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Brown & Brown, Inc. Announces a 7.8 Percent Increase in Commissions and Fees Revenues
DAYTONA BEACH, FL and TAMPA, FL, Feb 16, 2009 (MARKET WIRE via COMTEX) -- Brown & Brown, Inc. (NYSE: BRO) today announced its net income and net income per share for the fourth quarter of 2008. Additionally, it announced that its total commissions and fees revenues for the fourth quarter of 2008 increased 7.8% over the fourth quarter of 2007.

Net income for the fourth quarter of 2008 was $33,373,000, or $0.24 per share, compared with $33,004,000, or $0.23 per share for the same quarter of 2007, an increase of 4.3% in net income per share. Total revenues for the fourth quarter ended December 31, 2008 were $232,090,000, compared with the 2007 fourth-quarter revenues of $217,226,000.

Total revenues for the year ended December 31, 2008 were $977,554,000, compared with the total revenues for the year ended December 31, 2007 of $959,667,000. Excluding the non-recurring gain of $18,664,000 on the sale of shares of Rock-Tenn Company in 2007, total revenues in 2008 increased 3.9% over the adjusted total revenues in 2007 of $941,003,000. Net income for the year ended December 31, 2008 was $166,124,000, or $1.17 per share, compared with $190,959,000, or $1.35 per share for 2007. Excluding the non-recurring gain of $18,664,000 on the sale of shares of Rock-Tenn Company in 2007, the adjusted net income for 2007 was $179,291,000 compared to net income in 2008 of $166,124,000.

J. Hyatt Brown, Chairman and Chief Executive Officer, noted, "We continue to traverse rough seas and deliver industry-leading margins, in addition to tolerable (at this time) top-line growth. As we cross the current economic valley, we have increased our budget to bring in new quality people in order to continue our relentless pursuit of top-line and bottom-line growth."

Jim W. Henderson, Vice Chairman and Chief Operating Officer, added, "In the fourth quarter of 2008 we acquired 15 agencies, representing $24.1 million in estimated annualized revenues. For the 2008 calendar year, we acquired 45 agencies with estimated annualized revenues of $115.4 million -- our best year ever in terms of number of transactions. Looking into 2009, the acquisition landscape appears to be robust. In this period of economic stress, it is very important to be selective about your acquisition partners in order to ensure the sustainability of an acquisition's revenues and earnings."

Brown & Brown, Inc. and its subsidiaries offer a broad range of insurance and reinsurance products and services, as well as risk management, third party administration, managed health care, and Medicare set-aside services and programs. Providing service to business, public entity, quasi-public entity, individual, trade and professional association clients nationwide, the Company is ranked by Business Insurance magazine as the United States' seventh 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 future financial results and to acquisition opportunities. 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. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results and condition, as well as its other achievements, are contained in the Company's filings with the Securities and Exchange Commission. Some factors include: general economic conditions around the country; downward commercial property and casualty premium pressures; the effects of recent legislative and regulatory changes in Florida pertaining to the insurance industry, including those relating to coastal property coverages; the competitive environment; the integration of the Company's operations with those of businesses or assets the Company has acquired or may acquire in the future and the failure to realize the expected benefits of such integration; the potential occurrence of a disaster that affects certain areas of the States of California, Florida, Michigan, New Jersey, New York, Pennsylvania, Texas and/or Washington, where significant portions of the Company's business are concentrated; and the cost and impact on the Company of previously disclosed regulatory inquiries regarding industry and Company practices with respect to compensation received from insurance carriers. 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        Twelve Months
                                           Ended               Ended
                                        December 31         December 31
                                    ------------------- -------------------
                                      2008      2007      2008      2007
                                    --------- --------- --------- ---------
REVENUES
Commissions and fees                $ 229,854 $ 213,194 $ 965,983 $ 914,650
Investment income                         943     2,639     6,079    30,494
Other income, net                       1,293     1,393     5,492    14,523
                                    --------- --------- --------- ---------
  Total revenues                      232,090   217,226   977,554   959,667
                                    --------- --------- --------- ---------
EXPENSES
Employee compensation and benefits    121,910   110,164   485,783   444,101
Non-cash stock-based compensation       1,751     1,340     7,314     5,667
Other operating expenses               35,359    34,962   137,352   131,371
Amortization                           11,842    10,638    46,631    40,436
Depreciation                            3,357     3,271    13,286    12,763
Interest                                3,645     3,357    14,690    13,802
                                    --------- --------- --------- ---------
  Total expenses                      177,864   163,732   705,056   648,140
                                    --------- --------- --------- ---------
Income before income taxes             54,226    53,494   272,498   311,527
Income taxes                           20,853    20,490   106,374   120,568
                                    --------- --------- --------- ---------
Net income                          $  33,373 $  33,004 $ 166,124 $ 190,959
                                    ========= ========= ========= =========
Net income per share:
  Basic                             $    0.24 $    0.23 $    1.18 $    1.36
                                    ========= ========= ========= =========
  Diluted                           $    0.24 $    0.23 $    1.17 $    1.35
                                    ========= ========= ========= =========
Weighted average number of shares
 outstanding:
  Basic                               141,463   140,701   140,992   140,476
                                    ========= ========= ========= =========
  Diluted                             141,939   141,355   141,558   141,257
                                    ========= ========= ========= =========
Dividends declared per share        $   0.075 $    0.07 $   0.285 $    0.25
                                    ========= ========= ========= =========
                           Brown & Brown, Inc.
                        INTERNAL GROWTH SCHEDULE
                      Core Commissions and Fees(1)
                  Three Months Ended December 31, 2008
                            (in thousands)
                              (unaudited)
                                                  Less
               Quarter  Quarter  Total   Total   Acquisi- Internal Internal
                Ended    Ended    Net     Net     tion      Net      Net
              12/31/08 12/31/07 Change   Growth  Revenues Growth $ Growth %
              -------- -------- -------  -----   -------- -------  ------
Florida
 Retail       $ 41,048 $ 40,907 $   141    0.3 % $  4,122 $(3,981)   (9.7)%
National
 Retail         72,786   61,511  11,275   18.3 %   13,300  (2,025)   (3.3)%
Western
 Retail         24,722   21,158   3,564   16.8 %    5,999  (2,435)  (11.5)%
              -------- -------- -------          -------- -------
  Total
   Retail      138,556  123,576  14,980   12.1 %   23,421  (8,441)   (6.8)%
              -------- -------- -------          -------- -------
Wholesale
 Brokerage      32,156   34,826  (2,670)  (7.7)%    2,088  (4,758)  (13.7)%
Professional
 Programs       12,020   11,467     553    4.8 %        -     553     4.8 %
Special
 Programs       33,887   31,253   2,634    8.4 %      186   2,448     7.8 %
              -------- -------- -------          -------- -------
Total
 National
 Programs       45,907   42,720   3,187    7.5 %      186   3,001     7.0 %
              -------- -------- -------          -------- -------
Services         8,305    7,977     328    4.1 %        -     328     4.1 %
              -------- -------- -------          -------- -------
Total Core
 Commissions
 and Fees (1) $224,924 $209,099 $15,825    7.6 % $ 25,695 $(9,870)   (4.7)%
              ======== ======== =======          ======== =======
                Reconciliation of Internal Growth Schedule
                      to Total Commissions and Fees
            Included in the Consolidated Statements of Income
          for the Three Months Ended December 31, 2008 and 2007
                             (in thousands)
                               (unaudited)
                                                       Quarter     Quarter
                                                        Ended       Ended
                                                      12/31/08    12/31/07
                                                     ----------  ----------
 Total core commissions and fees(1)                  $  224,924  $  209,099
 Contingent commissions                                   4,930       1,945
 Divested business                                            -       2,150
                                                     ----------  ----------
 Total commission & fees                             $  229,854  $  213,194
                                                     ==========  ==========
(1) Total core commissions and fees are our total commissions and fees
    less (i) profit-sharing contingent commissions (revenue 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), and (ii) divested
    business (commissions and fees generated from offices, books of
    business or niches sold by the Company or terminated).
                           Brown & Brown, Inc.
                      CONSOLIDATED BALANCE SHEETS
                 (in thousands, except per share data)
                              (unaudited)
                                                  December 31, December 31,
                                                      2008         2007
                                                  ------------ ------------
ASSETS
Current assets:
  Cash and cash equivalents                       $     78,557 $     38,234
  Restricted cash and investments                      144,750      254,404
  Short-term investments                                 7,511        2,892
  Premiums, commissions and fees receivable            244,515      240,680
  Deferred income taxes                                 14,171       17,208
  Other current assets                                  33,528       33,964
                                                  ------------ ------------
    Total current assets                               523,032      587,382
  Fixed assets, net                                     63,520       62,327
  Goodwill                                           1,023,372      846,433
  Amortizable intangible assets, net                   495,627      443,224
  Other assets                                          14,029       21,293
                                                  ------------ ------------
    Total assets                                  $  2,119,580 $  1,960,659
                                                  ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Premiums payable to insurance companies         $    357,707 $    394,034
  Premium deposits and credits due customers            43,577       41,211
  Accounts payable                                      18,872       18,760
  Accrued expenses                                      96,325       90,599
  Current portion of long-term debt                      6,162       11,519
                                                  ------------ ------------
    Total current liabilities                          522,643      556,123
Long-term debt                                         253,616      227,707
Deferred income taxes, net                              90,143       65,736
Other liabilities                                       11,437       13,635
Shareholders' equity:
  Common stock, par value $0.10 per share;
   authorized 280,000 shares; issued and
   outstanding 141,544 at 2008 and 140,673
   at 2007                                              14,154       14,067
  Additional paid-in capital                           250,167      231,888
  Retained earnings                                    977,407      851,490
  Accumulated other comprehensive income                    13           13
                                                  ------------ ------------
    Total shareholders' equity                       1,241,741    1,097,458
                                                  ------------ ------------
    Total liabilities and shareholders' equity    $  2,119,580 $  1,960,659
                                                  ============ ============

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

SOURCE: Brown & Brown, Inc.

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