布朗保險經紀第二季總收入17億美元升30.4% 有機收入微跌0.7%

EX-99.1
2
bro-ex99_1.htm
EX-99.1

 
 EX-99.1
 
 
  

 Exhibit 99.1

 
 
Brown & Brown, Inc. announces second quarter 2026 results,
including total revenues of $1.7 billion, an increase of 30.4%; Organic Revenue decrease of 0.7%; growth of Organic Revenue with Contingents of 0.7%; diluted net income per share of $0.84; and Diluted Net Income Per Share - Adjusted of $1.07
 
DAYTONA BEACH, Fla., July 27, 2026 - Brown & Brown, Inc. (NYSE:BRO) (the "Company") announced its unaudited financial results for the second quarter of 2026.
For the second quarter ended June 30, 2026, the Company achieved:
•Total revenues of $1.7 billion, increasing $391 million, or 30.4%, compared to the second quarter of the prior year, with Organic Revenue decreasing 0.7% and Organic Revenue with Contingents increasing 0.7%.

•Income before income taxes of $383 million, increasing 23.2%, with Income Before Income Taxes Margin of 22.9%, compared to 24.2% in the second quarter of the prior year. 

•EBITDAC - Adjusted of $598 million, increasing 27.0%, with EBITDAC Margin - Adjusted of 35.7%, compared to 36.7% in the second quarter of the prior year. 

•Net income attributable to the Company of $288 million, increasing $57 million, or 24.7%, compared to the second quarter of the prior year. 

•Diluted net income per share of $0.84, an increase of 7.7%, with Diluted Net Income Per Share - Adjusted increasing to $1.07, or 3.9%, each compared to the second quarter of the prior year.

 
For the six months ended June 30, 2026, the Company achieved:
•Total revenues of $3.6 billion, increasing $888 million, or 33.0%, compared to the same period in 2025, with Organic Revenue decreasing 0.3% and Organic Revenue with Contingents increasing 1.6%.

•Income before income taxes of $915 million, increasing 24.0%, with Income Before Income Taxes Margin of 25.6%, compared to 27.4% in the same period in 2025. 

•EBITDAC - Adjusted of $1.3 billion, increasing 32.2%, with EBITDAC Margin - Adjusted of 37.2%, compared to 37.4% in the same period in 2025. 

•Net income attributable to the Company of $714 million, increasing $151 million, or 26.8%, compared to the same period in 2025.

•Diluted net income per share of $1.90, a decrease of 1.6%, with Diluted Net Income Per Share - Adjusted increasing to $2.46, or 6.0%, each compared to the same period in 2025.

 
J. Powell Brown, president and chief executive officer of the Company, noted, “We are pleased with our financial results for the quarter and have great momentum as we head into the back half of the year.”
 
 
 
 
 

 1

 
  

 Reconciliation of Commissions and Fees
to Organic Revenue and Organic Revenue with Contingents
(in millions, unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
 Commissions and fees

  

 $

 1,654

  

  

 $

 1,249

  

  

 $

 3,534

  

  

 $

 2,634

  

 

 
 Contingents

  

  

 (85

 )

  

  

 (45

 )

  

  

 (182

 )

  

  

 (88

 )

 

 
 Core commissions and fees

  

 $

 1,569

  

  

 $

 1,204

  

  

 $

 3,352

  

  

 $

 2,546

  

 

 
 Acquisitions

  

  

 (393

 )

  

  

  

  

  

 (829

 )

  

  

  

 

 
 Dispositions

  

  

  

  

  

 (4

 )

  

  

  

  

  

 (8

 )

 

 
 Foreign Currency Translation

  

  

  

  

  

 2

  

  

  

  

  

  

 20

  

 

 
 Litigation-Related Impact

  

  

  

  

  

 (18

 )

  

  

  

  

  

 (28

 )

 

 
 Organic Revenue

  

 $

 1,176

  

  

 $

 1,184

  

  

 $

 2,523

  

  

 $

 2,530

  

 

 
 Organic Revenue growth

  

  

 (8

 )

  

  

  

  

  

 (7

 )

  

  

  

 

 
 Organic Revenue growth %

  

  

 (0.7

 %)

  

  

  

  

  

 (0.3

 %)

  

  

  

 

 
  

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Organic Contingents

  

 $

 61

  

  

 $

 45

  

  

 $

 135

  

  

 $

 86

  

 

 
 Organic Revenue with Contingents

  

  

 1,237

  

  

  

 1,229

  

  

  

 2,658

  

  

  

 2,616

  

 

 
 Organic Revenue with Contingents growth

  

 $

 8

  

  

  

  

  

 $

 42

  

  

  

  

 

 
 Organic Revenue with Contingents growth %

  

  

 0.7

 %

  

  

  

  

  

 1.6

 %

  

  

  

 

  
See information regarding non-GAAP measures presented later in this press release.
 
Reconciliation of Diluted Net Income Per Share to
Diluted Net Income Per Share - Adjusted
(unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Change

  

  

 Six Months Ended June 30,

  

  

 Change

  

 

 
  

  

 2026

  

  

 2025

  

  

 $

  

  

 %

  

  

 2026

  

  

 2025

  

  

 $

  

  

 %

  

 

 
 Diluted net income per share(1)

  

 $

 0.84

  

  

 $

 0.78

  

  

 $

 0.06

  

  

  

 7.7

 %

  

 $

 1.90

  

  

 $

 1.93

  

  

 $

 (0.03

 )

  

  

 (1.6

 %)

 

 
 Change in estimated acquisition earn-out payables

  

  

 (0.09

 )

  

  

 0.03

  

  

  

 (0.12

 )

  

  

  

  

  

 (0.08

 )

  

  

 0.02

  

  

  

 (0.10

 )

  

  

  

 

 
 (Gain)/loss on disposal

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

  

 

 
 Acquisition/Integration Costs

  

  

 0.07

  

  

  

 0.09

  

  

  

 (0.02

 )

  

  

  

  

  

 0.13

  

  

  

 0.09

  

  

  

 0.04

  

  

  

  

 

 
 Amortization

  

  

 0.25

  

  

  

 0.13

  

  

  

 0.12

  

  

  

  

  

  

 0.51

  

  

  

 0.28

  

  

  

 0.23

  

  

  

  

 

 
 Mark-to-market of escrow liability(2)

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

  

  

  

 —

  

  

  

 —

  

  

  

 —

  

  

  

  

 

 
 Diluted Net Income Per Share - Adjusted

  

 $

 1.07

  

  

 $

 1.03

  

  

 $

 0.04

  

  

  

 3.9

 %

  

 $

 2.46

  

  

 $

 2.32

  

  

 $

 0.14

  

  

  

 6.0

 %

 

  
(1)The calculation of diluted net income per share for the three and six months ended June 30, 2026 (a) excludes the mark-to-market of escrow liability and (b) includes the escrowed shares within the Company’s diluted weighted average number of shares, in each case in accordance with Accounting Standards Codification Topic 260 — Earnings Per Share (“ASC 260”), which requires this treatment in periods where the combined effect of these adjustments is accretive to earnings. 

(2)No adjustment for the mark-to-market of escrow liability was made to Diluted Net Income Per Share – Adjusted for the three or six months ended June 30, 2026 as the calculation of diluted net income per share for these periods already excludes the mark-to-market of escrow liability in accordance with ASC 260.

 
See information regarding non-GAAP measures presented later in this press release.
 

 2

 
  

 Reconciliation of Income Before Income Taxes to EBITDAC and
 EBITDAC - Adjusted and Income Before Income Taxes Margin(1) to 
EBITDAC Margin and EBITDAC Margin - Adjusted
(in millions, unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025(2)

  

  

 2026

  

  

 2025(2)

  

 

 
 Total revenues

  

 $

 1,676

  

  

 $

 1,285

  

  

 $

 3,577

  

  

 $

 2,689

  

 

 
 Income before income taxes

  

 $

 383

  

  

 $

 311

  

  

 $

 915

  

  

 $

 738

  

 

 
 Income Before Income Taxes Margin(1)

  

  

 22.9

 %

  

  

 24.2

 %

  

  

 25.6

 %

  

  

 27.4

 %

 

 
 Amortization

  

  

 110

  

  

  

 50

  

  

  

 226

  

  

  

 103

  

 

 
 Depreciation

  

  

 18

  

  

  

 11

  

  

  

 35

  

  

  

 23

  

 

 
 Interest

  

  

 100

  

  

  

 51

  

  

  

 199

  

  

  

 96

  

 

 
 Change in estimated acquisition earn-out payables

  

  

 (40

 )

  

  

 11

  

  

  

 (34

 )

  

  

 7

  

 

 
 EBITDAC

  

 $

 571

  

  

 $

 434

  

  

 $

 1,341

  

  

 $

 967

  

 

 
 EBITDAC Margin

  

  

 34.1

 %

  

  

 33.8

 %

  

  

 37.5

 %

  

  

 36.0

 %

 

 
 (Gain)/loss on disposal

  

  

 1

  

  

  

 —

  

  

  

 —

  

  

  

 1

  

 

 
 Acquisition/Integration Costs

  

  

 31

  

  

  

 37

  

  

  

 57

  

  

  

 37

  

 

 
 Mark-to-market of escrow liability

  

  

 (5

 )

  

  

 —

  

  

  

 (69

 )

  

  

 —

  

 

 
 EBITDAC - Adjusted

  

 $

 598

  

  

 $

 471

  

  

 $

 1,329

  

  

 $

 1,005

  

 

 
 EBITDAC Margin - Adjusted

  

  

 35.7

 %

  

  

 36.7

 %

  

  

 37.2

 %

  

  

 37.4

 %

 

  
(1)“Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues.

(2) 2025 amounts reflect the positive impact of approximately $13 million of interest income earned from the proceeds of the Company’s follow-on common stock offering and senior notes issuance in June 2025, held in preparation for the closing of the Company’s pending acquisition of RSC Topco, Inc. 
 
See information regarding non-GAAP measures presented later in this press release.
 

 3

 
  

 Brown & Brown, Inc.
Consolidated Statements of Income
(in millions, except per share data; unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Three Months Ended June 30,

  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

  

 2026

  

  

 2025

  

 

 
 REVENUES

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Commissions and fees

  

 $

 1,654

  

  

 $

 1,249

  

  

 $

 3,534

  

  

 $

 2,634

  

 

 
 Investment and other income

  

  

 22

  

  

  

 36

  

  

  

 43

  

  

  

 55

  

 

 
 Total revenues

  

  

 1,676

  

  

  

 1,285

  

  

  

 3,577

  

  

  

 2,689

  

 

 
 EXPENSES

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Employee compensation and benefits

  

  

 838

  

  

  

 640

  

  

  

 1,745

  

  

  

 1,323

  

 

 
 Other operating expenses

  

  

 271

  

  

  

 211

  

  

  

 560

  

  

  

 398

  

 

 
 (Gain)/loss on disposal

  

  

 1

  

  

  

 —

  

  

  

 —

  

  

  

 1

  

 

 
 Amortization

  

  

 110

  

  

  

 50

  

  

  

 226

  

  

  

 103

  

 

 
 Depreciation

  

  

 18

  

  

  

 11

  

  

  

 35

  

  

  

 23

  

 

 
 Interest

  

  

 100

  

  

  

 51

  

  

  

 199

  

  

  

 96

  

 

 
 Change in estimated acquisition earn-out payables

  

  

 (40

 )

  

  

 11

  

  

  

 (34

 )

  

  

 7

  

 

 
 Mark-to-market of escrow liability

  

  

 (5

 )

  

  

 —

  

  

  

 (69

 )

  

  

 —

  

 

 
 Total expenses

  

  

 1,293

  

  

  

 974

  

  

  

 2,662

  

  

  

 1,951

  

 

 
 Income before income taxes

  

  

 383

  

  

  

 311

  

  

  

 915

  

  

  

 738

  

 

 
 Income taxes

  

  

 94

  

  

  

 77

  

  

  

 199

  

  

  

 169

  

 

 
 Net income before non-controlling interests

  

  

 289

  

  

  

 234

  

  

  

 716

  

  

  

 569

  

 

 
 Less: Net income attributable to non-controlling interests

  

  

 1

  

  

  

 3

  

  

  

 2

  

  

  

 6

  

 

 
 Net income attributable to the Company

  

 $

 288

  

  

 $

 231

  

  

 $

 714

  

  

 $

 563

  

 

 
 Net income per share:

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic

  

 $

 0.86

  

  

 $

 0.79

  

  

 $

 2.14

  

  

 $

 1.94

  

 

 
 Diluted

  

 $

 0.84

  

  

 $

 0.78

  

  

 $

 1.90

  

  

 $

 1.93

  

 

 
 Weighted average number of shares outstanding:

  

  

  

  

  

  

  

  

  

  

  

  

 

 
 Basic

  

  

 329

  

  

  

 292

  

  

  

 330

  

  

  

 287

  

 

 
 Diluted

  

  

 334

  

  

  

 293

  

  

  

 335

  

  

  

 289

  

 

  

 4

 
  

 Brown & Brown, Inc.
Consolidated Balance Sheets
(in millions, except per share data, unaudited)
 

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 June 30,2026

  

  

 December 31,2025

  

 

 
 ASSETS

  

  

  

  

  

  

 

 
 Current assets:

  

  

  

  

  

  

 

 
 Cash and cash equivalents

  

 $

 918

  

  

 $

 1,079

  

 

 
 Fiduciary cash

  

  

 2,613

  

  

  

 2,471

  

 

 
 Commission, fees, and other receivables

  

  

 1,547

  

  

  

 1,438

  

 

 
 Fiduciary receivables

  

  

 1,632

  

  

  

 1,515

  

 

 
 Reinsurance recoverable

  

  

 591

  

  

  

 647

  

 

 
 Prepaid reinsurance premiums

  

  

 850

  

  

  

 980

  

 

 
 Other current assets

  

  

 541

  

  

  

 484

  

 

 
 Total current assets

  

  

 8,692

  

  

  

 8,614

  

 

 
 Fixed assets, net

  

  

 368

  

  

  

 367

  

 

 
 Operating lease assets

  

  

 274

  

  

  

 269

  

 

 
 Goodwill

  

  

 15,146

  

  

  

 15,087

  

 

 
 Amortizable intangible assets, net

  

  

 4,570

  

  

  

 4,906

  

 

 
 Other assets

  

  

 837

  

  

  

 748

  

 

 
 Total assets

  

 $

 29,887

  

  

 $

 29,991

  

 

 
 LIABILITIES AND EQUITY

  

  

  

  

  

  

 

 
 Current liabilities:

  

  

  

  

  

  

 

 
 Fiduciary liabilities

  

 $

 4,245

  

  

 $

 3,986

  

 

 
 Losses and loss adjustment reserve

  

  

 612

  

  

  

 671

  

 

 
 Unearned premiums

  

  

 953

  

  

  

 1,053

  

 

 
 Accounts payable

  

  

 807

  

  

  

 990

  

 

 
 Accrued expenses and other liabilities

  

  

 683

  

  

  

 875

  

 

 
 Current portion of long-term debt

  

  

 413

  

  

  

 719

  

 

 
 Total current liabilities

  

  

 7,713

  

  

  

 8,294

  

 

 
 Long-term debt less unamortized discount and debt issuance costs

  

  

 7,346

  

  

  

 6,894

  

 

 
 Operating lease liabilities

  

  

 248

  

  

  

 243

  

 

 
 Deferred income taxes, net

  

  

 925

  

  

  

 815

  

 

 
 Other liabilities

  

  

 1,047

  

  

  

 1,172

  

 

 
 Equity:

  

  

  

  

  

  

 

 
 Common stock, par value $0.10 per share; authorized 560 shares; issued 359 shares and outstanding 330 shares at 2026, issued 357 shares and outstanding 336 shares at 2025

  

  

 36

  

  

  

 36

  

 

 
 Additional paid-in capital

  

  

 6,189

  

  

  

 6,160

  

 

 
 Treasury stock, at cost 29 shares at 2026 and 21 shares at 2025

  

  

 (1,348

 )

  

  

 (848

 )

 

 
 Accumulated other comprehensive income

  

  

 116

  

  

  

 210

  

 

 
 Non-controlling interests

  

  

 25

  

  

  

 26

  

 

 
 Retained earnings

  

  

 7,590

  

  

  

 6,989

  

 

 
 Total equity

  

  

 12,608

  

  

  

 12,573

  

 

 
 Total liabilities and equity

  

 $

 29,887

  

  

 $

 29,991

  

 

  

 5

 
  

 Brown & Brown, Inc.
Consolidated Statements of Cash Flows
(in millions, unaudited)

 
 
 
 
 
 
 
 
 
 
 
 

 
  

  

 Six Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Cash flows from operating activities:

  

  

  

  

  

  

 

 
 Net income before non-controlling interests

  

 $

 716

  

  

 $

 569

  

 

 
 Adjustments to reconcile net income before non-controlling interests to net cash provided by operating activities:

  

  

  

  

  

  

 

 
 Amortization

  

  

 226

  

  

  

 103

  

 

 
 Depreciation

  

  

 35

  

  

  

 23

  

 

 
 Non-cash stock-based compensation

  

  

 49

  

  

  

 52

  

 

 
 Change in estimated acquisition earn-out payables

  

  

 (34

 )

  

  

 7

  

 

 
 Mark-to-market of escrow liability

  

  

 (69

 )

  

  

 —

  

 

 
 Deferred income taxes

  

  

 128

  

  

  

 (2

 )

 

 
 Net loss on sales/disposals of investments, businesses, fixed assets and customer accounts

  

  

 —

  

  

  

 2

  

 

 
 Payments on acquisition earn-outs in excess of original estimated payables

  

  

 (40

 )

  

  

 (1

 )

 

 
 Other

  

  

 8

  

  

  

 2

  

 

 
 Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:

  

  

  

  

  

  

 

 
 Commissions, fees and other receivables (increase)/decrease

  

  

 (143

 )

  

  

 (139

 )

 

 
 Reinsurance recoverable (increase)/decrease

  

  

 56

  

  

  

 1,142

  

 

 
 Prepaid reinsurance premiums (increase)/decrease

  

  

 130

  

  

  

 (9

 )

 

 
 Other assets (increase)/decrease

  

  

 (112

 )

  

  

 (11

 )

 

 
 Losses and loss adjustment reserve increase/(decrease)

  

  

 (59

 )

  

  

 (1,143

 )

 

 
 Unearned premiums increase/(decrease)

  

  

 (100

 )

  

  

 55

  

 

 
 Accounts payable increase/(decrease)

  

  

 (11

 )

  

  

 5

  

 

 
 Accrued expenses and other liabilities increase/(decrease)

  

  

 (194

 )

  

  

 (132

 )

 

 
 Other liabilities increase/(decrease)

  

  

 22

  

  

  

 15

  

 

 
 Net cash provided by operating activities

  

  

 608

  

  

  

 538

  

 

 
 Cash flows from investing activities:

  

  

  

  

  

  

 

 
 Additions to fixed assets

  

  

 (38

 )

  

  

 (32

 )

 

 
 Payments for businesses acquired, net of cash acquired

  

  

 (30

 )

  

  

 (161

 )

 

 
 Proceeds from sales of businesses, fixed assets and customer accounts

  

  

 3

  

  

  

 10

  

 

 
 Other investing activities

  

  

 (6

 )

  

  

 (4

 )

 

 
 Net cash used in investing activities

  

  

 (71

 )

  

  

 (187

 )

 

 
 Cash flows from financing activities:

  

  

  

  

  

  

 

 
 Fiduciary receivables and liabilities, net

  

  

 157

  

  

  

 119

  

 

 
 Payments on acquisition earn-outs

  

  

 (184

 )

  

  

 (45

 )

 

 
 Proceeds from long-term debt

  

  

 —

  

  

  

 4,192

  

 

 
 Payments on long-term debt

  

  

 (31

 )

  

  

 (188

 )

 

 
 Deferred debt issuance costs

  

  

 (3

 )

  

  

 (36

 )

 

 
 Borrowings on revolving credit facility

  

  

 225

  

  

  

 150

  

 

 
 Payments on revolving credit facility

  

  

 (50

 )

  

  

 (400

 )

 

 
 Proceeds from issuance of common stock, net of expenses

  

  

 —

  

  

  

 4,315

  

 

 
 Repurchase shares to fund tax withholdings for non-cash stock-based compensation

  

  

 (27

 )

  

  

 (41

 )

 

 
 Purchase of treasury stock

  

  

 (500

 )

  

  

 —

  

 

 
 Cash dividends paid

  

  

 (112

 )

  

  

 (86

 )

 

 
 Other financing activities

  

  

 (1

 )

  

  

 1

  

 

 
 Net cash (used in) provided by financing activities

  

  

 (526

 )

  

  

 7,981

  

 

 
 Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash inclusive of fiduciary cash

  

  

 (27

 )

  

  

 85

  

 

 
 Net (decrease) increase in cash, cash equivalents and restricted cash inclusive of fiduciary cash

  

  

 (16

 )

  

  

 8,417

  

 

 
 Cash, cash equivalents and restricted cash inclusive of fiduciary cash at beginning of period

  

  

 3,815

  

  

  

 2,502

  

 

 
 Cash, cash equivalents and restricted cash inclusive of fiduciary cash at end of period

  

 $

 3,799

  

  

 $

 10,919

  

 

  

 6

 
  

  
 
Conference call, webcast and slide presentation
A conference call to discuss the results of the second quarter of 2026 will be held on Tuesday, July 28, 2026, at 8:00 AM (EDT). The Company may refer to a slide presentation during its conference call. You can access the webcast and the slides from the "Investor Relations" section of the Company’s website at bbrown.com.
About Brown & Brown
Brown & Brown, Inc. (NYSE: BRO) is a leading insurance brokerage firm delivering comprehensive and customized insurance solutions and specialization since 1939. With a global presence spanning 700+ locations and a team of more than 23,000 professionals, we are dedicated to delivering scalable, innovative strategies for our customers at every step of their growth journey. Learn more at BBrown.com.
Forward-looking statements
This press release may contain certain statements relating to future results which are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created by those laws. You can identify these statements by forward-looking words such as “may,” “will,” “should,” “expect,” “anticipate,” “believe,” “intend,” “estimate,” “plan” and “continue” or similar words. We have based these statements on our current expectations about potential future events. Although we believe the expectations expressed in the forward-looking statements included in this press release are based upon reasonable assumptions within the bounds of our knowledge of our business, a number of factors could cause actual results to differ materially from those expressed in any forward-looking statements, whether oral or written, made by us or on our behalf. Many of these factors have previously been identified in filings or statements made by us or on our behalf. Important factors which could cause our actual results to differ, possibly materially from the forward-looking statements in this press release include but are not limited to the following items: the Company's determination as it finalizes its financial results for the second quarter of 2026 that its financial results differ from the current preliminary unaudited numbers set forth herein; risks with respect to the acquisition of RSC Topco, Inc. (“Accession”) (the “Transaction”); the possibility that the anticipated benefits, including any anticipated cost savings and strategies, of the Transaction are not realized when expected or at all; risks related to the financing of the Transaction, including that financing the Transaction resulted in an increase in the Company’s indebtedness; risks relating to the financial information related to Accession; the risk that certain assumptions the Company has made relating to the Transaction prove to be materially inaccurate; risks related to Accession’s business, including underwriting risk in connection with certain captive insurance companies; the inability to hire, retain and develop qualified employees, as well as the loss of any of our executive officers or other key employees; a cybersecurity attack or any other interruption in information technology and/or data security that may impact our operations or the operations of third parties that support us; acquisition-related risks that could negatively affect the success of our growth strategy, including the possibility that we may not be able to successfully identify suitable acquisition candidates, complete acquisitions, successfully integrate acquired businesses into our operations and expand into new markets; risks related to our international operations, which may result in additional risks or require more management time and expense than our domestic operations to achieve or maintain profitability; the requirement for additional resources and time to adequately respond to dynamics resulting from rapid technological change, including the increasing use of artificial intelligence and robotic processing automation; the loss of or significant change to any of our insurance company or intermediary relationships, which could result in loss of capacity to write business, additional expense, loss of market share or material decrease in our commissions; the effect of natural disasters on our Contingents, insurer capacity or claims expenses within our capitalized captive insurance facilities; adverse economic conditions, political conditions, outbreaks of war, disasters, or regulatory changes in states or countries where we have a concentration of our business; the inability to maintain our culture or a significant change in management, management philosophy or our business strategy; fluctuations in our commission revenue as a result of factors outside of our control; the effects of significant or sustained inflation or higher interest rates; claims expense resulting from the limited underwriting risk associated with our participation in captive insurance facilities; risks associated with our automobile and recreational vehicle finance and incentives dealer services (“F&I”) businesses; changes in, or the termination of, certain programs administered by the U.S. federal government from which we derive revenues; the limitations of our system of disclosure and internal controls and procedures in preventing errors or fraud, or in informing management of all material information in a timely manner; our reliance on vendors and other third parties to perform key functions of our business operations and provide services to our customers; the significant control certain shareholders have; changes in data privacy and protection laws and regulations or any failure to comply with such laws and regulations; improper disclosure of confidential information; our ability to comply with non-U.S. laws, regulations and policies; the potential adverse effect of certain actual or potential claims, regulatory actions or proceedings on our businesses, results of operations, financial condition or liquidity; uncertainty in our business practices and compensation arrangements with insurance carriers due to potential changes in regulations; regulatory changes that could reduce our profitability or growth by increasing 

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 compliance costs, technology compliance, restricting the products or services we may sell, the markets we may enter, the methods by which we may sell our products and services, or the prices we may charge for our services and the form of compensation we may accept from our customers, carriers and third parties; increasing scrutiny and changing laws or competing expectations from regulators, investors and customers with respect to our environmental, social and governance practices and disclosure; a decrease in demand for liability insurance as a result of tort reform legislation; our failure to comply with any covenants contained in our debt agreements; the possibility that covenants in our debt agreements could prevent us from engaging in certain potentially beneficial activities; fluctuations in foreign currency exchange rates; a downgrade to our corporate credit rating, the credit ratings of our outstanding debt or other market speculation; future sales or other dilution of our equity could adversely affect the market price of our common stock; changes in the U.S.-based credit markets that might adversely affect our business, results of operations and financial condition; changes in current U.S. or global economic conditions, including an extended slowdown in the markets in which we operate; disintermediation within the insurance industry, including increased competition from insurance companies, technology companies and the financial services industry, as well as the shift away from traditional insurance markets; conditions that result in reduced insurer capacity; quarterly and annual variations in our commissions that result from the timing of policy renewals and the net effect of new and lost business production; intangible asset risk, including the possibility that our goodwill may become impaired in the future; changes in our accounting estimates and assumptions; other risks and uncertainties as may be detailed from time to time in our public announcements and Securities and Exchange Commission (“SEC”) filings; and other factors that the Company may not have currently identified or quantified. Assumptions as to any of the foregoing, and all statements, are not based upon historical fact, but rather reflect our current expectations concerning future results and events. Forward-looking statements that we make or that are made by others on our behalf are based upon a knowledge of our business and the environment in which we operate, but because of the factors listed above, among others, actual results may differ from those in the forward-looking statements. Consequently, these cautionary statements qualify all of the forward-looking statements we make herein. We cannot assure you that the results or developments anticipated by us will be realized, or even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business or our operations in the way we expect. We caution readers not to place undue reliance on these forward-looking statements. All forward-looking statements made herein are made only as of the date of this press release, and the Company does not undertake any obligation to publicly update or correct any forward-looking statements to reflect events or circumstances that subsequently occur or of which the Company hereafter becomes aware.
 
Non-GAAP supplemental financial information
 
This press release contains references to "non-GAAP financial measures" as defined in SEC Regulation G, consisting of Organic Revenue, Organic Revenue with Contingents, EBITDAC, EBITDAC Margin, EBITDAC - Adjusted, EBITDAC Margin - Adjusted and Diluted Net Income Per Share - Adjusted. We present these measures because we believe such information is of interest to the investment community and because we believe they provide additional meaningful methods to evaluate the Company’s operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis due to the impact of certain items that have a high degree of variability, that we believe are not indicative of ongoing performance and that are not easily comparable from period to period. This non-GAAP financial information should be considered in addition to, not in lieu of, GAAP information as of the relevant date. Consistent with Regulation G, a description of such information is provided below, and tabular reconciliations of such items to our most directly comparable GAAP information can be found within this press release as well as in our periodic filings with the SEC.
 
We view Organic Revenue and Organic Revenue growth (including Organic Revenue with Contingents and its growth) as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our two segments, because they allow us to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that were a part of our business in both the current and prior year and that are expected to continue in the future. In addition, we believe Diluted Net Income Per Share - Adjusted provides a meaningful representation of our operating performance and improves the comparability of our results between periods by excluding the impact of the change in estimated acquisition earn-out payables, the impact of amortization of intangible assets and certain other non-recurring or infrequently occurring items. We also view EBITDAC, EBITDAC - Adjusted, EBITDAC Margin and EBITDAC Margin - Adjusted as important indicators when assessing and evaluating our performance, as they present more comparable measurements of our operating margins in a meaningful and consistent manner. As disclosed in our most recent proxy statement, we use Organic Revenue growth, Diluted Net Income Per Share - Adjusted and EBITDAC Margin - Adjusted as key performance metrics for our short-term and long-term incentive compensation plans for executive officers and other key employees.
 
Non-GAAP Revenue Measures
 
•Organic Revenue is our core commissions and fees less: (i) the core commissions and fees earned for the first twelve months by newly acquired operations; (ii) divested business (core commissions and fees generated from offices, 

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 books of business or niches sold or terminated during the comparable period); (iii) Foreign Currency Translation (as defined below) and (iv) the Litigation-Related Impact. The term “core commissions and fees” excludes profit-sharing contingent commissions (“Contingents”); and therefore, represents the revenues earned directly from specific insurance policies sold and specific fee-based services rendered. Growth of Organic Revenue can be expressed as a dollar amount or a percentage rate.

•Organic Revenue with Contingents is Organic Revenue plus Organic Contingents (as defined below). Growth of Organic Revenue with Contingents can be expressed as a dollar amount or a percentage rate.

 
Non-GAAP Earnings Measures
•EBITDAC is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables.

•EBITDAC Margin is defined as EBITDAC divided by total revenues. 

•EBITDAC - Adjusted is defined as EBITDAC, excluding (i) (gain)/loss on disposal (as defined below), (ii) Acquisition/Integration Costs (as defined below) and (iii) mark-to-market of escrow liability (as defined below). 

•EBITDAC Margin - Adjusted is defined as EBITDAC - Adjusted divided by total revenues.

•Diluted Net Income Per Share - Adjusted is defined as diluted net income per share, excluding the after-tax impact of (i) the change in estimated acquisition earn-out payables, (ii) (gain)/loss on disposal, (as defined below), (iii) Acquisition/Integration Costs (as defined below), (iv) mark-to-market of escrow liability (as defined below) in periods wherein the effect of mark-to-market of escrow liability is not dilutive to the Company's earnings and, therefore, not already excluded from the calculation of diluted net income per share in accordance with ASC 260, and (v) amortization.

 
Definitions Related to Certain Components of Non-GAAP Measures 
 
•“Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings; costs for third-party professional services, including legal, accounting, consulting, financial advisory and due diligence; costs and fees associated with entry into the bridge financing commitment; costs of integrating or streamlining processes and information technology systems, including data migration and system integration; costs associated with optimizing vendor agreements and leased office space, including exit costs related to location combinations; and employment-related costs, including severance payments, costs associated with the transition of certain legacy compensation programs, retention-related compensation expenses, and incentive payments) arising out of our acquisition of Accession and acquisitions previously completed by Accession, which are not considered to be normal, recurring or part of ongoing operations.

•“Foreign Currency Translation” means the period-over-period impact of foreign currency translation, which is calculated by applying current-year foreign exchange rates to the various functional currencies in our business to our reporting currency of US dollars for the same period in the prior year.

•“(Gain)/loss on disposal” is a caption on our consolidated statements of income which reflects net proceeds received as compared to the net book value related to sales of books of business and other divestiture transactions.

 
•“Mark-to-market of escrow liability” is a caption on our consolidated statements of income which reflects the non-cash change in the fair value associated with certain shares of the Company’s common stock held in escrow. The change is driven by fluctuations in our stock price between the beginning of the period and the end of the period. These escrowed shares represent a portion of the merger consideration payable in connection with our acquisition of Accession. The escrowed shares secure certain indemnification obligations of the Accession equity holders related to businesses that are in run-off or discontinued.

•“Litigation-Related Impact” means the core commissions and fees attributable to (i) the loss of specifically identified customer accounts and (ii) new business generated in the prior year by certain former employees, in each case in connection with the conduct of a competitor that is the subject of pending litigation in multiple jurisdictions.

•“Organic Contingents” are Contingents, less (i) Contingents earned for the first twelve months by newly acquired stand-alone operations and (ii) Contingents earned from divested stand-alone operations (Contingents generated from stand-alone operations sold or terminated during the comparable period). 

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 Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments and, therefore comparability may be limited. This supplemental non-GAAP financial information should be considered in addition to, and not in lieu of, the Company's condensed consolidated financial statements.
 
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For more information:
 
R. Andrew Watts
Chief Financial Officer
(386) 239-5770

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