Business Combinations (Tables)

9 Months Ended

Sep. 30, 2012

Acquisitions Accounted for as Business Combinations


(in thousands)
Name	Business Segment		2012 Date of Acquisition		Cash Paid		Note Payable		Other Payable		Recorded Earn-out Payable		Net Assets Acquired		Maximum Potential Earn-out Payable
Arrowhead General Insurance Agency Superholding Corporation		National Programs; Services		January 9	$	397,531	$	—	$	22,694	$	3,634	$	423,859	$	5,000
Insurcorp & GGM Investments LLC (d/b/a Maalouf Benefit Resources)		Retail		May 1		15,500		—		900		4,944		21,344		17,000
Texas Security General Insurance Agency, Inc.		Wholesale		September 1		14,506		—		2,182		2,124		18,812		7,200
Other		Various		Various		15,938		59		—		4,353		20,350		10,235

Total					$	443,475	$	59	$	25,776	$	15,055	$	484,365	$	39,435

(in thousands)
Name	Business Segment		2011 Date of Acquisition		Cash Paid		Note Payable		Recorded Earn-out Payable		Net Assets Acquired		Maximum Potential Earn-out Payable
Balcos Insurance, Inc.		Retail		January 1	$	8,611	$	—	$	1,595	$	10,206	$	5,766
Associated Insurance Service, Inc. et al.		Retail		January 1		12,000		—		1,575		13,575		6,000
United Benefit Services Insurance Agency LLC et al.		Retail		February 1		14,559		—		3,199		17,758		9,133
First Horizon Insurance Group, Inc. et al.		Retail		April 30		24,835		—		—		24,835		—
Fitzharris Agency, Inc. et al.		Retail		May 1		6,159		—		888		7,047		3,832
Corporate Benefit Consultants, LLC		Retail		June 1		9,000		—		2,038		11,038		4,520
Other		Various		Various		25,285		1,194		6,168		32,647		12,865

Total					$	100,449	$	1,194	$	15,463	$	117,106	$	42,116

Estimated Fair Values of Aggregate Assets and Liabilities Acquired


(in thousands)	Arrowhead			Insurcorp			Texas Security			Other			Total
Cash	$	61,786		$	—		$	—		$	—		$	61,786
Other current assets		69,051			180			1,882			524			71,637
Fixed assets		4,629			25			45			67			4,766
Goodwill		322,779			14,745			10,776			12,818			361,118
Purchased customer accounts		99,515			6,490			6,227			8,371			120,603
Non-compete agreements		100			22			14			97			233
Other assets		1			—			—			—			1

Total assets acquired		557,861			21,462			18,944			21,877			620,144
Other current liabilities		(107,579	)		(118	)		(132	)		(1,527	)		(109,356	)
Deferred income taxes, net		(26,423	)		—			—			—			(26,423	)

Total liabilities assumed		(134,002	)		(118	)		(132	)		(1,527	)		(135,779	)

Net assets acquired	$	423,859		$	21,344		$	18,812		$	20,350		$	484,365


(in thousands)	Balcos			AIS			United			FHI			FA			CBC		Other			Total
Cash	$	—		$	—		$	—		$	5,170		$	—		$	—	$	—		$	5,170
Other current assets		187			252			438			1,415			77			—		879			3,248
Fixed assets		20			100			20			134			60			6		65			405
Goodwill		6,486			9,055			10,501			14,701			7,244			6,965		18,624			73,576
Purchased customer accounts		3,530			4,086			6,787			8,094			3,351			4,046		13,746			43,640
Non-compete agreements		42			92			45			10			21			21		177			408
Other assets		—			—			4			9			—			—		2			15

Total assets acquired		10,265			13,585			17,795			29,533			10,753			11,038		33,493			126,462

Other current liabilities		(59	)		(10	)		(37	)		(3,790	)		(3,706	)		—		(846	)		(8,448	)
Deferred income taxes, net		—			—			—			(908	)		—			—		—			(908	)


Total liabilities assumed		(59	)		(10	)		(37	)		(4,698	)		(3,706	)		—		(846	)		(9,356	)

Net assets acquired	$	10,206		$	13,575		$	17,758		$	24,835		$	7,047		$	11,038	$	32,647		$	117,106

Results of Operations


(UNAUDITED)	For the three months ended September 30,				For the nine months ended September 30,
(in thousands, except per share data)	2012		2011		2012		2011
Total revenues	$	304,776	$	292,599	$	907,796	$	866,115
Income before income taxes		81,998		81,785		239,286		238,144
Net income		49,715		49,699		143,630		144,021

Net income per share:
Basic	$	0.35	$	0.35	$	1.00	$	1.01
Diluted	$	0.34	$	0.34	$	0.98	$	1.00

Weighted average number of shares outstanding:
Basic		139,465		138,690		139,185		138,475
Diluted		142,097		140,443		141,769		140,120

(UNAUDITED)	For the three months ended September 30,				For the nine months ended September 30,
(in thousands, except per share data)	2011		2010		2011		2010
Total revenues	$	261,015	$	260,735	$	782,561	$	783,433
Income before income taxes		72,933		77,284		215,159		227,040
Net income		44,319		47,501		130,119		137,420

Net income per share:
Basic	$	0.31	$	0.33	$	0.91	$	0.97
Diluted	$	0.31	$	0.33	$	0.90	$	0.96

Weighted average number of shares outstanding:
Basic		138,690		138,093		138,475		137,802
Diluted		140,443		139,507		140,120		139,128

Estimated Acquisition Earn-Out Payables


	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2012			2011			2012			2011
Balance as of the beginning of the period	$	57,997		$	41,913		$	47,715		$	29,609
Additions to estimated acquisition earn-out payables		2,136			1,648			15,055			15,463
Payments for estimated acquisition earn-out payables		(2,743	)		(2,290	)		(4,388	)		(5,267	)

Sub Total		57,390			41,271			58,382			39,805

Net change in earnings from estimated acquisition earn-out payables:
Change in fair value on estimated acquisition earn-out payables		240			(1,286	)		(1,966	)		(697	)
Interest expense accretion		618			476			1,832			1,353

Net change in earnings from estimated acquisition earn-out payables		858			(810	)		(134	)		656

Balance as of September 30	$	58,248		$	40,461		$	58,248		$	40,461

- Definition

Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate.

+ References+ Details

- Definition

Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 141

-Paragraph 51

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 141R

-Paragraph F4

-Subparagraph e

-Appendix F

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 805

-SubTopic 10

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1392-128463

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 141R

-Paragraph 68

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 805

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=7659399&loc=d3e1486-128463

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 141

-Paragraph 52

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details