Item 1. Financial Statements (Unaudited)

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

		Three months ended March 31,
(in millions, except per share data)		2024				2023
REVENUES
Commissions and fees		$	1,237			$	1,108
Investment income			18				7
Other income, net			3				1
Total revenues			1,258				1,116
EXPENSES
Employee compensation and benefits			631				571
Other operating expenses			161				161
Loss/(gain) on disposal			2				(6	)
Amortization			43				41
Depreciation			11				10
Interest			48				47
Change in estimated acquisition earn-out payables			(2	)			(2	)
Total expenses			894				822
Income before income taxes			364				294
Income taxes			71				58
Net income before non-controlling interests			293				236
Less: Net income attributable to non-controlling interests			—				—
Net income attributable to the Company		$	293			$	236
Net income per share:
Basic		$	1.03			$	0.83
Diluted		$	1.02			$	0.83

See accompanying Notes to Condensed Consolidated Financial Statements.

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATE****MENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

		Three months ended March 31,
(in millions)		2024				2023
Net income attributable to the Company		$	293			$	236
Foreign currency translation (loss)/gain			(32	)			47
Comprehensive income attributable to the Company		$	261			$	283

See accompanying Notes to Condensed Consolidated Financial Statements.

BROWN & BROWN, INC.

CONDENSED CONSOLIDATE****D BALANCE SHEETS

(UNAUDITED)

(in millions, except per share data)		March 31, 2024				December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents		$	581			$	700
Fiduciary cash			1,569				1,603
Short-term investments			10				11
Commission, fees and other receivables			932				790
Fiduciary receivables			1,133				1,125
Reinsurance recoverable			65				125
Prepaid reinsurance premiums			428				462
Other current assets			287				314
Total current assets			5,005				5,130
Fixed assets, net			272				270
Operating lease assets			197				199
Goodwill			7,386				7,341
Amortizable intangible assets, net			1,592				1,621
Investments			21				21
Other assets			333				301
Total assets		$	14,806			$	14,883
LIABILITIES AND EQUITY
Current Liabilities:
Fiduciary liabilities		$	2,702			$	2,727
Losses and loss adjustment reserve			72				131
Unearned premiums			488				462
Accounts payable			322				459
Accrued expenses and other liabilities			421				608
Current portion of long-term debt			875				569
Total current liabilities			4,880				4,956
Long-term debt less unamortized discount and debt issuance costs			3,009				3,227
Operating lease liabilities			178				179
Deferred income taxes, net			614				616
Other liabilities			338				326
Equity:
Common stock, par value $0.10 per share; authorized 560 shares; issued 305 shares and outstanding 285 shares at 2024, issued 304shares and outstanding 285 shares at 2023, respectively			30				30
Additional paid-in capital			1,003				1,027
Treasury stock, at cost 20 shares at 2024, 20 shares at 2023, respectively			(748	)			(748	)
Accumulated other comprehensive loss			(51	)			(19	)
Non-controlling interests			9				—
Retained earnings			5,544				5,289
Total equity			5,787				5,579
Total liabilities and equity		$	14,806			$	14,883

See accompanying Notes to Condensed Consolidated Financial Statements.

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

		Common Stock
(in millions, except per share data)		Shares Outstanding				Par Value				Additional Paid-In Capital				Treasury Stock				Accumulated Other Comprehensive Loss				Retained Earnings				Non-Controlling Interest				Total
Balance at December 31, 2023			285			$	30			$	1,027			$	(748	)		$	(19	)		$	5,289			$	—			$	5,579
Net income																							293								293
Foreign currency translation																			(32	)											(32	)
Shares issued - employee stock compensation plans:
Employee stock purchase plan											4																				4
Stock incentive plans			1								25																				25
Net non-controlling interest acquired (disposed)											1																9				10
Repurchase shares to fund tax withholdings for non-cash stock-based compensation			(1	)							(54	)																			(54	)
Cash dividends paid ($0.1300 per share)																							(38	)							(38	)
Balance at March 31, 2024			285			$	30			$	1,003			$	(748	)		$	(51	)		$	5,544			$	9			$	5,787
Balance at December 31, 2022			283			$	30			$	920			$	(748	)		$	(148	)		$	4,553			$	—			$	4,607
Net income																							236								236
Foreign currency translation																			47												47
Shares issued - employee stock compensation plans:
Employee stock purchase plan											3																				3
Stock incentive plans			1								21																				21
Repurchase shares to fund tax withholdings for non-cash stock-based compensation											(36	)																			(36	)
Cash dividends paid ($0.1150 per share)																							(33	)							(33	)
Balance at March 31, 2023			284			$	30			$	908			$	(748	)		$	(101	)		$	4,756			$	—			$	4,845

See accompanying Notes to Condensed Consolidated Financial Statements.

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		Three months ended March 31,
(in millions)		2024				2023
Cash flows from operating activities:
Net income before non-controlling interests		$	293			$	236
Adjustments to reconcile net income before non-controlling interest to net cash provided by operating activities:
Amortization			43				41
Depreciation			11				10
Non-cash stock-based compensation			29				24
Change in estimated acquisition earn-out payables			(2	)			(2	)
Deferred income taxes			(1	)			1
Net loss/(gain) on sales/disposals of investments, fixed assets and customer accounts			2				(5	)
Payments on acquisition earn-outs in excess of original estimated payables			(13	)			—
Changes in operating assets and liabilities, net of effect from acquisitions and divestitures:
Commissions, fees and other receivables (increase) decrease			(142	)			(131	)
Reinsurance recoverable (increase) decrease			60				688
Prepaid reinsurance premiums (increase) decrease			33				14
Other assets (increase) decrease			—				(6	)
Losses and loss adjustment reserve increase (decrease)			(59	)			(687	)
Unearned premiums increase (decrease)			25				(13	)
Accounts payable increase (decrease)			(86	)			71
Accrued expenses and other liabilities increase (decrease)			(186	)			(169	)
Other liabilities increase (decrease)			6				(12	)
Net cash provided by operating activities			13				60
Cash flows from investing activities:
Additions to fixed assets			(13	)			(12	)
Payments for businesses acquired, net of cash acquired			(76	)			(38	)
Proceeds from sales of fixed assets and customer accounts			—				6
Purchases of investments			—				(3	)
Proceeds from sales of investments			1				4
Net cash used in investing activities			(88	)			(43	)
Cash flows from financing activities:
Fiduciary receivables and liabilities, net			(26	)			(19	)
Payments on acquisition earn-outs			(39	)			(16	)
Payments on long-term debt			(13	)			(17	)
Borrowings on revolving credit facility			150				—
Payments on revolving credit facilities			(50	)			—
Repurchase shares to fund tax withholdings for non-cash stock-based compensation			(54	)			(36	)
Cash dividends paid			(38	)			(33	)
Non-controlling interest acquired (disposed), net			3				—
Net cash used in financing activities			(67	)			(121	)
Effect of foreign exchange rate changes on cash and cash equivalents inclusive of fiduciary cash			(11	)			14
Net decrease in cash and cash equivalents inclusive of fiduciary cash			(153	)			(90	)
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		$	2,150			$	1,943

See accompanying Notes to Condensed Consolidated Financial Statements. Refer to Note 10 for the reconciliations of cash and cash equivalents inclusive of fiduciary cash.

NOTES TO CONDEN****SED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 Nature of Operations

Brown & Brown, Inc., a Florida corporation, and its subsidiaries (collectively, “Brown & Brown” or the “Company”) is a diversified insurance agency, wholesale brokerage, insurance programs and service organization that markets and sells insurance products and services, primarily in the property, casualty and employee benefits areas. Brown & Brown’s business is divided into three reportable segments. The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public entities, professional and individual insured customers, and non-insurance risk-mitigating products through our automobile and recreational vehicle dealer services (“F&I”) businesses. The Programs segment, which acts as a managing general underwriter (“MGU”), provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through a nationwide network of independent agents, including Brown & Brown retail agents. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents.

The Company primarily operates as an agent or broker not assuming underwriting risks. However, we operate a write-your-own flood insurance carrier, Wright National Flood Insurance Company (“WNFIC”). WNFIC’s underwriting business consists of policies written pursuant to the National Flood Insurance Program (“NFIP”), the program administered by the Federal Emergency Management Agency (“FEMA”). In addition, WNFIC writes excess flood policies that are fully reinsured by a private carrier. The Company also operates two capitalized captive insurance facilities (the "Captives") for the purpose of facilitating additional underwriting capacity, generating incremental revenues and participating in underwriting results.

NOTE 2 Basis of Financial Reporting

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes thereto set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The preparation of these financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosures of contingent assets and liabilities, at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates.

Business Realignment

In conjunction with the divestiture of certain businesses within the Company’s Services segment in the fourth quarter of 2023, the Company aligned its business from four to three segments beginning in fiscal year 2024. As a result of the segment reorganization, the Services segment was eliminated as a business segment. The Company reports its financial results in the following three reportable segments: Retail, Programs and Wholesale Brokerage. The historical results, discussion and presentation of our business segments as set forth in the accompanying Condensed Consolidated Financial Statements and these Notes reflect the impact of these changes for all periods presented in order to present segment information on a comparable basis. There is no impact on our previously reported consolidated statements of income, balance sheets, statements of cash flows, statements of comprehensive income or statements of shareholders’ equity resulting from these changes. See Note 12 of these Notes to Condensed Consolidated Financial Statements for further information.

Recently Issued Accounting Pronouncements

On November 27, 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, "Improvements to Reportable Segment Disclosures." This ASU requires additional reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. In addition, the ASU enhances interim disclosure requirements effectively making the current annual requirements a requirement for interim reporting. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating these new disclosure requirements.

On December 14, 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." This ASU improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating these new disclosure requirements.

Recently Adopted Accounting Standards

None.

Income Tax Expense

The effective tax rate on income from operations for the three months ended March 31, 2024, was 19.5%. The first quarter tax rate is generally lower than the full year rate due to the timing of vestings on equity-based compensation.

NOTE 3 Revenues

The following tables present the revenues disaggregated by revenue source:

		Three months ended March 31, 2024
(in millions)		Retail				Programs				Wholesale Brokerage				Other (8)				Total
Base commissions (1)		$	547			$	206			$	111			$	—			$	864
Fees (2)			156				49				21				1				227
Other supplemental commissions (3)			86				1				3				—				90
Profit-sharing contingent commissions (4)			14				26				6				—				46
Earned premium (5)			—				10				—				—				10
Investment income (6)			1				5				1				11				18
Other income, net (7)			2				1				—				—				3
Total Revenues		$	806			$	298			$	142			$	12			$	1,258

		Three months ended March 31, 2023
(in millions)		Retail				Programs				Wholesale Brokerage				Other (8)				Total
Base commissions (1)		$	490			$	158			$	99			$	—			$	747
Fees (2)			145				76				18				(1	)			238
Other supplemental commissions (3)			82				2				2				—				86
Profit-sharing contingent commissions (4)			15				8				4				—				27
Earned premium (5)			—				10				—				—				10
Investment income (6)			—				1				—				6				7
Other income, net (7)			1				—				—				—				1
Total Revenues		$	733			$	255			$	123			$	5			$	1,116

(1)

Base commissions generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, or sales and payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control.

(2)

Fee revenues relate to fees for services other than securing coverage for our customers, fees negotiated in lieu of commissions, and F&I products and services.

(3)

Other supplemental commissions include additional commissions over base commissions received from insurance carriers based on predetermined growth or production measures. This includes incentive commissions and guaranteed supplemental commissions.

(4)

Profit-sharing contingent commissions are based primarily on underwriting results, but may also reflect considerations for volume, growth and/or retention.

(5)

Earned premium relates to the premiums earned in the Captives.

(6)

Investment income consists primarily of interest on cash and investments.

(7)

Other income consists primarily of other miscellaneous income.

(8)

Fees within Other primarily reflects the elimination of intercompany revenues.

The following table presents the revenues disaggregated by geographic area where our services are being performed:

		Three months ended March 31,
(in millions, except per share data)		2024				2023
U.S.		$	1,099			$	999
U.K.			131				98
Ireland			12				11
Canada			9				5
Other			7				3
Total Revenues		$	1,258			$	1,116

Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of March 31, 2024 and December 31, 2023 were as follows:

(in millions)		March 31, 2024				December 31, 2023
Contract assets		$	630			$	473
Contract liabilities		$	107			$	113

Unbilled receivables (contract assets) arise when the Company recognizes revenue for amounts which have not yet been billed in the Company's systems and are reflected in commissions, fees and other receivables in the Company's Condensed Consolidated Balance Sheet. The increase in contract assets over the balance as of December 31, 2023 is due to normal seasonality and growth in our business.

Deferred revenue (contract liabilities) relates to payments received in advance of performance under the contract before the transfer of a good or service to the customer. Deferred revenue is reflected within accrued expenses and other liabilities for those to be recognized in less than twelve months and in other liabilities for those to be recognized more than twelve months from the date presented in the Company's Condensed Consolidated Balance Sheet.

As of March 31, 2024, deferred revenue consisted of $69 million as the current portion to be recognized within one year and $38 million in long-term to be recognized beyond one year. As of December 31, 2023, deferred revenue consisted of $78 million as the current portion to be recognized within one year and $35 million in long-term deferred revenue to be recognized beyond one year.

During the three months ended March 31, 2024 and 2023, the net amount of revenue recognized related to performance obligations satisfied in a previous period was $16 million and $12 million, consisting of additional variable consideration received on our incentive and profit-sharing contingent commissions.

Other Assets and Deferred Cost

Incremental cost to obtain customer contracts - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans in the Retail segment, in which the Company pays an incremental amount of compensation on new business. These incremental costs are deferred and amortized over a 15-year period, consistent with the period for acquired customer intangibles. The cost to obtain customer contracts balance within the other assets caption in the Company's Condensed Consolidated Balance Sheet was $102 million and $96 million as of March 31, 2024 and December 31, 2023, respectively. For the three months ended March 31, 2024, the Company deferred $8 million of incremental cost to obtain customer contracts. The Company recorded an expense of $2 million associated with the incremental cost to obtain customer contracts for the three months ended March 31, 2024.

Cost to fulfill customer contracts - The Company defers certain costs to fulfill contracts and recognizes these costs as the associated performance obligations are fulfilled. The cost to fulfill balance within the other current assets caption in the Company's Condensed Consolidated Balance Sheet as of March 31, 2024 was $107 million. The cost to fulfill customer contracts balance as of December 31, 2023 was $123 million. For the three months ended March 31, 2024, the Company had net expense of $17 million related to the release of previously deferred contract fulfillment costs associated with performance obligations that were satisfied in the period, net of current year deferrals for costs incurred that related to performance obligations yet to be fulfilled.

NOTE 4 Net Income Per Share

Basic net income per share is computed based on the weighted average number of common shares (including participating securities) issued and outstanding during the period. Diluted net income per share is computed based on the weighted average number of common shares issued and outstanding plus equivalent shares, assuming the issuance of all potentially issuable common shares. The dilutive effect of potentially issuable common shares is computed by application of the treasury stock method. The following is a reconciliation between basic and diluted weighted average shares outstanding:

		Three months ended March 31,
(in millions, except per share data)		2024				2023
Net income attributable to the Company		$	293			$	236
Net income attributable to unvested awarded performance stock			(4	)			(4	)
Net income attributable to common shares		$	289			$	232
Weighted average number of common shares outstanding – basic			285				283
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic			(4	)			(5	)
Weighted average number of common shares outstanding for basic net income per common share			281				278
Dilutive effect of potentially issuable common shares			2				1
Weighted average number of shares outstanding – diluted			283				279
Net income per share:
Basic		$	1.03			$	0.83
Diluted		$	1.02			$	0.83

NOTE 5 Business Combinations

During the three months ended March 31, 2024, Brown & Brown acquired all of the stock of two insurance intermediaries, purchased assets and assumed certain liabilities of three insurance intermediaries, and purchased one book of business (customer accounts) for a total of six acquisitions. Additionally, adjustments were recorded to the purchase price allocation of certain prior acquisitions completed within the last twelve months as permitted by Accounting Standards Codification Topic 805 — Business Combinations (“ASC 805”).

The recorded purchase price for all acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in the fair value of earn-out obligations will be recorded in the Condensed Consolidated Statements of Income when incurred. The fair value of earn-out obligations is based on the present value of the expected future payments to be made to the sellers of the acquired businesses in accordance with the provisions outlined in the respective purchase agreements.

Total consideration for acquisition activity during the three months ended March 31, 2024, was $87 million and included gross cash paid of $76 million, initial fair value of earnout-out liabilities of $9 million and other payables of $2 million. The Company recorded $66 million of goodwill and $21 million of other identifiable intangible assets in connection with the acquisitions and measurement period adjustments during the three months ended March 31, 2024. The weighted average useful lives for the acquired amortizable intangible assets are 15 years.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Consolidated Financial Statements are provisional and thus subject to further adjustments within the permitted measurement periods, as defined in ASC 805, including balances related to the acquisition of Kentro Capital Limited as of the October 1, 2023 acquisition date, primarily for intangible assets, goodwill, customer contract related balances and tax related balances.

Certain disclosures have not been presented as the effect of the acquisitions were not material to the Company's financial results.

Acquisition Earn-Out Payables

As of March 31, 2024 and 2023, the fair values of the estimated acquisition earn-out payables were re-evaluated and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820- Fair Value Measurement. The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three months ended March 31, 2024 and 2023, were as follows:

		Three months ended March 31,
(in millions)		2024				2023
Balance as of the beginning of the period		$	249			$	252
Additions to estimated acquisition earn-out payables			9				20
Payments for estimated acquisition earn-out payables			(52	)			(16	)
Subtotal			206				256
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables			(4	)			(4	)
Interest expense accretion			2				2
Net change in earnings from estimated acquisition earn-out payables			(2	)			(2	)
Foreign currency translation adjustments during the year			(1	)			1
Balance as of March 31,		$	203			$	255

Of the $203 million of estimated acquisition earn-out payables as of March 31, 2024, $118 million was recorded as current liabilities within the accounts payable caption in the Company's Consolidated Balance sheets and $85 million was recorded as non-current liabilities within the other liabilities caption in the Company's Consolidated Balance Sheets. Included within additions to estimated acquisition earn-out payables are any adjustments to opening balance sheet items within the allowable measurement period, which may therefore differ from previously reported amounts.

As of March 31, 2024, the maximum future acquisition contingency payments related to all acquisitions was $566 million. Six of the estimated acquisition earn-out payables included provisions with no maximum potential earn-out amount. The amount recorded for these acquisitions as of March 31, 2024 is $5 million. The Company deems a significant increase to this amount to be unlikely.

NOTE 6 Goodwill

The changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2024 are as follows:

(in millions)		Retail (2)				Programs				Wholesale Brokerage				Total
Balance as of December 31, 2023		$	4,870			$	1,853			$	618			$	7,341
Goodwill of acquired businesses			58				—				—				58
Goodwill adjustment during measurement period (1)			4				(1	)			5				8
Foreign currency translation adjustments during the year			(18	)			(3	)			—				(21	)
Balance as of March 31, 2024		$	4,914			$	1,849			$	623			$	7,386

(1)

Provisional estimates of fair value are established at the time of each acquisition and are subsequently reviewed and finalized within the first year of operations subsequent to the acquisition date to determine the necessity for adjustments.

(2)

The December 31, 2023 Retail balance includes $127 million of goodwill reclassified from the former Services segment as a result of our segment realignment.

NOTE 7 Amortizable Intangible Assets

Amortizable intangible assets at March 31, 2024 and December 31, 2023 consisted of the following:

		March 31, 2024																December 31, 2023
(in millions)		Gross carrying value				Accumulated amortization				Net carrying value				Weighted average life (years) (1)				Gross carrying value				Accumulated amortization				Net carrying value				Weighted average life (years) (1)
Purchased customer accounts and other		$	3,191			$	(1,593	)		$	1,598				15			$	3,138			$	(1,549	)		$	1,589				15
Foreign currency translation adjustments during the year			(7	)			1				(6	)							34				(2	)			32
Total		$	3,184			$	(1,592	)		$	1,592							$	3,172			$	(1,551	)		$	1,621

(1)

Weighted average life calculated as of the date of acquisition.

Amortization expense for amortizable intangible assets for the years ending December 31, 2024, 2025, 2026, 2027 and 2028 is estimated to be $171 million, $167 million, $161 million, $149 million, and $142 million, respectively.

NOTE 8 Long-Term Debt

Long-term debt at March 31, 2024 and December 31, 2023 consisted of the following:

(in millions)		March 31, 2024				December 31, 2023
Current portion of long-term debt:
Current portion of 5-year term loan facility expires 2026		$	25			$	25
Current portion of 3-year term loan facility expires 2025			300				—
Current portion of 5-year term loan facility expires 2027			50				44
Current portion of 4.200% senior notes, semi-annual interest payments, balloon due 2024			500				500
Total current portion of long-term debt			875				569
Long-term debt:
Note agreements:
4.500% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2029			350				350
2.375% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2031			700				700
4.200% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2032			598				598
4.950% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2052			592				592
Total notes			2,240				2,240
Credit agreements:
5-year term loan facility, periodic interest and principal payments, SOFR plus up to1.750%, expires October 27, 2026			187				194
5-year revolving loan facility, periodic interest payments, SOFR plus up to 1.525%, plus commitment fees up to 0.225%, expires October 27, 2026			200				100
3-year term loan facility, periodic interest payments, SOFR plus up to 1.625%, expires March 31, 2025			—				300
5-year term loan facility, periodic interest and principal payments, SOFR plus up to 1.750%, expires March 31, 2027			400				412
Total credit agreements			787				1,006
Debt issuance costs (contra)			(18	)			(19	)
Total long-term debt less unamortized discount and debt issuance costs			3,009				3,227
Current portion of long-term debt			875				569
Total debt		$	3,884			$	3,796

Note agreements: The Company maintains senior notes aggregating to a total outstanding debt balance of $2,750 million exclusive of the associated discount balance as of March 31, 2024 and December 31, 2023.

Credit agreements: On October 27, 2021, the Company entered into an amended and restated credit agreement (the “Second Amended and Restated Credit Agreement”) with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist Bank and BMO Harris Bank N.A. as co-syndication agents, and U.S. Bank National Association, Fifth Third Bank, National Association, Wells Fargo Bank, National Association, PNC Bank, National Association, Morgan Stanley Senior Funding, Inc. and Citizens Bank, N.A. as co-documentation agents. The Second Amended and Restated Credit Agreement amended and restated the credit agreement dated April 17, 2014, among certain of such parties, as amended by that certain amended and restated credit agreement dated June 28, 2017 (the “Original Credit Agreement”). The Second Amended and Restated Credit Agreement, among other certain terms, extended the maturity of the Revolving Credit Facility of $800 million and unsecured term loans associated with the agreement of $250 million to October 27, 2026. At the time of the renewal, the Company added an additional $3 million in debt issuance costs related to the transaction. The Company carried forward $1 million of existing debt issuance costs related to the previous credit facility agreements after expensing debt issuance costs due to certain lenders exiting the renewed facility agreement. On February 10, 2023, the Company entered into Amendment No.1 ("Amendment") of the Second Amended and Restated Credit Agreement which provided that the overnight LIBOR should be replaced with a successor rate. The amendment also included additional terms and conditions for the Secured Overnight Financing Rate (“SOFR”) loans and Risk-free Reference Rate ("RFR") loans.

The Company also maintains credit agreements that include term loans and a Revolving Credit Facility, all having similar terms and covenants. The outstanding balances on the other term loans as of March 31, 2024 was $962 million and on December 31, 2023, the outstanding balance on these term loans was $975 million. As of March 31, 2024 there was a $200 million outstanding balance on the Revolving Credit Facility and as of December 31, 2023, there was a $100 million outstanding balance on the Revolving Credit Facility.

The Second Amended and Restated Credit Agreement and Loan Agreement require the Company to maintain certain financial ratios and comply with certain other covenants. The Company was in compliance with all such covenants as of March 31, 2024 and December 31, 2023.

The 1-month Term SOFR Rate for the term loan and Revolving Credit Facility of the Second Amended and Restated Credit Agreement is 5.430% and 5.423%, respectively, while the 1-month Term SOFR Rate for the Term A-1 Loans and Term A-2 Loans is 5.427% as of March 31, 2024. These SOFR rates are inclusive of a 0.100% credit-spread adjustment per the terms of the relevant agreements.

Fair value information about financial instruments not measured at fair value

The following tables presents liabilities that are not measured at fair value on a recurring basis at March 31, 2024 and December 31, 2023:

		March 31, 2024								December 31, 2023
(in millions)		Carrying Value				Fair Value				Carrying Value				Fair Value
Liabilities:
Current portion of long-term debt		$	500			$	496			$	500			$	495
Long-term debt		$	2,240			$	2,009			$	2,240			$	1,993

The carrying value of the Company's borrowings under various credit agreements approximates its fair value due to the variable interest rate based upon adjusted SOFR. The fair values above, which exclude accrued interest, are not necessarily indicative of the amounts that the Company would realize upon disposition, nor do they indicate the Company’s intent or ability to dispose of the financial instruments. The fair values of our respective senior notes are considered Level 2 financial instruments as they are corroborated by observable market data.

NOTE 9 Leases

Substantially all of the Company's operating lease right-of-use assets and operating lease liabilities represent real estate leases for office space used to conduct the Company's business that expire on various dates through 2041. Leases generally contain renewal options and escalation clauses based upon increases in the lessors’ operating expenses and other charges. The Company anticipates that most of these leases will be renewed or replaced upon expiration, although not necessarily for the same amount of space.

The Company assesses at the inception of a contract, if it contains a lease. This assessment is based on: (i) whether the contract involves the use of a distinct identified asset; (ii) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period; and (iii) whether the Company has the right to direct the use of the asset.

The right-of-use asset is initially measured at cost, which is primarily composed of the initial lease liability, plus any initial direct costs incurred, less any lease incentives received. The lease liability is initially measured at the present value of the minimum lease payments through the term of the lease. Minimum lease payments are discounted to present value using the incremental borrowing rate at the lease commencement date, which approximates the rate of interest the Company expects to pay on a secured borrowing in an amount equal to the lease payments for the underlying asset under similar terms and economic conditions. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a total term of twelve months or less. The effect of short-term leases on the Company's right-of-use asset and lease liability would not be significant.

The balances and classification of operating lease right-of-use assets and operating lease liabilities within the Condensed Consolidated Balance Sheet is as follows:

(in millions)			March 31, 2024				December 31, 2023
Assets:
Operating lease right-of-use assets	Operating lease assets		$	197			$	199
Total assets				197				199
Liabilities:
Current operating lease liabilities	Accrued expenses and other liabilities			45				45
Non-current operating lease liabilities	Operating lease liabilities			178				179
Total liabilities			$	223			$	224

As of March 31, 2024, the Company has entered into future lease agreements expected to commence later in 2024 consisting of undiscounted lease liabilities of $1 million.

Lease expense for operating leases consists of the lease payments, inclusive of lease incentives, plus any initial direct costs, and is recognized on a straight-line basis over the lease term. Included in lease expense are any variable lease payments incurred in the period that were not included in the initial lease liability. Variable lease cost is lease payments that are based on an index or similar rate. They are initially measured using the index or rate in effect at lease commencement and are based on the minimum payments stated in the lease. Additional

payments based on the change in an index or rate, or payments based on a change in the Company's portion of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred.

The components of lease cost for operating leases for the three months ended March 31, 2024 and 2023 were:

	Three months ended March 31,
(in millions)	2024				2023
Operating leases:
Lease cost	$	14			$	14
Variable lease cost		1				1
Total lease cost net	$	15			$	15

The weighted average remaining lease term and the weighted average discount rate for operating leases as of March 31, 2024 were:

Weighted average remaining lease term in years			6.00
Weighted average discount rate			3.55	%

Maturities of the operating lease liabilities by fiscal year at March 31, 2024 for the Company's operating leases are as follows:

(in millions)		Operating leases
2024 (Remainder)		$	38
2025			51
2026			41
2027			34
2028			26
Thereafter			58
Total undiscounted lease payments			248
Less: imputed interest			25
Present value of lease payments		$	223

Supplemental cash flow information for operating leases for the three months ended March 31, 2024 and 2023:

	Three months ended March 31,
(in millions)	2024				2023
Cash paid for amounts included in measurement of liabilities
Operating cash flows from operating leases	$	15			$	15
Right-of-use assets obtained in exchange for new operating liabilities	$	11			$	4

NOTE 10 Supplemental Disclosures of Cash Flow Information and Non-Cash Financing and Investing Activities

During the three months ended March 31, 2024, the Company had an impact of $(11) million from foreign exchange rate changes on cash and cash equivalents inclusive of fiduciary cash reported on its Condensed Consolidated Statements of Cash Flows, which is primarily due to the change in currency exchange rates primarily for British pounds and, to a lesser extent, Canadian dollars.

During 2023, the Company accrued for and deferred $91 million related to certain federal income tax payments. This deferral was allowed under Hurricane Idalia tax relief, which was announced by the Internal Revenue Service on August 30, 2023. These deferral of income tax payments were paid by the deadline of February 15, 2024. On March 15, 2023, the Company paid $31 million of accrued federal income tax payments originally due in the fourth quarter of 2022 which was deferred under a similar tax deferral announced by the Internal Revenue Service associated with Hurricane Ian which was announced on September 29, 2022. During the first quarter of 2024, the Company also made tax payments of approximately $30 million associated with the gain on disposal of certain third-party claims administration and adjusting services businesses sold in the fourth quarter of 2023.

Cash paid during the period for interest and income taxes are summarized as follows:

		Three months ended March 31,
(in millions)		2024				2023
Cash paid during the period for:
Interest		$	74			$	73
Income taxes, net of refunds		$	134			$	44

Significant non-cash investing and financing activities are summarized as follows:

		Three months ended March 31,
(in millions)		2024				2023
Other payables issued for agency acquisitions and purchased customer accounts		$	2			$	—
Estimated acquisition earn-out payables issued for agency acquisitions		$	9			$	20

The Company's restricted cash balance is composed of funds held in separate premium trust accounts as required by state law or, in some cases, by agreement with carrier partners. The following is a reconciliation of cash and cash equivalents inclusive of restricted cash as of March 31, 2024 and 2023.

(in millions)		March 31, 2024				December 31, 2023
Table to reconcile restricted and non-restricted fiduciary cash
Restricted fiduciary cash		$	1,365			$	1,412
Non-restricted fiduciary cash			204				191
Total restricted and non-restricted fiduciary cash at the end of the period		$	1,569			$	1,603

The Company's fiduciary cash increased as of March 31, 2024 compared to December 31, 2023 primarily due to businesses acquired during 2024 and 2023.

		Balance as of March 31,
(in millions)		2024				2023
Table to reconcile cash and cash equivalents inclusive of fiduciary cash
Cash and cash equivalents		$	581			$	563
Fiduciary cash			1,569				1,380
Total cash and cash equivalents inclusive of restricted cash at the end of the period		$	2,150			$	1,943

NOTE 11 Legal and Regulatory Proceedings

The Company is involved in numerous pending or threatened proceedings by or against Brown & Brown, Inc. or one or more of its subsidiaries that arise in the ordinary course of business. The damages that may be claimed against the Company in these various proceedings are in some cases substantial, including in certain instances claims for punitive or extraordinary damages. Some of these claims and lawsuits have been resolved; others are in the process of being resolved and others are still in the investigation or discovery phase. The Company will continue to respond appropriately to these claims and lawsuits and to vigorously protect its interests.

The Company continues to assess certain litigation and claims to determine the amounts, if any, that management believes will be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could adversely impact the Company’s operating results, cash flows and overall liquidity. The Company maintains third-party insurance policies to provide coverage for certain legal claims, in an effort to mitigate its overall exposure to unanticipated claims or adverse decisions. However, as (i) one or more of the Company’s insurance carriers could take the position that portions of these claims are not covered by the Company’s insurance, (ii) to the extent that payments are made to resolve claims and lawsuits, applicable insurance policy limits are eroded and (iii) the claims and lawsuits relating to these matters are continuing to develop, it is possible that future results of operations or cash flows for any particular quarterly or annual period could be materially affected by unfavorable resolutions of these matters. Based upon the AM Best Company ratings of these third-party insurers and other factors, management does not believe there is a substantial risk of an insurer’s material non-performance related to any current insured claims.

On the basis of current information, the availability of insurance and legal advice, in management’s opinion, the Company is not currently involved in any legal proceedings which, individually or in the aggregate, would have a material adverse effect on its financial condition, operations and/or cash flows.

NOTE 12 Segment Information

Brown & Brown’s business is divided into three reportable segments: (i) the Retail segment, which provides a broad range of insurance products and services to commercial, public and quasi-public entities, and to professional and individual customers, and non-insurance risk-mitigating products through our F&I businesses; (ii) the Programs segment, which primarily acts as an managing general underwriters (“MGUs”), provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches, all of which are delivered through nationwide networks of independent agents, and Brown & Brown retail agents; and (iii) the Wholesale

Brokerage segment, which markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents.

Brown & Brown conducts most of its operations within the United States of America. International operations include retail operations based in Bermuda, Canada, Cayman Islands, Republic of Ireland and the United Kingdom, managing general underwriter operations in Canada, France, Germany, Hong Kong, Italy, Malaysia, the Netherlands, United Arab Emirates and the United Kingdom and wholesale brokerage operations based in Belgium, Hong Kong, Italy and the United Kingdom. These operations earned $159 million and $117 million of total revenues for the three months ended March 31, 2024 and 2023, respectively.

The accounting policies of the reportable segments are the same as those described in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Intersegment revenues are eliminated.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables. The “Other” column includes any income and expenses not allocated to reportable segments, corporate-related items, including the intercompany interest expense charged to the reporting segment.

In the fourth quarter of 2023, the Company sold certain third-party claims administration and adjusting services businesses representing approximately 50% of the total revenues of the Services segment. As a result, beginning in fiscal year 2024, the Company operates three segments: Retail, Programs (formerly National Programs) and Wholesale Brokerage. Balances presented for the three months ended March 31, 2023 have been recast to align with the three-segment structure.

		Three months ended March 31, 2024
(in millions)		Retail				Programs				Wholesale Brokerage				Other				Total
Total revenues		$	806			$	298			$	142			$	12			$	1,258
Investment income		$	1			$	5			$	1			$	11			$	18
Amortization		$	29			$	11			$	3			$	—			$	43
Depreciation		$	5			$	4			$	1			$	1			$	11
Interest expense		$	19			$	8			$	3			$	18			$	48
Income before income taxes		$	238			$	101			$	41			$	(16	)		$	364
Total assets		$	8,557			$	4,221			$	1,617			$	411			$	14,806
Capital expenditures		$	7			$	5			$	1			$	—			$	13

		Three months ended March 31, 2023
(in millions)		Retail				Programs				Wholesale Brokerage				Other				Total
Total revenues		$	733			$	255			$	123			$	5			$	1,116
Investment income		$	—			$	1			$	—			$	6			$	7
Amortization		$	28			$	11			$	3			$	(1	)		$	41
Depreciation		$	5			$	3			$	1			$	1			$	10
Interest expense		$	22			$	10			$	3			$	12			$	47
Income before income taxes		$	214			$	75			$	31			$	(26	)		$	294
Total assets		$	7,913			$	3,652			$	1,441			$	394			$	13,400
Capital expenditures		$	5			$	5			$	—			$	2			$	12

NOTE 13 Investments

At March 31, 2024, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

		Less than 12 Months												12 Months or More												Total
(in millions)		Cost				Unrealized Gains				Unrealized losses				Cost				Unrealized Gains				Unrealized losses				Cost				Fair Value
U.S. Treasury securities, obligations of U.S. Government agencies and municipalities		$	6			$	—			$	—			$	18			$	—			$	(1	)		$	24			$	23
Corporate debt			4				—				—				1				—				—				5				5
Non-subsidiary equity		$	—			$	—			$	—			$	3			$	—			$	—			$	3			$	3
Total		$	10			$	—			$	—			$	22			$	—			$	(1	)		$	32			$	31

At March 31, 2024, the Company had 31 securities in an unrealized loss position. The unrealized losses for the period ended March 31, 2024 in the Company’s investments in U.S. Treasury Securities and obligations of U.S. Government agencies were caused by interest rate

increases. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at March 31, 2024. The stated maturity for any investment held during the period is less than five years.

At December 31, 2023, the Company’s amortized cost and fair values of fixed maturity securities are summarized as follows:

		Less than 12 Months												12 Months or More												Total
(in millions)		Cost				Unrealized Gains				Unrealized losses				Cost				Unrealized Gains				Unrealized losses				Cost				Fair Value
U.S. Treasury securities, obligations of U.S. Government agencies and municipalities		$	7			$	—			$	—			$	18			$	—			$	(1	)		$	25			$	24
Corporate debt			4				—				—				1				—				—				5				5
Non-subsidiary equity		$	—			$	—			$	—			$	3			$	—			$	—			$	3			$	3
Total		$	11			$	—			$	—			$	22			$	—			$	(1	)		$	33			$	32

At December 31, 2023, the Company had 28 securities in an unrealized loss position. The unrealized losses for the period ended December 31, 2023 in the Company’s investments in U.S. Treasury Securities and obligations of U.S. Government agencies were caused by interest rate increases. The corporate securities are highly rated securities with no indicators of potential impairment. Based on the ability and intent of the Company to hold these investments until recovery of fair value, which may be maturity, the bonds were not considered to be other-than-temporarily impaired at December 31, 2023. The stated maturity for any investment held during the period is less than five years.

Proceeds from the sales and maturity of the Company’s investment in fixed maturity securities and maturing time deposits were $1 million from the period of January 1, 2024 to March 31, 2024. Their gains or losses realized on the sale of securities for the period from January 1, 2024 to March 31, 2024 were insignificant.

Realized gains and losses are reported on the Condensed Consolidated Statements of Income, with the cost of securities sold determined on a specific identification basis.

At March 31, 2024, investments with a fair value of approximately $4 million were on deposit with state insurance departments to satisfy regulatory requirements.

NOTE 14 Insurance Company Subsidiary Operations

The National Flood Insurance Program (“NFIP”) is a program administered by the Federal Emergency Management Agency (“FEMA”) whereby the Company sells and services NFIP flood insurance policies on behalf of FEMA and receives fees for its services. Congressional authorization for the NFIP is periodically evaluated and may be subject to potential government shutdowns. The Company sells excess flood policies which are 100% ceded to a highly rated reinsurance carrier. The Company also operates two Captives for the purpose of facilitating additional underwriting capacity and to participate in a portion of the underwriting results. One Captive participates on a quota share basis for policies placed by certain of our MGU businesses that are currently focused on property insurance for earthquake and wind exposed properties with a portion of premiums ceded to reinsurance companies, limiting, but not fully eliminating the Company's exposure to underwriting losses. The other Captive participates through excess of loss reinsurance layers associated with one of our MGU businesses focused on placements of personal property, excluding flood, primarily in the southeastern United States with one layer of per risk excess reinsurance and three layers of catastrophe ("CAT") per occurrence reinsurance. All four layers have limited reinstatements and therefore have capped, maximum aggregate limits. The effects of reinsurance on premiums written and earned are as follows:

		Three months ended March 31, 2024
(in millions)		Written				Earned
Direct premiums - WNFIC		$	190			$	223
Ceded premiums - WNFIC			(190	)			(223	)
Net premiums - WNFIC			—				—
Assumed premiums - Quota share captive and excess of loss layer captive			38				28
Ceded premiums - Quota share captive			(18	)			(18	)
Net premiums - Quota share captive and excess of loss layer captive			20				10
Net premiums - Total		$	20			$	10

All premiums written by the Company under NFIP are 100% ceded to FEMA, for which WNFIC received a 29.5% gross expense allowance from January 1, 2024 through March 31, 2024. For the same period, the Company ceded $189 million of written premiums to FEMA for NFIP policies and $1 million to a highly rated carrier for excess flood policies.

As of March 31, 2024 the Condensed Consolidated Balance Sheet contained reinsurance recoverable of $65 million and prepaid reinsurance premiums of $428 million which are related to the WNFIC business. For flood policies, there was no change in the balance in the

reserve for losses and loss adjustment expense net of reinsurance recoverable during the period January 1, 2024 through March 31, 2024, as the Company's direct premiums written were 100% ceded to two reinsurers. The balance of the reserve for losses and loss adjustment expense for the WNFIC, excluding related reinsurance recoverable, as of March 31, 2024 was $65 million.

WNFIC maintains capital in excess of the minimum statutory amount of $8 million as required by regulatory authorities. The statutory capital and surplus of WNFIC was $40 million at March 31, 2024 and $39 million as of December 31, 2023. For the period from January 1, 2024 through March 31, 2024, WNFIC generated a statutory net loss of $0.3 million. For the period from January 1, 2023 through December 31, 2023, WNFIC generated statutory net income of $7 million. The maximum amount of ordinary dividends that WNFIC can pay to the shareholders in a rolling 12-month period is limited to the greater of 10% of statutory adjusted capital and surplus or 100% of adjusted net income. On April 28, 2023, WNFIC paid an ordinary dividend of $3 million. The dividend was declared and approved by the WNFIC Board of Directors by consent on March 17, 2023. The maximum dividend payout that may be made in 2024 and without prior approval is $7 million.

In December 2021, the initial funding to capitalize the quota share Captive was $6 million. This capital in addition to earnings of

$1 million through March 31, 2024 is considered at risk for loss. Assumed net written and net earned premiums for the quota share Captive for the three months ended March 31, 2024, were $19 million and $10 million, respectively. For three months ended March 31, 2024 the ultimate loss expense inclusive of incurred but not reported ("IBNR") claims was $8 million, of which $3 million is related to the estimated insured losses with Hurricane Ian. As of March 31, 2024, reported insured losses associated with Hurricane Ian were $2 million. As of March 31, 2024, the Condensed Consolidated Balance Sheet contained deferred acquisitions costs of $37 million and the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable, was $4 million. The first collateral release was received in March 2024 and is based on an IBNR factor times earned premium compared to the current collateral balance.

The excess of loss layer Captive was renewed in June 2023 with underlying reinsurance treaties effective from June 1 through May 31, 2024. This Captive’s maximum aggregate annual underwriting exposure is $3 million.

NOTE 15 Equity

Under the authorization from the Company’s Board of Directors, shares may be purchased from time to time, at the Company’s discretion and subject to the availability of stock, market conditions, the trading price of the stock, alternative uses for capital, the Company’s financial performance and other potential factors. These purchases may be carried out through open market purchases, block trades, accelerated share repurchase plans of up to $100 million each (unless otherwise approved by the Board of Directors), negotiated private transactions or pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

The Company has outstanding approval to purchase up to approximately $249 million, in the aggregate, of the Company's outstanding common stock.

During the first quarter, the Company paid a dividend of $0.1300 per share, which was approved by the Board of Directors on January 17, 2024 and paid on February 14, 2024 for a total of $38 million.

On April 22, 2024 the Board of Directors approved a dividend of $0.1300 per share payable on May 15, 2024 to shareholders of record on May 6, 2024.

During the first quarter of 2024 the Company received $5 million in exchange for a 49% interest in our quota-share captive.

In the first quarter of 2024, the Company paid $2 million to buy additional interest in an entity in which it was already the majority owner.

The Company also has approximately $6 million of minority interest arising from consolidated acquisitions where the Company acquired a controlling majority ownership position with a residual noncontrolling ownership position held by unaffiliated entities.

NOTE 16 Subsequent Events

Pursuant to the sale of certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023, the Company is entitled to future consideration payments upon achievement of certain conditions in accordance with the terms of the sale agreement. Subsequent to the balance sheet date of March 31, 2024, the conditions associated with one of the contingent payments has been achieved which will result in the Company recognizing a gain of approximately $30 million in the second quarter of 2024. Receipt of funds for this contingent payment is also expected in the second quarter of 2024.