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Brown & Brown Inc. (BRO) filed Quarterly Report for the period ended 2011-09-30.
Brown & Brown Inc. has a market cap of $3.17 billion; its shares were traded at around $22.18 with a P/E ratio of 19.8 and P/S ratio of 3.3. The dividend yield of Brown & Brown Inc. stocks is 1.6%. Brown & Brown Inc. had an annual average earning growth of 10.9% over the past 10 years.
This is the annual revenues and earnings per share of BRO over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of BRO.
Highlight of Business Operations:
On June 12, 2008, the Company entered into an Amended and Restated Revolving Loan Agreement dated as of June 3, 2008 (the “Loan Agreement”), with a national banking institution, amending and restating the existing Revolving Loan Agreement dated September 29, 2003, as amended (the “Revolving Agreement”), to increase the lending commitment to $50.0 million (subject to potential increases up to $100.0 million) and to extend the maturity date from December 20, 2011, to June 3, 2013. The calculation of interest and fees is generally based on the Company’s quarterly ratio of funded debt to earnings before interest, taxes, depreciation, amortization, and non-cash stock-based compensation. Interest is charged at a rate equal to 0.50% to 1.00% above the London Interbank Offering Rate (“LIBOR”) or 1.00% below the base rate, each as more fully defined in the Loan Agreement. Fees include an upfront fee, an availability fee of 0.10% to 0.20%, and a letter of credit usage fee of 0.50% to 1.00%. The Loan Agreement contains various covenants, limitations, and events of default customary for similar facilities for similar borrowers. The 90-day LIBOR was 0.374% and 0.300% as of September 30, 2011, and December 31, 2010, respectively. There were no borrowings against this facility at September 30, 2011, or December 31, 2010.Income before income taxes in the three-month period ended September 30, 2011, decreased from the same period in 2010 by 0.5%, or $0.3 million, to $72.7 million. The $0.3 million net decrease resulted from the following factors: (i) a $1.8 million increase related to the operations of the new acquisitions that were stand-alone offices; and (ii) a $2.1 million decrease from those offices that existed in the same three-month periods ended September 30, 2011 and 2010 (including the new acquisitions that “folded in” to those offices). The $2.1 million decrease resulted primarily from the following factors: (i) a $2.3 million reduction in total revenues; (ii) a $3.1 million credit in the change in estimated acquisition earn-out payables; and (iii) $2.9 million increase in other costs, of which, $2.6 million relates to a legal claim first raised in 1996 that we vigorously defended for 15 years until exhausting all appellate avenues for review.
Total revenues for National Programs for the three months ended September 30, 2011 decreased 0.1%, or less than $0.1 million, from the same period in 2010, to $49.9 million. Profit-sharing contingent commissions for the third quarter of 2011 decreased $0.8 million from the third quarter of 2010. The $0.9 million net increase in commissions and fees revenue resulted from the following factors: (i) an increase of approximately $0.7 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2010; (ii) a decrease of $0.1 million related to commissions and fees revenue recorded in the third quarter of 2010 from business divested during 2011; and (iii) the remaining net increase of $0.3 million is primarily related to net new business. The National Programs Division’s internal growth rate for core commissions and fees revenue was 0.5% for the three months ended September 30, 2011. Of the $0.3 million of net new business, $0.7 million was from net new business from our public entity business and another $0.7 million related to commissions recorded in the third quarter of 2011, but which comparable prior year commissions were recorded in the second quarter of 2010. Partially offsetting this net new business was $0.9 million net revenue reductions at Proctor. It is expected that Proctor’s commissions and fees revenue for the fourth quarter of 2011 will be $0.5 million to $1.0 million greater than the fourth quarter of 2010.
Total revenues for National Programs for the nine months ended September 30, 2011 decreased 6.7%, or $9.6 million, from the same period in 2010, to $133.6 million. Profit-sharing contingent commissions for the nine months ended September 30, 2011, decreased $5.3 million from the same period of 2010, of which $4.6 million of that decrease related to Proctor. Proctor’s decreased profit-sharing contingent commissions were the direct result of the net lost business. Of the $4.1 million net decrease in commissions and fees for National Programs: (i) an increase of approximately $0.8 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2010; (ii) a decrease of $0.1 million related to commissions and fees revenue recorded in 2010 from business divested during 2011, and (iii) the remaining net decrease of $4.8 million is primarily related to net lost business. Therefore, the National Programs Division’s negative internal growth rate for core commissions and fees revenue was (3.8)% for the nine months ended September 30, 2011. Of the $4.8 million of net lost business, $6.2 million related to Proctor, $1.0 million related to our Cal-Surance operation (which 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), and $0.9 million related to our FIU operation, but partially offset by $2.9 million net business growth in our public entity business and $0.4 million net business growth in our other programs.
On June 12, 2008, the Company entered into an Amended and Restated Revolving Loan Agreement dated as of June 3, 2008 (the “Loan Agreement”), with a national banking institution, amending and restating the existing Revolving Loan Agreement dated September 29, 2003, as amended (the “Revolving Agreement”), to increase the lending commitment to $50.0 million (subject to potential increases up to $100.0 million) and to extend the maturity date from December 20, 2011, to June 3, 2013. The calculation of interest and fees is generally based on the Company’s quarterly ratio of funded debt to earnings before interest, taxes, depreciation, amortization, and non-cash stock-based compensation. Interest is charged at a rate equal to 0.50% to 1.00% above the London Interbank Offering Rate (“LIBOR”) or 1.00% below the base rate, each as more fully defined in the Loan Agreement. Fees include an upfront fee, an availability fee of 0.10% to 0.20%, and a letter of credit usage fee of 0.50% to 1.00%. The Loan Agreement contains various covenants, limitations, and events of default customary for similar facilities for similar borrowers. The 90-day LIBOR was 0.374% and 0.300% as of September 30, 2011, and December 31, 2010, respectively. There were no borrowings against this facility at September 30, 2011, or December 31, 2010. During the three months ended September 30, 2011, there were no borrowings under this facility.
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