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Brown & Brown, Inc. Announces Record Fourth-Quarter Earnings of $42.6 Million

DAYTONA BEACH, FL and TAMPA, FL -- (Marketwire) -- 02/01/13 -- Brown & Brown, Inc. (NYSE: BRO) today announced its preliminary, unaudited financial results for the fourth quarter of 2012.

Net income for the fourth quarter of 2012 was $42,637,000, or $0.29 per share, compared with $36,494,000, or $0.25 per share for the same quarter of 2011, an increase of 16.8%. Total revenue for the fourth quarter was $302,830,000, compared with 2011 fourth-quarter revenue of $244,097,000, an increase of 24.1%.

Total revenue for the twelve months ended December 31, 2012 was $1,200,032,000, compared with total revenue for the same period of 2011 of $1,013,542,000, an increase of 18.4%. Net income for the twelve-month period ended December 31, 2012 was $184,045,000, or $1.26 per share, compared with $163,995,000, or $1.13 per share for the same period of 2011, an increase of 12.2%.

J. Powell Brown, President and Chief Executive Officer of the Company, noted, "The fourth-quarter results were the culmination of the hard work of our 6,300-plus teammates throughout 2012. Two of our most important goals for 2012 -- to grow our revenues organically and to improve each and every quarter -- were accomplished. I am very proud of what we achieved in the fourth quarter and for the year. We will continue to work tirelessly for the benefit of our clients in 2013."

Brown & Brown, Inc., through its subsidiaries, offers a broad range of insurance and reinsurance products and services. Additionally, certain Brown & Brown subsidiaries offer a variety of risk management, third-party administration, and other services. Serving business, public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' sixth largest independent insurance intermediary. The Company's Web address is www.bbinsurance.com.

This press release may contain certain statements relating to future results which are forward-looking statements, including those relating to the Company's anticipated financial results for the fourth quarter of 2012. These statements are not historical facts, but instead represent only the Company's current belief regarding future events, many of which, by their nature, are inherently uncertain and outside of the Company's control. It is possible that the Company's actual results, financial condition and achievements may differ, possibly materially, from the anticipated results, financial condition and achievements contemplated by these forward-looking statements. These risks and uncertainties include, but are not limited to, the Company's determination as it finalizes its financial results for the fourth quarter of 2012 that its financial results differ from the current preliminary unaudited numbers set forth herein, other factors that the Company may not have currently identified or quantified, and other risks, relevant factors and uncertainties identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, and the Company's other filings with the Securities and Exchange Commission. All forward-looking statements made herein are made only as of the date of this 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.

                            Brown & Brown, Inc.
                     CONSOLIDATED STATEMENTS OF INCOME
                   (in thousands, except per share data)
                                (unaudited)

                                       For the               For the
                                  Three Months Ended   Twelve Months Ended
                                     December 31,          December 31,
                                 -------------------  ---------------------
                                    2012      2011       2012       2011
                                 --------- ---------  ---------- ----------
REVENUES
Commissions and fees             $ 300,296 $ 241,350  $1,189,081 $1,005,962
Investment income                      236       333         797      1,267
Other income, net                    2,298     2,414      10,154      6,313
                                 --------- ---------  ---------- ----------
  Total revenues                   302,830   244,097   1,200,032  1,013,542
                                 --------- ---------  ---------- ----------

EXPENSES
Employee compensation and
 benefits                          158,467   129,389     608,506    508,675
Non-cash stock-based compensation    4,472     2,856      15,865     11,194
Other operating expenses            44,995    34,590     174,389    144,079
Amortization                        16,123    13,965      63,573     54,755
Depreciation                         3,990     3,116      15,373     12,392
Interest                             4,004     3,352      16,097     14,132
Change in estimated acquisition
 earn-out payables                   1,552    (2,862)      1,418     (2,206)
                                 --------- ---------  ---------- ----------
    Total expenses                 233,603   184,406     895,221    743,021
                                 --------- ---------  ---------- ----------

Income before income taxes          69,227    59,691     304,811    270,521

Income taxes                        26,590    23,197     120,766    106,526
                                 --------- ---------  ---------- ----------

Net income                       $  42,637 $  36,494  $  184,045 $  163,995
                                 ========= =========  ========== ==========

Net income per share:
  Basic                          $    0.30 $    0.25  $     1.28 $     1.15
                                 ========= =========  ========== ==========
  Diluted                        $    0.29 $    0.25  $     1.26 $     1.13
                                 ========= =========  ========== ==========

Weighted average number of shares
 outstanding:
  Basic                            139,681   138,796     139,364    138,582
                                 ========= =========  ========== ==========
  Diluted                          142,314   140,547     142,010    140,264
                                 ========= =========  ========== ==========

Dividends declared per share     $   0.090 $  0.0850  $   0.3450 $   0.3250
                                 ========= =========  ========== ==========



                            Brown & Brown, Inc.
                          INTERNAL GROWTH SCHEDULE
                    Core Organic Commissions and Fees(1)
                    Three Months Ended December 31, 2012
                               (in thousands)
                                (unaudited)

                                       Total
           Quarter   Quarter   Total    Net       Less    Internal Internal
            Ended     Ended     Net   Growth  Acquisition    Net      Net
           12/31/12  12/31/11  Change    %      Revenues  Growth $ Growth %
          --------- --------- ------- ------  ----------- -------- --------

Retail(2) $ 153,230 $ 139,257 $13,973   10.0% $     6,166 $  7,807      5.6%

National
 Programs    64,090    41,057  23,033   56.1%      22,957       76      0.2%

Wholesale
 Brokerage   40,299    35,595   4,704   13.2%       1,738    2,966      8.3%

Services     34,398    16,482  17,916  108.7%      16,106    1,810     11.0%
          --------- --------- -------         ----------- --------

Total Core
 Commissions
 and Fees
 (1)      $ 292,017 $ 232,391 $59,626   25.7% $    46,967 $ 12,659      5.4%
          ========= ========= =======         =========== ========



                 Reconciliation of Internal Growth Schedule
                        to Total Commissions and Fees
              Included in the Consolidated Statements of Income
            For the Three Months Ended December 31, 2012 and 2011
                               (in thousands)
                                 (unaudited)

                                                      Quarter      Quarter
                                                       Ended        Ended
                                                      12/31/12     12/31/11
                                                    -----------  -----------
Total core commissions and fees(1)                  $   292,017  $   232,391
Profit-sharing contingent commissions                     6,342        4,810
Guaranteed supplemental commissions                       1,937        2,459
Divested business                                             -        1,690
                                                    -----------  -----------

Total commissions & fees                            $   300,296  $   241,350
                                                    ===========  ===========

(1) Total core commissions and fees are our total commissions and fees less (i) profit-sharing contingent commissions (revenues derived from special revenue-sharing commissions from insurance companies based upon the volume and the growth and/or profitability of the business placed with such companies during the prior year), (ii) guaranteed supplemental commissions (GSC) (revenues derived from special revenue-sharing commissions from insurance companies based solely upon the volume of the business placed with such companies during the current year),and (iii) divested business (commissions and fees generated from offices, books of business or niches sold by the Company or terminated).

(2) The Retail segment includes commissions and fees reported in the "Other" column of the Segment Information, which includes corporate and consolidation items.



                             Brown & Brown, Inc.
                         CONSOLIDATED BALANCE SHEETS
                    (in thousands, except per share data)
                                 (unaudited)

                                               December 31,    December 31,
                                                   2012            2011
                                              --------------  --------------
ASSETS
Current assets:
  Cash and cash equivalents                   $      219,821  $      286,305
  Restricted cash and investments                    164,564         130,535
  Short-term investments                               8,183           7,627
  Premiums, commissions and fees receivable          302,725         240,257
  Deferred income taxes                               24,408          19,863
  Other current assets                                39,811          23,540
                                              --------------  --------------
    Total current assets                             759,512         708,127

Fixed assets, net                                     74,337          61,360
Goodwill                                           1,711,514       1,323,469
Amortizable intangible assets, net                   566,538         496,182
Other assets                                          16,157          17,873
                                              --------------  --------------
    Total assets                              $    3,128,058  $    2,607,011
                                              ==============  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Premiums payable to insurance companies     $      406,704  $      327,096
  Premium deposits and credits due customers          32,867          30,048
  Accounts payable                                    48,524          22,384
  Accrued expenses and other liabilities              79,593         100,865
  Current portion of long-term debt                       93           1,227
                                              --------------  --------------
    Total current liabilities                        567,781         481,620

Long-term debt                                       450,000         250,033

Deferred income taxes, net                           237,630         178,052

Other liabilities                                     65,314          53,343

Shareholders' equity:
  Common stock, par value $0.10 per share;
   authorized 280,000 shares; issued and
   outstanding 143,878 at 2012 and 143,352
   at 2011                                            14,388          14,335
  Additional paid-in capital                         335,872         307,059
  Retained earnings                                1,457,073       1,322,562
  Accumulated other comprehensive income                   -               7
                                              --------------  --------------

    Total shareholders' equity                     1,807,333       1,643,963
                                              --------------  --------------

    Total liabilities and shareholders'
     equity                                   $    3,128,058  $    2,607,011
                                              ==============  ==============

Cory T. Walker
Chief Financial Officer
(386) 239-7250

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