x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934.
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For
the fiscal year ended December 31, 2006
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OR
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934.
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|
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For
the transition period from
__________to___________
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Florida
(State
or other jurisdiction of incorporation or organization)
220
South Ridgewood Avenue, Daytona Beach, FL
(Address
of principal executive offices)
|
®
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59-0864469
(I.R.S.
Employer Identification Number)
32114
(Zip
Code)
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Title
of each class
|
Name
of each exchange on which registered
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COMMON
STOCK, $0.10 PAR VALUE
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NEW
YORK STOCK EXCHANGE
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Large
accelerated filer x
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Accelerated
filer o
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Non-accelerated
filer o
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Page
No.
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3
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9
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14
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14
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14
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14
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15
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17
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18
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33
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34
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62
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62
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62
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63
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63
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63
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63
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63
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64
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66
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67
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-
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material
adverse changes in economic conditions in the markets we
serve;
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-
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future
regulatory actions and conditions in the states in which we conduct
our
business;
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-
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competition
from others in the insurance agency, wholesale brokerage and service
business;
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-
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a
significant portion of business written by Brown & Brown is for
customers located in California, Florida, Georgia, Michigan, New
Jersey,
New York, Pennsylvania and Washington. Accordingly, the occurrence of
adverse economic conditions, an adverse regulatory climate, or a
disaster
in any of these states could have a material adverse effect on our
business, although no such conditions have been encountered in the
past;
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-
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the
integration of our operations with those of businesses or assets
we have
acquired or may acquire in the future and the failure to realize
the
expected benefits of such integration; and
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-
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other
risks and uncertainties as may be detailed from time to time in our
public
announcements and Securities and Exchange Commission (“SEC”) filings.
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Florida
|
40
|
|
Arkansas
|
3
|
|
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Texas
|
12
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North
Carolina
|
3
|
|
|
California
|
11
|
|
South
Carolina
|
3
|
|
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Georgia
|
9
|
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Wisconsin
|
3
|
|
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New
York
|
9
|
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Connecticut
|
2
|
|
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New
Jersey
|
7
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Massachusetts
|
2
|
|
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Colorado
|
7
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Minnesota
|
2
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|
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Illinois
|
7
|
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Montana
|
2
|
|
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Pennsylvania
|
6
|
|
New
Hampshire
|
2
|
|
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Washington
|
6
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|
Hawaii
|
1
|
|
|
Virginia
|
6
|
|
Kansas
|
1
|
|
|
Arizona
|
5
|
|
Kentucky
|
1
|
|
|
Indiana
|
4
|
|
Missouri
|
1
|
|
|
Louisiana
|
4
|
|
Nebraska
|
1
|
|
|
Michigan
|
4
|
|
Ohio
|
1
|
|
New
Mexico
|
4
|
Utah
|
1
|
|
||
Nevada
|
4
|
West
Virginia
|
1
|
|
||
Oklahoma
|
4
|
|
|
|
|
|
|
|
|||||||||||||
(in
thousands, except percentages)
|
2006
|
%
|
2005
|
%
|
2004
|
%
|
|||||||||||||
|
|
|
|
|
|
|
|||||||||||||
Retail
Division
|
$
|
516,489
|
59.7
|
%
|
$
|
489,566
|
63.1
|
%
|
$
|
457,936
|
71.8
|
%
|
|||||||
National
Programs Division
|
156,996
|
18.2
|
133,147
|
17.2
|
111,907
|
17.5
|
|||||||||||||
Wholesale
Brokerage Division
|
159,268
|
18.4
|
125,537
|
16.2
|
41,585
|
6.5
|
|||||||||||||
Services
Division
|
32,561
|
3.8
|
26,565
|
3.4
|
25,807
|
4.0
|
|||||||||||||
Other
|
(651
|
)
|
(0.1
|
)
|
728
|
0.1
|
1,032
|
0.2
|
|||||||||||
Total
|
$
|
864,663
|
100.0
|
%
|
$
|
775,543
|
100.0
|
%
|
$
|
638,267
|
100.0
|
%
|
|
•
|
Dentists:
The Professional Protector Plan® for Dentists offers comprehensive
coverage for dentists, oral surgeons, dental schools and dental students,
including practice protection and professional liability. This program,
initiated in 1969, is endorsed by a number of state and local dental
societies and is offered in 49 states, the District of Columbia,
the U.S.
Virgin Islands and Puerto Rico.
|
|
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|
|
•
|
Lawyers:
The Lawyer’s Protector Plan® (LPP®) was introduced in 1983, 10 years
after we began marketing lawyers’ professional liability insurance. This
program is presently offered in 43 states, the District of Columbia
and
Puerto Rico.
|
|
|
|
|
•
|
Optometrists
and Opticians: The
Optometric Protector Plan® (OPP®) and the Optical Services Protector Plan®
(OSPP®) were created in 1973 and 1987, respectively, to provide
professional liability, package and workers’ compensation coverages
exclusively for optometrists and opticians. These programs insure
optometrists and opticians nationwide.
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|
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•
|
CalSurance®: CalSurance®
offers professional liability programs designed for insurance agents,
financial advisors, registered representatives, securities broker-dealers,
benefit administrators, real estate brokers and real estate title
agents.
CalSurance® also sells commercial insurance packages directly to customers
in certain industry niches including destination resort and luxury
hotels,
independent pizza restaurants, and others. An important aspect of
CalSurance® is Lancer Claims Services, which provides specialty claims
administration for insurance companies underwriting CalSurance® product
lines.
|
|
|
|
|
•
|
TitlePac®:
TitlePac® provides professional liability products and
services designed for real estate title agents and escrow agents
in 47
states and the District of Columbia.
|
|
|
|
|
•
|
Florida
Intracoastal Underwriters, Limited Company
(“FIU”) is a managing general agency that specializes in providing
insurance coverage for coastal and inland high-value condominiums
and
apartments. FIU has developed a specialty reinsurance facility to
support
the underwriting activities associated with these risks.
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•
|
Public
Risk Underwriters®,
along with our similar offices in Florida and other states, are program
administrators offering tailored property and casualty insurance
products,
risk management consulting, third-party administration and related
services designed for municipalities, schools, fire districts, and
other
public entities.
|
|
|
|
|
|
|
•
|
Proctor
Financial, Inc.
(“Proctor”) provides insurance programs and compliance solutions for
financial institutions that service mortgage loans. Proctor’s
products include lender-placed fire and flood insurance, full insurance
outsourcing, mortgage impairment, and blanket equity insurance.
Proctor also writes surplus lines property business for its financial
institutions clients and acts as a wholesaler for this line of
business.
|
|
|
|
|
|
•
|
American
Specialty Insurance & Risk Services, Inc.
provides insurance and risk management services for clients in
professional sports, motor sports, amateur sports, and the entertainment
industry.
|
||
|
|
|
|
|
•
|
Parcel
Insurance Plan®
(PIP®) is a specialty insurance agency providing insurance coverage to
commercial and private shippers for small packages and parcels with
insured values of less than $25,000 each.
|
|
|
|
|
|
•
|
Professional
Risk Specialty Group
is a specialty insurance agency providing liability insurance products
to
various professional groups.
|
||
|
|
|
|
|
•
|
AFC
Insurance, Inc.
(“AFC”) is a managing general underwriter, specializing in tailored
insurance products for the health and human services industry. AFC
works with retail agents in all states and targets home healthcare,
group
homes for the mentally and physically challenged, and drug and alcohol
facilities and programs for the developmentally disabled.
|
|
|
|
|
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|
•
|
Acumen
Re Management Corporation
is a reinsurance underwriting management organization, primarily
acting as
an outsourced specific excess workers’ compensation facultative
reinsurance underwriting facility.
|
|
|
|
|
|
|
•
|
Commercial
Programs serves the insurance needs of certain specialty trade/industry
groups. Programs offered include:
|
|
|
|
|
|
|
|
•
|
Wholesalers
& Distributors Preferred Program®.
Introduced in 1997, this program provides property and casualty protection
for businesses principally engaged in the wholesale-distribution
industry.
|
|
|
|
|
|
|
•
|
Railroad
Protector Plan®.
Also introduced in 1997, this program is designed for contractors,
manufacturers and other entities that service the needs of the railroad
industry.
|
|
|
|
|
|
|
•
|
Environmental
Protector Plan®.
Introduced in 1998, this program provides a variety of specialized
coverages, primarily to municipal mosquito control districts.
|
|
|
|
|
|
|
•
|
Food
Processors Preferred ProgramSM.
This program, introduced in 1998, provides property and casualty
insurance
protection for businesses involved in the handling and processing
of
various foods.
|
|
|
|
|
High
|
Low
|
Cash
Dividends
Per
Common
Share
|
||||||||
2005
|
||||||||||
First
Quarter
|
$
|
24.27
|
$
|
21.13
|
$
|
0.040
|
||||
Second
Quarter
|
$
|
23.75
|
$
|
21.00
|
$
|
0.040
|
||||
Third
Quarter
|
$
|
25.39
|
$
|
21.31
|
$
|
0.040
|
||||
Fourth
Quarter
|
$
|
31.90
|
$
|
23.85
|
$
|
0.050
|
||||
2006
|
|
|
||||||||
First
Quarter
|
$
|
33.23
|
$
|
27.86
|
$
|
0.050
|
||||
Second
Quarter
|
$
|
35.25
|
$
|
28.15
|
$
|
0.050
|
||||
Third
Quarter
|
$
|
32.50
|
$
|
27.06
|
$
|
0.050
|
||||
Fourth
Quarter
|
$
|
30.77
|
$
|
28.00
|
$
|
0.060
|
Plan
Category
|
|
Number
of Securities
to
be issued
upon
exercise of
outstanding
options,
warrants and
rights
|
|
Weighted-average
exercise
price
of
outstanding
options,
warrants
and rights
|
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation
plans
|
|
|
|
|
|
|
|
Equity
compensation
plans approved
by shareholders
|
|
1,885,775
|
|
$11.11
|
|
14,755,349
|
|
|
|
|
|
|
|
Equity
compensation plans not
approved
by shareholders
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Total
|
|
1,885,775
|
|
$11.11
|
|
14,755,349
|
2001
|
2002
|
2003
|
2004
|
2005
|
2006
|
|
Brown
& Brown, Inc.
|
100.00
|
119.12
|
121.08
|
162.23
|
227.71
|
212.22
|
S&P
500 Index
|
100.00
|
76.63
|
96.85
|
105.56
|
108.73
|
123.54
|
Peer
Group of Insurance Agents and Brokers
|
100.00
|
81.85
|
89.31
|
72.58
|
80.09
|
79.95
|
(in
thousands, except per share data, number of employees and percentages)
(1)
|
Year
Ended December 31,
|
|||||||||||||||
2006
|
2005
|
2004
|
2003
|
2002
|
||||||||||||
REVENUES
|
||||||||||||||||
Commissions
& fees (2)
|
$
|
864,663
|
$
|
775,543
|
$
|
638,267
|
$
|
545,287
|
$
|
452,289
|
||||||
Investment
income
|
11,479
|
6,578
|
2,715
|
1,428
|
2,945
|
|||||||||||
Other
income, net
|
1,862
|
3,686
|
5,952
|
4,325
|
508
|
|||||||||||
Total
revenues
|
878,004
|
785,807
|
646,934
|
551,040
|
455,742
|
|||||||||||
EXPENSES
|
||||||||||||||||
Employee
compensation and benefits
|
404,891
|
374,943
|
314,221
|
268,372
|
224,755
|
|||||||||||
Non-cash
stock-based compensation
|
5,416
|
3,337
|
2,625
|
2,272
|
3,823
|
|||||||||||
Other
operating expenses
|
126,492
|
105,622
|
84,927
|
74,617
|
66,554
|
|||||||||||
Amortization
|
36,498
|
33,245
|
22,146
|
17,470
|
14,042
|
|||||||||||
Depreciation
|
11,309
|
10,061
|
8,910
|
8,203
|
7,245
|
|||||||||||
Interest
|
13,357
|
14,469
|
7,156
|
3,624
|
4,659
|
|||||||||||
Total
expenses
|
597,963
|
541,677
|
439,985
|
374,558
|
321,078
|
|||||||||||
Income
before income taxes and minority interest
|
280,041
|
244,130
|
206,949
|
176,482
|
134,664
|
|||||||||||
Income
taxes
|
107,691
|
93,579
|
78,106
|
66,160
|
49,271
|
|||||||||||
Minority
interest, net of tax
|
-
|
-
|
-
|
-
|
2,271
|
|||||||||||
Net
income
|
$
|
172,350
|
$
|
150,551
|
$
|
128,843
|
$
|
110,322
|
$
|
83,122
|
||||||
EARNINGS
PER SHARE INFORMATION
|
||||||||||||||||
Net
income per share - diluted
|
$
|
1.22
|
$
|
1.08
|
$
|
0.93
|
$
|
0.80
|
$
|
0.61
|
||||||
Weighted
average number of shares outstanding - diluted
|
141,020
|
139,776
|
138,888
|
137,794
|
136,086
|
|||||||||||
Dividends
declared per share
|
$
|
0.2100
|
$
|
0.1700
|
$
|
0.1450
|
$
|
0.1213
|
$
|
0.1000
|
||||||
YEAR-END
FINANCIAL POSITION
|
||||||||||||||||
Total
assets
|
$
|
1,807,952
|
$
|
1,608,660
|
$
|
1,249,517
|
$
|
865,854
|
$
|
754,349
|
||||||
Long-term
debt
|
$
|
226,252
|
$
|
214,179
|
$
|
227,063
|
$
|
41,107
|
$
|
57,585
|
||||||
Shareholders'
equity
(3)
|
$
|
929,345
|
$
|
764,344
|
$
|
624,325
|
$
|
498,035
|
$
|
391,590
|
||||||
Total
shares outstanding
|
140,016
|
139,383
|
138,318
|
137,122
|
136,356
|
|||||||||||
OTHER
INFORMATION
|
||||||||||||||||
Number
of full-time equivalent employees
|
4,733
|
4,540
|
3,960
|
3,517
|
3,384
|
|||||||||||
Revenue
per average number of employees
|
$
|
189,368
|
$
|
184,896
|
$
|
173,046
|
$
|
159,699
|
$
|
144,565
|
||||||
Book
value per share at year-end
|
$
|
6.64
|
$
|
5.48
|
$
|
4.51
|
$
|
3.63
|
$
|
2.87
|
||||||
Stock
price at year-end
|
$
|
28.21
|
$
|
30.54
|
$
|
21.78
|
$
|
16.31
|
$
|
16.16
|
||||||
Stock
price earnings multiple at year-end
|
23.12
|
28.35
|
23.41
|
20.38
|
26.49
|
|||||||||||
Return
on beginning shareholders' equity
|
23
|
%
|
24
|
%
|
26
|
%
|
28
|
%
|
47
|
%
|
(1)
|
All
share and per share information has been restated to give effect
to a
two-for-one common stock split that became effective November 28,
2005.
|
(2)
|
See
Note 2 to the Consolidated Financial Statements for information regarding
business purchase transactions which impact the comparability of
this
information.
|
(3)
|
Shareholders’
equity as of December 31, 2006, 2005, 2004, 2003 and 2002 included
net
increases of $9,144,000, $4,446,000, $4,467,000, $4,227,000 and
$2,106,000, respectively, as a result of the Company’s applications of
Statement of Financial Accounting Standards (“SFAS”) 115, “Accounting for
Certain Investments in Debt and Equity Securities,” and SFAS 133,
“Accounting for Derivatives Instruments and Hedging Activities.”
|
2006
|
Percent
Change
|
2005
|
Percent
Change
|
2004
|
||||||||||||
REVENUES
|
||||||||||||||||
Commissions
and fees
|
$
|
823,615
|
11.2
|
%
|
$
|
740,567
|
21.9
|
%
|
$
|
607,615
|
||||||
Profit-sharing
contingent commissions
|
41,048
|
17.4
|
%
|
34,976
|
14.1
|
%
|
30,652
|
|||||||||
Investment
income
|
11,479
|
74.5
|
%
|
6,578
|
142.3
|
%
|
2,715
|
|||||||||
Other
income, net
|
1,862
|
(49.5
|
)%
|
3,686
|
(38.1
|
)%
|
5,952
|
|||||||||
Total
revenues
|
878,004
|
11.7
|
%
|
785,807
|
21.5
|
%
|
646,934
|
|||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Employee
compensation and benefits
|
404,891
|
8.0
|
%
|
374,943
|
19.3
|
%
|
314,221
|
|||||||||
Non-cash
stock-based compensation
|
5,416
|
62.3
|
%
|
3,337
|
27.1
|
%
|
2,625
|
|||||||||
Other
operating expenses
|
126,492
|
19.8
|
%
|
105,622
|
24.4
|
%
|
84,927
|
|||||||||
Amortization
|
36,498
|
9.8
|
%
|
33,245
|
50.1
|
%
|
22,146
|
|||||||||
Depreciation
|
11,309
|
12.4
|
%
|
10,061
|
12.9
|
%
|
8,910
|
|||||||||
Interest
|
13,357
|
(7.7
|
)%
|
14,469
|
102.2
|
%
|
7,156
|
|||||||||
Total
expenses
|
597,963
|
10.4
|
%
|
541,677
|
23.1
|
%
|
439,985
|
|||||||||
|
||||||||||||||||
Income
before income taxes
|
$
|
280,041
|
14.7
|
%
|
$
|
244,130
|
18.0
|
%
|
$
|
206,949
|
||||||
|
||||||||||||||||
Net
internal growth rate - core commissions and fees
|
4.0
|
%
|
3.1
|
%
|
4.3
|
%
|
||||||||||
Employee
compensation and benefits ratio
|
46.1
|
%
|
47.7
|
%
|
48.6
|
%
|
||||||||||
Other
operating expenses ratio
|
14.4
|
%
|
13.4
|
%
|
13.1
|
%
|
||||||||||
|
||||||||||||||||
Capital
expenditures
|
$
|
14,979
|
$
|
13,426
|
$
|
10,152
|
||||||||||
Total
assets at December 31
|
$
|
1,807,952
|
$
|
1,608,660
|
$
|
1,249,517
|
2006
|
For
the years
ended December 31, |
||||||||||||||||||
2006
|
2005
|
Total
Net
Change |
Total
Net
Growth % |
Less
Acquisition Revenues |
Internal
Net Growth% |
||||||||||||||
Florida
Retail
|
$
|
175,885
|
$
|
155,741
|
$
|
20,144
|
12.9
|
%
|
$
|
493
|
12.6
|
%
|
|||||||
National
Retail
|
206,661
|
198,033
|
8,628
|
4.4
|
%
|
11,417
|
(1.4
|
)%
|
|||||||||||
Western
Retail
|
103,222
|
103,951
|
(729
|
)
|
(0.7
|
)%
|
4,760
|
(5.3
|
)%
|
||||||||||
Total
Retail(1)
|
485,768
|
457,725
|
28,043
|
6.1
|
%
|
16,670
|
2.5
|
%
|
|||||||||||
Professional
Programs
|
40,867
|
41,930
|
(1,063
|
)
|
(2.5
|
)%
|
43
|
(2.6
|
)%
|
||||||||||
Special
Programs
|
113,141
|
90,933
|
22,208
|
24.4
|
%
|
9,255
|
14.2
|
%
|
|||||||||||
Total
National Programs
|
154,008
|
132,863
|
21,145
|
15.9
|
%
|
9,298
|
8.9
|
%
|
|||||||||||
Wholesale
Brokerage
|
151,278
|
120,889
|
30,389
|
25.1
|
%
|
25,616
|
3.9
|
%
|
|||||||||||
Services
|
32,561
|
26,565
|
5,996
|
22.6
|
%
|
4,496
|
5.6
|
%
|
|||||||||||
Total
Core Commissions and Fees
|
$
|
823,615
|
$
|
738,042
|
$
|
85,573
|
11.6
|
%
|
$
|
56,080
|
4.0
|
%
|
For
the years
ended
December 31,
|
|||||||
2006
|
2005
|
||||||
Total
core commissions and fees
|
$
|
823,615
|
$
|
738,042
|
|||
Contingent
commissions
|
41,048
|
34,976
|
|||||
Divested
business
|
—
|
2,525
|
|||||
Total
commission & fees
|
$
|
864,663
|
$
|
775,543
|
2005
|
For
the years
ended December 31, |
||||||||||||||||||
2005
|
2004
|
Total
Net
Change |
Total
Net
Growth % |
Less
Acquisition Revenues |
Internal
Net Growth% |
||||||||||||||
Florida
Retail
|
$
|
155,973
|
$
|
140,895
|
$
|
15,078
|
10.7
|
%
|
$
|
5,694
|
6.7
|
%
|
|||||||
National
Retail
|
201,112
|
182,098
|
19,014
|
10.4
|
%
|
20,540
|
(0.8
|
)%
|
|||||||||||
Western
Retail
|
104,879
|
107,529
|
(2,650
|
)
|
(2.5
|
)%
|
2,699
|
(5.0
|
)%
|
||||||||||
Total
Retail(1)
|
461,964
|
430,522
|
31,442
|
7.3
|
%
|
28,933
|
0.6
|
%
|
|||||||||||
Professional
Programs
|
41,861
|
42,463
|
(602
|
)
|
(1.4
|
)%
|
715
|
(3.1
|
)%
|
||||||||||
Special
Programs
|
89,288
|
66,601
|
22,687
|
34.1
|
%
|
17,155
|
8.3
|
%
|
|||||||||||
Total
National Programs
|
131,149
|
109,064
|
22,085
|
20.2
|
%
|
17,870
|
3.9
|
%
|
|||||||||||
Wholesale
Brokerage
|
120,889
|
38,080
|
82,809
|
217.5
|
%
|
73,317
|
24.9
|
%
|
|||||||||||
Services
|
26,565
|
24,334
|
2,231
|
9.2
|
%
|
—
|
9.2
|
%
|
|||||||||||
Total
Core Commissions and Fees
|
$
|
740,567
|
$
|
602,000
|
$
|
138,567
|
23.0
|
%
|
$
|
120,120
|
3.1
|
%
|
For
the years
ended
December 31,
|
|
||||||
|
|
2005
|
|
2004
|
|||
Total
core commissions and fees
|
$
|
740,567
|
$
|
602,000
|
|||
Contingent
commissions
|
34,976
|
30,652
|
|||||
Divested
business
|
—
|
5,615
|
|||||
Total
commission & fees
|
$
|
775,543
|
$
|
638,267
|
2004
|
For
the years
ended December 31, |
||||||||||||||||||
2004
|
2003
|
Total
Net
Change |
Total
Net
Growth % |
Less
Acquisition Revenues |
Internal
Net Growth% |
||||||||||||||
Florida
Retail
|
$
|
139,517
|
$
|
131,845
|
$
|
7,672
|
5.8
|
%
|
$
|
724
|
5.3
|
%
|
|||||||
National
Retail
|
183,666
|
134,492
|
49,174
|
36.6
|
%
|
50,039
|
(0.6
|
)%
|
|||||||||||
Western
Retail
|
108,922
|
95,814
|
13,108
|
13.7
|
%
|
9,124
|
4.2
|
%
|
|||||||||||
Total
Retail(1)
|
432,105
|
362,151
|
69,954
|
19.3
|
%
|
59,887
|
2.8
|
%
|
|||||||||||
Professional
Programs
|
42,462
|
37,714
|
4,748
|
12.6
|
%
|
2,400
|
6.2
|
%
|
|||||||||||
Special
Programs
|
68,618
|
47,881
|
20,737
|
43.3
|
%
|
19,191
|
3.2
|
%
|
|||||||||||
Total
National Programs
|
111,080
|
85,595
|
25,485
|
29.8
|
%
|
21,591
|
4.5
|
%
|
|||||||||||
Wholesale
Brokerage
|
37,929
|
27,092
|
10,837
|
40.0
|
%
|
7,006
|
14.1
|
%
|
|||||||||||
Services
|
25,062
|
21,321
|
3,741
|
17.5
|
%
|
—
|
17.5
|
%
|
|||||||||||
Total
Core Commissions and Fees
|
$
|
606,176
|
$
|
496,159
|
$
|
110,017
|
22.2
|
%
|
$
|
88,484
|
4.3
|
%
|
For
the years
ended
December 31,
|
|||||||
2004
|
2003
|
||||||
Total
core commissions and fees
|
$
|
606,176
|
$
|
496,159
|
|||
Contingent
commissions
|
30,652
|
32,534
|
|||||
Divested
business
|
1,439
|
16,594
|
|||||
Total
commission & fees
|
$
|
638,267
|
$
|
545,287
|
(1) |
The
Retail segment includes commissions and fees reported in the “Other”
column of the Segment Information in Note 16 which includes corporate
and
consolidation items.
|
2006
|
Percent
Change
|
2005
|
Percent
Change
|
2004
|
||||||||||||
REVENUES
|
|
|
|
|
|
|||||||||||
Commissions
and fees
|
$
|
486,419
|
5.5
|
%
|
$
|
461,236
|
6.8
|
%
|
$
|
431,767
|
||||||
Profit-sharing
contingent commissions
|
30,070
|
6.1
|
%
|
28,330
|
8.3
|
%
|
26,169
|
|||||||||
Investment
income
|
139
|
(12.6
|
)%
|
159
|
(72.0
|
)%
|
567
|
|||||||||
Other
income, net
|
1,361
|
(7.9
|
)%
|
1,477
|
(48.1
|
)%
|
2,845
|
|||||||||
Total
revenues
|
517,989
|
5.5
|
%
|
491,202
|
6.5
|
%
|
461,348
|
|||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Employee
compensation and benefits
|
242,469
|
4.0
|
%
|
233,124
|
3.4
|
%
|
225,438
|
|||||||||
Non-cash
stock-based compensation
|
2,976
|
35.4
|
%
|
2,198
|
37.5
|
%
|
1,599
|
|||||||||
Other
operating expenses
|
82,966
|
2.3
|
%
|
81,063
|
4.2
|
%
|
77,780
|
|||||||||
Amortization
|
19,305
|
(0.3
|
)%
|
19,368
|
26.5
|
%
|
15,314
|
|||||||||
Depreciation
|
5,621
|
(0.4
|
)%
|
5,641
|
(1.6
|
)%
|
5,734
|
|||||||||
Interest
|
18,903
|
(9.7
|
)%
|
20,927
|
(4.2
|
)%
|
21,846
|
|||||||||
Total
expenses
|
372,240
|
2.7
|
%
|
362,321
|
4.2
|
%
|
347,711
|
|||||||||
|
||||||||||||||||
Income
before income taxes
|
$
|
145,749
|
13.1
|
%
|
$
|
128,881
|
13.4
|
%
|
$
|
113,637
|
||||||
|
||||||||||||||||
Net
internal growth rate - core commissions and fees
|
2.5
|
%
|
0.6
|
%
|
2.8
|
%
|
||||||||||
Employee
compensation and benefits ratio
|
46.8
|
%
|
47.5
|
%
|
48.9
|
%
|
||||||||||
Other
operating expenses ratio
|
16.0
|
%
|
16.5
|
%
|
16.9
|
%
|
||||||||||
|
||||||||||||||||
Capital
expenditures
|
$
|
5,952
|
$
|
6,186
|
$
|
5,568
|
||||||||||
Total
assets at December 31
|
$
|
1,103,107
|
$
|
1,002,781
|
$
|
843,823
|
2006
|
Percent
Change
|
2005
|
Percent
Change
|
2004
|
||||||||||||
REVENUES
|
||||||||||||||||
Commissions
and fees
|
$
|
154,008
|
17.4
|
%
|
$
|
131,149
|
18.1
|
%
|
$
|
111,080
|
||||||
Profit-sharing
contingent commissions
|
2,988
|
49.5
|
%
|
1,998
|
141.6
|
%
|
827
|
|||||||||
Investment
income
|
432
|
17.7
|
%
|
367
|
164.0
|
%
|
139
|
|||||||||
Other
income, net
|
20
|
(95.2
|
)%
|
416
|
804.3
|
%
|
46
|
|||||||||
Total
revenues
|
157,448
|
17.6
|
%
|
133,930
|
19.5
|
%
|
112,092
|
|||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Employee
compensation and benefits
|
60,692
|
11.9
|
%
|
54,238
|
19.8
|
%
|
45,278
|
|||||||||
Non-cash
stock-based compensation
|
523
|
45.7
|
%
|
359
|
52.8
|
%
|
235
|
|||||||||
Other
operating expenses
|
26,014
|
27.4
|
%
|
20,414
|
23.1
|
%
|
16,581
|
|||||||||
Amortization
|
8,718
|
7.6
|
%
|
8,103
|
37.8
|
%
|
5,882
|
|||||||||
Depreciation
|
2,387
|
19.5
|
%
|
1,998
|
26.2
|
%
|
1,583
|
|||||||||
Interest
|
10,554
|
1.2
|
%
|
10,433
|
21.3
|
%
|
8,603
|
|||||||||
Total
expenses
|
108,888
|
14.0
|
%
|
95,545
|
22.2
|
%
|
78,162
|
|||||||||
|
||||||||||||||||
Income
before income taxes
|
$
|
48,560
|
26.5
|
%
|
$
|
38,385
|
13.1
|
%
|
$
|
33,930
|
||||||
|
||||||||||||||||
Net
internal growth rate - core commissions and fees
|
8.9
|
%
|
3.9
|
%
|
4.5
|
%
|
||||||||||
Employee
compensation and benefits ratio
|
38.5
|
%
|
40.5
|
%
|
40.4
|
%
|
||||||||||
Other
operating expenses ratio
|
16.5
|
%
|
15.2
|
%
|
14.8
|
%
|
||||||||||
|
||||||||||||||||
Capital
expenditures
|
$
|
3,750
|
$
|
3,067
|
$
|
2,693
|
||||||||||
Total
assets at December 31
|
$
|
544,272
|
$
|
445,146
|
$
|
359,551
|
2006
|
Percent
Change
|
2005
|
Percent
Change
|
2004
|
||||||||||||
REVENUES
|
||||||||||||||||
Commissions
and fees
|
$
|
151,278
|
25.1
|
%
|
$
|
120,889
|
218.7
|
%
|
$
|
37,929
|
||||||
Profit-sharing
contingent commissions
|
7,990
|
71.9
|
%
|
4,648
|
27.1
|
%
|
3,656
|
|||||||||
Investment
income
|
4,017
|
151.2
|
%
|
1,599
|
-
|
-
|
||||||||||
Other
(loss) income, net
|
61
|
(365.2
|
)%
|
(23
|
)
|
(227.8
|
)%
|
18
|
||||||||
Total
revenues
|
163,346
|
28.5
|
%
|
127,113
|
205.5
|
%
|
41,603
|
|||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Employee
compensation and benefits
|
78,459
|
32.0
|
%
|
59,432
|
200.4
|
%
|
19,782
|
|||||||||
Non-cash
stock-based compensation
|
519
|
216.5
|
%
|
164
|
64.0
|
%
|
100
|
|||||||||
Other
operating expenses
|
28,582
|
44.3
|
%
|
19,808
|
153.9
|
%
|
7,800
|
|||||||||
Amortization
|
8,087
|
42.6
|
%
|
5,672
|
649.3
|
%
|
757
|
|||||||||
Depreciation
|
2,075
|
61.5
|
%
|
1,285
|
153.0
|
%
|
508
|
|||||||||
Interest
|
18,759
|
50.7
|
%
|
12,446
|
843.6
|
%
|
1,319
|
|||||||||
Total
expenses
|
136,481
|
38.1
|
%
|
98,807
|
226.5
|
%
|
30,266
|
|||||||||
|
||||||||||||||||
Income
before income taxes
|
$
|
26,865
|
(5.1
|
)%
|
$
|
28,306
|
149.7
|
%
|
$
|
11,337
|
||||||
|
||||||||||||||||
Net
internal growth rate - core commissions and fees
|
3.9
|
%
|
24.9
|
%
|
14.1
|
%
|
||||||||||
Employee
compensation and benefits ratio
|
48.0
|
%
|
46.8
|
%
|
47.5
|
%
|
||||||||||
Other
operating expenses ratio
|
17.5
|
%
|
15.6
|
%
|
18.7
|
%
|
||||||||||
|
||||||||||||||||
Capital
expenditures
|
$
|
2,085
|
$
|
1,969
|
$
|
694
|
||||||||||
Total
assets at December 31
|
$
|
618,374
|
$
|
476,653
|
$
|
128,699
|
2006
|
Percent
Change
|
2005
|
Percent
Change
|
2004
|
||||||||||||
REVENUES
|
||||||||||||||||
Commissions
and fees
|
$
|
32,561
|
22.6
|
%
|
$
|
26,565
|
2.9
|
%
|
$
|
25,807
|
||||||
Profit-sharing
contingent commissions
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Investment
income
|
45
|
-
|
-
|
-
|
-
|
|||||||||||
Other
income, net
|
-
|
-
|
952
|
(5.0
|
)%
|
1,002
|
||||||||||
Total
revenues
|
32,606
|
18.5
|
%
|
27,517
|
2.6
|
%
|
26,809
|
|||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Employee
compensation and benefits
|
18,147
|
16.5
|
%
|
15,582
|
4.2
|
%
|
14,961
|
|||||||||
Non-cash
stock-based compensation
|
118
|
(3.3
|
)%
|
122
|
13.0
|
%
|
108
|
|||||||||
Other
operating expenses
|
5,062
|
16.7
|
%
|
4,339
|
(11.0
|
)%
|
4,873
|
|||||||||
Amortization
|
343
|
697.7
|
%
|
43
|
19.4
|
%
|
36
|
|||||||||
Depreciation
|
533
|
22.5
|
%
|
435
|
12.4
|
%
|
387
|
|||||||||
Interest
|
440
|
NMF
|
%
|
4
|
(94.2
|
)%
|
69
|
|||||||||
Total
expenses
|
24,643
|
20.1
|
%
|
20,525
|
0.4
|
%
|
20,434
|
|||||||||
|
||||||||||||||||
Income
before income taxes
|
$
|
7,963
|
13.9
|
%
|
$
|
6,992
|
9.7
|
%
|
$
|
6,375
|
||||||
|
||||||||||||||||
Net
internal growth rate - core commissions and fees
|
5.6
|
%
|
9.2
|
%
|
17.5
|
%
|
||||||||||
Employee
compensation and benefits ratio
|
55.7
|
%
|
56.6
|
%
|
55.8
|
%
|
||||||||||
Other
operating expenses ratio
|
15.5
|
%
|
15.8
|
%
|
18.2
|
%
|
||||||||||
|
||||||||||||||||
Capital
expenditures
|
$
|
588
|
$
|
350
|
$
|
788
|
||||||||||
Total
assets at December 31
|
$
|
32,554
|
$
|
18,766
|
$
|
13,760
|
(in
thousands, except per share data)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
2006
|
|
|
|
|
|
|
|
|
|
||||
Total
revenues
|
|
$
|
230,582
|
|
$
|
220,807
|
|
$
|
211,965
|
|
$
|
214,650
|
|
Income
before income taxes
|
|
$
|
81,436
|
|
$
|
70,967
|
|
$
|
65,565
|
|
$
|
62,073
|
|
Net
income
|
|
$
|
50,026
|
|
$
|
44,431
|
|
$
|
40,270
|
|
$
|
37,623
|
|
Net
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
$
|
0.32
|
|
$
|
0.29
|
|
$
|
0.27
|
|
Diluted
|
|
$
|
0.36
|
|
$
|
0.32
|
|
$
|
0.29
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
202,374
|
|
$
|
195,931
|
|
$
|
190,645
|
|
$
|
196,857
|
|
Income
before income taxes
|
|
$
|
70,513
|
|
$
|
60,468
|
|
$
|
55,689
|
|
$
|
57,460
|
|
Net
income
|
|
$
|
43,018
|
|
$
|
37,033
|
|
$
|
34,783
|
|
$
|
35,717
|
|
Net
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.31
|
|
$
|
0.27
|
|
$
|
0.25
|
|
$
|
0.26
|
|
Diluted
|
|
$
|
0.31
|
|
$
|
0.27
|
|
$
|
0.25
|
|
$
|
0.25
|
|
(in
thousands)
|
Total
|
Less
Than
1
Year
|
1-3
Years
|
4-5
Years
|
After
5
Years
|
|||||||||||
|
|
|
|
|
|
|||||||||||
Long-term
debt
|
$
|
244,324
|
$
|
18,074
|
$
|
1,034
|
$
|
100,216
|
$
|
125,000
|
||||||
Capital
lease obligations
|
10
|
8
|
2
|
-
|
-
|
|||||||||||
Other
long-term liabilities
|
11,967
|
9,409
|
309
|
362
|
1,887
|
|||||||||||
Operating
leases
|
82,293
|
20,955
|
33,601
|
18,339
|
9,398
|
|||||||||||
Interest
obligations
|
75,771
|
12,326
|
23,392
|
23,080
|
16,973
|
|||||||||||
Maximum
future acquisition contingency payments
|
169,947
|
37,728
|
132,219
|
-
|
-
|
|||||||||||
|
||||||||||||||||
Total
contractual cash obligations
|
$
|
584,312
|
$
|
98,500
|
$
|
190,557
|
$
|
141,997
|
$
|
153,258
|
|
|
|
|
|
(in
thousands, except percentages)
|
Contractual/
Notional
Amount
|
Fair
Value
|
Weighted
Average
Pay
Rates
|
Weighted
Average
Received
Rates
|
|
|
|
|
|
Interest
rate swap agreement
|
$12,857
|
$60
|
4.53%
|
5.30%
|
|
Page
No.
|
Consolidated
Statements of Income for the years ended December 31, 2006, 2005 and
2004
|
35
|
Consolidated
Balance Sheets as of December 31, 2006 and 2005
|
36
|
Consolidated
Statements of Shareholders’ Equity for the years ended December 31, 2006,
2005 and 2004
|
37
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2006, 2005
and
2004
|
38
|
|
|
Notes
to Consolidated Financial Statements for the years ended December
31,
2006, 2005 and 2004
|
39
|
Note
1: Summary of Significant Accounting Policies
|
39
|
Note
2: Business Combinations
|
43
|
Note
3: Goodwill
|
46
|
Note
4: Amortizable Intangible Assets
|
47
|
Note
5: Investments
|
47
|
Note
6: Fixed Assets
|
48
|
Note
7: Accrued Expenses
|
48
|
Note
8: Long-Term Debt
|
48
|
Note
9: Income Taxes
|
50
|
Note
10: Employee Savings Plan
|
51
|
Note
11: Stock-Based Compensation
|
51
|
Note
12: Supplemental Disclosures of Cash Flow Information
|
54
|
Note
13: Commitments and Contingencies
|
54
|
Note
14: Business Concentrations
|
57
|
Note
15: Quarterly Operating Results (Unaudited)
|
57
|
Note
16: Segment Information
|
57
|
Note
17: Subsequent Events
|
58
|
|
|
Report
of Independent Registered Public Accounting Firm on Consolidated
Financial
Statements
|
59
|
Management’s
Report on Internal Control Over Financial Reporting
|
60
|
Report
of Independent Registered Public Accounting Firm on Internal Control
Over
Financial Reporting
|
61
|
|
Year
Ended December 31,
|
|||||||||
(in
thousands, except per share data)
|
2006
|
2005
|
2004
|
|||||||
REVENUES
|
|
|
|
|||||||
Commissions
and fees
|
$
|
864,663
|
$
|
775,543
|
$
|
638,267
|
||||
Investment
income
|
11,479
|
6,578
|
2,715
|
|||||||
Other
income, net
|
1,862
|
3,686
|
5,952
|
|||||||
Total
revenues
|
878,004
|
785,807
|
646,934
|
|||||||
|
||||||||||
EXPENSES
|
||||||||||
Employee
compensation and benefits
|
404,891
|
374,943
|
314,221
|
|||||||
Non-cash
stock-based compensation
|
5,416
|
3,337
|
2,625
|
|||||||
Other
operating expenses
|
126,492
|
105,622
|
84,927
|
|||||||
Amortization
|
36,498
|
33,245
|
22,146
|
|||||||
Depreciation
|
11,309
|
10,061
|
8,910
|
|||||||
Interest
|
13,357
|
14,469
|
7,156
|
|||||||
Total
expenses
|
597,963
|
541,677
|
439,985
|
|||||||
|
||||||||||
Income
before income taxes
|
280,041
|
244,130
|
206,949
|
|||||||
|
||||||||||
Income
taxes
|
107,691
|
93,579
|
78,106
|
|||||||
|
||||||||||
Net
income
|
$
|
172,350
|
$
|
150,551
|
$
|
128,843
|
||||
|
||||||||||
Net
income per share:
|
||||||||||
Basic
|
$
|
1.23
|
$
|
1.09
|
$
|
0.93
|
||||
Diluted
|
$
|
1.22
|
$
|
1.08
|
$
|
0.93
|
||||
|
||||||||||
Weighted
average number of shares outstanding:
|
||||||||||
Basic
|
139,634
|
138,563
|
137,818
|
|||||||
Diluted
|
141,020
|
139,776
|
138,888
|
|||||||
|
||||||||||
Dividends
declared per share
|
$
|
0.21
|
$
|
0.17
|
$
|
0.1450
|
|
At
December 31,
|
||||||
(in
thousands, except per share data)
|
2006
|
2005
|
|||||
|
|
|
|||||
ASSETS
|
|
|
|||||
Current
Assets:
|
|
|
|||||
Cash
and cash equivalents
|
$
|
88,490
|
$
|
100,580
|
|||
Restricted
cash and investments
|
242,187
|
229,872
|
|||||
Short-term
investments
|
2,909
|
2,748
|
|||||
Premiums,
commissions and fees receivable
|
282,440
|
257,930
|
|||||
Other
current assets
|
32,180
|
28,637
|
|||||
Total
current assets
|
648,206
|
619,767
|
|||||
|
|||||||
Fixed
assets, net
|
44,170
|
39,398
|
|||||
Goodwill
|
684,521
|
549,040
|
|||||
Amortizable
intangible assets, net
|
396,069
|
377,907
|
|||||
Investments
|
15,826
|
8,421
|
|||||
Other
assets
|
19,160
|
14,127
|
|||||
Total
assets
|
$
|
1,807,952
|
$
|
1,608,660
|
|||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Premiums
payable to insurance companies
|
$
|
435,449
|
$
|
397,466
|
|||
Premium
deposits and credits due customers
|
33,273
|
34,027
|
|||||
Accounts
payable
|
17,854
|
21,161
|
|||||
Accrued
expenses
|
86,009
|
74,534
|
|||||
Current
portion of long-term debt
|
18,082
|
55,630
|
|||||
Total
current liabilities
|
590,667
|
582,818
|
|||||
|
|||||||
Long-term
debt
|
226,252
|
214,179
|
|||||
|
|||||||
Deferred
income taxes, net
|
49,721
|
35,489
|
|||||
|
|||||||
Other
liabilities
|
11,967
|
11,830
|
|||||
Commitments
and contingencies (Note 13)
|
|||||||
|
|||||||
Shareholders’
Equity:
|
|||||||
Common
stock, par value $0.10 per share; authorized 280,000 shares; issued
and outstanding
140,016 at 2006 and 139,383 at 2005
|
14,002
|
13,938
|
|||||
Additional
paid-in capital
|
210,543
|
193,313
|
|||||
Retained
earnings
|
695,656
|
552,647
|
|||||
Accumulated
other comprehensive income, net of related income tax effect
of $5,359 at 2006 and $2,606 at 2005
|
9,144
|
4,446
|
|||||
|
|||||||
Total
shareholders’ equity
|
929,345
|
764,344
|
|||||
|
|||||||
Total
liabilities and shareholders’ equity
|
$
|
1,807,952
|
$
|
1,608,660
|
Common
Stock
|
Accumulated
Other
Comprehensive
Income
|
||||||||||||||||||
(in
thousands, except per share data)
|
Shares
Outstanding
|
Par
Value
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Total
|
||||||||||||||
Balance
at January 1, 2004
|
137,122
|
$
|
13,712
|
$
|
163,274
|
$
|
316,822
|
$
|
4,227
|
$
|
498,035
|
||||||||
Net
income
|
128,843
|
128,843
|
|||||||||||||||||
Net
unrealized holding loss on available-for-sale securities
|
(649
|
)
|
(649
|
)
|
|||||||||||||||
Net
gain on cash-flow hedging derivative
|
889
|
889
|
|||||||||||||||||
Comprehensive
income
|
129,083
|
||||||||||||||||||
Common
stock issued for acquisitions
|
400
|
40
|
6,204
|
6,244
|
|||||||||||||||
Common
stock issued for employee stock benefit plans
|
790
|
80
|
10,525
|
10,605
|
|||||||||||||||
Income
tax benefit from exercise of stock options
|
234
|
234
|
|||||||||||||||||
Common
stock issued to directors
|
6
|
127
|
127
|
||||||||||||||||
Cash
dividends paid ($0.1450 per share)
|
(20,003
|
)
|
(20,003
|
)
|
|||||||||||||||
Balance
at December 31, 2004
|
138,318
|
13,832
|
180,364
|
425,662
|
4,467
|
624,325
|
|||||||||||||
Net
income
|
150,551
|
150,551
|
|||||||||||||||||
Net
unrealized holding loss on available-for-sale securities
|
(512
|
)
|
(512
|
)
|
|||||||||||||||
Net
gain on cash-flow hedging derivative
|
491
|
491
|
|||||||||||||||||
Comprehensive
income
|
150,530
|
||||||||||||||||||
Common
stock issued for employee stock benefit plans
|
1,057
|
105
|
12,769
|
12,874
|
|||||||||||||||
Common
stock issued to directors
|
8
|
1
|
180
|
181
|
|||||||||||||||
Cash
dividends paid ($0.17 per share)
|
(23,566
|
)
|
(23,566
|
)
|
|||||||||||||||
Balance
at December 31, 2005
|
139,383
|
13,938
|
193,313
|
552,647
|
4,446
|
764,344
|
|||||||||||||
Net
income
|
172,350
|
172,350
|
|||||||||||||||||
Net
unrealized holding gain on available-for-sale securities
|
4,697
|
4,697
|
|||||||||||||||||
Net
gain on cash-flow hedging derivative
|
1
|
1
|
|||||||||||||||||
Comprehensive
income
|
177,048
|
||||||||||||||||||
Common
stock issued for employee stock benefit plans
|
624
|
62
|
16,372
|
16,434
|
|||||||||||||||
Income
tax benefit from exercise of stock options
|
604
|
604
|
|||||||||||||||||
Common
stock issued to directors
|
9
|
2
|
254
|
256
|
|||||||||||||||
Cash
dividends paid ($0.21 per share)
|
(29,341
|
)
|
(29,341
|
)
|
|||||||||||||||
Balance
at December 31, 2006
|
140,016
|
$
|
14,002
|
$
|
210,543
|
$
|
695,656
|
$
|
9,144
|
$
|
929,345
|
Year
Ended December 31,
|
||||||||||
(in
thousands)
|
2006
|
2005
|
2004
|
|||||||
|
||||||||||
Cash
flows from operating activities:
|
||||||||||
Net
income
|
$
|
172,350
|
$
|
150,551
|
$
|
128,843
|
||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||
Amortization
|
36,498
|
33,245
|
22,146
|
|||||||
Depreciation
|
11,309
|
10,061
|
8,910
|
|||||||
Non-cash
stock-based compensation
|
5,416
|
3,337
|
2,625
|
|||||||
Deferred
income taxes
|
11,480
|
10,642
|
8,840
|
|||||||
Income
tax benefit from exercise of stock options
|
-
|
-
|
234
|
|||||||
Net
gain on sales of investments, fixed assets
and customer accounts
|
(781
|
)
|
(2,478
|
)
|
(5,999
|
)
|
||||
Changes
in operating assets and liabilities, net of effect from
acquisitions and divestitures:
|
||||||||||
Restricted
cash and investments (increase)
|
(12,315
|
)
|
(82,389
|
)
|
(30,940
|
)
|
||||
Premiums,
commissions and fees receivable (increase)
|
(23,564
|
)
|
(84,058
|
)
|
(22,907
|
)
|
||||
Other
assets (increase) decrease
|
(6,301
|
)
|
1,072
|
(3,953
|
)
|
|||||
Premiums
payable to insurance companies increase
|
27,314
|
153,032
|
41,473
|
|||||||
Premium
deposits and credits due customers (decrease) increase
|
(754
|
)
|
1,754
|
9,997
|
||||||
Accounts
payable (decrease) increase
|
(3,561
|
)
|
4,377
|
3,608
|
||||||
Accrued
expenses increase
|
8,441
|
14,854
|
7,140
|
|||||||
Other
liabilities (decrease) increase
|
(318
|
)
|
1,088
|
186
|
||||||
Net
cash provided by operating activities
|
225,214
|
215,088
|
170,203
|
|||||||
|
||||||||||
Cash
flows from investing activities:
|
||||||||||
Additions
to fixed assets
|
(14,979
|
)
|
(13,426
|
)
|
(10,152
|
)
|
||||
Payments
for businesses acquired, net of cash acquired
|
(143,737
|
)
|
(262,181
|
)
|
(202,664
|
)
|
||||
Proceeds
from sales of fixed assets and customer accounts
|
1,399
|
2,362
|
6,330
|
|||||||
Purchases
of investments
|
(211
|
)
|
(299
|
)
|
(3,142
|
)
|
||||
Proceeds
from sales of investments
|
119
|
896
|
1,107
|
|||||||
Net
cash used in investing activities
|
(157,409
|
)
|
(272,648
|
)
|
(208,521
|
)
|
||||
|
||||||||||
Cash
flows from financing activities:
|
||||||||||
Proceeds
from long-term debt
|
25,000
|
-
|
200,000
|
|||||||
Payments
on long-term debt
|
(87,432
|
)
|
(16,117
|
)
|
(18,606
|
)
|
||||
Borrowings
on revolving credit facility
|
40,000
|
50,000
|
50,000
|
|||||||
Payments
on revolving credit facility
|
(40,000
|
)
|
(50,000
|
)
|
(50,000
|
)
|
||||
Income
tax benefit from exercise of stock options
|
604
|
-
|
-
|
|||||||
Issuances
of common stock for employee stock benefit plans
|
11,274
|
9,717
|
8,107
|
|||||||
Cash
dividends paid
|
(29,341
|
)
|
(23,566
|
)
|
(20,003
|
)
|
||||
Net
cash (used in) provided by financing activities
|
(79,895
|
)
|
(29,966
|
)
|
169,498
|
|||||
|
||||||||||
Net
(decrease) increase in cash and cash equivalents
|
(12,090
|
)
|
(87,526
|
)
|
131,180
|
|||||
Cash
and cash equivalents at beginning of year
|
100,580
|
188,106
|
56,926
|
|||||||
Cash
and cash equivalents at end of year
|
$
|
88,490
|
$
|
100,580
|
$
|
188,106
|
|
|
Year
Ended December 31,
|
|
|||||||
(in
thousands, except per share data)
|
|
2006
|
|
2005
|
|
2004
|
|
|||
|
|
|
|
|
|
|
|
|||
Net
income
|
|
$
|
172,350
|
|
$
|
150,551
|
|
$
|
128,843
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding
|
|
|
139,634
|
|
|
138,563
|
|
|
137,818
|
|
Dilutive
effect of stock options using the treasury stock method
|
|
|
1,386
|
|
|
1,213
|
|
|
1,070
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
141,020
|
|
|
139,776
|
|
|
138,888
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.23
|
|
$
|
1.09
|
|
$
|
0.93
|
|
Diluted
|
|
$
|
1.22
|
|
$
|
1.08
|
|
$
|
0.93
|
|
Year
Ended December 31,
|
|||||||
(in
thousands, except per share data)
|
2005
|
2004
|
|||||
Net
income as reported
|
$
|
150,551
|
$
|
128,843
|
|||
Total
stock-based employee compensation cost included in the determination
of
net income, net of related income tax effects
|
2,061
|
1,638
|
|||||
Total
stock-based employee compensation cost determined under fair
value method
for all awards, net of related income tax effects
|
(5,069
|
)
|
(3,436
|
)
|
|||
Pro
forma net income
|
$
|
147,543
|
$
|
127,045
|
|||
Net
income per share:
|
|||||||
Basic,
as reported
|
$
|
1.09
|
$
|
0.93
|
|||
Basic,
pro forma
|
$
|
1.06
|
$
|
0.92
|
|||
|
|||||||
Diluted,
as reported
|
$
|
1.08
|
$
|
0.93
|
|||
Diluted,
pro forma
|
$
|
1.06
|
$
|
0.91
|
· |
Compensation
cost for all share-based awards (expected to vest) granted prior
to, but
not yet vested as of January 1, 2006, based upon grant-date fair
value
estimated in accordance with the original provisions of SFAS 123;
and
|
· |
Compensation
cost for all share-based awards (expected to vest) granted during
the
year ended December 31, 2006 based upon grant-date fair value
estimated in accordance with the provisions of SFAS
123R.
|
(in
thousands)
|
2006
|
|||
Non-cash
stock-based compensation
|
$
|
(564
|
)
|
|
Reduction
(increase) in:
|
||||
Provision
for income taxes
|
$
|
(217
|
)
|
|
Net
income
|
$
|
(347
|
)
|
|
Basic
earnings per share
|
$
|
—
|
||
Diluted
earnings per share
|
$
|
—
|
||
Increase
(decrease) in deferred tax assets
|
$
|
(217
|
)
|
Name
|
Business
Segment
|
2006
Date
of
Acquisition
|
Net
Cash
Paid
|
Notes
Payable
|
Recorded
Purchase
Price
|
||||||||
Axiom
Intermediaries, LLC
|
Wholesale
Brokerage
|
January
1
|
$
|
60,333
|
$
|
—
|
$
|
60,333
|
|||||
Delaware
Valley Underwriting Agency,
Inc., et al (DVUA) |
Wholesale
Brokerage/National Programs
|
September
30
|
46,333
|
—
|
46,333
|
||||||||
Other
|
Various
|
Various
|
32,029
|
3,696
|
35,725
|
||||||||
Total
|
$
|
138,695
|
$
|
3,696
|
$
|
142,391
|
(in
thousands)
|
Axiom
|
DVUA
|
Other
|
Total
|
|||||||||
Fiduciary
cash
|
$
|
9,598
|
$
|
—
|
$
|
—
|
$
|
9,598
|
|||||
Other
current assets
|
445
|
7
|
567
|
1,019
|
|||||||||
Fixed
assets
|
435
|
648
|
476
|
1,559
|
|||||||||
Purchased
customer accounts
|
14,022
|
22,667
|
18,682
|
55,371
|
|||||||||
Noncompete
agreements
|
31
|
52
|
581
|
664
|
|||||||||
Goodwill
|
45,600
|
24,942
|
17,107
|
87,649
|
|||||||||
Other
assets
|
—
|
9
|
—
|
9
|
|||||||||
Total
assets acquired
|
70,131
|
48,325
|
37,413
|
155,869
|
|||||||||
Other
current liabilities
|
(9,798
|
)
|
(1,843
|
)
|
(1,496
|
)
|
(13,137
|
)
|
|||||
Other
liabilities
|
—
|
(149
|
)
|
(192
|
)
|
(341
|
)
|
||||||
Total
liabilities assumed
|
(9,798
|
)
|
(1,992
|
)
|
(1,688
|
)
|
(13,478
|
)
|
|||||
Net
assets acquired
|
$
|
60,333
|
$
|
46,333
|
$
|
35,725
|
$
|
142,391
|
|
|
Year
Ended December 31,
|
|
||||
(in
thousands, except per share data)
|
|
2006
|
2005
|
|
|||
(UNAUDITED)
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
902,345
|
|
$
|
842,698
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
$
|
288,643
|
|
$
|
263,326
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
177,644
|
|
$
|
162,389
|
|
|
|
|
|
|
|
|
|
Net
income per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.27
|
|
$
|
1.17
|
|
Diluted
|
|
$
|
1.26
|
|
$
|
1.16
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
139,634
|
|
|
138,563
|
|
Diluted
|
|
|
141,020
|
|
|
139,776
|
|
Name
of Acquisitions
|
|
Business
Segment
|
|
2005
Date
of
Acquisition
|
|
Net
Cash
Paid
|
|
Notes
Payable
|
|
Recorded
Purchase
Price
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
American
Specialty Companies, Inc., et al.
|
|
|
National
Programs
|
|
|
January
1
|
|
$
|
23,782
|
|
$
|
-
|
|
$
|
23,782
|
|
Braishfield
Associates, Inc.
|
|
|
Wholesale
Brokerage
|
|
|
January
1
|
|
|
10,215
|
|
|
-
|
|
|
10,215
|
|
Hull
& Company, Inc., et al.
|
|
|
Wholesale
Brokerage
|
|
|
March
1
|
|
|
140,169
|
|
|
35,000
|
|
|
175,169
|
|
Weible
& Cahill, LLC
|
|
|
Retail
|
|
|
October
1
|
|
|
17,971
|
|
|
-
|
|
|
17,971
|
|
Timothy
R. Downey Insurance, Inc.
|
|
|
National
Programs
|
|
|
November
1
|
|
|
14,302
|
|
|
1,374
|
|
|
15,676
|
|
Other
|
|
|
Various
|
|
|
Various
|
|
|
37,567
|
|
|
1,698
|
|
|
39,265
|
|
Total
|
|
|
|
|
|
|
|
$
|
244,006
|
|
$
|
38,072
|
|
$
|
282,078
|
|
|
|
American
Specialty
|
|
Braishfield
|
|
Hull
|
|
Weible
&
Cahill
|
|
Downey
|
|
Other
|
|
Total
|
|
|||||||
Other
current assets
|
|
$
|
112
|
|
$
|
50
|
|
$
|
173
|
|
$
|
266
|
|
$
|
-
|
|
$
|
1,117
|
|
$
|
1,718
|
|
Fixed
assets
|
|
|
370
|
|
|
25
|
|
|
2,500
|
|
|
111
|
|
|
89
|
|
|
180
|
|
|
3,275
|
|
Purchased
customer accounts
|
|
|
7,410
|
|
|
4,835
|
|
|
68,000
|
|
|
10,825
|
|
|
9,042
|
|
|
17,633
|
|
|
117,745
|
|
Noncompete
agreements
|
|
|
38
|
|
|
50
|
|
|
95
|
|
|
11
|
|
|
55
|
|
|
887
|
|
|
1,136
|
|
Goodwill
|
|
|
18,247
|
|
|
5,408
|
|
|
105,463
|
|
|
7,092
|
|
|
8,382
|
|
|
20,157
|
|
|
164,749
|
|
Total
assets acquired
|
|
|
26,177
|
|
|
10,368
|
|
|
176,231
|
|
|
18,305
|
|
|
17,568
|
|
|
39,974
|
|
|
288,623
|
|
Other
current liabilities
|
|
|
(59
|
)
|
|
(153
|
)
|
|
(1,062
|
)
|
|
(100
|
)
|
|
(1,892
|
)
|
|
(709
|
)
|
|
(3,975
|
)
|
Other
liabilities
|
|
|
(2,336
|
)
|
|
-
|
|
|
-
|
|
|
(234
|
)
|
|
-
|
|
|
-
|
|
|
(2,570
|
)
|
Total
liabilities assumed
|
|
|
(2,395
|
)
|
|
(153
|
)
|
|
(1,062
|
)
|
|
(334
|
)
|
|
(1,892
|
)
|
|
(709
|
)
|
|
(6,545
|
)
|
Net
assets acquired
|
|
$
|
23,782
|
|
$
|
10,215
|
|
$
|
175,169
|
|
$
|
17,971
|
|
$
|
15,676
|
|
$
|
39,265
|
|
$
|
282,078
|
|
|
|
Year
Ended December 31,
|
|
||||
(in
thousands, except per share data)
|
|
2005
|
2004
|
|
|||
(UNAUDITED)
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
818,783
|
|
$
|
769,815
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
$
|
255,268
|
|
$
|
246,978
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
157,420
|
|
$
|
153,765
|
|
|
|
|
|
|
|
|
|
Net
income per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.14
|
|
$
|
1.12
|
|
Diluted
|
|
$
|
1.13
|
|
$
|
1.11
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
138,563
|
|
|
137,818
|
|
Diluted
|
|
|
139,776
|
|
|
138,888
|
|
(in
thousands)
|
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Service
|
|
Total
|
|
|||||
Balance
as of January 1, 2005
|
|
$
|
259,290
|
|
$
|
84,737
|
|
$
|
16,760
|
|
$
|
56
|
|
$
|
360,843
|
|
Goodwill
of acquired businesses
|
|
|
33,243
|
|
|
34,313
|
|
|
120,990
|
|
|
-
|
|
|
188,546
|
|
Goodwill
disposed of relating to sales of businesses
|
|
|
(321
|
)
|
|
(28
|
)
|
|
-
|
|
|
-
|
|
|
(349
|
)
|
Balance
as of December 31, 2005
|
|
|
292,212
|
|
|
119,022
|
|
|
137,750
|
|
|
56
|
|
|
549,040
|
|
Goodwill
of acquired businesses
|
|
|
38,681
|
|
|
23,307
|
|
|
72,115
|
|
|
2,767
|
|
|
136,870
|
|
Goodwill
disposed of relating to sales of businesses
|
|
|
(1,389
|
)
|
|
-
|
|
-
|
|
|
-
|
|
|
(1,389
|
)
|
|
Balance
as of December 31, 2006
|
|
$
|
329,504
|
|
$
|
142,329
|
|
$
|
209,865
|
|
$
|
2,823
|
|
$
|
684,521
|
|
2006
|
2005
|
||||||||||||||||||||||||
(in
thousands)
|
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
Carrying
Value
|
Weighted
Average
Life
(years)
|
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
Carrying
Value
|
Weighted
Average
Life
(years)
|
|||||||||||||||||
Purchased
customer accounts
|
$
|
541,967
|
$
|
(149,764
|
)
|
$
|
392,203
|
14.9
|
$
|
498,580
|
$
|
(126,161
|
)
|
$
|
372,419
|
14.9
|
|||||||||
Noncompete
agreements
|
25,589
|
(21,723
|
)
|
3,866
|
7.7
|
34,154
|
(28,666
|
)
|
5,488
|
7.0
|
|||||||||||||||
Total
|
$
|
567,556
|
$
|
(171,487
|
)
|
$
|
396,069
|
$
|
532,734
|
$
|
(154,827
|
)
|
$
|
377,907
|
|
|
2006
|
|
2005
|
||||||||
|
|
Carrying
Value
|
|
Carrying
Value
|
||||||||
(in
thousands)
|
|
Current
|
|
Non-Current
|
|
Current
|
|
Non-Current
|
||||
Available-for-sale
marketable equity securities
|
|
$
|
240
|
|
$
|
15,181
|
|
$
|
216
|
|
$
|
7,644
|
Non-marketable
equity securities and certificates of deposit
|
|
|
2,669
|
|
|
645
|
|
|
2,532
|
|
|
777
|
Total
investments
|
|
$
|
2,909
|
|
$
|
15,826
|
|
$
|
2,748
|
|
$
|
8,421
|
(in
thousands)
|
|
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated
Fair
Value
|
||||
Marketable
equity securities:
|
|
|
|
|
|
|
|
|
||||
2006
|
|
$
|
550
|
|
$
|
14,871
|
|
$
|
-
|
$
|
15,421
|
|
2005
|
|
$
|
550
|
|
$
|
7,312
|
|
$
|
(2
|
)
|
$
|
7,860
|
(in
thousands)
|
|
Proceeds
|
|
Gross
Realized
Gains
|
|
Gross
Realized
Losses
|
|
|||
|
|
|
|
|
|
|
|
|||
2006
|
|
$
|
119
|
|
$
|
25
|
|
$
|
-
|
|
2005
|
|
$
|
896
|
|
$
|
87
|
|
$
|
-
|
|
2004
|
|
$
|
1,107
|
|
$
|
526
|
|
$
|
(118
|
)
|
(in
thousands)
|
2006
|
2005
|
|||||
Furniture,
fixtures and equipment
|
$
|
90,146
|
$
|
83,275
|
|||
Leasehold
improvements
|
10,590
|
6,993
|
|||||
Land,
buildings and improvements
|
487
|
487
|
|||||
|
101,223
|
90,755
|
|||||
Less
accumulated depreciation and amortization
|
(57,053
|
)
|
(51,357
|
)
|
|||
Total
|
$
|
44,170
|
$
|
39,398
|
(in
thousands)
|
|
2006
|
|
2005
|
|
||
Accrued
bonuses
|
|
$
|
42,426
|
|
$
|
35,613
|
|
Accrued
compensation and benefits
|
|
|
16,213
|
|
|
15,179
|
|
Accrued
rent and vendor expenses
|
|
|
7,937
|
|
|
6,504
|
|
Reserve
for policy cancellations
|
|
|
7,432
|
|
|
5,019
|
|
Accrued
interest
|
|
|
4,524
|
|
|
5,302
|
|
Other
|
|
|
7,477
|
|
|
6,917
|
|
Total
|
|
$
|
86,009
|
|
$
|
74,534
|
|
(in
thousands)
|
2006
|
2005
|
|||||
Unsecured
Senior Notes
|
|
$
|
225,000
|
|
$
|
200,000
|
|
Term
loan agreements
|
|
|
12,857
|
|
|
25,714
|
|
Revolving
credit facility
|
|
|
-
|
|
|
-
|
|
Acquisition
notes payable
|
|
|
6,310
|
|
|
43,889
|
|
Other
notes payable
|
|
|
167
|
|
|
206
|
|
Total
debt
|
|
|
244,334
|
|
|
269,809
|
|
Less
current portion
|
|
|
(18,082
|
)
|
|
(55,630
|
) |
Long-term
debt
|
|
$
|
226,252
|
|
$
|
214,179
|
(in
thousands)
|
|
2006
|
|
2005
|
|
2004
|
|
|||
Current:
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
83,792
|
|
$
|
72,550
|
|
$
|
59,478
|
|
State
|
|
|
12,419
|
|
|
10,387
|
|
|
9,788
|
|
Total
current provision
|
|
|
96,211
|
|
|
82,937
|
|
|
69,266
|
|
Deferred:
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
9,139
|
|
|
8,547
|
|
|
6,967
|
|
State
|
|
|
2,341
|
|
|
2,095
|
|
|
1,873
|
|
Total
deferred provision
|
|
|
11,480
|
|
|
10,642
|
|
|
8,840
|
|
Total
tax provision
|
|
$
|
107,691
|
|
$
|
93,579
|
|
$
|
78,106
|
|
|
|
2006
|
|
2005
|
|
2004
|
|
|||
Federal
statutory tax rate
|
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State
income taxes, net of federal income tax benefit
|
|
|
3.4
|
|
|
3.3
|
|
|
3.7
|
|
State
income tax credits
|
|
|
-
|
|
|
-
|
|
(0.5
|
)
|
|
Non-deductible
employee stock purchase plan expense
|
0.4
|
-
|
-
|
|||||||
Interest
exempt from taxation and dividend exclusion
|
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
Other,
net
|
|
|
-
|
|
|
0.2
|
|
(0.3
|
)
|
|
Effective
tax rate
|
|
|
38.5
|
%
|
|
38.3
|
%
|
|
37.7
|
%
|
(in
thousands)
|
|
2006
|
|
2005
|
|
||
Deferred
tax liabilities:
|
|
|
|
|
|
||
Fixed
assets
|
|
$
|
3,051
|
|
$
|
3,454
|
|
Net
unrealized holding gain of available-for-sale securities
|
|
|
5,337
|
|
|
2,584
|
|
Prepaid
insurance and pension
|
|
|
2,516
|
|
|
2,219
|
|
Net
gain on cash-flow hedging derivative
|
|
|
22
|
|
|
22
|
|
Intangible
assets
|
|
|
51,127
|
|
|
37,379
|
|
Total
deferred tax liabilities
|
|
|
62,053
|
|
|
45,658
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
|
Deferred
compensation
|
|
|
5,886
|
|
|
4,984
|
|
Accruals
and reserves
|
|
|
6,310
|
|
|
4,973
|
|
Net
operating loss carryforwards
|
|
|
634
|
|
|
537
|
|
Valuation
allowance for deferred tax assets
|
|
|
(498
|
)
|
|
(325
|
)
|
Total
deferred tax assets
|
|
|
12,332
|
|
|
10,169
|
|
Net
deferred tax liability
|
|
$
|
49,721
|
|
$
|
35,489
|
|
Weighted-
Average
Grant
Date
Fair
Value
|
Granted
Shares
|
Awarded
Shares
|
Shares
Not
Yet
Awarded
|
|||||||
Outstanding
at January 1, 2006
|
$
|
5.21
|
5,851,682
|
5,125,304
|
726,378
|
|||||
Granted
|
$
|
18.48
|
262,260
|
868
|
261,392
|
|||||
Awarded
|
$
|
11.99
|
—
|
291,035
|
(291,035
|
)
|
||||
Vested
|
$
|
6.43
|
(28,696
|
)
|
(28,696
|
)
|
—
|
|||
Forfeited
|
$
|
5.93
|
(393,728
|
)
|
(352,341
|
)
|
(41,387
|
)
|
||
Outstanding
at December 31, 2006
|
$
|
5.92
|
5,691,518
|
5,036,170
|
655,348
|
Stock
Options
|
Shares
Under
option
|
Weighted-
Average
Exercise
Price
|
Weighted-
Average
Remaining
Contractual
Term
(in
years)
|
Aggregate
Intrinsic
Value
(in
thousands)
|
|||||||||
Outstanding
at January 1, 2004
|
2,227,276
|
$
|
10.18
|
||||||||||
Granted
|
—
|
$
|
—
|
||||||||||
Exercised
|
(154,248
|
)
|
$
|
4.96
|
|||||||||
Forfeited
|
—
|
$
|
—
|
||||||||||
Expired
|
—
|
$
|
—
|
||||||||||
Outstanding
at December 31, 2004
|
2,073,028
|
$
|
10.56
|
6.9
|
$
|
36,580
|
|||||||
Granted
|
12,000
|
$
|
22.06
|
||||||||||
Exercised
|
(68,040
|
)
|
$
|
4.84
|
|||||||||
Forfeited
|
—
|
$
|
—
|
||||||||||
Expired
|
—
|
$
|
—
|
||||||||||
Outstanding
at December 31, 2005
|
2,016,988
|
$
|
10.83
|
5.9
|
$
|
35,064
|
|||||||
Granted
|
—
|
$
|
—
|
||||||||||
Exercised
|
(123,213
|
)
|
$
|
6.11
|
|||||||||
Forfeited
|
(8,000
|
)
|
$
|
15.78
|
|||||||||
Expired
|
—
|
$
|
—
|
||||||||||
Outstanding
at December 31, 2006
|
1,885,775
|
$
|
11.11
|
4.9
|
$
|
32,241
|
|||||||
Exercisable
at December 31, 2006
|
1,185,067
|
$
|
8.29
|
4.2
|
$
|
23,607
|
|||||||
Exercisable
at December 31, 2005
|
783,672
|
$
|
4.88
|
5.2
|
$
|
18,281
|
|||||||
Exercisable
at December 31, 2004
|
698,312
|
$
|
4.86
|
6.2
|
$
|
16,304
|
Options
Outstanding
|
|
Options
Exercisable
|
|||||||||||||
Exercise
Price
|
|
Number
Outstanding
|
|
Weighted
Average
Remaining
Contractual
Life
(years)
|
|
Weighted
Average
Exercise
Price
|
|
Number
Exercisable
|
|
Weighted
Average
Exercise
Price
|
|||||
$4.84
|
|
|
810,444
|
|
|
3.3
|
|
$
|
4.84
|
|
|
810,444
|
|
$
|
4.84
|
$14.20
|
|
|
4,000
|
|
|
4.8
|
|
$
|
14.20
|
|
|
4,000
|
|
$
|
14.20
|
$15.78
|
|
|
1,059,331
|
|
|
6.2
|
|
$
|
15.78
|
|
|
370,623
|
|
$
|
15.78
|
$22.06
|
|
|
12,000
|
|
|
8.0
|
|
$
|
22.06
|
|
|
-
|
|
|
-
|
|
|
|
1,885,775
|
|
|
5.0
|
|
$
|
11.11
|
|
|
1,185,067
|
|
$
|
8.29
|
(in
thousands)
|
2006
|
2005
|
2004
|
|||||||
Employee
Stock Purchase Plan
|
$
|
3,049
|
$
|
-
|
|
$
|
-
|
|
||
Performance
Stock Plan
|
|
1,874
|
|
3,337
|
|
2,625
|
||||
Incentive
Stock Option Plan
|
|
493
|
|
-
|
|
-
|
||||
$
|
5,416
|
$
|
3,337
|
$
|
2,625
|
(in
thousands)
|
2006
|
2005
|
2004
|
|||||||
Unrealized
holding gain (loss) on available-for-sale securities, net of tax
benefit
of $2,752 for 2006; net of tax benefit of $300 for 2005; and net
of tax
benefit of $530 for 2004
|
$
|
4,697
|
$
|
(512
|
)
|
$
|
(649
|
)
|
||
Net
gain on cash-flow hedging derivative, net of tax effect of $0 for
2006,
net of tax effect of $289 for 2005; and net of tax effect of $557
for
2004
|
$
|
1
|
$
|
491
|
$
|
889
|
||||
Notes
payable issued or assumed for purchased customer accounts
|
$
|
36,957
|
$
|
42,843
|
$
|
1,976
|
||||
Notes
received on the sale of fixed assets and customer accounts
|
$
|
2,715
|
$
|
1,855
|
$
|
6,024
|
||||
Common
stock issued for acquisitions accounted for under the purchase method
of
accounting
|
$
|
-
|
$
|
-
|
$
|
6,244
|
(in
thousands)
|
|
|
|
|
2007
|
|
$
|
20,955
|
|
2008
|
|
|
18,472
|
|
2009
|
|
|
15,129
|
|
2010
|
|
|
11,471
|
|
2011
|
|
|
6,868
|
|
Thereafter
|
|
|
9,398
|
|
Total
minimum future lease payments
|
|
$
|
82,293
|
|
|
|
|
|
|
(in
thousands, except per share data)
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
||||
2006
|
|
|
|
|
|
|
|
|
|
||||
Total
revenues
|
|
$
|
230,582
|
|
$
|
220,807
|
|
$
|
211,965
|
|
$
|
214,650
|
|
Total
expenses
|
|
$
|
149,146
|
|
$
|
149,840
|
|
$
|
146,400
|
|
$
|
152,577
|
|
Income
before income taxes
|
|
$
|
81,436
|
|
$
|
70,967
|
|
$
|
65,565
|
|
$
|
62,073
|
|
Net
income
|
|
$
|
50,026
|
|
$
|
44,431
|
|
$
|
40,270
|
|
$
|
37,623
|
|
Net
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
$
|
0.32
|
|
$
|
0.29
|
|
$
|
0.27
|
|
Diluted
|
|
$
|
0.36
|
|
$
|
0.32
|
|
$
|
0.29
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
|
202,374
|
|
$
|
195,931
|
|
$
|
190,645
|
|
$
|
196,857
|
|
Total
expenses
|
|
$
|
131,861
|
|
$
|
135,463
|
|
$
|
134,956
|
|
$
|
139,397
|
|
Income
before income taxes
|
|
$
|
70,513
|
|
$
|
60,468
|
|
$
|
55,689
|
|
$
|
57,460
|
|
Net
income
|
|
$
|
43,018
|
|
$
|
37,033
|
|
$
|
34,783
|
|
$
|
35,717
|
|
Net
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.31
|
|
$
|
0.27
|
|
$
|
0.25
|
|
$
|
0.26
|
|
Diluted
|
|
$
|
0.31
|
|
$
|
0.27
|
|
$
|
0.25
|
|
$
|
0.25
|
|
|
|
Year
Ended December 31, 2006
|
|
||||||||||||||||
(in
thousands)
|
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
|
||||||
Total
revenues
|
|
$
|
517,989
|
|
$
|
157,448
|
|
$
|
163,346
|
|
$
|
32,606
|
|
$
|
6,615
|
|
$
|
878,004
|
|
Investment
income
|
|
|
139
|
|
|
432
|
|
|
4,017
|
|
|
45
|
|
|
6,846
|
|
|
11,479
|
|
Amortization
|
|
|
19,305
|
|
|
8,718
|
|
|
8,087
|
|
|
343
|
|
|
45
|
|
|
36,498
|
|
Depreciation
|
|
|
5,621
|
|
|
2,387
|
|
|
2,075
|
|
|
533
|
|
|
693
|
|
|
11,309
|
|
Interest
expense
|
|
|
18,903
|
|
|
10,554
|
|
|
18,759
|
|
|
440
|
|
|
(35,299
|
)
|
|
13,357
|
|
Income
before income taxes
|
|
|
145,749
|
|
|
48,560
|
|
|
26,865
|
|
|
7,963
|
|
|
50,904
|
|
|
280,041
|
|
Total
assets
|
|
|
1,103,107
|
|
|
544,272
|
|
|
618,374
|
|
|
32,554
|
|
|
(490,355
|
)
|
|
1,807,952
|
|
Capital
expenditures
|
|
|
5,952
|
|
|
3,750
|
|
|
2,085
|
|
|
588
|
|
|
2,604
|
|
|
14,979
|
|
|
|
Year
Ended December 31, 2005
|
|
||||||||||||||||
(in
thousands)
|
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
|
||||||
Total
revenues
|
|
$
|
491,202
|
|
$
|
133,930
|
|
$
|
127,113
|
|
$
|
27,517
|
|
$
|
6,045
|
|
$
|
785,807
|
|
Investment
income
|
|
|
159
|
|
|
367
|
|
|
1,599
|
|
|
-
|
|
|
4,453
|
|
|
6,578
|
|
Amortization
|
|
|
19,368
|
|
|
8,103
|
|
|
5,672
|
|
|
43
|
|
|
59
|
|
|
33,245
|
|
Depreciation
|
|
|
5,641
|
|
|
1,998
|
|
|
1,285
|
|
|
435
|
|
|
702
|
|
|
10,061
|
|
Interest
expense
|
|
|
20,927
|
|
|
10,433
|
|
|
12,446
|
|
|
4
|
|
|
(29,341
|
)
|
|
14,469
|
|
Income
before income taxes
|
|
|
128,881
|
|
|
38,385
|
|
|
28,306
|
|
|
6,992
|
|
|
41,566
|
|
|
244,130
|
|
Total
assets
|
|
|
1,002,781
|
|
|
445,146
|
|
|
476,653
|
|
|
18,766
|
|
|
(334,686
|
)
|
|
1,608,660
|
|
Capital
expenditures
|
|
|
6,186
|
|
|
3,067
|
|
|
1,969
|
|
|
350
|
|
|
1,854
|
|
|
13,426
|
|
|
|
Year
Ended December 31, 2004
|
|
||||||||||||||||
(in
thousands)
|
|
Retail
|
|
National
Programs
|
|
Wholesale
Brokerage
|
|
Services
|
|
Other
|
|
Total
|
|
||||||
Total
revenues
|
|
$
|
461,348
|
|
$
|
112,092
|
|
$
|
41,603
|
|
$
|
26,809
|
|
$
|
5,082
|
|
$
|
646,934
|
|
Investment
income
|
|
|
567
|
|
|
139
|
|
|
-
|
|
|
-
|
|
|
2,009
|
|
|
2,715
|
|
Amortization
|
|
|
15,314
|
|
|
5,882
|
|
|
757
|
|
|
36
|
|
|
157
|
|
|
22,146
|
|
Depreciation
|
|
|
5,734
|
|
|
1,583
|
|
|
508
|
|
|
387
|
|
|
698
|
|
|
8,910
|
|
Interest
expense
|
|
|
21,846
|
|
|
8,603
|
|
|
1,319
|
|
|
69
|
|
|
(24,681
|
)
|
|
7,156
|
|
Income
before income taxes
|
|
|
113,637
|
|
|
33,930
|
|
|
11,337
|
|
|
6,375
|
|
|
41,670
|
|
|
206,949
|
|
Total
assets
|
|
|
843,823
|
|
|
359,551
|
|
|
128,699
|
|
|
13,760
|
|
|
(96,316
|
)
|
|
1,249,517
|
|
Capital
expenditures
|
|
|
5,568
|
|
|
2,693
|
|
|
694
|
|
|
788
|
|
|
409
|
|
|
10,152
|
|
/s/
J. Hyatt Brown
|
/s/
Cory T. Walker
|
|
|
J.
Hyatt Brown
|
Cory
T. Walker
|
Chief
Executive Officer
|
Chief
Financial Officer
|
ITEM 9. |
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure.
|
ITEM 9A. |
Controls
and Procedures.
|
ITEM 10. |
Directors, Executive
Officers and Corporate
Governance.
|
ITEM 11. |
Executive
Compensation.
|
ITEM 12. |
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
|
ITEM 13. |
Certain
Relationships and Related Transactions, and Director
Independence.
|
ITEM 14. |
Principal
Accountant Fees and
Services.
|
ITEM 15. |
Exhibits
and Financial Statement
Schedules.
|
(a)
|
1.
|
Financial
statements
|
|
|
|
|
|
Reference
is made to the information set forth in Part II, Item 8 of this
Report,
which information is incorporated by reference.
|
|
|
|
|
2.
|
Consolidated
Financial Statement Schedules.
|
|
|
|
|
|
All
required Financial Statement Schedules are included in the Consolidated
Financial Statements or the Notes to Consolidated Financial
Statements.
|
|
3.
|
Exhibits
|
|
|
|
|
|
|
|
The
following exhibits are filed as a part of this Report:
|
|
|
|
|
|
|
|
3.1
|
Articles
of Amendment to Articles of Incorporation (adopted April 24,
2003)
(incorporated by reference to Exhibit 3a to Form 10-Q for the
quarter
ended March 31, 2003), and Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3a to Form 10-Q for the
quarter
ended March 31, 1999).
|
|
|
|
|
|
|
3.2
|
Bylaws
(incorporated by reference to Exhibit 3b to Form 10-K for the year ended
December 31, 2002).
|
|
|
10.1(a)
|
Lease
of the Registrant for office space at 220 South Ridgewood Avenue,
Daytona
Beach, Florida dated August 15, 1987 (incorporated by reference
to Exhibit
10a(3) to Form 10-K for the year ended December 31, 1993), as
amended by
Letter Agreement dated June 26, 1995; First Amendment to Lease
dated
August 2, 1999; Second Amendment to Lease dated December 11,
2001; Third
Amendment to Lease dated August 8, 2002; and Fourth Amendment
to Lease
dated October 26, 2004 (incorporated by reference to Exhibit
10.2(a) to
Form 10-K for the year ended December 31, 2005).
|
|
|
|
|
|
|
10.1(b)
|
Lease
Agreement for office space at 3101 W. Martin Luther King, Jr.
Blvd.,
Tampa, Florida, dated July 1, 2004 and effective May 9, 2005, between
Highwoods/Florida Holdings, L.P., as landlord and the Registrant, as
tenant (incorporated by reference to Exhibit 10.2(ba) to Form
10-K for the
year ended December 31, 2005).
|
|
|
|
|
|
|
10.1(c)
|
Lease
Agreement for office space at Riedman Tower, Rochester, New York,
dated
January 3, 2001, between Riedman Corporation, as landlord, and
the
Registrant, as tenant (incorporated by reference to Exhibit 10b(3)
to Form
10-K for the year ended December 31, 2001), and Lease for same
office
space at Riedman Tower, Rochester, New York, dated December 31,
2005,
between Riedman Corporation, as landlord, and a subsidiary of
the
Registrant, as tenant (incorporated by reference to Exhibit 10.2(c)
to
Form 10-K for the year ended December 31, 2005).
|
|
|
|
|
|
|
10.2
|
Indemnity
Agreement dated January 1, 1979, among the Registrant, Whiting
National
Management, Inc., and Pennsylvania Manufacturers’ Association Insurance
Company (incorporated by reference to Exhibit 10g to Registration
Statement No. 33-58090 on Form S-4).
|
|
|
|
|
|
|
10.3
|
Agency
Agreement dated January 1, 1979 among the Registrant, Whiting
National
Management, Inc., and Pennsylvania Manufacturers’ Association Insurance
Company (incorporated by reference to Exhibit 10h to Registration
Statement No. 33-58090 on Form S-4).
|
|
|
|
|
|
|
10.4
|
Employment
Agreement, dated as of July 29, 1999, between the Registrant
and J. Hyatt
Brown (incorporated by reference to Exhibit 10f to Form 10-K
for the year
ended December 31, 1999).
|
|
|
|
|
|
|
10.5
|
Portions
of Employment Agreement, dated April 28, 1993 between the Registrant
and
Jim W. Henderson (incorporated by reference to Exhibit 10m to
Form 10-K
for the year ended December 31, 1993).
|
|
|
10.6(a)
|
Registrant’s
2000 Incentive Stock Option Plan (incorporated by reference to
Exhibit 4
to Registration Statement No. 333-43018 on Form S-8 filed on
August 3,
2000).
|
|
|
|
|
|
|
10.6(b)
|
Registrant’s
Stock Performance Plan (incorporated by reference to Exhibit
4 to
Registration Statement No. 333-14925 on Form S-8 filed on October
28,
1996).
|
|
|
10.7
|
International
Swap Dealers Association, Inc. Master Agreement dated as of December
5,
2001 between SunTrust Bank and the Registrant and letter agreement
dated
December 6, 2001, regarding confirmation of interest rate transaction
(incorporated by reference to Exhibit 10p to Form 10-K for the
year ended
December 31, 2001).
|
|
|
10.8
|
Note
Purchase Agreement, dated as of July 15, 2004, among the Company
and the
listed Purchasers of the 5.57% Series A Senior Notes due September
15,
2011 and 6.08% Series B Senior Notes due July 15, 2014. (incorporated
by
reference to Exhibit 4.1 to Form 10-Q for the quarter ended June
30,
2004).
|
|
|
|
|
|
|
10.9
|
First
Amendment to Amended and Restated Revolving and Term Loan Agreement
dated
and effective July 15, 2004, by and between Brown & Brown, Inc. and
SunTrust Bank (incorporated by reference to Exhibit 4.2 to Form
10-Q for
the quarter ended June 30, 2004).
|
|
|
|
|
|
|
10.10
|
Second
Amendment to Revolving Loan Agreement dated and effective July
15, 2004,
by and between Brown & Brown, Inc. and SunTrust Bank (incorporated by
reference to Exhibit 4.3 to Form 10-Q for the quarter ended June
30,
2004).
|
|
|
10.11
|
Revolving
Loan Agreement Dated as of September 29, 2003, By and Among Brown
&
Brown, Inc. and SunTrust Bank (incorporated by reference to Exhibit
10a on
Form 10-Q for the quarter ended September 30, 2003).
|
|
|
10.12
|
Amended
and Restated Revolving and Term Loan Agreement dated January 3,
2001 by
and between the Registrant and SunTrust Bank (incorporated by reference
to
Exhibit 4a to Form 10-K for the year ended December 31,
2000).
|
|
|
|
|
|
|
10.13
|
Extension
of the Term Loan Agreement between the Registrant and SunTrust
Bank
(incorporated by reference to Exhibit 10b to Form 10-Q for the
quarter
ended September 30, 2000).
|
|
|
10.14
|
Master
Shelf and Note Purchase Agreement Dated as of December 22, 2006,
by and
among Brown & Brown, Inc., and Prudential Investment Management, Inc.
and certain Prudential affiliates as purchasers of the 5.66% Series
C
Senior Notes due December 22, 2016.
|
10.15
|
Second
Amendment to Amended and Restated Revolving and Term Loan Agreement
dated
as of December 22, 2006, by and between Brown & Brown, Inc. and
SunTrust Bank.
|
||
10.16
|
Third
Amendment to Revolving Loan Agreement dated as of December 22,
2006, by
and between Brown & Brown, Inc. and SunTrust Bank.
|
||
10.17
|
Third
Amendment to Amended and Restated Revolving and Term Loan Agreement
dated
as of January 30, 2007 by and between Brown & Brown, Inc. and SunTrust
Bank.
|
||
10.18
|
Fourth
Amendment to Revolving Loan Agreement dated as of January 30, 2007
by and
between Brown & Brown, Inc. and SunTrust Bank.
|
||
|
|
21
|
Subsidiaries
of the Registrant.
|
|
|
|
|
|
|
23
|
Consent
of Deloitte & Touche LLP.
|
|
|
|
|
|
|
24
|
Powers
of Attorney pursuant to which this Form 10-K has been signed on
behalf of
certain directors and officers of the Registrant.
|
|
|
|
|
|
|
31.1
|
Rule 13a-14(a)/15d-14(a)
Certification by the Chief Executive Officer of the
Registrant.
|
|
|
|
|
|
|
31.2
|
Rule 13a-14(a)/15d-14(a)
Certification by the Chief Financial Officer of the
Registrant.
|
|
|
|
|
|
|
32.1
|
Section 1350
Certification by the Chief Executive Officer of the
Registrant.
|
|
|
|
|
|
|
32.2
|
Section 1350
Certification by the Chief Financial Officer of the
Registrant.
|
|
BROWN
& BROWN, INC.
|
|
|
Registrant
|
|
|
|
|
Date:
March 1, 2007
|
By:
|
/S/
J.
Hyatt
Brown
|
|
J.
Hyatt Brown
|
|
|
Chief
Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Chairman
of the Board and
|
|
March
1, 2007
|
J.
Hyatt Brown
|
|
Chief
Executive Officer
|
|
|
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
*
|
|
Vice
Chairman and Chief Operating
|
|
March
1, 2007
|
Jim
W. Henderson
|
|
Officer,
Director
|
|
|
|
|
|
|
|
*
|
|
Sr.
Vice President, Treasurer and
|
|
March
1, 2007
|
Cory
T. Walker
|
|
Chief
Financial Officer (Principal
|
|
|
|
|
Financial
and Accounting Officer)
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
Samuel
P. Bell, III
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
Hugh
M. Brown
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
||
Bradley
Currey, Jr.
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
Theodore
J. Hoepner
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
David
H. Hughes
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
Toni
Jennings
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
John
R. Riedman
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
Jan
E. Smith
|
|
|
|
|
|
|
|
|
|
*
|
|
Director
|
|
March
1, 2007
|
Chilton
D. Varner
|
|
|
|
|
*By:
|
/S/
LAUREL L. GRAMMIG
|
|
|
Laurel
L. Grammig
|
|
|
Attorney-in-Fact
|
|
|
|
3.1
|
Articles
of Amendment to Articles of Incorporation (adopted April 24, 2003)
(incorporated by reference to Exhibit 3a to Form 10-Q for the quarter
ended March 31, 2003), and Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3a to Form 10-Q for the quarter
ended March 31, 1999).
|
|
|
|
|
|
|
3.2
|
Bylaws
(incorporated by reference to Exhibit 3b to Form 10-K for the year
ended
December 31, 2002).
|
|
|
10.1(a)
|
Lease
of the Registrant for office space at 220 South Ridgewood Avenue,
Daytona
Beach, Florida dated August 15, 1987 (incorporated by reference
to Exhibit
10a(3) to Form 10-K for the year ended December 31, 1993), as amended
by
Letter Agreement dated June 26, 1995; First Amendment to Lease
dated
August 2, 1999; Second Amendment to Lease dated December 11, 2001;
Third
Amendment to Lease dated August 8, 2002; and Fourth Amendment to
Lease
dated October 26, 2004 (incorporated by reference to Exhibit 10.2(a)
to
Form 10-K for the year ended December 31, 2005).
|
|
|
|
|
|
|
10.1(b)
|
Lease
Agreement for office space at 3101 W. Martin Luther King, Jr. Blvd.,
Tampa, Florida, dated July 1, 2004 and effective May 9, 2005, between
Highwoods/Florida Holdings, L.P., as landlord and the Registrant, as
tenant (incorporated by reference to Exhibit 10.2(b) to Form 10-K
for the
year ended December 31, 2005).
|
|
|
|
|
|
|
10.1(c)
|
Lease
Agreement for office space at Riedman Tower, Rochester, New York,
dated
January 3, 2001, between Riedman Corporation, as landlord, and
the
Registrant, as tenant (incorporated by reference to Exhibit 10b(3)
to Form
10-K for the year ended December 31, 2001), and Lease for same
office
space at Riedman Tower, Rochester, New York, dated December 31,
2005,
between Riedman Corporation, as landlord, and a subsidiary of the
Registrant, as tenant (incorporated by reference to Exhibit 10.2(c)
to
Form 10-K for the year ended December 31, 2005).
|
|
|
|
|
|
|
10.2
|
Indemnity
Agreement dated January 1, 1979, among the Registrant, Whiting
National
Management, Inc., and Pennsylvania Manufacturers’ Association Insurance
Company (incorporated by reference to Exhibit 10g to Registration
Statement No. 33-58090 on Form S-4).
|
|
|
|
|
|
|
10.3
|
Agency
Agreement dated January 1, 1979 among the Registrant, Whiting National
Management, Inc., and Pennsylvania Manufacturers’ Association Insurance
Company (incorporated by reference to Exhibit 10h to Registration
Statement No. 33-58090 on Form S-4).
|
|
|
|
|
|
|
10.4
|
Employment
Agreement, dated as of July 29, 1999, between the Registrant and
J. Hyatt
Brown (incorporated by reference to Exhibit 10f to Form 10-K for
the year
ended December 31, 1999).
|
|
|
|
|
|
|
10.5
|
Portions
of Employment Agreement, dated April 28, 1993 between the Registrant
and
Jim W. Henderson (incorporated by reference to Exhibit 10m to Form
10-K
for the year ended December 31, 1993).
|
|
|
10.6(a)
|
Registrant’s
2000 Incentive Stock Option Plan (incorporated by reference to
Exhibit 4
to Registration Statement No. 333-43018 on Form S-8 filed on August 3,
2000).
|
|
|
|
|
|
|
10.6(b)
|
Registrant’s
Stock Performance Plan (incorporated by reference to Exhibit 4
to
Registration Statement No. 333-14925 on Form S-8 filed on October
28,
1996).
|
|
|
10.7
|
International
Swap Dealers Association, Inc. Master Agreement dated as of December
5,
2001 between SunTrust Bank and the Registrant and letter agreement
dated
December 6, 2001, regarding confirmation of interest rate transaction
(incorporated by reference to Exhibit 10p to Form 10-K for the
year ended
December 31, 2001).
|
|
|
10.8
|
Note
Purchase Agreement, dated as of July 15, 2004, among the Company
and the
listed Purchasers of the 5.57% Series A Senior Notes due September
15,
2011 and 6.08% Series B Senior Notes due July 15, 2014. (incorporated
by
reference to Exhibit 4.1 to Form 10-Q for the quarter ended
June 30,
2004).
|
|
|
|
|
|
|
10.9
|
First
Amendment to Amended and Restated Revolving and Term Loan Agreement
dated
and effective July 15, 2004, by and between Brown & Brown, Inc. and
SunTrust Bank (incorporated by reference to Exhibit 4.2 to
Form 10-Q for
the quarter ended June 30, 2004).
|
|
|
|
|
|
|
10.10
|
Second
Amendment to Revolving Loan Agreement dated and effective July
15, 2004,
by and between Brown & Brown, Inc. and SunTrust Bank (incorporated by
reference to Exhibit 4.3 to Form 10-Q for the quarter ended
June 30,
2004).
|
|
|
10.11
|
Revolving
Loan Agreement Dated as of September 29, 2003, By and Among
Brown &
Brown, Inc. and SunTrust Bank (incorporated by reference to
Exhibit 10a on
Form 10-Q for the quarter ended September 30, 2003).
|
|
|
10.12
|
Amended
and Restated Revolving and Term Loan Agreement dated January
3, 2001 by
and between the Registrant and SunTrust Bank (incorporated
by reference to
Exhibit 4a to Form 10-K for the year ended December 31,
2000).
|
|
|
|
|
|
|
10.13
|
Extension
of the Term Loan Agreement between the Registrant and SunTrust
Bank
(incorporated by reference to Exhibit 10b to Form 10-Q for
the quarter
ended September 30, 2000).
|
|
|
10.14
|
Master
Shelf and Note Purchase Agreement Dated as of December 22,
2006, by and
among Brown & Brown, Inc., and Prudential Investment Management, Inc.
and certain Prudential affiliates as purchasers of the 5.66%
Series C
Senior Notes due December 22, 2016.
|
10.15
|
Second
Amendment to Amended and Restated Revolving and Term Loan Agreement
dated
as of December 22, 2006, by and between Brown & Brown, Inc. and
SunTrust Bank.
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||
10.16
|
Third
Amendment to Revolving Loan Agreement dated as of December
22, 2006, by
and between Brown & Brown, Inc. and SunTrust Bank.
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10.17
|
Third
Amendment to Amended and Restated Revolving and Term Loan Agreement
dated
as of January 30, 2007 by and between Brown & Brown, Inc. and SunTrust
Bank.
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||
10.18
|
Fourth
Amendment to Revolving Loan Agreement dated as of January 30,
2007 by and
between Brown & Brown, Inc. and SunTrust Bank.
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21
|
Subsidiaries
of the Registrant.
|
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23
|
Consent
of Deloitte & Touche LLP.
|
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24
|
Powers
of Attorney pursuant to which this Form 10-K has been signed
on behalf of
certain directors and officers of the Registrant.
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|
|
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|
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31.1
|
Rule 13a-14(a)/15d-14(a)
Certification by the Chief Executive Officer of the
Registrant.
|
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31.2
|
Rule 13a-14(a)/15d-14(a)
Certification by the Chief Financial Officer of the
Registrant.
|
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32.1
|
Section 1350
Certification by the Chief Executive Officer of the
Registrant.
|
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32.2
|
Section 1350
Certification by the Chief Financial Officer of the
Registrant.
|