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

 

展示99.1

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ブラウン&ブラウン社、2024年第3四半期の業績を発表

売上高総額は12億ドルで、11.0%増加しました。オーガニック売上高は9.5%増加しました。

希薄化後当期純利益のシェアは$0.81であり、調整後の希薄化後当期純利益のシェアは$0.91です

 

2024年10月28日、フロリダ州デイトナビーチ - ブラウン&ブラウン、インク(nyse:BRO)(以下「当社」)は、2024年第3四半期の未監査の財務結果を発表しました。

2024年第3四半期の売上高は、米国一般会計原則("GAAP")に基づいて12億ドルでした。前年同四半期と比較して11800万ドル、または11.0%増加し、手数料と手数料が10.1%増加し、オーガニック売上高が9.5%増加しました。法人税引前利益は3億1700万ドルで、前年同四半期比31.0%増加し、法人税引前利益率は22.7%から26.7%に増加しました。調整後のEBITDACは4億1400万ドルで、前年同四半期比11.9%増加し、調整後のEBITDAC率は34.6%から34.9%に増加しました。会社への帰属純利益は2億3400万ドルで、前年同四半期比5800万ドル、または33.0%増加し、希薄化後の一株当たり純利益は0.81ドルに増加し、30.6%増加しました。調整後の希薄化後の一株当たり純利益は、前年同四半期と比較して0.91ドル、または12.3%増加しました。

GAAPによる2024年9月30日までの9か月の売上高は36億ドルで、前年の同期比で39100万ドル、または12.1%増加し、手数料と料金は11.0%増加し、オーガニック売上高は9.4%増加した。 所得税前利益は10億ドルで、前年の同期比で30.0%増加し、同期比で所得税前利益率が24.5%から28.4%に増加した。調整後のEBITDACは13億ドルで、前年の同期比で15.4%増加し、調整後のEBITDACマージンは34.9%から35.9%に増加した。当該期間の会社に帰属する当期純利益は78300万ドルで、前年の同期比で18100万ドル、または30.1%増加し、希薄化後1株当たりの当期純利益は2.73ドルに増加し、29.4%増加し、調整後の希薄化後1株当たりの当期純利益は2.98ドルに増加した、それぞれ前年の同期と比較して16.4%増加した。

 

会社の社長兼最高経営責任者であるJ. Powell Brownは、「私たちのチームはさらに素晴らしい四半期を提供し、集団的な能力を活用する際に大きな勢いがあります。」と述べています。

 

 

 

 

 

1


 

手数料および手数料の調整

有機売上高へ

(百万単位、未監査)

 

 

 

9月30日までの3か月間

 

 

9月30日までの9ヶ月間

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

手数料と手数料

 

$

1,155

 

 

$

1,049

 

 

$

3,545

 

 

$

3,193

 

利益配分型手数料

 

 

(27

)

 

 

(27

)

 

 

(110

)

 

 

(88

)

コア手数料と手数料

 

$

1,128

 

 

$

1,022

 

 

$

3,435

 

 

$

3,105

 

買収

 

 

(35

)

 

 

 

 

 

(120

)

 

 

 

譲渡

 

 

 

 

 

(26

)

 

 

 

 

 

(81

)

外貨翻訳

 

 

 

 

 

2

 

 

 

 

 

 

7

 

有機売上高

 

$

1,093

 

 

$

998

 

 

$

3,315

 

 

$

3,031

 

有機的な売上高成長

 

$

95

 

 

 

 

 

$

284

 

 

 

 

有機的な売上高成長 %

 

 

9.5

%

 

 

 

 

 

9.4

%

 

 

 

 

このプレスリリースの後半で提示される非GAAP指標に関する情報を参照してください。

 

希薄化後の当期純利益シェアに対する調整

希薄化後当期純利益シェア - 調整後

(未監査)

 

 

 

9月30日までの3か月間

 

 

変化

 

 

9月30日までの9ヶ月間

 

 

変化

 

 

 

2024

 

 

2023

 

 

$

 

 

%

 

 

2024

 

 

2023

 

 

$

 

 

%

 

希薄化後1株当たり当期純利益

 

$

0.81

 

 

$

0.62

 

 

$

0.19

 

 

 

30.6

%

 

$

2.73

 

 

$

2.11

 

 

$

0.62

 

 

 

29.4

%

見積もりの買収欲求償却費の変化

 

 

(0.02

)

 

 

0.09

 

 

 

(0.11

)

 

 

 

 

 

(0.02

)

 

 

0.09

 

 

 

(0.11

)

 

 

 

処分に伴う利益/損失

 

 

 

 

 

(0.01

)

 

 

0.01

 

 

 

 

 

 

(0.08

)

 

 

(0.02

)

 

 

(0.06

)

 

 

 

取得/統合コスト

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.02

 

 

 

(0.02

)

 

 

 

償却費

 

 

0.12

 

 

 

0.11

 

 

 

0.01

 

 

 

 

 

 

0.35

 

 

 

0.33

 

 

 

0.02

 

 

 

 

当期純利益希薄化後シェア - 調整後

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.03

 

 

 

(0.03

)

 

 

 

希薄化後当期純利益シェア - 調整後

 

$

0.91

 

 

$

0.81

 

 

$

0.10

 

 

 

12.3

%

 

$

2.98

 

 

$

2.56

 

 

$

0.42

 

 

 

16.4

%

 

このプレスリリースの後半で提示される非GAAP指標に関する情報を参照してください。

 

2


 

所得税前の収入の調整をEBITDACと調整すること

EBITDAC - 調整後および所得税前利益率(1)「PAKリチウムプロジェクトへようこそ。」

EBITDACマージンおよび調整後のEBITDACマージン

(百万単位、未監査)

 

 

 

9月30日までの3か月間

 

 

9月30日までの9ヶ月間

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

収益合計

 

$

1,186

 

 

$

1,068

 

 

$

3,622

 

 

$

3,231

 

税引前当期純利益

 

$

317

 

 

$

242

 

 

$

1,028

 

 

$

791

 

所得税課税前利益率(1)

 

 

26.7

%

 

 

22.7

%

 

 

28.4

%

 

 

24.5

%

償却費

 

 

45

 

 

 

41

 

 

 

131

 

 

 

123

 

減価償却費用

 

 

11

 

 

 

10

 

 

 

33

 

 

 

30

 

利息

 

 

50

 

 

 

48

 

 

 

147

 

 

 

143

 

見積もりの買収欲求償却費の変化

 

 

(8

)

 

 

30

 

 

 

(9

)

 

 

30

 

EBITDAC

 

$

415

 

 

$

371

 

 

$

1,330

 

 

$

1,117

 

EBITDAC マージン

 

 

35.0

%

 

 

34.7

%

 

 

36.7

%

 

 

34.6

%

処分に伴う利益/損失

 

 

(1

)

 

 

(3

)

 

 

(30

)

 

 

(9

)

買収/統合コスト

 

 

 

 

 

2

 

 

 

 

 

 

8

 

第1四半期23年度の特別コスト

 

 

 

 

 

 

 

 

 

 

 

11

 

調整後の EBITDAC

 

$

414

 

 

$

370

 

 

$

1,300

 

 

$

1,127

 

調整後の EBITDAC マージン

 

 

34.9

%

 

 

34.6

%

 

 

35.9

%

 

 

34.9

%

 

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

 

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Commissions and fees

 

$

1,155

 

 

$

1,049

 

 

$

3,545

 

 

$

3,193

 

Investment income

 

 

31

 

 

 

17

 

 

 

71

 

 

 

34

 

Other

 

 

 

 

 

2

 

 

 

6

 

 

 

4

 

Total revenues

 

 

1,186

 

 

 

1,068

 

 

 

3,622

 

 

 

3,231

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

607

 

 

 

532

 

 

 

1,823

 

 

 

1,633

 

Other operating expenses

 

 

165

 

 

 

168

 

 

 

499

 

 

 

490

 

Gain on disposal

 

 

(1

)

 

 

(3

)

 

 

(30

)

 

 

(9

)

Amortization

 

 

45

 

 

 

41

 

 

 

131

 

 

 

123

 

Depreciation

 

 

11

 

 

 

10

 

 

 

33

 

 

 

30

 

Interest

 

 

50

 

 

 

48

 

 

 

147

 

 

 

143

 

Change in estimated acquisition earn-out payables

 

 

(8

)

 

 

30

 

 

 

(9

)

 

 

30

 

Total expenses

 

 

869

 

 

 

826

 

 

 

2,594

 

 

 

2,440

 

Income before income taxes

 

 

317

 

 

 

242

 

 

 

1,028

 

 

 

791

 

Income taxes

 

 

78

 

 

 

66

 

 

 

237

 

 

 

189

 

Net income before non-controlling interests

 

 

239

 

 

 

176

 

 

 

791

 

 

 

602

 

Less: Net income attributable to non-controlling interests

 

 

5

 

 

 

 

 

 

8

 

 

 

 

Net income attributable to the Company

 

$

234

 

 

$

176

 

 

$

783

 

 

$

602

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.82

 

 

$

0.62

 

 

$

2.75

 

 

$

2.12

 

Diluted

 

$

0.81

 

 

$

0.62

 

 

$

2.73

 

 

$

2.11

 

Weighted average number of shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

282

 

 

 

280

 

 

 

282

 

 

 

279

 

Diluted

 

 

284

 

 

 

281

 

 

 

283

 

 

 

280

 

 

4


 

Brown & Brown, Inc.

Consolidated Balance Sheets

(in millions, except per share data, unaudited)

 

 

 

September 30,
2024

 

 

December 31,
2023

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

957

 

 

$

700

 

Fiduciary cash

 

 

1,744

 

 

 

1,603

 

Short-term investments

 

 

11

 

 

 

11

 

Commission, fees, and other receivables

 

 

917

 

 

 

790

 

Fiduciary receivables

 

 

961

 

 

 

1,125

 

Reinsurance recoverable

 

 

2,036

 

 

 

125

 

Prepaid reinsurance premiums

 

 

539

 

 

 

462

 

Other current assets

 

 

314

 

 

 

314

 

Total current assets

 

 

7,479

 

 

 

5,130

 

Fixed assets, net

 

 

309

 

 

 

270

 

Operating lease assets

 

 

192

 

 

 

199

 

Goodwill

 

 

7,577

 

 

 

7,341

 

Amortizable intangible assets, net

 

 

1,582

 

 

 

1,621

 

Investments

 

 

21

 

 

 

21

 

Other assets

 

 

365

 

 

 

301

 

Total assets

 

$

17,525

 

 

$

14,883

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Fiduciary liabilities

 

$

2,705

 

 

$

2,727

 

Losses and loss adjustment reserve

 

 

2,044

 

 

 

131

 

Unearned premiums

 

 

625

 

 

 

462

 

Accounts payable

 

 

329

 

 

 

459

 

Accrued expenses and other liabilities

 

 

597

 

 

 

608

 

Current portion of long-term debt

 

 

225

 

 

 

569

 

Total current liabilities

 

 

6,525

 

 

 

4,956

 

Long-term debt less unamortized discount and debt issuance costs

 

 

3,367

 

 

 

3,227

 

Operating lease liabilities

 

 

181

 

 

 

179

 

Deferred income taxes, net

 

 

638

 

 

 

616

 

Other liabilities

 

 

334

 

 

 

326

 

Equity:

 

 

 

 

 

 

Common stock, par value $0.10 per share; authorized 560 shares; issued 306 shares and outstanding 286 shares at 2024, issued 304 shares and outstanding 285 shares at 2023, respectively

 

 

31

 

 

 

30

 

Additional paid-in capital

 

 

1,095

 

 

 

1,027

 

Treasury stock, at cost 20 shares at 2024 and 2023

 

 

(748

)

 

 

(748

)

Accumulated other comprehensive loss

 

 

125

 

 

 

(19

)

Non-controlling interests

 

 

16

 

 

 

-

 

Retained earnings

 

 

5,961

 

 

 

5,289

 

Total equity

 

 

6,480

 

 

 

5,579

 

Total liabilities and equity

 

$

17,525

 

 

$

14,883

 

 

5


 

Brown & Brown, Inc.

Consolidated Statements of Cash Flows

(in millions, unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income before non-controlling interests

 

$

791

 

 

$

602

 

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

 

 

 

 

 

 

Amortization

 

 

131

 

 

 

123

 

Depreciation

 

 

33

 

 

 

30

 

Non-cash stock-based compensation

 

 

77

 

 

 

67

 

Change in estimated acquisition earn-out payables

 

 

(9

)

 

 

30

 

Deferred income taxes

 

 

(11

)

 

 

(1

)

Amortization of debt discount and disposal of deferred financing costs

 

 

3

 

 

 

3

 

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

 

 

(29

)

 

 

(11

)

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

 

 

(35

)

 

 

(18

)

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

 

 

 

 

 

 

Commissions, fees and other receivables (increase)/decrease

 

 

(119

)

 

 

(83

)

Reinsurance recoverables (increase)/decrease

 

 

(1,911

)

 

 

612

 

Prepaid reinsurance premiums (increase)/decrease

 

 

(77

)

 

 

(110

)

Other assets (increase)/decrease

 

 

(81

)

 

 

(87

)

Losses and loss adjustment reserve increase/(decrease)

 

 

1,913

 

 

 

(609

)

Unearned premiums increase/(decrease)

 

 

163

 

 

 

118

 

Accounts payable increase/(decrease)

 

 

(9

)

 

 

163

 

Accrued expenses and other liabilities increase/(decrease)

 

 

(17

)

 

 

(41

)

Other liabilities increase/(decrease)

 

 

 

 

 

(84

)

Net cash provided by operating activities

 

 

813

 

 

 

704

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to fixed assets

 

 

(62

)

 

 

(38

)

Payments for businesses acquired, net of cash acquired

 

 

(118

)

 

 

(163

)

Proceeds from sales of businesses, fixed assets and customer accounts

 

 

60

 

 

 

8

 

Purchases of investments

 

 

(5

)

 

 

(6

)

Proceeds from sales of investments

 

 

6

 

 

 

6

 

Net cash used in investing activities

 

 

(119

)

 

 

(193

)

Cash flows from financing activities:

 

 

 

 

 

 

Fiduciary receivables and liabilities, net

 

 

83

 

 

 

117

 

Payments on acquisition earn-outs

 

 

(100

)

 

 

(57

)

Proceeds from long-term debt

 

 

599

 

 

 

 

Payments on long-term debt

 

 

(700

)

 

 

(238

)

Deferred debt issuance costs

 

 

(5

)

 

 

 

Borrowings on revolving credit facilities

 

 

150

 

 

 

170

 

Payments on revolving credit facilities

 

 

(250

)

 

 

(170

)

Issuances of common stock for employee stock benefit plans

 

 

44

 

 

 

41

 

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

 

 

(54

)

 

 

(40

)

Cash dividends paid

 

 

(111

)

 

 

(98

)

Other financing activities

 

 

3

 

 

 

 

Net cash used in financing activities

 

 

(341

)

 

 

(275

)

Effect of foreign exchange rate changes in cash and cash equivalents inclusive of fiduciary cash

 

 

45

 

 

 

2

 

Net increase in cash and cash equivalents inclusive of fiduciary cash

 

 

398

 

 

 

238

 

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

 

 

2,303

 

 

 

2,033

 

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

 

$

2,701

 

 

$

2,271

 

 

6


 

 

 

Conference call, webcast and slide presentation

A conference call to discuss the results of the third quarter of 2024 will be held on Tuesday, October 29, 2024, 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 bbinsurance.com.

About Brown & Brown

Brown & Brown, Inc. (NYSE: BRO) is a leading insurance brokerage firm, delivering risk management solutions to individuals and businesses since 1939. With over 16,000 teammates and 500+ locations worldwide, we are committed to providing innovative strategies to help protect what our customers value most. For more information or to find an office near you, please visit bbinsurance.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 third quarter of 2024 that its financial results differ from the current preliminary unaudited numbers set forth herein; 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 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 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; the significant control certain shareholders have over the Company; 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; changes in the U.S.-based credit markets that might adversely affect our business,

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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; 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. 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, 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 it provides 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, the Company’s consolidated income statements and balance sheets as of the relevant date. Consistent with Regulation G, a description of such information is provided below and a reconciliation of such items to 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 as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our three segments, because it allows 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.

 

Beginning January 1, 2024, we no longer exclude Foreign Currency Translation from the calculation of EBITDAC - Adjusted, EBITDAC Margin - Adjusted and Diluted Net Income Per Share - Adjusted. Prior periods are presented accordingly on the same basis so that the calculations of EBITDAC - Adjusted, EBITDAC Margin - Adjusted and Diluted Net Income Per Share - Adjusted are comparable for both periods. We no longer exclude Foreign Currency Translation from the calculation of these earnings measures because fluctuations in Foreign Currency Translation affect both our revenues and expenses, largely offsetting each other. Therefore, excluding Foreign Currency Translation from these earnings measures provides no meaningful incremental value in evaluating our financial performance.

 

Beginning January 1, 2024, amortization of intangible assets is excluded from the calculation of Diluted Net Income Per Share - Adjusted. Prior periods are presented accordingly on the same basis so that the calculation of Diluted Net Income Per Share - Adjusted is comparable for both periods. We exclude the impact of amortization of intangible assets from the calculation of Diluted Net Income Per Share - Adjusted because amortization of intangible assets is a non-cash expense that is not indicative of the performance of our business and provides no meaningful incremental value in evaluating our financial performance.

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Non-GAAP Revenue Measures

Organic Revenue is our core commissions and fees less: (i) the core commissions and fees earned for the first 12 months by newly acquired operations; (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period); and (iii) Foreign Currency Translation (as defined below). The term “core commissions and fees” excludes profit-sharing contingent commissions and therefore represents the revenues earned directly from specific insurance policies sold and specific fee-based services rendered. Organic Revenue can be expressed as a dollar amount or a percentage rate when describing Organic Revenue growth.

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, (ii) for 2022 and 2023, Acquisition/Integration Costs (as defined below) and (iii) for 2023, the 1Q23 Nonrecurring Cost (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, (iii) for 2022 and 2023, Acquisition/Integration Costs (as defined below), (iv) for 2023, the 1Q23 Nonrecurring Cost (as defined below) 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, legal/accounting services, due diligence and the costs of integrating our information technology systems) arising out of our acquisitions of GRP (Jersey) Holdco Limited and its business, Orchid Underwriters Agency and CrossCover Insurance Services, and BdB Limited companies, which are not considered to be normal, recurring or part of the 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.
“1Q23 Nonrecurring Cost” means approximately $11.0 million expensed and substantially paid in the first quarter of 2023 to resolve a business matter, which is not considered to be normal, recurring or part of the ongoing operations.
(Gain)/loss on disposal,” a caption on our consolidated statements of income which reflects net proceeds received as compared to net book value related to sales of books of business and other divestiture transactions, such as the disposal of a business through sale or closure.

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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