10-QPeriod: Q3 FY2017

BROWN & BROWN, INC. Quarterly Report for Q3 Ended Sep 30, 2017

Filed November 3, 2017For Securities:BRO

Summary

Brown & Brown, Inc. (BRO) reported solid financial results for the nine months ended September 30, 2017. Total revenues increased by 5.6% to $1.41 billion, driven by a 4.4% increase in core commissions and fees. Net income grew by 6.2% to $212.1 million, or $1.49 per diluted share, demonstrating continued profitability. The company's organic revenue growth rate was 2.8% for the period, indicating sustained performance from existing operations. The balance sheet shows total assets growing to $7.41 billion, with a significant increase in current assets, largely due to a substantial rise in 'Reinsurance recoverable'. The company maintained a strong liquidity position with $823.2 million in cash and cash equivalents, inclusive of restricted cash. Long-term debt decreased to $860.7 million. The company continued its acquisition strategy, completing six acquisitions during the nine-month period, contributing to its growth.

Financial Statements
Beta
Revenue$462.27M
Operating Expenses$345.30M
Interest Expense$9.88M
Net Income$71.55M
EPS (Basic)$0.00
EPS (Diluted)$0.00
Shares Outstanding (Basic)272.92M
Shares Outstanding (Diluted)276.36M

Key Highlights

  • 1Total revenues for the nine months increased 5.6% to $1.41 billion.
  • 2Net income for the nine months rose 6.2% to $212.1 million.
  • 3Diluted EPS increased to $1.49 for the nine months ended September 30, 2017, up from $1.41 in the prior year.
  • 4Organic revenue growth remained positive at 2.8% for the nine months, indicating stable underlying business performance.
  • 5The company actively pursued its acquisition strategy, completing six acquisitions in the first nine months of 2017.
  • 6Total assets grew significantly to $7.41 billion, with a notable increase in 'Reinsurance recoverable'.
  • 7Cash and cash equivalents, including restricted cash, stood at a healthy $823.2 million, supporting liquidity.

Frequently Asked Questions

Total revenues increased by 5.6% to $1.41 billion for the nine months ended September 30, 2017, compared to $1.33 billion for the same period in 2016. This growth was primarily driven by an increase in commissions and fees.

Net income for the nine months ended September 30, 2017, was $212.1 million, a 6.2% increase from $199.9 million in the prior year. Diluted earnings per share grew to $1.49 from $1.41.

Total debt decreased to $860.7 million. The company maintained a strong liquidity position with $823.2 million in cash and cash equivalents (including restricted cash) as of September 30, 2017, indicating sufficient resources to meet its obligations.

The substantial increase in 'Reinsurance recoverable' to $2.16 billion (from $78.1 million at year-end 2016) is a key balance sheet item for this period. This indicates a significant change in how the company is structuring its reinsurance agreements, particularly related to its flood insurance operations, where premiums are now heavily ceded. This impacts the reported net premiums but is crucial for managing risk exposure.