BROWN & BROWN INC

Previous wording

For the three months ended June 30, 2024, our total commissions and fees growth rate was 11.4%, and our consolidated Organic Revenue growth rate was 10.0%.

Current wording

For the three months ended September 30, 2024, our total commissions and fees growth rate was 10.1%, and our consolidated Organic Revenue growth rate was 9.5%.

Previous wording

Historically, investment income has consisted primarily of interest earnings on operating cash and where permitted, on premiums and advance premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy as it relates to the Company’s capital is to invest available funds in high-quality, short-term money-market funds and fixed income investment securities. Investment income also includes gains and losses realized from the sale of investments. Other income primarily reflects other miscellaneous revenues.

Current wording

Historically, investment income has consisted primarily of interest earnings on operating cash and where permitted, on premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy as it relates to the Company’s capital is to invest available funds in high-quality, short-term money-market funds and fixed income investment securities. Investment income also includes gains and losses realized from the sale of investments. Other income primarily reflects other miscellaneous revenues.

Previous wording

Income before income taxes for the three months ended June 30, 2024 increased from the second quarter of 2023 by $92 million or 36.2%, driven by net new business, increased investment income and profit-sharing contingent commissions, acquisitions completed in the past twelve months and the gain on disposal of certain businesses.

Current wording

Income before income taxes for the three months ended September 30, 2024 increased from the third quarter of 2023 by $75 million or 31.0%, driven by Organic Revenue growth, leveraging our expense base, net new business, increased investment income, acquisitions completed in the past twelve months and the change in estimated acquisition earn-out payables.

Previous wording

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

Current wording

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

Previous wording

“Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings, legal/accounting services, due diligence and the costs of integrating our information technology systems) arising out of our acquisitions of GRP (Jersey) Holdco Limited and its business ("GRP"), Orchid Underwriters Agency and CrossCover Insurance Services, and BdB Limited companies, which are not considered to be normal, recurring or part of the ongoing operations.

Current wording

“Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings, legal/accounting services, due diligence and the costs of integrating our information technology systems) arising out of our acquisitions of GRP (Jersey) Holdco Limited and its business, Orchid Underwriters Agency and CrossCover Insurance Services, and BdB Limited companies, which are not considered to be normal, recurring or part of the ongoing operations.

Previous wording

Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 1993 through the second quarter of 2024, we acquired 660 insurance intermediary operations.

Current wording

Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 1993 through the third quarter of 2024, we acquired 664 insurance intermediary operations.

Previous wording

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

Current wording

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

Previous wording

Commissions and fees, including profit-sharing contingent commissions and earned premiums, for the three months ended June 30, 2024 increased $118 million to $1,154 million, or 11.4%, over the same period in 2023. Core commissions and fees revenue for the second quarter of 2024 increased $115 million or 11.5%, composed of: (i) approximately $98 million of net new and renewal business, which reflects an Organic Revenue growth rate of 10.0%; (ii) $44 million from acquisitions that had no comparable revenues in the same period of 2023; (iii) an increase from the impact of Foreign Currency Translation of $1 million and (iv) an offsetting decrease of $28 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months. Profit-sharing contingent commissions for the second quarter of 2024 increased by $3 million, compared to the same period in 2023.

Current wording

Commissions and fees, including profit-sharing contingent commissions and earned premiums, for the three months ended September 30, 2024 increased $106 million to $1,155 million, or 10.1%, over the same period in 2023. Core commissions and fees revenue for the third quarter of 2024 increased $106 million or 10.4%, composed of: (i) approximately $95 million of net new and renewal business, which reflects an Organic Revenue growth rate of 9.5%; (ii) $35 million from acquisitions that had no comparable revenues in the same period of 2023; (iii) an increase from the impact of Foreign Currency Translation of $2 million and (iv) an offsetting decrease of $26 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months. Profit-sharing contingent commissions for the third quarter of 2024 were flat when compared to the same period in 2023.

Previous wording

Commissions and fees, including profit-sharing contingent commissions and earned premiums, for the six months ended June 30, 2024, increased $246 million to $2,390 million, or 11.5%, over the same period in 2023. Core commissions and fees revenue for the six months ended June 30, 2024 increased $224 million or 10.7%, composed of: (i) approximately $189 million of net new and renewal business, which reflects an Organic Revenue growth rate of 9.3%; (ii) $85 million from acquisitions that had no comparable revenues in the same period of 2023; (iii) an increase from the impact of Foreign Currency Translation of $5 million and (iv) an offsetting decrease of $55 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months. Profit-sharing contingent commissions for the six months ended June 30, 2024 increased by $22 million, or 36.7%, compared to the same period in 2023. This increase was driven primarily by (i) improved underwriting results and qualifying for certain prior year profit-sharing contingent commissions in excess of estimates that we did not qualify for in the prior year and (ii) recent acquisitions.

Current wording

Commissions and fees, including profit-sharing contingent commissions and earned premiums, for the nine months ended September 30, 2024, increased $352 million to $3,545 million, or 11.0%, over the same period in 2023. Core commissions and fees revenue for the nine months ended September 30, 2024 increased $330 million or 10.6%, composed of: (i) approximately $284 million of net new and renewal business, which reflects an Organic Revenue growth rate of 9.4%; (ii) $120 million from acquisitions that had no comparable revenues in the same period of 2023; (iii) an increase from the impact of Foreign Currency Translation of $7 million and (iv) an offsetting decrease of $81 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months. Profit-sharing contingent commissions for the nine months ended September 30, 2024 increased by $22 million, or 25.0%, compared to the same period in 2023. This increase was driven primarily by (i) improved underwriting results and qualifying for certain profit-sharing contingent commissions that we did not qualify for in the prior year and (ii) recent acquisitions.

Previous wording

Investment income for the three months ended June 30, 2024 increased $12 million, from the same period in 2023. Investment income for the six months ended June 30, 2024 increased $23 million, from the same period in 2023. The increases were primarily driven by higher average interest rates compared to the prior year.

Current wording

Investment income for the three months ended September 30, 2024 increased $14 million from the same period in 2023. Investment income for the nine months ended September 30, 2024 increased $37 million, from the same period in 2023. The increases were primarily driven by higher average interest rates and cash balances compared to the prior year.

Previous wording

Other income for the three months ended June 30, 2024 increased $1 million to $2 million as compared to the same period in 2023 and other income for the six months ended June 30, 2024 increased by $3 million, or 150.0%, as compared to the same period in 2023. Other income consists primarily of miscellaneous income and therefore can fluctuate between comparable periods.

Current wording

Other income for the three months ended September 30, 2024 decreased $2 million from the same period in 2023, and other income for the nine months ended September 30, 2024 increased by $2 million, or 50.0%, as compared to the same period in 2023. Other income consists primarily of miscellaneous income and therefore can fluctuate between comparable periods.

Previous wording

Employee compensation and benefits expense as a percentage of total revenues was 49.7% for the three months ended June 30, 2024 as compared to 50.6% for the three months ended June 30, 2023, and increased 10.4%, or $55 million. This increase included $20 million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2023. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2024 and 2023 increased by $35 million, or 6.7%. This underlying employee compensation and benefits expense increase was primarily related to: (i) an increase in staff salaries and bonuses attributable to new hires; (ii) an increase in producer compensation associated with revenue growth and (iii) an increase in non-cash stock-based compensation driven by the strong financial performance of the Company, partially offset by (iv) employee compensation and benefits associated with businesses divested in the fourth quarter of 2023.

Current wording

Employee compensation and benefits expense as a percentage of total revenues was 51.2% for the three months ended September 30, 2024 as compared to 49.8% for the three months ended September 30, 2023, an increase of 14.1%, or $75 million. This increase included $20 million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2023. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2024 and 2023 increased by $55 million, or 10.6%. This underlying employee compensation and benefits expense increase was primarily related to: (i) an increase in staff costs attributable to new hires; (ii) an increase in producer compensation associated with revenue growth; (iii) an increase in non-cash stock-based compensation driven by the strong financial performance of the Company and (iv) the year-over-year increase of approximately $18 million in the value of deferred compensation liabilities driven by changes in the market prices of our deferred compensation plan, with such amount substantially offset within other operating expenses as we hold assets to fund these liabilities, partially offset by (v) employee compensation and benefits associated with businesses divested in the fourth quarter of 2023.

Previous wording

Employee compensation and benefits expense as a percentage of total revenues was 49.9% for the six months ended June 30, 2024 as compared to 50.9% for the six months ended June 30, 2023, and increased 10.4%, or $115 million. This increase included $41 million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2023. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2024 and 2023 increased by $74 million, or 6.7%. This underlying employee compensation and benefits expense increase was primarily related to: (i) an increase in staff salaries and bonuses attributable to new hires; (ii) an increase in producer compensation associated with revenue growth and (iii) an increase in non-cash stock-based compensation driven by the strong financial performance of the Company, partially offset by (iv) employee compensation and benefits associated with businesses divested in the fourth quarter of 2023.

Current wording

Employee compensation and benefits expense as a percentage of total revenues was 50.3% for the nine months ended September 30, 2024 as compared to 50.5% for the nine months ended September 30, 2023, and increased 11.6%, or $190 million. This increase included $55 million of compensation costs related to stand-alone acquisitions that had no comparable costs in the same period of 2023. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2024 and 2023 increased by $135 million, or 8.3%. This underlying employee compensation and benefits expense increase was primarily related to: (i) an increase in staff costs attributable to new hires; (ii) an increase in producer compensation associated with revenue growth; (iii) an increase in non-cash stock-based compensation driven by the strong financial performance of the Company and (iv) the year-over-year increase of approximately $19 million in the value of deferred compensation liabilities driven by changes in the market prices of our deferred compensation plan, with such amount substantially offset within other operating expenses as we hold assets to fund these liabilities, partially offset by (v) employee compensation and benefits associated with businesses divested in the fourth quarter of 2023.

Previous wording

Other operating expenses represented 14.7% of total revenues for the second quarter of 2024, as compared to 15.5% for the second quarter of 2023. Other operating expenses for the second quarter of 2024 increased $11 million, or 6.8%, from the same period of 2023. This increase includes: (i) $8 million of other operating expenses related to stand-alone acquisitions that had no comparable costs in the same period of 2023; (ii) increased information technology related costs; (iii) and to a lesser extent, increased variable costs associated with revenue growth, offset by (iv) other operating expenses associated with businesses divested in the fourth quarter of 2023.

Current wording

Other operating expenses represented 13.9% of total revenues for the third quarter of 2024, as compared to 15.7% for the third quarter of 2023. Other operating expenses for the third quarter of 2024 decreased $3 million, or 1.8%, from the same period of 2023. This change includes: (i) the year-over-year decrease of approximately $18 million in the value of assets held to fund the associated liabilities within our deferred compensation plan, which was substantially offset within employee compensation and benefits, as noted above and (ii) other operating expenses associated with businesses divested in the fourth quarter of 2023, offset by (iii) $8 million of other operating expenses related to stand-alone acquisitions that had no comparable costs in the same period of 2023; (iv) increased information technology related costs; (v) and to a lesser extent, increased variable costs associated with revenue growth.

Previous wording

Other operating expenses represented 13.7% of total revenues for the six months ended June 30, 2024, as compared to 14.9% for the six months ended June 30, 2023. Other operating expenses for the first six months of 2024 increased $12 million, or 3.7%, from the same period of 2023. This increase includes: (i) $17 million of other operating expenses related to stand-alone acquisitions that had no comparable costs in the same period of 2023; (ii) increased information technology related costs; (iii) and to a lesser extent, increased variable costs associated with revenue growth, offset by (iv) the 1Q23 Nonrecurring Cost and (v) other operating expenses associated with businesses divested in the fourth quarter of 2023.

Current wording

Other operating expenses represented 13.8% of total revenues for the nine months ended September 30, 2024, as compared to 15.2% for the nine months ended September 30, 2023. Other operating expenses for the first nine months of 2024 increased $9 million, or 1.8%, from the same period of 2023. This change includes: (i) $24 million of other operating expenses related to stand-alone acquisitions that had no comparable costs in the same period of 2023; (ii) increased information technology related costs; (iii) and to a lesser extent, increased variable costs associated with revenue growth, offset by (iv) the 1Q23 Nonrecurring Cost (v) other operating expenses associated with businesses divested in the fourth quarter of 2023 and (vi) the year-over-year decrease of approximately $19 million in the value of assets held to fund the associated liabilities within our deferred compensation plan, which was substantially offset within employee compensation and benefits, as noted above.

Previous wording

Gain on disposal for the second quarter of 2024 increased $31 million from the second quarter of 2023. Gain on disposal for the six months ended June 30, 2024 increased $23 million from the six months ended June 30, 2023. Activity for (Gain)/Loss on disposal for the three and six months ended June 30, 2024 was primarily attributable to finalization of the gain associated with selling certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023. Although we do not routinely sell businesses or customer accounts, we periodically sell an office or a book of business (one or more customer accounts) that we believe does not produce reasonable margins or demonstrate a potential for adequate growth, or because doing so is in the Company’s best interest.

Current wording

Gain on disposal for the third quarter of 2024 decreased $2 million from the third quarter of 2023. Gain on disposal for the nine months ended September 30, 2024 increased $21 million from the nine months ended September 30, 2023. Activity for (Gain)/Loss on disposal for the nine months ended September 30, 2024 was primarily attributable to finalization of the gain associated with selling certain third-party claims administration and adjusting services businesses in the fourth quarter of 2023. Although we do not routinely sell businesses or customer accounts, we periodically sell an office or a book of business (one or more customer accounts) that we believe does not produce reasonable margins or demonstrate a potential for adequate growth, or because doing so is in the Company’s best interest.

Previous wording

Amortization expense for the second quarter of 2024 increased $3 million, or 7.3%, compared to the second quarter of 2023. Amortization expense for the six months ended June 30, 2024 increased $3 million, or 3.6%, compared to the six months ended June 30, 2023. This change reflects the amortization of new intangibles from businesses acquired within the past twelve months, net of certain intangible assets becoming fully amortized or written off in the (Gain)/Loss on disposal.

Current wording

Amortization expense for the third quarter of 2024 increased $4 million, or 9.8%, compared to the third quarter of 2023. Amortization expense for the nine months ended September 30, 2024 increased $8 million, or 6.5%, compared to the nine months ended September 30, 2023. This change reflects the amortization of new intangibles from businesses acquired within the past twelve months, net of certain intangible assets becoming fully amortized or written off in the (Gain)/Loss on disposal.

Previous wording

Depreciation expense for the second quarter of 2024 increased $1 million, or 10.0%, compared to the second quarter of 2023. Depreciation expense for the six months ended June 30, 2024 increased $1 million, or 5.0%, compared to the six months ended June 30, 2023. Changes in depreciation expense reflect net additions of fixed assets resulting from businesses acquired in the past twelve months and the addition of fixed assets resulting from business initiatives, net of the impact of fixed assets that became fully depreciated or written off in the gain or loss on disposal.

Current wording

Depreciation expense for the third quarter of 2024 increased $1 million, or 10.0%, compared to the third quarter of 2023. Depreciation expense for the nine months ended September 30, 2024 increased $3 million, or 10.0%, compared to the nine months ended September 30, 2023. Changes in depreciation expense reflect net additions of fixed assets resulting from businesses acquired in the past twelve months and the addition of fixed assets resulting from business initiatives, partially offset by the impact of fixed assets that became fully depreciated or written off in the gain or loss on disposal.

Previous wording

Interest expense for the second quarter of 2024 increased $1 million, or 2.1%, compared to the second quarter of 2023. Interest expense for the six months ended June 30, 2024 increased $2 million, or 2.1%, compared to the first six months of 2023.

Current wording

Interest expense for the third quarter of 2024 increased $2 million, or 4.2%, compared to the third quarter of 2023. Interest expense for the nine months ended September 30, 2024 increased $4 million, or 2.8%, compared to the first nine months of 2023.

Previous wording

For the three months and six months ended June 30, 2024, the fair value of estimated earn-out payables was re-evaluated and resulted in decreases of $2 million and $7 million, respectively, which resulted in credits to the Condensed Consolidated Statements of Income.

Current wording

For the three months and nine months ended September 30, 2024, the fair value of estimated earn-out payables was re-evaluated and resulted in decreases of $9 million and $15 million, respectively, which resulted in credits to the Condensed Consolidated Statements of Income.

Previous wording

As of June 30, 2024, estimated acquisition earn-out payables totaled $169 million, of which $93 million was recorded as accounts payable and $76 million was recorded as other non-current liabilities.

Current wording

As of September 30, 2024, estimated acquisition earn-out payables totaled $137 million, of which $73 million was recorded as accounts payable and $64 million was recorded as other non-current liabilities.

Previous wording

The effective tax rate on income from operations for the three months ended June 30, 2024 and 2023 was 25.1% and 25.2%, respectively. The effective tax rate on income from operations for the six months ended June 30, 2024 and 2023 was 22.3% and 22.4%, respectively.

Current wording

The effective tax rate on income from operations for the three months ended September 30, 2024 and 2023 was 24.6% and 27.3%, respectively. The decrease in the effective tax rate for the quarter was primarily impacted by the change in the market value of Company-owned life insurance associated with our deferred compensation plan and certain prior year nonrecurring items. The effective tax rate on income from operations for the nine months ended September 30, 2024 and 2023 was 23.1% and 23.9%, respectively.

Previous wording

As discussed in Note 12 to the Condensed Consolidated Financial Statements, we operate three reportable segments: Retail, Programs and Wholesale Brokerage. On a segmented basis, changes in amortization, depreciation and interest expenses generally result from activity associated with acquisitions. Likewise, other income consists primarily of miscellaneous income and therefore can fluctuate between comparable periods. As such, in evaluating the operational efficiency of a segment, management primarily focuses on the Organic Revenue growth rate and EBITDAC Margin.

Current wording

As discussed in Note 12 to the Condensed Consolidated Financial Statements, we operate three reportable segments: Retail, Programs and Wholesale Brokerage. On a segmented basis, changes in amortization, depreciation and interest expenses generally result from activity associated with acquisitions. Likewise, other income consists primarily of miscellaneous income and therefore can fluctuate between comparable periods. As such, management primarily focuses on the Organic Revenue growth rate and EBITDAC Margin when evaluating the operational efficiency of a segment.

Previous wording

The Retail segment’s total revenues for the three months ended June 30, 2024 increased 9.3%, or $55 million, as compared to the same period in 2023, to $646 million. The $62 million increase in core commissions and fees revenue was driven by: (i) approximately $21 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023; (ii) an increase of $42 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $1 million and (iv) a decrease of $2 million related to commissions and fees recorded in 2023 from businesses since divested. Profit-sharing contingent commissions for the second quarter of 2024 decreased 53.3%, or $8 million, as compared to the same period in 2023, to $7 million. This decrease was primarily the result of not qualifying for certain profit-sharing contingent commissions in 2024, due to higher loss ratios experienced by our insurance carrier partners, that we qualified for in the prior year. The Retail segment’s total commissions and fees increased by 10.8%, and the Organic Revenue growth rate was 7.3% for the second quarter of 2024. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth on renewals of existing customers. Renewal business was impacted by increases in exposure units, as well as continued rate increases for property and casualty, employee benefits and auto.

Current wording

The Retail segment’s total revenues for the three months ended September 30, 2024 increased 6.5%, or $39 million, as compared to the same period in 2023, to $641 million. The $40 million increase in core commissions and fees revenue was driven by: (i) approximately $16 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023; (ii) an increase of $23 million related to net new and renewal business; and (iii) an increase from the impact of Foreign Currency Translation of $2 million. Profit-sharing contingent commissions for the third quarter of 2024 decreased 11.1%, or $1 million, as compared to the same period in 2023, to $8 million. This decrease was primarily the result of not qualifying for certain profit-sharing contingent commissions in 2024, due to higher loss ratios experienced by our insurance carrier partners. The Retail segment’s total commissions and fees increased by 6.5%, and the Organic Revenue growth rate was 3.9% for the third quarter of 2024. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth on renewals of existing customers. Renewal business was impacted by timing of certain nonrecurring revenue adjustments to incentive commissions and moderating rates and exposure unit growth.

Previous wording

Income before income taxes for the three months ended June 30, 2024 increased 21.7%, or $23 million, as compared to the same period in 2023, to $129 million. The primary factors driving this increase were: (i) a decrease in intercompany interest expense and (ii) the profit associated with the net increase in revenue as described above.

Current wording

Income before income taxes for the three months ended September 30, 2024 increased 7.1%, or $8 million, as compared to the same period in 2023, to $120 million. The primary factors driving this increase were: (i) a decrease in intercompany interest expense; (ii) a decrease in estimated acquisition earn-out payables, and (iii) the profit associated with the net increase in revenue as described above.

Previous wording

EBITDAC - Adjusted for the three months ended June 30, 2024 increased 9.0%, or $15 million, as compared to the same period in 2023, to $181 million. EBITDAC Margin - Adjusted for the three months ended June 30, 2024 decreased to 28.0% from 28.1% in the same period in 2023. The decrease in EBITDAC Margin - Adjusted was primarily driven by: (i) a decrease in profit-sharing contingent commissions and, to a lesser extent, (ii) higher non-cash stock-based compensation and (iii) higher performance-based compensation associated with the increased level of Organic Revenue growth which was partially offset by (iv) the net increase in revenue as described above and (v) leveraging our expense base.

Current wording

EBITDAC - Adjusted for the three months ended September 30, 2024 decreased 0.6%, or $1 million, as compared to the same period in 2023, to $170 million. EBITDAC Margin - Adjusted for the three months ended September 30, 2024 decreased to 26.5% from 28.4% in the same period in 2023. The change in EBITDAC Margin - Adjusted was primarily driven by: (i) a decrease in profit-sharing contingent commissions, (ii) higher non-cash stock-based compensation (iii) the timing of certain nonrecurring revenue and adjustments to incentive commissions, (iv) higher compensation due to investments in employees which was partially offset by (v) the net increase in revenue as described above and (vi) leveraging our expense base.

Previous wording

The Retail segment’s total revenues for the six months ended June 30, 2024 increased 9.7%, or $128 million, as compared to the same period in 2023, to $1,452 million. The $135 million increase in core commissions and fees revenue was driven by: (i) approximately $39 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023; (ii) an increase of $95 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $4 million and (iv) an offsetting decrease of $3 million related to commissions and fees recorded in 2023 from businesses since divested. Profit-sharing contingent commissions for the six months of 2024 decreased 30.0%, or $9 million, as compared to the same period in 2023, to $21 million. This decrease was primarily the result of not qualifying for certain profit-sharing contingent commissions in 2024, due to higher loss ratios experienced by our insurance carrier partners, that we qualified for in the prior year. The Retail segment’s total commissions and fees increased by 10.4%, and the Organic Revenue growth rate was 7.4% for the first six months of 2024. The Organic Revenue growth rate was driven by net new business written during the preceding 12 months and growth on renewals of existing customers. Renewal business was impacted by rate increases with continued increases in property and casualty, employee benefits and auto.

Current wording

The Retail segment’s total revenues for the nine months ended September 30, 2024 increased 8.7%, or $167 million, as compared to the same period in 2023, to $2,093 million. The $175 million increase in core commissions and fees revenue was driven by: (i) approximately $55 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023; (ii) an increase of $119 million related to net new and renewal business and (iii) an offsetting decrease of $3 million related to commissions and fees recorded in 2023 from businesses since divested. Profit-sharing contingent commissions for the nine months of 2024 decreased 25.0%, or $10 million, as compared to the same period in 2023, to $30 million. This decrease was primarily the result of not qualifying for certain profit-sharing contingent commissions in 2024, due to higher loss ratios experienced by our insurance carrier partners. The Retail segment’s total commissions and fees increased by 8.6%, and the Organic Revenue growth rate was 6.3% for the first nine months of 2024. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth on renewals of existing customers. Renewal business was impacted by moderating rates and growth of exposure units.

Previous wording

Income before income taxes for the six months ended June 30, 2024 increased 14.7%, or $47 million, as compared to the same period in 2023, to $367 million. The primary factors driving this increase were: (i) a decrease in intercompany interest expense and (ii) the profit associated with the net increase in revenue as described above.

Current wording

Income before income taxes for the nine months ended September 30, 2024 increased 13.0%, or $56 million, as compared to the same period in 2023, to $488 million. The primary factors driving this increase were: (i) a decrease in intercompany interest expense; (ii) a decrease in estimated acquisition earn-out payables, and (iii) the profit associated with the net increase in revenue as described above.

Previous wording

EBITDAC - Adjusted for the six months ended June 30, 2024 increased 8.5%, or $37 million, as compared to the same period in 2023, to $472 million. EBITDAC Margin - Adjusted for the six months ended June 30, 2024 decreased to 32.5% from 32.9% in the same period in 2023. The decrease in EBITDAC Margin - Adjusted was primarily driven by: (i) a decrease in profit-sharing contingent commissions and, to a lesser extent, (ii) higher non-cash stock-based compensation and (iii) higher performance-based compensation associated with increased level of Organic Revenue growth, which was partially offset by, (iv) the net increase in revenue as described above and (v) leveraging our expense base.

Current wording

EBITDAC - Adjusted for the nine months ended September 30, 2024 increased 5.8%, or $35 million, as compared to the same period in 2023, to $641 million. EBITDAC Margin - Adjusted for the nine months ended September 30, 2024 decreased to 30.6% from 31.5% in the same period in 2023. The decrease in EBITDAC Margin - Adjusted was primarily driven by: (i) a decrease in profit-sharing contingent commissions and, (ii) higher non-cash stock-based compensation and (iii) higher compensation due to investments in employees, which was partially offset by, (iv) the net increase in revenue as described above and (v) leveraging our expense base.

Previous wording

The Programs segment’s total revenues for the three months ended June 30, 2024 increased 15.8%, or $49 million, as compared to the same period in 2023, to $359 million. The $35 million increase in core commissions and fees revenue was driven by: (i) approximately $20 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023; (ii) approximately $41 million of net new business, renewal business, and fee revenues and (iii) an offsetting decrease of $26 million related to commissions and fees revenue from businesses divested in the preceding twelve months. Profit-sharing contingent commissions for the second quarter of 2024 increased approximately $10 million as compared to the second quarter of 2023. This increase was driven by improved underwriting results, qualifying for certain contingent commissions that we did not qualify for in the prior year, increased written premium and acquisitions completed in the past twelve months.

Current wording

The Programs segment’s total revenues for the three months ended September 30, 2024 increased 15.7%, or $48 million, as compared to the same period in 2023, to $353 million. The $51 million increase in core commissions and fees revenue was driven by: (i) approximately $17 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023; (ii) approximately $60 million of net new business, renewal business, and fee revenues and (iii) an offsetting decrease of $26 million related to commissions and fees revenue from businesses divested in the preceding twelve months. Profit-sharing contingent commissions for the third quarter of 2024 decreased approximately $5 million as compared to the third quarter of 2023. This decrease was driven by the expected claims costs associated with Hurricane Helene.

Previous wording

Income before income taxes for the three months ended June 30, 2024 increased 47.6%, or $59 million, as compared to the same period in 2023, to $183 million. Income before income taxes increased due to the drivers of EBITDAC - Adjusted described below along with the gain on disposal of certain businesses.

Current wording

Income before income taxes for the three months ended September 30, 2024 increased 33.9%, or $39 million, as compared to the same period in 2023, to $154 million. Income before income taxes increased due to the drivers of EBITDAC - Adjusted described below along with the decrease in estimated acquisition earn-out payables.

Previous wording

The Programs segment’s total revenues for the six months ended June 30, 2024 increased 16.3%, or $92 million, as compared to the same period in 2023, to $657 million. The $55 million increase in core commissions and fees revenue was driven by: (i) approximately $66 million of net new renewal business and fee revenues; (ii) an offsetting decrease of $51 million related to commissions and fees revenue from business divested in the preceding 12 months and (iii) $40 million from acquisitions that had no comparable revenues in the same period of 2023. Profit-sharing contingent commissions for the six months ended June 30, 2023 increased approximately $28 million, or by 121.7%, as compared to the same period in 2023. This increase was driven by qualifying for certain contingent commissions that we did not qualify for in the prior year from greater written premium, favorable loss ratios, prior year adjustments and acquisitions.

Current wording

$126 million of net new renewal business and fee revenues; (ii) an offsetting decrease of $79 million related to commissions and fees revenue from business divested in the preceding twelve months and (iii) $58 million from acquisitions that had no comparable revenues in the same period of 2023. Profit-sharing contingent commissions for the nine months ended September 30, 2023 increased approximately $23 million, or by 65.7%, as compared to the same period in 2023. This increase was driven by qualifying for certain contingent commissions that we did not qualify for in the prior year, favorable loss ratios, prior year adjustments and acquisitions partially offset due to the impact related to expected insured losses resulting from Hurricane Helene.

Previous wording

The Programs segment’s total commissions and fees increased by 10.2%, and the Organic Revenue growth rate was 13.5%, for the six months ended June 30, 2024. The Organic Revenue growth was driven primarily by strong net new business across most of our Programs and good retention, a growth incentive received for one of our programs and offset by nonrecurring claims revenue in the prior year.

Current wording

The Programs segment’s total commissions and fees increased by 14.8%, and the Organic Revenue growth rate was 16.8%, for the nine months ended September 30, 2024. The Organic Revenue growth was driven primarily by strong net new business across most of our Programs and good retention, a growth incentive received for one of our programs and partially offset by nonrecurring claims revenue in the prior year.

Previous wording

Income before income taxes for the six months ended June 30, 2024 increased 43.2%, or $86 million, from the same period in 2023, to $285 million. Income before income taxes increased due to the drivers of EBITDAC - Adjusted described below along with the gain on disposal of certain businesses.

Current wording

Income before income taxes for the nine months ended September 30, 2024 increased 39.8%, or $125 million, from the same period in 2023, to $439 million. Income before income taxes increased due to the drivers of EBITDAC - Adjusted described below along with the gain on disposal of certain businesses.

Previous wording

The Wholesale Brokerage segment’s total revenues for the three months ended June 30, 2024 increased 14.4%, or $20 million, as compared to the same period in 2023, to $159 million. The $18 million net increase in core commissions and fees revenue was driven primarily by: (i) $15 million related to net new and renewal business and (ii) $3 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023. Profit-sharing contingent commissions for the second quarter of 2024 increased $1 million compared to the second quarter of 2023, driven by acquired businesses in the last year. The Wholesale Brokerage segment’s growth rate for total commissions and fees was 13.2%, and the Organic Revenue growth rate was 11.0% for the second quarter of 2024. The Organic Revenue growth rate was driven by strong new business and good retention, as well as a combination of rate and exposure unit increases.

Current wording

The Wholesale Brokerage segment’s total revenues for the three months ended September 30, 2024 increased 14.0%, or $21 million, as compared to the same period in 2023, to $171 million. The $14 million net increase in core commissions and fees revenue was driven primarily by: (i) $12 million related to net new and renewal business and (ii) $2 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023. Profit-sharing contingent commissions for the third quarter of 2024 increased $6 million compared to the third quarter of 2023, driven by improved underwriting results, increased written premium and finalization of prior year estimates of profit-sharing contingent commissions. The Wholesale Brokerage segment’s growth rate for total commissions and fees was 13.4%, and the Organic Revenue growth rate was 8.4% for the third quarter of 2024. The Organic Revenue growth rate was driven by net new business and a combination of rate and exposure unit increases.

Previous wording

Income before income taxes for the three months ended June 30, 2024 increased 23.7%, or $9 million, as compared to the same period in 2023, to $47 million due to: (i) the growth of EBITDAC - Adjusted described below and (ii) a decrease in the change in estimated acquisition earn-out payables.

Current wording

Income before income taxes for the three months ended September 30, 2024 increased 133.3%, or $32 million, as compared to the same period in 2023, to $56 million due to: (i) the growth of EBITDAC - Adjusted described below and (ii) a decrease in the change in estimated acquisition earn-out payables.

Previous wording

EBITDAC - Adjusted for the three months ended June 30, 2024 increased 23.3%, or $10 million, as compared to the same period in 2023, to $53 million. EBITDAC Margin - Adjusted for the three months ended June 30, 2024 increased to 33.3% from 30.9%, as compared to the same period in 2023. EBITDAC Margin - Adjusted increased due to: (i) certain nonrecurring operating expenses in the prior year; (ii) total revenues growth and (iii) leveraging our expense base.

Current wording

EBITDAC - Adjusted for the three months ended September 30, 2024 increased 17.9%, or $10 million, as compared to the same period in 2023, to $66 million. EBITDAC Margin - Adjusted for the three months ended September 30, 2024 increased to 38.6% from 37.3%, as compared to the same period in 2023. EBITDAC Margin - Adjusted increased due to: (i) total revenues growth and (ii) leveraging our expense base.

Previous wording

The Wholesale Brokerage segment’s total revenues for the six months ended June 30, 2024 increased 14.9%, or $39 million, as compared to the same period in 2023, to $301 million. The $34 million net increase in core commissions and fees revenue was driven primarily by: (i) $28 million related to net new and renewal business and (ii) $6 million related to core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2023. Profit-sharing contingent commissions for the first six months of 2024 increased approximately $3 million compared to the same period of 2023. The Wholesale Brokerage segment’s growth rate for total commissions and fees was 13.3%, and the Organic Revenue growth rate was 11.0% for the first six months of 2024. The Organic Revenue growth rate was driven by strong new business and good retention, as well as a combination of rate and exposure unit increases.

Current wording

The Wholesale Brokerage segment’s total revenues for the nine months ended September 30, 2024 increased 14.6%, or $60 million, as compared to the same period in 2023, to $472 million. The $48 million net increase in core commissions and fees revenue was driven primarily by: (i) $39 million related to net new and renewal business; (ii) $7 million related to core commissions and fees revenue from acquisitions and dispositions that had no comparable revenues in the same period of 2023; and (iii) an increase from the impact of Foreign Currency Translation of $1 million. Profit-sharing contingent commissions for the first nine months of 2024 increased approximately $9 million compared to the same period of 2023 driven by improved underwriting results, increased written premium, finalization of prior-year estimates and acquisitions completed in the past twelve months. The Wholesale Brokerage segment’s growth rate for total commissions and fees was 13.9%, and the Organic Revenue growth rate was 9.8% for the first nine months of 2024. The Organic Revenue growth rate was driven by strong new business and good retention, as well as a combination of rate and exposure unit increases.

Previous wording

Income before income taxes for the six months ended June 30, 2024 increased 27.5%, or $19 million, as compared to the same period in 2023, to $88 million due to: (i) the growth of EBITDAC - Adjusted described below and (ii) a decrease in the change in estimated acquisition earn-out payables.

Current wording

Income before income taxes for the nine months ended September 30, 2024 increased 55.9%, or $52 million, as compared to the same period in 2023, to $145 million due to: (i) the growth of EBITDAC - Adjusted described below and (ii) a decrease in the change in estimated acquisition earn-out payables.

Previous wording

EBITDAC - Adjusted for the six months ended June 30, 2024 increased 22.2%, or $18 million, as compared to the same period in 2023, to $99 million. EBITDAC Margin - Adjusted for the six months ended June 30, 2024 increased to 32.9% from 30.9% in the same period in 2023 due to: (i) certain nonrecurring operating expenses in the prior year; (ii) total revenues growth and (iii) leveraging our expense base.

Current wording

EBITDAC - Adjusted for the nine months ended September 30, 2024 increased 21.2%, or $29 million, as compared to the same period in 2023, to $166 million. EBITDAC Margin - Adjusted for the nine months ended September 30, 2024 increased to 35.2% from 33.3% in the same period in 2023 due to: (i) total revenues growth; (ii) certain nonrecurring operating expenses in the prior year; and (iii) leveraging our expense base.