Twelve Months Ended December 31, 2025 2024 Cash flows from operating activities: Net income before non-controlling interests $ 1,067 $ 1,002 Adjustments to reconcile net income before non-controlling interests to net cash provided by operating activities: Amortization 312 178 Depreciation 55 44 Non-cash stock-based compensation 93 101 Change in estimated acquisition earn-out payables 25 2 Mark-to-market of escrow liability (54 ) — Deferred income taxes (7 ) 13 Net loss/(gain) on sales/disposals of investments, businesses, fixed assets and customer accounts 3 (29 ) Payments on acquisition earn-outs in excess of original estimated payables (3 ) (37 ) Other 6 5 Changes in operating assets and liabilities, net of effect from acquisitions and divestitures: Commissions, fees and other receivables (increase)/decrease (69 ) (94 ) Reinsurance recoverable (increase)/decrease 1,146 (1,402 ) Prepaid reinsurance premiums (increase)/decrease (182 ) (58 ) Other assets (increase)/decrease (44 ) (98 ) Losses and loss adjustment reserve increase/(decrease) (1,164 ) 1,411 Unearned premiums increase/(decrease) 177 115 Accounts payable increase/(decrease) 11 (47 ) Accrued expenses and other liabilities increase/(decrease) 18 35 Other liabilities increase/(decrease) 60 33 Net cash provided by operating activities 1,450 1,174 Cash flows from investing activities: Additions to fixed assets (68 ) (82 ) Payments for businesses acquired, net of cash acquired (7,854 ) (890 ) Proceeds from sales of businesses, fixed assets and customer accounts 9 70 Other investing activities (1 ) 4 Net cash used in investing activities (7,914 ) (898 ) Cash flows from financing activities: Fiduciary receivables and liabilities, net 53 191 Payments on acquisition earn-outs (143 ) (117 ) Proceeds from long-term debt 4,192 599 Payments on long-term debt (225 ) (719 ) Deferred debt issuance costs (36 ) (5 ) Borrowings on revolving credit facility 450 500 Payments on revolving credit facility (600 ) (350 ) Proceeds from issuance of common stock, net of expenses 4,315 — Issuances of common stock for employee stock benefit plans 48 44 Repurchase shares to fund tax withholdings for non-cash stock-based compensation (42 ) (55 ) Purchase of treasury stock (100 ) — Cash dividends paid (194 ) (154 ) Other financing activities (5 ) 2 Net cash provided by (used in) financing activities 7,713 (64 ) Effect of foreign exchange rate changes on cash and cash equivalents inclusive of fiduciary cash 64 (13 ) Net increase in cash, cash equivalents and restricted cash inclusive of fiduciary cash 1,313 199 Cash, cash equivalents and restricted cash inclusive of fiduciary cash at beginning of period 2,502 2,303 Cash, cash equivalents and restricted cash inclusive of fiduciary cash at end of period $ 3,815 $ 2,502 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 fourth quarter and full year 2025 that its financial results differ from the current preliminary unaudited numbers set forth herein; risks with respect to the acquisition of Accession (the “Transaction”); the possibility that the anticipated benefits, including any anticipated costs saving 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; risks related to Accession’s business, including underwriting risk in connection with certain captive insurance companies; the risk that certain assumptions the Company has made relating to the Transaction prove to be materially inaccurate; 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 profit-sharing contingent commissions, 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 capitalized 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 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 and 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; 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; future pandemics, epidemics or outbreaks of infectious diseases, and the resulting governmental and societal responses; 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. 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.
Author: Brown & Brown, Inc.
Published at: 2026-01-26 22:00:00
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