Item 1. Financial Statements (Unaudited)

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

		Three months ended September 30,								Nine months ended September 30,
(in millions, except per share data)		2024				2023				2024				2023
REVENUES
Commissions and fees		$	1,155			$	1,049			$	3,545			$	3,193
Investment income			31				17				71				34
Other income, net			—				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

See accompanying Notes to Condensed Consolidated Financial Statements.

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATE****MENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

		Three months ended September 30,								Nine months ended September 30,
(in millions)		2024				2023				2024				2023
Net income attributable to the Company		$	234			$	176			$	783			$	602
Foreign currency translation gain/(loss)			172				(77	)			144				21
Comprehensive income attributable to the Company		$	406			$	99			$	927			$	623

See accompanying Notes to Condensed Consolidated Financial Statements.

BROWN & BROWN, INC.

CONDENSED CONSOLIDATE****D BALANCE SHEETS

(UNAUDITED)

(in millions, except per share data)		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 304shares 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

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				1				294
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																8				9
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
Net income																							256				2				258
Foreign currency translation																			4												4
Shares issued - employee stock compensation plans:
Employee stock purchase plan											3																				3
Stock incentive plans											20																				20
Directors											1																				1
Cash dividends paid ($0.1300 per share)																							(36	)							(36	)
Balance at June 30, 2024			285			$	30			$	1,027			$	(748	)		$	(47	)		$	5,764			$	11			$	6,037
Net income																							234				5				239
Foreign currency translation																			172												172
Shares issued - employee stock compensation plans:
Employee stock purchase plan			1				1				46																				47
Stock incentive plans											22																				22
Cash dividends paid ($0.1300 per share)																							(37	)							(37	)
Balance at September 30, 2024			286			$	31			$	1,095			$	(748	)		$	125			$	5,961			$	16			$	6,480
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
Net income																							190								190
Foreign currency translation																			51												51
Shares issued - employee stock compensation plans:
Employee stock purchase plan											2																				2
Stock incentive plans											19																				19
Directors											1																				1
Repurchase shares to fund tax withholdings for non-cash stock-based compensation											(3	)																			(3	)
Cash dividends paid ($0.1150 per share)																							(32	)							(32	)
Balance at June 30, 2023			284			$	30			$	927			$	(748	)		$	(50	)		$	4,914			$	—			$	5,073
Net income																							176								176
Foreign currency translation																			(77	)											(77	)
Shares issued - employee stock compensation plans:
Employee stock purchase plan											43																				43
Stock incentive plans											18																				18
Agency acquisition											(1	)																			(1	)
Cash dividends paid ($0.1150 per share)																							(33	)							(33	)
Balance at September 30, 2023			284			$	30			$	987			$	(748	)		$	(127	)		$	5,057			$	—			$	5,199

See accompanying Notes to Condensed Consolidated Financial Statements.

BROWN & BROWN, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		Nine months ended September 30,
(in millions)		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 recoverable (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 facility			150				170
Payments on revolving credit facility			(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 on 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

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”) to which premiums and underwriting exposure are ceded, and excess flood policies which are fully reinsured in the private market. 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 former 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 now 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. The results of the businesses sold in the fourth quarter of 2023 are presented within the Programs segment. 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 equity resulting from these changes. See Note 12 of these Notes to Condensed Consolidated Financial Statements for further information.

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. During the second quarter of 2024, the conditions associated with one of the contingent payments were achieved which resulted in the Company recognizing a gain of $29 million within the Programs segment.

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 ASU will require additional disclosures in Note 12 of these Notes to Condensed Consolidated Financial Statements but will not have a material impact on the Consolidated Condensed Financial Statements.

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

NOTE 3 Revenues

The following tables present the revenues disaggregated by revenue source:

		Three months ended September 30, 2024
(in millions)		Retail				Programs				Wholesale Brokerage				Other (8)				Total
Base commissions (1)		$	444			$	249			$	129			$	—			$	822
Fees (2)			158				67				26				—				251
Other supplemental commissions (3)			29				1				2				—				32
Profit-sharing contingent commissions (4)			8				7				12				—				27
Earned premium (5)			—				23				—				—				23
Investment income (6)			2				6				2				21				31
Other income, net (7)			—				—				—				—				—
Total revenues		$	641			$	353			$	171			$	21			$	1,186

		Three months ended September 30, 2023
(in millions)		Retail				Programs				Wholesale Brokerage				Other (8)				Total
Base commissions (1)		$	412			$	189			$	121			$	(1	)		$	721
Fees (2)			150				87				21				—				258
Other supplemental commissions (3)			29				1				1				—				31
Profit-sharing contingent commissions (4)			9				12				6				—				27
Earned premium (5)			—				12				—				—				12
Investment income (6)			—				4				1				12				17
Other income, net (7)			2				—				—				—				2
Total revenues		$	602			$	305			$	150			$	11			$	1,068

		Nine months ended September 30, 2024
(in millions)		Retail				Programs				Wholesale Brokerage				Other (8)				Total
Base commissions (1)		$	1,440			$	696			$	369			$	—			$	2,505
Fees (2)			469				177				71				(1	)			716
Other supplemental commissions (3)			148				8				6				—				162
Profit-sharing contingent commissions (4)			30				58				22				—				110
Earned premium (5)			—				52				—				—				52
Investment income (6)			3				17				4				47				71
Other income, net (7)			3				2				—				1				6
Total revenues		$	2,093			$	1,010			$	472			$	47			$	3,622

		Nine months ended September 30, 2023
(in millions)		Retail				Programs				Wholesale Brokerage				Other (8)				Total
Base commissions (1)		$	1,297			$	543			$	336			$	—			$	2,176
Fees (2)			446				246				59				(3	)			748
Other supplemental commissions (3)			139				5				3				—				147
Profit-sharing contingent commissions (4)			40				35				13				—				88
Earned premium (5)			—				34				—				—				34
Investment income (6)			—				7				1				26				34
Other income, net (7)			4				—				—				—				4
Total revenues		$	1,926			$	870			$	412			$	23			$	3,231

(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 reflect the elimination of intercompany revenues.

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

		Three months ended September 30,								Nine months ended September 30,
(in millions)		2024				2023				2024				2023
U.S.		$	1,031			$	941			$	3,136			$	2,857
U.K.			133				106				408				309
Republic of Ireland			9				9				33				31
Canada			10				10				29				25
Other			3				2				16				9
Total revenues		$	1,186			$	1,068			$	3,622			$	3,231

Contract Assets and Liabilities

The balances of contract assets and contract liabilities arising from contracts with customers as of September 30, 2024 and December 31, 2023 were as follows:

(in millions)		September 30, 2024				December 31, 2023
Contract assets		$	575			$	473
Contract liabilities		$	117			$	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 Sheets. The increase in contract assets over the balance as of December 31, 2023 is due to normal seasonality, growth in the business and from businesses acquired in the current year.

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 Sheets.

As of September 30, 2024, deferred revenue consisted of $78 million as the current portion to be recognized within one year and $39 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 nine months ended September 30, 2024 and 2023, the net amount of revenue recognized related to performance obligations satisfied in a previous period was $17 million and $26 million, consisting of additional variable consideration received on our incentive and profit-sharing contingent commissions.

Other Assets and Deferred Cost

Incremental cost to obtain - 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. The cost to obtain balance within the other assets caption in the Company's Condensed Consolidated Balance Sheets was $114 million and $96 million as of September 30, 2024 and December 31, 2023, respectively. For the nine months ended September 30, 2024, the Company deferred $24 million of incremental cost to obtain customer contracts. The Company recorded an expense of $6 million associated with the incremental cost to obtain customer contracts for the nine months ended September 30, 2024.

Cost to fulfill - 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 Sheets as of September 30, 2024 was $120 million. The cost to fulfill balance as of December 31, 2023 was $123 million. For the nine months ended September 30, 2024, the Company had net expense of $7 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 September 30,								Nine months ended September 30,
(in millions, except per share data)		2024				2023				2024				2023
Net income attributable to the Company		$	234			$	176			$	783			$	602
Net income attributable to unvested awarded performance stock			(3	)			(3	)			(9	)			(9	)
Net income attributable to common shares		$	231			$	173			$	774			$	593
Weighted average number of common shares outstanding – basic			286				284				285				284
Less unvested awarded performance stock included in weighted average number of common shares outstanding – basic			(4	)			(4	)			(4	)			(4	)
Weighted average number of common shares outstanding for basic net income per common share			282				280				281				280
Dilutive effect of potentially issuable common shares			2				1				2				1
Weighted average number of shares outstanding – diluted			284				281				283				281
Net income per share:
Basic		$	0.82			$	0.62			$	2.75			$	2.12
Diluted		$	0.81			$	0.62			$	2.73			$	2.11

NOTE 5 Business Combinations

During the nine months ended September 30, 2024, Brown & Brown acquired all of the stock of seven insurance intermediaries, purchased assets and assumed certain liabilities of eleven insurance intermediaries, and purchased four books of business (customer accounts) for a total of 22 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 are 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.

Based on the acquisition date and the complexity of the underlying valuation work, certain amounts included in the Company’s Condensed Consolidated Financial Statements may be provisional and thus subject to further adjustments within the permitted measurement period, as defined in ASC 805.

For the nine months ended September 30, 2024, adjustments were made within the permitted measurement period for the following: an increase to total consideration of $9 million, an increase to fiduciary assets and fiduciary liabilities of $20 million, increase to non-controlling interest of $6 million, increase in amortizable intangible assets of $11 million, decrease to other net assets of $3 million and net increase in goodwill of $7 million. These measurement period adjustments have been reflected as current period adjustments in the nine months ended September 30, 2024 in accordance with the guidance in ASU 2015-16 “Business Combinations.” The measurement period adjustments had no effect on earnings or cash in the current period.

Subsequent to September 30, 2024, the Company completed one acquisition with total consideration in excess of $50 million. The maximum purchase price for the acquisition is $74 million.

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

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired through the nine months ended September 30, 2024 as of the date of each acquisition and adjustments made during the measurement period of the prior year acquisitions.

(in millions)		Other (1)
Cash paid		$	145
Other payable			14
Recorded earn-out payable			28
Total consideration			187
Maximum potential earn-out payable			54
Allocation of purchase price:
Cash and equivalents			6
Fiduciary cash			21
Fiduciary receivables			1
Other current assets			7
Goodwill			127
Purchased customer accounts and other			60
Other assets			2
Total assets acquired			224
Fiduciary liabilities			(22	)
Other current liabilities			(2	)
Deferred income tax, net			(7	)
Total liabilities assumed			(31	)
Acquired non-controlling interest			(6	)
Net assets acquired		$	187

(1)

The other column represents a summarization of current year acquisitions with total consideration of less than $50 million per acquisition and adjustments from prior year acquisitions that were made within the permitted measurement period.

The weighted average useful life of purchased customer accounts is 15 years.

Acquisition Earn-Out Payables

As of September 30, 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 were as follows:

		Three months ended September 30,								Nine months ended September 30,
(in millions)		2024				2023				2024				2023
Balance as of the beginning of the period		$	169			$	231			$	249			$	252
Additions to estimated acquisition earn-out payables			8				11				28				50
Payments for estimated acquisition earn-out payables			(38	)			(11	)			(135	)			(74	)
Subtotal			139				231				142				228
Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables			(9	)			28				(15	)			23
Interest expense accretion			1				2				6				7
Net change in earnings from estimated acquisition earn-out payables			(8	)			30				(9	)			30
Foreign currency translation adjustments during the year			6				(3	)			4				—
Balance as of September 30,		$	137			$	258			$	137			$	258

Of the $137 million of estimated acquisition earn-out payables as of September 30, 2024, $73 million was recorded as accounts payable and $64 million was recorded as other non-current liabilities. As of September 30, 2024, the maximum future acquisition contingency payments was $460 million. Six of the estimated acquisition earn-out payables include provisions with no maximum potential earn-out amount. The amount recorded for these acquisitions as of September 30, 2024 is $4 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 nine months ended September 30, 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			119				—				1				120
Goodwill adjustment during measurement period (1)			(37	)			38				6				7
Foreign currency translation adjustments during the year			80				22				7				109
Balance as of September 30, 2024		$	5,032			$	1,913			$	632			$	7,577

(1)

Provisional estimates of fair value of acquired assets and liabilities 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 to goodwill.

(2)

The December 31, 2023 Retail segment 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 consisted of the following:

		September 30, 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		$	3,229			$	(1,681	)		$	1,548				15			$	3,138			$	(1,549	)		$	1,589				15
Foreign currency translation adjustments during the year			39				(5	)			34								34				(2	)			32
Total		$	3,268			$	(1,686	)		$	1,582							$	3,172			$	(1,551	)		$	1,621

(1)

Weighted average life calculated as of the date of acquisition.

Amortization expense for intangible assets for the years ending December 31, 2024, 2025, 2026, 2027 and 2028 is estimated to be $173 million, $170 million, $164 million, $151 million, and $145 million, respectively.

NOTE 8 Long-Term Debt

Long-term debt consisted of the following:

(in millions)		September 30, 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			150				—
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
Total current portion of long-term debt			225				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
5.650% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2034			599				—
4.950% senior notes, semi-annual interest payments, net of the unamortized discount, balloon due 2052			592				592
Total notes			2,839				2,240
Credit agreements:
5-year term loan facility, periodic interest and principal payments, SOFR plus up to 1.750%, expires October 27, 2026			175				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			—				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			375				412
Total credit agreements			550				1,006
Debt issuance costs (contra)			(22	)			(19	)
Total long-term debt, less unamortized discount and debt issuance costs			3,367				3,227
Current portion of long-term debt			225				569
Total debt		$	3,592			$	3,796

Note agreements: On June 11, 2024, the Company completed the issuance of $600 million aggregate principal amount of 5.650% Senior Notes due 2034 (the “2034 Senior Notes”). The net proceeds to the Company from the issuance of the 2034 Senior Notes, after deducting underwriting discounts and estimated offering expenses, were approximately $593 million. The 2034 Senior Notes were given investment grade ratings of BBB- stable outlook and Baa3 positive outlook. The 2034 Senior Notes will mature in June 2034. Interest on the 2034 Senior Notes will be payable semi-annually in arrears. The 2034 Senior Notes are senior unsecured obligations of the Company and will rank equal in right of payment to all of the Company’s existing and future senior unsecured indebtedness. The Company may redeem the 2034 Senior Notes in whole or in part at any time and from time to time, at the “make whole” redemption prices specified in the prospectus supplement for the 2034 Senior Notes being redeemed, plus accrued and unpaid interest thereon. In September 2024, the Company used a portion of the proceeds from the 2034 Senior Notes to repay $500 million of the 4.200% senior notes due September 2024. In June 2024, the Company also used $100 million of the proceeds to repay a portion of an outstanding term loan balance. As of September 30, 2024 there was a total outstanding debt balance of $600 million exclusive of the associated discount balance on the 2034 Senior Notes.

The Company also maintains notes from other issuances aggregating to a total outstanding debt balance of $2,250 million exclusive of the associated discount balance as of September 30, 2024, and $2,750 million exclusive of the associated discount balance as of December 31, 2023.

Credit agreements: The Company has credit agreements that include term loans and a Revolving Credit Facility of $800 million, all having similar terms and covenants. The outstanding balance on the term loans was $775 million and $975 million as of September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, there was no 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 credit agreements 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 September 30, 2024 and December 31, 2023.

The 1-month Term SOFR Rate for the 5-year term loan facility expiring October 27, 2026 is 4.945%, the 1-month Term SOFR Rate for the 3-year term loan facility expiring March 31, 2025 is 4.945% and the 1-month Term SOFR Rate for the 5-year term loan facility expiring March 31, 2027 is 4.945% as of September 30, 2024. These SOFR rates are inclusive of a 0.100% credit-spread adjustment per the terms of the relevant agreements.

Subsequent to September 30, 2024, the Company exercised a draw down on the Revolving Credit Facility for $350 million in connection with the acquisition of Quintes Holding B.V.

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:

		September 30, 2024								December 31, 2023
(in millions)		Carrying Value				Fair Value				Carrying Value				Fair Value
Liabilities:
Current portion of long-term debt		$	—			$	—			$	500			$	495
Long-term debt		$	2,839			$	2,711			$	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 balances and classification of operating lease right-of-use assets and operating lease liabilities within the Condensed Consolidated Balance Sheets is as follows:

(in millions)			September 30, 2024				December 31, 2023
Assets:
Operating lease right-of-use assets	Operating lease assets		$	192			$	199
Total assets				192				199
Liabilities:
Current operating lease liabilities	Accrued expenses and other liabilities			45				45
Non-current operating lease liabilities	Operating lease liabilities			181				179
Total liabilities			$	226			$	224

The components of lease cost for operating leases were as follows:

	Three months ended September 30,								Nine months ended September 30,
(in millions)	2024				2023				2024				2023
Operating leases:
Lease cost	$	16			$	14			$	44			$	43
Variable lease cost		2				1				4				3
Operating lease cost		18				15				48				46
Sublease income		—				—				(1	)			(1	)
Total lease cost net	$	18			$	15			$	47			$	45

The weighted average remaining lease term and the weighted average discount rate for operating leases as of September 30, 2024 were:

Weighted average remaining lease term in years			6.08
Weighted average discount rate			3.78	%

Maturities of the operating lease liabilities by fiscal year at September 30, 2024 for the Company's operating leases are as follows:

(in millions)		Operating leases
2024 (Remainder)		$	10
2025			55
2026			45
2027			38
2028			30
Thereafter			75
Total undiscounted lease payments			253
Less: imputed interest			27
Present value of lease payments		$	226

Supplemental cash flow information for operating leases is as follows:

	Three months ended September 30,								Nine months ended September 30,
(in millions)	2024				2023				2024				2023
Cash paid for amounts included in measurement of liabilities
Operating cash flows from operating leases	$	16			$	15			$	45			$	45
Right-of-use assets obtained in exchange for new operating liabilities	$	11			$	6			$	35			$	16

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

During the nine months ended September 30, 2024, the Company had an impact of $45 million from foreign exchange rate changes on cash and cash equivalents inclusive of fiduciary cash reported on its Condensed Consolidated Statements of Cash Flows due to the change in currency exchange rates primarily for British pounds.

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. During the second quarter of 2024, the Company received $57 million from the settlement of two of the contingent payments.

As of September 30, 2024, the Company has accrued for and deferred approximately $50 million related to our third quarter federal income tax payment due to Hurricane Debby tax relief, which was announced by the Internal Revenue Service on August 9, 2024. In addition, the Internal Revenue Service announced on October 11, 2024, that as a result of Hurricane Milton, the fourth quarter federal income taxes are also permissible to be deferred. The deadline to pay these deferred tax payments is May 1, 2025.

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 deferred 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:

		Nine months ended September 30,
(in millions)		2024				2023
Cash paid during the period for:
Interest		$	162			$	167
Income taxes, net of refunds		$	289			$	183

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

		Nine months ended September 30,
(in millions)		2024				2023
Other payables issued for agency acquisitions and purchased customer accounts		$	14			$	5
Estimated acquisition earn-out payables issued for agency acquisitions		$	28			$	51

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 September 30, 2024 and 2023.

(in millions)		September 30, 2024				December 31, 2023
Table to reconcile restricted and non-restricted fiduciary cash
Restricted fiduciary cash		$	1,457			$	1,412
Non-restricted fiduciary cash			287				191
Total restricted and non-restricted fiduciary cash at the end of the period		$	1,744			$	1,603

The Company's fiduciary cash increased as of September 30, 2024 compared to December 31, 2023 due to growth in the business, normal seasonality and acquisition activity during 2024.

		Balance as of September 30,
(in millions)		2024				2023
Table to reconcile cash and cash equivalents inclusive of fiduciary cash
Cash and cash equivalents		$	957			$	756
Fiduciary cash			1,744				1,515
Total cash and cash equivalents inclusive of restricted cash at the end of the period		$	2,701			$	2,271

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 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 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 $155 million and $127 million of total revenues for the three months ended September 30, 2024 and 2023, respectively. These operations earned $486 million and $374 million of total revenues for the nine months ended September 30, 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 charge 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 and nine months ended September 30, 2024 have been recast to align with the three-segment structure.

		Three months ended September 30, 2024
(in millions)		Retail				Programs				Wholesale Brokerage				Other				Total
Total revenues		$	641			$	353			$	171			$	21			$	1,186
Investment income			2				6				2				21				31
Amortization			29				13				3				—				45
Depreciation			6				4				1				—				11
Interest expense			18				7				3				22				50
Income before income taxes			120				154				56				(13	)			317
Total assets			8,617				6,558				1,633				717				17,525
Capital expenditures			16				4				1				2				23

		Three months ended September 30, 2023
(in millions)		Retail				Programs				Wholesale Brokerage				Other				Total
Total revenues		$	602			$	305			$	150			$	11			$	1,068
Investment income			—				4				1				12				17
Amortization			28				10				3				—				41
Depreciation			5				3				1				1				10
Interest expense			22				8				3				15				48
Income before income taxes			112				115				24				(9	)			242
Total assets			8,101				3,884				1,489				509				13,983
Capital expenditures			9				3				1				1				14

		Nine months ended September 30, 2024
(in millions)		Retail				Programs				Wholesale Brokerage				Other				Total
Total revenues		$	2,093			$	1,010			$	472			$	47			$	3,622
Investment income			3				17				4				47				71
Amortization			86				36				9				—				131
Depreciation			15				11				3				4				33
Interest expense			56				23				9				59				147
Income before income taxes			488				439				145				(44	)			1,028
Total assets			8,617				6,558				1,633				717				17,525
Capital expenditures			44				14				2				2				62

		Nine months ended September 30, 2023
(in millions)		Retail				Programs				Wholesale Brokerage				Other				Total
Total revenues		$	1,926			$	870			$	412			$	23			$	3,231
Investment income			—				7				1				26				34
Amortization			84				32				9				(2	)			123
Depreciation			15				9				3				3				30
Interest expense			66				27				9				41				143
Income before income taxes			432				314				93				(48	)			791
Total assets			8,101				3,884				1,489				509				13,983
Capital expenditures			23				11				2				2				38

NOTE 13 Insurance Company Subsidiary Operations

The National Flood Insurance Program is a program administered by 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 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:

		Nine months ended September 30, 2024
(in millions)		Written				Earned
Direct premiums - WNFIC		$	773			$	695
Ceded premiums - WNFIC			(773	)			(695	)
Net premiums - WNFIC			—				—
Assumed premiums - Quota share captive and excess of loss layer captive			140				110
Ceded premiums - Quota share captive			(19	)			(58	)
Net premiums - Quota share captive and excess of loss layer captive			121				52
Net premiums - Total		$	121			$	52

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 September 30, 2024. For the same period, the Company ceded $771 million of written premiums to FEMA for NFIP policies and $2 million to highly rated carriers for excess flood policies.

As of September 30, 2024 the Condensed Consolidated Balance Sheets contained reinsurance recoverable of $2,034 million and prepaid reinsurance premiums of $539 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 September 30, 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 September 30, 2024 was $2,034 million. These balances primarily relate to claims activity from Hurricane Helene which occurred in late September 2024. The Company expects to process additional flood claims resulting from Hurricane Milton, which occurred in October 2024.

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 $43 million at September 30, 2024 and $39 million as of December 31, 2023. For the period from January 1, 2024 through September 30, 2024, WNFIC generated statutory net income of $9 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 in a rolling twelve month period is limited to the greater of 10% of statutory adjusted capital and surplus or 100% of adjusted net income. On June 10, 2024, WNFIC paid an ordinary dividend of $7 million. The dividend was declared and approved by the WNFIC Board of Directors on May 28, 2024. 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 $15 million through September 30, 2024 is considered at risk for loss. Assumed net written and net earned premiums for the quota share Captive for the three months ended September 30, 2024, were $10 million and $22 million, respectively. For nine months ended September 30, 2024 and 2023, the ultimate loss expense inclusive of incurred but not reported ("IBNR") claims was $11 million, of which $3 million is related to the estimated insured losses resulting from Hurricane Ian. As of September 30, 2024, the Condensed Consolidated Balance Sheet contained deferred acquisitions costs of $58 million, reinsurance payable for $5 million, and the reserve for losses and loss adjustment expense, excluding related reinsurance recoverable, was $6 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 2024 with underlying reinsurance treaties effective from June 1, 2024 through May 31, 2025. This Captive’s maximum aggregate annual underwriting exposure is $2 million per occurrence, up to $6 million.

NOTE 14 Shareholders’ 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. During the second quarter, the Company paid a dividend of $0.1300 per share, which was approved by the Board of Directors on April 22, 2024 and paid on May 15, 2024 for a total of $36 million. During the third quarter, the Company paid a dividend of $0.1300 per share, which was approved by the Board of Directors on July 17, 2024 and paid on August 14, 2024 for a total of $37 million.

On October 23, 2024, the Board of Directors approved a dividend of $0.1500 per share payable on November 13, 2024 to shareholders of record on November 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.