BROWN & BROWN, INC.

Previous wording

We also earn Contingents, which are commissions based primarily on underwriting results, but in select situations may reflect additional considerations for volume, growth and/or retention. These commissions, which are included in our commissions and fees in the Consolidated Statements of Income, are estimated and accrued throughout the year based on actual premiums written and knowledge, to the extent it is available, of losses incurred. Payments are primarily received in the first and second quarters of each subsequent underwriting year, based upon the prior year(s) underwriting results, but may differ from the amount estimated and accrued due to the lack of complete visibility regarding loss information until it is received. Over the last three years, annual Contingents have averaged approximately 4.4% of total commissions and fee revenues.

Current wording

We also earn Contingents, which are commissions based primarily on underwriting results, but in select situations may reflect additional considerations for volume, growth and/or retention. These commissions, which are included in our commissions and fees in the Consolidated Statements of Income, are estimated and accrued throughout the year based on actual premiums written and knowledge, to the extent it is available, of losses incurred. Payments are primarily received in the first and second quarters of each subsequent underwriting year, based upon prior year(s) underwriting results, but may differ from the amount estimated and accrued due to the lack of complete visibility regarding loss information until they are received. Over the last three years, Contingents have averaged approximately 4.4% of total commissions and fee revenues.

Previous wording

For the three months ended March 31, 2026, our total commissions and fees growth rate was 35.7%. Our consolidated Organic Revenue growth rate was flat and our Organic Revenue with Contingents growth rate was 2.2%.

Current wording

For the three months ended June 30, 2026, our total commissions and fees growth rate was 32.4%. Our consolidated Organic Revenue decreased by 0.7% and our Organic Revenue with Contingents growth rate was 0.7%.

Previous wording

Income before income taxes for the three months ended March 31, 2026 increased from the first quarter of 2025 by $106 million or 24.8%, driven by increased Contingents, leveraging our expense base, acquisitions completed in the past twelve months and the change in mark-to-market of escrow liability. This growth was partially offset by Acquisition/Integration Costs and the change in estimated acquisition earn-out payables.

Current wording

Income before income taxes for the three months ended June 30, 2026 increased from the second quarter of 2025 by $72 million or 23.2%, driven by increased Contingents, leveraging our expense base, synergies realized from the acquisition of Accession, acquisitions completed in the past twelve months and the change in estimated acquisition earn-out payables. This growth was partially offset by Acquisition/Integration Costs.

Previous wording

“Mark-to-market of escrow liability” is a caption on our consolidated statements of income which reflects the non-cash change in the fair value associated with certain shares of the Company’s common stock held in escrow. The change is driven by fluctuations in our stock price between the beginning of the quarter and the end of the quarter. These escrowed shares represent a portion of the merger consideration payable in connection with our acquisition of Accession. The escrowed shares secure certain indemnification obligations of the Accession equity holders related to businesses that are in run-off or discontinued.

Current wording

“Mark-to-market of escrow liability” is a caption on our consolidated statements of income which reflects the non-cash change in the fair value associated with certain shares of the Company’s common stock held in escrow. The change is driven by fluctuations in our stock price between the beginning of the period and the end of the period. These escrowed shares represent a portion of the merger consideration payable in connection with our acquisition of Accession. The escrowed shares secure certain indemnification obligations of the Accession equity holders related to businesses that are in run-off or discontinued.

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 first quarter of 2026, we acquired 725 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 second quarter of 2026, we acquired 732 insurance intermediary operations.

Previous wording

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

Current wording

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

Previous wording

Commissions and fees, including Contingents and earned premiums, for the three months ended March 31, 2026 increased $495 million to $1,880 million, or 35.7%, over the same period in 2025. Core commissions and fees revenue for the first quarter of 2026 increased $441 million or 32.9%, composed of: (i) $435 million from acquisitions that had no comparable revenues in the same period of 2025; (ii) an increase from the impact of Foreign Currency Translation of $19 million and an offsetting decrease from (iii) $3 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months and (iv) $10 million related to the Litigation-Related Impact. Contingents for the first quarter of 2026 increased by $54 million, or 126%, compared to the same period in 2025. This increase was driven primarily by (i) improved underwriting results for our carrier partners, growth in premium volume and qualifying for certain Contingents that we did not qualify for in the prior year and (ii) recent acquisitions. The Organic Revenue with Contingents growth rate was 2.2% driven by the increase in Organic Contingents.

Current wording

Commissions and fees, including Contingents and earned premiums, for the three months ended June 30, 2026 increased $405 million to $1,654 million, or 32.4%, over the same period in 2025. Core commissions and fees revenue for the second quarter of 2026 increased $365 million or 30.3%, composed of: (i) $393 million from acquisitions that had no comparable revenues in the same period of 2025; (ii) an increase from the impact of Foreign Currency Translation of $2 million and an offsetting decrease from (iii) $4 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months; (iv) $18 million related to the Litigation-Related Impact and (v) $8 million of net new and renewal business, which combined reflected an overall Organic Revenue decrease of 0.7%. Contingents for the second quarter of 2026 increased by $40 million, or 88.9%, compared to the same period in 2025. This increase was driven primarily by (i) improved underwriting results for our carrier partners, growth in premium volume and qualifying for certain Contingents that we did not qualify for in the prior year, (ii) recent acquisitions and (iii) our enhanced carrier engagement model. The Organic Revenue with Contingents growth rate was 0.7%.

Previous wording

Employee compensation and benefits expense as a percentage of total revenues was 47.7% for the three months ended March 31, 2026 as compared to 48.6% for the three months ended March 31, 2025, an increase of 32.8%, or $224 million. This increase included $241 million of compensation costs related to acquisitions that had no comparable costs in the same period of 2025. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2026 and 2025 decreased by $17 million. This underlying employee compensation and benefits expense decrease was primarily related to: (i) lower non-cash stock-based compensation expense driven by the company's performance; (ii) a decrease in claims costs within our self-insured health plan; (iii) a decrease in commissions, base compensation and bonuses driven by the Litigation-Related Impact; partially offset by (iv) an increase in staff costs attributable to new hires and annual compensation increases.

Current wording

Employee compensation and benefits expense as a percentage of total revenues was 50.0% for the three months ended June 30, 2026 as compared to 49.8% for the three months ended June 30, 2025, an increase of 30.9%, or $198 million. This increase included $203 million of compensation costs related to acquisitions that had no comparable costs in the same period of 2025. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2026 and 2025 decreased by $5 million. This underlying employee compensation and benefits expense decrease was primarily related to: (i) lower non-cash stock-based compensation expense driven by the company's performance; (ii) a decrease in claims costs within our self-insured health plan; (iii) a decrease in commissions, base compensation and bonuses resulting from the Litigation-Related Impact; partially offset by (iv) an increase in staff costs attributable to new hires and annual compensation increases.

Previous wording

Other operating expenses represented 15.2% of total revenues for the first quarter of 2026, as compared to 13.2% for the first quarter of 2025. Other operating expenses for the first quarter of 2026 increased $103 million, or 55.4%, from the same period of 2025. This change includes: (i) $95 million of other operating expenses related to acquisitions that had no comparable costs in the same period of 2025; (ii) $26 million of Acquisition/Integration Costs associated with the Transaction, $20 million of which is included in the $95 million related to acquisitions that had no comparable costs in the same period of 2025; and (iii) increased information technology-related costs.

Current wording

Other operating expenses represented 16.2% of total revenues for the second quarter of 2026, as compared to 16.4% for the second quarter of 2025. Other operating expenses for the second quarter of 2026 increased $60 million, or 28.4%, from the same period of 2025. This change includes: (i) $72 million of other operating expenses related to acquisitions that had no comparable costs in the same period of 2025; and (ii) increased information technology-related costs.

Previous wording

Gain on disposal for the first quarter of 2026 increased $3 million from the first quarter of 2025. 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 second quarter of 2026 decreased $1 million from the second quarter of 2025. Gain on disposal for the six months ended June 30, 2026 increased $1 million from the six months ended June 30, 2025. 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 first quarter of 2026 increased $63 million, or 118.9%, compared to the first quarter of 2025. 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 second quarter of 2026 increased $60 million, or 120.0%, compared to the second quarter of 2025. Amortization expense for the six months ended June 30, 2026 increased $123 million, or 119.4%, compared to the six months ended June 30, 2025. 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 first quarter of 2026 increased $6 million, or 54.5%, compared to the first quarter of 2025. 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.

Current wording

Depreciation expense for the second quarter of 2026 increased $7 million, or 63.6%, compared to the second quarter of 2025. Depreciation expense for the six months ended June 30, 2026 increased $12 million, or 52.2%, compared to the six months ended June 30, 2025. 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 first quarter of 2026 increased $53 million, or 115.2%, compared to the first quarter of 2025. The increase is due to higher debt balances resulting from debt issuance in the second quarter of 2025 to fund the Transaction, which was partially offset by decreases in the floating rate benchmark used on our adjustable-rate debt.

Current wording

Interest expense for the second quarter of 2026 increased $49 million, or 96.1%, compared to the second quarter of 2025. Interest expense for the six months ended June 30, 2026 increased $103 million, or 107.3%, compared to the first six months of 2025. The increase is due to higher debt resulting from a debt issuance in the second quarter of 2025 to fund the Transaction, which was partially offset by decreases in the floating rate benchmark used on our adjustable-rate debt.

Previous wording

Accounting Standards Codification (“ASC”) Topic 805 - Business Combinations is the authoritative guidance requiring an acquirer to recognize 100% of the fair value of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase price arrangements) at the acquisition date must be included in the purchase price consideration. The recorded purchase price for acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations are required to be recorded in the Condensed Consolidated Statements of Income when incurred or reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years.

Current wording

ASC 805 - Business Combinations is the authoritative guidance requiring an acquirer to recognize 100% of the fair value of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase price arrangements) at the acquisition date must be included in the purchase price consideration. The recorded purchase price for acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations are required to be recorded in the Condensed Consolidated Statements of Income when incurred or reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years.

Previous wording

The net charge or credit to the Consolidated Statements of Income for the period is the combination of the net change in the estimated acquisition earn-out payables liability, and the accretion of the present value discount on those liabilities.

Current wording

The net charge or credit to the Condensed Consolidated Statements of Income for the period is the combination of the net change in the estimated acquisition earn-out payables liability, and the accretion of the present value discount on those liabilities.

Previous wording

For the three months and three months ended March 31, 2026, the fair value of estimated earn-out payables was re-evaluated and resulted in decreases of $1 million and $6 million, respectively, which resulted in credits to the Condensed Consolidated Statements of Income.

Current wording

For the three months and six months ended June 30, 2026, the fair value of estimated earn-out payables was re-evaluated and resulted in decreases of $44 million and $45 million, respectively, which resulted in credits to the Condensed Consolidated Statements of Income. These adjustments were primarily related to revised estimates for companies acquired in the Transaction.

Previous wording

As of March 31, 2026, estimated acquisition earn-out payables totaled $393 million, of which $193 million was recorded as accounts payable and $200 million was recorded as other non-current liabilities.

Current wording

As of June 30, 2026, estimated acquisition earn-out payables totaled $310 million, of which $136 million was recorded as accounts payable and $174 million was recorded as other non-current liabilities.

Previous wording

The effective tax rate on income from operations for the three months ended March 31, 2026 and 2025 was 19.9% and 21.8%, respectively. The decrease for the three months ended March 31, 2026 was primarily driven by the non-taxable treatment of the mark-to-market of escrow liability.

Current wording

The effective tax rate on income from operations for the three months ended June 30, 2026 and 2025 was 24.5% and 24.8%, respectively. The effective tax rate on income from operations for the six months ended June 30, 2026 and 2025 was 21.7% and 22.9%, respectively. The decrease for the six months ended June 30, 2026 was driven by the non-taxable treatment of the mark-to-market of escrow liability.

Previous wording

The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the three months ended March 31, 2026 and 2025, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the three months ended March 31, 2026, including by segment, are as follows:

Current wording

The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the three months ended June 30, 2026 and 2025, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the three months ended June 30, 2026 and 2025, including by segment, are as follows:

Previous wording

The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the three months ended March 31, 2025 and 2024, including by segment, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the three months ended March 31, 2025, including by segment, are as follows:

Current wording

The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the three months ended June 30, 2025 and 2024, including by segment, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the three months ended June 30, 2025 and 2024, including by segment, are as follows:

Previous wording

The Retail segment’s total revenues for the three months ended March 31, 2026 increased 33.4%, or $303 million, as compared to the same period in 2025, to $1,210 million. The $282 million increase in core commissions and fees revenue was driven by: (i) approximately $270 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; (ii) an increase of $9 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $15 million; (iv) an offsetting decrease of $1 million related to commissions and fees recorded in 2025 from businesses since divested; and (v) an offsetting decrease of $10 million related to the Litigation-Related Impact. Contingents for the first quarter of 2026 increased $16 million to $30 million, as compared to the same period in 2025. This increase was due to acquisitions completed within the last twelve months. The Retail segment’s total commissions and fees increased by 32.9%. The Organic Revenue growth rate was 1.0% and the Organic Revenue with Contingents growth rate was 1.3% for the first quarter of 2026. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth on renewals of existing customers. Growth for renewal business was moderated by slowing rate increases, rate decreases for certain lines of coverage, and a change to the revenue model in our specialty pharmacy consulting business.

Current wording

The Retail segment’s total revenues for the three months ended June 30, 2026 increased 35.9%, or $250 million, as compared to the same period in 2025, to $947 million. The $227 million increase in core commissions and fees revenue was driven by: (i) approximately $236 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; (ii) an increase of $10 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $1 million; (iv) an offsetting decrease of $2 million related to commissions and fees recorded in 2025 from businesses since divested; and (v) an offsetting decrease of $18 million related to the Litigation-Related Impact. Contingents for the second quarter of 2026 increased $19 million to $26 million, as compared to the same period in 2025. This increase was due to acquisitions completed within the last twelve months and more favorable terms for certain carrier contracts resulting from our enhanced carrier engagement model. The Retail segment’s total commissions and fees increased by 35.4%. The Organic Revenue growth rate was 1.5% and the Organic Revenue with Contingents growth rate was 2.5% for the second quarter of 2026. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth on renewals of existing customers. Growth for renewal business was moderated by slowing rate increases, rate decreases for certain lines of coverage, and a change to the revenue model for our specialty pharmacy consulting business.

Previous wording

Income before income taxes for the three months ended March 31, 2026 increased 11.6%, or $33 million, as compared to the same period in 2025, to $317 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, partially offset by (iii) an increase in estimated acquisition earn-out payables, (iv) an increase in amortization expense; and (v) Acquisition/Integration Costs.

Current wording

Income before income taxes for the three months ended June 30, 2026 increased 62.2%, or $79 million, as compared to the same period in 2025, to $206 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, partially offset by (iv) an increase in amortization expense and (v) Acquisition/Integration Costs.

Previous wording

EBITDAC - Adjusted for the three months ended March 31, 2026 increased 29.0%, or $98 million, as compared to the same period in 2025, to $436 million. EBITDAC Margin - Adjusted for the three months ended March 31, 2026 decreased to 36.0% from 37.3% in the same period in 2025. The decrease in EBITDAC Margin - Adjusted was primarily driven by:(i) the timing of revenues and profit associated with certain recent acquisitions which was partially offset by; (ii) leveraging our expense base; and (ii) lower compensation as a result of teammate defections associated with our pending litigation with a start-up US broker.

Current wording

EBITDAC - Adjusted for the three months ended June 30, 2026 increased 46.9%, or $90 million, as compared to the same period in 2025, to $282 million. EBITDAC Margin - Adjusted for the three months ended June 30, 2026 increased to 29.8% from 27.5% in the same period in 2025. The change in EBITDAC Margin - Adjusted was primarily driven by: (i) increased Contingents; (ii) leveraging our expense base; and (iii) lower compensation as a result of employee departures associated with the Litigation-Related Impact.

Previous wording

The Specialty Distribution Segment is composed of three divisions; our programs business, known as Arrowhead Programs; our wholesale brokerage business, known as Bridge Specialty Group; and our specialty program business, known as Arrowhead Specialty.

Current wording

The Specialty Distribution Segment is composed of three divisions; our programs business, operating as Arrowhead Programs; our wholesale brokerage business, operating as Bridge Specialty Group; and our specialty program business, operating as Arrowhead Specialty.

Previous wording

Bridge Specialty Group offers global wholesale brokerage and delegated binding/underwriting capabilities across multiple lines, to independent agents and brokers, including Brown & Brown retail agents. Our teams across the globe provide industry knowledge and expertise, for placements across multiple lines of coverage based on access to admitted, excess and surplus lines carriers, as well as the Lloyd’s markets in the United Kingdom.

Current wording

Bridge Specialty Group offers global wholesale brokerage and delegated binding/underwriting capabilities across multiple lines, to independent agents and brokers, including Brown & Brown retail agents. Our teams across the globe provide deep industry knowledge and expertise, for placements across multiple lines of coverage based on access to admitted, excess and surplus lines carriers, as well as the Lloyd’s markets in the United Kingdom.

Previous wording

The Specialty Distribution segment’s total revenues for the three months ended March 31, 2026 increased 40.0%, or $195 million, as compared to the same period in 2025, to $682 million. The $158 million increase in core commissions and fees revenue was driven by: (i) approximately $165 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; and (ii) an increase from the impact of Foreign Currency Translation of $4 million; partially offset by: (iii) a $9 million decrease in net new business, renewal business, and fee revenues; and (iv) a $2 million decline in core commission and fees revenue from dispositions that had no comparable revenues in the same period of 2026. Contingents for the first quarter of 2026 increased approximately $38 million as compared to the first quarter of 2025. This increase is a result of favorable loss ratios, increased premiums, and to a lesser extent acquisitions completed in the past twelve months. The Organic Revenue with Contingents growth rate was 3.9% driven by the increase in Organic Contingents.

Current wording

The Specialty Distribution segment’s total revenues for the three months ended June 30, 2026 increased 28.1%, or $158 million, as compared to the same period in 2025, to $721 million. The $138 million increase in core commissions and fees revenue was driven by: (i) approximately $157 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; and (ii) an increase from the impact of Foreign Currency Translation of $1 million; partially offset by: (iii) a $18 million decrease in net new business, renewal business, and fee revenues; and (iv) a $2 million decline in core commission and fees revenue from dispositions that had no comparable revenues in the same period of 2026. Contingents for the second quarter of 2026 increased approximately $21 million as compared to the second quarter of 2025. This increase is a result of acquisitions completed in the past twelve months and favorable loss ratios.

Previous wording

Income before income taxes for the three months ended March 31, 2026 increased 33.1%, or $55 million, as compared to the same period in 2025, to $221 million due to: (i) the growth of EBITDAC – Adjusted described below; (ii) a decrease in estimated acquisition earn-out payables; partially offset by: (iii) increased amortization expense; and (iv) Acquisition/Integration Costs.

Current wording

Income before income taxes for the three months ended June 30, 2026 increased 8.6%, or $20 million, as compared to the same period in 2025, to $253 million due to: (i) the growth of EBITDAC - Adjusted described below; (ii) a decrease in estimated acquisition earn-out payables; partially offset by: (iii) increased amortization expense; (iv) Acquisition/Integration Costs; and (v) increased depreciation expense.

Previous wording

The Specialty Distribution segment’s total commissions and fees increased by 40.7%, with Organic Revenue decreasing 2.0% and Organic Revenue with Contingents increasing 3.9% for the three months ended March 31, 2026. The Organic Revenue with Contingents growth rate was driven by: (i) increased Contingents; (ii) net new and retained business; (iii) and exposure unit expansion; partially offset by (iv) declining rates on catastrophe ("CAT") property.

Current wording

The Specialty Distribution segment’s total commissions and fees increased by 34.3% with Organic Revenue decreasing 2.7% and Organic Revenue with Contingents increasing 1.2%, for the six months ended June 30, 2026. The Organic Revenue with Contingents growth was driven by: (i) increased Contingents; (ii) net new and retained business; and (iii) exposure unit expansion; which were partially offset by (iv) declining rates on CAT property.

Previous wording

EBITDAC - Adjusted for the three months ended March 31, 2026 increased 41.1%, or $81 million, from the same period in 2025, to $278 million. EBITDAC Margin - Adjusted for the three months ended March 31, 2026 increased to 40.8% from 40.5% in the same period in 2025. EBITDAC Margin - Adjusted increased due to: (i) the increase in Contingents (ii) the timing of revenues associated with recent acquisitions; and (iii) disciplined expense management.

Current wording

EBITDAC - Adjusted for the six months ended June 30, 2026 increased 27.8%, or $128 million to $588 million, as compared to the same period in 2025. EBITDAC Margin - Adjusted for the six months ended June 30, 2026 decreased to 41.9% from 43.8% in the same period in 2025. EBITDAC Margin - Adjusted decreased due to: (i) the decline in Organic Revenue; partially offset by: (ii) the increase in Contingents; and (iii) disciplined expense management.

Previous wording

The Company seeks to maintain a conservative balance sheet and strong liquidity profile. Our capital requirements to operate as an insurance intermediary are low, and we have been able to grow and invest in our business through a combination of cash that has been generated from operations, the disciplined use of debt and the issuance of equity as part of the purchase price consideration to acquire certain businesses. We have the ability to utilize our Revolving Credit Facility under the Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement”), which as of March 31, 2026 provided additional capacity for up to $475 million in available cash. We believe that we have access to additional funds, if needed, through the capital markets or private placements to obtain further debt financing under the current market conditions. The Company believes that its existing cash, cash equivalents, short-term investment portfolio and funds generated from operations, together with the funds available under the Revolving Credit Facility and the Loan Agreement, dated March 31, 2022, which provided term loan capacity of $800 million (the “Loan Agreement”), will be sufficient to satisfy its normal liquidity needs, including principal payments on our long-term debt, for the next twelve months and in the long term.

Current wording

The Company seeks to maintain a conservative balance sheet and strong liquidity profile. Our capital requirements to operate as an insurance intermediary are low, and we have been able to grow and invest in our business through a combination of cash that has been generated from operations, the disciplined use of debt and the issuance of equity as part of the purchase price consideration to acquire certain businesses. We have the ability to utilize our Revolving Credit Facility under the Third Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”), which as of June 30, 2026 provided additional capacity for up to $975 million in available cash. We believe that we have access to additional funds, if needed, through the capital markets or private placements to obtain further debt financing under the current market conditions. The Company believes that its existing cash, cash equivalents, short-term investment portfolio and funds generated from operations, together with the funds available under the Revolving Credit Facility will be sufficient to satisfy its normal liquidity needs, including principal payments on our long-term debt, for the next twelve months and in the long term.

Previous wording

The Revolving Credit Facility contains an expansion option for up to an additional $500 million of borrowing capacity, subject to the approval of participating lenders. Additionally, the Company may, subject to satisfaction of certain conditions, including receipt of additional term loan commitments by new or existing lenders, increase either Term Loan Commitment under the existing Loan Agreement or the term loans issued thereunder or issue new tranches of term loans in an aggregate additional amount of up to $400 million. Including the expansion options under all existing credit agreements, the Company has access to up to $1,375 million of incremental borrowing capacity as of March 31, 2026.

Current wording

The Revolving Credit Facility contains an expansion option for up to an additional $1,000 million of borrowing capacity, subject to the approval of participating lenders. Including the expansion options under all existing credit agreements, the Company has access to up to $1,975 million of incremental borrowing capacity as of June 30, 2026.

Previous wording

Cash and cash equivalents totaled $1,003 million at March 31, 2026 reflecting a decrease of $76 million from the $1,079 million balance at December 31, 2025. This decrease is primarily due to the payment of annual bonus compensation and deferred contingent consideration paid during the quarter offset by our cash generated.

Current wording

Cash and cash equivalents totaled $918 million at June 30, 2026 reflecting a decrease of $161 million from the $1,079 million balance at December 31, 2025. This decrease was primarily driven by share repurchases and deferred contingent consideration payments, partially offset by cash generated from operations.

Previous wording

Our operating cash flows are primarily derived from the net income generated during the period adjusted for non-cash expenses, which include depreciation, amortization, changes in estimated earnout payables, mark-to-market escrow liability non-cash stock-based compensation and deferred income taxes while excluding gains and losses on sales/disposals of investments, businesses, fixed assets and customer accounts, payments on acquisition earn-outs in excess of original estimated payables and changes in working capital which relate primarily to the timing of payments of accrued liabilities and receipts of receivables from commissions and fees related to our revenues. Our ratio of current assets to current liabilities was 1.02 and 1.04 for March 31, 2026 and December 31, 2025, respectively.

Current wording

Our operating cash flows are primarily derived from the net income generated during the period adjusted for non-cash expenses, which include depreciation, amortization, changes in estimated earnout payables, mark-to-market escrow liability, non-cash stock-based compensation and deferred income taxes while excluding gains and losses on sales/disposals of investments, businesses, fixed assets and customer accounts, payments on acquisition earn-outs in excess of original estimated payables and changes in working capital which relate primarily to the timing of payments of accrued liabilities and receipts of receivables from commissions and fees related to our revenues. Our ratio of current assets to current liabilities was 1.13 and 1.04 for June 30, 2026 and December 31, 2025, respectively.

Previous wording

Cash flows generated from operating activities totaled $262 million and $213 million for the three months ended March 31, 2026 and 2025, respectively, representing an increase of $49 million. Operating cash flows generated in 2026 included $427 million from net income before non-controlling interests with $167 million of non-cash adjustments, offset by $332 million from changes in working capital. The growth in cash from operations is primarily due to recent acquisitions.

Current wording

Cash flows generated from operating activities totaled $608 million and $538 million for the six months ended June 30, 2026 and 2025, respectively, representing an increase of $70 million. Operating cash flows generated in 2026 included $716 million from net income before non-controlling interests with $303 million of non-cash adjustments, offset by $411 million from changes in working capital. The growth in cash from operations is primarily due to recent acquisitions.

Previous wording

Cash flows used for investing activities were $38 million and $79 million for the three months ended March 31, 2026 and 2025, respectively, a decrease of $41 million.

Current wording

Cash flows used for investing activities were $71 million and $187 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of $116 million.

Previous wording

During the three months ended March 31, 2026, the Company completed eight acquisitions (including book purchases) and paid $17 million, net of cash, and cash and cash equivalents held in a fiduciary capacity acquired. Net cash paid for acquisitions decreased $50 million in the three months ended March 31, 2026, down from $67 million during the same period in 2025.

Current wording

During the six months ended June 30, 2026, the Company completed 14 acquisitions (including book purchases) and paid $30 million net of cash acquired, and including cash and cash equivalents held in a fiduciary capacity. Net cash paid for acquisitions decreased $131 million in the six months ended June 30, 2026, from $161 million during the same period in 2025.

Previous wording

The Company received minimal cash proceeds from the sale of businesses, fixed assets and customer accounts during the three months ended March 31, 2026, compared to $9 million proceeds received in the same period in 2025. The decrease is attributed to smaller sales of businesses in the current period.

Current wording

The Company received $3 million from the sale of businesses, fixed assets and customer accounts during the six months ended June 30, 2026, compared to $10 million proceeds received in the same period in 2025. The decrease is attributed to smaller sales of businesses in the current period.

Previous wording

Capital expenditures amounted to $21 million and $17 million in the three months ended March 31, 2026 and 2025, respectively, and included purchases of furniture and fixtures, leasehold improvements related to office moves and hardware and software purchases related to information technology investments.

Current wording

Capital expenditures amounted to $38 million and $32 million in the six months ended June 30, 2026 and 2025, respectively, and included purchases of furniture and fixtures, leasehold improvements related to office moves and hardware and software purchases related to information technology investments.

Previous wording

Fiduciary cash represents funds in the Company's possession collected from customers to be remitted to insurance companies and funds from insurance companies to be distributed to insureds for the settlement of claims or refunds. The net change in fiduciary cash is represented by the net change in fiduciary liabilities and fiduciary receivables and is presented as cash flows from financing activities in the statement of cash flows. Financing cash flows reflect a decrease of $76 million and $90 million in the three months ended March 31, 2026 and 2025, respectively, related to fiduciary receivables and liabilities.

Current wording

Fiduciary cash represents funds in the Company's possession collected from customers to be remitted to insurance companies and funds from insurance companies to be distributed to insureds for the settlement of claims or refunds. The net change in fiduciary cash is represented by the net change in fiduciary liabilities and fiduciary receivables and is presented as cash flows from financing activities in the statement of cash flows. Financing cash flows reflect an increase of $157 million and $119 million in the six months ended June 30, 2026 and 2025, respectively, related to fiduciary receivables and liabilities.

Previous wording

During the three months ended March 31, 2026 and 2025, the Company paid cash dividends of $57 million and $43 million, respectively, an increase of $14 million, or 32.6%. On April 27, 2026, the board of directors approved a quarterly cash dividend of $0.165 per share to be paid on May 20, 2026.

Current wording

During the six months ended June 30, 2026 and 2025, the Company paid cash dividends of $112 million and $86 million, respectively, an increase of $26 million, or 30.2%. On July 22, 2026, the Board of Directors approved a quarterly cash dividend of $0.165 per share to be paid on August 19, 2026.