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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Florida
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59-0864469
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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220 South Ridgewood Avenue,
Daytona Beach, FL
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32114
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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COMMON STOCK, $0.10 PAR VALUE
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NEW YORK STOCK EXCHANGE
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨ (Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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PAGE
NO.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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•
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Future prospects;
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•
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Material adverse changes in economic conditions in the markets we serve and in the general economy;
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•
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Premium rates set by insurance companies and insurable exposure units, which have traditionally varied and are difficult to predict;
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•
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Future regulatory actions and conditions in the states in which we conduct our business;
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•
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The occurrence of adverse economic conditions, an adverse regulatory climate, or a disaster (such as the recent hurricanes in Florida and Texas and fires in California) in Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Texas, Virginia and Washington, because a significant portion of business written by us is for customers located in these states;
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•
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Our ability to attract, retain and enhance qualified personnel;
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•
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Competition from others in or entering into the insurance agency, wholesale brokerage, insurance programs and related service business;
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•
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The integration of our operations with those of businesses or assets we have acquired or may acquire in the future and the failure to realize the expected benefits of such integration;
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•
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Risks that could negatively affect our acquisition strategy, including continuing consolidation among insurance intermediaries and the increasing presence of private equity investors driving up valuations;
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•
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Our ability to forecast liquidity needs through at least the end of 2018;
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•
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Our ability to renew or replace expiring leases;
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•
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Outcomes of existing or future legal proceedings and governmental investigations;
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•
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Policy cancellations and renewal terms, which can be unpredictable;
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•
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Potential changes to the tax rate that would affect the value of deferred tax assets and liabilities and the impact on income available for investment or distributable to shareholders;
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•
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The inherent uncertainty in making estimates, judgments, and assumptions in the preparation of financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”);
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•
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Our ability to effectively utilize technology to provide improved value for our customers or carrier partners as well as applying effective internal controls and efficiencies in operations; and
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•
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Other risks and uncertainties as may be detailed from time to time in our public announcements and Securities and Exchange Commission (“SEC”) filings.
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Florida
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41
|
|
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Minnesota
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5
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Maryland
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2
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California
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23
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|
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Arizona
|
4
|
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Missouri
|
2
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New York
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18
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|
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Michigan
|
4
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Montana
|
2
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New Jersey
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13
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Oklahoma
|
4
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New Hampshire
|
2
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Washington
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12
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|
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Virginia
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4
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Rhode Island
|
2
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Georgia
|
10
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|
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Arkansas
|
3
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Wisconsin
|
2
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Texas
|
10
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Indiana
|
3
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Delaware
|
1
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Louisiana
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9
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New Mexico
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3
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Mississippi
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1
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Pennsylvania
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8
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|
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Ohio
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3
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|
Nevada
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1
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Massachusetts
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7
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|
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South Carolina
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3
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North Carolina
|
1
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Oregon
|
7
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Tennessee
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3
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Utah
|
1
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Colorado
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6
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|
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Hawaii
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2
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Vermont
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1
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Illinois
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6
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|
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Kansas
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2
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Connecticut
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5
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Kentucky
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2
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(in thousands, except percentages)
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2017
|
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%
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2016
|
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%
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2015
|
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%
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|||||||||
Retail Segment
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$
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942,247
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50.7
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%
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$
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916,723
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52.0
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%
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$
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867,762
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52.4
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%
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National Programs Segment
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479,017
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25.8
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%
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447,808
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25.4
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%
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428,473
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|
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25.9
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%
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|||
Wholesale Brokerage Segment
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271,141
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14.6
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%
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242,813
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13.8
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%
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216,638
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|
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13.1
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%
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|||
Services Segment
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165,073
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8.9
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%
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156,082
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8.8
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%
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145,375
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|
|
8.8
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%
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|||
Other
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(208
|
)
|
|
—
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%
|
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(639
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)
|
|
—
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%
|
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(1,297
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)
|
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(0.2
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)%
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|||
Total
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$
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1,857,270
|
|
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100.0
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%
|
|
$
|
1,762,787
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|
|
100.0
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%
|
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$
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1,656,951
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|
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100.0
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%
|
|
Healthcare Professionals: Allied Protector Plan® (“APP®”) specializes in customized professional liability and business insurance programs for individual practitioners and businesses in the healthcare industry. The APP program offers liability insurance coverage for, among others, dental hygienists and dental assistants, home health agencies, physical therapy clinics, and medical directors. Also available through the APP program is cyber/data breach insurance offering a solution to privacy breaches and information security exposures tailored to the needs of healthcare organizations.
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Physicians: The Physicians Protector Plan program provides professional liability insurance solutions for physicians on an admitted basis in several key states. The program offers comprehensive insurance solutions and provides risk management benefits and claims services.
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Wedding Protector Plan® and Protector Plan® for Events provide an online wedding and private event cancellation and postponement insurance policy that offers financial protection if certain unfortunate or unforeseen events should occur during the period leading up to and including the wedding or event date. Liability and liquor liability is available as an option.
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Personal Property: mono-line property coverage for homeowners and renters in numerous states.
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Florida Intracoastal Underwriters, Limited Company: (“FIU”) is a MGA that specializes in providing insurance coverage for coastal and inland high-value condominiums and apartments. FIU has developed a specialty insurance facility to support the underwriting activities associated with these risks.
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Parcel Insurance Plan®: is a specialty insurance agency providing insurance coverage to commercial and private shippers for small packages and parcels with insured values of less than $25,000 each.
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Sigma Underwriting Managers: is the nationwide wind catastrophic property insurance specialists for commercial and habitational properties and has over 100 years of combined underwriting experience. The commercial nationwide program is designed to write all types of low- to medium-hazard properties including adult living facilities, hotels/motels, medical offices, shopping centers, restaurants, warehouses and churches. The Florida habitational property program is a high-valued property program for commercial residential accounts.
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Towing Operators Protector Plan®: (“TOPP®”) providing insurance coverage including general liability, commercial auto, garage keeper’s legal liability, property and motor truck cargo coverage.
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Wright Specialty Insurance Agency, LLC: provides insurance products for specialty programs such as food, grocery, K-12 education and franchise programs that are offered throughout the U.S.
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Public Risk Underwriters of Indiana, LLC: doing business as Downey Insurance is a program administrator of insurance trusts offering tailored property and casualty insurance products, risk management consulting, third-party administration and related services designed for cities, counties, municipalities, schools, special taxing districts and other public entities in the State of Indiana.
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Public Risk Underwriters of New Jersey, Inc.: provides administrative services and insurance procurement for the Statewide Insurance Fund (“Statewide”). Statewide is a municipal joint insurance fund comprising coverages for counties, municipalities, utility authorities, community colleges and emergency services entities in New Jersey.
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Public Risk Underwriters of Florida, Inc.: is the program administrator for the Preferred Governmental Insurance Trust offering tailored property and casualty insurance products, risk management consulting, third-party administration and related services designed for cities, counties, municipalities, schools, special taxing districts and other public entities in the State of Florida.
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Wright Risk Management Company, LLC: is a program administrator for the New York Schools Insurance Reciprocal and the New York Municipal Insurance Reciprocal offering tailored property and casualty insurance products, risk management consulting, third-party administration and related services designed for cities, counties, municipalities, schools, special taxing districts and other public entities in the State of New York.
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|
The Advocator Group, LLC (“The Advocator Group”) and Social Security Advocates for the Disabled LLC (“SSAD”) assist individuals throughout the United States who are seeking to establish eligibility for coverage under the federal Social Security Disability program and provides health plan selection and enrollment assistance for Medicare beneficiaries. These two businesses work closely with employer sponsored group life, disability and health plan participants to assist disabled employees in receiving the education, advocacy and benefit coordination assistance necessary to achieve the fastest possible benefit approvals. In addition, The Advocator Group also provides second injury fund recovery services to the workers’ compensation insurance market.
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|
ICA provides comprehensive claims management solutions for both personal and commercial lines of insurance. ICA is a national service provider for daily claims, vendor management, TPA operations and staff augmentation. ICA offers training and educational opportunities to independent adjusters nationwide in ICA’s regional training facilities. Additional claims services offered by ICA include first notice of loss, fast track, field appraisals, quality control and consulting.
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NuQuest provides a full spectrum of Medicare Secondary Payer (“MSP”) statutory compliance services, from Medicare Set-aside Allocation through Professional Administration to over 250 insurance carriers, third-party administrators, self-insured employers, attorneys, brokers and related claims professionals nationwide. Specialty services include medical projections, life care plans, Medicare Set-aside analysis, allocation and administration
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|
Preferred Governmental Claims Solutions (“PGCS”) provides TPA services for government entities and self-funded or fully-insured workers’ compensation and liability plans and trusts. PGCS’ services include claims administration and a dedicated subrogation recovery department.
|
•
|
Less flexible employee relationships, which may make it difficult and expensive to terminate employees and which limits our ability to prohibit employees from competing with us after their employment ceases;
|
•
|
Adverse trade policies, and adverse changes to any of the policies of either the U.S. or any of the foreign jurisdictions in which we operate;
|
•
|
Burdens of complying with a wide variety of labor practices and foreign laws, including those relating to export and import duties, environmental policies and privacy issues.
|
|
High
|
|
Low
|
|
Cash
Dividends
Per
Common
Share
|
2016
|
|
|
|
|
|
First Quarter
|
$35.91
|
|
$28.41
|
|
$0.12
|
Second Quarter
|
$37.49
|
|
$34.23
|
|
$0.12
|
Third Quarter
|
$38.11
|
|
$35.81
|
|
$0.12
|
Fourth Quarter
|
$45.62
|
|
$36.05
|
|
$0.14
|
2017
|
|
|
|
|
|
First Quarter
|
$45.77
|
|
$41.68
|
|
$0.14
|
Second Quarter
|
$44.57
|
|
$41.10
|
|
$0.14
|
Third Quarter
|
$48.97
|
|
$42.30
|
|
$0.14
|
Fourth Quarter
|
$52.42
|
|
$48.07
|
|
$0.15
|
|
A
|
|
B
|
|
C
|
|
|||
Plan Category
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants
and rights(1)
|
|
Weighted-average
exercise price of
outstanding
options,
warrants and
rights(2)
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected
in column (A))(3)
|
|
|||
Equity compensation plans approved by shareholders:
|
|
|
|
|
|
|
|
|
|
Brown & Brown, Inc. 2000 Incentive Stock Option Plan
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
Brown & Brown, Inc. 2010 Stock Incentive Plan
|
N/A
|
|
|
N/A
|
|
|
4,197,920
|
|
(4)
|
Brown & Brown, Inc. 1990 Employee Stock Purchase Plan
|
N/A
|
|
|
N/A
|
|
|
4,151,251
|
|
|
Brown & Brown, Inc. Performance Stock Plan
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
Total
|
N/A
|
|
|
N/A
|
|
|
8,349,171
|
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(1)
|
In addition to the number of securities listed in this column, 3,252,040 shares are issuable upon the vesting of restricted stock granted under the Brown & Brown, Inc. Performance Stock Plan and the Brown & Brown, Inc. 2010 Stock Incentive Plan, which represents the maximum number of shares that can vest based upon the achievement of certain performance criteria.
|
(2)
|
The weighted-average exercise price excludes outstanding restricted stock as there is no exercise price associated with these equity awards.
|
(3)
|
All of the shares available for future issuance under the Brown & Brown, Inc. 2000 Incentive Stock Option Plan, the Brown & Brown, Inc. Performance Stock Plan, and the Brown & Brown, Inc. 2010 Stock Incentive Plan may be issued in connection with options, warrants, rights, restricted stock, or other stock-based awards.
|
(4)
|
The payout for 634,091 shares of our outstanding performance-based restricted stock grants 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 is calculated assuming the maximum payout for all restricted stock grants.
|
Period
|
|
Total Number of
Shares
Purchased (1)
|
|
Average
Price Paid
per Share
|
|
Total
Number of
Shares
Purchased
as Part of
Publicly
Announced
Plans or
Programs
|
|
Approximate
Dollar Value of
Shares that May
Yet Be
Purchased Under
the Plans or
Programs
|
||||||
October 1, 2017 to October 31, 2017
|
|
1,799
|
|
|
$
|
49.38
|
|
|
—
|
|
|
$
|
302,453,029
|
|
November 1, 2017 to November 30, 2017
|
|
1,295,819
|
|
|
49.40
|
|
|
1,290,486
|
|
|
238,703,029
|
|
||
December 1, 2017 to December 31, 2017
|
|
1,232
|
|
|
51.50
|
|
|
—
|
|
|
238,703,029
|
|
||
Total
|
|
1,298,850
|
|
|
$
|
49.40
|
|
|
1,290,486
|
|
|
$
|
238,703,029
|
|
|
12/12
|
|
12/13
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
||||||
Brown & Brown, Inc.
|
100.00
|
|
|
124.74
|
|
|
132.41
|
|
|
130.98
|
|
|
185.09
|
|
|
214.61
|
|
NYSE Composite
|
100.00
|
|
|
126.06
|
|
|
134.62
|
|
|
129.40
|
|
|
144.72
|
|
|
171.65
|
|
Peer Group
|
100.00
|
|
|
142.91
|
|
|
157.73
|
|
|
156.96
|
|
|
185.44
|
|
|
228.52
|
|
(in thousands, except per share data, number of employees and percentages
|
|
Year Ended December 31
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions and fees
|
|
$
|
1,857,270
|
|
|
$
|
1,762,787
|
|
|
$
|
1,656,951
|
|
|
$
|
1,567,460
|
|
|
$
|
1,355,503
|
|
Investment income
|
|
1,626
|
|
|
1,456
|
|
|
1,004
|
|
|
747
|
|
|
638
|
|
|||||
Other income, net
|
|
22,451
|
|
|
2,386
|
|
|
2,554
|
|
|
7,589
|
|
|
7,138
|
|
|||||
Total revenues
|
|
1,881,347
|
|
|
1,766,629
|
|
|
1,660,509
|
|
|
1,575,796
|
|
|
1,363,279
|
|
|||||
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Employee compensation and benefits
|
|
994,652
|
|
|
925,217
|
|
|
856,952
|
|
|
811,112
|
|
|
705,603
|
|
|||||
Other operating expenses
|
|
283,470
|
|
|
262,872
|
|
|
251,055
|
|
|
235,328
|
|
|
195,677
|
|
|||||
(Gain)/loss on disposal
|
|
(2,157
|
)
|
|
(1,291
|
)
|
|
(619
|
)
|
|
47,425
|
|
|
—
|
|
|||||
Amortization
|
|
85,446
|
|
|
86,663
|
|
|
87,421
|
|
|
82,941
|
|
|
67,932
|
|
|||||
Depreciation
|
|
22,698
|
|
|
21,003
|
|
|
20,890
|
|
|
20,895
|
|
|
17,485
|
|
|||||
Interest
|
|
38,316
|
|
|
39,481
|
|
|
39,248
|
|
|
28,408
|
|
|
16,440
|
|
|||||
Change in estimated acquisition earn-out payables
|
|
9,200
|
|
|
9,185
|
|
|
3,003
|
|
|
9,938
|
|
|
2,533
|
|
|||||
Total expenses
|
|
1,431,625
|
|
|
1,343,130
|
|
|
1,257,950
|
|
|
1,236,047
|
|
|
1,005,670
|
|
|||||
Income before income taxes
|
|
449,722
|
|
|
423,499
|
|
|
402,559
|
|
|
339,749
|
|
|
357,609
|
|
|||||
Income taxes
|
|
50,092
|
|
|
166,008
|
|
|
159,241
|
|
|
132,853
|
|
|
140,497
|
|
|||||
Net income
|
|
$
|
399,630
|
|
|
$
|
257,491
|
|
|
$
|
243,318
|
|
|
$
|
206,896
|
|
|
$
|
217,112
|
|
EARNINGS PER SHARE INFORMATION
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income per share - diluted
|
|
$
|
2.81
|
|
|
$
|
1.82
|
|
|
$
|
1.70
|
|
|
$
|
1.41
|
|
|
$
|
1.48
|
|
Weighted-average number of shares outstanding - diluted
|
|
138,793
|
|
|
137,804
|
|
|
140,112
|
|
|
142,891
|
|
|
142,624
|
|
|||||
Dividends declared per share
|
|
$
|
0.56
|
|
|
$
|
0.50
|
|
|
$
|
0.45
|
|
|
$
|
0.41
|
|
|
$
|
0.37
|
|
YEAR-END FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets(1)
|
|
$
|
5,747,550
|
|
|
$
|
5,262,734
|
|
|
$
|
4,979,844
|
|
|
$
|
4,931,027
|
|
|
$
|
3,620,232
|
|
Long-term debt(2)
|
|
$
|
856,141
|
|
|
$
|
1,018,372
|
|
|
$
|
1,071,618
|
|
|
$
|
1,142,948
|
|
|
$
|
379,171
|
|
Total shareholders’ equity
|
|
$
|
2,582,699
|
|
|
$
|
2,360,211
|
|
|
$
|
2,149,776
|
|
|
$
|
2,113,745
|
|
|
$
|
2,007,141
|
|
Total shares outstanding at year end
|
|
138,105
|
|
|
140,104
|
|
|
138,985
|
|
|
143,486
|
|
|
145,419
|
|
|||||
OTHER INFORMATION
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of full-time equivalent employees at year end
|
|
8,491
|
|
|
8,297
|
|
|
7,807
|
|
|
7,591
|
|
|
6,992
|
|
|||||
Total revenues per average number of employees(3)
|
|
$
|
224,130
|
|
|
$
|
219,403
|
|
|
$
|
215,679
|
|
|
$
|
216,114
|
|
|
$
|
203,020
|
|
Stock price at year end
|
|
$
|
51.46
|
|
|
$
|
44.86
|
|
|
$
|
32.10
|
|
|
$
|
32.91
|
|
|
$
|
31.39
|
|
Stock price earnings multiple at year-end(4)
|
|
18.3
|
|
|
24.6
|
|
|
18.9
|
|
|
23.3
|
|
|
21.2
|
|
|||||
Return on beginning shareholders’ equity(5)
|
|
17
|
%
|
|
12
|
%
|
|
12
|
%
|
|
10
|
%
|
|
12
|
%
|
(1)
|
Years 2016 to 2013 have been restated to reflect the adoption of ASU No. 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”).
|
(2)
|
Please refer to Part I, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 8 “Long-Term Debt” for more details.
|
(3)
|
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 equivalent employees at the end of the year.
|
(4)
|
Stock price at year-end divided by net income per share diluted.
|
(5)
|
Represents net income divided by total shareholders’ equity as of the beginning of the year.
|
(in thousands, except percentages)
|
2017
|
|
%
Change
|
|
2016
|
|
%
Change
|
|
2015
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||
Core commissions and fees
|
$
|
1,794,714
|
|
|
5.7
|
%
|
|
$
|
1,697,308
|
|
|
6.4
|
%
|
|
$
|
1,595,218
|
|
Profit-sharing contingent commissions
|
52,186
|
|
|
(3.4
|
)%
|
|
54,000
|
|
|
4.4
|
%
|
|
51,707
|
|
|||
Guaranteed supplemental commissions
|
10,370
|
|
|
(9.7
|
)%
|
|
11,479
|
|
|
14.5
|
%
|
|
10,026
|
|
|||
Commissions and fees
|
1,857,270
|
|
|
5.4
|
%
|
|
1,762,787
|
|
|
6.4
|
%
|
|
1,656,951
|
|
|||
Investment income
|
1,626
|
|
|
11.7
|
%
|
|
1,456
|
|
|
45.0
|
%
|
|
1,004
|
|
|||
Other income, net
|
22,451
|
|
|
NMF
|
|
|
2,386
|
|
|
(6.6
|
)%
|
|
2,554
|
|
|||
Total revenues
|
1,881,347
|
|
|
6.5
|
%
|
|
1,766,629
|
|
|
6.4
|
%
|
|
1,660,509
|
|
|||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits
|
994,652
|
|
|
7.5
|
%
|
|
925,217
|
|
|
8.0
|
%
|
|
856,952
|
|
|||
Other operating expenses
|
283,470
|
|
|
7.8
|
%
|
|
262,872
|
|
|
4.7
|
%
|
|
251,055
|
|
|||
(Gain)/loss on disposal
|
(2,157
|
)
|
|
67.1
|
%
|
|
(1,291
|
)
|
|
108.6
|
%
|
|
(619
|
)
|
|||
Amortization
|
85,446
|
|
|
(1.4
|
)%
|
|
86,663
|
|
|
(0.9
|
)%
|
|
87,421
|
|
|||
Depreciation
|
22,698
|
|
|
8.1
|
%
|
|
21,003
|
|
|
0.5
|
%
|
|
20,890
|
|
|||
Interest
|
38,316
|
|
|
(3.0
|
)%
|
|
39,481
|
|
|
0.6
|
%
|
|
39,248
|
|
|||
Change in estimated acquisition earn-out payables
|
9,200
|
|
|
0.2
|
%
|
|
9,185
|
|
|
NMF
|
|
|
3,003
|
|
|||
Total expenses
|
1,431,625
|
|
|
6.6
|
%
|
|
1,343,130
|
|
|
6.8
|
%
|
|
1,257,950
|
|
|||
Income before income taxes
|
449,722
|
|
|
6.2
|
%
|
|
423,499
|
|
|
5.2
|
%
|
|
402,559
|
|
|||
Income taxes
|
50,092
|
|
|
(69.8
|
)%
|
|
166,008
|
|
|
4.2
|
%
|
|
159,241
|
|
|||
NET INCOME
|
$
|
399,630
|
|
|
55.2
|
%
|
|
$
|
257,491
|
|
|
5.7
|
%
|
|
$
|
243,318
|
|
Organic revenue growth rate(1)
|
4.4
|
%
|
|
|
|
3.0
|
%
|
|
|
|
2.6
|
%
|
|||||
Employee compensation and benefits relative to total revenues
|
52.9
|
%
|
|
|
|
52.4
|
%
|
|
|
|
51.6
|
%
|
|||||
Other operating expenses relative to total revenues
|
15.1
|
%
|
|
|
|
14.9
|
%
|
|
|
|
15.1
|
%
|
|||||
Capital expenditures
|
$
|
24,192
|
|
|
|
|
$
|
17,765
|
|
|
|
|
$
|
18,375
|
|
||
Total assets at December 31
|
$
|
5,747,550
|
|
|
|
|
$
|
5,262,734
|
|
|
|
|
$
|
4,979,844
|
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Change in fair value of estimated acquisition earn-out payables
|
$
|
6,874
|
|
|
$
|
6,338
|
|
|
$
|
13
|
|
Interest expense accretion
|
2,326
|
|
|
2,847
|
|
|
2,990
|
|
|||
Net change in earnings from estimated acquisition earn-out payables
|
$
|
9,200
|
|
|
$
|
9,185
|
|
|
$
|
3,003
|
|
|
For the Year Ended December 31,
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
Commissions and fees
|
$
|
1,857,270
|
|
|
$
|
1,762,787
|
|
Less profit-sharing contingent commissions
|
52,186
|
|
|
54,000
|
|
||
Less guaranteed supplemental commissions
|
10,370
|
|
|
11,479
|
|
||
Core commissions and fees
|
1,794,714
|
|
|
1,697,308
|
|
||
Less acquisition revenues
|
27,739
|
|
|
—
|
|
||
Less divested businesses
|
—
|
|
|
4,912
|
|
||
Organic Revenue
|
$
|
1,766,975
|
|
|
$
|
1,692,396
|
|
2017
|
Retail(1)
|
|
National Programs
|
|
Wholesale Brokerage
|
|
Services
|
|
Total
|
||||||||||||||||||||||||||||||
(in thousands, except percentages)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
Commissions and fees
|
$
|
942,039
|
|
|
$
|
916,084
|
|
|
$
|
479,017
|
|
|
$
|
447,808
|
|
|
$
|
271,141
|
|
|
$
|
242,813
|
|
|
$
|
165,073
|
|
|
$
|
156,082
|
|
|
$
|
1,857,270
|
|
|
$
|
1,762,787
|
|
Total change
|
$
|
25,955
|
|
|
|
|
$
|
31,209
|
|
|
|
|
$
|
28,328
|
|
|
|
|
$
|
8,991
|
|
|
|
|
$
|
94,483
|
|
|
|
||||||||||
Total growth %
|
2.8
|
%
|
|
|
|
7.0
|
%
|
|
|
|
11.7
|
%
|
|
|
|
5.8
|
%
|
|
|
|
5.4
|
%
|
|
|
|||||||||||||||
Contingent commissions
|
23,377
|
|
|
25,207
|
|
|
20,123
|
|
|
17,306
|
|
|
8,686
|
|
|
11,487
|
|
|
—
|
|
|
—
|
|
|
52,186
|
|
|
54,000
|
|
||||||||||
GSCs
|
9,108
|
|
|
9,787
|
|
|
31
|
|
|
23
|
|
|
1,231
|
|
|
1,669
|
|
|
—
|
|
|
—
|
|
|
10,370
|
|
|
11,479
|
|
||||||||||
Core commissions and fees
|
$
|
909,554
|
|
|
$
|
881,090
|
|
|
$
|
458,863
|
|
|
$
|
430,479
|
|
|
$
|
261,224
|
|
|
$
|
229,657
|
|
|
$
|
165,073
|
|
|
$
|
156,082
|
|
|
$
|
1,794,714
|
|
|
$
|
1,697,308
|
|
Acquisition revenues
|
8,151
|
|
|
—
|
|
|
2,296
|
|
|
—
|
|
|
16,442
|
|
|
—
|
|
|
850
|
|
|
—
|
|
|
27,739
|
|
|
—
|
|
||||||||||
Divested business
|
—
|
|
|
4,838
|
|
|
—
|
|
|
277
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(203
|
)
|
|
—
|
|
|
4,912
|
|
||||||||||
Organic Revenue(2)
|
$
|
901,403
|
|
|
$
|
876,252
|
|
|
$
|
456,567
|
|
|
$
|
430,202
|
|
|
$
|
244,782
|
|
|
$
|
229,657
|
|
|
$
|
164,223
|
|
|
$
|
156,285
|
|
|
$
|
1,766,975
|
|
|
$
|
1,692,396
|
|
Organic revenue growth(2)
|
$
|
25,151
|
|
|
|
|
$
|
26,365
|
|
|
|
|
$
|
15,125
|
|
|
|
|
$
|
7,938
|
|
|
|
|
$
|
74,579
|
|
|
|
||||||||||
Organic revenue growth %(2)
|
2.9
|
%
|
|
|
|
6.1
|
%
|
|
|
|
6.6
|
%
|
|
|
|
5.1
|
%
|
|
|
|
4.4
|
%
|
|
|
|
(1)
|
The Retail Segment includes commissions and fees reported in the “Other” column of the Segment Information in Note 15 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.
|
(2)
|
A non-GAAP financial measure.
|
|
For the Year Ended December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Commissions and fees
|
$
|
1,762,787
|
|
|
$
|
1,656,951
|
|
Less profit-sharing contingent commissions
|
54,000
|
|
|
51,707
|
|
||
Less guaranteed supplemental commissions
|
11,479
|
|
|
10,026
|
|
||
Core commissions and fees
|
1,697,308
|
|
|
1,595,218
|
|
||
Less acquisition revenues
|
61,713
|
|
|
—
|
|
||
Less divested businesses
|
—
|
|
|
6,669
|
|
||
Organic Revenue
|
$
|
1,635,595
|
|
|
$
|
1,588,549
|
|
2016
|
Retail(1)
|
|
National Programs
|
|
Wholesale Brokerage
|
|
Services
|
|
Total
|
||||||||||||||||||||||||||||||
(in thousands, except percentages)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||
Commissions and fees
|
$
|
916,084
|
|
|
$
|
866,465
|
|
|
$
|
447,808
|
|
|
$
|
428,473
|
|
|
$
|
242,813
|
|
|
$
|
216,638
|
|
|
$
|
156,082
|
|
|
$
|
145,375
|
|
|
$
|
1,762,787
|
|
|
$
|
1,656,951
|
|
Total change
|
$
|
49,619
|
|
|
|
|
$
|
19,335
|
|
|
|
|
$
|
26,175
|
|
|
|
|
$
|
10,707
|
|
|
|
|
$
|
105,836
|
|
|
|
||||||||||
Total growth %
|
5.7
|
%
|
|
|
|
4.5
|
%
|
|
|
|
12.1
|
%
|
|
|
|
7.4
|
%
|
|
|
|
6.4
|
%
|
|
|
|||||||||||||||
Contingent commissions
|
25,207
|
|
|
22,051
|
|
|
17,306
|
|
|
15,558
|
|
|
11,487
|
|
|
14,098
|
|
|
—
|
|
|
—
|
|
|
54,000
|
|
|
51,707
|
|
||||||||||
GSCs
|
9,787
|
|
|
8,291
|
|
|
23
|
|
|
30
|
|
|
1,669
|
|
|
1,705
|
|
|
—
|
|
|
—
|
|
|
11,479
|
|
|
10,026
|
|
||||||||||
Core commissions and fees
|
$
|
881,090
|
|
|
$
|
836,123
|
|
|
$
|
430,479
|
|
|
$
|
412,885
|
|
|
$
|
229,657
|
|
|
$
|
200,835
|
|
|
$
|
156,082
|
|
|
$
|
145,375
|
|
|
$
|
1,697,308
|
|
|
$
|
1,595,218
|
|
Acquisition revenues
|
31,151
|
|
|
—
|
|
|
1,680
|
|
|
—
|
|
|
20,164
|
|
|
—
|
|
|
8,718
|
|
|
—
|
|
|
61,713
|
|
|
—
|
|
||||||||||
Divested business
|
—
|
|
|
1,926
|
|
|
—
|
|
|
1,296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,447
|
|
|
—
|
|
|
6,669
|
|
||||||||||
Organic Revenue(2)
|
$
|
849,939
|
|
|
$
|
834,197
|
|
|
$
|
428,799
|
|
|
$
|
411,589
|
|
|
$
|
209,493
|
|
|
$
|
200,835
|
|
|
$
|
147,364
|
|
|
$
|
141,928
|
|
|
$
|
1,635,595
|
|
|
$
|
1,588,549
|
|
Organic revenue growth(2)
|
$
|
15,742
|
|
|
|
|
$
|
17,210
|
|
|
|
|
$
|
8,658
|
|
|
|
|
$
|
5,436
|
|
|
|
|
$
|
47,046
|
|
|
|
||||||||||
Organic revenue growth %(2)
|
1.9
|
%
|
|
|
|
4.2
|
%
|
|
|
|
4.3
|
%
|
|
|
|
3.8
|
%
|
|
|
|
3.0
|
%
|
|
|
|
(1)
|
The Retail Segment includes commissions and fees reported in the “Other” column of the Segment Information in Note 15 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.
|
(2)
|
A non-GAAP financial measure.
|
|
For the Year Ended December 31,
|
||||||
(in thousands)
|
2015
|
|
2014
|
||||
Commissions and fees
|
$
|
1,656,951
|
|
|
$
|
1,567,460
|
|
Less profit-sharing contingent commissions
|
51,707
|
|
|
57,706
|
|
||
Less guaranteed supplemental commissions
|
10,026
|
|
|
9,851
|
|
||
Core commissions and fees
|
1,595,218
|
|
|
1,499,903
|
|
||
Less acquisition revenues
|
76,632
|
|
|
—
|
|
||
Less divested businesses
|
—
|
|
|
19,336
|
|
||
Organic Revenue
|
$
|
1,518,586
|
|
|
$
|
1,480,567
|
|
2015
|
Retail(1)
|
|
National Programs
|
|
Wholesale Brokerage
|
|
Services
|
|
Total
|
||||||||||||||||||||||||||||||
(in thousands, except percentages)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
Commissions and fees
|
$
|
866,465
|
|
|
$
|
822,140
|
|
|
$
|
428,473
|
|
|
$
|
397,326
|
|
|
$
|
216,638
|
|
|
$
|
211,512
|
|
|
$
|
145,375
|
|
|
$
|
136,482
|
|
|
$
|
1,656,951
|
|
|
$
|
1,567,460
|
|
Total change
|
$
|
44,325
|
|
|
|
|
$
|
31,147
|
|
|
|
|
$
|
5,126
|
|
|
|
|
$
|
8,893
|
|
|
|
|
$
|
89,491
|
|
|
|
||||||||||
Total growth %
|
5.4
|
%
|
|
|
|
7.8
|
%
|
|
|
|
2.4
|
%
|
|
|
|
6.5
|
%
|
|
|
|
5.7
|
%
|
|
|
|||||||||||||||
Contingent commissions
|
22,051
|
|
|
21,616
|
|
|
15,558
|
|
|
20,822
|
|
|
14,098
|
|
|
15,268
|
|
|
—
|
|
|
—
|
|
|
51,707
|
|
|
57,706
|
|
||||||||||
GSCs
|
8,291
|
|
|
7,730
|
|
|
30
|
|
|
21
|
|
|
1,705
|
|
|
2,100
|
|
|
—
|
|
|
—
|
|
|
10,026
|
|
|
9,851
|
|
||||||||||
Core commissions and fees
|
$
|
836,123
|
|
|
$
|
792,794
|
|
|
$
|
412,885
|
|
|
$
|
376,483
|
|
|
$
|
200,835
|
|
|
$
|
194,144
|
|
|
$
|
145,375
|
|
|
$
|
136,482
|
|
|
$
|
1,595,218
|
|
|
$
|
1,499,903
|
|
Acquisition revenues
|
35,644
|
|
|
—
|
|
|
38,519
|
|
|
—
|
|
|
2,469
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,632
|
|
|
—
|
|
||||||||||
Divested business
|
—
|
|
|
3,291
|
|
|
—
|
|
|
8,811
|
|
|
—
|
|
|
6,887
|
|
|
—
|
|
|
347
|
|
|
—
|
|
|
19,336
|
|
||||||||||
Organic Revenue(2)
|
$
|
800,479
|
|
|
$
|
789,503
|
|
|
$
|
374,366
|
|
|
$
|
367,672
|
|
|
$
|
198,366
|
|
|
$
|
187,257
|
|
|
$
|
145,375
|
|
|
$
|
136,135
|
|
|
$
|
1,518,586
|
|
|
$
|
1,480,567
|
|
Organic revenue growth(2)
|
$
|
10,976
|
|
|
|
|
$
|
6,694
|
|
|
|
|
$
|
11,109
|
|
|
|
|
$
|
9,240
|
|
|
|
|
$
|
38,019
|
|
|
|
||||||||||
Organic revenue growth %(2)
|
1.4
|
%
|
|
|
|
1.8
|
%
|
|
|
|
5.9
|
%
|
|
|
|
6.8
|
%
|
|
|
|
2.6
|
%
|
|
|
|
(1)
|
The Retail Segment includes commissions and fees reported in the “Other” column of the Segment Information in Note 15 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items.
|
(2)
|
A non-GAAP financial measure.
|
|
|
(in thousands, except percentages)
|
2017
|
|
% Change
|
|
2016
|
|
% Change
|
|
2015
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
||||||||
Core commissions and fees
|
$
|
261,224
|
|
|
13.7
|
%
|
|
$
|
229,657
|
|
|
14.4
|
%
|
|
$
|
200,835
|
|
Profit-sharing contingent commissions
|
8,686
|
|
|
(24.4
|
)%
|
|
11,487
|
|
|
(18.5
|
)%
|
|
14,098
|
|
|||
Guaranteed supplemental commissions
|
1,231
|
|
|
(26.2
|
)%
|
|
1,669
|
|
|
(2.1
|
)%
|
|
1,705
|
|
|||
Commissions and fees
|
271,141
|
|
|
11.7
|
%
|
|
242,813
|
|
|
12.1
|
%
|
|
216,638
|
|
|||
Investment income
|
—
|
|
|
(100.0
|
)%
|
|
4
|
|
|
(97.3
|
)%
|
|
150
|
|
|||
Other income, net
|
596
|
|
|
108.4
|
%
|
|
286
|
|
|
37.5
|
%
|
|
208
|
|
|||
Total revenues
|
271,737
|
|
|
11.8
|
%
|
|
243,103
|
|
|
12.0
|
%
|
|
216,996
|
|
|||
EXPENSES
|
|
|
|
|
|
|
|
|
|
||||||||
Employee compensation and benefits
|
138,297
|
|
|
13.5
|
%
|
|
121,863
|
|
|
16.4
|
%
|
|
104,692
|
|
|||
Other operating expenses
|
44,665
|
|
|
6.0
|
%
|
|
42,139
|
|
|
22.6
|
%
|
|
34,379
|
|
|||
(Gain)/loss on disposal
|
—
|
|
|
—
|
%
|
|
—
|
|
|
(100.0
|
)%
|
|
(385
|
)
|
|||
Amortization
|
11,456
|
|
|
6.1
|
%
|
|
10,801
|
|
|
10.9
|
%
|
|
9,739
|
|
|||
Depreciation
|
1,885
|
|
|
(4.6
|
)%
|
|
1,975
|
|
|
(7.8
|
)%
|
|
2,142
|
|
|||
Interest
|
6,263
|
|
|
57.5
|
%
|
|
3,976
|
|
|
NMF
|
|
|
891
|
|
|||
Change in estimated acquisition earn-out payables
|
327
|
|
|
NMF
|
|
|
(274
|
)
|
|
(133.0
|
)%
|
|
830
|
|
|||
Total expenses
|
202,893
|
|
|
12.4
|
%
|
|
180,480
|
|
|
18.5
|
%
|
|
152,288
|
|
|||
Income before income taxes
|
$
|
68,844
|
|
|
9.9
|
%
|
|
$
|
62,623
|
|
|
(3.2
|
)%
|
|
$
|
64,708
|
|
Organic revenue growth rate(1)
|
6.6
|
%
|
|
|
|
4.3
|
%
|
|
|
|
5.9
|
%
|
|||||
Employee compensation and benefits relative to total revenues
|
50.9
|
%
|
|
|
|
50.1
|
%
|
|
|
|
48.2
|
%
|
|||||
Other operating expenses relative to total revenues
|
16.4
|
%
|
|
|
|
17.3
|
%
|
|
|
|
15.8
|
%
|
|||||
Capital expenditures
|
$
|
1,836
|
|
|
|
|
$
|
1,301
|
|
|
|
|
$
|
3,084
|
|
||
Total assets at December 31
|
$
|
1,260,239
|
|
|
|
|
$
|
1,108,829
|
|
|
|
|
$
|
895,782
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
(in thousands)
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
After 5
Years
|
||||||||||
Long-term debt
|
$
|
985,000
|
|
|
$
|
120,000
|
|
|
$
|
70,000
|
|
|
$
|
295,000
|
|
|
$
|
500,000
|
|
Other liabilities(1)
|
51,266
|
|
|
3,973
|
|
|
8,305
|
|
|
2,430
|
|
|
36,558
|
|
|||||
Operating leases
|
210,559
|
|
|
43,080
|
|
|
73,272
|
|
|
49,711
|
|
|
44,496
|
|
|||||
Interest obligations
|
188,285
|
|
|
35,450
|
|
|
62,455
|
|
|
54,505
|
|
|
35,875
|
|
|||||
Unrecognized tax benefits
|
1,694
|
|
|
—
|
|
|
1,694
|
|
|
—
|
|
|
—
|
|
|||||
Maximum future acquisition contingency payments(2)
|
88,382
|
|
|
42,233
|
|
|
46,149
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
1,525,186
|
|
|
$
|
244,736
|
|
|
$
|
261,875
|
|
|
$
|
401,646
|
|
|
$
|
616,929
|
|
|
(1)
|
Includes the current portion of other long-term liabilities.
|
(2)
|
Includes $36.2 million of current and non-current estimated earn-out payables resulting from acquisitions consummated after January 1, 2009.
|
(in thousands, except per share data)
|
For the Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
REVENUES
|
|
|
|
|
|
||||||
Commissions and fees
|
$
|
1,857,270
|
|
|
$
|
1,762,787
|
|
|
$
|
1,656,951
|
|
Investment income
|
1,626
|
|
|
1,456
|
|
|
1,004
|
|
|||
Other income, net
|
22,451
|
|
|
2,386
|
|
|
2,554
|
|
|||
Total revenues
|
1,881,347
|
|
|
1,766,629
|
|
|
1,660,509
|
|
|||
EXPENSES
|
|
|
|
|
|
||||||
Employee compensation and benefits
|
994,652
|
|
|
925,217
|
|
|
856,952
|
|
|||
Other operating expenses
|
283,470
|
|
|
262,872
|
|
|
251,055
|
|
|||
(Gain)/loss on disposal
|
(2,157
|
)
|
|
(1,291
|
)
|
|
(619
|
)
|
|||
Amortization
|
85,446
|
|
|
86,663
|
|
|
87,421
|
|
|||
Depreciation
|
22,698
|
|
|
21,003
|
|
|
20,890
|
|
|||
Interest
|
38,316
|
|
|
39,481
|
|
|
39,248
|
|
|||
Change in estimated acquisition earn-out payables
|
9,200
|
|
|
9,185
|
|
|
3,003
|
|
|||
Total expenses
|
1,431,625
|
|
|
1,343,130
|
|
|
1,257,950
|
|
|||
Income before income taxes
|
449,722
|
|
|
423,499
|
|
|
402,559
|
|
|||
Income taxes
|
50,092
|
|
|
166,008
|
|
|
159,241
|
|
|||
Net income
|
$
|
399,630
|
|
|
$
|
257,491
|
|
|
$
|
243,318
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.86
|
|
|
$
|
1.84
|
|
|
$
|
1.72
|
|
Diluted
|
$
|
2.81
|
|
|
$
|
1.82
|
|
|
$
|
1.70
|
|
Dividends declared per share
|
$
|
0.56
|
|
|
$
|
0.50
|
|
|
$
|
0.45
|
|
(in thousands, except per share data)
|
December 31,
2017 |
|
December 31,
2016 |
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
573,383
|
|
|
$
|
515,646
|
|
Restricted cash and investments
|
250,705
|
|
|
265,637
|
|
||
Short-term investments
|
24,965
|
|
|
15,048
|
|
||
Premiums, commissions and fees receivable
|
546,402
|
|
|
502,482
|
|
||
Reinsurance recoverable
|
477,820
|
|
|
78,083
|
|
||
Prepaid reinsurance premiums
|
321,017
|
|
|
308,661
|
|
||
Other current assets
|
47,864
|
|
|
50,571
|
|
||
Total current assets
|
2,242,156
|
|
|
1,736,128
|
|
||
Fixed assets, net
|
77,086
|
|
|
75,807
|
|
||
Goodwill
|
2,716,079
|
|
|
2,675,402
|
|
||
Amortizable intangible assets, net
|
641,005
|
|
|
707,454
|
|
||
Investments
|
13,949
|
|
|
23,048
|
|
||
Other assets
|
57,275
|
|
|
44,895
|
|
||
Total assets
|
$
|
5,747,550
|
|
|
$
|
5,262,734
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Premiums payable to insurance companies
|
$
|
685,163
|
|
|
$
|
647,564
|
|
Losses and loss adjustment reserve
|
476,721
|
|
|
78,083
|
|
||
Unearned premiums
|
321,017
|
|
|
308,661
|
|
||
Premium deposits and credits due customers
|
91,648
|
|
|
83,765
|
|
||
Accounts payable
|
64,177
|
|
|
69,595
|
|
||
Accrued expenses and other liabilities
|
228,748
|
|
|
201,989
|
|
||
Current portion of long-term debt
|
120,000
|
|
|
55,500
|
|
||
Total current liabilities
|
1,987,474
|
|
|
1,445,157
|
|
||
Long-term debt less unamortized discount and debt issuance costs
|
856,141
|
|
|
1,018,372
|
|
||
Deferred income taxes, net
|
256,185
|
|
|
357,686
|
|
||
Other liabilities
|
65,051
|
|
|
81,308
|
|
||
Shareholders’ Equity:
|
|
|
|
||||
Common stock, par value $0.10 per share; authorized 280,000 shares; issued 148,824 shares and outstanding 138,105 shares at 2017, issued 148,107 shares and outstanding 140,104 shares at 2016
|
14,882
|
|
|
14,811
|
|
||
Additional paid-in capital
|
497,540
|
|
|
468,443
|
|
||
Treasury stock, at cost 10,719 and 8,003 shares at 2017 and 2016, respectively
|
(386,322
|
)
|
|
(257,683
|
)
|
||
Retained earnings
|
2,456,599
|
|
|
2,134,640
|
|
||
Total shareholders’ equity
|
2,582,699
|
|
|
2,360,211
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,747,550
|
|
|
$
|
5,262,734
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
||||||||||||
(in thousands, except per share data)
|
Shares
|
|
Par Value
|
|
Additional Paid-In Capital
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Total
|
||||||||||
Balance at January 1, 2015
|
145,871
|
|
$
|
14,587
|
|
|
$
|
405,982
|
|
|
$
|
(75,025
|
)
|
|
$
|
1,768,201
|
|
|
$
|
2,113,745
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
243,318
|
|
|
243,318
|
|
||||||
Common stock issued for employee stock benefit plans
|
528
|
|
53
|
|
|
27,992
|
|
|
|
|
|
|
|
|
28,045
|
|
|||||
Purchase of treasury stock
|
|
|
|
|
|
(11,250
|
)
|
|
(163,750
|
)
|
|
|
|
(175,000
|
)
|
||||||
Income tax benefit from exercise of stock benefit plans
|
|
|
|
|
|
3,276
|
|
|
|
|
|
|
|
|
3,276
|
|
|||||
Common stock issued to directors
|
16
|
|
2
|
|
|
498
|
|
|
|
|
|
|
|
|
500
|
|
|||||
Cash dividends paid ($0.41 per share)
|
|
|
|
|
|
|
|
|
|
|
(64,108
|
)
|
|
(64,108
|
)
|
||||||
Balance at December 31, 2015
|
146,415
|
|
14,642
|
|
|
426,498
|
|
|
(238,775
|
)
|
|
1,947,411
|
|
|
2,149,776
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
|
|
257,491
|
|
|
257,491
|
|
||||||
Common stock issued for employee stock benefit plans
|
1,675
|
|
167
|
|
|
22,851
|
|
|
|
|
|
|
|
|
23,018
|
|
|||||
Purchase of treasury stock
|
|
|
|
|
|
11,250
|
|
|
(18,908
|
)
|
|
|
|
(7,658
|
)
|
||||||
Income tax benefit from exercise of stock benefit plans
|
|
|
|
|
|
7,346
|
|
|
|
|
|
|
|
|
7,346
|
|
|||||
Common stock issued to directors
|
17
|
|
2
|
|
|
498
|
|
|
|
|
|
|
|
|
500
|
|
|||||
Cash dividends paid ($0.50 per share)
|
|
|
|
|
|
|
|
|
|
|
(70,262
|
)
|
|
(70,262
|
)
|
||||||
Balance at December 31, 2016
|
148,107
|
|
14,811
|
|
|
468,443
|
|
|
(257,683
|
)
|
|
2,134,640
|
|
|
2,360,211
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
|
|
399,630
|
|
|
399,630
|
|
||||||
Net unrealized holding (loss) gain on available-for-sale securities
|
|
|
|
|
(47
|
)
|
|
|
|
41
|
|
|
(6
|
)
|
|||||||
Common stock issued for employee stock benefit plans
|
706
|
|
70
|
|
|
39,895
|
|
|
|
|
|
|
|
|
39,965
|
|
|||||
Purchase of treasury stock
|
|
|
|
|
|
(11,250
|
)
|
|
(128,639
|
)
|
|
|
|
(139,889
|
)
|
||||||
Common stock issued to directors
|
11
|
|
1
|
|
|
499
|
|
|
|
|
|
|
|
|
500
|
|
|||||
Cash dividends paid ($0.56 per share)
|
|
|
|
|
|
|
|
|
|
|
(77,712
|
)
|
|
(77,712
|
)
|
||||||
Balance at December 31, 2017
|
148,824
|
|
$
|
14,882
|
|
|
$
|
497,540
|
|
|
$
|
(386,322
|
)
|
|
$
|
2,456,599
|
|
|
$
|
2,582,699
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
399,630
|
|
|
$
|
257,491
|
|
|
$
|
243,318
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Amortization
|
85,446
|
|
|
86,663
|
|
|
87,421
|
|
|||
Depreciation
|
22,698
|
|
|
21,003
|
|
|
20,890
|
|
|||
Non-cash stock-based compensation
|
30,631
|
|
|
16,052
|
|
|
15,513
|
|
|||
Change in estimated acquisition earn-out payables
|
9,200
|
|
|
9,185
|
|
|
3,003
|
|
|||
Deferred income taxes
|
(102,183
|
)
|
|
18,163
|
|
|
22,696
|
|
|||
Amortization of debt discount
|
158
|
|
|
165
|
|
|
157
|
|
|||
Amortization and disposal of deferred financing costs
|
1,682
|
|
|
1,597
|
|
|
—
|
|
|||
Accretion of discounts and premiums, investments
|
22
|
|
|
39
|
|
|
—
|
|
|||
Income tax benefit from exercise of shares from the stock benefit plans
|
—
|
|
|
(7,346
|
)
|
|
(3,276
|
)
|
|||
Loss/(gain) on sales of investments, fixed assets and customer accounts
|
(1,841
|
)
|
|
596
|
|
|
(107
|
)
|
|||
Payments on acquisition earn-outs in excess of original estimated payables
|
(14,501
|
)
|
|
(3,904
|
)
|
|
(11,383
|
)
|
|||
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
|
|
|
|
|
|
||||||
Premiums, commissions and fees receivable (increase)
|
(43,306
|
)
|
|
(63,550
|
)
|
|
(7,163
|
)
|
|||
Reinsurance recoverables (increase)
|
(399,737
|
)
|
|
(46,115
|
)
|
|
(18,940
|
)
|
|||
Prepaid reinsurance premiums (increase) decrease
|
(12,356
|
)
|
|
982
|
|
|
10,943
|
|
|||
Other assets (increase)
|
(9,747
|
)
|
|
(4,718
|
)
|
|
(5,318
|
)
|
|||
Premiums payable to insurance companies decrease
|
37,380
|
|
|
66,084
|
|
|
542
|
|
|||
Premium deposits and credits due customers increase (decrease)
|
7,750
|
|
|
527
|
|
|
(2,973
|
)
|
|||
Losses and loss adjustment reserve increase
|
398,638
|
|
|
46,115
|
|
|
18,940
|
|
|||
Unearned premiums increase (decrease)
|
12,356
|
|
|
(982
|
)
|
|
(10,943
|
)
|
|||
Accounts payable increase
|
26,798
|
|
|
30,174
|
|
|
34,206
|
|
|||
Accrued expenses and other liabilities increase
|
25,509
|
|
|
8,670
|
|
|
8,204
|
|
|||
Other liabilities (decrease)
|
(32,252
|
)
|
|
(25,849
|
)
|
|
(23,898
|
)
|
|||
Net cash provided by operating activities
|
441,975
|
|
|
411,042
|
|
|
381,832
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to fixed assets
|
(24,192
|
)
|
|
(17,765
|
)
|
|
(18,375
|
)
|
|||
Payments for businesses acquired, net of cash acquired
|
(41,471
|
)
|
|
(122,622
|
)
|
|
(136,000
|
)
|
|||
Proceeds from sales of fixed assets and customer accounts
|
4,094
|
|
|
4,957
|
|
|
10,576
|
|
|||
Purchases of investments
|
(10,665
|
)
|
|
(25,872
|
)
|
|
(22,766
|
)
|
|||
Proceeds from sales of investments
|
9,644
|
|
|
18,890
|
|
|
21,928
|
|
|||
Net cash used in investing activities
|
(62,590
|
)
|
|
(142,412
|
)
|
|
(144,637
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payments on acquisition earn-outs
|
(29,265
|
)
|
|
(24,309
|
)
|
|
(25,415
|
)
|
|||
Payments on long-term debt
|
(96,750
|
)
|
|
(73,125
|
)
|
|
(45,625
|
)
|
|||
Deferred debt issuance costs
|
(2,821
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax benefit from exercise of shares from the stock benefit plans
|
—
|
|
|
7,346
|
|
|
3,276
|
|
|||
Issuances of common stock for employee stock benefit plans
|
17,422
|
|
|
15,983
|
|
|
15,890
|
|
|||
Repurchase of stock benefit plan shares for employees to fund tax withholdings
|
(7,565
|
)
|
|
(8,495
|
)
|
|
(2,857
|
)
|
|||
Purchase of treasury stock
|
(128,639
|
)
|
|
(18,908
|
)
|
|
(163,750
|
)
|
|||
Settlement (prepayment) of accelerated share repurchase program
|
(11,250
|
)
|
|
11,250
|
|
|
(11,250
|
)
|
|||
Cash dividends paid
|
(77,712
|
)
|
|
(70,262
|
)
|
|
(64,108
|
)
|
|||
Net cash used in by financing activities
|
(336,580
|
)
|
|
(160,520
|
)
|
|
(293,839
|
)
|
|||
Net increase (decrease) in cash and cash equivalents inclusive of restricted cash
|
42,805
|
|
|
108,110
|
|
|
(56,644
|
)
|
|||
Cash and cash equivalents inclusive of restricted cash at beginning of period
|
781,283
|
|
|
673,173
|
|
|
729,817
|
|
|||
Cash and cash equivalents inclusive of restricted cash at end of period
|
$
|
824,088
|
|
|
$
|
781,283
|
|
|
$
|
673,173
|
|
(in thousands, except per share data)
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
399,630
|
|
|
$
|
257,491
|
|
|
$
|
243,318
|
|
Net income attributable to unvested awarded performance stock
|
(9,746
|
)
|
|
(6,705
|
)
|
|
(5,695
|
)
|
|||
Net income attributable to common shares
|
$
|
389,884
|
|
|
$
|
250,786
|
|
|
$
|
237,623
|
|
Weighted-average number of common shares outstanding – basic
|
139,697
|
|
|
139,779
|
|
|
141,113
|
|
|||
Less unvested awarded performance stock included in weighted-average number of common shares outstanding – basic
|
(3,407
|
)
|
|
(3,640
|
)
|
|
(3,303
|
)
|
|||
Weighted-average number of common shares outstanding for basic earnings per common share
|
136,290
|
|
|
136,139
|
|
|
137,810
|
|
|||
Dilutive effect of stock options
|
2,503
|
|
|
1,665
|
|
|
2,302
|
|
|||
Weighted-average number of shares outstanding – diluted
|
138,793
|
|
|
137,804
|
|
|
140,112
|
|
|||
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.86
|
|
|
$
|
1.84
|
|
|
$
|
1.72
|
|
Diluted
|
$
|
2.81
|
|
|
$
|
1.82
|
|
|
$
|
1.70
|
|
(in thousands)
|
Total
|
||
Other current assets
|
$
|
601
|
|
Fixed assets
|
69
|
|
|
Goodwill
|
42,172
|
|
|
Purchased customer accounts
|
18,738
|
|
|
Non-compete agreements
|
721
|
|
|
Total assets acquired
|
62,301
|
|
|
Other current liabilities
|
(1,512
|
)
|
|
Deferred income tax, net
|
(689
|
)
|
|
Total liabilities assumed
|
(2,201
|
)
|
|
Net assets acquired
|
$
|
60,100
|
|
(UNAUDITED)
|
For the Year Ended December 31,
|
||||||
(in thousands, except per share data)
|
2017
|
|
2016
|
||||
Total revenues
|
$
|
1,891,701
|
|
|
$
|
1,784,776
|
|
Income before income taxes
|
$
|
453,397
|
|
|
$
|
429,490
|
|
Net income
|
$
|
401,908
|
|
|
$
|
261,133
|
|
Net income per share:
|
|
|
|
||||
Basic
|
$
|
2.88
|
|
|
$
|
1.87
|
|
Diluted
|
$
|
2.83
|
|
|
$
|
1.85
|
|
Weighted-average number of shares outstanding:
|
|
|
|
||||
Basic
|
136,290
|
|
|
136,139
|
|
||
Diluted
|
138,793
|
|
|
137,804
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Name
|
Business
Segment |
|
Effective
Date of Acquisition |
|
Cash
Paid |
|
Note Payable
|
|
Other
Payable |
|
Recorded
Earn-Out Payable |
|
Net Assets
Acquired |
|
Maximum
Potential Earn- Out Payable |
||||||||||||
Social Security Advocates for the Disabled LLC (SSAD)
|
Services
|
|
February 1, 2016
|
|
$
|
32,526
|
|
|
$
|
492
|
|
|
$
|
—
|
|
|
$
|
971
|
|
|
$
|
33,989
|
|
|
$
|
3,500
|
|
Morstan General Agency, Inc. (Morstan)
|
Wholesale Brokerage
|
|
June 1, 2016
|
|
66,050
|
|
|
—
|
|
|
10,200
|
|
|
3,091
|
|
|
79,341
|
|
|
5,000
|
|
||||||
Other
|
Various
|
|
Various
|
|
26,140
|
|
|
—
|
|
|
464
|
|
|
400
|
|
|
27,004
|
|
|
7,785
|
|
||||||
Total
|
|
|
|
|
$
|
124,716
|
|
|
$
|
492
|
|
|
$
|
10,664
|
|
|
$
|
4,462
|
|
|
$
|
140,334
|
|
|
$
|
16,285
|
|
(in thousands)
|
SSAD
|
|
Morstan
|
|
Other
|
|
Total
|
||||||||
Cash
|
$
|
2,094
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,094
|
|
Other current assets
|
1,042
|
|
|
2,482
|
|
|
1,555
|
|
|
5,079
|
|
||||
Fixed assets
|
307
|
|
|
300
|
|
|
77
|
|
|
684
|
|
||||
Goodwill
|
22,352
|
|
|
51,454
|
|
|
19,570
|
|
|
93,376
|
|
||||
Purchased customer accounts
|
13,069
|
|
|
26,481
|
|
|
11,075
|
|
|
50,625
|
|
||||
Non-compete agreements
|
72
|
|
|
39
|
|
|
117
|
|
|
228
|
|
||||
Other assets
|
—
|
|
|
—
|
|
|
20
|
|
|
20
|
|
||||
Total assets acquired
|
38,936
|
|
|
80,756
|
|
|
32,414
|
|
|
152,106
|
|
||||
Other current liabilities
|
(1,717
|
)
|
|
(1,415
|
)
|
|
(5,410
|
)
|
|
(8,542
|
)
|
||||
Deferred income tax, net
|
(3,230
|
)
|
|
—
|
|
|
—
|
|
|
(3,230
|
)
|
||||
Total liabilities assumed
|
(4,947
|
)
|
|
(1,415
|
)
|
|
(5,410
|
)
|
|
(11,772
|
)
|
||||
Net assets acquired
|
$
|
33,989
|
|
|
$
|
79,341
|
|
|
$
|
27,004
|
|
|
$
|
140,334
|
|
(UNAUDITED)
|
For the Year Ended December 31,
|
||||||
(in thousands, except per share data)
|
2016
|
|
2015
|
||||
Total revenues
|
$
|
1,789,790
|
|
|
$
|
1,716,592
|
|
Income before income taxes
|
$
|
428,194
|
|
|
$
|
414,911
|
|
Net income
|
$
|
260,346
|
|
|
$
|
250,783
|
|
Net income per share:
|
|
|
|
||||
Basic
|
$
|
1.86
|
|
|
$
|
1.78
|
|
Diluted
|
$
|
1.84
|
|
|
$
|
1.75
|
|
Weighted-average number of shares outstanding:
|
|
|
|
||||
Basic
|
136,139
|
|
|
137,810
|
|
||
Diluted
|
137,804
|
|
|
140,112
|
|
(in thousands)
|
Liberty
|
|
Spain
|
|
Bellingham
|
|
Fitness
|
|
SBA
|
|
Bentrust
|
|
MBA
|
|
Smith
|
|
Other
|
|
Total
|
||||||||||||||||||||
Other current assets
|
$
|
2,486
|
|
|
$
|
324
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
652
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169
|
|
|
$
|
3,640
|
|
Fixed assets
|
40
|
|
|
50
|
|
|
25
|
|
|
17
|
|
|
41
|
|
|
36
|
|
|
33
|
|
|
73
|
|
|
59
|
|
|
374
|
|
||||||||||
Goodwill
|
10,010
|
|
|
15,748
|
|
|
9,608
|
|
|
8,105
|
|
|
39,859
|
|
|
8,166
|
|
|
13,471
|
|
|
10,374
|
|
|
21,040
|
|
|
136,381
|
|
||||||||||
Purchased customer accounts
|
4,506
|
|
|
7,430
|
|
|
3,223
|
|
|
3,715
|
|
|
23,000
|
|
|
2,789
|
|
|
7,338
|
|
|
3,526
|
|
|
(2,135
|
)
|
|
53,392
|
|
||||||||||
Non-compete agreements
|
24
|
|
|
21
|
|
|
21
|
|
|
—
|
|
|
21
|
|
|
43
|
|
|
11
|
|
|
31
|
|
|
156
|
|
|
328
|
|
||||||||||
Other assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||||||
Total assets acquired
|
17,066
|
|
|
23,573
|
|
|
12,877
|
|
|
11,846
|
|
|
63,587
|
|
|
11,034
|
|
|
20,853
|
|
|
14,004
|
|
|
19,289
|
|
|
194,129
|
|
||||||||||
Other current liabilities
|
(42
|
)
|
|
(250
|
)
|
|
(48
|
)
|
|
(12
|
)
|
|
—
|
|
|
(182
|
)
|
|
(6,280
|
)
|
|
(504
|
)
|
|
(4,895
|
)
|
|
(12,213
|
)
|
||||||||||
Deferred income tax, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,576
|
|
|
2,576
|
|
||||||||||
Other liabilities
|
(2,043
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(157
|
)
|
|
635
|
|
|
(1,565
|
)
|
||||||||||
Total liabilities assumed
|
(2,085
|
)
|
|
(250
|
)
|
|
(48
|
)
|
|
(12
|
)
|
|
—
|
|
|
(182
|
)
|
|
(6,280
|
)
|
|
(661
|
)
|
|
(1,684
|
)
|
|
(11,202
|
)
|
||||||||||
Net assets acquired
|
$
|
14,981
|
|
|
$
|
23,323
|
|
|
$
|
12,829
|
|
|
$
|
11,834
|
|
|
$
|
63,587
|
|
|
$
|
10,852
|
|
|
$
|
14,573
|
|
|
$
|
13,343
|
|
|
$
|
17,605
|
|
|
$
|
182,927
|
|
(UNAUDITED)
|
For the Year Ended December 31,
|
||
(in thousands, except per share data)
|
2015
|
||
Total revenues
|
$
|
1,688,297
|
|
Income before income taxes
|
$
|
411,497
|
|
Net income
|
$
|
248,720
|
|
Net income per share:
|
|
||
Basic
|
$
|
1.76
|
|
Diluted
|
$
|
1.73
|
|
Weighted-average number of shares outstanding:
|
|
||
Basic
|
137,810
|
|
|
Diluted
|
140,112
|
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance as of the beginning of the period
|
$
|
63,821
|
|
|
$
|
78,387
|
|
|
$
|
75,283
|
|
Additions to estimated acquisition earn-out payables
|
6,920
|
|
|
4,462
|
|
|
36,899
|
|
|||
Payments for estimated acquisition earn-out payables
|
(43,766
|
)
|
|
(28,213
|
)
|
|
(36,798
|
)
|
|||
Subtotal
|
26,975
|
|
|
54,636
|
|
|
75,384
|
|
|||
Net change in earnings from estimated acquisition earn-out payables:
|
|
|
|
|
|
||||||
Change in fair value on estimated acquisition earn-out payables
|
6,874
|
|
|
6,338
|
|
|
13
|
|
|||
Interest expense accretion
|
2,326
|
|
|
2,847
|
|
|
2,990
|
|
|||
Net change in earnings from estimated acquisition earn-out payables
|
9,200
|
|
|
9,185
|
|
|
3,003
|
|
|||
Balance as of December 31,
|
$
|
36,175
|
|
|
$
|
63,821
|
|
|
$
|
78,387
|
|
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Total
|
||||||||||
Balance as of January 1, 2016
|
$
|
1,345,636
|
|
|
$
|
901,866
|
|
|
$
|
226,961
|
|
|
$
|
112,220
|
|
|
$
|
2,586,683
|
|
Goodwill of acquired businesses
|
13,117
|
|
|
(1
|
)
|
|
57,908
|
|
|
22,352
|
|
|
93,376
|
|
|||||
Goodwill of transferred businesses
|
571
|
|
|
(571
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Goodwill disposed of relating to sales of businesses
|
(4,657
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,657
|
)
|
|||||
Balance as of December 31, 2016
|
$
|
1,354,667
|
|
|
$
|
901,294
|
|
|
$
|
284,869
|
|
|
$
|
134,572
|
|
|
$
|
2,675,402
|
|
Goodwill of acquired businesses
|
33,076
|
|
|
7,178
|
|
|
1,229
|
|
|
689
|
|
|
42,172
|
|
|||||
Goodwill disposed of relating to sales of businesses
|
(1,495
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,495
|
)
|
|||||
Balance as of December 31, 2017
|
$
|
1,386,248
|
|
|
$
|
908,472
|
|
|
$
|
286,098
|
|
|
$
|
135,261
|
|
|
$
|
2,716,079
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||
(in thousands)
|
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
|
$
|
1,464,274
|
|
|
$
|
(824,584
|
)
|
|
$
|
639,690
|
|
|
15.0
|
|
$
|
1,447,680
|
|
|
$
|
(741,770
|
)
|
|
$
|
705,910
|
|
|
15.0
|
Non-compete agreements
|
30,287
|
|
|
(28,972
|
)
|
|
1,315
|
|
|
6.8
|
|
29,668
|
|
|
(28,124
|
)
|
|
1,544
|
|
|
6.8
|
||||||
Total
|
$
|
1,494,561
|
|
|
$
|
(853,556
|
)
|
|
$
|
641,005
|
|
|
|
|
$
|
1,477,348
|
|
|
$
|
(769,894
|
)
|
|
$
|
707,454
|
|
|
|
(1)
|
Weighted-average life calculated as of the date of acquisition.
|
(in thousands)
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. Treasury securities, obligations of
U.S. Government agencies and Municipalities
|
$
|
29,970
|
|
|
$
|
—
|
|
|
$
|
(206
|
)
|
|
$
|
29,764
|
|
Corporate debt
|
1,072
|
|
|
12
|
|
|
—
|
|
|
1,084
|
|
||||
Total
|
$
|
31,042
|
|
|
$
|
12
|
|
|
$
|
(206
|
)
|
|
$
|
30,848
|
|
(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
|
$
|
17,919
|
|
|
$
|
(157
|
)
|
|
$
|
11,845
|
|
|
$
|
(49
|
)
|
|
$
|
29,764
|
|
|
$
|
(206
|
)
|
Corporate debt
|
400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400
|
|
|
—
|
|
||||||
Total
|
$
|
18,319
|
|
|
$
|
(157
|
)
|
|
$
|
11,845
|
|
|
$
|
(49
|
)
|
|
$
|
30,164
|
|
|
$
|
(206
|
)
|
(in thousands)
|
Cost
|
|
Gross Unrealized
Gains
|
|
Gross Unrealized
Losses
|
|
Fair Value
|
||||||||
U.S. Treasury securities, obligations of
U.S. Government agencies and Municipalities
|
$
|
26,280
|
|
|
$
|
11
|
|
|
$
|
(59
|
)
|
|
$
|
26,232
|
|
Corporate debt
|
2,358
|
|
|
13
|
|
|
(1
|
)
|
|
2,370
|
|
||||
Total
|
$
|
28,638
|
|
|
$
|
24
|
|
|
$
|
(60
|
)
|
|
$
|
28,602
|
|
(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
|
$
|
14,663
|
|
|
$
|
(59
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,663
|
|
|
$
|
(59
|
)
|
Corporate debt
|
1,001
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
1,001
|
|
|
(1
|
)
|
||||||
Total
|
$
|
15,664
|
|
|
$
|
(60
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,664
|
|
|
$
|
(60
|
)
|
(in thousands)
|
Amortized Cost
|
|
Fair Value
|
||||
Years to maturity:
|
|
|
|
||||
Due in one year or less
|
$
|
16,934
|
|
|
$
|
16,899
|
|
Due after one year through five years
|
13,876
|
|
|
13,708
|
|
||
Due after five years through ten years
|
232
|
|
|
241
|
|
||
Total
|
$
|
31,042
|
|
|
$
|
30,848
|
|
(in thousands)
|
Amortized Cost
|
|
Fair Value
|
||||
Years to maturity:
|
|
|
|
||||
Due in one year or less
|
$
|
5,551
|
|
|
$
|
5,554
|
|
Due after one year through five years
|
22,757
|
|
|
22,708
|
|
||
Due after five years through ten years
|
330
|
|
|
340
|
|
||
Total
|
$
|
28,638
|
|
|
$
|
28,602
|
|
(in thousands)
|
2017
|
|
2016
|
||||
Furniture, fixtures and equipment
|
$
|
190,784
|
|
|
$
|
177,823
|
|
Leasehold improvements
|
35,481
|
|
|
33,137
|
|
||
Land, buildings and improvements
|
7,643
|
|
|
3,375
|
|
||
Total cost
|
233,908
|
|
|
214,335
|
|
||
Less accumulated depreciation and amortization
|
(156,822
|
)
|
|
(138,528
|
)
|
||
Total
|
$
|
77,086
|
|
|
$
|
75,807
|
|
(in thousands)
|
2017
|
|
2016
|
||||
Accrued incentive compensation
|
$
|
106,923
|
|
|
$
|
82,438
|
|
Accrued compensation and benefits
|
40,540
|
|
|
45,771
|
|
||
Accrued rent and vendor expenses
|
30,616
|
|
|
28,669
|
|
||
Deferred revenue
|
21,921
|
|
|
17,377
|
|
||
Reserve for policy cancellations
|
11,048
|
|
|
9,567
|
|
||
Accrued interest
|
6,749
|
|
|
6,441
|
|
||
Other
|
10,951
|
|
|
11,726
|
|
||
Total
|
$
|
228,748
|
|
|
$
|
201,989
|
|
(in thousands)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Current portion of long-term debt:
|
|
|
|
||||
Current portion of 5-year term loan facility expires 2019
|
$
|
20,000
|
|
|
$
|
55,000
|
|
4.500% senior notes, Series E, quarterly interest payments, balloon due 2018
|
100,000
|
|
|
—
|
|
||
Short-term promissory note
|
—
|
|
|
500
|
|
||
Total current portion of long-term debt
|
120,000
|
|
|
55,500
|
|
||
Long-term debt:
|
|
|
|
||||
Note agreements:
|
|
|
|
||||
4.500% senior notes, Series E, quarterly interest payments, balloon due 2018
|
—
|
|
|
100,000
|
|
||
4.200% senior notes, semi-annual interest payments, balloon due 2024
|
498,943
|
|
|
498,785
|
|
||
Total notes
|
498,943
|
|
|
598,785
|
|
||
Credit agreements:
|
|
|
|
||||
5-year term loan facility, periodic interest and principal payments, LIBOR plus up to 1.750%, expires June 28, 2022
|
365,000
|
|
|
426,250
|
|
||
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
|
—
|
|
|
—
|
|
||
Total credit agreements
|
365,000
|
|
|
426,250
|
|
||
Debt issuance costs (contra)
|
(7,802
|
)
|
|
(6,663
|
)
|
||
Total long-term debt less unamortized discount and debt issuance costs
|
856,141
|
|
|
1,018,372
|
|
||
Current portion of long-term debt
|
120,000
|
|
|
55,500
|
|
||
Total debt
|
$
|
976,141
|
|
|
$
|
1,073,872
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
129,954
|
|
|
$
|
126,145
|
|
|
$
|
118,490
|
|
State
|
21,392
|
|
|
21,110
|
|
|
17,625
|
|
|||
Foreign
|
929
|
|
|
590
|
|
|
430
|
|
|||
Total current provision
|
152,275
|
|
|
147,845
|
|
|
136,545
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
18,999
|
|
|
15,551
|
|
|
18,416
|
|
|||
State
|
2,984
|
|
|
2,612
|
|
|
4,280
|
|
|||
Foreign
|
—
|
|
|
—
|
|
|
—
|
|
|||
Tax Reform Act deferred tax revaluation
|
(124,166
|
)
|
|
—
|
|
|
—
|
|
|||
Total deferred provision
|
(102,183
|
)
|
|
18,163
|
|
|
22,696
|
|
|||
Total tax provision
|
$
|
50,092
|
|
|
$
|
166,008
|
|
|
$
|
159,241
|
|
|
2017
|
|
2016
|
|
2015
|
Federal statutory tax rate
|
35.0%
|
|
35.0%
|
|
35.0%
|
State income taxes, net of federal income tax benefit
|
3.8
|
|
3.9
|
|
3.9
|
Non-deductible employee stock purchase plan expense
|
0.3
|
|
0.3
|
|
0.3
|
Non-deductible meals and entertainment
|
0.3
|
|
0.3
|
|
0.3
|
Tax Reform Act deferred tax revaluation and transition tax impact
|
(26.9)
|
|
—
|
|
—
|
Other, net
|
(1.4)
|
|
(0.3)
|
|
0.1
|
Effective tax rate
|
11.1%
|
|
39.2%
|
|
39.6%
|
(in thousands)
|
2017
|
|
2016
|
||||
Non-current deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
$
|
306,351
|
|
|
$
|
422,478
|
|
Fixed assets
|
2,723
|
|
|
6,425
|
|
||
Net unrealized holding (loss)/gain on available-for-sale securities
|
(6
|
)
|
|
(12
|
)
|
||
Total non-current deferred tax liabilities
|
309,068
|
|
|
428,891
|
|
||
Non-current deferred tax assets:
|
|
|
|
||||
Deferred compensation
|
36,701
|
|
|
44,912
|
|
||
Accruals and reserves
|
7,534
|
|
|
14,032
|
|
||
Deferred profit-sharing contingent commissions
|
7,107
|
|
|
10,567
|
|
||
Net operating loss carryforwards
|
2,434
|
|
|
2,394
|
|
||
Valuation allowance for deferred tax assets
|
(893
|
)
|
|
(700
|
)
|
||
Total non-current deferred tax assets
|
52,883
|
|
|
71,205
|
|
||
Net non-current deferred tax liability
|
$
|
256,185
|
|
|
$
|
357,686
|
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Unrecognized tax benefits balance at January 1
|
$
|
750
|
|
|
$
|
584
|
|
|
$
|
113
|
|
Gross increases for tax positions of prior years
|
1,070
|
|
|
412
|
|
|
773
|
|
|||
Gross decreases for tax positions of prior years
|
—
|
|
|
(41
|
)
|
|
—
|
|
|||
Settlements
|
(126
|
)
|
|
(205
|
)
|
|
(302
|
)
|
|||
Unrecognized tax benefits balance at December 31
|
$
|
1,694
|
|
|
$
|
750
|
|
|
$
|
584
|
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|
Granted
Shares
|
|
Awarded
Shares
|
|
Shares Not
Yet
Awarded
|
|||||
Outstanding at January 1, 2015
|
$
|
8.71
|
|
|
1,928,631
|
|
|
1,903,213
|
|
|
25,418
|
|
Granted
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Awarded
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Vested
|
$
|
5.55
|
|
|
(208,889
|
)
|
|
(208,889
|
)
|
|
—
|
|
Forfeited
|
$
|
9.78
|
|
|
(117,528
|
)
|
|
(100,110
|
)
|
|
(17,418
|
)
|
Outstanding at December 31, 2015
|
$
|
9.03
|
|
|
1,602,214
|
|
|
1,594,214
|
|
|
8,000
|
|
Granted
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Awarded
|
$
|
—
|
|
|
—
|
|
|
4,000
|
|
|
(4,000
|
)
|
Vested
|
$
|
6.39
|
|
|
(506,422
|
)
|
|
(506,422
|
)
|
|
—
|
|
Forfeited
|
$
|
10.52
|
|
|
(92,517
|
)
|
|
(88,517
|
)
|
|
(4,000
|
)
|
Outstanding at December 31, 2016
|
$
|
10.23
|
|
|
1,003,275
|
|
|
1,003,275
|
|
|
—
|
|
Granted
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Awarded
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Vested
|
$
|
9.61
|
|
|
(138,801
|
)
|
|
(138,801
|
)
|
|
—
|
|
Forfeited
|
$
|
10.47
|
|
|
(17,236
|
)
|
|
(17,236
|
)
|
|
—
|
|
Outstanding at December 31, 2017
|
$
|
10.32
|
|
|
847,238
|
|
|
847,238
|
|
|
—
|
|
Year
|
|
Time-Based Restricted Stock Granted and Awarded
|
|
Performance-Based Restricted Stock Granted
|
|
Performance-Based Restricted Stock Awarded
|
|||
2017
|
|
120,667
|
|
|
575,789
|
|
(1)
|
163,404
|
|
2016
|
|
182,653
|
|
|
789,446
|
|
(2)
|
1,435,319
|
|
2015
|
|
164,646
|
|
|
316,520
|
|
|
—
|
|
(1)
|
Of the 575,789 shares of performance-based restricted stock granted in 2017, the payout for 320,826 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 restricted stock grants at a target payout of 100%.
|
(2)
|
Of the 789,446 shares of performance-based restricted stock granted in 2016, the payout for 353,132 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 restricted stock grants at a target payout of 100%.
|
|
Weighted-
Average
Grant
Date Fair
Value
|
|
Granted
Shares
|
|
Awarded
Shares
|
|
Shares Not
Yet
Awarded
|
|
|||||
Outstanding at January 1, 2015
|
$
|
28.19
|
|
|
6,659,047
|
|
|
1,060,890
|
|
|
5,598,157
|
|
|
Granted
|
$
|
31.74
|
|
|
481,166
|
|
|
164,646
|
|
|
316,520
|
|
|
Awarded
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Vested
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Forfeited
|
$
|
26.32
|
|
|
(863,241
|
)
|
|
(95,542
|
)
|
|
(767,699
|
)
|
|
Outstanding at December 31, 2015
|
$
|
28.74
|
|
|
6,276,972
|
|
|
1,129,994
|
|
|
5,146,978
|
|
|
Granted
|
$
|
35.52
|
|
|
972,099
|
|
|
182,653
|
|
|
789,446
|
|
(1)
|
Awarded
|
$
|
24.93
|
|
|
—
|
|
|
1,431,319
|
|
|
(1,431,319
|
)
|
|
Vested
|
$
|
27.31
|
|
|
(166,884
|
)
|
|
(166,884
|
)
|
|
—
|
|
|
Forfeited
|
$
|
25.34
|
|
|
(954,131
|
)
|
|
(175,788
|
)
|
|
(778,343
|
)
|
|
Outstanding at December 31, 2016
|
$
|
29.96
|
|
|
6,128,056
|
|
|
2,401,294
|
|
|
3,726,762
|
|
|
Granted
|
$
|
41.65
|
|
|
696,456
|
|
|
120,667
|
|
|
575,789
|
|
(2)
|
Awarded
|
$
|
31.44
|
|
|
—
|
|
|
163,404
|
|
|
(163,404
|
)
|
|
Vested
|
$
|
25.22
|
|
|
(242,457
|
)
|
|
(242,457
|
)
|
|
—
|
|
|
Forfeited
|
$
|
29.77
|
|
|
(171,060
|
)
|
|
(38,106
|
)
|
|
(132,954
|
)
|
|
Outstanding at December 31, 2017
|
$
|
31.16
|
|
|
6,410,995
|
|
|
2,404,802
|
|
|
4,006,193
|
|
|
(1)
|
Of the 789,446 shares of performance-based restricted stock granted in 2016, the payout for 353,132 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 restricted stock grants at a target payout of 100%.
|
(2)
|
Of the 575,789 shares of performance-based restricted stock granted in 2016, the payout for 320,826 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 restricted stock grants at a target payout of 100%.
|
Stock Options
|
|
Shares
Under
Option
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(in years)
|
|
Aggregate
Intrinsic
Value
(in thousands)
|
|||||
Outstanding at January 1, 2015
|
|
470,356
|
|
|
$
|
18.57
|
|
|
3.1
|
|
$
|
5,087
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
|
(151,767
|
)
|
|
$
|
18.48
|
|
|
|
|
|
|
|
Forfeited
|
|
(49,000
|
)
|
|
$
|
19.36
|
|
|
|
|
|
|
|
Expired
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Outstanding at December 31, 2015
|
|
269,589
|
|
|
$
|
18.48
|
|
|
2.2
|
|
$
|
2,395
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
|
(64,589
|
)
|
|
$
|
18.48
|
|
|
|
|
|
|
|
Forfeited
|
|
(30,000
|
)
|
|
$
|
18.48
|
|
|
|
|
|
|
|
Expired
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Outstanding at December 31, 2016
|
|
175,000
|
|
|
$
|
18.48
|
|
|
1.2
|
|
$
|
4,616
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
|
(175,000
|
)
|
|
$
|
18.48
|
|
|
|
|
|
|
|
Forfeited
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Expired
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Outstanding at December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
$
|
—
|
|
Ending vested and expected to vest at December 31,
2017 |
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
$
|
—
|
|
Exercisable at December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
$
|
—
|
|
Exercisable at December 31, 2016
|
|
175,000
|
|
|
$
|
18.48
|
|
|
1.2
|
|
$
|
4,616
|
|
Exercisable at December 31, 2015
|
|
164,589
|
|
|
$
|
18.48
|
|
|
2.2
|
|
$
|
2,241
|
|
(in thousands)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Stock Incentive Plan
|
|
$
|
24,899
|
|
|
$
|
11,049
|
|
|
$
|
11,111
|
|
Employee Stock Purchase Plan
|
|
4,025
|
|
|
3,698
|
|
|
3,430
|
|
|||
Performance Stock Plan
|
|
1,707
|
|
|
1,305
|
|
|
972
|
|
|||
Incentive Stock Option Plan
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
30,631
|
|
|
$
|
16,052
|
|
|
$
|
15,513
|
|
|
For the Year Ended December 31,
|
||||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
36,172
|
|
|
$
|
37,652
|
|
|
$
|
37,542
|
|
Income taxes
|
$
|
152,024
|
|
|
$
|
143,111
|
|
|
$
|
132,874
|
|
|
Balance as of December 31,
|
|||||||||
(in thousands)
|
2017
|
|
2016
|
|
2015
|
|||||
Table to reconcile cash and cash equivalents inclusive of restricted cash
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
573,383
|
|
|
$
|
515,646
|
|
|
443,420
|
|
Restricted cash
|
250,705
|
|
|
265,637
|
|
|
229,753
|
|
||
Total cash and cash equivalents inclusive of restricted cash at the end of the period
|
$
|
824,088
|
|
|
$
|
781,283
|
|
|
673,173
|
|
(in thousands)
|
|
||
2018
|
$
|
42,970
|
|
2019
|
39,005
|
|
|
2020
|
34,236
|
|
|
2021
|
27,715
|
|
|
2022
|
21,996
|
|
|
Thereafter
|
44,496
|
|
|
Total minimum future lease payments
|
$
|
210,418
|
|
(in thousands, except per share data)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues
|
|
$
|
465,080
|
|
|
$
|
466,305
|
|
|
$
|
475,646
|
|
|
$
|
474,316
|
|
|
Total expenses
|
|
$
|
354,113
|
|
|
$
|
358,303
|
|
|
$
|
351,227
|
|
|
$
|
367,982
|
|
|
Income before income taxes
|
|
$
|
110,967
|
|
|
$
|
108,002
|
|
|
$
|
124,419
|
|
|
$
|
106,334
|
|
|
Net income
|
|
$
|
70,110
|
|
|
$
|
66,102
|
|
|
$
|
75,913
|
|
|
$
|
187,505
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.50
|
|
|
$
|
0.47
|
|
|
$
|
0.54
|
|
|
$
|
1.35
|
|
|
Diluted
|
|
$
|
0.49
|
|
|
$
|
0.46
|
|
|
$
|
0.53
|
|
|
$
|
1.32
|
|
(1)
|
2016
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
$
|
424,173
|
|
|
$
|
446,518
|
|
|
$
|
462,274
|
|
|
$
|
433,664
|
|
|
Total expenses
|
|
$
|
321,624
|
|
|
$
|
337,441
|
|
|
$
|
345,302
|
|
|
$
|
338,763
|
|
|
Income before income taxes
|
|
$
|
102,549
|
|
|
$
|
109,077
|
|
|
$
|
116,972
|
|
|
$
|
94,901
|
|
|
Net income
|
|
$
|
62,070
|
|
|
$
|
66,250
|
|
|
$
|
71,545
|
|
|
$
|
57,626
|
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.45
|
|
|
$
|
0.47
|
|
|
$
|
0.51
|
|
|
$
|
0.41
|
|
|
Diluted
|
|
$
|
0.44
|
|
|
$
|
0.47
|
|
|
$
|
0.50
|
|
|
$
|
0.41
|
|
|
(1)
|
Includes $0.85 impact associated with recording impact of Tax Reform Act.
|
|
For the year ended December 31, 2017
|
||||||||||||||||||||||
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Total revenues
|
$
|
943,460
|
|
|
$
|
479,813
|
|
|
$
|
271,737
|
|
|
$
|
165,372
|
|
|
$
|
20,965
|
|
|
$
|
1,881,347
|
|
Investment income
|
$
|
8
|
|
|
$
|
384
|
|
|
$
|
—
|
|
|
$
|
299
|
|
|
$
|
935
|
|
|
$
|
1,626
|
|
Amortization
|
$
|
42,164
|
|
|
$
|
27,277
|
|
|
$
|
11,456
|
|
|
$
|
4,548
|
|
|
$
|
1
|
|
|
$
|
85,446
|
|
Depreciation
|
$
|
5,210
|
|
|
$
|
6,325
|
|
|
$
|
1,885
|
|
|
$
|
1,600
|
|
|
$
|
7,678
|
|
|
$
|
22,698
|
|
Interest expense
|
$
|
31,133
|
|
|
$
|
35,561
|
|
|
$
|
6,263
|
|
|
$
|
3,522
|
|
|
$
|
(38,163
|
)
|
|
$
|
38,316
|
|
Income before income taxes
|
$
|
196,616
|
|
|
$
|
109,961
|
|
|
$
|
68,844
|
|
|
$
|
30,498
|
|
|
$
|
43,803
|
|
|
$
|
449,722
|
|
Total assets
|
$
|
4,255,515
|
|
|
$
|
3,267,486
|
|
|
$
|
1,260,239
|
|
|
$
|
399,240
|
|
|
$
|
(3,434,930
|
)
|
|
$
|
5,747,550
|
|
Capital expenditures
|
$
|
4,494
|
|
|
$
|
5,936
|
|
|
$
|
1,836
|
|
|
$
|
1,033
|
|
|
$
|
10,893
|
|
|
$
|
24,192
|
|
|
For the year ended December 31, 2016
|
||||||||||||||||||||||
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Total revenues
|
$
|
917,406
|
|
|
$
|
448,516
|
|
|
$
|
243,103
|
|
|
$
|
156,365
|
|
|
$
|
1,239
|
|
|
$
|
1,766,629
|
|
Investment income
|
$
|
37
|
|
|
$
|
628
|
|
|
$
|
4
|
|
|
$
|
283
|
|
|
$
|
504
|
|
|
$
|
1,456
|
|
Amortization
|
$
|
43,447
|
|
|
$
|
27,920
|
|
|
$
|
10,801
|
|
|
$
|
4,485
|
|
|
$
|
10
|
|
|
$
|
86,663
|
|
Depreciation
|
$
|
6,191
|
|
|
$
|
7,868
|
|
|
$
|
1,975
|
|
|
$
|
1,881
|
|
|
$
|
3,088
|
|
|
$
|
21,003
|
|
Interest expense
|
$
|
38,216
|
|
|
$
|
45,738
|
|
|
$
|
3,976
|
|
|
$
|
4,950
|
|
|
$
|
(53,399
|
)
|
|
$
|
39,481
|
|
Income before income taxes
|
$
|
188,001
|
|
|
$
|
91,762
|
|
|
$
|
62,623
|
|
|
$
|
24,338
|
|
|
$
|
56,775
|
|
|
$
|
423,499
|
|
Total assets(1)
|
$
|
3,854,393
|
|
|
$
|
2,711,378
|
|
|
$
|
1,108,829
|
|
|
$
|
371,645
|
|
|
$
|
(2,783,511
|
)
|
|
$
|
5,262,734
|
|
Capital expenditures
|
$
|
5,951
|
|
|
$
|
6,977
|
|
|
$
|
1,301
|
|
|
$
|
656
|
|
|
$
|
2,880
|
|
|
$
|
17,765
|
|
|
For the year ended December 31, 2015
|
||||||||||||||||||||||
(in thousands)
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
||||||||||||
Total revenues
|
$
|
870,346
|
|
|
$
|
428,734
|
|
|
$
|
216,996
|
|
|
$
|
145,365
|
|
|
$
|
(932
|
)
|
|
$
|
1,660,509
|
|
Investment income
|
$
|
87
|
|
|
$
|
210
|
|
|
$
|
150
|
|
|
$
|
42
|
|
|
$
|
515
|
|
|
$
|
1,004
|
|
Amortization
|
$
|
45,145
|
|
|
$
|
28,479
|
|
|
$
|
9,739
|
|
|
$
|
4,019
|
|
|
$
|
39
|
|
|
$
|
87,421
|
|
Depreciation
|
$
|
6,558
|
|
|
$
|
7,250
|
|
|
$
|
2,142
|
|
|
$
|
1,988
|
|
|
$
|
2,952
|
|
|
$
|
20,890
|
|
Interest expense
|
$
|
41,036
|
|
|
$
|
55,705
|
|
|
$
|
891
|
|
|
$
|
5,970
|
|
|
$
|
(64,354
|
)
|
|
$
|
39,248
|
|
Income before income taxes
|
$
|
181,938
|
|
|
$
|
67,673
|
|
|
$
|
64,708
|
|
|
$
|
19,713
|
|
|
$
|
68,527
|
|
|
$
|
402,559
|
|
Total assets(1)
|
$
|
3,507,476
|
|
|
$
|
2,503,537
|
|
|
$
|
895,782
|
|
|
$
|
285,459
|
|
|
$
|
(2,212,410
|
)
|
|
$
|
4,979,844
|
|
Capital expenditures
|
$
|
6,797
|
|
|
$
|
6,001
|
|
|
$
|
3,084
|
|
|
$
|
1,088
|
|
|
$
|
1,405
|
|
|
$
|
18,375
|
|
|
(1)
|
Total assets have been restated to reflect the adoption of ASU No. 2015-17, “Income Taxes (Topic 740) - Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”).
|
|
2017
|
|
2016
|
||||||||||||
(in thousands)
|
Written
|
|
Earned
|
|
Written
|
|
Earned
|
||||||||
Direct premiums
|
$
|
604,623
|
|
|
$
|
592,267
|
|
|
$
|
591,142
|
|
|
$
|
592,123
|
|
Assumed premiums
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ceded premiums
|
604,610
|
|
|
592,254
|
|
|
591,124
|
|
|
592,105
|
|
||||
Net premiums
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
18
|
|
|
$
|
18
|
|
|
/s/ DELOITTE & TOUCHE LLP
|
Certified Public Accountants
|
|
Tampa, Florida
|
February 28, 2018
|
|
We have served as the Company’s auditor since 2002.
|
/s/ DELOITTE & TOUCHE LLP
|
Certified Public Accountants
|
|
Tampa, Florida
|
February 28, 2018
|
|
|
/s/ J. Powell Brown
|
|
/s/ R. Andrew Watts
|
J. Powell Brown
Chief Executive Officer
|
|
R. Andrew Watts
Executive Vice President, Chief Financial Officer and Treasurer
|
Robert W. Lloyd
|
Executive Vice President; Secretary and General Counsel
|
53
|
J. Scott Penny
|
Executive Vice President; Chief Acquisitions Officer
|
51
|
Julie K. Ryan
|
Executive Vice President; Chief People Officer
|
46
|
Anthony T. Strianese
|
Executive Vice President; President - Wholesale Brokerage Division
|
56
|
Chris L. Walker
|
Executive Vice President; President - Programs Division
|
60
|
R. Andrew Watts
|
Executive Vice President; Chief Financial Officer and Treasurer
|
49
|
3.1
|
Articles of Amendment to Articles of Incorporation (adopted April 24, 2003) (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 2003), and Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3a to Form 10-Q for the quarter ended March 31, 1999).
|
|
|
3.2
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
10.1(a)
|
|
|
|
10.1(b)
|
|
|
|
10.1(c)
|
|
|
|
10.1(d)
|
|
|
|
10.1(e)
|
|
|
|
10.2
|
|
|
|
10.3(a)
|
|
|
|
10.3(b)
|
|
|
|
10.3(c)
|
|
|
|
10.4
|
|
|
|
10.5(a)
|
|
|
|
|
|
BROWN & BROWN, INC.
Registrant
|
||
Date: February 28, 2018
|
|
By:
|
/s/ J. Powell Brown
|
|
|
|
|
J. Powell Brown
|
|
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ J. Powell Brown
|
|
Director; President and Chief Executive Officer (Principal Executive Officer)
|
|
February 28, 2018
|
J. Powell Brown
|
|
|||
|
|
|
|
|
/s/ R. Andrew Watts
|
|
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)
|
|
February 28, 2018
|
R. Andrew Watts
|
|
|||
|
|
|
|
|
*
|
|
Chairman of the Board
|
|
February 28, 2018
|
J. Hyatt Brown
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Samuel P. Bell, III
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Hugh M. Brown
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Bradley Currey, Jr.
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Theodore J. Hoepner
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
James S. Hunt
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Toni Jennings
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Timothy R.M. Main
|
|
|
||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
H. Palmer Proctor, Jr.
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Wendell Reilly
|
|
|||
|
|
|
|
|
*
|
|
Director
|
|
February 28, 2018
|
Chilton D. Varner
|
|
*By:
|
/s/ Robert W. Lloyd
|
|
Robert W. Lloyd
Attorney-in-Fact
|
Performance Level
|
Average Organic Sales Growth
|
Awarded Percentage of
Tranche 1 Performance Shares
|
Maximum
|
|
|
High Target
|
|
|
Target
|
|
|
Low Target
|
|
|
Threshold
|
|
|
No Payout
|
|
|
Performance Level
|
Cumulative
Earnings Per Share
|
CAGR
|
Awarded Percentage of Tranche 2 Performance Shares
|
Maximum
|
|
|
|
High Target
|
|
|
|
Target
|
|
|
|
Low Target
|
|
|
|
Threshold
|
|
|
|
No Payout
|
|
|
|
Entity Name
|
Domestic Jurisdiction
|
Acumen RE Management Corporation
|
Delaware
|
Adeo Solutions, LLC
|
Massachusetts
|
Advocate Insurance Services Corp.
|
Delaware
|
Advocator Group Holding Company, Inc.
|
Florida
|
Aevo Insurance Services, LLC
|
Florida
|
AFC Insurance, Inc.
|
Pennsylvania
|
AGIA Premium Finance Company, Inc.
|
California
|
Allocation Services, Inc.
|
Florida
|
American Claims Management - Atlantic Region, LLC
|
Georgia
|
American Claims Management, Inc.
|
California
|
American Specialty Insurance & Risk Services, Inc.
|
Indiana
|
Apex Insurance Agency, LLC
|
Virginia
|
Arrowhead General Insurance Agency - Atlantic Region, LLC
|
Georgia
|
Arrowhead General Insurance Agency Holding Corp.
|
Delaware
|
Arrowhead General Insurance Agency Superholding Corp.
|
Delaware
|
Arrowhead General Insurance Agency, Inc.
|
Minnesota
|
Arrowhead Insurance Risk Managers, LLC fka Arrowhead Specialty Underwriting, LLC
|
Georgia
|
AVIRS Acquisition, LLC
|
Pennsylvania
|
Axiom Re, LP
|
Florida
|
Azure International Holding Co.
|
Delaware
|
B&B Canada Holdco, Inc.
|
Delaware
|
B&B Fitness PG, Inc.
|
Colorado
|
B&B Metro Holding, Inc.
|
New Jersey
|
B&B PF, LLC
|
Pennsylvania
|
B&B Protector Plans, Inc.
|
Florida
|
B&B TN Holding Company, Inc.
|
Delaware
|
B&B Wholesale, Inc.
|
Florida
|
BB FL Holding 2, LLC
|
Florida
|
BB FL Holding, LLC
|
Florida
|
Beecher Carlson Brokerage, Ltd.
|
Bermuda
|
Beecher Carlson Cayman, Ltd.
|
Cayman Islands
|
Beecher Carlson Holdings, Inc.
|
Delaware
|
Beecher Carlson Insurance Services of Colorado, LLC
|
Colorado
|
Beecher Carlson Insurance Services, LLC
|
California
|
Beecher Carlson Management, Ltd.
|
Bermuda
|
Beecher Carlson of Florida, Inc.
|
Florida
|
Benefit Integration Management Services, LLC
|
Delaware
|
Brown & Brown Benefit Advisors, Inc.
|
New Jersey
|
Brown & Brown Disaster Relief Foundation, Inc.
|
Florida
|
Brown & Brown Insurance Agency of Virginia, Inc.
|
Virginia
|
Brown & Brown Insurance Brokers of Sacramento, Inc.
|
California
|
Brown & Brown Insurance of Arizona, Inc.
|
Arizona
|
Brown & Brown Insurance of Georgia, Inc.
|
Georgia
|
Brown & Brown Insurance of Nevada, Inc.
|
Nevada
|
Brown & Brown Insurance Services of California, Inc.
|
California
|
Brown & Brown Insurance Services of The Bay Area, Inc.
|
California
|
Brown & Brown Lone Star Insurance Services, Inc.
|
Texas
|
Brown & Brown Metro, LLC
|
New Jersey
|
Brown & Brown NJ Holding Co., Inc.
|
Florida
|
Brown & Brown of Arkansas, Inc.
|
Arkansas
|
Brown & Brown of Canada, Inc.
|
Ontario
|
Brown & Brown of Central Carolina, LLC
|
North Carolina
|
Brown & Brown of Central Michigan, Inc.
|
Michigan
|
Brown & Brown of Colorado, Inc.
|
Colorado
|
Brown & Brown of Connecticut, Inc.
|
Connecticut
|
Brown & Brown of Delaware, Inc.
|
Delaware
|
Brown & Brown of Detroit, Inc.
|
Michigan
|
Brown & Brown of Florida, Inc.
|
Florida
|
Brown & Brown of Garden City, Inc.
|
Florida
|
Brown & Brown of Illinois, Inc.
|
Illinois
|
Brown & Brown of Indiana, LLC
|
Indiana
|
Brown & Brown of Iowa, Inc.
|
Iowa
|
Brown & Brown of Kentucky, Inc.
|
Kentucky
|
Brown & Brown of Lehigh Valley, LP
|
Pennsylvania
|
Brown & Brown of Louisiana, LLC
|
Louisiana
|
Brown & Brown of Massachusetts, LLC
|
Massachusetts
|
Brown & Brown of Michigan, Inc.
|
Michigan
|
Brown & Brown of Minnesota, Inc.
|
Minnesota
|
Brown & Brown of Mississippi, LLC
|
Delaware
|
Brown & Brown of Missouri, Inc.
|
Missouri
|
Brown & Brown of Nashville, Inc.
|
Tennessee
|
Brown & Brown of New Hampshire, Inc.
|
New Hampshire
|
Brown & Brown of New Jersey, LLC
|
New Jersey
|
Brown & Brown of New Mexico, Inc.
|
New Mexico
|
Brown & Brown of New York, Inc.
|
New York
|
Brown & Brown of North Dakota, Inc.
|
North Dakota
|
Brown & Brown of Northern Illinois, Inc.
|
Delaware
|
Brown & Brown of Ohio, LLC
|
Ohio
|
Brown & Brown of Oklahoma, Inc. fka Brown & Brown of Central Oklahoma, Inc.
|
Oklahoma
|
Brown & Brown of Oregon, LLC
|
Oregon
|
Brown & Brown of Pennsylvania, LP
|
Pennsylvania
|
Brown & Brown of South Carolina, Inc.
|
South Carolina
|
Brown & Brown of Tennessee, Inc.
|
Tennessee
|
Brown & Brown of Washington, Inc.
|
Washington
|
Brown & Brown of West Virginia, Inc.
|
West Virginia
|
Brown & Brown of Wisconsin, Inc.
|
Wisconsin
|
Brown & Brown PA Holding Co. 2, LLC
|
Florida
|
Brown & Brown PA Holding Co., LLC
|
Florida
|
Brown & Brown Program Insurance Services, Inc.
|
California
|
Brown & Brown Programs (CA), Inc.
|
Ontario
|
Brown & Brown Realty Co.
|
Delaware
|
Brown & Brown West Coast, Inc.
|
California
|
Brown & Brown, Inc.
|
Florida
|
Brown Holding, Inc.
|
Illinois
|
CC Acquisition Corp.
|
Florida
|
Decus Holdings (UK) Limited
|
United Kingdom
|
Decus Insurance Brokers Limited
|
United Kingdom
|
DTBB, LLC
|
Florida
|
ECC Insurance Brokers, LLC
|
Illinois
|
Elohssa, Inc.
|
Florida
|
Florida Intracoastal Underwriters, Limited Company
|
Florida
|
Healthcare Insurance Professionals, Inc.
|
Texas
|
Hull & Company of New York, Inc.
|
New York
|
Hull & Company, LLC
|
Florida
|
ICA, LP
|
North Carolina
|
Independent Consulting & Risk Management Services, Inc.
|
California
|
Industry Consulting Group, Inc.
|
Florida
|
International E & S Insurance Brokers, Inc.
|
California
|
Investigation Solutions, Inc.
|
California
|
Irving Weber Associates, Inc.
|
New York
|
MacDuff Underwriters, LLC
|
Florida
|
Madoline Corporation
|
Florida
|
Marquee Managed Care Solutions, Inc.
|
California
|
Monarch Management Corporation
|
Kansas
|
National ConnectForce Claims, Inc.
|
California
|
New SSAD Holding, LLC
|
Delaware
|
OnPoint Insurance Services, LLC
|
Delaware
|
OnPoint Underwriting, Inc.
|
Delaware
|
Pacific Resources Benefits Advisors, LLC
|
Illinois
|
Peachtree Special Risk Brokers of New York, LLC
|
New York
|
Peachtree Special Risk Brokers, LLC
|
Georgia
|
Preferred Governmental Claim Solutions, Inc.
|
Florida
|
Premier Interpreting & Transportation, Inc.
|
California
|
Proctor Financial, Inc.
|
Michigan
|
Program Management Services, Inc.
|
Florida
|
Public Risk Underwriters Insurance Services of Texas, LLC
|
Texas
|
Public Risk Underwriters of Florida, Inc.
|
Florida
|
Public Risk Underwriters of Illinois, LLC
|
Illinois
|
Public Risk Underwriters of Indiana, LLC
|
Indiana
|
Public Risk Underwriters of New Jersey, Inc.
|
New Jersey
|
Public Risk Underwriters of The Northwest, Inc.
|
Washington
|
Public Risk Underwriters, LLC
|
Florida
|
Risk Management Associates, Inc.
|
Florida
|
Social Security Advocates for the Disabled, LLC
|
Delaware
|
Spectrum Wholesale Insurance Services, LLC
|
Delaware
|
Superior Recovery Services, Inc.
|
California
|
Texas Security General Insurance Agency, LLC
|
Texas
|
The Advocator Group, LLC
|
Florida
|
The Wright Insurance Group LLC
|
Delaware
|
Title Pac, Inc.
|
Oklahoma
|
TSG Premium Finance, LLC
|
Texas
|
USIS, Inc.
|
Florida
|
Valiant Insurance Services, LLC fka Alexander Anthony Insurance, LLC
|
Utah
|
Wright Managed Care LLC
|
New York
|
Wright National Flood Insurance Company
|
Texas
|
Wright National Flood Insurance Services of New York LLC
|
New York
|
Wright National Flood Insurance Services, LLC
|
Delaware
|
Wright Program Management, LLC
|
Delaware
|
Wright Risk Consulting, LLC
|
Delaware
|
Wright Risk Management Company, LLC
|
Delaware
|
Wright RPG, LLC
|
Delaware
|
Wright Specialty Insurance Agency, LLC
|
Delaware
|
WRM America Intermediate Holding Co., Inc.
|
Delaware
|
YouZoom Insurance Services, Inc.
|
California
|
/s/ SAMUEL P. BELL III
|
Samuel P. Bell, III
|
/s/ HUGH M. BROWN
|
Hugh M. Brown
|
/s/ J. HYATT BROWN
|
J. Hyatt Brown
|
/s/ BRADLEY CURREY, JR.
|
Bradley Currey, Jr.
|
/s/ THEODORE J. HOEPNER
|
Theodore J. Hoepner
|
/s/ JAMES S. HUNT
|
James S. Hunt
|
/s/ TONI JENNINGS
|
Toni Jennings
|
/s/ TIMOTHY R.M. MAIN
|
Timothy R.M. Main
|
/s/ H. PALMER PROCTOR, JR.
|
H. Palmer Proctor, Jr.
|
/s/ WENDELL S. REILLY
|
Wendell S. Reilly
|
/s/ CHILTON D. VARNER
|
Chilton D. Varner
|
|
/s/ J. Powell Brown
|
J. Powell Brown
|
President and Chief Executive Officer
|
|
/s/ R. Andrew Watts
|
R. Andrew Watts
|
Executive Vice President, Chief Financial Officer and Treasurer
|
|
/s/ J. Powell Brown
|
J. Powell Brown
|
President and Chief Executive Officer
|
|
/s/ R. Andrew Watts
|
R. Andrew Watts
|
Executive Vice President, Chief Financial Officer and Treasurer
|