(in millions, unaudited) Six Months Ended June 30, 2025 2024 Cash flows from operating activities: Net income before non-controlling interests $ 569 $ 553 Adjustments to reconcile net income before non-controlling interests to net cash provided by operating activities: Amortization 103 86 Depreciation 23 21 Non-cash stock-based compensation 52 52 Change in estimated acquisition earn-out payables 7 (2 ) Deferred income taxes (2 ) (3 ) Net loss/(gain) on sales/disposals of investments, businesses, fixed assets and customer accounts 2 (29 ) Payments on acquisition earn-outs in excess of original estimated payables (1 ) (31 ) Other 2 2 Changes in operating assets and liabilities, net of effect from acquisitions and divestitures: Commissions, fees and other receivables (increase)/decrease (139 ) (140 ) Reinsurance recoverable (increase)/decrease 1,142 26 Prepaid reinsurance premiums (increase)/decrease (9 ) (21 ) Other assets (increase)/decrease (11 ) (80 ) Losses and loss adjustment reserve increase/(decrease) (1,143 ) (23 ) Unearned premiums increase/(decrease) 55 140 Accounts payable increase/(decrease) 5 (54 ) Accrued expenses and other liabilities increase/(decrease) (132 ) (109 ) Other liabilities increase/(decrease) 15 (15 ) Net cash provided by operating activities 538 373 Cash flows from investing activities: Additions to fixed assets (32 ) (39 ) Payments for businesses acquired, net of cash acquired (161 ) (98 ) Proceeds from sales of businesses, fixed assets and customer accounts 10 58 Other investing activities (4 ) 2 Net cash used in investing activities (187 ) (77 ) Cash flows from financing activities: Fiduciary receivables and liabilities, net 119 248 Payments on acquisition earn-outs (45 ) (65 ) Proceeds from long-term debt 4,192 599 Payments on long-term debt (188 ) (175 ) Deferred debt issuance costs (36 ) (5 ) Borrowings on revolving credit facility 150 150 Payments on revolving credit facility (400 ) (250 ) Proceeds from issuance of common stock, net of expenses 4,315 — Repurchase shares to fund tax withholdings for non-cash stock-based compensation (41 ) (54 ) Cash dividends paid (86 ) (75 ) Other financing activities 1 2 Net cash provided by financing activities 7,981 375 Effect of foreign exchange rate changes in cash and cash equivalents inclusive of fiduciary cash 85 — Net increase in cash and cash equivalents inclusive of fiduciary cash 8,417 671 Cash and cash equivalents inclusive of fiduciary cash at beginning of period 2,502 2,303 Cash and cash equivalents inclusive of fiduciary cash at end of period $ 10,919 $ 2,974 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 2025 that its financial results differ from the current preliminary unaudited numbers set forth herein; risks with respect to the timing and completion of 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 will result 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; 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 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. “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 and retention-related compensation expenses) arising out of our pending acquisition of Accession, which are not considered to be normal, recurring or part of ongoing operations.
Author: Brown & Brown, Inc.
Published at: 2025-07-28 21:00:00
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