10-KPeriod: FY2016

BROWN & BROWN, INC. Annual Report, Year Ended Dec 31, 2016

Filed February 24, 2017For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) demonstrated consistent revenue growth in its fiscal year ending December 31, 2016, with total revenues reaching $1.77 billion, an increase of 6.4% from the prior year. This growth was primarily driven by its Retail and National Programs segments, which together accounted for approximately 77.4% of total revenues. The company's strategic focus on acquisitions and organic growth continues to be a key driver of its financial performance. Operationally, Brown & Brown operates through four distinct segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail segment remains the largest contributor to revenue, while the National Programs segment showed strong organic growth. The company also maintained a healthy financial position, with total assets of $5.29 billion and significant shareholder equity. Management expressed confidence in continued organic revenue growth, anticipating positive results in the upcoming year based on current trends in insurable exposure units and premium rates.

Financial Highlights

26 data points
Beta

Revenue

$1.77B

Net Income

$257.49M

14.6% Net Margin

EPS (Diluted)

$0.91

Free Cash Flow

$393.28M

Financial Statements
Beta
Revenue$1.77B
Operating Expenses$1.34B
Interest Expense$39.48M
Net Income$257.49M
EPS (Basic)$0.92
EPS (Diluted)$0.91
Shares Outstanding (Basic)272.28M
Shares Outstanding (Diluted)275.61M

Key Highlights

  • 1Total revenues grew by 6.4% to $1.77 billion in 2016, indicating a consistent growth trajectory.
  • 2The Retail segment, the largest revenue contributor, saw a 5.4% increase in total revenues, driven by acquisitions and net new business.
  • 3The National Programs segment experienced a 4.6% increase in total revenues, with a notable organic revenue growth rate of 4.2% for core commissions and fees.
  • 4Employee compensation and benefits represent a significant portion of expenses, accounting for approximately 52.4% of total revenues in 2016.
  • 5The company actively pursues growth through acquisitions, adding seven insurance intermediaries and three books of business in 2016.
  • 6Brown & Brown's financial health is supported by substantial shareholder equity of $2.36 billion and total assets of $5.29 billion as of year-end 2016.
  • 7The company's performance is geographically diversified, with operations across 41 states, although concentrated in 17 key states.

Frequently Asked Questions

Brown & Brown operates as a diversified insurance agency, wholesale brokerage, insurance programs, and service organization. Its primary revenue sources are commissions paid by insurance companies and fees paid directly by customers for services like claims administration and risk management.

In 2016, Brown & Brown reported total revenues of $1.77 billion, representing a 6.4% increase compared to $1.66 billion in 2015. This growth was fueled by both acquisitions and organic new business across its segments, particularly in the Retail and National Programs divisions.

Brown & Brown's operations are divided into four reportable segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail segment is the largest, followed by National Programs, Wholesale Brokerage, and Services.

Brown & Brown's growth strategy is a combination of organic growth, driven by new business production and customer retention, and strategic acquisitions. In 2016, the company completed multiple acquisitions to expand its reach and service offerings.

As of December 31, 2016, Brown & Brown had total assets of $5.29 billion and total shareholders' equity of $2.36 billion. The company manages its capital through operating cash flow, a revolving credit facility, and a conservative balance sheet approach, with total debt at $1.07 billion.