During the nine-month period ended September 30, 2023, we acquired substantially all of the ownership interest or net assets, as applicable, of the following firms in exchange for our common stock and/or cash. These acquisitions have been accounted for using the acquisition method for recording business combinations (in millions, except share data):


													Total		Maximum
	Common		Common								Recorded		Recorded		Potential
Name and Effective	Shares		Share				Accrued		Escrow		Earnout		Purchase		Earnout
Date of Acquisition	Issued		Value		Cash Paid		Liability		Deposited		Payable		Price		Payable
	(000s)
First Ireland Risk Management Ltd. January 1, 2023 (FIR)		—	$	—	$	86.4	$	—	$	5.3	$	5.9	$	97.6	$	6.6
BCHR Holdings, L.P. dba Buck April 1, 2023 (BCHR)		—		—		600.8		0.5		19.5		—		620.8		—
Boley-Featherston-Huffman & Deal Co. April 1, 2023 (BFH)		243		45.2		8.8		—		6.0		7.9		67.9		15.0
Tay River Holdings Limited April 1, 2023 (TRH)		—		—		40.3		4.3		2.4		32.4		79.4		88.7
Insurance by Ken Brown May 1, 2023 (IKB)		273		53.9		1.8		—		2.9		11.0		69.6		17.5
RHP General Agency May 1, 2023 (RHP)		335		65.7		1.3		—		5.0		3.3		75.3		11.0
Thirty-one other acquisitions completed in 2023		116		19.5		496.8		8.7		25.9		96.3		647.2		160.0
		967	$	184.3	$	1,236.2	$	13.5	$	67.0	$	156.8	$	1,657.8	$	298.8

On October 24, 2023, we signed a definitive agreement to acquire all the issued and outstanding shares of capital stock of Cadence Insurance, Inc. (Cadence Insurance), a wholly-owned subsidiary of Cadence Bank, for consideration of approximately $749 million, which is net of a discounted tax benefit associated with the transaction of approximately $155 million. The transaction is subject to regulatory approval, standard closing conditions and is expected to close during the fourth quarter of 2023. Cadence Insurance offers a full suite of commercial property/casualty, employee benefits and personal lines products to clients from 34 offices spanning 9 states across the Southeast, including Texas.

On September 19, 2023, we signed a definitive agreement to acquire the assets of Eastern Insurance Group, LLC (Eastern Insurance), a subsidiary of Eastern Bank, a wholly-owned subsidiary of Eastern Bankshares, Inc. for consideration of approximately $510 million net of agreed seller funded expenses. The transaction is subject to regulatory approval, key employee retention closing conditions and is expected to close during the fourth quarter of 2023. Eastern Insurance offers comprehensive commercial property/casualty and personal lines products as well as employee benefits consulting to clients throughout the Northeastern U.S.

On April 3, 2023, we acquired the partnership interests of BCHR holdings, L.P. and its subsidiaries dba Buck (which we refer to as Buck). We funded the transaction using free cash flow and funds received from an unsecured senior notes offering. Buck was a leading provider of retirement, human resources and employee benefits consulting and administration services operating for more than 100 years with a diverse client base by both size and industry. Immediately prior to closing, Buck had over 2,300 employees, including more than 220 credentialed actuaries, primarily serving customers throughout the U.S., Canada and the U.K.

Common shares issued in connection with acquisitions are valued at closing market prices as of the effective date of the applicable acquisition or on the days when the shares are issued, if purchase consideration is deferred. We record escrow deposits that are returned to us as a result of adjustments to net assets acquired as reductions of goodwill when the escrows are settled. The maximum potential earnout payables disclosed in the foregoing table represent the maximum amount of additional consideration that could be paid pursuant to the terms of the purchase agreement for the applicable acquisition. The amounts recorded as earnout payables, which are primarily based upon the estimated future operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date, are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price

consideration in the foregoing table. We will record subsequent changes in these estimated earnout obligations, including the accretion of discount, in our consolidated statement of earnings when incurred.

The fair value of these earnout obligations is generally based on the present value of the expected future payments to be made to the sellers of the acquired entities in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement (discounted cash flow method of the income approach). In determining fair value, we estimated the acquired entity’s future performance using financial projections developed by management for the acquired entity and market participant assumptions that were derived for revenue growth and/or profitability. Revenue growth rates generally ranged from 5.0% to 20.0% for our 2023 acquisitions. We estimated future payments using the earnout formula and performance targets specified in each purchase agreement and the financial projections just described. We then discounted these payments to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the acquired entity to achieve the targets. The discount rates ranged from 8.0% to 9.0% for all of our 2023 acquisitions. In some instances, the fair value of these earnout obligations can be based on other valuation methods including the Black-Scholes Option Pricing Method or Monte Carlo Simulation method. Changes in financial projections, market participant assumptions for revenue growth and/or profitability, or the risk-adjusted discount rate, would result in a change in the fair value of recorded earnout obligations.

During the three-month periods ended September 30, 2023 and 2022, we recognized $17.9 million and $19.4 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions. During the nine-month periods ended September 30, 2023 and 2022, we recognized $57.5 million and $42.8 million, respectively, of expense in our consolidated statement of earnings related to the accretion of the discount recorded for earnout obligations in connection with our acquisitions. In addition, during the three-month periods ended September 30, 2023 and 2022, we recognized $20.4 million and $35.6 million of income, respectively, related to net adjustments in the estimated fair value of the liability for earnout obligations in connection with revised assumptions due to changes in interest rates, volatility and other assumptions and projections of future performance for 20 and 27 acquisitions, respectively. In addition, during the nine-month periods ended September 30, 2023 and 2022, we recognized $8.8 million of expense and $71.9 million of income, respectively, related to net adjustments in the estimated fair value of the liability for earnout obligations in connection with revised assumptions due to changes in interest rates, volatility and other assumptions and projections of future performance for 59 and 70 acquisitions, respectively. The net adjustments in the three-month and nine-month periods ended September 30, 2023, include changes made to the estimated fair value of the Willis Re acquisition earnout and reflect updated assumptions as of September 30, 2023. The aggregate amount of maximum earnout obligations related to acquisitions was $1,915.7 million as of September 30, 2023, of which $899.0 million was recorded in the consolidated balance sheet as of September 30, 2023, based on the estimated fair value of the expected future payments to be made, of which approximately $486.6 million can be settled in cash or stock at our option and $412.4 million must be settled in cash.

The following is a summary of the estimated fair values of the net assets acquired at the date of each acquisition made in the nine-month period ended September 30, 2023 (in millions):


													Thirty-one Other
	FIR		BCHR		BFH		TRH		IKB		RHP		Acquisitions		Total
Cash and cash equivalents	$	13.0	$	25.8	$	0.6	$	5.3	$	2.0	$	—	$	19.0	$	65.7
Fiduciary assets		13.8		—		3.7		—		0.5		3.0		40.7		61.7
Other current assets		1.5		60.9		1.4		8.3		2.6		1.5		15.2		91.4
Fixed assets		0.8		36.8		—		—		0.1		—		0.7		38.4
Noncurrent assets		8.6		53.2		0.2		0.3		0.5		0.3		12.0		75.1
Goodwill		58.8		395.8		38.5		50.0		43.8		49.6		321.4		957.9
Expiration lists		27.5		202.4		37.4		22.0		30.4		34.0		314.2		667.9
Non-compete agreements		4.3		—		0.4		2.2		0.2		0.2		8.3		15.6
Trade names		—		2.6		—		—		—		—		1.6		4.2
Total assets acquired		128.3		777.5		82.2		88.1		80.1		88.6		733.1		1,977.9
Fiduciary liabilities		13.8		—		3.7		—		0.5		3.0		40.7		61.7
Current liabilities		3.9		53.0		0.6		2.6		1.7		1.2		12.6		75.6
Noncurrent liabilities		13.0		103.7		10.0		6.1		8.3		9.1		32.6		182.8
Total liabilities assumed		30.7		156.7		14.3		8.7		10.5		13.3		85.9		320.1
Total net assets acquired	$	97.6	$	620.8	$	67.9	$	79.4	$	69.6	$	75.3	$	647.2	$	1,657.8

Among other things, these acquisitions allow us to expand into desirable geographic locations, further extend our presence in the retail and wholesale insurance and reinsurance brokerage markets and increase the volume of general services currently provided. The excess of the purchase price over the estimated fair value of the tangible net assets acquired at the acquisition date was allocated to

goodwill, expiration lists, non-compete agreements and trade names in the amounts of $957.9 million, $667.9 million, $15.6 million and $4.2 million, respectively, within the brokerage segment.

Provisional estimates of fair value are established at the time of each acquisition and are subsequently reviewed and finalized within the first year of operations subsequent to the acquisition date to determine the necessity for adjustments. During this period, we may use independent third-party valuation specialists to assist us in finalizing the fair value of assets acquired and liabilities assumed. Fair value adjustments, if any, are most common to the values established for amortizable intangible assets, including expiration lists, non‑compete agreements and trade names, as well as for acquired software, and earnout liabilities, with the offset to goodwill, net of any income tax effect.

The fair value of the tangible assets and liabilities for each applicable acquisition at the acquisition date approximated their carrying values. In general, the fair value of expiration lists was established using the excess earnings method, which is an income approach based on estimated financial projections developed by management for each acquired entity using market participant assumptions. Revenue growth and attrition rates generally ranged from 3.0% to 5.0% and 5.0% to 25.5%, respectively, for our 2022 and 2023 acquisitions for which valuations were performed in 2023. We estimate the fair value as the present value of the benefits anticipated from ownership of the subject expiration list in excess of returns required on the investment in contributory assets necessary to realize those benefits. The rate used to discount the net benefits was based on a risk-adjusted rate that takes into consideration market-based rates of return and reflects the risk of the asset relative to the acquired business. The discount rates ranged from 9.0% to 11.0% for our 2022 and 2023 acquisitions for which valuations were performed in 2023. The fair value of non-compete agreements was established using the profit differential method, which is an income approach based on estimated financial projections developed by management for the acquired company using market participant assumptions and various non-compete scenarios.

Expiration lists, non-compete agreements and trade names related to our acquisitions are amortized using the straight-line method over their estimated useful lives (two to fifteen years for expiration lists, two to six years for non-compete agreements and two to fifteen years for trade names), while goodwill is not subject to amortization. We use the straight-line method to amortize these intangible assets because the pattern of their economic benefits cannot be reasonably determined with any certainty. We review all of our identifiable intangible assets for impairment periodically (at least annually) and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing identifiable intangible assets, if the undiscounted future cash flows were less than the carrying amount of the respective (or underlying) asset, an indicator of impairment would exist and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of amortization expense. Based on the results of impairment reviews during the nine-month periods ended September 30, 2023 and 2022, we wrote off $3.3 million and $0.4 million, respectively, of amortizable assets related to the brokerage and risk management segments.

Of the $667.9 million of expiration lists, $15.6 million of non-compete agreements and $4.2 million of trade names related to our acquisitions made during the nine-month period ended September 30, 2023, $441.4 million, $12.4 million and $2.9 million, respectively, are not expected to be deductible for income tax purposes. Accordingly, we recorded a deferred tax liability of $113.5 million, and a corresponding amount of goodwill, in the nine-month period ended September 30, 2023, related to the nondeductible amortizable intangible assets.

Our unaudited consolidated financial statements for the nine-month period ended September 30, 2023 include the operations of the entities acquired in the nine-month period ended September 30, 2023 from their respective acquisition dates. The following is a summary of the unaudited pro forma historical results, as if these entities had been acquired at January 1, 2022 (in millions, except per share data):

The unaudited pro forma results above have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had these acquisitions occurred at January 1, 2022, nor are they necessarily indicative of future operating results. Annualized revenues of entities acquired during the nine-month period ended September 30, 2023 totaled approximately $475.3 million. For the nine-month period ended September 30, 2023, total revenues, net pre-tax loss and net earnings before interest, income taxes, depreciation, amortization and the change in estimated acquisition earnout payables (EBITDAC) recorded in our unaudited consolidated statement of earnings related to our acquisitions made during the nine-month period ended September 30, 2023 in the aggregate, were $223.3 million, $(1.9) million and $43.5 million, respectively.