Brown & Brown (BRO) 8-K Brown & Brown, Inc. Announces a 24.1% Increase

              News Release

Cory T. Walker

July 15, 2013                                                                       Chief Financial Officer

                                                                                               (386) 239-7250

BROWN & BROWN, INC. ANNOUNCES A 24.1% INCREASE

IN EARNINGS PER SHARE

(Daytona Beach and Tampa, Florida) . . . Brown & Brown, Inc. (NYSE:BRO) today announced its preliminary, unaudited financial results for the second quarter of 2013.

Net income for the second quarter of 2013 was $52,007,000, or $0.36 per share, compared with $42,471,000, or $0.29 per share for the same quarter of 2012, an increase of 24.1%. Total revenue for the second quarter was $325,792,000, compared with 2012 second-quarter revenue of $290,916,000, an increase of 12.0%.

Total revenue for the six months ended June 30, 2013 was $660,804,000, compared with total revenue for the same period of 2012 of $593,402,000, an increase of 11.4%. Net income for the six-month period ended June 30, 2013 was $112,138,000, or $0.77 per share, compared with $91,904,000, or $0.63 per share for the same period of 2012, an increase of 22.0%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, “We are very pleased with our quarterly consolidated internal growth rate in core commissions and fees (see the calculation and explanation of this term later in the release) of 7.4%. Our largest Division, Retail, continues to show nice improvements with a quarterly internal growth rate in core commissions and fees of 2.3%, which reflects a gradual, but steady improvement in the middle-market economy. Our other Divisions, National Programs, Wholesale Brokerage, and Services, each had exceptional quarterly internal growth rates in core commissions and fees in excess of 10.0%.”

Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third-party administration, and other services. Serving business, public entity, individual, trade and professional association clients nationwide, the Company is ranked byBusiness Insurance magazine as the United States’ sixth largest independent insurance intermediary. The Company’s Web address is www.bbinsurance.com.

This press release may contain certain statements relating to future results which are forward-looking statements, including those relating to the Company'santicipated financial results forthe second quarter of 2013. These statements are not historical facts, but instead represent only the Company’s current belief regarding future events, many of which, by their nature, are inherently uncertainand outside of the Company’s control. It is possible that the Company’s actual results, financial condition and achievements may differ, possibly materially, from the anticipated results, financial condition and achievements contemplated by these forward-looking statements. These risks and uncertainties include, but are not limited to, the Company's determination as it finalizes its financial results for the second quarter of 2013 that its financial results differ from the current preliminary unaudited numbers set forth herein, other factors that the Company may not have currently identified or quantified, and other risks, relevant factors and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, and the Company’s other subsequent filings with the Securities and Exchange Commission. All forward-looking statements made herein are made only as of the date of this release, and the Company does not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which the Company hereafter becomes aware.

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Brown & Brown, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2013		2012			2013		2012
REVENUES
Commissions and fees	$	324,150	$	289,942		$	657,943	$	586,475
Investment income		239		187			425		322
Other income, net		1,403		787			2,436		6,605
Total revenues		325,792		290,916			660,804		593,402
EXPENSES
Employee compensation and benefits		163,514		150,752			323,012		300,348
Non-cash stock-based compensation		3,623		3,738			7,473		7,485
Other operating expenses		47,397		42,220			93,736		85,620
Amortization		16,121		15,881			32,282		31,494
Depreciation		4,263		3,784			8,430		7,425
Interest		3,997		4,000			7,981		8,087
Change in estimated acquisition earn-out payables		656		(604	)		2,178		(992	)
Total expenses		239,571		219,771			475,092		439,467
Income before income taxes		86,221		71,145			185,712		153,935
Income taxes		34,214		28,674			73,574		62,031
Net income	$	52,007	$	42,471		$	112,138	$	91,904
Net income per share:
Basic	$	0.36	$	0.30		$	0.78	$	0.64
Diluted	$	0.36	$	0.29		$	0.77	$	0.63
Weighted average number of shares outstanding:
Basic		140,836		139,086			140,816		139,044
Diluted		143,021		141,828			142,938		141,664
Dividends declared per share	$	0.09	$	0.085		$	0.18	$	0.17

Brown & Brown, Inc.

INTERNAL GROWTH SCHEDULE

Core Organic Commissions and Fees⁽¹⁾

Three Months Ended June 30, 2013

(in thousands)

(unaudited)

		Quarter Ended 06/30/13		Quarter Ended 06/30/12		Total Net Change	Total Net Growth %			Less Acquisition Revenues		Internal Net Growth $	Internal Net Growth %
Retail(2)	$	168,582	$	158,035	$	10,547	6.7	%	$	6,922	$	3,625	2.3	%
National Programs		62,860		53,135		9,725	18.3	%		—		9,725	18.3	%
Wholesale Brokerage		52,858		46,286		6,572	14.2	%		1,592		4,980	10.8	%
Services		30,271		27,521		2,750	10.0	%		—		2,750	10.0	%
Total Core Commissions and Fees(1)	$	314,571	$	284,977	$	29,594	10.4	%	$	8,514	$	21,080	7.4	%

Reconciliation of Internal Growth Schedule

to Total Commissions and Fees

Included in the Consolidated Statements of Income

For the Three Months Ended June 30, 2013 and 2012

(in thousands)

(unaudited)

		Quarter Ended 06/30/13		Quarter Ended 06/30/12
Total core commissions and fees(1)	$	314,571	$	284,977
Profit-sharing contingent commissions		7,879		1,043
Guaranteed supplemental commissions		1,700		2,258
Divested business		—		1,664
Total commissions & fees	$	324,150	$	289,942

(1) Total core commissions and fees are our total commissions and fees less (i) profit-sharing contingent

commissions (revenues derived from special revenue-sharing commissions from insurance companies based upon the volume and the growth and/or profitability of the business placed with such companies during the prior year), (ii) guaranteed supplemental commissions (GSC) (revenues derived from special revenue-sharing commissions from insurance companies based solely upon the volume of the business placed with such companies during the current year),and (iii) divested business (commissions and fees generated from offices, books of business or niches sold by the Company or terminated).

(2) The Retail segment includes commissions and fees reported in the “Other” column of the Segment Information, which includes corporate and consolidation items.

Brown & Brown, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

		June 30,		December 31,
		2013		2012
ASSETS
Current assets:
Cash and cash equivalents	$	385,525	$	219,821
Restricted cash and investments		210,538		164,564
Short-term investments		12,205		8,183
Premiums, commissions and fees receivable		310,486		302,725
Deferred income taxes		15,051		24,408
Other current assets		38,767		39,811
Total current assets		972,572		759,512
Fixed assets, net		72,929		74,337
Goodwill		1,722,828		1,711,514
Amortizable intangible assets, net		538,767		566,538
Other assets		19,224		16,157
Total assets	$	3,326,320	$	3,128,058
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Premiums payable to insurance companies	$	476,529	$	406,704
Premium deposits and credits due customers		31,216		32,867
Accounts payable		46,884		48,524
Accrued expenses and other liabilities		107,153		79,593
Current portion of long-term debt		33		93
Total current liabilities		661,815		567,781
Long-term debt		450,000		450,000
Deferred income taxes, net		249,195		237,630
Other liabilities		63,252		65,314
Shareholders’ equity:
Common stock, par value $0.10 per share;    authorized 280,000 shares; issued and   outstanding 144,045 at 2013 and 143,878 at 2012		14,405		14,388
Additional paid-in capital		344,354		335,872
Retained earnings		1,543,299		1,457,073
Total shareholders’ equity		1,902,058		1,807,333
Total liabilities and shareholders’ equity	$	3,326,320	$	3,128,058