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Commitments, Contingencies and Off-Balance Sheet Arrangements | 9 Months Ended
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Sep. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments, Contingencies and Off-Balance Sheet Arrangements | Commitments, Contingencies and Off-Balance Sheet Arrangements In connection with our investing and operating activities, we have entered into certain contractual obligations and commitments. Our future minimum cash payments, including interest, associated with our contractual obligations pursuant to the Senior Notes, Note Purchase Agreements, Credit Agreement, Premium Financing Debt Facility, operating leases and purchase obligations at September 30, 2025 were as follows (in millions):
|  | Payments Due by Period
Contractual Obligations |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  | Thereafter |  | Total
Senior Notes |  | $ | — |  |  | $ | — |  |  | $ | 750.0 |  |  | $ | — |  |  | $ | 750.0 |  |  | $ | 8,050.0 |  |  | $ | 9,550.0 |
Note Purchase Agreements |  | — |  |  | 640.0 |  |  | 478.0 |  |  | 200.0 |  |  | 350.0 |  |  | 1,655.0 |  |  | 3,323.0 |
Credit Agreement |  | 130.0 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 130.0 |
Premium Financing Debt Facility |  | 237.4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 237.4 |
Interest on debt |  | 87.7 |  |  | 611.5 |  |  | 593.0 |  |  | 539.2 |  |  | 528.5 |  |  | 6,589.4 |  |  | 8,949.3 |
Total debt obligations |  | 455.1 |  |  | 1,251.5 |  |  | 1,821.0 |  |  | 739.2 |  |  | 1,628.5 |  |  | 16,294.4 |  |  | 22,189.7 |
Operating lease obligations |  | 70.3 |  |  | 170.9 |  |  | 139.3 |  |  | 101.5 |  |  | 76.5 |  |  | 224.6 |  |  | 783.1 |
Less sublease arrangements |  | (0.8) |  |  | (2.7) |  |  | (2.0) |  |  | (1.4) |  |  | (1.0) |  |  | — |  |  | (7.9) |
Outstanding purchase obligations |  | 67.7 |  |  | 237.7 |  |  | 203.4 |  |  | 62.0 |  |  | 41.4 |  |  | 57.2 |  |  | 669.4 |
Total contractual obligations |  | $ | 592.3 |  |  | $ | 1,657.4 |  |  | $ | 2,161.7 |  |  | $ | 901.3 |  |  | $ | 1,745.4 |  |  | $ | 16,576.2 |  |  | $ | 23,634.3 |
The amounts presented in the table above may not necessarily reflect our actual future cash funding requirements, because the actual timing of the future payments made may vary from the stated contractual obligation. Senior Notes, Note Purchase Agreements, Credit Agreement and Premium Financing Debt Facility - See Note 6 to these unaudited consolidated financial statements for a summary of the amounts outstanding under the Senior Notes, Note Purchase Agreements, the Credit Agreement and Premium Financing Debt Facility. Operating Lease Obligations - Our corporate segment’s executive offices and certain subsidiary and branch facilities of our brokerage and risk management segments are located in a building we own at 2850 Golf Road, Rolling Meadows, Illinois, where we have approximately 360,000 square feet of space. We generally operate in leased premises at our other locations. Certain of these leases have options permitting renewals for additional periods. In addition to minimum fixed rentals, a number of leases contain annual escalation clauses which are generally related to increases in an inflation index. We have leased certain office space to several non-affiliated tenants under operating sublease arrangements. In the normal course of business, we expect that certain of these leases will not be renewed or replaced. We adjust charges for real estate taxes and common area maintenance annually based on actual expenses, and we recognize the related revenues in the year in which the expenses are incurred. These amounts are not included in the minimum future rentals to be received in the contractual obligations table above. Outstanding Purchase Obligations - The amount disclosed in the contractual obligations table above represents the aggregate amount of unrecorded purchase obligations that we had outstanding at September 30, 2025. These obligations represent agreements to purchase goods or services that were executed in the normal course of business. Off-Balance Sheet Commitments - Our total unrecorded commitments associated with outstanding letters of credit, financial guarantees and funding commitments as of September 30, 2025 were as follows (in millions):
|  | Amount of Commitment Expiration by Period |  | Total Amounts Committed
Off-Balance Sheet Commitments |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  | Thereafter |
Letters of credit |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 14.3 |  |  | $ | 14.3 |
Financial guarantees |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 42.0 |  |  | 42.0 |
Total commitments |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 56.3 |  |  | $ | 56.3 |
Since commitments may expire unused, the amounts presented in the table above do not necessarily reflect our actual future cash funding requirements. See the Off‑Balance Sheet Debt section below for a discussion of our letters of credit. All of the letters of credit represent multiple year commitments that have annual, automatic renewing provisions and are classified by the latest commitment date. Since January 1, 2002, we have acquir ed 776 companies, all of which were accounted for using the acquisition method for recording business combinations. Substantiall y all of the purchase agreements related to these acquisitions contain provisions for potential earnout obligations. For all of our acquisitions made in the period from 2021 to 2025 that contain potential earnout obligations, such obligations are measured at fair value as of the acquisition date and are included on that basis in the recorded purchase price consideration for the respective acquisition. The amounts recorded as earnout payables are primarily based upon estimated future potential operating results of the acquired entities over a two- to three-year period subsequent to the acquisition date. The aggregate amount of the maximum earnout obligations related to these acquisitions was $1,723.1 million, of which $823.5 million was recorded in our consolidated balance sheet as of September 30, 2025 based on the estimated fair value of the expected future payments to be made, of which approximately $557.9 million can be settled in cash or stock at our option and $265.6 million must be settled in cash. Off-Balance Sheet Debt - Our unconsolidated investment portfolio includes investments in enterprises where our ownership interest is between 1% and 50%, in which management has determined that our level of influence and economic interest is not sufficient to require consolidation. As a result, these investments are accounted for under the equity method. None of these unconsolidated investments had any outstanding debt at September 30, 2025 or December 31, 2024, that was recourse to us. At September 30, 2025, we had posted one letter of credit totaling $0.3 million, in the aggregate, related to our self‑insurance deductibles, for which we had a recorded liability of $12.0 million. We have an equity investment in a rent-a-captive facility, which we use as a placement facility for certain of our insurance brokerage operations. At September 30, 2025, we had posted ten letters of credit totaling $13.2 million to allow certain of our captive operations to meet minimum statutory surplus requirements plus additional collateral related to premium and claim funds held in a fiduciary capacity and one letter of credit totaling $0.8 million for collateral related to claim funds held in a fiduciary capacity by a recent acquisition. These letters of credit have never been drawn upon. Litigation, Regulatory and Taxation Matters - We routinely are involved in legal proceedings, claims, disputes, regulatory matters and governmental inspections or investigations arising in the ordinary course of or incidental to our business, including errors and omissions (which we refer to as E&O) claims and those noted below in this section. We record accruals in the unaudited consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies, unless disclosed below. We currently believe that the ultimate outcome of these proceedings, individually and in the aggregate, will not materially harm our financial position, results of operations or cash flows. However, legal proceedings and government investigations are subject to inherent uncertainties, and unfavorable rulings or other adverse events could occur, including the payment of substantial monetary damages or an injunction or other order prohibiting us from selling one or more products at all or in particular ways, precluding particular business practices or requiring other remedies, which may result in a material adverse impact on our business, results of operations or financial position. As previously disclosed, our IRC 831(b) (or “micro-captive”) advisory services business has been under a promoter investigation by the IRS since 2013. Among other matters, the IRS is investigating whether we have been acting as a tax shelter promoter in connection with these operations. Additionally, the IRS is conducting a criminal investigation related to IRC 831(b) micro-captive underwriting enterprises. We have been advised that we are not a target of the criminal investigation. We are fully cooperating with both matters. Contingent Liabilities - We purchase insurance to provide protection from E&O claims that may arise during the ordinary course of business. Currently we retain the first $15.0 million of each and every E&O claim. In addition, we retain, in aggregate, up to another $2.0 million between $15.0 million and $100.0 million, plus up to another $10.0 million between $100.0 million and $225.0 million, and up to another $20.0 million between $225.0 million and $400.0 million. We have historically maintained self-insurance reserves for the portion of our E&O exposure that is not insured. We periodically determine a range of possible reserve levels using actuarial techniques that rely heavily on projecting historical claim data into the future. Our E&O reserve in the September 30, 2025 consolidated balance sheet is above the lower end of the most recently determined actuarial range by $6.2 million and below the upper end of the actuarial range by $7.7 million. We can make no assurances that the historical claim data used to project the current reserve levels will be indicative of future claim activity. Thus, the E&O reserve level and corresponding actuarial range could change in the future as more information becomes known, which could materially impact the amounts reported and disclosed herein.

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