10-KPeriod: FY2015

BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2015

Filed February 26, 2016For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) reported solid performance in its 2015 10-K filing, highlighting continued revenue growth driven by both organic increases and strategic acquisitions. The company's diversified business model, encompassing Retail, National Programs, Wholesale Brokerage, and Services segments, demonstrated resilience. Total revenues reached $1.66 billion, marking an increase from the previous year, with core commissions and fees contributing the majority of this growth. The company's financial health appears robust, supported by healthy operating cash flows and a diversified revenue stream across its segments. Key areas of focus for investors include the company's ability to integrate acquisitions effectively, manage operating expenses, and navigate the competitive insurance intermediary landscape. The filing also detailed significant strategic initiatives, including substantial investment in growth through acquisitions, as evidenced by the purchase of The Wright Insurance Group, LLC and Beecher Carlson Holdings, Inc. The company's strong emphasis on a decentralized sales and service culture supports its long-term growth strategy. Despite macroeconomic uncertainties and industry competition, Brown & Brown has consistently grown revenues and net income over the years, underscoring its stable business model and effective management.

Financial Highlights

26 data points
Beta

Revenue

$1.66B

Net Income

$243.32M

14.7% Net Margin

EPS (Diluted)

$0.85

Free Cash Flow

$363.46M

Financial Statements
Beta
Revenue$1.66B
Operating Expenses$1.26B
Interest Expense$39.25M
Net Income$243.32M
EPS (Basic)$0.86
EPS (Diluted)$0.85
Shares Outstanding (Basic)275.62M
Shares Outstanding (Diluted)280.22M

Key Highlights

  • 1Total revenues for 2015 reached $1.66 billion, a 5.4% increase from 2014, driven by core commissions and fees.
  • 2The company successfully integrated multiple acquisitions, including The Wright Insurance Group, LLC and Beecher Carlson Holdings, Inc., contributing significantly to revenue growth.
  • 3Core organic commissions and fees, a key performance indicator, showed a healthy 2.6% internal growth rate in 2015.
  • 4The company demonstrated strong operational cash flow generation, providing ample resources for growth initiatives and debt management.
  • 5Brown & Brown maintained a diversified revenue base across its four reportable segments: Retail (52.4% of revenue), National Programs (25.9%), Wholesale Brokerage (13.1%), and Services (8.8%).
  • 6The company actively managed its capital structure, including share repurchases totaling $375 million authorized by year-end 2015.
  • 7Despite an increase in long-term debt primarily due to acquisitions, the company maintained compliance with its debt covenants.

Frequently Asked Questions

In 2015, Brown & Brown generated total revenues of $1.66 billion, an increase of 5.4% from 2014. The company experienced growth across all its segments, supported by both organic growth and strategic acquisitions. Net income was $243.3 million, a 17.6% increase over the prior year.

Acquisitions played a significant role in Brown & Brown's growth in 2015. The company completed thirteen acquisitions, which contributed approximately $76.6 million in core commissions and fees. Major acquisitions, such as The Wright Insurance Group, LLC and Beecher Carlson Holdings, Inc. from prior periods, continued to be integrated and contributed to the overall revenue increase.

Brown & Brown's primary revenue driver is commissions and fees earned from marketing and selling insurance products and services. These are generated through its four segments: Retail, National Programs, Wholesale Brokerage, and Services. Additionally, the company earns profit-sharing contingent commissions and guaranteed supplemental commissions.

Brown & Brown's growth strategy is multifaceted, focusing on attracting high-quality insurance intermediaries for acquisition, fostering a strong decentralized sales and service culture for organic growth, and investing in its existing operations to enhance service and product offerings.