Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 28, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | BROWN & BROWN, INC. | |
Entity Central Index Key | 0000079282 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 281,746,279 | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock, $0.10 Par Value | |
Trading Symbol | BRO | |
Security Exchange Name | NYSE | |
Entity File Number | 001-13619 | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-0864469 | |
Entity Address, Address Line One | 220 South Ridgewood Avenue | |
Entity Address, City or Town | Daytona Beach | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32114 | |
City Area Code | 386 | |
Local Phone Number | 252-9601 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
REVENUES | ||||
Commissions and fees | $ 617,363 | $ 529,813 | $ 1,807,758 | $ 1,502,219 |
Investment income | 1,668 | 719 | 4,274 | 2,051 |
Other income, net | (348) | 318 | 1,150 | 1,228 |
Total revenues | 618,683 | 530,850 | 1,813,182 | 1,505,498 |
EXPENSES | ||||
Employee compensation and benefits | 331,120 | 268,045 | 973,567 | 790,902 |
Other operating expenses | 96,409 | 83,697 | 283,242 | 243,704 |
(Gain)/loss on disposal | (3,815) | 1,106 | (4,326) | (1,544) |
Amortization | 26,272 | 21,637 | 78,418 | 62,961 |
Depreciation | 5,815 | 5,259 | 17,516 | 16,410 |
Interest | 16,314 | 8,963 | 47,805 | 28,686 |
Change in estimated acquisition earn-out payables | (5,270) | (357) | (6,920) | 2,528 |
Total expenses | 466,845 | 388,350 | 1,389,302 | 1,143,647 |
Income before income taxes | 151,838 | 142,500 | 423,880 | 361,851 |
Income taxes | 36,332 | 36,447 | 101,885 | 91,048 |
Net income | $ 115,506 | $ 106,053 | $ 321,995 | $ 270,803 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.41 | $ 0.38 | $ 1.14 | $ 0.98 |
Diluted (in dollars per share) | 0.41 | 0.38 | 1.14 | 0.96 |
Dividends declared per share (in dollars per share) | $ 0.080 | $ 0.075 | $ 0.240 | $ 0.225 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 497,510 | $ 438,961 |
Restricted cash and investments | 377,085 | 338,635 |
Short-term investments | 9,935 | 12,868 |
Premiums, commissions and fees receivable | 895,612 | 844,815 |
Reinsurance recoverable | 309,787 | 65,396 |
Prepaid reinsurance premiums | 383,565 | 337,920 |
Other current assets | 133,443 | 128,716 |
Total current assets | 2,606,937 | 2,167,311 |
Fixed assets, net | 128,889 | 100,395 |
Operating lease assets | 193,419 | 0 |
Goodwill | 3,702,265 | 3,432,786 |
Amortizable intangible assets, net | 923,418 | 898,807 |
Investments | 28,137 | 17,394 |
Other assets | 97,599 | 71,975 |
Total assets | 7,680,664 | 6,688,668 |
Current Liabilities: | ||
Premiums payable to insurance companies | 906,136 | 857,559 |
Losses and loss adjustment reserve | 309,787 | 65,212 |
Unearned premiums | 383,565 | 337,920 |
Premium deposits and credits due customers | 118,350 | 105,640 |
Accounts payable | 103,920 | 87,345 |
Accrued expenses and other liabilities | 272,166 | 279,310 |
Current portion of long-term debt | 55,000 | 50,000 |
Total current liabilities | 2,148,924 | 1,782,986 |
Long-term debt less unamortized discount and debt issuance costs | 1,513,560 | 1,456,990 |
Operating lease liabilities | 177,097 | 0 |
Deferred income taxes, net | 322,024 | 315,732 |
Other liabilities | 204,536 | 132,392 |
Shareholders’ Equity: | ||
Common stock, par value $0.10 per share; authorized 560,000 shares; issued 297,136 shares and outstanding 282,498 shares at 2019, issued 293,380 shares and outstanding 279,583 shares at 2018 - in thousands. | 29,714 | 29,338 |
Additional paid-in capital | 703,949 | 615,180 |
Treasury stock, at cost at 14,638 shares at 2019 and 13,797 shares at 2018, respectively - in thousands | (507,314) | (477,572) |
Retained earnings | 3,088,174 | 2,833,622 |
Total shareholders’ equity | 3,314,523 | 3,000,568 |
Total liabilities and shareholders’ equity | $ 7,680,664 | $ 6,688,668 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 560,000,000 | 560,000,000 |
Common stock, shares issued (in shares) | 297,136,000 | 293,380,000 |
Common stock, shares outstanding (in shares) | 282,498,000 | 279,583,000 |
Treasury stock shares (in shares) | 14,638,000 | 13,797,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings |
Beginning Balance, Value at Dec. 31, 2017 | $ 2,582,699 | $ 28,689 | $ 483,733 | $ (386,322) | $ 2,456,599 |
Beginning Balance, Shares at Dec. 31, 2017 | 286,895 | ||||
Adoption of Topic 606 at January 1, 2018 (Accounting Standards Update 2014-09) at Dec. 31, 2017 | 117,515 | 117,515 | |||
Beginning Balance, Value at Dec. 31, 2017 | 2,700,214 | $ 28,689 | 483,733 | (386,322) | 2,574,114 |
Net income | 90,828 | 90,828 | |||
Net unrealized holding (loss) gain on available-for- sale securities | (132) | (77) | (55) | ||
Common stock issued for employee stock benefit plans | (321) | $ 6 | (327) | ||
Common stock issued for employee stock benefit plans, Shares | 53 | ||||
Purchase of treasury stock | 11,250 | (11,250) | |||
Common stock issued to directors | 700 | $ 1 | 699 | ||
Common stock issued to directors, Shares | 13 | ||||
Cash dividends paid | (20,696) | (20,696) | |||
Ending Balance, Value at Mar. 31, 2018 | 2,770,593 | $ 28,696 | 495,278 | (397,572) | 2,644,191 |
Ending Balance, Shares at Mar. 31, 2018 | 286,961 | ||||
Beginning Balance, Value at Dec. 31, 2017 | 2,582,699 | $ 28,689 | 483,733 | (386,322) | 2,456,599 |
Beginning Balance, Shares at Dec. 31, 2017 | 286,895 | ||||
Adoption of Topic 606 at January 1, 2018 (Accounting Standards Update 2014-09) at Dec. 31, 2017 | 117,515 | 117,515 | |||
Beginning Balance, Value at Dec. 31, 2017 | 2,700,214 | $ 28,689 | 483,733 | (386,322) | 2,574,114 |
Net income | 270,803 | ||||
Ending Balance, Value at Sep. 30, 2018 | 2,939,408 | $ 29,011 | 525,465 | (397,572) | 2,782,504 |
Ending Balance, Shares at Sep. 30, 2018 | 290,109 | ||||
Beginning Balance, Value at Mar. 31, 2018 | 2,770,593 | $ 28,696 | 495,278 | (397,572) | 2,644,191 |
Beginning Balance, Shares at Mar. 31, 2018 | 286,961 | ||||
Net income | 73,922 | 73,922 | |||
Net unrealized holding (loss) gain on available-for- sale securities | (29) | (27) | (2) | ||
Common stock issued for employee stock benefit plans | 7,711 | $ 12 | 7,699 | ||
Common stock issued for employee stock benefit plans, Shares | 123 | ||||
Cash dividends paid | (20,715) | (20,715) | |||
Ending Balance, Value at Jun. 30, 2018 | 2,831,482 | $ 28,708 | 502,950 | (397,572) | 2,697,396 |
Ending Balance, Shares at Jun. 30, 2018 | 287,084 | ||||
Net income | 106,053 | 106,053 | |||
Net unrealized holding (loss) gain on available-for- sale securities | (68) | (68) | |||
Common stock issued for employee stock benefit plans | 22,886 | $ 303 | 22,583 | ||
Common stock issued for employee stock benefit plans, Shares | 3,025 | ||||
Cash dividends paid | (20,945) | (20,945) | |||
Ending Balance, Value at Sep. 30, 2018 | 2,939,408 | $ 29,011 | 525,465 | (397,572) | 2,782,504 |
Ending Balance, Shares at Sep. 30, 2018 | 290,109 | ||||
Beginning Balance, Value at Dec. 31, 2018 | $ 3,000,568 | $ 29,338 | 615,180 | (477,572) | 2,833,622 |
Beginning Balance, Shares at Dec. 31, 2018 | 279,583 | 293,380 | |||
Net income | $ 113,896 | 113,896 | |||
Net unrealized holding (loss) gain on available-for- sale securities | 106 | 106 | |||
Common stock issued for employee stock benefit plans | 6,209 | $ 246 | 5,963 | ||
Common stock issued for employee stock benefit plans, Shares | 2,465 | ||||
Cash dividends paid | (22,348) | (22,348) | |||
Ending Balance, Value at Mar. 31, 2019 | 3,098,431 | $ 29,584 | 621,249 | (477,572) | 2,925,170 |
Ending Balance, Shares at Mar. 31, 2019 | 295,845 | ||||
Beginning Balance, Value at Dec. 31, 2018 | $ 3,000,568 | $ 29,338 | 615,180 | (477,572) | 2,833,622 |
Beginning Balance, Shares at Dec. 31, 2018 | 279,583 | 293,380 | |||
Net income | $ 321,995 | ||||
Common stock issued for agency acquisitions | 20,000 | ||||
Ending Balance, Value at Sep. 30, 2019 | $ 3,314,523 | $ 29,714 | 703,949 | (507,314) | 3,088,174 |
Ending Balance, Shares at Sep. 30, 2019 | 282,498 | 297,136 | |||
Beginning Balance, Value at Mar. 31, 2019 | $ 3,098,431 | $ 29,584 | 621,249 | (477,572) | 2,925,170 |
Beginning Balance, Shares at Mar. 31, 2019 | 295,845 | ||||
Net income | 92,593 | 92,593 | |||
Net unrealized holding (loss) gain on available-for- sale securities | 181 | 205 | (24) | ||
Common stock issued for employee stock benefit plans | 11,079 | $ (5) | 11,084 | ||
Common stock issued for employee stock benefit plans, Shares | (54) | ||||
Purchase of treasury stock | 20,000 | (20,000) | |||
Common stock issued to directors | 880 | $ 3 | 877 | ||
Common stock issued to directors, Shares | 28 | ||||
Cash dividends paid | (22,533) | (22,533) | |||
Ending Balance, Value at Jun. 30, 2019 | 3,180,631 | $ 29,582 | 653,415 | (497,572) | 2,995,206 |
Ending Balance, Shares at Jun. 30, 2019 | 295,819 | ||||
Net income | 115,506 | 115,506 | |||
Net unrealized holding (loss) gain on available-for- sale securities | 21 | 8 | 13 | ||
Common stock issued for employee stock benefit plans | 30,658 | $ 75 | 30,583 | ||
Common stock issued for employee stock benefit plans, Shares | 748 | ||||
Common stock issued for agency acquisitions | 20,000 | $ 57 | 19,943 | ||
Common stock issued for agency acquisitions, Shares | 569 | ||||
Purchase of treasury stock | (9,742) | (9,742) | |||
Cash dividends paid | (22,551) | (22,551) | |||
Ending Balance, Value at Sep. 30, 2019 | $ 3,314,523 | $ 29,714 | $ 703,949 | $ (507,314) | $ 3,088,174 |
Ending Balance, Shares at Sep. 30, 2019 | 282,498 | 297,136 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||||||
Cash dividends paid | $ 0.080 | $ 0.080 | $ 0.080 | $ 0.075 | $ 0.075 | $ 0.075 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 321,995 | $ 270,803 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization | 78,418 | 62,961 |
Depreciation | 17,516 | 16,410 |
Non-cash stock-based compensation | 34,679 | 23,522 |
Change in estimated acquisition earn-out payables | (6,920) | 2,528 |
Deferred income taxes | 6,172 | (16,416) |
Amortization of debt discount and disposal of deferred financing costs | 1,521 | 1,220 |
Accretion (amortization) of discounts and premiums, investment | (11) | (4) |
Net gain/(loss) on sales of investments, fixed assets and customer accounts | (4,108) | (1,259) |
Payments on acquisition earn-outs in excess of original estimated payables | (351) | (11,775) |
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures: | ||
Premiums, commissions and fees receivable (increase) decrease | (41,078) | (24,560) |
Reinsurance recoverables (increase) decrease | (244,391) | 379,304 |
Prepaid reinsurance premiums (increase) decrease | (45,645) | (23,938) |
Other assets (increase) decrease | (23,105) | (9,052) |
Premiums payable to insurance companies increase (decrease) | 43,055 | 19,179 |
Premium deposits and credits due customers increase (decrease) | 12,335 | 16,089 |
Losses and loss adjustment reserve increase (decrease) | 244,575 | (378,246) |
Unearned premiums increase (decrease) | 45,645 | 23,938 |
Accounts payable increase (decrease) | 22,086 | 27,817 |
Accrued expenses and other liabilities increase (decrease) | (22,462) | (21,465) |
Other liabilities increase (decrease) | 7,194 | (1,539) |
Net cash provided by operating activities | 447,120 | 355,517 |
Cash flows from investing activities: | ||
Additions to fixed assets | (47,358) | (28,859) |
Payments for businesses acquired, net of cash acquired | (288,393) | (254,836) |
Proceeds from sales of fixed assets and customer accounts | 3,499 | 3,338 |
Purchases of investments | (15,769) | (8,897) |
Proceeds from sales of investments | 8,385 | 17,551 |
Net cash used in investing activities | (339,636) | (271,703) |
Cash flows from financing activities: | ||
Payments on acquisition earn-outs | (7,514) | (13,337) |
Proceeds from long-term debt | 350,000 | |
Payments on long-term debt | (36,250) | (115,000) |
Deferred debt issuance costs | (3,701) | |
Borrowings on revolving credit facility | 100,000 | |
Payments on revolving credit facilities | (350,000) | |
Issuances of common stock for employee stock benefit plans | 24,948 | 19,406 |
Repurchase shares to fund tax withholdings for non-cash stock-based compensation | (10,794) | (11,928) |
Purchase of treasury stock | (29,742) | (11,250) |
Settlement (prepayment) of accelerated share repurchase program | 20,000 | 11,250 |
Cash dividends paid | (67,432) | (62,356) |
Net cash provided by (used in) financing activities | (10,485) | (183,215) |
Net increase (decrease) in cash and cash equivalents inclusive of restricted cash | 96,999 | (99,401) |
Cash and cash equivalents inclusive of restricted cash at beginning of period | 777,596 | 824,088 |
Cash and cash equivalents inclusive of restricted cash at end of period | $ 874,595 | $ 724,687 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | NOTE 1 Nature of Operations Brown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and service organization that markets and sells insurance products and services, primarily in the property, casualty and employee benefits areas. Brown & Brown’s business is divided into four reportable segments. The Retail Segment provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers. The National Programs Segment, which acts as a managing general agent (“MGA”), provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through a nationwide network of independent agents, including Brown & Brown retail agents. The Wholesale Brokerage Segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents. The Services Segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims adjusting services. |
Basis of Financial Reporting
Basis of Financial Reporting | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Financial Reporting | NOTE 2 Basis of Financial Reporting The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which provides guidance for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The impact of ASU 2018-15 is not expected to be material to the Company. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates Step 2 of the goodwill impairment test. The updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and will be applied prospectively. The Company is currently evaluating the impact of this guidance on future interim or annual goodwill impairment tests performed. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“Topic 842”), which provides guidance for accounting for leases. Under Topic 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. Effective as of January 1, 2019, the Company adopted Topic 842, and all related amendments, which established Accounting Standards Codification (“ASC”) Topic 842. The Company adopted these standards by the recognition of right-of-use assets and related lease liabilities on the balance sheet. As permitted by Topic 842, the Company elected the transition practical expedient to adopt as of January 1, 2019, the date of initial application under the modified retrospective approach for leases existing at that date, with an adjustment to retained earnings. As a result, the Consolidated Balance Sheet at December 31, 2018 was not restated and continues to be reported under ASC Topic 840 (“Topic 840”) which did not require the recognition of operating lease liabilities on the balance sheet, and thus is not comparative. For the nine months ended September 30, 2019, all of the Company's leases are classified as operating leases, which are primarily real estate leases for office space. The expense recognition for operating leases under Topic 842 is substantially consistent with Topic 840, where operating lease charges are recorded entirely in operating expenses. As a result, there is no significant difference in the Company's results of operations presented in the Company's Condensed Consolidated Statements of Income for each period presented. The adoption of Topic 842 had a significant impact on the Company's balance sheet with the recognition of the operating lease right-of-use asset and the liability for operating leases. Upon adoption, leases that were classified as operating leases under Topic 840 were classified as operating leases under Topic 842. For the adoption of Topic 842, the Company recorded an adjustment of $202.9 million to operating lease right-of-use asset and the related lease liability, with no impact to retained earnings. The deferred rent previously accrued under Topic 840 was reclassified to the right-of-use asset upon the adoption of Topic 842. The lease liability is the present value of the remaining minimum lease payments, determined under Topic 840, discounted using the Company's incremental borrowing rate at the effective date of January 1, 2019. As permitted under Topic 842, the Company elected to use the practical expedient that permits the Company to not reassess whether a contract is or contains a lease, the classification of the Company's existing operating leases, and initial direct costs for any existing leases. The Company did not elect the practical expedient to use hindsight in determining the lease term (when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Company's right-of-use assets. The application of the practical expedient did not have a significant impact on the measurement of the operating lease liability. The impact of the adoption of Topic 842 on the balance sheet at January 1, 2019 was (in thousands): (in thousands) Balance at December 31, 2018 Adjustments due to Topic 842 Balance at January 1, 2019 Balance Sheet Assets: Other current assets 128,716 (3,004 ) 125,712 Operating lease assets — 178,304 178,304 Total Assets 6,688,668 175,300 6,863,968 Liabilities: Accrued expenses and other liabilities 279,310 13,836 293,146 Operating lease liabilities — 161,464 161,464 Total Liabilities 3,688,100 175,300 3,863,400 For contracts entered into on or after the January 1, 2019, at the inception of a contract the Company assesses whether the contract is, or contains, a lease. This assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019 are accounted for under Topic 840 and were not reassessed. For real estate leases that contain both lease and non-lease components, the Company elected to account the lease components together with non-lease components (e.g., common-area maintenance). Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, or the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. None of the Company's real estate leases for office space meet the definition of a finance lease. The Company's policy is to own, rather than lease, equipment. For leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, less any lease incentives received. The lease liability is initially measured at the present value of the lease payments under the lease. For the Company's operating leases, the lease payments are discounted using an incremental borrowing rate, which approximates the rate of interest that would be paid on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms. Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Some of the Company's real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and based on the minimum amount stated in the lease. Lease components are included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate, or payments based on a change in the Company's portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in remeasurement of the right-of-use assets and the lease liability. Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. The Company elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a total term of 12 months or less. The effect of short-term leases on the Company's right-of-use asset and lease liability would not be significant. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2019 | |
Revenues [Abstract] | |
Revenues | NOTE 3 Revenues The following tables present the revenues disaggregated by revenue source: Three months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other (8) Total Base commissions (1) $ 248,488 $ 92,224 $ 68,162 $ — $ — $ 408,874 Fees (2) 65,501 44,984 15,850 50,069 (288 ) 176,116 Incentive commissions (3) 12,852 258 449 — 5 13,564 Profit-sharing contingent commissions (4) 7,848 4,412 1,927 — — 14,187 Guaranteed supplemental commissions (5) 3,415 609 598 — — 4,622 Investment income (6) 28 375 48 35 1,182 1,668 Other income, net (7) (420 ) (8 ) 75 2 3 (348 ) Total Revenues $ 337,712 $ 142,854 $ 87,109 $ 50,106 $ 902 $ 618,683 Nine months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other (8) Total Base commissions (1) $ 755,108 $ 254,495 $ 187,388 $ — $ 13 $ 1,197,004 Fees (2) 178,205 109,702 42,299 150,276 (863 ) 479,619 Incentive commissions (3) 68,342 (669 ) 947 — 23 68,643 Profit-sharing contingent commissions (4) 26,054 9,365 6,073 — — 41,492 Guaranteed supplemental commissions (5) 9,211 10,225 1,564 — — 21,000 Investment income (6) 45 1,071 131 117 2,910 4,274 Other income, net (7) 716 42 387 2 3 1,150 Total Revenues $ 1,037,681 $ 384,231 $ 238,789 $ 150,395 $ 2,086 $ 1,813,182 (1) Base commissions generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which the Company controls. (2) Fee revenues relate to fees for services other than securing coverage for the Company's customers and fees negotiated in lieu of commissions. (3) Incentive commissions include additional commissions over base commissions received from insurance carriers based on predetermined production levels mutually agreed upon by both parties. (4) Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention. (5) Guaranteed supplemental commissions represent guaranteed fixed-base agreements in lieu of profit-sharing contingent commissions. (6) Investment income consists primarily of interest on cash and investments. (7) Other income consists primarily of legal settlements and other miscellaneous income. (8) Fees within other reflects the elimination of intercompany revenues. Contract Assets and Liabilities The balances of contract assets and contract liabilities arising from contracts with customers as of September 30, 2019 and December 31, 2018 were as follows: (in thousands) September 30, 2019 December 31, 2018 Contract assets $ 297,696 $ 265,994 Contract liabilities $ 55,138 $ 53,496 Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in the Company's systems and are reflected in premiums, commissions and fee receivables in the Company's Condensed Consolidated Balance Sheet. Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the transfer of a good or service to the customer. Deferred revenue is reflected within accrued expenses and other liabilities for those to be recognized in less than 12 months and in other liabilities for those to be recognized more than 12 months from the date presented in the Company's Condensed Consolidated Balance Sheet. As of September 30, 2019, deferred revenue consisted of $37.5 million as current portion to be recognized within one year and $17.6 million in long term to be recognized beyond one year. As of December 31, 2018, deferred revenue consisted of $37.0 million as current portion to be recognized within one year and $16.5 million in long-term deferred revenue to be recognized beyond one year. During the nine months ended September 30, 2019, the amount of revenue recognized related to performance obligations satisfied in a previous period, was $14.0 million. This revenue is primarily related to variable consideration and is inclusive of changes due to estimates. Other Assets and Deferred Cost Incremental cost to obtain - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans in the Retail Segment, in which the Company pays an incremental amount of compensation on new business. These incremental costs are deferred and amortized over a 15-year period. The cost to obtain balance within the other assets caption in the Company's Condensed Consolidated Balance Sheet was $23.4 million and $13.2 million as of September 30, 2019 and December 31, 2018, respectively. For the nine months ended September 30, 2019, the Company deferred $11.6 million of incremental cost to obtain customer contracts. The Company recorded an expense of $1.4 million associated with the incremental cost to obtain customer contracts for the nine months ended September 30, 2019. Cost to fulfill - The Company defers certain costs to fulfill contracts and recognizes these costs as the associated performance obligations are fulfilled. The cost to fulfill balance within the other current assets caption in the Company's Condensed Consolidated Balance Sheet was $68.0 million and $69.8 million as of September 30, 2019 and December 31, 2018, respectively. For the nine months ended September 30, 2019, the Company had net expense of $1.9 million related to the release of previously deferred contract fulfillment costs associated with performance obligations that were satisfied in the period, net of current year deferrals for costs incurred that related to performance obligations yet to be fulfilled. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | NOTE 4 Net Income Per Share Basic net income per share is computed based on the weighted average number of common shares (including participating securities) issued and outstanding during the period. Diluted net income per share is computed based on the weighted average number of common shares issued and outstanding plus equivalent shares, assuming the exercise of stock options. The dilutive effect of stock options is computed by application of the treasury-stock method. The following is a reconciliation between basic and diluted weighted average shares outstanding: For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share data) 2019 2018 2019 2018 Net income $ 115,506 $ 106,053 $ 321,995 $ 270,803 Net income attributable to unvested awarded performance stock (3,772 ) (2,716 ) (10,386 ) (6,185 ) Net income attributable to common shares $ 111,734 $ 103,337 $ 311,609 $ 264,618 Weighted average number of common shares outstanding – basic 282,178 278,132 281,505 276,744 Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic (9,216 ) (7,124 ) (9,080 ) (6,321 ) Weighted average number of common shares outstanding for basic net income per common share 272,962 271,008 272,425 270,423 Dilutive effect of stock options 2,113 4,274 2,104 5,191 Weighted average number of shares outstanding – diluted 275,075 275,282 274,529 275,614 Net income per share: Basic $ 0.41 $ 0.38 $ 1.14 $ 0.98 Diluted $ 0.41 $ 0.38 $ 1.14 $ 0.96 |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | NOTE 5 Business Combinations During the nine months ended September 30, 2019, Brown & Brown acquired the assets and assumed certain liabilities of seventeen insurance intermediaries and all of the stock of one insurance intermediary. Additionally, miscellaneous adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last 12 months as permitted by Accounting Standards Codification Topic 805 — Business Combinations The fair value of earn-out obligations is based on the present value of the expected future payments to be made to the sellers of the acquired businesses in accordance with the provisions outlined in the respective purchase agreements. In determining fair value, the acquired business’s future performance is estimated using financial projections developed by management for the acquired business and reflects market participant assumptions regarding revenue growth and/or profitability. The expected future payments are estimated on the basis of the earn-out formula and performance targets specified in each purchase agreement compared to the associated financial projections. These payments are then discounted to present value using a risk-adjusted rate that takes into consideration the likelihood that the forecasted earn-out payments will be made. Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC 805. For the nine months ended September 30, 2019, adjustments were made within the permitted measurement period that resulted in a decrease in the aggregate purchase price of the affected acquisitions of $6.6 million relating to the assumption of certain liabilities. These measurement period adjustments have been reflected as current period adjustments in the nine months ended September 30, 2019 in accordance with the guidance in ASU 2015-16 “Business Combinations.” The measurement period adjustments primarily impacted goodwill, with no effect on earnings or cash in the current period. Cash paid for acquisitions was $291.6 million in the nine-month period ended September 30, 2019. The Company completed 18 acquisitions (excluding book of business purchases) in the nine-month period ended September 30, 2019. The Company completed 18 acquisitions (excluding book of business purchases) in the nine-month period ended September 30, 2018. The following table summarizes the purchase price allocations made as of the date of each acquisition for current year acquisitions and adjustments made during the measurement period for prior year acquisitions. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date. (in thousands) Name Business segment Effective date of acquisition Cash paid Common Stock Issued Other payable Recorded earn-out payable Net assets acquired Maximum potential earn- out payable Smith Insurance Associates, Inc. (Smith) Retail February 1, 2019 $ 20,129 $ — $ — $ 2,704 $ 22,833 $ 4,550 Donald P. Pipino Company, LTD (Pipino) Retail February 1, 2019 16,420 — 135 9,821 26,376 12,996 Cossio Insurance Agency (Cossio) Retail March 1, 2019 13,990 — 10 1,710 15,710 2,000 Medval LLC (Medval) Services March 1, 2019 29,106 — 100 1,684 30,890 2,500 United Development Systems, Inc. (United) Retail May 1, 2019 18,987 — 388 3,268 22,643 8,625 Twinbrook Insurance Brokerage, Inc. (Twinbrook) Retail June 1, 2019 26,251 — 400 1,565 28,216 5,073 Innovative Risk Solutions, Inc. (IRS) Retail July 1, 2019 26,435 — 2,465 5,482 34,382 9,000 WBR Insurance Agency, LLC et al (WBR) Retail August 1, 2019 10,667 — 203 2,197 13,067 4,575 West Ridge Insurance Agency, Inc. d/b/a Yozell Associates (Yozell) Retail August 1, 2019 13,030 — 470 768 14,268 6,730 CKP Insurance, LLC (CKP) Retail August 1, 2019 89,190 20,000 4,000 38,093 151,283 76,500 Other Various Various 27,405 — 1,291 4,172 32,868 9,404 Total $ 291,610 $ 20,000 $ 9,462 $ 71,464 $ 392,536 $ 141,953 The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period of the prior year acquisitions. (in thousands) Smith Pipino Cossio Medval United Twinbrook IRS WBR Yozell CKP Other Total Cash $ — $ — $ — $ 3,217 $ — $ — $ — $ — $ — $ — $ — $ 3,217 Other current assets 473 819 17 1,708 477 — 1,200 169 1,473 8,900 (6,173 ) 9,063 Fixed assets 39 112 29 50 20 85 11 10 12 193 (166 ) 395 Goodwill 16,249 16,765 11,319 19,108 15,111 19,839 24,040 9,376 9,212 110,765 23,523 275,307 Purchased customer accounts 6,500 11,360 4,324 7,300 7,065 8,557 9,246 4,022 3,550 32,274 10,732 104,930 Non-compete agreements 41 11 21 1 11 12 11 34 21 21 128 312 Other assets — 772 — 15 — — — — — — (732 ) 55 Total assets acquired 23,302 29,839 15,710 31,399 22,684 28,493 34,508 13,611 14,268 152,153 27,312 393,279 Other current liabilities (469 ) (3,463 ) — (480 ) (41 ) (277 ) (126 ) (166 ) — (870 ) 5,556 (336 ) Other liabilities — — — (29 ) — — — (378 ) — — — (407 ) Total liabilities assumed (469 ) (3,463 ) — (509 ) (41 ) (277 ) (126 ) (544 ) — (870 ) 5,556 (743 ) Net assets acquired $ 22,833 $ 26,376 $ 15,710 $ 30,890 $ 22,643 $ 28,216 $ 34,382 $ 13,067 $ 14,268 $ 151,283 $ 32,868 $ 392,536 The other column represents current year acquisitions with total net assets acquired of less than $10.0 million and adjustments from prior year acquisitions that were made within the permitted measurement period. The weighted average useful lives for the acquired amortizable intangible assets are as follows: purchased customer accounts, 15 years; and non-compete agreements, 5 years. Goodwill of $275.3 million, which is net of any opening balance sheet adjustments within the allowable measurement period, was allocated to the Retail, National Programs, Wholesale Brokerage and Services Segments in the amounts of $249.7 million, $0.1 million, $6.2 million and $19.3 million, respectively. Of the total goodwill of $275.3 million, the amount currently deductible for income tax purposes is $203.8 million and the remaining $71.5 million relates to the recorded earn-out payables and will not be deductible until it is earned and paid. For the acquisitions completed during 2019, the results of operations since the acquisition dates have been combined with those of the Company. The total revenues from the acquisitions completed through September 30, 2019, included in the Condensed Consolidated Statement of Income for the nine months ended September 30, 2019, was $31.0 million. The income before income taxes, including the intercompany cost of capital charge, from the acquisitions completed through September 30, 2019, included in the Condensed Consolidated Statement of Income for the nine months ended September 30, 2019, was $0.3 million. If the acquisitions had occurred as of the beginning of the respective periods, the Company’s results of operations would be as shown in the following table. These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods. (UNAUDITED) Three months ended September 30, Nine months ended September 30, (in thousands, except per share data) 2019 2018 2019 2018 Total revenues $ 619,359 $ 547,196 $ 1,853,193 $ 1,578,627 Income before income taxes $ 152,038 $ 147,351 $ 438,289 $ 385,327 Net income $ 115,658 $ 109,663 $ 332,940 $ 288,373 Net income per share: Basic $ 0.41 $ 0.39 $ 1.18 $ 1.04 Diluted $ 0.41 $ 0.39 $ 1.17 $ 1.02 Weighted average number of shares outstanding: Basic 272,962 271,008 272,425 270,423 Diluted 275,075 275,282 274,529 275,614 As of September 30, 2019 and 2018 , the fair values of the estimated acquisition earn-out payables were re-evaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820- Fair Value Measurement . The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the nine months ended September 30, 2019 and 2018 , were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2019 2018 2019 2018 Balance as of the beginning of the period $ 104,976 $ 52,540 $ 89,924 $ 36,175 Additions to estimated acquisition earn-out payables 47,498 29,646 71,464 51,717 Payments for estimated acquisition earn-out payables (601 ) (16,521 ) (7,865 ) (25,112 ) Subtotal 151,873 65,665 153,523 62,780 Net change in earnings from estimated acquisition earn-out payables: Change in fair value on estimated acquisition earn-out payables (6,573 ) (928 ) (10,873 ) 945 Interest expense accretion 1,303 571 3,953 1,583 Net change in earnings from estimated acquisition earn-out payables (5,270 ) (357 ) (6,920 ) 2,528 Balance as of September 30, $ 146,603 $ 65,308 $ 146,603 $ 65,308 Of the $146.6 million estimated acquisition earn-out payables as of September 30, 2019, $23.7 million was recorded as accounts payable and $122.9 million was recorded as other non-current liabilities. As of September 30, 2019, the maximum future acquisition contingency payments related to all acquisitions was $310.6 million, inclusive of the $146.6 million estimated acquisition earn-out payables as of September 30, 2019. Included within the additions to estimated acquisition earn-out payables are any adjustments to opening balance sheet items within the allowable measurement period, which may therefore differ from previously reported amounts. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | NOTE 6 Goodwill Goodwill is subject to at least an annual assessment for impairment by applying a fair value-based test. The Company completed its most recent annual assessment as of November 30, 2018, and identified no impairment as a result of the evaluation. The changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2019 are as follows: (in thousands) Retail National Programs Wholesale Brokerage Services Total Balance as of December 31, 2018 $ 2,063,150 $ 926,206 $ 291,622 $ 151,808 $ 3,432,786 Goodwill of acquired businesses 249,691 74 6,189 19,353 275,307 Goodwill disposed of relating to sales of businesses (5,089 ) (739 ) — — (5,828 ) Balance as of September 30, 2019 $ 2,307,752 $ 925,541 $ 297,811 $ 171,161 $ 3,702,265 |
Amortizable Intangible Assets
Amortizable Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortizable Intangible Assets | NOTE 7 Amortizable Intangible Assets Amortizable intangible assets at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Gross carrying value Accumulated amortization Net carrying value Weighted average life (years) (1) Gross carrying value Accumulated amortization Net carrying value Weighted average life (years) (1) Purchased customer accounts $ 1,905,638 $ (985,436 ) $ 920,202 15.0 $ 1,804,404 $ (909,415 ) $ 894,989 14.9 Non-compete agreements 33,781 (30,565 ) 3,216 4.5 33,469 (29,651 ) 3,818 4.5 Total $ 1,939,419 $ (1,016,001 ) $ 923,418 $ 1,837,873 $ (939,066 ) $ 898,807 (1) Weighted average life calculated as of the date of acquisition. Amortization expense for amortizable intangible assets for the years ending December 31, 2019, 2020, 2021, 2022 and 2023 is estimated to be $104.7 million, $99.8 million, $96.3 million, $91.8 million, and $84.8 million, respectively. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 8 Long-Term Debt Long-term debt at (in thousands) September 30, 2019 December 31, 2018 Current portion of long-term debt: Current portion of 5-year $ 40,000 $ 35,000 Current portion of 5-year 15,000 15,000 Total current portion of long-term debt 55,000 50,000 Long-term debt: Note agreements: 4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2024 $ 499,219 $ 499,101 4.500% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2029 349,470 — Total notes 848,689 499,101 Credit agreements: 5-year 1.750%, expires June 28, 2022 300,000 330,000 5-year revolving-loan facility, periodic interest payments, LIBOR plus up to 1.500%, plus commitment fees up to 0.250%, expires June 28, 2022 100,000 350,000 5-year 1.750%, expires December 21, 2023 273,750 285,000 Total credit agreements 673,750 965,000 Debt issuance costs (contra) (8,879 ) (7,111 ) Total long-term debt less unamortized discount and debt issuance costs 1,513,560 1,456,990 Current portion of long-term debt 55,000 50,000 Total debt $ 1,568,560 $ 1,506,990 On June 28, 2017, the Company entered into an amended and restated credit agreement (the “Amended and Restated Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent and certain other banks as co-syndication agents and co-documentation agents. The Amended and Restated Credit Agreement amended and restated the credit agreement dated April 17, 2014, among such parties (the “Original Credit Agreement”). The Amended and Restated Credit Agreement extends the applicable maturity date of the existing revolving credit facility (the “Revolving Credit Facility”) of $800.0 million to June 28, 2022 and re-evidences unsecured term loans at $400.0 million while also extending the applicable maturity date to June 28, 2022. The quarterly term loan principal amortization schedule was reset. At the time of the execution of the Amended and Restated Credit Agreement, $67.5 million of principal from the original unsecured term loans was repaid using operating cash balances, and the Company added an additional $2.8 million in debt issuance costs related to the Revolving Credit Facility to the Condensed Consolidated Balance Sheet. The Company also expensed to the Condensed Consolidated Statements of Income $0.2 million of debt issuance costs related to the Original Credit Agreement due to certain lenders exiting prior to execution of the Amended and Restated Credit Agreement. The Company also carried forward $1.6 million on the Condensed Consolidated Balance Sheet the remaining unamortized portion of the Original Credit Agreement debt issuance costs, which will be amortized over the term of the Amended and Restated Credit Agreement. On September 30, 2019, the Company made a scheduled principal payment of $10.0 million per the terms of the Amended and Restated Credit Agreement. As of September 30, 2019, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit Agreement of $340.0 million and $100.0 million borrowings outstanding against the Revolving Credit Facility. As of December 31, 2018, there was an outstanding debt balance issued under the term loan of the Amended and Restated Credit Agreement of $365.0 million with $350.0 million in borrowings outstanding against the Revolving Credit Facility. The Company had borrowed approximately $600.0 million under its Revolving Credit Facility on November 15, 2018 in connection with the closing of the acquisition of certain assets and assumption of certain liabilities of the Hays Companies. Per the terms of the Amended and Restated Credit Agreement, a scheduled principal payment of $10.0 million is due December 31, 2019. On September 18, 2014, the Company issued $500.0 million of 4.200% unsecured Senior Notes due in 2024. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions and regulations which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay the outstanding balance of $475.0 million on the Revolving Credit Facility and for other general corporate purposes. As of September 30, 2019 and December 31, 2018, there was an outstanding debt balance of $500.0 million exclusive of the associated discount balance. On December 21, 2018, the Company entered into a term loan credit agreement (the “Term Loan Credit Agreement”) with the lenders named therein, Wells Fargo Bank, National Association, as administrative agent, and certain other banks as co-syndication agents and as joint lead arrangers and joint bookrunners. The Term Loan Credit Agreement provides for an unsecured term loan in the initial amount of $300.0 million , which may, subject to lenders’ discretion, potentially be increased up to an aggregate amount of $450.0 million (the “Term Loan”). The Term Loan is repayable over the five-year term from the effective date of the Term Loan Credit Agreement, which was December 21, 2018. Based on the Company’s net debt leverage ratio or a non-credit enhanced senior unsecured long-term debt rating as determined by Moody’s Investor Service and Standard & Poor’s Rating Service, the rates of interest charged on the term loan are 1.00% to 1.75% , above the adjusted 1-Month LIBOR rate. On December 21, 2018, the Company borrowed $300.0 million under the Term Loan Credit Agreement and used $250.0 million of the proceeds to reduce indebtedness under the Company’s Amended and Restated Credit Agreement, dated June 28, 2017, with the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, and certain other banks as co-syndication agents and co-documentation agents (the “Revolving Credit Facility”). As of September 30, 2019 , there was an outstanding debt balance issued under the Term Loan of $288.8 million . As of December 31, 2018 , there was an outstanding debt balance issued under the Term Loan of $300.0 million . Per the terms of the Term Loan Credit Agreement, a scheduled principal payment of $3.8 million is due December 31 , 2019. On March 11, 2019, the Company completed the issuance of $350.0 million aggregate principal amount of the Company's 4.500% Senior Notes due 2029. The Senior Notes were given investment grade ratings of BBB-/Baa3 with a stable outlook. The notes are subject to certain covenant restrictions, which are customary for credit rated obligations. At the time of funding, the proceeds were offered at a discount of the original note amount, which also excluded an underwriting fee discount. The net proceeds received from the issuance were used to repay a portion of the outstanding balance of $350.0 million on the Revolving Credit Facility, utilized in connection with the financing related to the Hays Companies acquisition and for other general corporate purposes. As of September 30, 2019, there was an outstanding debt balance of $350.0 million exclusive of the associated discount balance. The Amended and Restated Credit Agreement and Term Loan Credit Agreement require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of September 30, 2019 and December 31, 2018. The 30-day Adjusted LIBOR Rate as of September 30, 2019 was 2.063%. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | NOTE 9 Leases Substantially all of the Company's operating lease right-of-use assets and operating lease liabilities represent real estate leases for office space used to conduct the Company's business. The balances and classification of operating lease right-of-use assets and operating lease liabilities within the Condensed Consolidated Balance Sheet is as follows: (in thousands) September 30, 2019 Balance Sheet Assets: Operating lease right-of-use assets Operating lease assets $ 193,419 Total Assets 193,419 Liabilities: Current operating lease liabilities Accrued expenses and other liabilities 41,828 Non-current operating lease liabilities Operating lease liabilities 177,097 Total Liabilities $ 218,925 The components of lease cost for operating leases for the three and nine months ended September 30, 2019 were: (in thousands) Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating leases: Lease cost $ 11,581 $ 36,671 Variable lease cost 1,197 2,701 Operating lease cost $ 12,778 $ 39,372 Sublease income (145 ) (329 ) Total lease cost net $ 12,633 $ 39,043 The weighted average remaining lease term and the weighted average discount rate for operating leases as of September 30, 2019 were: Weighted-average remaining lease term 6.10 Weighted-average discount rate 3.73 Maturities of the operating lease liabilities by fiscal year at September 30, 2019 for the Company's operating leases are as follows: (in thousands) Operating Leases 2019 (Remainder) $ 10,441 2020 50,613 2021 43,859 2022 36,448 2023 29,936 Thereafter 75,843 Total undiscounted lease payments 247,140 Less: Imputed interest 28,215 Present value of lease payments $ 218,925 At December 31, 2018, the aggregate future minimum lease payments under all non-cancelable lease agreements were as follows: (in thousands) December 31, 2018 2019 $ 48,292 2020 43,517 2021 34,836 2022 27,035 2023 19,981 Thereafter 36,349 Total minimum future lease payments $ 210,010 Supplemental cash flow information for operating leases: (in thousands) Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash paid for amounts included in measurement of liabilities Operating cash flows from operating leases $ 11,816 $ 37,728 Right-of-use assets obtained in exchange for new operating liabilities $ 11,660 $ 38,291 |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities | NOTE 10 Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities Brown & Brown's cash paid during the period for interest and income taxes are summarized as follows: Nine months ended September 30, (in thousands) 2019 2018 Cash paid during the period for: Interest $ 52,127 $ 32,896 Income taxes $ 85,970 $ 21,380 Brown & Brown’s significant non-cash investing and financing activities are summarized as follows: Nine months ended September 30, (in thousands) 2019 2018 Other payable issued for purchased customer accounts $ 9,462 $ 3,339 Estimated acquisition earn-out payables and related charges $ 71,464 $ 51,717 Notes received on the sale of fixed assets and customer accounts $ 9,903 $ — The Company's restricted cash balance is composed of funds held in separate premium trust accounts as required by state law or, in some cases, by agreement with carrier partners. The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of September 30, 2019 and 2018 . Balance as of September 30, (in thousands) 2019 2018 Table to reconcile cash and cash equivalents inclusive of restricted cash Cash and cash equivalents $ 497,510 $ 422,971 Restricted cash 377,085 301,716 Total cash and cash equivalents inclusive of restricted cash at the end of the period $ 874,595 $ 724,687 The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of December 31, 2018 and 2017. Balance as of December 31, (in thousands) 2018 2017 Table to reconcile cash and cash equivalents inclusive of restricted cash Cash and cash equivalents $ 438,961 $ 573,383 Restricted cash 338,635 250,705 Total cash and cash equivalents inclusive of restricted cash at the end of the period $ 777,596 $ 824,088 In the preparation of the Statement of Cash Flows in this Quarterly Report on Form 10-Q, beginning balance sheet balances for 2018 were adjusted to reflect the modified retrospective adoption of Accounting Standards Update No.2014-09, “Revenue from Contracts with Customers” and Accounting Standards Codification Topic 340 - Other Assets and Deferred Cost, thereby reflecting in the Statement of Cash Flows the change in operating assets and liabilities for the period, excluding the initial impact of adoption of these new accounting standards. |
Legal and Regulatory Proceeding
Legal and Regulatory Proceedings | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal and Regulatory Proceedings | NOTE 11 Legal and Regulatory Proceedings The Company is involved in numerous pending or threatened proceedings by or against Brown & Brown, Inc. or one or more of its subsidiaries that arise in the ordinary course of business. The damages that may be claimed against the Company in these various proceedings are in some cases substantial, including in certain instances claims for punitive or extraordinary damages. Some of these claims and lawsuits have been resolved; others are in the process of being resolved and others are still in the investigation or discovery phase. The Company will continue to respond appropriately to these claims and lawsuits and to vigorously protect its interests. The Company continues to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could adversely impact the Company’s operating results, cash flows and overall liquidity. The Company maintains third-party insurance policies to provide coverage for certain legal claims, in an effort to mitigate its overall exposure to unanticipated claims or adverse decisions. However, as (i) one or more of the Company’s insurance carriers could take the position that portions of these claims are not covered by the Company’s insurance, (ii) to the extent that payments are made to resolve claims and lawsuits, applicable insurance policy limits are eroded and (iii) the claims and lawsuits relating to these matters are continuing to develop, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by unfavorable resolutions of these matters. Based upon the AM Best Company ratings of these third-party insurers, management does not believe there is a substantial risk of an insurer’s material non-performance related to any current insured claims. On the basis of current information, the availability of insurance and legal advice, in management’s opinion, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, would have a material adverse effect on its financial condition, operations and/or cash flows. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 12 Segment Information Brown & Brown’s business is divided into four reportable segments: (1) the Retail Segment, which provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers, (2) the National Programs Segment, which acts as an MGA, provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through nationwide networks of independent agents, and Brown & Brown retail agents, (3) the Wholesale Brokerage Segment, which markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents, and (4) the Services Segment, which provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as Medicare Set-aside services, Social Security disability and Medicare benefits advocacy services and claims adjusting services. Brown & Brown conducts all of its operations within the United States of America, except for a wholesale brokerage operation based in London, England, retail operations in Bermuda and the Cayman Islands, and a national programs operation in Canada. These operations earned $4.4 million and $3.7 million of total revenues for the three months ended September 30, 2019 and 2018, respectively. These operations earned $12.4 million and $11.3 million of total revenues for the nine months ended September 30, 2019 and 2018 , respectively. Long-lived assets held outside of the United States as of September 30, 2019 and 2018 were not material. The accounting policies of the reportable segments are the same as those described in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The Company evaluates the performance of its segments based upon revenues and income before income taxes. Inter-segment revenues are eliminated. Summarized financial information concerning the Company’s reportable segments is shown in the following tables. The “Other” column includes any income and expenses not allocated to reportable segments, corporate-related items, including the intercompany interest expense charge to the reporting segment. Three months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 337,712 $ 142,854 $ 87,109 $ 50,106 $ 902 $ 618,683 Investment income $ 28 $ 375 $ 48 $ 35 $ 1,182 $ 1,668 Amortization $ 15,821 $ 6,264 $ 2,797 $ 1,390 $ — $ 26,272 Depreciation $ 1,897 $ 1,779 $ 422 $ 315 $ 1,402 $ 5,815 Interest expense $ 22,287 $ 3,557 $ 1,105 $ 1,164 $ (11,799 ) $ 16,314 Income before income taxes $ 51,133 $ 46,629 $ 28,908 $ 14,775 $ 10,393 $ 151,838 Total assets $ 6,155,670 $ 3,315,656 $ 1,406,709 $ 469,292 $ (3,666,663 ) $ 7,680,664 Capital expenditures $ 2,266 $ 1,276 $ 768 $ 209 $ 7,665 $ 12,184 Three months ended September 30, 2018 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 261,087 $ 143,519 $ 78,009 $ 48,105 $ 130 $ 530,850 Investment income $ 1 $ 138 $ 44 $ 51 $ 485 $ 719 Amortization $ 10,754 $ 6,736 $ 2,878 $ 1,269 $ — $ 21,637 Depreciation $ 1,236 $ 1,346 $ 385 $ 393 $ 1,899 $ 5,259 Interest expense $ 7,468 $ 6,147 $ 1,233 $ 846 $ (6,731 ) $ 8,963 Income before income taxes $ 61,224 $ 46,707 $ 23,614 $ 6,988 $ 3,967 $ 142,500 Total assets $ 4,651,080 $ 2,933,465 $ 1,272,795 $ 448,027 $ (3,502,561 ) $ 5,802,806 Capital expenditures $ 1,467 $ 2,420 $ 895 $ 366 $ 4,321 $ 9,469 Nine months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 1,037,681 $ 384,231 $ 238,789 $ 150,395 $ 2,086 $ 1,813,182 Investment income $ 45 $ 1,071 $ 131 $ 117 $ 2,910 $ 4,274 Amortization $ 46,622 $ 19,217 $ 8,490 $ 4,089 $ — $ 78,418 Depreciation $ 5,440 $ 4,990 $ 1,251 $ 902 $ 4,933 $ 17,516 Interest expense $ 64,641 $ 13,134 $ 3,692 $ 3,239 $ (36,901 ) $ 47,805 Income before income taxes $ 189,191 $ 106,188 $ 67,421 $ 33,220 $ 27,860 $ 423,880 Total assets $ 6,155,670 $ 3,315,656 $ 1,406,709 $ 469,292 $ (3,666,663 ) $ 7,680,664 Capital expenditures $ 7,810 $ 7,786 $ 2,470 $ 540 $ 28,752 $ 47,358 Nine months ended September 30, 2018 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 772,806 $ 374,434 $ 219,725 $ 138,038 $ 495 $ 1,505,498 Investment income $ 2 $ 384 $ 125 $ 160 $ 1,380 $ 2,051 Amortization $ 31,498 $ 19,383 $ 8,537 $ 3,543 $ — $ 62,961 Depreciation $ 3,746 $ 4,087 $ 1,238 $ 1,183 $ 6,156 $ 16,410 Interest expense $ 21,377 $ 20,019 $ 4,039 $ 2,023 $ (18,772 ) $ 28,686 Income before income taxes $ 175,984 $ 91,809 $ 55,544 $ 23,889 $ 14,625 $ 361,851 Total assets $ 4,651,080 $ 2,933,465 $ 1,272,795 $ 448,027 $ (3,502,561 ) $ 5,802,806 Capital expenditures $ 5,828 $ 7,313 $ 1,762 $ 798 $ 13,158 $ 28,859 |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | NOTE 13 Investments At (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 24,854 $ 183 $ (37 ) $ 25,000 Corporate debt 5,329 63 (10 ) 5,382 Total $ 30,183 $ 246 $ (47 ) $ 30,382 At September 30, 2019, the Company held $25.0 million in fixed income securities composed of U.S. Treasury securities, securities issued by U.S. Government agencies and municipalities, and $5.4 million issued by corporations with investment grade ratings. Of that total, $2.2 million is classified as short-term investments on the Condensed Consolidated Balance Sheet as maturities are less than one-year, which also includes $7.7 million that is related to time deposits held with various financial institutions. For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2019: Less than 12 Months 12 Months or More Total (in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 5,435 $ (32 ) $ 2,246 $ (5 ) $ 7,681 $ (37 ) Corporate debt 997 (10 ) — — 997 (10 ) Total $ 6,432 $ (42 ) $ 2,246 $ (5 ) $ 8,678 $ (47 ) The unrealized losses were caused by interest rate increases. At September 30, 2019, the Company had 8 securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at September 30, 2019. At December 31, 2018, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows: (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 21,729 $ 7 $ (222 ) $ 21,514 Corporate debt 623 — — 623 Total $ 22,352 $ 7 $ (222 ) $ 22,137 At December 31, 2018, the Company held $21.5 million in fixed income securities composed of U.S. Treasury securities, securities issued by U.S. Government agencies and municipalities, and $0.6 million issued by corporations with investment grade ratings. Of that total, $4.8 million is classified as short-term investments on the Condensed Consolidated Balance Sheet as maturities are less than one-year, which also includes $8.1 million that is related to time deposits held with various financial institutions. For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018: Less than 12 Months 12 Months or More Total (in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 5,866 $ (6 ) $ 12,634 $ (216 ) $ 18,500 $ (222 ) Corporate debt 457 — 100 — 557 — Total $ 6,323 $ (6 ) $ 12,734 $ (216 ) $ 19,057 $ (222 ) The unrealized losses from corporate issuers were caused by interest rate increases. At December 31, 2018, the Company had 20 securities in an unrealized loss position. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at December 31, 2018. The amortized cost and estimated fair value of the fixed maturity securities at September 30, 2019 by contractual maturity are set forth below: (in thousands) Amortized cost Fair value Years to maturity: Due in one year or less $ 2,250 $ 2,245 Due after one year through five years 27,933 28,137 Due after five years — — Total $ 30,183 $ 30,382 The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2018 by contractual maturity are set forth below: (in thousands) Amortized cost Fair value Years to maturity: Due in one year or less $ 4,768 $ 4,743 Due after one year through five years 17,584 17,394 Due after five years — — Total $ 22,352 $ 22,137 The expected maturities in the foregoing table may differ from the contractual maturities because certain borrowers have the right to call or prepay obligations with or without penalty. Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities were $5.8 million. This along with maturing time deposits yielded total cash proceeds from the sale of investments of $8.4 million in the period of January 1, 2019 to September 30, 2019. These proceeds were used to purchase additional fixed maturity securities and time deposits. The gains and losses realized on those sales for the period from January 1, 2018 to September 30, 2019 were insignificant. Realized gains and losses are reported on the Condensed Consolidated Statements of Income, with the cost of securities sold determined on a specific identification basis. At September 30, 2019, investments with a fair value of approximately $4.8 million were on deposit with state insurance departments to satisfy regulatory requirements. |
Reinsurance
Reinsurance | 9 Months Ended |
Sep. 30, 2019 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | NOTE 14 Reinsurance Although the reinsurers are liable to the Company for amounts reinsured, our subsidiary, Wright National Flood Insurance Company (“Wright Flood”) remains primarily liable to its policyholders for the full amount of the policies written whether or not the reinsurers meet their obligations to the Company when they become due. The effects of reinsurance on premiums written and earned are as follows: Period from January 1, 2019 to September 30, 2019 (in thousands) Written Earned Direct premiums $ 539,499 $ 493,854 Ceded premiums (539,489 ) (493,844 ) Net premiums $ 10 $ 10 All premiums written by Wright Flood under the National Flood Insurance Program are 100% ceded to the Federal Emergency Management Agency, or FEMA, for which Wright Flood received a 30.0% expense allowance from January 1, 2019 through September 30, 2019. For the period from January 1, 2019 through September 30, 2019, the Company ceded $538.0 million of written premiums. Effective April 1, 2014, Wright Flood is also a party to a quota share agreement whereby it cedes 100% of its gross excess flood premiums, excluding fees, to Arch Reinsurance Company and receives a 30.5% commission. Wright Flood ceded $1.5 million for the period from January 1, 2019 through September 30, 2019. As of September 30, 2019, no loss data exists on this agreement. Wright Flood also ceded 100% of the homeowners, private passenger auto liability, and other liability occurrence to Stillwater Insurance Company, formerly known as Fidelity National Insurance Company. This business is in runoff. Therefore, only loss data exists on this business. As of September 30, 2019, no ceded unpaid losses and loss adjustment expenses or incurred but not reported expenses for homeowners, private passenger auto liability and other liability occurrence existed. As of September 30, 2019 the Condensed Consolidated Balance Sheet contained reinsurance recoverable of $309.8 million and prepaid reinsurance premiums of $383.6 million. There was no net activity in the reserve for losses and loss adjustment expense during the period January 1, 2019 through September 30, 2019, as Wright Flood’s direct premiums written were 100% to two reinsurers. The balance of the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable, as of September 30, 2019 was $309.8 million. |
Statutory Financial Information
Statutory Financial Information | 9 Months Ended |
Sep. 30, 2019 | |
Statutory Accounting Practices [Abstract] | |
Statutory Financial Information | NOTE 15 Statutory Financial Data Wright Flood maintains capital in excess of the minimum statutory amount of $7.5 million as required by regulatory authorities. The unaudited statutory capital and surplus of Wright Flood was $28.9 million at September 30, 2019 and $19.4 million as of December 31, 2018. For the period from January 1, 2019 through September 30, 2019, Wright Flood generated statutory net income of $8.1 million. For the period from January 1, 2018 through December 31, 2018, Wright Flood generated statutory net income of $4.5 million. |
Subsidiary Dividend Restriction
Subsidiary Dividend Restrictions | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure Of Restrictions On Dividends Loans And Advances Disclosure [Abstract] | |
Subsidiary Dividend Restrictions | NOTE 16 Subsidiary Dividend Restrictions Under the insurance regulations of Texas, where Wright Flood is incorporated, the maximum amount of ordinary dividends that Wright Flood can pay to shareholders in a rolling 12-month period is limited to the greater of 10% of statutory adjusted capital and surplus as shown on Wright Flood’s last annual statement on file with the superintendent of the Texas Department of Insurance or 100% of adjusted net income. There was no dividend payout in 2018 and the maximum dividend payout that may be made in 2019 without prior approval is $4.5 million. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 17 Shareholders’ Equity Under the authorization from the Company’s Board of Directors, shares may be purchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors. These purchases may be carried out through open market purchases, block trades, accelerated share repurchase plans of up to $100.0 million each (unless otherwise approved by the Board of Directors), negotiated private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. Between September 13, 2019 and September 30, 2019, the Company made share repurchases in the open market of 274,981 shares at a total cost of $9.7 million. After completing these open market share repurchases, the Company has outstanding approval to purchase up to approximately $490.2 million, in the aggregate, of the Company's outstanding common stock. |
Basis of Financial Reporting (P
Basis of Financial Reporting (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which provides guidance for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). ASU 2018-15 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The impact of ASU 2018-15 is not expected to be material to the Company. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The new guidance eliminates Step 2 of the goodwill impairment test. The updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and will be applied prospectively. The Company is currently evaluating the impact of this guidance on future interim or annual goodwill impairment tests performed. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“Topic 842”), which provides guidance for accounting for leases. Under Topic 842, all leases are required to be recorded on the balance sheet and are classified as either operating leases or finance leases. Effective as of January 1, 2019, the Company adopted Topic 842, and all related amendments, which established Accounting Standards Codification (“ASC”) Topic 842. The Company adopted these standards by the recognition of right-of-use assets and related lease liabilities on the balance sheet. As permitted by Topic 842, the Company elected the transition practical expedient to adopt as of January 1, 2019, the date of initial application under the modified retrospective approach for leases existing at that date, with an adjustment to retained earnings. As a result, the Consolidated Balance Sheet at December 31, 2018 was not restated and continues to be reported under ASC Topic 840 (“Topic 840”) which did not require the recognition of operating lease liabilities on the balance sheet, and thus is not comparative. For the nine months ended September 30, 2019, all of the Company's leases are classified as operating leases, which are primarily real estate leases for office space. The expense recognition for operating leases under Topic 842 is substantially consistent with Topic 840, where operating lease charges are recorded entirely in operating expenses. As a result, there is no significant difference in the Company's results of operations presented in the Company's Condensed Consolidated Statements of Income for each period presented. The adoption of Topic 842 had a significant impact on the Company's balance sheet with the recognition of the operating lease right-of-use asset and the liability for operating leases. Upon adoption, leases that were classified as operating leases under Topic 840 were classified as operating leases under Topic 842. For the adoption of Topic 842, the Company recorded an adjustment of $202.9 million to operating lease right-of-use asset and the related lease liability, with no impact to retained earnings. The deferred rent previously accrued under Topic 840 was reclassified to the right-of-use asset upon the adoption of Topic 842. The lease liability is the present value of the remaining minimum lease payments, determined under Topic 840, discounted using the Company's incremental borrowing rate at the effective date of January 1, 2019. As permitted under Topic 842, the Company elected to use the practical expedient that permits the Company to not reassess whether a contract is or contains a lease, the classification of the Company's existing operating leases, and initial direct costs for any existing leases. The Company did not elect the practical expedient to use hindsight in determining the lease term (when considering lessee options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of the Company's right-of-use assets. The application of the practical expedient did not have a significant impact on the measurement of the operating lease liability. The impact of the adoption of Topic 842 on the balance sheet at January 1, 2019 was (in thousands): (in thousands) Balance at December 31, 2018 Adjustments due to Topic 842 Balance at January 1, 2019 Balance Sheet Assets: Other current assets 128,716 (3,004 ) 125,712 Operating lease assets — 178,304 178,304 Total Assets 6,688,668 175,300 6,863,968 Liabilities: Accrued expenses and other liabilities 279,310 13,836 293,146 Operating lease liabilities — 161,464 161,464 Total Liabilities 3,688,100 175,300 3,863,400 For contracts entered into on or after the January 1, 2019, at the inception of a contract the Company assesses whether the contract is, or contains, a lease. This assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019 are accounted for under Topic 840 and were not reassessed. For real estate leases that contain both lease and non-lease components, the Company elected to account the lease components together with non-lease components (e.g., common-area maintenance). Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, or the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. None of the Company's real estate leases for office space meet the definition of a finance lease. The Company's policy is to own, rather than lease, equipment. For leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, less any lease incentives received. The lease liability is initially measured at the present value of the lease payments under the lease. For the Company's operating leases, the lease payments are discounted using an incremental borrowing rate, which approximates the rate of interest that would be paid on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms. Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early. Some of the Company's real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at lease commencement and based on the minimum amount stated in the lease. Lease components are included in the measurement of the initial lease liability. Additional payments based on the change in an index or rate, or payments based on a change in the Company's portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in remeasurement of the right-of-use assets and the lease liability. Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. The Company elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a total term of 12 months or less. The effect of short-term leases on the Company's right-of-use asset and lease liability would not be significant. |
Basis of Financial Reporting (T
Basis of Financial Reporting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Impact of Adoption of Topic 842 on Balance Sheet | The impact of the adoption of Topic 842 on the balance sheet at January 1, 2019 was (in thousands): (in thousands) Balance at December 31, 2018 Adjustments due to Topic 842 Balance at January 1, 2019 Balance Sheet Assets: Other current assets 128,716 (3,004 ) 125,712 Operating lease assets — 178,304 178,304 Total Assets 6,688,668 175,300 6,863,968 Liabilities: Accrued expenses and other liabilities 279,310 13,836 293,146 Operating lease liabilities — 161,464 161,464 Total Liabilities 3,688,100 175,300 3,863,400 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenues [Abstract] | |
Schedule of Disaggregated by Revenue | The following tables present the revenues disaggregated by revenue source: Three months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other (8) Total Base commissions (1) $ 248,488 $ 92,224 $ 68,162 $ — $ — $ 408,874 Fees (2) 65,501 44,984 15,850 50,069 (288 ) 176,116 Incentive commissions (3) 12,852 258 449 — 5 13,564 Profit-sharing contingent commissions (4) 7,848 4,412 1,927 — — 14,187 Guaranteed supplemental commissions (5) 3,415 609 598 — — 4,622 Investment income (6) 28 375 48 35 1,182 1,668 Other income, net (7) (420 ) (8 ) 75 2 3 (348 ) Total Revenues $ 337,712 $ 142,854 $ 87,109 $ 50,106 $ 902 $ 618,683 Nine months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other (8) Total Base commissions (1) $ 755,108 $ 254,495 $ 187,388 $ — $ 13 $ 1,197,004 Fees (2) 178,205 109,702 42,299 150,276 (863 ) 479,619 Incentive commissions (3) 68,342 (669 ) 947 — 23 68,643 Profit-sharing contingent commissions (4) 26,054 9,365 6,073 — — 41,492 Guaranteed supplemental commissions (5) 9,211 10,225 1,564 — — 21,000 Investment income (6) 45 1,071 131 117 2,910 4,274 Other income, net (7) 716 42 387 2 3 1,150 Total Revenues $ 1,037,681 $ 384,231 $ 238,789 $ 150,395 $ 2,086 $ 1,813,182 (1) Base commissions generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which the Company controls. (2) Fee revenues relate to fees for services other than securing coverage for the Company's customers and fees negotiated in lieu of commissions. (3) Incentive commissions include additional commissions over base commissions received from insurance carriers based on predetermined production levels mutually agreed upon by both parties. (4) Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention. (5) Guaranteed supplemental commissions represent guaranteed fixed-base agreements in lieu of profit-sharing contingent commissions. (6) Investment income consists primarily of interest on cash and investments. (7) Other income consists primarily of legal settlements and other miscellaneous income. (8) Fees within other reflects the elimination of intercompany revenues. |
Schedule of Balances of Contract Assets and Contract Liabilities Arising from Contracts with Customers | The balances of contract assets and contract liabilities arising from contracts with customers as of September 30, 2019 and December 31, 2018 were as follows: (in thousands) September 30, 2019 December 31, 2018 Contract assets $ 297,696 $ 265,994 Contract liabilities $ 55,138 $ 53,496 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation between Basic and Diluted Weighted Average Shares Outstanding | The following is a reconciliation between basic and diluted weighted average shares outstanding: For the three months ended September 30, For the nine months ended September 30, (in thousands, except per share data) 2019 2018 2019 2018 Net income $ 115,506 $ 106,053 $ 321,995 $ 270,803 Net income attributable to unvested awarded performance stock (3,772 ) (2,716 ) (10,386 ) (6,185 ) Net income attributable to common shares $ 111,734 $ 103,337 $ 311,609 $ 264,618 Weighted average number of common shares outstanding – basic 282,178 278,132 281,505 276,744 Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic (9,216 ) (7,124 ) (9,080 ) (6,321 ) Weighted average number of common shares outstanding for basic net income per common share 272,962 271,008 272,425 270,423 Dilutive effect of stock options 2,113 4,274 2,104 5,191 Weighted average number of shares outstanding – diluted 275,075 275,282 274,529 275,614 Net income per share: Basic $ 0.41 $ 0.38 $ 1.14 $ 0.98 Diluted $ 0.41 $ 0.38 $ 1.14 $ 0.96 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Purchase Price Allocation for Current Year Acquisitions and Adjustments Made for Prior Year Acquisitions | The following table summarizes the purchase price allocations made as of the date of each acquisition for current year acquisitions and adjustments made during the measurement period for prior year acquisitions. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date. (in thousands) Name Business segment Effective date of acquisition Cash paid Common Stock Issued Other payable Recorded earn-out payable Net assets acquired Maximum potential earn- out payable Smith Insurance Associates, Inc. (Smith) Retail February 1, 2019 $ 20,129 $ — $ — $ 2,704 $ 22,833 $ 4,550 Donald P. Pipino Company, LTD (Pipino) Retail February 1, 2019 16,420 — 135 9,821 26,376 12,996 Cossio Insurance Agency (Cossio) Retail March 1, 2019 13,990 — 10 1,710 15,710 2,000 Medval LLC (Medval) Services March 1, 2019 29,106 — 100 1,684 30,890 2,500 United Development Systems, Inc. (United) Retail May 1, 2019 18,987 — 388 3,268 22,643 8,625 Twinbrook Insurance Brokerage, Inc. (Twinbrook) Retail June 1, 2019 26,251 — 400 1,565 28,216 5,073 Innovative Risk Solutions, Inc. (IRS) Retail July 1, 2019 26,435 — 2,465 5,482 34,382 9,000 WBR Insurance Agency, LLC et al (WBR) Retail August 1, 2019 10,667 — 203 2,197 13,067 4,575 West Ridge Insurance Agency, Inc. d/b/a Yozell Associates (Yozell) Retail August 1, 2019 13,030 — 470 768 14,268 6,730 CKP Insurance, LLC (CKP) Retail August 1, 2019 89,190 20,000 4,000 38,093 151,283 76,500 Other Various Various 27,405 — 1,291 4,172 32,868 9,404 Total $ 291,610 $ 20,000 $ 9,462 $ 71,464 $ 392,536 $ 141,953 |
Estimated Fair Values of Aggregate Assets and Liabilities Acquired | The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period of the prior year acquisitions. (in thousands) Smith Pipino Cossio Medval United Twinbrook IRS WBR Yozell CKP Other Total Cash $ — $ — $ — $ 3,217 $ — $ — $ — $ — $ — $ — $ — $ 3,217 Other current assets 473 819 17 1,708 477 — 1,200 169 1,473 8,900 (6,173 ) 9,063 Fixed assets 39 112 29 50 20 85 11 10 12 193 (166 ) 395 Goodwill 16,249 16,765 11,319 19,108 15,111 19,839 24,040 9,376 9,212 110,765 23,523 275,307 Purchased customer accounts 6,500 11,360 4,324 7,300 7,065 8,557 9,246 4,022 3,550 32,274 10,732 104,930 Non-compete agreements 41 11 21 1 11 12 11 34 21 21 128 312 Other assets — 772 — 15 — — — — — — (732 ) 55 Total assets acquired 23,302 29,839 15,710 31,399 22,684 28,493 34,508 13,611 14,268 152,153 27,312 393,279 Other current liabilities (469 ) (3,463 ) — (480 ) (41 ) (277 ) (126 ) (166 ) — (870 ) 5,556 (336 ) Other liabilities — — — (29 ) — — — (378 ) — — — (407 ) Total liabilities assumed (469 ) (3,463 ) — (509 ) (41 ) (277 ) (126 ) (544 ) — (870 ) 5,556 (743 ) Net assets acquired $ 22,833 $ 26,376 $ 15,710 $ 30,890 $ 22,643 $ 28,216 $ 34,382 $ 13,067 $ 14,268 $ 151,283 $ 32,868 $ 392,536 |
Unaudited Proforma Results | These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods. (UNAUDITED) Three months ended September 30, Nine months ended September 30, (in thousands, except per share data) 2019 2018 2019 2018 Total revenues $ 619,359 $ 547,196 $ 1,853,193 $ 1,578,627 Income before income taxes $ 152,038 $ 147,351 $ 438,289 $ 385,327 Net income $ 115,658 $ 109,663 $ 332,940 $ 288,373 Net income per share: Basic $ 0.41 $ 0.39 $ 1.18 $ 1.04 Diluted $ 0.41 $ 0.39 $ 1.17 $ 1.02 Weighted average number of shares outstanding: Basic 272,962 271,008 272,425 270,423 Diluted 275,075 275,282 274,529 275,614 |
Additions, Payments, and Net Changes, as well as Interest Expense Accretion on Estimated Acquisition Earn-Out Payables | The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the nine months ended September 30, 2019 and 2018 , were as follows: Three months ended September 30, Nine months ended September 30, (in thousands) 2019 2018 2019 2018 Balance as of the beginning of the period $ 104,976 $ 52,540 $ 89,924 $ 36,175 Additions to estimated acquisition earn-out payables 47,498 29,646 71,464 51,717 Payments for estimated acquisition earn-out payables (601 ) (16,521 ) (7,865 ) (25,112 ) Subtotal 151,873 65,665 153,523 62,780 Net change in earnings from estimated acquisition earn-out payables: Change in fair value on estimated acquisition earn-out payables (6,573 ) (928 ) (10,873 ) 945 Interest expense accretion 1,303 571 3,953 1,583 Net change in earnings from estimated acquisition earn-out payables (5,270 ) (357 ) (6,920 ) 2,528 Balance as of September 30, $ 146,603 $ 65,308 $ 146,603 $ 65,308 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Value of Goodwill by Operating Segment | The changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2019 are as follows: (in thousands) Retail National Programs Wholesale Brokerage Services Total Balance as of December 31, 2018 $ 2,063,150 $ 926,206 $ 291,622 $ 151,808 $ 3,432,786 Goodwill of acquired businesses 249,691 74 6,189 19,353 275,307 Goodwill disposed of relating to sales of businesses (5,089 ) (739 ) — — (5,828 ) Balance as of September 30, 2019 $ 2,307,752 $ 925,541 $ 297,811 $ 171,161 $ 3,702,265 |
Amortizable Intangible Assets (
Amortizable Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortizable Intangible Assets | Amortizable intangible assets at September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Gross carrying value Accumulated amortization Net carrying value Weighted average life (years) (1) Gross carrying value Accumulated amortization Net carrying value Weighted average life (years) (1) Purchased customer accounts $ 1,905,638 $ (985,436 ) $ 920,202 15.0 $ 1,804,404 $ (909,415 ) $ 894,989 14.9 Non-compete agreements 33,781 (30,565 ) 3,216 4.5 33,469 (29,651 ) 3,818 4.5 Total $ 1,939,419 $ (1,016,001 ) $ 923,418 $ 1,837,873 $ (939,066 ) $ 898,807 (1) Weighted average life calculated as of the date of acquisition. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt at (in thousands) September 30, 2019 December 31, 2018 Current portion of long-term debt: Current portion of 5-year $ 40,000 $ 35,000 Current portion of 5-year 15,000 15,000 Total current portion of long-term debt 55,000 50,000 Long-term debt: Note agreements: 4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2024 $ 499,219 $ 499,101 4.500% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2029 349,470 — Total notes 848,689 499,101 Credit agreements: 5-year 1.750%, expires June 28, 2022 300,000 330,000 5-year revolving-loan facility, periodic interest payments, LIBOR plus up to 1.500%, plus commitment fees up to 0.250%, expires June 28, 2022 100,000 350,000 5-year 1.750%, expires December 21, 2023 273,750 285,000 Total credit agreements 673,750 965,000 Debt issuance costs (contra) (8,879 ) (7,111 ) Total long-term debt less unamortized discount and debt issuance costs 1,513,560 1,456,990 Current portion of long-term debt 55,000 50,000 Total debt $ 1,568,560 $ 1,506,990 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Balances and Classification of Operating Lease Right-of-Use Assets and Operating Lease Liabilities within Condensed Consolidated Balance Sheet | The balances and classification of operating lease right-of-use assets and operating lease liabilities within the Condensed Consolidated Balance Sheet is as follows: (in thousands) September 30, 2019 Balance Sheet Assets: Operating lease right-of-use assets Operating lease assets $ 193,419 Total Assets 193,419 Liabilities: Current operating lease liabilities Accrued expenses and other liabilities 41,828 Non-current operating lease liabilities Operating lease liabilities 177,097 Total Liabilities $ 218,925 |
Schedule of Components of Lease Cost for Operating Leases | The components of lease cost for operating leases for the three and nine months ended September 30, 2019 were: (in thousands) Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating leases: Lease cost $ 11,581 $ 36,671 Variable lease cost 1,197 2,701 Operating lease cost $ 12,778 $ 39,372 Sublease income (145 ) (329 ) Total lease cost net $ 12,633 $ 39,043 |
Schedule of Weighted Average Remaining Lease Term and Weighted Average Discount Rate for Operating Leases | The weighted average remaining lease term and the weighted average discount rate for operating leases as of September 30, 2019 were: Weighted-average remaining lease term 6.10 Weighted-average discount rate 3.73 |
Schedule of Maturities of Operating Lease Liabilities | Maturities of the operating lease liabilities by fiscal year at September 30, 2019 for the Company's operating leases are as follows: (in thousands) Operating Leases 2019 (Remainder) $ 10,441 2020 50,613 2021 43,859 2022 36,448 2023 29,936 Thereafter 75,843 Total undiscounted lease payments 247,140 Less: Imputed interest 28,215 Present value of lease payments $ 218,925 |
Schedule of Aggregate Future Minimum Lease Payments under Non-cancelable Lease Agreements | At December 31, 2018, the aggregate future minimum lease payments under all non-cancelable lease agreements were as follows: (in thousands) December 31, 2018 2019 $ 48,292 2020 43,517 2021 34,836 2022 27,035 2023 19,981 Thereafter 36,349 Total minimum future lease payments $ 210,010 |
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information for operating leases: (in thousands) Three months ended September 30, 2019 Nine months ended September 30, 2019 Cash paid for amounts included in measurement of liabilities Operating cash flows from operating leases $ 11,816 $ 37,728 Right-of-use assets obtained in exchange for new operating liabilities $ 11,660 $ 38,291 |
Supplemental Disclosures of C_2
Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Summary of Cash Paid for Interest and Income Taxes | Brown & Brown's cash paid during the period for interest and income taxes are summarized as follows: Nine months ended September 30, (in thousands) 2019 2018 Cash paid during the period for: Interest $ 52,127 $ 32,896 Income taxes $ 85,970 $ 21,380 |
Summary of Significant Non-Cash Investing and Financing Activities | Brown & Brown’s significant non-cash investing and financing activities are summarized as follows: Nine months ended September 30, (in thousands) 2019 2018 Other payable issued for purchased customer accounts $ 9,462 $ 3,339 Estimated acquisition earn-out payables and related charges $ 71,464 $ 51,717 Notes received on the sale of fixed assets and customer accounts $ 9,903 $ — |
Schedule of Reconciliation of Cash and Cash Equivalents Inclusive of Restricted Cash | The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of September 30, 2019 and 2018 . Balance as of September 30, (in thousands) 2019 2018 Table to reconcile cash and cash equivalents inclusive of restricted cash Cash and cash equivalents $ 497,510 $ 422,971 Restricted cash 377,085 301,716 Total cash and cash equivalents inclusive of restricted cash at the end of the period $ 874,595 $ 724,687 The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of December 31, 2018 and 2017. Balance as of December 31, (in thousands) 2018 2017 Table to reconcile cash and cash equivalents inclusive of restricted cash Cash and cash equivalents $ 438,961 $ 573,383 Restricted cash 338,635 250,705 Total cash and cash equivalents inclusive of restricted cash at the end of the period $ 777,596 $ 824,088 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summarized Financial Information Reportable Segments | Summarized financial information concerning the Company’s reportable segments is shown in the following tables. The “Other” column includes any income and expenses not allocated to reportable segments, corporate-related items, including the intercompany interest expense charge to the reporting segment. Three months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 337,712 $ 142,854 $ 87,109 $ 50,106 $ 902 $ 618,683 Investment income $ 28 $ 375 $ 48 $ 35 $ 1,182 $ 1,668 Amortization $ 15,821 $ 6,264 $ 2,797 $ 1,390 $ — $ 26,272 Depreciation $ 1,897 $ 1,779 $ 422 $ 315 $ 1,402 $ 5,815 Interest expense $ 22,287 $ 3,557 $ 1,105 $ 1,164 $ (11,799 ) $ 16,314 Income before income taxes $ 51,133 $ 46,629 $ 28,908 $ 14,775 $ 10,393 $ 151,838 Total assets $ 6,155,670 $ 3,315,656 $ 1,406,709 $ 469,292 $ (3,666,663 ) $ 7,680,664 Capital expenditures $ 2,266 $ 1,276 $ 768 $ 209 $ 7,665 $ 12,184 Three months ended September 30, 2018 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 261,087 $ 143,519 $ 78,009 $ 48,105 $ 130 $ 530,850 Investment income $ 1 $ 138 $ 44 $ 51 $ 485 $ 719 Amortization $ 10,754 $ 6,736 $ 2,878 $ 1,269 $ — $ 21,637 Depreciation $ 1,236 $ 1,346 $ 385 $ 393 $ 1,899 $ 5,259 Interest expense $ 7,468 $ 6,147 $ 1,233 $ 846 $ (6,731 ) $ 8,963 Income before income taxes $ 61,224 $ 46,707 $ 23,614 $ 6,988 $ 3,967 $ 142,500 Total assets $ 4,651,080 $ 2,933,465 $ 1,272,795 $ 448,027 $ (3,502,561 ) $ 5,802,806 Capital expenditures $ 1,467 $ 2,420 $ 895 $ 366 $ 4,321 $ 9,469 Nine months ended September 30, 2019 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 1,037,681 $ 384,231 $ 238,789 $ 150,395 $ 2,086 $ 1,813,182 Investment income $ 45 $ 1,071 $ 131 $ 117 $ 2,910 $ 4,274 Amortization $ 46,622 $ 19,217 $ 8,490 $ 4,089 $ — $ 78,418 Depreciation $ 5,440 $ 4,990 $ 1,251 $ 902 $ 4,933 $ 17,516 Interest expense $ 64,641 $ 13,134 $ 3,692 $ 3,239 $ (36,901 ) $ 47,805 Income before income taxes $ 189,191 $ 106,188 $ 67,421 $ 33,220 $ 27,860 $ 423,880 Total assets $ 6,155,670 $ 3,315,656 $ 1,406,709 $ 469,292 $ (3,666,663 ) $ 7,680,664 Capital expenditures $ 7,810 $ 7,786 $ 2,470 $ 540 $ 28,752 $ 47,358 Nine months ended September 30, 2018 (in thousands) Retail National Programs Wholesale Brokerage Services Other Total Total revenues $ 772,806 $ 374,434 $ 219,725 $ 138,038 $ 495 $ 1,505,498 Investment income $ 2 $ 384 $ 125 $ 160 $ 1,380 $ 2,051 Amortization $ 31,498 $ 19,383 $ 8,537 $ 3,543 $ — $ 62,961 Depreciation $ 3,746 $ 4,087 $ 1,238 $ 1,183 $ 6,156 $ 16,410 Interest expense $ 21,377 $ 20,019 $ 4,039 $ 2,023 $ (18,772 ) $ 28,686 Income before income taxes $ 175,984 $ 91,809 $ 55,544 $ 23,889 $ 14,625 $ 361,851 Total assets $ 4,651,080 $ 2,933,465 $ 1,272,795 $ 448,027 $ (3,502,561 ) $ 5,802,806 Capital expenditures $ 5,828 $ 7,313 $ 1,762 $ 798 $ 13,158 $ 28,859 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Amortized Cost and Fair Values of Fixed Maturity Securities | At (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 24,854 $ 183 $ (37 ) $ 25,000 Corporate debt 5,329 63 (10 ) 5,382 Total $ 30,183 $ 246 $ (47 ) $ 30,382 At December 31, 2018, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows: (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 21,729 $ 7 $ (222 ) $ 21,514 Corporate debt 623 — — 623 Total $ 22,352 $ 7 $ (222 ) $ 22,137 |
Schedule of Investments' Gross Unrealized Loss and Fair Value | For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2019: Less than 12 Months 12 Months or More Total (in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 5,435 $ (32 ) $ 2,246 $ (5 ) $ 7,681 $ (37 ) Corporate debt 997 (10 ) — — 997 (10 ) Total $ 6,432 $ (42 ) $ 2,246 $ (5 ) $ 8,678 $ (47 ) For securities in a loss position, the following table shows the investments’ gross unrealized loss and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2018: Less than 12 Months 12 Months or More Total (in thousands) Fair value Unrealized losses Fair value Unrealized losses Fair value Unrealized losses U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities $ 5,866 $ (6 ) $ 12,634 $ (216 ) $ 18,500 $ (222 ) Corporate debt 457 — 100 — 557 — Total $ 6,323 $ (6 ) $ 12,734 $ (216 ) $ 19,057 $ (222 ) |
Amortized Cost and Fair Value of Fixed Maturity Securities by Contractual Maturity | The amortized cost and estimated fair value of the fixed maturity securities at September 30, 2019 by contractual maturity are set forth below: (in thousands) Amortized cost Fair value Years to maturity: Due in one year or less $ 2,250 $ 2,245 Due after one year through five years 27,933 28,137 Due after five years — — Total $ 30,183 $ 30,382 The amortized cost and estimated fair value of the fixed maturity securities at December 31, 2018 by contractual maturity are set forth below: (in thousands) Amortized cost Fair value Years to maturity: Due in one year or less $ 4,768 $ 4,743 Due after one year through five years 17,584 17,394 Due after five years — — Total $ 22,352 $ 22,137 |
Reinsurance (Tables)
Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Reinsurance Disclosures [Abstract] | |
Effects of Reinsurance on Premiums Written and Earned | The effects of reinsurance on premiums written and earned are as follows: Period from January 1, 2019 to September 30, 2019 (in thousands) Written Earned Direct premiums $ 539,499 $ 493,854 Ceded premiums (539,489 ) (493,844 ) Net premiums $ 10 $ 10 |
Nature of Operations - Addition
Nature of Operations - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Number of reportable segments | 4 |
Basis of Financial Reporting -
Basis of Financial Reporting - Additional Information (Details) $ in Millions | Jan. 01, 2019USD ($) |
Accounting Standards Update 2016-02 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 202.9 |
Basis of Financial Reporting _2
Basis of Financial Reporting - Schedule of Impact of adoption of Topic 842 on Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Assets: | ||||
Other current assets | $ 133,443 | $ 125,712 | $ 128,716 | |
Operating lease assets | 193,419 | 178,304 | 0 | |
Total Assets | 7,680,664 | 6,863,968 | 6,688,668 | $ 5,802,806 |
Liabilities: | ||||
Accrued expenses and other liabilities | 272,166 | 293,146 | 279,310 | |
Operating lease liabilities | $ 177,097 | 161,464 | 0 | |
Total Liabilities | 3,863,400 | $ 3,688,100 | ||
Accounting Standards Update 2016-02 | ||||
Assets: | ||||
Other current assets | (3,004) | |||
Operating lease assets | 178,304 | |||
Total Assets | 175,300 | |||
Liabilities: | ||||
Accrued expenses and other liabilities | 13,836 | |||
Operating lease liabilities | 161,464 | |||
Total Liabilities | $ 175,300 |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregated by Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Investment Income, Nonoperating | $ 1,668 | $ 719 | $ 4,274 | $ 2,051 |
Other Income | (348) | 318 | 1,150 | 1,228 |
Revenues | 618,683 | 530,850 | 1,813,182 | 1,505,498 |
Corporate, Non-Segment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Investment Income, Nonoperating | 1,182 | 2,910 | ||
Other Income | 3 | 3 | ||
Revenues | 902 | 2,086 | ||
Retail | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Investment Income, Nonoperating | 28 | 1 | 45 | 2 |
Other Income | (420) | 716 | ||
Revenues | 337,712 | 261,087 | 1,037,681 | 772,806 |
National Programs | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Investment Income, Nonoperating | 375 | 138 | 1,071 | 384 |
Other Income | (8) | 42 | ||
Revenues | 142,854 | 143,519 | 384,231 | 374,434 |
Wholesale Brokerage | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Investment Income, Nonoperating | 48 | 44 | 131 | 125 |
Other Income | 75 | 387 | ||
Revenues | 87,109 | 78,009 | 238,789 | 219,725 |
Services | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Investment Income, Nonoperating | 35 | 51 | 117 | 160 |
Other Income | 2 | 2 | ||
Revenues | 50,106 | $ 48,105 | 150,395 | $ 138,038 |
Core Commission Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 408,874 | 1,197,004 | ||
Core Commission Revenue | Corporate, Non-Segment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 13 | |||
Core Commission Revenue | Retail | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 248,488 | 755,108 | ||
Core Commission Revenue | National Programs | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 92,224 | 254,495 | ||
Core Commission Revenue | Wholesale Brokerage | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 68,162 | 187,388 | ||
Core Commission Revenue | Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 0 | 0 | ||
Fee Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 176,116 | 479,619 | ||
Fee Revenue | Corporate, Non-Segment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | (288) | (863) | ||
Fee Revenue | Retail | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 65,501 | 178,205 | ||
Fee Revenue | National Programs | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 44,984 | 109,702 | ||
Fee Revenue | Wholesale Brokerage | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 15,850 | 42,299 | ||
Fee Revenue | Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 50,069 | 150,276 | ||
Incentive Commissions Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 13,564 | 68,643 | ||
Incentive Commissions Revenue | Corporate, Non-Segment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 5 | 23 | ||
Incentive Commissions Revenue | Retail | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 12,852 | 68,342 | ||
Incentive Commissions Revenue | National Programs | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 258 | (669) | ||
Incentive Commissions Revenue | Wholesale Brokerage | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 449 | 947 | ||
Incentive Commissions Revenue | Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 0 | 0 | ||
Profit-Sharing Contingent Commission Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 14,187 | 41,492 | ||
Profit-Sharing Contingent Commission Revenue | Corporate, Non-Segment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 0 | 0 | ||
Profit-Sharing Contingent Commission Revenue | Retail | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 7,848 | 26,054 | ||
Profit-Sharing Contingent Commission Revenue | National Programs | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 4,412 | 9,365 | ||
Profit-Sharing Contingent Commission Revenue | Wholesale Brokerage | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 1,927 | 6,073 | ||
Profit-Sharing Contingent Commission Revenue | Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 0 | 0 | ||
Guaranteed Supplemental Commission Revenue | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 4,622 | 21,000 | ||
Guaranteed Supplemental Commission Revenue | Corporate, Non-Segment | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 0 | 0 | ||
Guaranteed Supplemental Commission Revenue | Retail | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 3,415 | 9,211 | ||
Guaranteed Supplemental Commission Revenue | National Programs | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 609 | 10,225 | ||
Guaranteed Supplemental Commission Revenue | Wholesale Brokerage | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | 598 | 1,564 | ||
Guaranteed Supplemental Commission Revenue | Services | ||||
Disaggregation Of Revenue [Line Items] | ||||
Fees and Commissions, Other | $ 0 | $ 0 |
Revenues - Schedule of Balances
Revenues - Schedule of Balances of Contract Assets and Contract Liabilities Arising from contracts with Customers (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Revenues [Abstract] | ||
Contract assets | $ 297,696 | $ 265,994 |
Contract liabilities | $ 55,138 | $ 53,496 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Contract with Customer, Liability | $ 37.5 | $ 37 |
Contract with Customer, Liability, Noncurrent | 17.6 | 16.5 |
Deferred Revenue, Revenue Recognized | 14 | |
Deferred Costs | 23.4 | 13.2 |
Cost to Obtain | ||
Segment Reporting Information [Line Items] | ||
Deferred Costs | 11.6 | |
Capitalized Contract Cost, Amortization | 1.4 | |
Cost to Fulfill | ||
Segment Reporting Information [Line Items] | ||
Deferred Costs | 68 | $ 69.8 |
Capitalized Contract Cost, Amortization | $ 1.9 |
Net Income Per Share - Reconcil
Net Income Per Share - Reconciliation between Basic and Diluted Weighted Average Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||||||
Net income | $ 115,506 | $ 92,593 | $ 113,896 | $ 106,053 | $ 73,922 | $ 90,828 | $ 321,995 | $ 270,803 |
Net income attributable to unvested awarded performance stock | (3,772) | (2,716) | (10,386) | (6,185) | ||||
Net income attributable to common shares | $ 111,734 | $ 103,337 | $ 311,609 | $ 264,618 | ||||
Weighted average number of common shares outstanding – basic | 282,178 | 278,132 | 281,505 | 276,744 | ||||
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic | (9,216) | (7,124) | (9,080) | (6,321) | ||||
Weighted average number of common shares outstanding for basic net income per common share | 272,962 | 271,008 | 272,425 | 270,423 | ||||
Dilutive effect of stock options | 2,113 | 4,274 | 2,104 | 5,191 | ||||
Weighted average number of shares outstanding – diluted | 275,075 | 275,282 | 274,529 | 275,614 | ||||
Basic (in dollars per share) | $ 0.41 | $ 0.38 | $ 1.14 | $ 0.98 | ||||
Diluted (in dollars per share) | $ 0.41 | $ 0.38 | $ 1.14 | $ 0.96 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2019USD ($)Acquisition | Sep. 30, 2018USD ($)Acquisition | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Business Acquisition [Line Items] | ||||||
Number of acquisitions | Acquisition | 18 | 18 | ||||
Aggregate purchase price of acquisitions | $ (6,600) | |||||
Payments to Acquire Businesses, Gross | 291,610 | |||||
Net assets acquired | 392,536 | |||||
Goodwill, Acquired During Period | 275,307 | |||||
Goodwill currently deductible for income tax purposes | 203,800 | |||||
Goodwill related to the recorded earn-out payables | 71,500 | |||||
Total revenues related to acquisitions | 31,000 | |||||
Income before income taxes related to acquisitions | 300 | |||||
Estimated acquisition earn-out payables | 146,603 | $ 65,308 | $ 104,976 | $ 89,924 | $ 52,540 | $ 36,175 |
Maximum Future Contingency payments Acquisitions | 310,600 | |||||
Other Noncurrent Liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Estimated acquisition earn-out payables | 122,900 | |||||
Accounts payable | ||||||
Business Acquisition [Line Items] | ||||||
Estimated acquisition earn-out payables | 23,700 | |||||
Retail | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill, Acquired During Period | 249,691 | |||||
National Programs | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill, Acquired During Period | 74 | |||||
Wholesale Brokerage | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill, Acquired During Period | 6,189 | |||||
Services | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill, Acquired During Period | 19,353 | |||||
Goodwill adjusted amount | $ 19,300 | |||||
Purchased Customer Accounts | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average life (years) | 15 years | |||||
Non-compete Agreements | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average life (years) | 5 years | |||||
Business Combinations - Asset Deals | ||||||
Business Acquisition [Line Items] | ||||||
Number of acquisitions | Acquisition | 17 | |||||
Business Combinations - Stock Deals | ||||||
Business Acquisition [Line Items] | ||||||
Number of acquisitions | Acquisition | 1 | |||||
Other Acquisitions | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Net assets acquired | $ 10,000 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation for Current Year Acquisitions and Adjustments Made for Prior Year Acquisitions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Business Combination Separately Recognized Transactions [Line Items] | ||
Cash paid | $ 291,610 | |
Common Stock Issued | $ 20,000 | 20,000 |
Other payable | 9,462 | |
Recorded earn-out payable | 71,464 | 71,464 |
Net assets acquired | 392,536 | 392,536 |
Maximum potential earn- out payable | 141,953 | 141,953 |
Smith Insurance Associates, Inc. (Smith) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 22,833 | $ 22,833 |
Smith Insurance Associates, Inc. (Smith) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Feb. 1, 2019 | |
Cash paid | $ 20,129 | |
Recorded earn-out payable | 2,704 | 2,704 |
Net assets acquired | 22,833 | 22,833 |
Maximum potential earn- out payable | 4,550 | 4,550 |
Donald P. Pipino Company, LTD (Pipino) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 26,376 | $ 26,376 |
Donald P. Pipino Company, LTD (Pipino) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Feb. 1, 2019 | |
Cash paid | $ 16,420 | |
Other payable | 135 | |
Recorded earn-out payable | 9,821 | 9,821 |
Net assets acquired | 26,376 | 26,376 |
Maximum potential earn- out payable | 12,996 | 12,996 |
Cossio Insurance Agency (Cossio) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 15,710 | $ 15,710 |
Cossio Insurance Agency (Cossio) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Mar. 1, 2019 | |
Cash paid | $ 13,990 | |
Other payable | 10 | |
Recorded earn-out payable | 1,710 | 1,710 |
Net assets acquired | 15,710 | 15,710 |
Maximum potential earn- out payable | 2,000 | 2,000 |
Medval LLC (Medval) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 30,890 | $ 30,890 |
Medval LLC (Medval) | Services | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Mar. 1, 2019 | |
Cash paid | $ 29,106 | |
Other payable | 100 | |
Recorded earn-out payable | 1,684 | 1,684 |
Net assets acquired | 30,890 | 30,890 |
Maximum potential earn- out payable | 2,500 | 2,500 |
United Development Systems, Inc. (United) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 22,643 | $ 22,643 |
United Development Systems, Inc. (United) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | May 1, 2019 | |
Cash paid | $ 18,987 | |
Other payable | 388 | |
Recorded earn-out payable | 3,268 | 3,268 |
Net assets acquired | 22,643 | 22,643 |
Maximum potential earn- out payable | 8,625 | 8,625 |
Twinbrook Insurance Brokerage, Inc. (Twinbrook) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 28,216 | $ 28,216 |
Twinbrook Insurance Brokerage, Inc. (Twinbrook) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Jun. 1, 2019 | |
Cash paid | $ 26,251 | |
Other payable | 400 | |
Recorded earn-out payable | 1,565 | 1,565 |
Net assets acquired | 28,216 | 28,216 |
Maximum potential earn- out payable | 5,073 | 5,073 |
Innovative Risk Solutions, Inc. (IRS) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 34,382 | $ 34,382 |
Innovative Risk Solutions, Inc. (IRS) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Jul. 1, 2019 | |
Cash paid | $ 26,435 | |
Other payable | 2,465 | |
Recorded earn-out payable | 5,482 | 5,482 |
Net assets acquired | 34,382 | 34,382 |
Maximum potential earn- out payable | 9,000 | 9,000 |
Other Acquisitions | Various | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Cash paid | 27,405 | |
Other payable | 1,291 | |
Recorded earn-out payable | 4,172 | 4,172 |
Net assets acquired | 32,868 | 32,868 |
Maximum potential earn- out payable | 9,404 | 9,404 |
WBR Insurance Agency, LLC et al (WBR) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 13,067 | $ 13,067 |
WBR Insurance Agency, LLC et al (WBR) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Aug. 1, 2019 | |
Cash paid | $ 10,667 | |
Other payable | 203 | |
Recorded earn-out payable | 2,197 | 2,197 |
Net assets acquired | 13,067 | 13,067 |
Maximum potential earn- out payable | 4,575 | 4,575 |
West Ridge Insurance Agency, Inc. d/b/a Yozell Associates (Yozell) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 14,268 | $ 14,268 |
West Ridge Insurance Agency, Inc. d/b/a Yozell Associates (Yozell) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Aug. 1, 2019 | |
Cash paid | $ 13,030 | |
Other payable | 470 | |
Recorded earn-out payable | 768 | 768 |
Net assets acquired | 14,268 | 14,268 |
Maximum potential earn- out payable | 6,730 | 6,730 |
CKP Insurance, LLC (CKP) | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Net assets acquired | 151,283 | $ 151,283 |
CKP Insurance, LLC (CKP) | Retail | ||
Business Combination Separately Recognized Transactions [Line Items] | ||
Effective date of acquisition | Aug. 1, 2019 | |
Cash paid | $ 89,190 | |
Common Stock Issued | 20,000 | |
Other payable | 4,000 | |
Recorded earn-out payable | 38,093 | 38,093 |
Net assets acquired | 151,283 | 151,283 |
Maximum potential earn- out payable | $ 76,500 | $ 76,500 |
Business Combinations - Estimat
Business Combinations - Estimated Fair Values of Aggregate Assets and Liabilities Acquired (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Cash | $ 3,217 |
Other current assets | 9,063 |
Fixed assets | 395 |
Goodwill | 275,307 |
Other assets | 55 |
Total assets acquired | 393,279 |
Other current liabilities | (336) |
Other liabilities | (407) |
Total liabilities assumed | (743) |
Net assets acquired | 392,536 |
Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 104,930 |
Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 312 |
Smith | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 473 |
Fixed assets | 39 |
Goodwill | 16,249 |
Total assets acquired | 23,302 |
Other current liabilities | (469) |
Total liabilities assumed | (469) |
Net assets acquired | 22,833 |
Smith | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 6,500 |
Smith | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 41 |
Pipino | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 819 |
Fixed assets | 112 |
Goodwill | 16,765 |
Other assets | 772 |
Total assets acquired | 29,839 |
Other current liabilities | (3,463) |
Total liabilities assumed | (3,463) |
Net assets acquired | 26,376 |
Pipino | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 11,360 |
Pipino | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 11 |
Cossio | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 17 |
Fixed assets | 29 |
Goodwill | 11,319 |
Total assets acquired | 15,710 |
Net assets acquired | 15,710 |
Cossio | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 4,324 |
Cossio | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 21 |
Medval | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Cash | 3,217 |
Other current assets | 1,708 |
Fixed assets | 50 |
Goodwill | 19,108 |
Other assets | 15 |
Total assets acquired | 31,399 |
Other current liabilities | (480) |
Other liabilities | (29) |
Total liabilities assumed | (509) |
Net assets acquired | 30,890 |
Medval | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 7,300 |
Medval | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 1 |
United | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 477 |
Fixed assets | 20 |
Goodwill | 15,111 |
Total assets acquired | 22,684 |
Other current liabilities | (41) |
Total liabilities assumed | (41) |
Net assets acquired | 22,643 |
United | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 7,065 |
United | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 11 |
Twinbrook | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Fixed assets | 85 |
Goodwill | 19,839 |
Total assets acquired | 28,493 |
Other current liabilities | (277) |
Total liabilities assumed | (277) |
Net assets acquired | 28,216 |
Twinbrook | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 8,557 |
Twinbrook | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 12 |
IRS | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 1,200 |
Fixed assets | 11 |
Goodwill | 24,040 |
Total assets acquired | 34,508 |
Other current liabilities | (126) |
Total liabilities assumed | (126) |
Net assets acquired | 34,382 |
IRS | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 9,246 |
IRS | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 11 |
Other | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | (6,173) |
Fixed assets | (166) |
Goodwill | 23,523 |
Other assets | (732) |
Total assets acquired | 27,312 |
Other current liabilities | 5,556 |
Total liabilities assumed | 5,556 |
Net assets acquired | 32,868 |
Other | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 10,732 |
Other | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 128 |
WBR | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 169 |
Fixed assets | 10 |
Goodwill | 9,376 |
Total assets acquired | 13,611 |
Other current liabilities | (166) |
Other liabilities | (378) |
Total liabilities assumed | (544) |
Net assets acquired | 13,067 |
WBR | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 4,022 |
WBR | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 34 |
Yozell | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 1,473 |
Fixed assets | 12 |
Goodwill | 9,212 |
Total assets acquired | 14,268 |
Net assets acquired | 14,268 |
Yozell | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 3,550 |
Yozell | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 21 |
CKP | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Other current assets | 8,900 |
Fixed assets | 193 |
Goodwill | 110,765 |
Total assets acquired | 152,153 |
Other current liabilities | (870) |
Total liabilities assumed | (870) |
Net assets acquired | 151,283 |
CKP | Purchased Customer Accounts | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | 32,274 |
CKP | Non-compete Agreements | |
Fair Value Of Assets And Liabilities Statement [Line Items] | |
Intangible assets | $ 21 |
Business Combinations - Unaudit
Business Combinations - Unaudited Pro Forma Results (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||||
Total revenues | $ 619,359 | $ 547,196 | $ 1,853,193 | $ 1,578,627 |
Income before income taxes | 152,038 | 147,351 | 438,289 | 385,327 |
Net income | $ 115,658 | $ 109,663 | $ 332,940 | $ 288,373 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.41 | $ 0.39 | $ 1.18 | $ 1.04 |
Diluted (in dollars per share) | $ 0.41 | $ 0.39 | $ 1.17 | $ 1.02 |
Weighted average number of shares outstanding: | ||||
Weighted Average Basic Shares Outstanding, Pro Forma | 272,962 | 271,008 | 272,425 | 270,423 |
Pro Forma Weighted Average Shares Outstanding, Diluted | 275,075 | 275,282 | 274,529 | 275,614 |
Business Combinations - Addit_2
Business Combinations - Additions, Payments, and Net Changes, as well as Interest Expense Accretion on Estimated Acquisition Earn-Out Payables (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Combinations [Abstract] | ||||
Beginning balance | $ 104,976 | $ 52,540 | $ 89,924 | $ 36,175 |
Additions to estimated acquisition earn-out payables | 47,498 | 29,646 | 71,464 | 51,717 |
Payments for estimated acquisition earn-out payables | (601) | (16,521) | (7,865) | (25,112) |
Subtotal | 151,873 | 65,665 | 153,523 | 62,780 |
Net change in earnings from estimated acquisition earn-out payables: | ||||
Change in fair value on estimated acquisition earn-out payables | (6,573) | (928) | (10,873) | 945 |
Interest expense accretion | 1,303 | 571 | 3,953 | 1,583 |
Net change in earnings from estimated acquisition earn-out payables | (5,270) | (357) | (6,920) | 2,528 |
Ending balance | $ 146,603 | $ 65,308 | $ 146,603 | $ 65,308 |
Goodwill - Changes in Carrying
Goodwill - Changes in Carrying Value of Goodwill by Operating Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 3,432,786 |
Goodwill of acquired businesses | 275,307 |
Goodwill disposed of relating to sales of businesses | (5,828) |
Ending balance | 3,702,265 |
Retail | |
Goodwill [Line Items] | |
Beginning balance | 2,063,150 |
Goodwill of acquired businesses | 249,691 |
Goodwill disposed of relating to sales of businesses | (5,089) |
Ending balance | 2,307,752 |
National Programs | |
Goodwill [Line Items] | |
Beginning balance | 926,206 |
Goodwill of acquired businesses | 74 |
Goodwill disposed of relating to sales of businesses | (739) |
Ending balance | 925,541 |
Wholesale Brokerage | |
Goodwill [Line Items] | |
Beginning balance | 291,622 |
Goodwill of acquired businesses | 6,189 |
Goodwill disposed of relating to sales of businesses | 0 |
Ending balance | 297,811 |
Services | |
Goodwill [Line Items] | |
Beginning balance | 151,808 |
Goodwill of acquired businesses | 19,353 |
Goodwill disposed of relating to sales of businesses | 0 |
Ending balance | $ 171,161 |
Amortizable Intangible Assets -
Amortizable Intangible Assets - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 1,939,419 | $ 1,837,873 |
Accumulated amortization | (1,016,001) | (939,066) |
Net carrying value | 923,418 | 898,807 |
Purchased Customer Accounts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1,905,638 | 1,804,404 |
Accumulated amortization | (985,436) | (909,415) |
Net carrying value | $ 920,202 | $ 894,989 |
Weighted average life (years) | 15 years | 14 years 10 months 24 days |
Non-compete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 33,781 | $ 33,469 |
Accumulated amortization | (30,565) | (29,651) |
Net carrying value | $ 3,216 | $ 3,818 |
Weighted average life (years) | 4 years 6 months | 4 years 6 months |
Amortizable Intangible Assets_2
Amortizable Intangible Assets - Additional Information (Details) $ in Millions | Sep. 30, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortization expense estimated, year one (2019) | $ 104.7 |
Amortization expense estimated, year two (2020) | 99.8 |
Amortization expense estimated, year three (2021) | 96.3 |
Amortization expense estimated, year four (2022) | 91.8 |
Amortization expense estimated, year five (2023) | $ 84.8 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | $ 55,000 | $ 50,000 |
Total notes | 848,689 | 499,101 |
Long-term credit agreements | 673,750 | 965,000 |
Debt issuance costs (contra) | (8,879) | (7,111) |
Total long-term debt less unamortized discount and debt issuance costs | 1,513,560 | 1,456,990 |
Current portion of long-term debt | 55,000 | 50,000 |
Total debt | 1,568,560 | 1,506,990 |
5-year Term-Loan Facility Expires in 2022 | ||
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | 40,000 | 35,000 |
Long-term credit agreements | 300,000 | 330,000 |
5-year Term-Loan Facility Expires in 2023 | ||
Debt Instrument [Line Items] | ||
Total current portion of long-term debt | 15,000 | 15,000 |
Long-term credit agreements | 273,750 | 285,000 |
4.200% Senior Notes, Semi-Annual Interest Payments, Net of the Unamortized Discount, Balloon Due 2024 | ||
Debt Instrument [Line Items] | ||
Total notes | 499,219 | 499,101 |
4.500% Senior Notes, Semi-Annual Interest Payments, Net of the Unamortized Discount, Balloon Due 2029 | ||
Debt Instrument [Line Items] | ||
Total notes | 349,470 | |
5-year Revolving-Loan Facility, Periodic Interest Payments, LIBOR Plus up to 1.500%, Plus Commitment Fees up to 0.250%, Expires June 28, 2022 | ||
Debt Instrument [Line Items] | ||
Long-term credit agreements | $ 100,000 | $ 350,000 |
Long-Term Debt - Schedule of _2
Long-Term Debt - Schedule of Long-Term Debt (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Maximum | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 1.75% | |
Minimum | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 1.00% | |
4.200% Senior Notes, Semi-Annual Interest Payments, Net of the Unamortized Discount, Balloon Due 2024 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate stated percentage | 4.20% | 4.20% |
Debt instrument maturity year | 2024 | 2024 |
4.500% Senior Notes, Semi-Annual Interest Payments, Net of the Unamortized Discount, Balloon Due 2029 | ||
Debt Instrument [Line Items] | ||
Debt instrument interest rate stated percentage | 4.50% | |
Debt instrument maturity year | 2029 | |
5-year Term-Loan Facility Expires in 2022 | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity year | 2022 | 2022 |
Line of credit facility, expiration period | 5 years | 5 years |
Line of credit facility, expiration date | Jun. 28, 2022 | Jun. 28, 2022 |
5-year Term-Loan Facility Expires in 2022 | Maximum | LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 1.75% | 1.75% |
5-year Revolving-Loan Facility, Periodic Interest Payments, LIBOR Plus up to 1.500%, Plus Commitment Fees up to 0.250%, Expires June 28, 2022 | ||
Debt Instrument [Line Items] | ||
Line of credit facility, expiration period | 5 years | |
Line of credit facility, expiration date | Jun. 28, 2022 | |
5-year Revolving-Loan Facility, Periodic Interest Payments, LIBOR Plus up to 1.500%, Plus Commitment Fees up to 0.250%, Expires June 28, 2022 | Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee, percentage | 0.25% | |
5-year Revolving-Loan Facility, Periodic Interest Payments, LIBOR Plus up to 1.500%, Plus Commitment Fees up to 0.250%, Expires June 28, 2022 | Maximum | LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 1.50% | |
5-year Term-Loan Facility Expires in 2023 | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity year | 2023 | 2023 |
Line of credit facility, expiration period | 5 years | 5 years |
Line of credit facility, expiration date | Dec. 21, 2023 | Dec. 21, 2023 |
5-year Term-Loan Facility Expires in 2023 | Maximum | LIBOR | ||
Debt Instrument [Line Items] | ||
Debt instrument, variable interest rate | 1.75% | 1.75% |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) - USD ($) | Dec. 21, 2018 | Dec. 31, 2018 | Jun. 30, 2017 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 11, 2019 | Nov. 15, 2018 | Jun. 28, 2017 | Sep. 18, 2014 | Apr. 17, 2014 |
Debt Instrument [Line Items] | |||||||||||
Unsecured revolving credit facility | $ 350,000,000 | $ 100,000,000 | $ 10,000,000 | $ 600,000,000 | $ 400,000,000 | $ 800,000,000 | |||||
Debt instrument, periodic payment, principal | 365,000,000 | 10,000,000 | |||||||||
Proceeds from issuance of debt | 2,800,000 | ||||||||||
Write off of deferred debt issuance cost | $ 200,000 | ||||||||||
Debt issuance costs | $ 1,600,000 | ||||||||||
Unsecured term loans | 340,000,000 | ||||||||||
Outstanding debt balance | 1,506,990,000 | $ 1,568,560,000 | |||||||||
Debt instrument, periodic payment, principal | $ 250,000,000 | ||||||||||
LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
30-day Adjusted LIBOR Rate | 2.063% | ||||||||||
Scenario Forecast [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Long-term debt, scheduled principal payment | $ 3,800,000 | ||||||||||
Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, variable interest rate | 1.00% | ||||||||||
Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, variable interest rate | 1.75% | ||||||||||
Unsecured Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 500,000,000 | ||||||||||
Debt instrument interest rate stated percentage | 4.50% | 4.20% | |||||||||
Outstanding debt balance | 500,000,000 | $ 500,000,000 | $ 350,000,000 | ||||||||
4.500% Senior Notes, Semi-Annual Interest Payments, Net of the Unamortized Discount, Balloon Due 2029 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument interest rate stated percentage | 4.50% | ||||||||||
Senior notes | $ 350,000,000 | $ 350,000,000 | |||||||||
Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, periodic payment, principal | 67,500,000 | ||||||||||
Unsecured term loans | $ 300,000,000 | $ 300,000,000 | $ 288,800,000 | ||||||||
Loan repayment term | 5 years | ||||||||||
Term Loan | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unsecured term loans | $ 300,000,000 | ||||||||||
Term Loan | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unsecured term loans | $ 450,000,000 | ||||||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, outstanding amount | $ 475,000,000 |
Leases - Schedule of Balances a
Leases - Schedule of Balances and Classification of Operating Lease Right-of-Use Assets and Operating Lease Liabilities within Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets: | |||
Operating lease right-of-use assets | $ 193,419 | $ 178,304 | $ 0 |
Total Assets | 193,419 | ||
Liabilities: | |||
Current operating lease liabilities | 41,828 | ||
Non-current operating lease liabilities | 177,097 | $ 161,464 | $ 0 |
Total Liabilities | $ 218,925 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Cost for Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Operating leases: | ||
Lease cost | $ 11,581 | $ 36,671 |
Variable lease cost | 1,197 | 2,701 |
Operating lease cost | 12,778 | 39,372 |
Sublease income | (145) | (329) |
Total lease cost net | $ 12,633 | $ 39,043 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term and Weighted Average Discount Rate for Operating Leases (Details) | Sep. 30, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term | 6 years 1 month 6 days |
Weighted-average discount rate | 3.73% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (Remainder) | $ 10,441 |
2020 | 50,613 |
2021 | 43,859 |
2022 | 36,448 |
2023 | 29,936 |
Thereafter | 75,843 |
Total undiscounted lease payments | 247,140 |
Less: Imputed interest | 28,215 |
Present value of lease payments | $ 218,925 |
Leases - Schedule of Aggregate
Leases - Schedule of Aggregate Future Minimum Lease Payments under Non-cancelable Lease Agreements (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 48,292 |
2020 | 43,517 |
2021 | 34,836 |
2022 | 27,035 |
2023 | 19,981 |
Thereafter | 36,349 |
Total minimum future lease payments | $ 210,010 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Cash paid for amounts included in measurement of liabilities | ||
Operating cash flows from operating leases | $ 11,816 | $ 37,728 |
Right-of-use assets obtained in exchange for new operating liabilities | $ 11,660 | $ 38,291 |
Supplemental Disclosures of C_3
Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities - Summary of Cash Paid for Interest and Income Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash paid during the period for: | ||
Interest | $ 52,127 | $ 32,896 |
Income taxes | $ 85,970 | $ 21,380 |
Supplemental Disclosures of C_4
Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities - Summary of Significant Non-Cash Investing and Financing Activities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Significant non-cash investing and financing activities | ||
Other payable issued for purchased customer accounts | $ 9,462 | $ 3,339 |
Estimated acquisition earn-out payables and related charges | 71,464 | $ 51,717 |
Notes received on the sale of fixed assets and customer accounts | $ 9,903 |
Supplemental Disclosures of C_5
Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities - Schedule of Reconciliation of Cash and Cash Equivalents Inclusive of Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Supplemental Cash Flow Elements [Abstract] | ||||
Cash and cash equivalents | $ 497,510 | $ 438,961 | $ 422,971 | $ 573,383 |
Restricted cash | 377,085 | 338,635 | 301,716 | 250,705 |
Total cash and cash equivalents inclusive of restricted cash at the end of the period | $ 874,595 | $ 777,596 | $ 724,687 | $ 824,088 |
Segment Information - Additiona
Segment Information - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | Segment | 4 | |||
Revenues | $ 618,683 | $ 530,850 | $ 1,813,182 | $ 1,505,498 |
London, Bermuda and Cayman Islands | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 4,400 | $ 3,700 | $ 12,400 | $ 11,300 |
Segment Information - Summarize
Segment Information - Summarized Financial Information Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 618,683 | $ 530,850 | $ 1,813,182 | $ 1,505,498 | ||
Investment income | 1,668 | 719 | 4,274 | 2,051 | ||
Amortization | 26,272 | 21,637 | 78,418 | 62,961 | ||
Depreciation | 5,815 | 5,259 | 17,516 | 16,410 | ||
Interest expense | 16,314 | 8,963 | 47,805 | 28,686 | ||
Income before income taxes | 151,838 | 142,500 | 423,880 | 361,851 | ||
Total assets | 7,680,664 | 5,802,806 | 7,680,664 | 5,802,806 | $ 6,863,968 | $ 6,688,668 |
Capital expenditures | 12,184 | 9,469 | 47,358 | 28,859 | ||
Operating Segments | Retail | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 337,712 | 261,087 | 1,037,681 | 772,806 | ||
Investment income | 28 | 1 | 45 | 2 | ||
Amortization | 15,821 | 10,754 | 46,622 | 31,498 | ||
Depreciation | 1,897 | 1,236 | 5,440 | 3,746 | ||
Interest expense | 22,287 | 7,468 | 64,641 | 21,377 | ||
Income before income taxes | 51,133 | 61,224 | 189,191 | 175,984 | ||
Total assets | 6,155,670 | 4,651,080 | 6,155,670 | 4,651,080 | ||
Capital expenditures | 2,266 | 1,467 | 7,810 | 5,828 | ||
Operating Segments | National Programs | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 142,854 | 143,519 | 384,231 | 374,434 | ||
Investment income | 375 | 138 | 1,071 | 384 | ||
Amortization | 6,264 | 6,736 | 19,217 | 19,383 | ||
Depreciation | 1,779 | 1,346 | 4,990 | 4,087 | ||
Interest expense | 3,557 | 6,147 | 13,134 | 20,019 | ||
Income before income taxes | 46,629 | 46,707 | 106,188 | 91,809 | ||
Total assets | 3,315,656 | 2,933,465 | 3,315,656 | 2,933,465 | ||
Capital expenditures | 1,276 | 2,420 | 7,786 | 7,313 | ||
Operating Segments | Wholesale Brokerage | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 87,109 | 78,009 | 238,789 | 219,725 | ||
Investment income | 48 | 44 | 131 | 125 | ||
Amortization | 2,797 | 2,878 | 8,490 | 8,537 | ||
Depreciation | 422 | 385 | 1,251 | 1,238 | ||
Interest expense | 1,105 | 1,233 | 3,692 | 4,039 | ||
Income before income taxes | 28,908 | 23,614 | 67,421 | 55,544 | ||
Total assets | 1,406,709 | 1,272,795 | 1,406,709 | 1,272,795 | ||
Capital expenditures | 768 | 895 | 2,470 | 1,762 | ||
Operating Segments | Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 50,106 | 48,105 | 150,395 | 138,038 | ||
Investment income | 35 | 51 | 117 | 160 | ||
Amortization | 1,390 | 1,269 | 4,089 | 3,543 | ||
Depreciation | 315 | 393 | 902 | 1,183 | ||
Interest expense | 1,164 | 846 | 3,239 | 2,023 | ||
Income before income taxes | 14,775 | 6,988 | 33,220 | 23,889 | ||
Total assets | 469,292 | 448,027 | 469,292 | 448,027 | ||
Capital expenditures | 209 | 366 | 540 | 798 | ||
Segment Reconciling Items | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 902 | 130 | 2,086 | 495 | ||
Investment income | 1,182 | 485 | 2,910 | 1,380 | ||
Amortization | 0 | 0 | 0 | 0 | ||
Depreciation | 1,402 | 1,899 | 4,933 | 6,156 | ||
Interest expense | (11,799) | (6,731) | (36,901) | (18,772) | ||
Income before income taxes | 10,393 | 3,967 | 27,860 | 14,625 | ||
Total assets | (3,666,663) | (3,502,561) | (3,666,663) | (3,502,561) | ||
Capital expenditures | $ 7,665 | $ 4,321 | $ 28,752 | $ 13,158 |
Investments - Summary of Amorti
Investments - Summary of Amortized Cost and Fair Values of Fixed Maturity Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Cost | $ 30,183 | $ 22,352 |
Gross Unrealized Gains | 246 | 7 |
Gross Unrealized Losses | (47) | (222) |
Fair Value | 30,382 | 22,137 |
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 24,854 | 21,729 |
Gross Unrealized Gains | 183 | 7 |
Gross Unrealized Losses | (37) | (222) |
Fair Value | 25,000 | 21,514 |
Corporate debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost | 5,329 | 623 |
Gross Unrealized Gains | 63 | 0 |
Gross Unrealized Losses | (10) | 0 |
Fair Value | $ 5,382 | $ 623 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)Security | Dec. 31, 2018USD ($)Security | |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Debt Securities | $ 30,382 | $ 22,137 |
Number of securities in unrealized loss position | Security | 8 | 20 |
Proceeds from sale of investment in fixed maturity securities | $ 5,800 | |
Proceeds from Sale of Other Investments | 8,400 | |
Investments on deposit with the state insurance department | 4,800 | |
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Debt Securities | 25,000 | $ 21,514 |
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities | Short-term Investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Debt Securities | 2,200 | 4,800 |
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities | Bank Time Deposits | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Debt Securities | 7,700 | 8,100 |
Corporate Debt Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale Debt Securities | $ 5,382 | $ 623 |
Investments - Schedule of Inves
Investments - Schedule of Investments' Gross Unrealized Loss and Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value, Less than 12 Months | $ 6,432 | $ 6,323 |
Unrealized Losses, Less than 12 Months | (42) | (6) |
Fair Value, 12 Months or More | 2,246 | 12,734 |
Unrealized Losses, 12 Months or More | (5) | (216) |
Fair Value | 8,678 | 19,057 |
Unrealized Losses | (47) | (222) |
U.S. Treasury securities, obligations of U.S. Government agencies and Municipalities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value, Less than 12 Months | 5,435 | 5,866 |
Unrealized Losses, Less than 12 Months | (32) | (6) |
Fair Value, 12 Months or More | 2,246 | 12,634 |
Unrealized Losses, 12 Months or More | (5) | (216) |
Fair Value | 7,681 | 18,500 |
Unrealized Losses | (37) | (222) |
Corporate debt | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value, Less than 12 Months | 997 | 457 |
Unrealized Losses, Less than 12 Months | (10) | 0 |
Fair Value, 12 Months or More | 0 | 100 |
Unrealized Losses, 12 Months or More | 0 | 0 |
Fair Value | 997 | 557 |
Unrealized Losses | $ (10) | $ 0 |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Value of Fixed Maturity Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Amortized cost | ||
Due in one year or less | $ 2,250 | $ 4,768 |
Due after one year through five years | 27,933 | 17,584 |
Due after five years | 0 | 0 |
Amortized Cost, Total | 30,183 | 22,352 |
Fair value | ||
Due in one year or less | 2,245 | 4,743 |
Due after one year through five years | 28,137 | 17,394 |
Due after five years | 0 | 0 |
Fair Value, Total | $ 30,382 | $ 22,137 |
Reinsurance - Effects of Reinsu
Reinsurance - Effects of Reinsurance on Premiums Written and Earned (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Written | |
Direct premiums | $ 539,499 |
Ceded premiums | (539,489) |
Net premiums | 10 |
Earned | |
Direct premiums | 493,854 |
Ceded premiums | (493,844) |
Net premiums | $ 10 |
Reinsurance - Additional Inform
Reinsurance - Additional Information (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019USD ($)Reinsurer | Dec. 31, 2018USD ($) | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||
Ceded rate of premiums under insurance program | 100.00% | |
Premiums written net | $ 539,489 | |
Ceded unpaid loss | 309,800 | |
Prepaid reinsurance premiums | 383,565 | $ 337,920 |
Reserve for losses and loss adjustment expense | $ 309,800 | |
Number of reinsurers | Reinsurer | 2 | |
Wright National Flood Insurance Company | ||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||
Ceded rate of premiums under insurance program | 100.00% | |
Expenses and allowance rate received in premiums | 30.00% | |
Premiums written net | $ 538,000 | |
Wright National Flood Insurance Company | Quota Share Agreement | ||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | ||
Effective cedes rate under quota share agreement | 100.00% | |
Commission rate, percent of ceded written premiums | 30.50% | |
Ceded amount | $ 1,500 |
Statutory Financial Informati_2
Statutory Financial Information - Additional Information (Details) - Wright Flood - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Statutory Accounting Practices [Line Items] | ||
Statutory capital and surplus required | $ 7,500,000 | |
Statutory capital and surplus | 28,900,000 | $ 19,400,000 |
Statutory net Income | $ 8,100,000 | $ 4,500,000 |
Subsidiary Dividend Restricti_2
Subsidiary Dividend Restrictions - Additional Information (Details) - Wright Flood $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Dividend Restrictions [Line Items] | |
Preferred stock, dividend rate, percentage | 100.00% |
Maximum dividend payout that may be made without prior approval | $ 4.5 |
Maximum | |
Dividend Restrictions [Line Items] | |
Preferred stock, dividend rate, percentage | 10.00% |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) | Sep. 30, 2019USD ($)shares |
Second Accelerated Share Repurchase Agreement | Maximum | |
Accelerated Share Repurchases [Line Items] | |
Shares repurchased, authorized amount | $ 100,000,000 |
Third Accelerated Share Repurchase Agreement | |
Accelerated Share Repurchases [Line Items] | |
Shares repurchased, authorized amount | $ 9,700,000 |
Shares repurchased, authorized shares | shares | 274,981 |
Accelerated Share Repurchase Agreement | |
Accelerated Share Repurchases [Line Items] | |
Stock repurchase program, remaining authorized repurchase amount | $ 490,200,000 |