, currently LIBOR plus up to 1.500%, plus 
commitment fees up to 0.250%, expires June 28, 2022

5-year term loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires 
December 21, 2023

Total credit agreements

Debt issuance costs (contra)

Total long-term debt less unamortized discount and debt issuance costs

Current portion of long-term debt

58

Total debt

—

—

—

250,000

—

—

210,000

444,375

(12,433)

240,000

490,000

(12,302)

1,980,437

2,025,906

42,500

70,000

$2,022,937 $2,095,906

On October 27, 2021, the Company entered into an amended and restated credit agreement (the “Second Amended and Restated  

Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist 

Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S. Bank National Association, Fifth Third Bank, National Association, 

Wells Fargo Bank, National Association, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc. and Citizens Bank, N.A. as  

co-documentation agents. The Second Amended and Restated Credit Agreement amended and restated the credit agreement dated 

April 17, 2014, among certain of such parties, as amended by that certain amended and restated credit agreement dated June 28, 2017 

(the “Original Credit Agreement”). The Second Amended and Restated Credit Agreement, among other certain terms, extended the 

maturity of the revolving credit facility of $800.0 million and unsecured term loans associated with the agreement of $250.0 million 

to October 27, 2026. At the time of the renewal, the Company added an additional $2.7 million in debt issuance costs related to the 

transaction. The Company carried forward $0.6 million of existing debt issuance costs related to the previous credit facility agreements 

while expensing $0.1 million in debt issuance costs due to certain lenders exiting the renewed facility agreement. As of December 31, 

2021, there was an outstanding debt balance issued under the term loan of the Second Amended and Restated Credit Agreement of 

$246.9 million with no borrowings outstanding against the revolving credit facility.

On June 28, 2017, the Company entered into an amended and restated credit agreement (the “Amended and Restated Credit 

Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as  

co-syndication agents and co-documentation agents. The Amended and Restated Credit Agreement amended and restated the  

credit agreement dated April 17, 2014, among such parties (the “Original Credit Agreement”). The Amended and Restated Credit 

Agreement extended the applicable maturity date of the existing revolving credit facility (the “Revolving Credit Facility”) of $800.0 

million to June 28, 2022 and re-evidences unsecured term loans at $400.0 million while also extending the applicable maturity date 

to June 28, 2022. The quarterly term loan principal amortization schedule was reset. At the time of the execution of the Amended and 

Restated Credit Agreement, $67.5 million of principal from the original unsecured term loans was repaid using operating cash balances, 

and the Company added an additional $2.8 million in debt issuance costs related to the Revolving Credit Facility to the Consolidated 

Balance Sheets. The Company also expensed to the Consolidated Statements of Income $0.2 million of debt issuance costs related to 

the Original Credit Agreement due to certain lenders exiting before execution of the Amended and Restated Credit Agreement. The 

Company also carried forward $1.6 million on the Consolidated Balance Sheets the remaining unamortized portion of the Original  

Credit Agreement debt issuance costs, which will be amortized over the term of the Amended and Restated Credit Agreement. As 

of December 31, 2020, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit 

Agreement of $290.0 million with no borrowings outstanding against the Revolving Credit Facility.

On September 18, 2014, the Company issued $500.0 million of 4.200% unsecured Senior Notes due in 2024. The Senior Notes were 

given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions and regulations 

which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note 

amount which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay the 

outstanding balance of $475.0 million on the Revolving Credit Facility and for other general corporate purposes. As of December 31, 2021 

and December 31, 2020, there was an outstanding debt balance of $500.0 million exclusive of the associated discount balance.

On December 21, 2018, the Company entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with the lenders 

named therein, Wells Fargo Bank, National Association, as administrative agent, and certain other banks as co-syndication agents and 

as joint lead arrangers and joint bookrunners. The Term Loan Credit Agreement provides for an unsecured term loan in the initial amount 

of $300.0 million, which may, subject to lenders’ discretion, potentially be increased up to an aggregate amount of $450.0 million (the 

“Term Loan”). The Term Loan is repayable over the five-year term from the effective date of the Term Loan Credit Agreement, which 

was December 21, 2018. Based on the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt 

rating as determined by Moody’s Investor Service and Standard & Poor’s Rating Service, the rates of interest charged on the term loan 

are 1.000% to 1.750%, above the adjusted 1-Month LIBOR rate. On December 21, 2018, the Company borrowed $300.0 million under the 

Term Loan Credit Agreement and used $250.0 million of the proceeds to reduce indebtedness under the Revolving Credit Facility. As 

of December 31, 2021, there was an outstanding debt balance issued under the Term Loan of $240.0 million. As of December 31, 2020, 

there was an outstanding debt balance issued under the Term Loan of $270.0 million.

On March 11, 2019, the Company completed the issuance of $350.0 million aggregate principal amount of the Company’s 4.500% Senior 

Notes due 2029. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to 

certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a 

discount of the original note amount, which also excluded an underwriting fee discount. The net proceeds received from the issuance 

were used to repay a portion of the outstanding balance of $350.0 million on the Revolving Credit Facility, utilized in connection with the 

financing related to our acquisition of Hays and for other general corporate purposes. As of December 31, 2021, and December 31, 2020 

there was an outstanding debt balance of $350.0 million exclusive of the associated discount balance.

On September 24, 2020, the Company completed the issuance of $700.0 million aggregate principal amount of the Company’s 2.375% 

Senior Notes due 2031. The Senior Notes were given investment grade ratings of BBB- stable outlook and Baa3 positive outlook. The 

notes are subject to certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, the proceeds 

were offered at a discount of the original note amount, which also excluded an underwriting fee discount. The net proceeds received 

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NOTE 8. Accrued Expenses and Other Liabilities

Accrued expenses and other current liabilities at December 31 consisted of the following:

(IN THOUSANDS)

Accrued incentive compensation

Accrued compensation and benefits

Lease liability(1)

Deferred revenue

Reserve for policy cancellations

Accrued interest

Accrued rent and vendor expenses

Other

Total

2021

2020

$216,721

$159,356

53,547

43,441

67,450

29,213

15,871

7,552

22,364

41,550

43,542

53,956

31,081

15,260

6,682

20,310

$456,159

$371,737

DECEMBER 31, 

DECEMBER 31, 

2021

2020

$12,500

—

30,000

42,500

$—

40,000

30,000

70,000

499,574

349,596

699,325

499,416

349,540

699,252

1,548,495

1,548,208

234,375

—

—

—

250,000

—

—

—

210,000

444,375

(12,433)

240,000

490,000

(12,302)

1,980,437

2,025,906

42,500

70,000

$2,022,937 $2,095,906

(1)	 The Lease liability is the current portion of the Operating lease liabilities as reflected in the Consolidated Balance Sheets as of December 31, 2021 and 2020.

NOTE 9. Long-Term Debt

Long-term debt at December 31, 2021 and 2020 consisted of the following:

(IN THOUSANDS)

Current portion of long-term debt:

Current portion of 5-year term loan facility expires 2026

Current portion of 5-year term loan facility expires 2022

Current portion of 5-year term loan credit agreement expires 2023

Total current portion of long-term debt

4.200% Senior Notes, semi-annual interest payments, balloon due 2024

4.500% Senior Notes, semi-annual interest payments, balloon due 2029

2.375% Senior Note due 2031, semi-annual interest payments, balloon due 2031

Long-term debt:

Note agreements:

Total notes

Credit agreements:

October 27, 2026

June 28, 2022

5-year term loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires 

5-year term loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires 

5-year revolving loan facility, periodic interest payments, currently LIBOR plus up to 1.500%, plus 

commitment fees up to 0.225%, expires October 27, 2026

5-year revolving loan facility, periodic interest payments, currently LIBOR plus up to 1.500%, plus 

commitment fees up to 0.250%, expires June 28, 2022

5-year term loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires 

December 21, 2023

Total credit agreements

Debt issuance costs (contra)

Total long-term debt less unamortized discount and debt issuance costs

Current portion of long-term debt

58

Total debt

On October 27, 2021, the Company entered into an amended and restated credit agreement (the “Second Amended and Restated  
Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist 
Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S. Bank National Association, Fifth Third Bank, National Association, 
Wells Fargo Bank, National Association, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc. and Citizens Bank, N.A. as  
co-documentation agents. The Second Amended and Restated Credit Agreement amended and restated the credit agreement dated 
April 17, 2014, among certain of such parties, as amended by that certain amended and restated credit agreement dated June 28, 2017 
(the “Original Credit Agreement”). The Second Amended and Restated Credit Agreement, among other certain terms, extended the 
maturity of the revolving credit facility of $800.0 million and unsecured term loans associated with the agreement of $250.0 million 
to October 27, 2026. At the time of the renewal, the Company added an additional $2.7 million in debt issuance costs related to the 
transaction. The Company carried forward $0.6 million of existing debt issuance costs related to the previous credit facility agreements 
while expensing $0.1 million in debt issuance costs due to certain lenders exiting the renewed facility agreement. As of December 31, 
2021, there was an outstanding debt balance issued under the term loan of the Second Amended and Restated Credit Agreement of 
$246.9 million with no borrowings outstanding against the revolving credit facility.

On June 28, 2017, the Company entered into an amended and restated credit agreement (the “Amended and Restated Credit 
Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as  
co-syndication agents and co-documentation agents. The Amended and Restated Credit Agreement amended and restated the  
credit agreement dated April 17, 2014, among such parties (the “Original Credit Agreement”). The Amended and Restated Credit 
Agreement extended the applicable maturity date of the existing revolving credit facility (the “Revolving Credit Facility”) of $800.0 
million to June 28, 2022 and re-evidences unsecured term loans at $400.0 million while also extending the applicable maturity date 
to June 28, 2022. The quarterly term loan principal amortization schedule was reset. At the time of the execution of the Amended and 
Restated Credit Agreement, $67.5 million of principal from the original unsecured term loans was repaid using operating cash balances, 
and the Company added an additional $2.8 million in debt issuance costs related to the Revolving Credit Facility to the Consolidated 
Balance Sheets. The Company also expensed to the Consolidated Statements of Income $0.2 million of debt issuance costs related to 
the Original Credit Agreement due to certain lenders exiting before execution of the Amended and Restated Credit Agreement. The 
Company also carried forward $1.6 million on the Consolidated Balance Sheets the remaining unamortized portion of the Original  
Credit Agreement debt issuance costs, which will be amortized over the term of the Amended and Restated Credit Agreement. As 
of December 31, 2020, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit 
Agreement of $290.0 million with no borrowings outstanding against the Revolving Credit Facility.

On September 18, 2014, the Company issued $500.0 million of 4.200% unsecured Senior Notes due in 2024. The Senior Notes were 
given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions and regulations 
which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note 
amount which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay the 
outstanding balance of $475.0 million on the Revolving Credit Facility and for other general corporate purposes. As of December 31, 2021 
and December 31, 2020, there was an outstanding debt balance of $500.0 million exclusive of the associated discount balance.

On December 21, 2018, the Company entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with the lenders 
named therein, Wells Fargo Bank, National Association, as administrative agent, and certain other banks as co-syndication agents and 
as joint lead arrangers and joint bookrunners. The Term Loan Credit Agreement provides for an unsecured term loan in the initial amount 
of $300.0 million, which may, subject to lenders’ discretion, potentially be increased up to an aggregate amount of $450.0 million (the 
“Term Loan”). The Term Loan is repayable over the five-year term from the effective date of the Term Loan Credit Agreement, which 
was December 21, 2018. Based on the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt 
rating as determined by Moody’s Investor Service and Standard & Poor’s Rating Service, the rates of interest charged on the term loan 
are 1.000% to 1.750%, above the adjusted 1-Month LIBOR rate. On December 21, 2018, the Company borrowed $300.0 million under the 
Term Loan Credit Agreement and used $250.0 million of the proceeds to reduce indebtedness under the Revolving Credit Facility. As 
of December 31, 2021, there was an outstanding debt balance issued under the Term Loan of $240.0 million. As of December 31, 2020, 
there was an outstanding debt balance issued under the Term Loan of $270.0 million.

On March 11, 2019, the Company completed the issuance of $350.0 million aggregate principal amount of the Company’s 4.500% Senior 
Notes due 2029. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to 
certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a 
discount of the original note amount, which also excluded an underwriting fee discount. The net proceeds received from the issuance 
were used to repay a portion of the outstanding balance of $350.0 million on the Revolving Credit Facility, utilized in connection with the 
financing related to our acquisition of Hays and for other general corporate purposes. As of December 31, 2021, and December 31, 2020 
there was an outstanding debt balance of $350.0 million exclusive of the associated discount balance.

On September 24, 2020, the Company completed the issuance of $700.0 million aggregate principal amount of the Company’s 2.375% 
Senior Notes due 2031. The Senior Notes were given investment grade ratings of BBB- stable outlook and Baa3 positive outlook. The 
notes are subject to certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, the proceeds 
were offered at a discount of the original note amount, which also excluded an underwriting fee discount. The net proceeds received 

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(IN THOUSANDS)

Non-current deferred tax liabilities:

Intangible assets

Fixed assets

ASC 842 ROU Asset

Non-current deferred tax assets:

Deferred compensation

Accruals and reserves

ASC 842 lease liabilities

from the issuance were used to repay a portion of the outstanding balance of $200.0 million on the Revolving Credit Facility, utilized in 
connection with the financing related to the acquisitions of LP Insurance Services, LLP and CKP Insurance, LLC and for other general 
corporate purposes. As of December 31, 2021 and December 31, 2020, there was an outstanding debt balance of $700.0 million 
exclusive of the associated discount balance.

The Second Amended and Restated Credit Agreement and Term Loan Credit Agreement 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 December 31, 
2021 and December 31, 2020.

Significant components of the Company’s net deferred tax liabilities as of December 31 are as follows:

The 30-day Adjusted LIBOR Rate for the term loan of the Amended and Restated Credit Agreement and Term Loan Credit Agreement as 
of December 31, 2021 was 0.125%.

Impact of adoption of ASC 606 revenue recognition

Net unrealized holding (loss)/gain on available-for-sale securities

Interest paid in 2021, 2020 and 2019 was $61.5 million, $52.4 million, and $58.3 million, respectively.

Total non-current deferred tax liabilities

523,080

478,909

At December 31, 2021, maturities of long-term debt were $42.5 million in 2022, $225.6 million in 2023, $525.0 million in 2024, $25.0 
million in 2025, $168.8 million in 2026, $350.0 million in 2029 and $700.0 million in 2031.

NOTE 10. Income Taxes

Significant components of the provision for income taxes for the years ended December 31 are as follows:

(IN THOUSANDS)

Current:

Federal

State

Foreign

2021

2020

2019

$106,763

$93,620

$85,507

32,635

1,831

34,123

28,905

325

620

Total current provision

141,229

128,068

115,032

operating loss carryforward in Canada of $1.8 million.

Deferred:

Federal

State

Foreign

Total deferred provision

Total tax provision

27,963

11,655

4,954

1,573

4,119

(226)

14,994

(2,587)

(24)

34,490

15,548

12,383

$175,719

$143,616

$127,415

(IN THOUSANDS)

Unrecognized tax benefits balance at January 1

Gross increases for tax positions of prior years

Gross decreases for tax positions of prior years

Settlements

A reconciliation of the differences between the effective tax rate and the federal statutory tax rate for the years ended December 31 is 
as follows:

Unrecognized tax benefits balance at December 31

Net operating loss carryforwards and 163( j) disallowed carryforwards

Valuation allowance for deferred tax assets

Total non-current deferred tax assets

Net non-current deferred tax liability

Income taxes paid in 2021, 2020 and 2019 were $147.5 million, $132.9 million and $110.0 million, respectively.

At December 31, 2021, the Company had no net operating loss carryforwards for federal purposes and $34.5 million net operating 

loss carryforwards for state income tax reporting purposes, portions of which expire in the years 2022 through indefinite. The state 

carryforward amount is derived from the operating results of certain subsidiaries. As of December 31, 2021, the Company had a net 

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

2021

2020

$440,238

$400,335

20,004

47,663

15,216

(41)

66,354

15,708

53,343

1,910

(1,029)

11,740

46,730

19,928

176

59,897

19,497

53,150

3,168

(1,025)

136,286

$386,794

134,687

$344,222

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2021

2020

2019

$1,267

$1,127

$1,639

270

(446)

(174)

848

(708)

—

778

(791)

(499 )

$917

$1,267

$1,127

(IN THOUSANDS)

Federal statutory tax rate

State income taxes, net of federal income tax benefit

Non-deductible employee stock purchase plan expense

Non-deductible meals and entertainment

Non-deductible officers’ compensation

Stock Vesting under ASU 2016-19

Other, net

Effective tax rate

2021

2020

2019

and 2019 the Company had $0.3 million, $0.3 million and $0.2 million of accrued interest and penalties related to uncertain tax positions, 

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2021, 2020 

21.0%

21.0 %

21.0%

respectively.

4.7

0.2

0.0

0.4

(3.6)

0.3

5.3

0.3

0.1

0.3

(3.5)

(0.5)

3.8

0.3

0.3

0.2

(1.1)

(0.3)

23.0%

23.0%

24.2%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for 
financial reporting purposes and the corresponding amounts used for income tax reporting purposes.

income taxes in these countries.

60

The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate if recognized was $0.9 million as of 

December 31, 2021, $1.3 million as of December 31, 2020 and $1.1 million as of December 31, 2019. The Company does not expect its 

unrecognized tax benefits to change significantly over the next 12 months.

The Company is subject to taxation in the United States and various state jurisdictions. The Company is also subject to taxation in the 

United Kingdom, Ireland and Canada. In the United States, federal returns for fiscal years 2018 through 2021 remain open and subject to 

examination by the Internal Revenue Service. The Company files and remits state income taxes in various states where the Company has 

determined it is required to file state income taxes. The Company’s filings with those states remain open for audit for the fiscal years 2017 

through 2021. In the United Kingdom, the Company’s filings remain open for audit for the fiscal years 2020 through 2021. In Canada, the 

Company’s filings remain open for audit for the fiscal years 2016 through 2021. In Ireland, the Company’s filings remain open for audit for 

the fiscal years 2017 through 2021. The Company also operates in Bermuda and the Cayman Islands. The Company is not subject to any 

During 2019, the Company settled the previously disclosed State of Colorado income tax audit for the fiscal years 2013-2016, the State of 

Kansas income tax audit for the fiscal years 2014-2016, and the State of New York income tax audit for the fiscal years 2015-2017.

During 2021, the Company settled the previously disclosed State of Wisconsin income tax audit for the fiscal years 2015-2018, the 

State of Illinois income tax audit for the fiscal years 2015-2017, and the State of California income tax audit for the fiscal years 2015-2017. 

There were no material adjustments as a result of the finalization of these audits. The Company is currently under audit in the State of 

61

 
 
from the issuance were used to repay a portion of the outstanding balance of $200.0 million on the Revolving Credit Facility, utilized in 

Significant components of the Company’s net deferred tax liabilities as of December 31 are as follows:

connection with the financing related to the acquisitions of LP Insurance Services, LLP and CKP Insurance, LLC and for other general 

corporate purposes. As of December 31, 2021 and December 31, 2020, there was an outstanding debt balance of $700.0 million 

(IN THOUSANDS)

The Second Amended and Restated Credit Agreement and Term Loan Credit Agreement 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 December 31, 

exclusive of the associated discount balance.

2021 and December 31, 2020.

of December 31, 2021 was 0.125%.

The 30-day Adjusted LIBOR Rate for the term loan of the Amended and Restated Credit Agreement and Term Loan Credit Agreement as 

Impact of adoption of ASC 606 revenue recognition

Net unrealized holding (loss)/gain on available-for-sale securities

Non-current deferred tax liabilities:

Intangible assets

Fixed assets

ASC 842 ROU Asset

2021

2020

$440,238

$400,335

20,004

47,663

15,216

(41)

11,740

46,730

19,928

176

Interest paid in 2021, 2020 and 2019 was $61.5 million, $52.4 million, and $58.3 million, respectively.

Total non-current deferred tax liabilities

523,080

478,909

At December 31, 2021, maturities of long-term debt were $42.5 million in 2022, $225.6 million in 2023, $525.0 million in 2024, $25.0 

million in 2025, $168.8 million in 2026, $350.0 million in 2029 and $700.0 million in 2031.

NOTE 10. Income Taxes

Significant components of the provision for income taxes for the years ended December 31 are as follows:

(IN THOUSANDS)

2021

2020

2019

Non-current deferred tax assets:

Deferred compensation

Accruals and reserves

ASC 842 lease liabilities

Net operating loss carryforwards and 163( j) disallowed carryforwards

Valuation allowance for deferred tax assets

Total non-current deferred tax assets

Net non-current deferred tax liability

66,354

15,708

53,343

1,910

(1,029)

59,897

19,497

53,150

3,168

(1,025)

136,286

$386,794

134,687

$344,222

Income taxes paid in 2021, 2020 and 2019 were $147.5 million, $132.9 million and $110.0 million, respectively.

At December 31, 2021, the Company had no net operating loss carryforwards for federal purposes and $34.5 million net operating 
loss carryforwards for state income tax reporting purposes, portions of which expire in the years 2022 through indefinite. The state 
carryforward amount is derived from the operating results of certain subsidiaries. As of December 31, 2021, the Company had a net 
operating loss carryforward in Canada of $1.8 million.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

A reconciliation of the differences between the effective tax rate and the federal statutory tax rate for the years ended December 31 is 

Unrecognized tax benefits balance at December 31

(IN THOUSANDS)

Unrecognized tax benefits balance at January 1

Gross increases for tax positions of prior years

Gross decreases for tax positions of prior years

Settlements

2021

2020

2019

$1,267

$1,127

$1,639

270

(446)

(174)

848

(708)

—

778

(791)

(499 )

$917

$1,267

$1,127

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The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2021, 2020 
and 2019 the Company had $0.3 million, $0.3 million and $0.2 million of accrued interest and penalties related to uncertain tax positions, 
respectively.

The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate if recognized was $0.9 million as of 
December 31, 2021, $1.3 million as of December 31, 2020 and $1.1 million as of December 31, 2019. The Company does not expect its 
unrecognized tax benefits to change significantly over the next 12 months.

The Company is subject to taxation in the United States and various state jurisdictions. The Company is also subject to taxation in the 
United Kingdom, Ireland and Canada. In the United States, federal returns for fiscal years 2018 through 2021 remain open and subject to 
examination by the Internal Revenue Service. The Company files and remits state income taxes in various states where the Company has 
determined it is required to file state income taxes. The Company’s filings with those states remain open for audit for the fiscal years 2017 
through 2021. In the United Kingdom, the Company’s filings remain open for audit for the fiscal years 2020 through 2021. In Canada, the 
Company’s filings remain open for audit for the fiscal years 2016 through 2021. In Ireland, the Company’s filings remain open for audit for 
the fiscal years 2017 through 2021. The Company also operates in Bermuda and the Cayman Islands. The Company is not subject to any 
income taxes in these countries.

During 2019, the Company settled the previously disclosed State of Colorado income tax audit for the fiscal years 2013-2016, the State of 
Kansas income tax audit for the fiscal years 2014-2016, and the State of New York income tax audit for the fiscal years 2015-2017.

During 2021, the Company settled the previously disclosed State of Wisconsin income tax audit for the fiscal years 2015-2018, the 
State of Illinois income tax audit for the fiscal years 2015-2017, and the State of California income tax audit for the fiscal years 2015-2017. 
There were no material adjustments as a result of the finalization of these audits. The Company is currently under audit in the State of 

61

Current:

Federal

State

Foreign

Deferred:

Federal

State

Foreign

Total current provision

Total deferred provision

Total tax provision

as follows:

(IN THOUSANDS)

Federal statutory tax rate

State income taxes, net of federal income tax benefit

Non-deductible employee stock purchase plan expense

Non-deductible meals and entertainment

Non-deductible officers’ compensation

Stock Vesting under ASU 2016-19

Other, net

Effective tax rate

60

$106,763

$93,620

$85,507

32,635

1,831

34,123

28,905

325

620

141,229

128,068

115,032

27,963

11,655

4,954

1,573

4,119

(226)

14,994

(2,587)

(24)

34,490

15,548

12,383

$175,719

$143,616

$127,415

2021

2020

2019

21.0%

21.0 %

21.0%

4.7

0.2

0.0

0.4

(3.6)

0.3

5.3

0.3

0.1

0.3

(3.5)

(0.5)

3.8

0.3

0.3

0.2

(1.1)

(0.3)

23.0%

23.0%

24.2%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for 

financial reporting purposes and the corresponding amounts used for income tax reporting purposes.

 
 
Massachusetts for the fiscal years 2015 through 2017. A subsidiary of the Company is currently under audit in the State of Wisconsin for 
the fiscal years 2017-2020 and with the Internal Revenue Service for the fiscal years 2017-2018.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. The Company has 
determined it is not practical to determine the unrecognized deferred tax liabilities on the undistributed earnings from the Company’s 
international subsidiaries as such earnings are considered to be indefinitely reinvested.

$5.0 million and $3.5 million, respectively.

Stock Incentive Plans

The total fair value of PSP grants that vested during each of the years ended December 31, 2021, 2020 and 2019 was $2.3 million,  

NOTE 11. Employee Savings Plan

The Company has an Employee Savings Plan (401(k)) in which substantially all employees with more than 30 days of service are eligible 
to participate. Under this plan, the Company makes matching contributions of up to 4.0% of each participant’s annual compensation. The 
Company’s contribution expense to the plan totaled $35.6 million in 2021 and $31.2 million in 2020.

NOTE 12. Stock-Based Compensation

Performance Stock Plan

In 1996, the Company adopted and the shareholders approved a performance stock plan, under which until the suspension of the plan in 
2010, up to 28,800,000 Performance Stock Plan (“PSP”) shares could be granted to key employees contingent on the employees’ future 
years of service with the Company and other performance-based criteria established by the Compensation Committee of the Company’s 
board of directors. Before participants may take full title to Performance Stock, two vesting conditions must be met. Of the grants currently 
outstanding, specified portions satisfied the first condition for vesting based upon 20% incremental increases in the 20-trading-day average 
stock price of Brown & Brown’s common stock from the price on the last business day before date of grant. Performance Stock that has 
satisfied the first vesting condition is considered “awarded shares.” Awarded shares are included as issued and outstanding common stock 
shares and are included in the calculation of basic and diluted net income per share. Dividends are paid on awarded shares and participants 
may exercise voting privileges on such shares. Awarded shares satisfy the second condition for vesting on the earlier of a participant’s: (i) 15 
years of continuous employment with Brown & Brown from the date shares are granted to the participants (or, in the case of the July 2009 
grant to Powell Brown, 20 years), (ii) attainment of age 64 (on a prorated basis corresponding to the number of years since the date of grant), 
or (iii) death or disability. On April 28, 2010, the PSP was suspended and any remaining authorized, but unissued shares, as well as any 
shares forfeited in the future, were reserved for issuance under the 2010 Stock Incentive Plan (the “2010 SIP”).

At December 31, 2021, 10,192,982 shares had been granted, net of forfeitures, under the PSP. As of December 31, 2021, 839,842 shares 
had met the first condition of vesting and had been awarded, and 9,353,140 shares had satisfied both conditions of vesting and had been 
distributed to participants. Of the shares that have not vested as of December 31, 2021, the initial stock prices ranged from $8.30 to $10.31.

The Company uses a path-dependent lattice model to estimate the fair value of PSP grants on the grant date.

A summary of 2010 SIP and 2019 SIP activity for the years ended December 31, 2021, 2020 and 2019 is as follows:

A summary of PSP activity for the years ended December 31, 2021, 2020 and 2019 is as follows:

WEIGHTED-
AVERAGE GRANT
DATE FAIR VALUE

GRANTED
SHARES

AWARDED
SHARES

SHARES NOT
YET AWARDED

Outstanding at January 1, 2019

Outstanding at January 1, 2019

$5.03

1,196,092

1,196,092

Granted

Awarded

Vested

Forfeited

Outstanding at December 31, 2019

Granted

Awarded

Vested

Forfeited

Outstanding at December 31, 2020

Granted

Awarded

Vested

Forfeited

Outstanding at December 31, 2021

62

$—

$—

$5.29

$4.74

$5.00

$—

$—

$6.06

$5.03

$4.86

$—

$—

$4.73

$5.50

$4.87

—

—

—

—

(115,040)

(115,040)

(29,760)

(29,760)

1,051,292

1,051,292

—

—

—

—

(119,072)

(119,072)

(22,392)

909,828

(22,392)

909,828

—

—

—

—

(45,736)

(24,250)

(45,736)

(24,250)

839,842

839,842

Outstanding at December 31, 2019

Outstanding at December 31, 2020

Granted

Awarded

Vested

Forfeited

Granted

Awarded

Vested

Forfeited

Granted

Awarded

Vested

Forfeited

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

On April 28, 2010, the shareholders of the Company approved the 2010 Stock Incentive Plan (“2010 SIP”), which was suspended May 

1, 2019. On May 1, 2019, the shareholders of the Company approved the 2019 Stock Incentive Plan (“2019 SIP”) that provides for the 

granting of restricted stock, restricted stock units, stock options, stock appreciation rights and other stock-based awards to employees 

and directors contingent on performance-based and/or time-based criteria established by the Compensation Committee of the 

Company’s board of directors. In addition, the 2019 SIP provides for a limited delegation of authority of the Company’s chief executive 

officer to grant awards to individuals who are not subject to Section 16 of the Securities Exchange Act of 1934. The principal purpose of 

the 2019 SIP is to attract, incentivize and retain key employees by offering those persons an opportunity to acquire or increase a direct 

proprietary interest in the Company’s operations and future success. The number of shares of stock reserved for issuance under the 

2019 SIP is 2,283,475 shares, plus any shares that are authorized for issuance under the 2010 SIP (described below), and not already 

subject to grants under the 2010 SIP, and that were outstanding as of May 1, 2019, the date of suspension of the 2010 SIP, together with 

PSP shares, 2010 SIP shares and 2019 SIP shares forfeited after that date. As of May 1, 2019, 6,957,897 shares were available for issuance 

under the 2010 SIP, which were then transferred to the 2019 SIP.

The Company has granted restricted share awards (including both restricted stock and restricted stock units) to our employees in the 

form of time-based grants and performance-based grants under the 2010 SIP and 2019 SIP. To date, a substantial majority of restricted 

share grants to employees under these plans vest in 5 to 10 years. The performance-based grants are subject to the achievement 

of certain performance criteria by grantees, which may include growth in a defined book of business, Organic Revenue growth and 

operating profit growth of a profit center, Organic Revenue growth of the Company and consolidated diluted net income per share 

growth at certain levels of the Company. The performance measurement period ranges from 3 to 5 years. Beginning in 2016, certain 

performance-based grants have a payout range between 0% to 200% depending on the achievement against the stated performance 

target. Prior to 2016, the majority of the grants had a binary performance measurement criteria that only allowed for 0% or 100% payout.

Non-employee members of the board of directors received shares annually issued pursuant to the 2010 SIP and 2019 SIP as part of their 

annual compensation. A total of 27,885 shares were issued in April 2019, 16,490 shares were issued in May 2020 and 16,857 shares 

were issued in May 2021.

The Company uses the closing stock price on the day before the grant date to determine the fair value of grants under the 2010 SIP 

and 2019 SIP and then applies an estimated forfeiture factor to estimate the annual expense. Additionally, the Company uses the path-

dependent lattice model to estimate the fair value of grants with PSP-type vesting conditions as of the grant date. SIP shares that satisfied 

the first vesting condition for PSP-type grants or the established performance criteria are considered awarded shares. Awarded shares are 

included as issued and outstanding common stock shares and are included in the calculation of basic and diluted net income per share.

T

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WEIGHTED-

AVERAGE GRANT

DATE FAIR VALUE

GRANTED

SHARES

AWARDED

SHARES

SHARES NOT

YET AWARDED

11,102,375

6,595,319

4,507,056

1,812,047

797,778

1,014,269(1)

299,339

1,954,983

(1,655,644)

(1,068,211)

(1,068,211)

(503,632)

(209,293)

11,641,918

8,070,576

970,997

497,082

148,015

1,880,512

(1,383,430)

(3,059,619)

(3,059,619)

(356,041)

9,694,337

1,143,094

(119,637)

6,919,847

204,826

310,147

1,272,554

(3,223,964)

(3,223,964)

(294,339)

3,571,342

822,982(2)

(236,404)

2,774,490

938,268(3)

(962,407)

—

—

—

$16.69

$28.53

$17.26

$14.29

$19.09

$18.10

$46.58

$19.71

$15.97

$20.75

$19.89

$46.05

$25.80

$15.73

$30.54

Outstanding at December 31, 2021

(315,168)

(147,702)

(167,466)

$21.59

7,608,446

5,025,561

2,582,885

 
 
Massachusetts for the fiscal years 2015 through 2017. A subsidiary of the Company is currently under audit in the State of Wisconsin for 

the fiscal years 2017-2020 and with the Internal Revenue Service for the fiscal years 2017-2018.

The total fair value of PSP grants that vested during each of the years ended December 31, 2021, 2020 and 2019 was $2.3 million,  
$5.0 million and $3.5 million, respectively.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. The Company has 

determined it is not practical to determine the unrecognized deferred tax liabilities on the undistributed earnings from the Company’s 

Stock Incentive Plans

On April 28, 2010, the shareholders of the Company approved the 2010 Stock Incentive Plan (“2010 SIP”), which was suspended May 
1, 2019. On May 1, 2019, the shareholders of the Company approved the 2019 Stock Incentive Plan (“2019 SIP”) that provides for the 
granting of restricted stock, restricted stock units, stock options, stock appreciation rights and other stock-based awards to employees 
and directors contingent on performance-based and/or time-based criteria established by the Compensation Committee of the 
Company’s board of directors. In addition, the 2019 SIP provides for a limited delegation of authority of the Company’s chief executive 
officer to grant awards to individuals who are not subject to Section 16 of the Securities Exchange Act of 1934. The principal purpose of 
the 2019 SIP is to attract, incentivize and retain key employees by offering those persons an opportunity to acquire or increase a direct 
proprietary interest in the Company’s operations and future success. The number of shares of stock reserved for issuance under the 
2019 SIP is 2,283,475 shares, plus any shares that are authorized for issuance under the 2010 SIP (described below), and not already 
subject to grants under the 2010 SIP, and that were outstanding as of May 1, 2019, the date of suspension of the 2010 SIP, together with 
PSP shares, 2010 SIP shares and 2019 SIP shares forfeited after that date. As of May 1, 2019, 6,957,897 shares were available for issuance 
under the 2010 SIP, which were then transferred to the 2019 SIP.

The Company has granted restricted share awards (including both restricted stock and restricted stock units) to our employees in the 
form of time-based grants and performance-based grants under the 2010 SIP and 2019 SIP. To date, a substantial majority of restricted 
share grants to employees under these plans vest in 5 to 10 years. The performance-based grants are subject to the achievement 
of certain performance criteria by grantees, which may include growth in a defined book of business, Organic Revenue growth and 
operating profit growth of a profit center, Organic Revenue growth of the Company and consolidated diluted net income per share 
growth at certain levels of the Company. The performance measurement period ranges from 3 to 5 years. Beginning in 2016, certain 
performance-based grants have a payout range between 0% to 200% depending on the achievement against the stated performance 
target. Prior to 2016, the majority of the grants had a binary performance measurement criteria that only allowed for 0% or 100% payout.

Non-employee members of the board of directors received shares annually issued pursuant to the 2010 SIP and 2019 SIP as part of their 
annual compensation. A total of 27,885 shares were issued in April 2019, 16,490 shares were issued in May 2020 and 16,857 shares 
were issued in May 2021.

The Company uses the closing stock price on the day before the grant date to determine the fair value of grants under the 2010 SIP 
and 2019 SIP and then applies an estimated forfeiture factor to estimate the annual expense. Additionally, the Company uses the path-
dependent lattice model to estimate the fair value of grants with PSP-type vesting conditions as of the grant date. SIP shares that satisfied 
the first vesting condition for PSP-type grants or the established performance criteria are considered awarded shares. Awarded shares are 
included as issued and outstanding common stock shares and are included in the calculation of basic and diluted net income per share.

The Company uses a path-dependent lattice model to estimate the fair value of PSP grants on the grant date.

A summary of 2010 SIP and 2019 SIP activity for the years ended December 31, 2021, 2020 and 2019 is as follows:

international subsidiaries as such earnings are considered to be indefinitely reinvested.

NOTE 11. Employee Savings Plan

The Company has an Employee Savings Plan (401(k)) in which substantially all employees with more than 30 days of service are eligible 

to participate. Under this plan, the Company makes matching contributions of up to 4.0% of each participant’s annual compensation. The 

Company’s contribution expense to the plan totaled $35.6 million in 2021 and $31.2 million in 2020.

NOTE 12. Stock-Based Compensation

Performance Stock Plan

In 1996, the Company adopted and the shareholders approved a performance stock plan, under which until the suspension of the plan in 

2010, up to 28,800,000 Performance Stock Plan (“PSP”) shares could be granted to key employees contingent on the employees’ future 

years of service with the Company and other performance-based criteria established by the Compensation Committee of the Company’s 

board of directors. Before participants may take full title to Performance Stock, two vesting conditions must be met. Of the grants currently 

outstanding, specified portions satisfied the first condition for vesting based upon 20% incremental increases in the 20-trading-day average 

stock price of Brown & Brown’s common stock from the price on the last business day before date of grant. Performance Stock that has 

satisfied the first vesting condition is considered “awarded shares.” Awarded shares are included as issued and outstanding common stock 

shares and are included in the calculation of basic and diluted net income per share. Dividends are paid on awarded shares and participants 

may exercise voting privileges on such shares. Awarded shares satisfy the second condition for vesting on the earlier of a participant’s: (i) 15 

years of continuous employment with Brown & Brown from the date shares are granted to the participants (or, in the case of the July 2009 

grant to Powell Brown, 20 years), (ii) attainment of age 64 (on a prorated basis corresponding to the number of years since the date of grant), 

or (iii) death or disability. On April 28, 2010, the PSP was suspended and any remaining authorized, but unissued shares, as well as any 

shares forfeited in the future, were reserved for issuance under the 2010 Stock Incentive Plan (the “2010 SIP”).

At December 31, 2021, 10,192,982 shares had been granted, net of forfeitures, under the PSP. As of December 31, 2021, 839,842 shares 

had met the first condition of vesting and had been awarded, and 9,353,140 shares had satisfied both conditions of vesting and had been 

distributed to participants. Of the shares that have not vested as of December 31, 2021, the initial stock prices ranged from $8.30 to $10.31.

A summary of PSP activity for the years ended December 31, 2021, 2020 and 2019 is as follows:

Outstanding at January 1, 2019

$5.03

1,196,092

1,196,092

Outstanding at December 31, 2019

Outstanding at December 31, 2020

Granted

Awarded

Vested

Forfeited

Granted

Awarded

Vested

Forfeited

Granted

Awarded

Vested

Forfeited

62

Outstanding at December 31, 2021

$—

$—

$5.29

$4.74

$5.00

$—

$—

$6.06

$5.03

$4.86

$—

$—

$4.73

$5.50

$4.87

—

—

—

—

—

—

—

—

—

—

—

—

(115,040)

(115,040)

(29,760)

(29,760)

1,051,292

1,051,292

(119,072)

(119,072)

(22,392)

909,828

(22,392)

909,828

(45,736)

(24,250)

(45,736)

(24,250)

839,842

839,842

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

WEIGHTED-

AVERAGE GRANT

DATE FAIR VALUE

GRANTED

SHARES

AWARDED

SHARES

SHARES NOT

YET AWARDED

Outstanding at January 1, 2019

Granted

Awarded

Vested

Forfeited

Outstanding at December 31, 2019

Granted

Awarded

Vested

Forfeited

Outstanding at December 31, 2020

Granted

Awarded

Vested

Forfeited

WEIGHTED-
AVERAGE GRANT
DATE FAIR VALUE

$16.69

$28.53

$17.26

$14.29

$19.09

$18.10

$46.58

$19.71

$15.97

$20.75

$19.89

$46.05

$25.80

$15.73

$30.54

(3,059,619)

(3,059,619)

(356,041)

9,694,337

1,143,094

(119,637)

6,919,847

204,826

310,147

1,272,554

(3,223,964)

(3,223,964)

—

(236,404)

2,774,490

938,268(3)

(962,407)

—

(315,168)

(147,702)

(167,466)

GRANTED
SHARES

AWARDED
SHARES

SHARES NOT
YET AWARDED

11,102,375

6,595,319

4,507,056

1,812,047

797,778

1,014,269(1)

299,339

1,954,983

(1,655,644)

Outstanding at December 31, 2021

$21.59

7,608,446

5,025,561

2,582,885

(1,068,211)

(1,068,211)

(503,632)

(209,293)

11,641,918

8,070,576

—

(294,339)

3,571,342

822,982(2)

1,880,512

(1,383,430)

970,997

497,082

148,015

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(1)	 Of the 1,014,269 performance-based shares granted in 2019, the payout for 501,384 shares may be increased up to 200% of the target or decreased to zero, subject to the level of 

performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

(2)	 Of the 822,982 performance-based shares granted in 2020, the payout for 365,606 shares may be increased up to 200% of the target or decreased to zero, 20,611 shares may be 
increased up to 120% of the target or decreased to zero, 15,850 shares may be increased up to 150% of the target or decreased to zero and 56,226 shares may be increased up to 
150% or decreased to 50% of target subject to the level of performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

(3)	 Of the 938,268 performance-based shares granted in 2021, the payout for 486,679 shares may be increased up to 200% of the target or decreased to zero, 21,651 shares may 
be increased up to 120% of the target or decreased to zero and 3,886 shares may be increased up to 150% or decreased to 50% of target subject to the level of performance 
attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

The following table sets forth information as of December 31, 2021, 2020 and 2019, with respect to the number of time-based restricted 
shares granted and awarded, the number of performance-based restricted shares granted, and the number of performance-based 
restricted shares awarded under our Performance Stock Plan and 2010 and 2019 Stock Incentive Plans:

Summary of Unamortized Compensation Expense

As of December 31, 2021, the Company estimates there to be $135.1 million of unamortized compensation expense related to all non-

vested stock-based compensation arrangements granted under the Company’s stock-based compensation plans, based upon current 

projections of grant measurement against performance criteria. That expense is expected to be recognized over a weighted average 

period of 3.36 years.

NOTE 13. Supplemental Disclosures of Cash 

Flow Information and Non-Cash Financing and 

YEAR

2021

2020

2019

TIME-BASED RESTRICTED
STOCK GRANTED AND
AWARDED

PERFORMANCE-BASED
RESTRICTED
STOCK GRANTED

PERFORMANCE-BASED
RESTRICTED
STOCK AWARDED

Investing Activities

204,826

148,015

797,778

938,268(1)

822,982(2)

1,014,269(3)

1,272,554

1,880,512

1,954,983

Throughout 2020, the Company deferred $31.1 million in employer-only payroll tax payments as allowed under the Coronavirus Aid, Relief, 

and Economic Security Act (the “CARES” Act), which was signed into law on March 27, 2020. During 2021, there were no additional deferrals 

under the CARES Act. The Company paid the first installment of $15.6 million in December 2021. The remaining balance of approximately 

$15.6 million of deferred employer payroll tax payments related to the CARES Act is expected to be paid in December 2022.

(1)	 Of the 938,268 performance-based shares granted in 2021, the payout for 486,679 shares may be increased up to 200% of the target or decreased to zero, 21,651 shares may 
be increased up to 120% of the target or decreased to zero and 3,886 shares may be increased up to 150% or decreased to 50% of target subject to the level of performance 
attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

(2)	 Of the 822,982 performance-based shares granted in 2020, the payout for 365,606 shares may be increased up to 200% of the target or decreased to zero, 20,611 shares may be 
increased up to 120% of the target or decreased to zero, 15,850 shares may be increased up to 150% of the target or decreased to zero and 56,226 shares may be increased up to 
150% or decreased to 50% of target subject to the level of performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

During the second quarter of 2021, the Company received an $8.1 million reimbursement for capitalizable costs of public infrastructure 

improvements related to the construction of the Company’s headquarters in accordance with an economic development grant 

agreement between the Company and the City of Daytona Beach and Volusia County. The reimbursement has been reflected as a 

reduction to the additions to fixed asset line item on the Consolidated Statements of Cash Flows for the year ended December 31, 2021.

(3)	 Of the 1,014,269 performance-based shares granted in 2019, the payout for 501,384 shares may be increased up to 200% of the target or decreased to zero, subject to the level of 

The Company’s cash paid during the period for interest and income taxes are summarized as follows:

performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

At December 31, 2021, 7,569,607 shares were available for future grants under the 2019 SIP. This amount is calculated assuming the 
maximum payout for all grants.

Employee Stock Purchase Plan

The Company has a shareholder-approved Employee Stock Purchase Plan (“ESPP”) with a total of 34,000,000 authorized shares of 
which 4,527,511 were available for future subscriptions as of December 31, 2021. Employees of the Company who regularly work 20 
hours or more per week are generally eligible to participate in the ESPP. Participants, through payroll deductions, may allot up to 10% 
of their compensation towards the purchase of a maximum of $25,000 worth of Company stock between August 1st of each year and 
the following July 31st (the “Subscription Period”) at a cost of 85% of the lower of the stock price as of the beginning or end of the 
Subscription Period.

The Company estimates the fair value of an ESPP share option as of the beginning of the Subscription Period as the sum of: (i) 15% of the 
quoted market price of the Company’s stock on the day prior to the beginning of the Subscription Period, and (ii) 85% of the value of a 
one-year stock option on the Company stock using the Black-Scholes option-pricing model. The estimated fair value of an ESPP share 
option as of the Subscription Period beginning in August 2021 was $11.60. The fair values of an ESPP share option as of the Subscription 
Periods beginning in August 2020 and 2019, were $12.43 and $7.46, respectively.

For the ESPP plan years ended July 31, 2021, 2020 and 2019, the Company issued 850,956, 962,131 and 976,303 shares of common 
stock, respectively. These shares were issued at an aggregate purchase price of $32.9 million, or $38.70 per share, in 2021, $29.3 
million, or $30.51 per share, in 2020 and $24.0 million, or $24.63 per share, in 2019.

For the five months ended December 31, 2021, 2020 and 2019 (portions of the 2021-2022, 2020-2021 and 2019-2020 plan years), 
354,911, 381,371 and 419,446 shares of common stock (from authorized but unissued shares), respectively, were subscribed to by ESPP 
participants for proceeds of approximately $16.4 million, $14.8 million and $12.8 million, respectively.

Summary of Non-Cash Stock-Based Compensation Expense

The non-cash stock-based compensation expense for the years ended December 31 is as follows:

(IN THOUSANDS)

Stock incentive plan

Employee stock purchase plan

Performance stock plan

Total

64

2021

2020

2019

$50,664

$50,198

$39,626

9,953

401

8,789

762

6,504

864

$61,018

$59,749

$46,994

(IN THOUSANDS)

Cash paid during the period for:

Interest

Income taxes, net of refunds

The Company’s significant non-cash investing and financing activities are summarized as follows:

(IN THOUSANDS)

Other payables issued for agency acquisitions and purchased customer accounts

Estimated acquisition earn-out payables and related charges

Contingent payable issued for agency acquisition

Common stock issued for agency acquisition

Notes payable assumed for agency acquisition

Notes received on the sale of fixed assets and customer accounts

Our Restricted Cash balance is composed of funds held in separate premium trust accounts as required by state law or, in some cases, 

per agreement with our carrier partners. The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of 

December 31, 2021, 2020 and 2019.

Table to reconcile cash and cash equivalents inclusive of restricted cash

(IN THOUSANDS)

Cash and cash equivalents

Restricted cash

Total cash and cash equivalents inclusive of restricted cash at the end of the period

$1,470,256

$1,271,915

$962,975

YEAR ENDED DECEMBER 31,

2021

2020

2019

$61,531

$52,378

$58,290

$146,932

$131,596

$109,766

YEAR ENDED DECEMBER 31,

2021

$15,072

$75,761

$24,114

$9,892

$1,355

$—

2020

$9,130

$131,397

$—

$—

$—

$—

2019

$12,135

$82,872

$—

$—

$—

$9,903

BALANCE AS OF DECEMBER 31,

2021

2020

2019

$887,009

$817,398

$542,174

583,247

454,517

420,801

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(1)	 Of the 1,014,269 performance-based shares granted in 2019, the payout for 501,384 shares may be increased up to 200% of the target or decreased to zero, subject to the level of 

performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

(2)	 Of the 822,982 performance-based shares granted in 2020, the payout for 365,606 shares may be increased up to 200% of the target or decreased to zero, 20,611 shares may be 

increased up to 120% of the target or decreased to zero, 15,850 shares may be increased up to 150% of the target or decreased to zero and 56,226 shares may be increased up to 

150% or decreased to 50% of target subject to the level of performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

(3)	 Of the 938,268 performance-based shares granted in 2021, the payout for 486,679 shares may be increased up to 200% of the target or decreased to zero, 21,651 shares may 

be increased up to 120% of the target or decreased to zero and 3,886 shares may be increased up to 150% or decreased to 50% of target subject to the level of performance 

attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

The following table sets forth information as of December 31, 2021, 2020 and 2019, with respect to the number of time-based restricted 

shares granted and awarded, the number of performance-based restricted shares granted, and the number of performance-based 

restricted shares awarded under our Performance Stock Plan and 2010 and 2019 Stock Incentive Plans:

YEAR

2021

2020

2019

TIME-BASED RESTRICTED

PERFORMANCE-BASED

PERFORMANCE-BASED

STOCK GRANTED AND

RESTRICTED

STOCK GRANTED

RESTRICTED

STOCK AWARDED

AWARDED

204,826

148,015

797,778

At December 31, 2021, 7,569,607 shares were available for future grants under the 2019 SIP. This amount is calculated assuming the 

maximum payout for all grants.

Employee Stock Purchase Plan

The Company has a shareholder-approved Employee Stock Purchase Plan (“ESPP”) with a total of 34,000,000 authorized shares of 

which 4,527,511 were available for future subscriptions as of December 31, 2021. Employees of the Company who regularly work 20 

hours or more per week are generally eligible to participate in the ESPP. Participants, through payroll deductions, may allot up to 10% 

of their compensation towards the purchase of a maximum of $25,000 worth of Company stock between August 1st of each year and 

the following July 31st (the “Subscription Period”) at a cost of 85% of the lower of the stock price as of the beginning or end of the 

Subscription Period.

The Company estimates the fair value of an ESPP share option as of the beginning of the Subscription Period as the sum of: (i) 15% of the 

quoted market price of the Company’s stock on the day prior to the beginning of the Subscription Period, and (ii) 85% of the value of a 

Summary of Unamortized Compensation Expense

As of December 31, 2021, the Company estimates there to be $135.1 million of unamortized compensation expense related to all non-
vested stock-based compensation arrangements granted under the Company’s stock-based compensation plans, based upon current 
projections of grant measurement against performance criteria. That expense is expected to be recognized over a weighted average 
period of 3.36 years.

NOTE 13. Supplemental Disclosures of Cash 
Flow Information and Non-Cash Financing and 
Investing Activities

938,268(1)

822,982(2)

1,014,269(3)

1,272,554

1,880,512

1,954,983

Throughout 2020, the Company deferred $31.1 million in employer-only payroll tax payments as allowed under the Coronavirus Aid, Relief, 
and Economic Security Act (the “CARES” Act), which was signed into law on March 27, 2020. During 2021, there were no additional deferrals 
under the CARES Act. The Company paid the first installment of $15.6 million in December 2021. The remaining balance of approximately 
$15.6 million of deferred employer payroll tax payments related to the CARES Act is expected to be paid in December 2022.

(1)	 Of the 938,268 performance-based shares granted in 2021, the payout for 486,679 shares may be increased up to 200% of the target or decreased to zero, 21,651 shares may 

be increased up to 120% of the target or decreased to zero and 3,886 shares may be increased up to 150% or decreased to 50% of target subject to the level of performance 

attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

(2)	 Of the 822,982 performance-based shares granted in 2020, the payout for 365,606 shares may be increased up to 200% of the target or decreased to zero, 20,611 shares may be 

increased up to 120% of the target or decreased to zero, 15,850 shares may be increased up to 150% of the target or decreased to zero and 56,226 shares may be increased up to 

150% or decreased to 50% of target subject to the level of performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

During the second quarter of 2021, the Company received an $8.1 million reimbursement for capitalizable costs of public infrastructure 
improvements related to the construction of the Company’s headquarters in accordance with an economic development grant 
agreement between the Company and the City of Daytona Beach and Volusia County. The reimbursement has been reflected as a 
reduction to the additions to fixed asset line item on the Consolidated Statements of Cash Flows for the year ended December 31, 2021.

(3)	 Of the 1,014,269 performance-based shares granted in 2019, the payout for 501,384 shares may be increased up to 200% of the target or decreased to zero, subject to the level of 

The Company’s cash paid during the period for interest and income taxes are summarized as follows:

performance attained. The amount reflected in the table includes all time-based share grants at a target payout of 100%.

(IN THOUSANDS)

Cash paid during the period for:

Interest

Income taxes, net of refunds

YEAR ENDED DECEMBER 31,

2021

2020

2019

$61,531

$52,378

$58,290

$146,932

$131,596

$109,766

one-year stock option on the Company stock using the Black-Scholes option-pricing model. The estimated fair value of an ESPP share 

Common stock issued for agency acquisition

option as of the Subscription Period beginning in August 2021 was $11.60. The fair values of an ESPP share option as of the Subscription 

Periods beginning in August 2020 and 2019, were $12.43 and $7.46, respectively.

Notes payable assumed for agency acquisition

Notes received on the sale of fixed assets and customer accounts

The Company’s significant non-cash investing and financing activities are summarized as follows:

(IN THOUSANDS)

Other payables issued for agency acquisitions and purchased customer accounts

Estimated acquisition earn-out payables and related charges

Contingent payable issued for agency acquisition

YEAR ENDED DECEMBER 31,

2021

$15,072

$75,761

$24,114

$9,892

$1,355

$—

2020

$9,130

$131,397

$—

$—

$—

$—

2019

$12,135

$82,872

$—

$—

$—

$9,903

For the ESPP plan years ended July 31, 2021, 2020 and 2019, the Company issued 850,956, 962,131 and 976,303 shares of common 

stock, respectively. These shares were issued at an aggregate purchase price of $32.9 million, or $38.70 per share, in 2021, $29.3 

million, or $30.51 per share, in 2020 and $24.0 million, or $24.63 per share, in 2019.

For the five months ended December 31, 2021, 2020 and 2019 (portions of the 2021-2022, 2020-2021 and 2019-2020 plan years), 

354,911, 381,371 and 419,446 shares of common stock (from authorized but unissued shares), respectively, were subscribed to by ESPP 

participants for proceeds of approximately $16.4 million, $14.8 million and $12.8 million, respectively.

Summary of Non-Cash Stock-Based Compensation Expense

The non-cash stock-based compensation expense for the years ended December 31 is as follows:

Our Restricted Cash balance is composed of funds held in separate premium trust accounts as required by state law or, in some cases, 
per agreement with our carrier partners. The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of 
December 31, 2021, 2020 and 2019.

(IN THOUSANDS)

Table to reconcile cash and cash equivalents inclusive of restricted cash

Cash and cash equivalents

Restricted cash

BALANCE AS OF DECEMBER 31,

2021

2020

2019

$887,009

$817,398

$542,174

583,247

454,517

420,801

Total cash and cash equivalents inclusive of restricted cash at the end of the period

$1,470,256

$1,271,915

$962,975

(IN THOUSANDS)

Stock incentive plan

Employee stock purchase plan

Performance stock plan

64

Total

2021

2020

2019

$50,664

$50,198

$39,626

9,953

401

8,789

762

6,504

864

$61,018

$59,749

$46,994

T
R
O
P
E
R

L
A
U
N
N
A

1
2
0
2

65

 
 
NOTE 14. Commitments and Contingencies

As of December 31, 2021, the Company has entered into future lease agreements expected to commence in 2022 consisting of 

undiscounted lease liabilities of $18.8 million.

Legal Proceedings

The Company records losses for claims in excess of the limits of, or outside the coverage of, applicable insurance at the time and to the 
extent they are probable and estimable. In accordance with ASC Topic 450-Contingencies, the Company accrues anticipated costs of 
settlement, damages, losses for liability claims and, under certain conditions, costs of defense, based upon historical experience or to the 
extent specific losses are probable and estimable. Otherwise, the Company expenses these costs as incurred. If the best estimate of a 
probable loss is a range rather than a specific amount, the Company accrues the amount at the lower end of the range.

The Company’s accruals for legal matters that were probable and estimable were not material at December 31, 2021 and 2020. We 
continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of 
such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could adversely impact the 
Company’s operating results, cash flows and overall liquidity. The Company maintains third-party insurance policies to provide coverage 
for certain legal claims, in an effort to mitigate its overall exposure to unanticipated claims or adverse decisions. However, as (i) one 
or more of the Company’s insurance carriers 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. Based upon the AM 
Best Company ratings of these third-party insurers, management does not believe there is a substantial risk of an insurer’s material non-
performance related to any current insured claims.

On the basis of current information, the availability of insurance and legal advice, in management’s opinion, the Company is not currently 
involved in any legal proceedings which, individually or in the aggregate, would have a material adverse effect on its financial condition, 
operations and/or cash flows.

NOTE 15. Leases

Substantially all of the Company’s leases are classified as operating leases and primarily represent real estate leases for office space 
used to conduct the Company’s business that expire on various dates through 2041. Leases generally contain renewal options and 
escalation clauses based upon increases in the lessors’ operating expenses and other charges. The Company anticipates that most of 
these leases will be renewed or replaced upon expiration.

The Company assesses at inception of a contract if it contains a lease. This assessment is based on: (i) whether the contract involves the 
use of a distinct identified asset, (ii) whether the Company obtains the right to substantially all the economic benefit from the use of the 
asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset.

The right-of-use asset is initially measured at cost, which is primarily composed of the initial lease liability, plus any initial direct costs 
incurred, less any lease incentives received. The lease liability is initially measured at the present value of the minimum lease payments 
through the term of the lease. Minimum lease payments are discounted to present value using the incremental borrowing rate at the 
lease commencement date, which approximates the rate of interest the Company expects to be paid on a secured borrowing in an 
amount equal to the lease payments for the underlying asset under similar terms and economic conditions. The Company elected not to 
recognize right-of-use assets and lease liabilities for short-term leases that have a total term of 12 months or less. The effect of short-
term leases on the Company’s right-of-use asset and lease liability would not be significant. The balances and classification of operating 
lease right-of-use assets and operating lease liabilities within the Consolidated Balance Sheets as of December 31, 2021 and 2020 is 
as follows:

(IN THOUSANDS)

BALANCE SHEET

Assets:

Operating lease right-of-use assets

Total assets

Liabilities:

Operating lease assets

Current operating lease liabilities

Accrued expenses and other liabilities

Non-current operating lease liabilities

Operating lease liabilities

Total liabilities

66

DECEMBER 31, 
2021

DECEMBER 31, 
2020

$197,035

197,035

43,441

179,976

$223,417

$186,998

186,998

43,542

172,935

$216,477

Variable lease cost represents lease payments that are based on an index or similar rate. They are initially measured using the index or 

rate in effect at lease commencement and are based on the minimum payments stated in the lease. Additional payments based on the 

change in an index or rate, or payments based on a change in the Company’s portion of the operating expenses, including real estate 

taxes and insurance, are recorded as a period expense when incurred.

Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is 

recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period 

that were not included in the initial lease liability.

The components of lease cost for operating leases for the 12 months ended December 31, 2021 and 2020 were:

FOR THE YEAR ENDED 

FOR THE YEAR ENDED  

DECEMBER 31, 2021

DECEMBER 31, 2020

The weighted average remaining lease term and the weighted average discount rate for operating leases as of December 31, 2021 were:

Maturities of the operating lease liabilities by fiscal year at December 31, 2021 for the Company’s operating leases are as follows:

(IN THOUSANDS)

Operating leases:

Lease cost

Variable lease cost

Short term lease cost

Operating lease cost

Sublease income

Total lease cost net

Weighted-average remaining lease term

Weighted-average discount rate

(IN THOUSANDS)

2022

2023

2024

2025

2026

Thereafter

Total undiscounted lease payments

Less: Imputed interest

Present value of future lease payments

Supplemental cash flow information for operating leases:

(IN THOUSANDS)

Cash paid for amounts included in measurement of liabilities

Operating cash flows from operating leases

Right-of-use assets obtained in exchange for new operating liabilities

$52,751

4,316

1,165

58,232

(1,661)

$56,571

T

R

O

P

E

R

L

A

U

N

N

A

1

2

0

2

OPERATING LEASES

$53,821

3,739

468

58,028

(1,798)

$56,230

6.47

2.72

$48,743

44,794

37,996

31,587

22,511

56,416

242,047

18,630

$223,417

FOR THE YEAR ENDED 

FOR THE YEAR ENDED  

DECEMBER 31, 2021

DECEMBER 31, 2020

$56,034

$53,978

$54,946

$45,750

NOTE 16. Segment Information

Brown & Brown’s business is divided into four reportable segments: (i) the Retail segment, which provides a broad range of insurance 

products and services to commercial, public and quasi-public entities, and to professional and individual customers, and non-insurance 

risk-mitigating products through our F&I businesses, (ii) the National Programs segment, which acts as an MGA, provides professional 

liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and 

targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are 

67

 
 
NOTE 14. Commitments and Contingencies

As of December 31, 2021, the Company has entered into future lease agreements expected to commence in 2022 consisting of 
undiscounted lease liabilities of $18.8 million.

Variable lease cost represents lease payments that are based on an index or similar rate. They are initially measured using the index or 
rate in effect at lease commencement and are based on the minimum payments stated in the lease. Additional payments based on the 
change in an index or rate, or payments based on a change in the Company’s portion of the operating expenses, including real estate 
taxes and insurance, are recorded as a period expense when incurred.

Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is 
recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period 
that were not included in the initial lease liability.

The components of lease cost for operating leases for the 12 months ended December 31, 2021 and 2020 were:

(IN THOUSANDS)

Operating leases:

Lease cost

Variable lease cost

Short term lease cost

Operating lease cost

Sublease income

Total lease cost net

FOR THE YEAR ENDED 
DECEMBER 31, 2021

FOR THE YEAR ENDED  
DECEMBER 31, 2020

$52,751

4,316

1,165

58,232

(1,661)

$56,571

$53,821

3,739

468

58,028

(1,798)

$56,230

The weighted average remaining lease term and the weighted average discount rate for operating leases as of December 31, 2021 were:

Weighted-average remaining lease term

Weighted-average discount rate

6.47

2.72

Substantially all of the Company’s leases are classified as operating leases and primarily represent real estate leases for office space 

used to conduct the Company’s business that expire on various dates through 2041. Leases generally contain renewal options and 

Maturities of the operating lease liabilities by fiscal year at December 31, 2021 for the Company’s operating leases are as follows:

escalation clauses based upon increases in the lessors’ operating expenses and other charges. The Company anticipates that most of 

(IN THOUSANDS)

OPERATING LEASES

incurred, less any lease incentives received. The lease liability is initially measured at the present value of the minimum lease payments 

Thereafter

2022

2023

2024

2025

2026

Total undiscounted lease payments

Less: Imputed interest

Present value of future lease payments

Supplemental cash flow information for operating leases:

(IN THOUSANDS)

Cash paid for amounts included in measurement of liabilities

Operating cash flows from operating leases

Right-of-use assets obtained in exchange for new operating liabilities

$48,743

44,794

37,996

31,587

22,511

56,416

242,047

18,630

$223,417

FOR THE YEAR ENDED 
DECEMBER 31, 2021

FOR THE YEAR ENDED  
DECEMBER 31, 2020

$56,034
$53,978

$54,946
$45,750

T
R
O
P
E
R

L
A
U
N
N
A

1
2
0
2

NOTE 16. Segment Information

Brown & Brown’s business is divided into four reportable segments: (i) the Retail segment, which provides a broad range of insurance 
products and services to commercial, public and quasi-public entities, and to professional and individual customers, and non-insurance 
risk-mitigating products through our F&I businesses, (ii) the National Programs segment, which acts as an MGA, provides professional 
liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and 
targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are 

67

Legal Proceedings

The Company records losses for claims in excess of the limits of, or outside the coverage of, applicable insurance at the time and to the 

extent they are probable and estimable. In accordance with ASC Topic 450-Contingencies, the Company accrues anticipated costs of 

settlement, damages, losses for liability claims and, under certain conditions, costs of defense, based upon historical experience or to the 

extent specific losses are probable and estimable. Otherwise, the Company expenses these costs as incurred. If the best estimate of a 

probable loss is a range rather than a specific amount, the Company accrues the amount at the lower end of the range.

The Company’s accruals for legal matters that were probable and estimable were not material at December 31, 2021 and 2020. We 

continue to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of 

such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could adversely impact the 

Company’s operating results, cash flows and overall liquidity. The Company maintains third-party insurance policies to provide coverage 

for certain legal claims, in an effort to mitigate its overall exposure to unanticipated claims or adverse decisions. However, as (i) one 

or more of the Company’s insurance carriers 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. Based upon the AM 

Best Company ratings of these third-party insurers, management does not believe there is a substantial risk of an insurer’s material non-

performance related to any current insured claims.

On the basis of current information, the availability of insurance and legal advice, in management’s opinion, the Company is not currently 

involved in any legal proceedings which, individually or in the aggregate, would have a material adverse effect on its financial condition, 

operations and/or cash flows.

NOTE 15. Leases

these leases will be renewed or replaced upon expiration.

The Company assesses at inception of a contract if it contains a lease. This assessment is based on: (i) whether the contract involves the 

use of a distinct identified asset, (ii) whether the Company obtains the right to substantially all the economic benefit from the use of the 

asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset.

The right-of-use asset is initially measured at cost, which is primarily composed of the initial lease liability, plus any initial direct costs 

through the term of the lease. Minimum lease payments are discounted to present value using the incremental borrowing rate at the 

lease commencement date, which approximates the rate of interest the Company expects to be paid on a secured borrowing in an 

amount equal to the lease payments for the underlying asset under similar terms and economic conditions. The Company elected not to 

recognize right-of-use assets and lease liabilities for short-term leases that have a total term of 12 months or less. The effect of short-

term leases on the Company’s right-of-use asset and lease liability would not be significant. The balances and classification of operating 

lease right-of-use assets and operating lease liabilities within the Consolidated Balance Sheets as of December 31, 2021 and 2020 is 

as follows:

(IN THOUSANDS)

BALANCE SHEET

Assets:

Total assets

Liabilities:

Total liabilities

66

Operating lease right-of-use assets

Operating lease assets

Current operating lease liabilities

Accrued expenses and other liabilities

Non-current operating lease liabilities

Operating lease liabilities

DECEMBER 31, 

DECEMBER 31, 

2021

2020

$197,035

197,035

43,441

179,976

$223,417

$186,998

186,998

43,542

172,935

$216,477

 
 
delivered through nationwide networks of independent agents, and Brown & Brown retail agents, (iii) the Wholesale Brokerage segment, 
which markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, 
as well as Brown & Brown retail agents, and (iv) the Services segment, which provides insurance-related services, including third-party 
claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines 
liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims 
adjusting services.

Brown & Brown conducts all of its operations within the United States of America, except for a wholesale brokerage operation based in 
London, England, retail operations in Ireland, Bermuda and the Cayman Islands, and a national programs operation in Canada. These 
operations earned $78.0 million, $35.1 million and $17.7 million of total revenues for the years ended December 31, 2021, 2020 and 2019, 
respectively. Long-lived assets held outside of the United States during each of these three years were not material.

The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance 
of its segments based upon revenues and income before income taxes. Intersegment revenues are eliminated.

Summarized financial information concerning the Company’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 intercompany 
interest expense charge to the reporting segment.

Income before income taxes

$334,377

$242,334

Total assets

Capital expenditures

$5,040,706

$2,943,006

$1,154,373

$299,185

$358,173

$9,795,443

$8,093

$13,467

$1,612

$1,609

$20,264

$45,045

(IN THOUSANDS)

Total revenues

Investment income

Amortization

Depreciation

Interest expense

(IN THOUSANDS)

Total revenues

Investment income

Amortization

Depreciation

Interest expense

(IN THOUSANDS)

Total revenues

Investment income

Amortization

Depreciation

Interest expense

YEAR ENDED DECEMBER 31, 2021

RETAIL

NATIONAL
PROGRAMS

WHOLESALE
BROKERAGE

SERVICES

OTHER

TOTAL

$1,767,938

$701,850

$403,417

$178,860

$(667)

$3,051,398

$278

$77,810

$11,194

$91,425

$550

$27,357

$9,839

$11,381

$155

$9,150

$2,646

$15,990

$94,845

$3

$5,276

$1,484

$2,899

$28,257

$113

$—

$8,146

$(56,714)

$63,010

$1,099

$119,593

$33,309

$64,981

$762,823

YEAR ENDED DECEMBER 31, 2020

RETAIL

NATIONAL
PROGRAMS

WHOLESALE
BROKERAGE

SERVICES

$1,472,766

$610,640

$352,797

$174,012

$163

$67,315

$9,071

$85,968

$756

$27,166

$8,658

$20,597

$184

$8,481

$1,948

$10,281

$93,593

$—

$5,561

$1,424

$4,142

$27,994

OTHER

$3,160

$1,708

TOTAL

$2,613,375

$2,811

$—

$108,523

$5,175

$(62,015)

$57,375

$26,276

$58,973

$624,099

YEAR ENDED DECEMBER 31, 2019

RETAIL

NATIONAL
PROGRAMS

WHOLESALE
BROKERAGE

SERVICES

OTHER

TOTAL

$1,367,261

$518,384

$310,087

$193,781

$2,658

$2,392,171

$149

$63,146

$7,390

$87,295

$1,397

$25,482

$6,791

$16,690

$178

$11,191

$1,674

$4,756

$139

$5,479

$1,229

$4,404

$3,917

$5,780

$—

$105,298

$6,333

$(49,485)

$36,241

$23,417

$63,660

$525,929

Income before income taxes

$262,245

$182,892

Total assets

Capital expenditures

$7,093,627

$3,510,983

$1,791,717

$480,440

$(3,910,275)

$8,966,492

$13,175

$7,208

$3,324

$1,424

$45,569

$70,700

Income before income taxes

$222,875

$143,737

$82,739

$40,337

Total assets

Capital expenditures

$6,413,459

$3,110,368

$1,390,250

$481,336

$(3,772,592)

$7,622,821

$12,497

$10,365

$6,171

$804

$43,271

$73,108

68

Historically, the total assets balance in the “Other” column has been negative, reflecting the historical accumulation of the purchase price 

for acquisitions which are funded at the corporate level, net of a portion returned to Corporate through intercompany interest charges, 

as well as the historical accumulation of payments for income taxes, dividends, and share repurchases which are paid by Corporate, but 

not pushed down to the segments. As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by 

Corporate that gave rise to the related intercompany receivables and payables to better reflect the total assets of each segment.

NOTE 17. Insurance Company WNFIC

Although the reinsurers are liable to the Company for amounts reinsured, our subsidiary, WNFIC remains primarily liable to its 

policyholders for the full amount of the policies written whether or not the reinsurers meet their obligations to the Company when they 

become due. The effects of reinsurance on premiums written and earned at December 31 are as follows:

(IN THOUSANDS)

Direct premiums

Assumed premiums

Ceded premiums

Net premiums

2021

2020

WRITTEN

EARNED

WRITTEN

EARNED

$747,384

$732,777

$728,109

$716,515

—

—

—

—

747,366

732,759

728,093

716,499

$18

$18

$16

$16

All premiums written by WNFIC under the National Flood Insurance Program are 100.0% ceded to FEMA, for which WNFIC received 

a 30.0% expense allowance from January 1, 2021 through September 30, 2021 and a 29.9% expense allowance from October 1, 2021 

through December 31, 2021. As of December 31, 2021 and 2020, the Company ceded $745.0 million and $725.8 million of written 

premiums for Federal Flood, respectively.

As of December 31, 2021, the Consolidated Balance Sheets contained Reinsurance recoverable of $63.1 million and Prepaid reinsurance 

premiums of $392.2 million. As of December 31, 2020, the Consolidated Balance Sheets contained reinsurance recoverable of $43.5 

million and prepaid reinsurance premiums of $377.6 million. There was no net activity in the reserve for losses and loss adjustment 

expense for the years ended December 31, 2021 and 2020, as WNFIC’s direct premiums written were 100.0% ceded to two reinsurers. 

The balance of the reserve for losses and loss adjustment expense, excluding related reinsurance recoverables was $63.1 million as of 

December 31, 2021 and $43.5 million as of December 31, 2020.

WNFIC maintains capital in excess of minimum statutory amount of $7.5 million as required by regulatory authorities. The statutory 

capital and surplus of WNFIC was $33.1 million as of December 31, 2021 and $32.6 million as of December 31, 2020. As of December 31, 

2021 and 2020, WNFIC generated statutory net income of $1.6 million and $0.8 million, respectively. The maximum amount of ordinary 

dividends that WNFIC can pay to shareholders in a rolling 12 month period is limited to the greater of 10.0% of statutory adjusted capital 

and surplus of 100.0% of adjusted net income. There was no dividend payout in 2020 and 2021 and the maximum dividend payout that 

may be made in 2022 without prior approval is $3.3 million.

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NOTE 18. Shareholders’ Equity

Under the authorization from the Company’s board of directors, shares may be purchased 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 purchases may be carried out through open market purchases, block trades, 

accelerated share repurchase plans of up to $100.0 million each (unless otherwise approved by the board of directors), negotiated 

private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 

1934. On May 1, 2019, the Company’s board of directors authorized the purchasing of up to an additional $372.5 million of the Company’s 

outstanding common stock.

During 2021, the Company repurchased 1,811,853 shares at an average price of $45.57 for a total cost of $82.6 million under the current 

share repurchase authorization. During 2020, the Company repurchased 1,234,417 shares at an average price of $44.63 for a total cost 

of $55.1 million under the current share repurchase authorization. At December 31, 2021, the remaining amount authorized by our board 

of directors for share repurchases was approximately $323.6 million. Under the authorized repurchase programs, the Company has 

repurchased approximately 18.5 million shares for an aggregate cost of approximately $673.9 million between 2014 and 2021.

During 2021, the Company paid an annualized dividend of $0.380 per share for a total of $107.2 million in annualized dividends paid. 

During 2020, the Company paid an annualized dividend of $0.348 per share for a total $100.6 million in annualized dividends paid. On 

January 20, 2022 the board of directors approved a dividend of $0.1025 per share payable on February 16, 2022 to shareholders of 

record on February 4, 2022.

During 2021, the Company issued 184,772 shares valued at $9.9 million associated with business combinations. During 2020, the 

69

Company issued 722,939 shares valued at $30.1 million associated with business combinations.

 
 
delivered through nationwide networks of independent agents, and Brown & Brown retail agents, (iii) the Wholesale Brokerage segment, 

which markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, 

as well as Brown & Brown retail agents, and (iv) the Services segment, which provides insurance-related services, including third-party 

claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines 

liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims 

Historically, the total assets balance in the “Other” column has been negative, reflecting the historical accumulation of the purchase price 
for acquisitions which are funded at the corporate level, net of a portion returned to Corporate through intercompany interest charges, 
as well as the historical accumulation of payments for income taxes, dividends, and share repurchases which are paid by Corporate, but 
not pushed down to the segments. As of December 31, 2021, the Company settled the historical accumulation of the cash outlays paid by 
Corporate that gave rise to the related intercompany receivables and payables to better reflect the total assets of each segment.

adjusting services.

Brown & Brown conducts all of its operations within the United States of America, except for a wholesale brokerage operation based in 

London, England, retail operations in Ireland, Bermuda and the Cayman Islands, and a national programs operation in Canada. These 

operations earned $78.0 million, $35.1 million and $17.7 million of total revenues for the years ended December 31, 2021, 2020 and 2019, 

respectively. Long-lived assets held outside of the United States during each of these three years were not material.

The accounting policies of the reportable segments are the same as those described in Note 1. The Company evaluates the performance 

of its segments based upon revenues and income before income taxes. Intersegment revenues are eliminated.

Summarized financial information concerning the Company’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 intercompany 

interest expense charge to the reporting segment.

Income before income taxes

$334,377

$242,334

Income before income taxes

$262,245

$182,892

YEAR ENDED DECEMBER 31, 2021

RETAIL

NATIONAL

PROGRAMS

WHOLESALE

BROKERAGE

SERVICES

OTHER

TOTAL

$1,767,938

$701,850

$403,417

$178,860

$(667)

$3,051,398

$278

$77,810

$11,194

$91,425

$550

$27,357

$9,839

$11,381

$155

$9,150

$2,646

$15,990

$94,845

$3

$5,276

$1,484

$2,899

$28,257

$113

$—

$8,146

$(56,714)

$63,010

$1,099

$119,593

$33,309

$64,981

$762,823

$5,040,706

$2,943,006

$1,154,373

$299,185

$358,173

$9,795,443

$8,093

$13,467

$1,612

$1,609

$20,264

$45,045

YEAR ENDED DECEMBER 31, 2020

RETAIL

NATIONAL

PROGRAMS

WHOLESALE

BROKERAGE

SERVICES

$1,472,766

$610,640

$352,797

$174,012

$163

$67,315

$9,071

$85,968

$756

$27,166

$8,658

$20,597

$184

$8,481

$1,948

$10,281

$93,593

$—

$5,561

$1,424

$4,142

$27,994

OTHER

$3,160

$1,708

TOTAL

$2,613,375

$2,811

$—

$108,523

$5,175

$(62,015)

$57,375

$26,276

$58,973

$624,099

$7,093,627

$3,510,983

$1,791,717

$480,440

$(3,910,275)

$8,966,492

$13,175

$7,208

$3,324

$1,424

$45,569

$70,700

YEAR ENDED DECEMBER 31, 2019

RETAIL

NATIONAL

PROGRAMS

WHOLESALE

BROKERAGE

SERVICES

OTHER

TOTAL

$1,367,261

$518,384

$310,087

$193,781

$2,658

$2,392,171

$149

$63,146

$7,390

$87,295

$1,397

$25,482

$6,791

$16,690

$178

$11,191

$1,674

$4,756

$139

$5,479

$1,229

$4,404

$3,917

$5,780

$—

$105,298

$6,333

$(49,485)

$36,241

$23,417

$63,660

$525,929

$6,413,459

$3,110,368

$1,390,250

$481,336

$(3,772,592)

$7,622,821

$12,497

$10,365

$6,171

$804

$43,271

$73,108

(IN THOUSANDS)

Total revenues

Investment income

Amortization

Depreciation

Interest expense

Total assets

Capital expenditures

(IN THOUSANDS)

Total revenues

Investment income

Amortization

Depreciation

Interest expense

Total assets

Capital expenditures

(IN THOUSANDS)

Total revenues

Investment income

Amortization

Depreciation

Interest expense

Total assets

Capital expenditures

68

Income before income taxes

$222,875

$143,737

$82,739

$40,337

NOTE 17. Insurance Company WNFIC

Although the reinsurers are liable to the Company for amounts reinsured, our subsidiary, WNFIC remains primarily liable to its 
policyholders for the full amount of the policies written whether or not the reinsurers meet their obligations to the Company when they 
become due. The effects of reinsurance on premiums written and earned at December 31 are as follows:

(IN THOUSANDS)

Direct premiums

Assumed premiums

Ceded premiums

Net premiums

2021

2020

WRITTEN

EARNED

WRITTEN

EARNED

$747,384

$732,777

$728,109

$716,515

—

—

—

—

747,366

732,759

728,093

716,499

$18

$18

$16

$16

All premiums written by WNFIC under the National Flood Insurance Program are 100.0% ceded to FEMA, for which WNFIC received 
a 30.0% expense allowance from January 1, 2021 through September 30, 2021 and a 29.9% expense allowance from October 1, 2021 
through December 31, 2021. As of December 31, 2021 and 2020, the Company ceded $745.0 million and $725.8 million of written 
premiums for Federal Flood, respectively.

As of December 31, 2021, the Consolidated Balance Sheets contained Reinsurance recoverable of $63.1 million and Prepaid reinsurance 
premiums of $392.2 million. As of December 31, 2020, the Consolidated Balance Sheets contained reinsurance recoverable of $43.5 
million and prepaid reinsurance premiums of $377.6 million. There was no net activity in the reserve for losses and loss adjustment 
expense for the years ended December 31, 2021 and 2020, as WNFIC’s direct premiums written were 100.0% ceded to two reinsurers. 
The balance of the reserve for losses and loss adjustment expense, excluding related reinsurance recoverables was $63.1 million as of 
December 31, 2021 and $43.5 million as of December 31, 2020.

WNFIC maintains capital in excess of minimum statutory amount of $7.5 million as required by regulatory authorities. The statutory 
capital and surplus of WNFIC was $33.1 million as of December 31, 2021 and $32.6 million as of December 31, 2020. As of December 31, 
2021 and 2020, WNFIC generated statutory net income of $1.6 million and $0.8 million, respectively. The maximum amount of ordinary 
dividends that WNFIC can pay to shareholders in a rolling 12 month period is limited to the greater of 10.0% of statutory adjusted capital 
and surplus of 100.0% of adjusted net income. There was no dividend payout in 2020 and 2021 and the maximum dividend payout that 
may be made in 2022 without prior approval is $3.3 million.

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NOTE 18. Shareholders’ Equity

Under the authorization from the Company’s board of directors, shares may be purchased 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 purchases may be carried out through open market purchases, block trades, 
accelerated share repurchase plans of up to $100.0 million each (unless otherwise approved by the board of directors), negotiated 
private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 
1934. On May 1, 2019, the Company’s board of directors authorized the purchasing of up to an additional $372.5 million of the Company’s 
outstanding common stock.

During 2021, the Company repurchased 1,811,853 shares at an average price of $45.57 for a total cost of $82.6 million under the current 
share repurchase authorization. During 2020, the Company repurchased 1,234,417 shares at an average price of $44.63 for a total cost 
of $55.1 million under the current share repurchase authorization. At December 31, 2021, the remaining amount authorized by our board 
of directors for share repurchases was approximately $323.6 million. Under the authorized repurchase programs, the Company has 
repurchased approximately 18.5 million shares for an aggregate cost of approximately $673.9 million between 2014 and 2021.

During 2021, the Company paid an annualized dividend of $0.380 per share for a total of $107.2 million in annualized dividends paid. 
During 2020, the Company paid an annualized dividend of $0.348 per share for a total $100.6 million in annualized dividends paid. On 
January 20, 2022 the board of directors approved a dividend of $0.1025 per share payable on February 16, 2022 to shareholders of 
record on February 4, 2022.

During 2021, the Company issued 184,772 shares valued at $9.9 million associated with business combinations. During 2020, the 
Company issued 722,939 shares valued at $30.1 million associated with business combinations.

69

 
 
Report of Independent 
Registered Public  
Accounting Firm

To the shareholders and the Board of Directors of Brown & 
Brown, Inc.

statements. We believe that our audits provide a reasonable basis 
for our opinion.

Opinion on the Financial Statements

Critical Audit Matter

We have audited the accompanying consolidated balance 
sheets of Brown & Brown, Inc. and subsidiaries (the “Company”) 
as of December 31, 2021 and 2020, the related consolidated 
statements of income, comprehensive income, shareholders’ 
equity, and cash flows, for each of the three years in the period 
ended December 31, 2021, and the related notes (collectively 
referred to as the “financial statements”). In our opinion, the 
financial statements present fairly, in all material respects, the 
financial position of the Company as of December 31, 2021 and 
2020, and the results of its operations and its cash flows for each 
of the three years in the period ended December 31, 2021, in 
conformity with accounting principles generally accepted in the 
United States of America.

We have also audited, in accordance with the standards of the 
Public Company Accounting Oversight Board (United States) 
(PCAOB), the Company’s internal control over financial reporting 
as of December 31, 2021, based on criteria established in Internal 
Control — Integrated Framework (2013) issued by the Committee 
of Sponsoring Organizations of the Treadway Commission and 
our report dated February 22, 2022 expressed an unqualified 
opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s 
management. Our responsibility is to express an opinion on 
the Company’s financial statements based on our audits. We 
are a public accounting firm registered with the PCAOB and 
are required to be independent with respect to the Company 
in accordance with the U.S. federal securities laws and the 
applicable rules and regulations of the Securities and Exchange 
Commission and the PCAOB.

We conducted our audits in accordance with the standards of the 
PCAOB. Those standards require that we plan and perform the 
audit to obtain reasonable assurance about whether the financial 
statements are free of material misstatement, whether due to error 
or fraud. Our audits included performing procedures to assess the 
risks of material misstatement of the financial statements, whether 
due to error or fraud, and performing procedures that respond to 
those risks. Such procedures included examining, on a test basis, 
evidence regarding the amounts and disclosures in the financial 
statements. Our audits also included evaluating the accounting 
principles used and significant estimates made by management, 
as well as evaluating the overall presentation of the financial 

The critical audit matter communicated below is a matter arising 
from the current-period audit of the financial statements that 
was communicated or required to be communicated to the 
audit committee and that (1) relates to accounts or disclosures 
that are material to the financial statements and (2) involved our 
especially challenging, subjective, or complex judgments. The 
communication of critical audit matters does not alter in any way 
our opinion on the financial statements, taken as a whole, and 
we are not, by communicating the critical audit matter below, 
providing a separate opinion on the critical audit matter or on the 
accounts or disclosures to which it relates.

Earn-out obligation — Refer to Notes 1 (Goodwill 
and Amortizable Intangible Assets) and 3 (Business 
Combinations) to the financial statements

Critical Audit Matter Description

The Company’s acquisition purchase price for business 
combinations is typically based upon a multiple of average annual 
operating profit and/or revenue earned over a one to three-year 
period within a minimum and maximum price range. The recorded 
purchase price for most acquisitions includes an estimation of 
the fair value of liabilities associated with potential earn-out 
provisions, when an earn-out obligation is part of the negotiated 
transaction. The fair value of the earn-out obligations is based 
upon the present value of the expected future payments to be 
made to the sellers of the acquired businesses in accordance with 
the provisions contained in the respective purchase agreements. 
Subsequent changes in the fair value of the earn-out obligations 
are recorded in the consolidated statement of income when 
incurred.

In determining fair value of the earn-out obligation, the acquired 
business’s future performance is estimated using financial projections 
of future earnings developed by management that are discounted 
to a present value using a risk-adjusted rate that takes into 
consideration the likelihood that the forecasted earn-out obligation 
will be paid. The earn-out obligation balance was $291 million as of 
December 31, 2021 and the potential maximum earn-out obligation 
was $484.8 million. Of the total earn-out obligation balance, $78.4 
million is recorded in accounts payable and $212.6 million is 
recorded in other liabilities in the consolidated balance sheet.

We identified the earn-out obligation as a critical audit matter 
because of the increased auditor judgment and extent of effort 

70

required to evaluate whether an adjustment is required for the 

earn-out obligation in periods after the acquisition. Specifically, 

there was a high degree of auditor judgment and an increased 

extent of effort to audit the reasonableness of management’s 

assumptions related to projections of future earnings of the 

acquired businesses.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasted future earnings 

assumptions used in determining the fair value of the earn-out 

obligation included the following, among others:

 • We tested the design and operating effectiveness of controls 

over management’s earn-out obligation calculation, including 

the controls over management’s determination of future 

earnings.

 • We read the asset/stock purchase agreements and associated 

addenda and agreed the provisions of the contracts to the earn-

out obligation models for our testing selections.

 • We read any post-acquisition asset/stock purchase agreements 

and associated addenda modifications for any additional terms 

to evaluate the completeness and reasonableness of the 

models utilized to calculate the earn-out obligation for our testing 

selections.

 • We evaluated the reasonableness of projections of future 

earnings for the earn-out obligation models by comparing the 

projections to historical results and assessing management’s 

key assumptions for our testing selections.

 • We evaluated management’s ability to accurately forecast future 

earnings by comparing actual results to management’s historical 

forecast and forecasted growth rates to that of comparable 

subsidiaries for our testing selections.

/s/ Deloitte & Touche LLP

Tampa, Florida 

February 22, 2022

We have served as the Company’s auditor since 2002.

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71

 
 
required to evaluate whether an adjustment is required for the 
earn-out obligation in periods after the acquisition. Specifically, 
there was a high degree of auditor judgment and an increased 
extent of effort to audit the reasonableness of management’s 
assumptions related to projections of future earnings of the 
acquired businesses.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasted future earnings 
assumptions used in determining the fair value of the earn-out 
obligation included the following, among others:

 • We tested the design and operating effectiveness of controls 
over management’s earn-out obligation calculation, including 
the controls over management’s determination of future 
earnings.

 • We read the asset/stock purchase agreements and associated 
addenda and agreed the provisions of the contracts to the earn-
out obligation models for our testing selections.

 • We read any post-acquisition asset/stock purchase agreements 
and associated addenda modifications for any additional terms 
to evaluate the completeness and reasonableness of the 
models utilized to calculate the earn-out obligation for our testing 
selections.

 • We evaluated the reasonableness of projections of future 

earnings for the earn-out obligation models by comparing the 
projections to historical results and assessing management’s 
key assumptions for our testing selections.

 • We evaluated management’s ability to accurately forecast future 
earnings by comparing actual results to management’s historical 
forecast and forecasted growth rates to that of comparable 
subsidiaries for our testing selections.

provisions, when an earn-out obligation is part of the negotiated 

/s/ Deloitte & Touche LLP

Tampa, Florida 
February 22, 2022

We have served as the Company’s auditor since 2002.

Report of Independent 

Registered Public  

Accounting Firm

To the shareholders and the Board of Directors of Brown & 

statements. We believe that our audits provide a reasonable basis 

Brown, Inc.

Opinion on the Financial Statements

for our opinion.

Critical Audit Matter

We have audited the accompanying consolidated balance 

sheets of Brown & Brown, Inc. and subsidiaries (the “Company”) 

as of December 31, 2021 and 2020, the related consolidated 

statements of income, comprehensive income, shareholders’ 

equity, and cash flows, for each of the three years in the period 

ended December 31, 2021, and the related notes (collectively 

referred to as the “financial statements”). In our opinion, the 

financial statements present fairly, in all material respects, the 

financial position of the Company as of December 31, 2021 and 

2020, and the results of its operations and its cash flows for each 

of the three years in the period ended December 31, 2021, in 

conformity with accounting principles generally accepted in the 

United States of America.

The critical audit matter communicated below is a matter arising 

from the current-period audit of the financial statements that 

was communicated or required to be communicated to the 

audit committee and that (1) relates to accounts or disclosures 

that are material to the financial statements and (2) involved our 

especially challenging, subjective, or complex judgments. The 

communication of critical audit matters does not alter in any way 

our opinion on the financial statements, taken as a whole, and 

we are not, by communicating the critical audit matter below, 

providing a separate opinion on the critical audit matter or on the 

accounts or disclosures to which it relates.

Earn-out obligation — Refer to Notes 1 (Goodwill 

and Amortizable Intangible Assets) and 3 (Business 

We have also audited, in accordance with the standards of the 

Combinations) to the financial statements

Public Company Accounting Oversight Board (United States) 

(PCAOB), the Company’s internal control over financial reporting 

as of December 31, 2021, based on criteria established in Internal 

Control — Integrated Framework (2013) issued by the Committee 

of Sponsoring Organizations of the Treadway Commission and 

our report dated February 22, 2022 expressed an unqualified 

opinion on the Company’s internal control over financial reporting.

Basis for Opinion

Critical Audit Matter Description

The Company’s acquisition purchase price for business 

combinations is typically based upon a multiple of average annual 

operating profit and/or revenue earned over a one to three-year 

period within a minimum and maximum price range. The recorded 

purchase price for most acquisitions includes an estimation of 

the fair value of liabilities associated with potential earn-out 

These financial statements are the responsibility of the Company’s 

transaction. The fair value of the earn-out obligations is based 

management. Our responsibility is to express an opinion on 

the Company’s financial statements based on our audits. We 

are a public accounting firm registered with the PCAOB and 

are required to be independent with respect to the Company 

in accordance with the U.S. federal securities laws and the 

upon the present value of the expected future payments to be 

made to the sellers of the acquired businesses in accordance with 

the provisions contained in the respective purchase agreements. 

Subsequent changes in the fair value of the earn-out obligations 

are recorded in the consolidated statement of income when 

applicable rules and regulations of the Securities and Exchange 

incurred.

Commission and the PCAOB.

In determining fair value of the earn-out obligation, the acquired 

We conducted our audits in accordance with the standards of the 

business’s future performance is estimated using financial projections 

PCAOB. Those standards require that we plan and perform the 

of future earnings developed by management that are discounted 

audit to obtain reasonable assurance about whether the financial 

to a present value using a risk-adjusted rate that takes into 

statements are free of material misstatement, whether due to error 

consideration the likelihood that the forecasted earn-out obligation 

or fraud. Our audits included performing procedures to assess the 

will be paid. The earn-out obligation balance was $291 million as of 

risks of material misstatement of the financial statements, whether 

December 31, 2021 and the potential maximum earn-out obligation 

due to error or fraud, and performing procedures that respond to 

was $484.8 million. Of the total earn-out obligation balance, $78.4 

those risks. Such procedures included examining, on a test basis, 

million is recorded in accounts payable and $212.6 million is 

evidence regarding the amounts and disclosures in the financial 

recorded in other liabilities in the consolidated balance sheet.

statements. Our audits also included evaluating the accounting 

principles used and significant estimates made by management, 

as well as evaluating the overall presentation of the financial 

70

We identified the earn-out obligation as a critical audit matter 

because of the increased auditor judgment and extent of effort 

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Report of Independent 
Registered Public  
Accounting Firm

To the shareholders and the Board of Directors of Brown & 
Brown, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting 
of Brown & Brown, Inc. (the “Company”) and subsidiaries 
as of December 31, 2021, based on criteria established in 
Internal Control — Integrated Framework (2013) issued by 
the Committee of Sponsoring Organizations of the Treadway 
Commission (COSO). In our opinion, the Company maintained, 
in all material respects, effective internal control over 
financial reporting as of December 31, 2021, based on criteria 
established in Internal Control — Integrated Framework (2013) 
issued by COSO.

We have also audited, in accordance with the standards of the 
Public Company Accounting Oversight Board (United States) 
(PCAOB), the consolidated financial statements as of and for the 
year ended December 31, 2021, of the Company and our report 
dated February 22, 2022, expressed an unqualified opinion on 
those financial statements.

As described in Management’s Report on Internal Control Over 
Financial Reporting, management excluded from its assessment the 
internal control over financial reporting at O’Leary Insurance, Piper 
Jordan, LLC, Berkshire Insurance Group, Inc., AGIS Network, Inc., 
Winston Financial Services, Inc., Remedy Analytics Inc., Heacock 
Insurance Group, LLC, and Dealer Admin. Services, Inc., which 
were acquired in 2021 and whose financial statements constitute 
approximately 2.44% and 5.63% of net and total assets, respectively, 
1.91% of revenues, and (1.55%) of net income of the consolidated 
financial statement amounts as of and for the year ended 
December 31, 2021. Accordingly, our audit did not include the internal 
control over financial reporting of these acquired entities.

Basis for Opinion

The Company’s management is responsible for maintaining effective 
internal control over financial reporting and for its assessment of the 
effectiveness of internal control over financial reporting, included in 
the accompanying Management’s Report on Internal Control Over 
Financial Reporting. Our responsibility is to express an opinion on 
the Company’s internal control over financial reporting based on our 
audit. We are a public accounting firm registered with the PCAOB 
and are required to be independent with respect to the Company in 
accordance with the U.S. federal securities laws and the applicable 
rules and regulations of the Securities and Exchange Commission 
and the PCAOB.

We conducted our audit in accordance with the standards of the 
PCAOB. Those standards require that we plan and perform the audit 
to obtain reasonable assurance about whether effective internal 
control over financial reporting was maintained in all material respects. 
Our audit included obtaining an understanding of internal control 
over financial reporting, assessing the risk that a material weakness 
exists, testing and evaluating the design and operating effectiveness 
of internal control based on the assessed risk, and performing such 
other procedures as we considered necessary in the circumstances. 
We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial 
Reporting

A company’s internal control over financial reporting is a process 
designed 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. A company’s internal control over 
financial reporting includes those policies and procedures that (1) 
pertain to the maintenance of records that, in reasonable detail, 
accurately and fairly reflect the transactions and dispositions of 
the assets of the company; (2) provide reasonable assurance that 
transactions are recorded as necessary to permit preparation 
of financial statements in accordance with generally accepted 
accounting principles, and that receipts and expenditures of the 
company are being made only in accordance with authorizations 
of management and directors of the company; and (3) provide 
reasonable assurance regarding prevention or timely detection 
of unauthorized acquisition, use, or disposition of the company’s 
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial 
reporting may not prevent or detect misstatements. Also, projections 
of any evaluation of effectiveness to future periods are subject to 
the risk that controls may become inadequate because of changes 
in conditions, or that the degree of compliance with the policies or 
procedures may deteriorate.

/s/ Deloitte & Touche LLP

Tampa, Florida 
February 22, 2022

72

Management’s Report 

on Internal Control over 

Financial Reporting

The management of Brown & Brown, Inc. and its subsidiaries (“Brown 

Based upon Brown & Brown’s evaluation under the framework 

& Brown”) is responsible for establishing and maintaining adequate 

in Internal Control-Integrated Framework (2013) issued by 

internal control over financial reporting, as such term is defined in 

the Committee of Sponsoring Organizations of the Treadway 

Securities Exchange Act Rule 13a-15(f). Under the supervision and 

Commission, management concluded that internal control 

with the participation of management, including Brown & Brown’s 

over financial reporting was effective as of December 31, 2021. 

principal executive officer and principal financial officer, Brown & 

Management’s internal control over financial reporting as of 

Brown conducted an evaluation of the effectiveness of internal 

December 31, 2021 has been audited by Deloitte & Touche LLP, an 

control over financial reporting based upon the framework in Internal 

independent registered public accounting firm, as stated in their 

Control-Integrated Framework (2013) issued by the Committee of 

report which is included herein.

Sponsoring Organizations of the Treadway Commission (“COSO”).

Brown & Brown, Inc. 

Daytona Beach, Florida 

February 22, 2022

In conducting Brown & Brown’s evaluation of the effectiveness 

of its internal control over financial reporting, Brown & Brown has 

excluded the following acquisitions completed by Brown & Brown 

during 2021: O’Leary Insurances, Piper Jordan LLC, Berkshire 

Insurance Group, Inc., AGIS Network, Inc., Winston Financial 

Services, Inc., Remedy Analytics, Inc., Heacock Insurance Group, 

LLC, and Dealer Admin. Services, Inc. (collectively the “2021 

Excluded Acquisitions”), which were acquired during 2021 and 

whose financial statements constitute approximately 2.44% and 

5.63% of net and total assets, respectively, 1.91% of revenues, 

and (1.55%) of net income of the consolidated financial statement 

amounts as of and for the year ended December 31, 2021. Refer 

to Note 3 to the Consolidated Financial Statements for further 

discussion of these acquisitions and their impact on Brown & 

Brown’s Consolidated Financial Statements.

/s/ J. Powell Brown

J. Powell Brown

Chief executive officer

/s/ R. Andrew Watts

R. Andrew Watts

Executive vice president, chief 

financial officer and treasurer

T

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2

0

2

73

 
 
Report of Independent 

Registered Public  

Accounting Firm

To the shareholders and the Board of Directors of Brown & 

We conducted our audit in accordance with the standards of the 

Brown, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting 

of Brown & Brown, Inc. (the “Company”) and subsidiaries 

as of December 31, 2021, based on criteria established in 

Internal Control — Integrated Framework (2013) issued by 

the Committee of Sponsoring Organizations of the Treadway 

Commission (COSO). In our opinion, the Company maintained, 

in all material respects, effective internal control over 

PCAOB. Those standards require that we plan and perform the audit 

to obtain reasonable assurance about whether effective internal 

control over financial reporting was maintained in all material respects. 

Our audit included obtaining an understanding of internal control 

over financial reporting, assessing the risk that a material weakness 

exists, testing and evaluating the design and operating effectiveness 

of internal control based on the assessed risk, and performing such 

other procedures as we considered necessary in the circumstances. 

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial 

financial reporting as of December 31, 2021, based on criteria 

established in Internal Control — Integrated Framework (2013) 

Reporting

issued by COSO.

We have also audited, in accordance with the standards of the 

Public Company Accounting Oversight Board (United States) 

(PCAOB), the consolidated financial statements as of and for the 

year ended December 31, 2021, of the Company and our report 

dated February 22, 2022, expressed an unqualified opinion on 

those financial statements.

As described in Management’s Report on Internal Control Over 

Financial Reporting, management excluded from its assessment the 

internal control over financial reporting at O’Leary Insurance, Piper 

Jordan, LLC, Berkshire Insurance Group, Inc., AGIS Network, Inc., 

Winston Financial Services, Inc., Remedy Analytics Inc., Heacock 

Insurance Group, LLC, and Dealer Admin. Services, Inc., which 

were acquired in 2021 and whose financial statements constitute 

approximately 2.44% and 5.63% of net and total assets, respectively, 

1.91% of revenues, and (1.55%) of net income of the consolidated 

A company’s internal control over financial reporting is a process 

designed 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. A company’s internal control over 

financial reporting includes those policies and procedures that (1) 

pertain to the maintenance of records that, in reasonable detail, 

accurately and fairly reflect the transactions and dispositions of 

the assets of the company; (2) provide reasonable assurance that 

transactions are recorded as necessary to permit preparation 

of financial statements in accordance with generally accepted 

accounting principles, and that receipts and expenditures of the 

company are being made only in accordance with authorizations 

of management and directors of the company; and (3) provide 

reasonable assurance regarding prevention or timely detection 

of unauthorized acquisition, use, or disposition of the company’s 

assets that could have a material effect on the financial statements.

of any evaluation of effectiveness to future periods are subject to 

the risk that controls may become inadequate because of changes 

in conditions, or that the degree of compliance with the policies or 

procedures may deteriorate.

financial statement amounts as of and for the year ended 

Because of its inherent limitations, internal control over financial 

December 31, 2021. Accordingly, our audit did not include the internal 

reporting may not prevent or detect misstatements. Also, projections 

control over financial reporting of these acquired entities.

Basis for Opinion

The Company’s management is responsible for maintaining effective 

internal control over financial reporting and for its assessment of the 

effectiveness of internal control over financial reporting, included in 

the accompanying Management’s Report on Internal Control Over 

Financial Reporting. Our responsibility is to express an opinion on 

/s/ Deloitte & Touche LLP

the Company’s internal control over financial reporting based on our 

Tampa, Florida 

audit. We are a public accounting firm registered with the PCAOB 

February 22, 2022

and are required to be independent with respect to the Company in 

accordance with the U.S. federal securities laws and the applicable 

rules and regulations of the Securities and Exchange Commission 

and the PCAOB.

72

Management’s Report 
on Internal Control over 
Financial Reporting

The management of Brown & Brown, Inc. and its subsidiaries (“Brown 
& Brown”) is responsible for establishing and maintaining adequate 
internal control over financial reporting, as such term is defined in 
Securities Exchange Act Rule 13a-15(f). Under the supervision and 
with the participation of management, including Brown & Brown’s 
principal executive officer and principal financial officer, Brown & 
Brown conducted an evaluation of the effectiveness of internal 
control over financial reporting based upon the framework in Internal 
Control-Integrated Framework (2013) issued by the Committee of 
Sponsoring Organizations of the Treadway Commission (“COSO”).

In conducting Brown & Brown’s evaluation of the effectiveness 
of its internal control over financial reporting, Brown & Brown has 
excluded the following acquisitions completed by Brown & Brown 
during 2021: O’Leary Insurances, Piper Jordan LLC, Berkshire 
Insurance Group, Inc., AGIS Network, Inc., Winston Financial 
Services, Inc., Remedy Analytics, Inc., Heacock Insurance Group, 
LLC, and Dealer Admin. Services, Inc. (collectively the “2021 
Excluded Acquisitions”), which were acquired during 2021 and 
whose financial statements constitute approximately 2.44% and 
5.63% of net and total assets, respectively, 1.91% of revenues, 
and (1.55%) of net income of the consolidated financial statement 
amounts as of and for the year ended December 31, 2021. Refer 
to Note 3 to the Consolidated Financial Statements for further 
discussion of these acquisitions and their impact on Brown & 
Brown’s Consolidated Financial Statements.

Based upon Brown & Brown’s evaluation under the framework 
in Internal Control-Integrated Framework (2013) issued by 
the Committee of Sponsoring Organizations of the Treadway 
Commission, management concluded that internal control 
over financial reporting was effective as of December 31, 2021. 
Management’s internal control over financial reporting as of 
December 31, 2021 has been audited by Deloitte & Touche LLP, an 
independent registered public accounting firm, as stated in their 
report which is included herein.

Brown & Brown, Inc. 
Daytona Beach, Florida 
February 22, 2022

/s/ J. Powell Brown
J. Powell Brown
Chief executive officer

/s/ R. Andrew Watts
R. Andrew Watts
Executive vice president, chief 
financial officer and treasurer

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73

 
 
Performance Graph

Shareholder Information

The following graph is a comparison of five-year cumulative total shareholder returns for our common stock as compared with the 
cumulative total shareholder return for the NYSE Composite Index, and a group of peer insurance broker and agency companies 
(Aon plc, Arthur J. Gallagher & Co, Marsh & McLennan Companies, and Willis Towers Watson Public Limited Company). The returns of 
each company have been weighted according to such companies’ respective stock market capitalizations as of December 31, 2016 
for the purposes of arriving at a peer group average. The total return calculations are based upon an assumed $100 investment on 
December 31, 2016, with all dividends reinvested.

Brown & Brown, Inc.

NYSE Composite

Peer Group

12/16

12/17

12/18

12/19

12/20

12/21

100.00

116.15

125.78

181.96

220.27

328.87

100.00

118.90

108.45

136.38

146.05

176.45

100.00

123.56

133.21

184.04

206.45

283.30

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Brown & Brown, Inc, the NYSE Composite Index, and Peer Group

$350.00

$300.00

$250.00

$200.00

$150.00

$100.00

$50.00

$0.00

12/16

12/17

12/18

12/19

12/20

12/21

Brown & Brown, Inc.

NYSE Composite

Peer Group

* 

100 invested on 12/31/16 in stock or index, including reinvestment of dividends.

Fiscal year ending December 31

Corporate Information and Shareholder Services 

The Company has included, as Exhibits 31.1 and 31.2, and 32.1 

(800) 937-5449 

and 32.2 to its Annual Report on Form 10-K for fiscal year 2021, 

email: help@amstock.com 

filed with the Securities and Exchange Commission, certificates 

www.astfinancial.com

Corporate Offices 

300 North Beach Street 

Daytona Beach, Florida 32114 

(386) 252-9601

Outside Counsel 

Holland & Knight LLP 

200 South Orange Avenue, Suite 2600 

Orlando, Florida 32801

of the chief executive officer and the chief financial officer of the 

Company certifying the Company’s public disclosure is accurate 

and complete and that they have established and maintained 

adequate internal controls. The Company has also submitted to 

the New York Stock Exchange a certificate from its chief executive 

officer certifying that he is not aware of any violation by the 

Company of New York Stock Exchange corporate governance 

listing standards. 

A copy of the Company’s 2021 Annual Report on Form 10-K 

will be furnished without charge to any shareholder who 

directs a request in writing to: 

Corporate Secretary 

Brown & Brown, Inc. 

300 North Beach Street 

Daytona Beach, Florida 32114

A reasonable charge will be made for copies 

of the exhibits to the Form 10-K.

Annual Meeting 

The Annual Meeting of Shareholders of  

Brown & Brown, Inc. will be held virtually.

Please register at 

http://www.viewproxy.com/bbinsurance.com/2022/htype.asp

Transfer Agent and Registrar 

American Stock Transfer & Trust Company, LLC  

6201 15th Ave. 

Brooklyn, New York 11219  

Independent Registered Public Accounting Firm 

Deloitte & Touche LLP 

201 North Franklin Street 

Suite 3600 

Tampa, Florida 33602

Stock Listing 

shareholders of record.

Additional Information 

The New York Stock Exchange Symbol: BRO 

On February 18, 2022, there were 282,215,614 shares of 

our common stock outstanding, held by approximately 1,512 

Information concerning the services of Brown & Brown, Inc., as 

well as access to current earnings releases, is available on Brown 

& Brown’s website at www.bbinsurance.com.

74

 
Performance Graph

Shareholder Information

The following graph is a comparison of five-year cumulative total shareholder returns for our common stock as compared with the 

cumulative total shareholder return for the NYSE Composite Index, and a group of peer insurance broker and agency companies 

(Aon plc, Arthur J. Gallagher & Co, Marsh & McLennan Companies, and Willis Towers Watson Public Limited Company). The returns of 

each company have been weighted according to such companies’ respective stock market capitalizations as of December 31, 2016 

for the purposes of arriving at a peer group average. The total return calculations are based upon an assumed $100 investment on 

December 31, 2016, with all dividends reinvested.

12/16

12/17

12/18

12/19

12/20

12/21

100.00

116.15

125.78

181.96

220.27

328.87

100.00

118.90

108.45

136.38

146.05

176.45

100.00

123.56

133.21

184.04

206.45

283.30

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Brown & Brown, Inc, the NYSE Composite Index, and Peer Group

12/16

12/17

12/18

12/19

12/20

12/21

Brown & Brown, Inc.

NYSE Composite

Peer Group

* 

100 invested on 12/31/16 in stock or index, including reinvestment of dividends.

Fiscal year ending December 31

Corporate Offices 
300 North Beach Street 
Daytona Beach, Florida 32114 
(386) 252-9601

Outside Counsel 
Holland & Knight LLP 
200 South Orange Avenue, Suite 2600 
Orlando, Florida 32801

Corporate Information and Shareholder Services 
The Company has included, as Exhibits 31.1 and 31.2, and 32.1 
and 32.2 to its Annual Report on Form 10-K for fiscal year 2021, 
filed with the Securities and Exchange Commission, certificates 
of the chief executive officer and the chief financial officer of the 
Company certifying the Company’s public disclosure is accurate 
and complete and that they have established and maintained 
adequate internal controls. The Company has also submitted to 
the New York Stock Exchange a certificate from its chief executive 
officer certifying that he is not aware of any violation by the 
Company of New York Stock Exchange corporate governance 
listing standards. 

A copy of the Company’s 2021 Annual Report on Form 10-K 
will be furnished without charge to any shareholder who 
directs a request in writing to: 

Corporate Secretary 
Brown & Brown, Inc. 
300 North Beach Street 
Daytona Beach, Florida 32114

A reasonable charge will be made for copies 
of the exhibits to the Form 10-K.

Annual Meeting 
The Annual Meeting of Shareholders of  
Brown & Brown, Inc. will be held virtually.

Please register at 
http://www.viewproxy.com/bbinsurance.com/2022/htype.asp

Transfer Agent and Registrar 
American Stock Transfer & Trust Company, LLC  
6201 15th Ave. 
Brooklyn, New York 11219  
(800) 937-5449 
email: help@amstock.com 
www.astfinancial.com

Independent Registered Public Accounting Firm 
Deloitte & Touche LLP 
201 North Franklin Street 
Suite 3600 
Tampa, Florida 33602

Stock Listing 
The New York Stock Exchange Symbol: BRO 
On February 18, 2022, there were 282,215,614 shares of 
our common stock outstanding, held by approximately 1,512 
shareholders of record.

Additional Information 
Information concerning the services of Brown & Brown, Inc., as 
well as access to current earnings releases, is available on Brown 
& Brown’s website at www.bbinsurance.com.

Brown & Brown, Inc.

NYSE Composite

Peer Group

$350.00

$300.00

$250.00

$200.00

$150.00

$100.00

$50.00

$0.00

74

 
Ten-Year Statistical Summary

The following includes selected Consolidated Financial Data for each of the ten fiscal years in the period ended December 31 that have 
been derived from our Consolidated Financial Statements. Such data should be read in conjunction with Management’s Discussion and 
Analysis of Financial Condition and Results of Operations in this Annual Report and with our Consolidated Financial Statements and 
related Notes thereto in Item 8 of Part II of this Annual Report.

(IN THOUSANDS, EXCEPT PER SHARE DATA, AND PERCENTAGES)
(IN THOUSANDS, EXCEPT PER SHARE DATA, AND PERCENTAGES)

2021
2021

2020
2020

2019
2019

2018
2018

2017

2017

2016

2016

2015

2015

2014

2014

2013

2013

2012

2012

Year Ended December 31,

Year Ended December 31,

Revenues
Revenues

Commissions & fees
Commissions & fees

Investment income
Investment income

Other income, net
Other income, net

Total revenues(1)
Total revenues(1)

Expenses
Expenses

Employee compensation and benefits
Employee compensation and benefits

Other operating expenses
Other operating expenses

(Gain)/loss on disposal
(Gain)/loss on disposal

Amortization
Amortization

Depreciation
Depreciation

Interest
Interest

Change in estimated earn-out payables
Change in estimated earn-out payables

Total expenses
Total expenses

Income before income taxes 
Income before income taxes 

Income taxes(2)
Income taxes(2)

Net income
Net income

Earnings per Share Information
Earnings per Share Information

Net income per share - diluted(3)
Net income per share - diluted(3)

Weighted average number of shares outstanding - diluted(3) 
Weighted average number of shares outstanding - diluted(3) 

Dividends paid per share 
Dividends paid per share 
Year-End Financial Position
Year-End Financial Position

Total assets(4)
Total assets(4)

Long-term debt(5)
Long-term debt(5)

Total shareholders’ equity
Total shareholders’ equity

Total shares outstanding at year-end(3)
Total shares outstanding at year-end(3)

Other Information
Other Information

$ 3,047,522
$ 3,047,522
1,099
1,099
2,777
2,777
3,051,398
3,051,398

$ 2,606,108 
$ 2,606,108 
2,811 
2,811 
4,456 
4,456 
2,613,375 
2,613,375 

1,636,911
1,636,911
402,941
402,941
(9,605)
(9,605)
119,593
119,593
33,309
33,309
64,981
64,981
40,445
40,445
2,288,575
2,288,575
762,823
762,823
175,719
175,719
$ 587,104
$ 587,104

1,436,377 
1,436,377 
365,973 
365,973 
(2,388)
(2,388)
108,523 
108,523 
26,276 
26,276 
58,973 
58,973 
(4,458)
(4,458)
1,989,276 
1,989,276 
624,099 
624,099 
143,616 
143,616 
$ 480,483 
$ 480,483 

$ 2,384,737
$ 2,384,737

$ 2,009,857
$ 2,009,857

$

$

1,857,270

1,857,270

$

$

1,762,787

1,762,787

$

$

1,656,951

1,656,951

$

$

1,567,460

1,567,460

$

$

1,355,503

1,355,503

$

$

1,189,081

1,189,081

5,780
5,780

1,654
1,654

2,746
2,746

1,643
1,643

2,392,171
2,392,171

2,014,246
2,014,246

1,308,165
1,308,165

1,068,914
1,068,914

377,089
377,089
(10,021)
(10,021)

105,298
105,298

23,417
23,417

63,660
63,660
(1,366)
(1,366)

332,118
332,118
(2,175)
(2,175)

86,544
86,544

22,834
22,834

40,580
40,580

2,969
2,969

1,866,242
1,866,242

1,551,784
1,551,784

525,929
525,929

127,415
127,415

462,462
462,462

118,207
118,207

$ 398,514
$ 398,514

$ 344,255
$ 344,255

$
$

$
$

2.07
2.07
277,414
277,414
0.38
0.38

$
$

$
$

1.69 
1.69 
275,867 
275,867 
0.35 
0.35 

$
$

$
$

1.40
1.40

274,616
274,616

0.33
0.33

$
$

$
$

1.22
1.22

275,521
275,521

0.31
0.31

$ 9,795,443
$ 9,795,443
$ 1,980,437
$ 1,980,437
$ 4,196,893
$ 4,196,893
282,496
282,496

$ 8,966,492 
$ 8,966,492 
$ 2,025,906 
$ 2,025,906 
$ 3,754,223 
$ 3,754,223 
283,004 
283,004 

$ 7,622,821
$ 7,622,821

$ 6,688,668
$ 6,688,668

$ 1,500,343
$ 1,500,343

$ 1,456,990
$ 1,456,990

$ 3,350,279
$ 3,350,279

$ 3,000,568
$ 3,000,568

281,655
281,655

279,583
279,583

Number of full-time equivalent employees at year-end
Number of full-time equivalent employees at year-end

Total revenues per average number of employees(6)
Total revenues per average number of employees(6)

Stock price at year-end(3)
Stock price at year-end(3)

Stock price earnings multiple at year-end(7)
Stock price earnings multiple at year-end(7)

Return on beginning shareholders’ equity(8)
Return on beginning shareholders’ equity(8)

$
$

$
$

12,023
12,023
263,517
263,517
70.28
70.28
34.0
34.0

16%
16%

$
$

$
$

11,136 
11,136 
246,324 
246,324 
47.41 
47.41 
28.1 
28.1 

$
$

$
$

10,083
10,083

243,193
243,193

39.48
39.48

28.2
28.2

$
$

$
$

9,590
9,590

222,809
222,809

27.56
27.56

22.6
22.6

14%
14%

13%
13%

13%
13%

17%

17%

12%

12%

12%

12%

10%

10%

12%

12%

11%

11%

(1)  Years 2017 and 2016 do not reflect the adoption of “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”), ASC Topic 340 - Other Assets and Deferred Cost (“ASC 
(1)  Years 2017 and 2016 do not reflect the adoption of “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”), ASC Topic 340 - Other Assets and Deferred Cost (“ASC 

(5)  Please refer to Part I, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 9 “Long-Term Debt” for more 

340”) and ASU 2016-08, “Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)”, which was adopted under the modified retrospective method.
340”) and ASU 2016-08, “Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)”, which was adopted under the modified retrospective method.

details.

(2)  Years 2017 and 2016 do not reflect the adoption of ASU 2016-09, “Improvements to Employee Share Based Payment Accounting” (“ASU 2016-09”), which was adopted using the 
(2)  Years 2017 and 2016 do not reflect the adoption of ASU 2016-09, “Improvements to Employee Share Based Payment Accounting” (“ASU 2016-09”), which was adopted using the 

(6)  Represents total revenues divided by the average of the number of full-time equivalent employees at the beginning of the year and the number of full-time 

prospective method.
prospective method.

(3)  Years 2017 and 2016 reflect the 2-for-1 stock split that occurred on March 28, 2018.
(3)  Years 2017 and 2016 reflect the 2-for-1 stock split that occurred on March 28, 2018.

equivalent employees at the end of the year.

(7)  Stock price at year-end divided by net income per share diluted.

(4)  All years presented reflect the adoption of ASU No. 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”).
(4)  All years presented reflect the adoption of ASU No. 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”).

(8)  Represents net income divided by total shareholders’ equity as of the beginning of the year.

1,626

1,626

22,451

22,451

1,456

1,456

2,386

2,386

1,004

1,004

2,554

2,554

747

747

7,589

7,589

638

638

7,138

7,138

797

797

10,154

10,154

1,881,347

1,881,347

1,766,629

1,766,629

1,660,509

1,660,509

1,575,796

1,575,796

1,363,279

1,363,279

1,200,032

1,200,032

1,431,625

1,431,625

1,343,130

1,343,130

1,257,950

1,257,950

1,236,047

1,236,047

1,005,670

1,005,670

994,652

994,652

283,470

283,470

(2,157)

(2,157)

85,446

85,446

22,698

22,698

38,316

38,316

9,200

9,200

449,722

449,722

50,092

50,092

399,630

399,630

1.40

1.40

277,586

277,586

0.28

0.28

5,747,550

5,747,550

856,141

856,141

2,582,699

2,582,699

276,210

276,210

8,491

8,491

224,130

224,130

25.73

25.73

18.3

18.3

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

925,217

925,217

262,872

262,872

(1,291)

(1,291)

86,663

86,663

21,003

21,003

39,481

39,481

9,185

9,185

423,499

423,499

166,008

166,008

257,491

257,491

0.91

0.91

275,608

275,608

0.25

0.25

5,262,734

5,262,734

1,018,372

1,018,372

2,360,211

2,360,211

280,208

280,208

8,297

8,297

219,403

219,403

22.43

22.43

24.6

24.6

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

856,952

856,952

251,055

251,055

(619)

(619)

87,421

87,421

20,890

20,890

39,248

39,248

3,003

3,003

402,559

402,559

159,241

159,241

243,318

243,318

0.85

0.85

280,224

280,224

0.23

0.23

4,979,844

4,979,844

1,071,618

1,071,618

2,149,776

2,149,776

277,970

277,970

7,807

7,807

215,679

215,679

16.05

16.05

18.9

18.9

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

811,112

811,112

235,328

235,328

47,425

47,425

82,941

82,941

20,895

20,895

28,408

28,408

9,938

9,938

339,749

339,749

132,853

132,853

206,896

206,896

0.71

0.71

285,782

285,782

0.21

0.21

4,931,027

4,931,027

1,142,948

1,142,948

2,113,745

2,113,745

286,972

286,972

7,591

7,591

216,114

216,114

16.45

16.45

23.3

23.3

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

705,603

705,603

195,677

195,677

—

—

67,932

67,932

17,485

17,485

16,440

16,440

2,533

2,533

357,609

357,609

140,497

140,497

217,112

217,112

0.74

0.74

285,248

285,248

0.19

0.19

3,620,232

3,620,232

379,171

379,171

2,007,141

2,007,141

290,838

290,838

6,992

6,992

203,020

203,020

15.70

15.70

21.1

21.1

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

624,371

624,371

174,389

174,389

—

—

63,573

63,573

15,373

15,373

16,097

16,097

1,418

1,418

895,221

895,221

304,811

304,811

120,766

120,766

184,045

184,045

0.63

0.63

284,020

284,020

0.17

0.17

3,103,650

3,103,650

449,136

449,136

1,807,333

1,807,333

287,756

287,756

6,438

6,438

191,729

191,729

12.73

12.73

20.2

20.2

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

   
 
   
   
   
 
   
   
Ten-Year Statistical Summary

The following includes selected Consolidated Financial Data for each of the ten fiscal years in the period ended December 31 that have 

been derived from our Consolidated Financial Statements. Such data should be read in conjunction with Management’s Discussion and 

Analysis of Financial Condition and Results of Operations in this Annual Report and with our Consolidated Financial Statements and 

related Notes thereto in Item 8 of Part II of this Annual Report.

Revenues

Revenues

Commissions & fees

Commissions & fees

Investment income

Investment income

Other income, net

Other income, net

Total revenues(1)

Total revenues(1)

Expenses

Expenses

Other operating expenses

Other operating expenses

(Gain)/loss on disposal

(Gain)/loss on disposal

Amortization

Amortization

Depreciation

Depreciation

Interest

Interest

Change in estimated earn-out payables

Change in estimated earn-out payables

Total expenses

Total expenses

Income before income taxes 

Income before income taxes 

Income taxes(2)

Income taxes(2)

Net income

Net income

Earnings per Share Information

Earnings per Share Information

Net income per share - diluted(3)

Net income per share - diluted(3)

Dividends paid per share 

Dividends paid per share 

Year-End Financial Position

Year-End Financial Position

Total assets(4)

Total assets(4)

Long-term debt(5)

Long-term debt(5)

Total shareholders’ equity

Total shareholders’ equity

Total shares outstanding at year-end(3)

Total shares outstanding at year-end(3)

Other Information

Other Information

402,941

402,941

(9,605)

(9,605)

119,593

119,593

33,309

33,309

64,981

64,981

40,445

40,445

762,823

762,823

175,719

175,719

365,973 

365,973 

(2,388)

(2,388)

108,523 

108,523 

26,276 

26,276 

58,973 

58,973 

(4,458)

(4,458)

624,099 

624,099 

143,616 

143,616 

377,089

377,089

(10,021)

(10,021)

105,298

105,298

23,417

23,417

63,660

63,660

(1,366)

(1,366)

525,929

525,929

127,415

127,415

2.07

2.07

0.38

0.38

$

$

$

$

1.69 

1.69 

0.35 

0.35 

$

$

$

$

1.40

1.40

0.33

0.33

332,118

332,118

(2,175)

(2,175)

86,544

86,544

22,834

22,834

40,580

40,580

2,969

2,969

462,462

462,462

118,207

118,207

1.22

1.22

0.31

0.31

$ 587,104

$ 587,104

$ 480,483 

$ 480,483 

$ 398,514

$ 398,514

$ 344,255

$ 344,255

$ 9,795,443

$ 9,795,443

$ 8,966,492 

$ 8,966,492 

$ 7,622,821

$ 7,622,821

$ 6,688,668

$ 6,688,668

$ 1,980,437

$ 1,980,437

$ 2,025,906 

$ 2,025,906 

$ 1,500,343

$ 1,500,343

$ 1,456,990

$ 1,456,990

$ 4,196,893

$ 4,196,893

$ 3,754,223 

$ 3,754,223 

$ 3,350,279

$ 3,350,279

$ 3,000,568

$ 3,000,568

282,496

282,496

283,004 

283,004 

281,655

281,655

279,583

279,583

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Weighted average number of shares outstanding - diluted(3) 

Weighted average number of shares outstanding - diluted(3) 

277,414

277,414

275,867 

275,867 

274,616

274,616

275,521

275,521

Number of full-time equivalent employees at year-end

Number of full-time equivalent employees at year-end

Total revenues per average number of employees(6)

Total revenues per average number of employees(6)

Stock price at year-end(3)

Stock price at year-end(3)

Stock price earnings multiple at year-end(7)

Stock price earnings multiple at year-end(7)

Return on beginning shareholders’ equity(8)

Return on beginning shareholders’ equity(8)

12,023

12,023

263,517

263,517

70.28

70.28

34.0

34.0

16%

16%

$

$

$

$

11,136 

11,136 

246,324 

246,324 

47.41 

47.41 

28.1 

28.1 

$

$

$

$

10,083

10,083

243,193

243,193

39.48

39.48

28.2

28.2

9,590

9,590

222,809

222,809

27.56

27.56

22.6

22.6

(IN THOUSANDS, EXCEPT PER SHARE DATA, AND PERCENTAGES)

(IN THOUSANDS, EXCEPT PER SHARE DATA, AND PERCENTAGES)

2021

2021

2020

2020

2019

2019

2018

2018

2017
2017

2016
2016

2015
2015

2014
2014

2013
2013

2012
2012

Year Ended December 31,
Year Ended December 31,

$ 3,047,522

$ 3,047,522

$ 2,606,108 

$ 2,606,108 

$ 2,384,737

$ 2,384,737

$ 2,009,857

$ 2,009,857

$
$

1,857,270
1,857,270

$
$

1,762,787
1,762,787

$
$

1,656,951
1,656,951

$
$

1,567,460
1,567,460

$
$

1,355,503
1,355,503

$
$

1,189,081
1,189,081

1,099

1,099

2,777

2,777

2,811 

2,811 

4,456 

4,456 

5,780

5,780

1,654

1,654

2,746

2,746

1,643

1,643

3,051,398

3,051,398

2,613,375 

2,613,375 

2,392,171

2,392,171

2,014,246

2,014,246

1,626
1,626

22,451
22,451

1,456
1,456

2,386
2,386

1,004
1,004

2,554
2,554

747
747

7,589
7,589

638
638

7,138
7,138

797
797

10,154
10,154

1,881,347
1,881,347

1,766,629
1,766,629

1,660,509
1,660,509

1,575,796
1,575,796

1,363,279
1,363,279

1,200,032
1,200,032

Employee compensation and benefits

Employee compensation and benefits

1,636,911

1,636,911

1,436,377 

1,436,377 

1,308,165

1,308,165

1,068,914

1,068,914

2,288,575

2,288,575

1,989,276 

1,989,276 

1,866,242

1,866,242

1,551,784

1,551,784

1,431,625
1,431,625

1,343,130
1,343,130

1,257,950
1,257,950

1,236,047
1,236,047

1,005,670
1,005,670

994,652
994,652

283,470
283,470
(2,157)
(2,157)

85,446
85,446

22,698
22,698

38,316
38,316

9,200
9,200

925,217
925,217

262,872
262,872
(1,291)
(1,291)

86,663
86,663

21,003
21,003

39,481
39,481

9,185
9,185

856,952
856,952

251,055
251,055
(619)
(619)

87,421
87,421

20,890
20,890

39,248
39,248

3,003
3,003

811,112
811,112

235,328
235,328

47,425
47,425

82,941
82,941

20,895
20,895

28,408
28,408

9,938
9,938

705,603
705,603

195,677
195,677

—
—

67,932
67,932

17,485
17,485

16,440
16,440

2,533
2,533

449,722
449,722

50,092
50,092

399,630
399,630

1.40
1.40

277,586
277,586

0.28
0.28

5,747,550
5,747,550

856,141
856,141

2,582,699
2,582,699

276,210
276,210

8,491
8,491

224,130
224,130

25.73
25.73

18.3
18.3

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

423,499
423,499

166,008
166,008

257,491
257,491

0.91
0.91

275,608
275,608

0.25
0.25

5,262,734
5,262,734

1,018,372
1,018,372

2,360,211
2,360,211

280,208
280,208

8,297
8,297

219,403
219,403

22.43
22.43

24.6
24.6

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

402,559
402,559

159,241
159,241

243,318
243,318

0.85
0.85

280,224
280,224

0.23
0.23

4,979,844
4,979,844

1,071,618
1,071,618

2,149,776
2,149,776

277,970
277,970

7,807
7,807

215,679
215,679

16.05
16.05

18.9
18.9

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

339,749
339,749

132,853
132,853

206,896
206,896

0.71
0.71

285,782
285,782

0.21
0.21

4,931,027
4,931,027

1,142,948
1,142,948

2,113,745
2,113,745

286,972
286,972

7,591
7,591

216,114
216,114

16.45
16.45

23.3
23.3

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

357,609
357,609

140,497
140,497

217,112
217,112

0.74
0.74

285,248
285,248

0.19
0.19

3,620,232
3,620,232

379,171
379,171

2,007,141
2,007,141

290,838
290,838

6,992
6,992

203,020
203,020

15.70
15.70

21.1
21.1

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

624,371
624,371

174,389
174,389

—
—

63,573
63,573

15,373
15,373

16,097
16,097

1,418
1,418

895,221
895,221

304,811
304,811

120,766
120,766

184,045
184,045

0.63
0.63

284,020
284,020

0.17
0.17

3,103,650
3,103,650

449,136
449,136

1,807,333
1,807,333

287,756
287,756

6,438
6,438

191,729
191,729

12.73
12.73

20.2
20.2

(1)  Years 2017 and 2016 do not reflect the adoption of “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”), ASC Topic 340 - Other Assets and Deferred Cost (“ASC 

(1)  Years 2017 and 2016 do not reflect the adoption of “Revenue from Contracts with Customers (Topic 606)” (“Topic 606”), ASC Topic 340 - Other Assets and Deferred Cost (“ASC 

(5)  Please refer to Part I, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 9 “Long-Term Debt” for more 

340”) and ASU 2016-08, “Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)”, which was adopted under the modified retrospective method.

340”) and ASU 2016-08, “Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net)”, which was adopted under the modified retrospective method.

details.

(2)  Years 2017 and 2016 do not reflect the adoption of ASU 2016-09, “Improvements to Employee Share Based Payment Accounting” (“ASU 2016-09”), which was adopted using the 

(2)  Years 2017 and 2016 do not reflect the adoption of ASU 2016-09, “Improvements to Employee Share Based Payment Accounting” (“ASU 2016-09”), which was adopted using the 

(6)  Represents total revenues divided by the average of the number of full-time equivalent employees at the beginning of the year and the number of full-time 

prospective method.

prospective method.

(3)  Years 2017 and 2016 reflect the 2-for-1 stock split that occurred on March 28, 2018.

(3)  Years 2017 and 2016 reflect the 2-for-1 stock split that occurred on March 28, 2018.

equivalent employees at the end of the year.

(7)  Stock price at year-end divided by net income per share diluted.

(4)  All years presented reflect the adoption of ASU No. 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”).

(4)  All years presented reflect the adoption of ASU No. 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”).

(8)  Represents net income divided by total shareholders’ equity as of the beginning of the year.

14%

14%

13%

13%

13%

13%

17%
17%

12%
12%

12%
12%

10%
10%

12%
12%

11%
11%

   
 
   
   
   
 
   
   
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