Business Combinations (Tables)

9 Months Ended

Sep. 30, 2014

2014 Acquisitions [Member]

Acquisitions Accounted for Business Combinations

The following table summarizes the aggregate purchase price allocations made as of the date of the acquisitions for the current-year acquisitions and adjustments made during the measurement period for prior-year acquisitions:


(in thousands)
Name	Business Segment	Effective Date of Acquisition	Cash Paid		Other Payable		Recorded Earn-Out Payable		Net Assets Acquired		Maximum Potential Earn- Out Payable
The Wright Insurance Group, LLC.	National Programs	May 1, 2014	$	610,158	$	1,471	$	—	$	611,629	$	—
Pacific Resources Benefits Advisors, LLC (“PacRes”)	Retail	May 1, 2014		90,000		—		8,819		98,819		35,000
Axia Strategies, Inc (“Axia”).	Wholesale Brokerage	May 1, 2014		9,870		—		1,824		11,694		5,200
Other	Various	Various		10,153		125		2,294		12,572		6,028

Total			$	720,181	$	1,596	$	12,937	$	734,714	$	46,228

Estimated Fair Values of Aggregate Assets and Liabilities Acquired

The following table summarizes the adjustments made to the estimated fair values along with the aggregate assets and liabilities acquired as of the date of each acquisition:


(in thousands)	Wright			PacRes			Axia		Other			Total
Cash	$	25,365		$	—		$	—	$	—		$	25,365
Other current assets		16,768			3,647			101		742			21,258
Fixed assets		7,445			53			24		1,719			9,241
Reinsurance recoverables		25,238			—			—		—			25,238
Prepaid reinsurance premiums		289,013			—			—		—			289,013
Goodwill		427,947			63,656			7,276		7,427			506,306
Purchased customer accounts		207,486			31,845			4,252		2,812			246,395
Non-compete agreements		1,119			21			41		119			1,300
Other assets		20,045			—			—		—			20,045

Total assets acquired		1,020,426			99,222			11,694		12,819			1,144,161
Other current liabilities		(14,911	)		(403	)		—		(247	)		(15,561	)
Losses and loss adjustment expense		(25,238	)		—			—		—			(25,238	)
Unearned premiums		(289,013	)		—			—		—			(289,013	)
Deferred income tax, net		(46,675	)		—			—		—			(46,675	)
Other liabilities		(32,960	)		—			—		—			(32,960	)

Total liabilities assumed		(408,797	)		(403	)		—		(247	)		(409,447	)

Net assets acquired		611,629		$	98,819			11,694	$	12,572		$	734,714

Results of Operations

These unaudited pro forma results are not necessarily indicative of the actual results of operations that would have occurred had the acquisitions actually been made at the beginning of the respective periods.


(UNAUDITED)	For the three months ended September 30,				For the nine months ended September 30,
(in thousands, except per share data)	2014		2013		2014		2013
Total revenues	$	421,433	$	400,738	$	1,234,451	$	1,138,466
Income before income taxes		112,687		109,069		318,806		320,089
Net income		68,332		65,985		193,103		193,404

Net income per share:
Basic	$	0.47	$	0.45	$	1.33	$	1.34
Diluted	$	0.47	$	0.45	$	1.32	$	1.32

Weighted average number of shares outstanding:
Basic		140,915		141,139		141,253		140,925
Diluted		142,964		142,789		143,102		142,476

2013 Acquisitions [Member]

Additions, Payments, and Net Changes, as well as Interest Expense Accretion on Estimated Acquisition Earn-Out Payables

The resulting additions, payments, and net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables, for the three and nine months ended September 30, 2014 and 2013, were as follows:


	For the three months ended September 30,						For the nine months ended September 30,
(in thousands)	2014			2013			2014			2013
Balance as of the beginning of the period	$	52,696		$	48,918		$	43,058		$	52,987
Additions to estimated acquisition earn-out payables		(221	)		955			14,586			2,787
Payments for estimated acquisition earn-out payables		(463	)		(2,518	)		(11,892	)		(10,597	)

Subtotal		52,012			47,355			45,752			45,177

Net change in earnings from estimated acquisition earn-out payables:

Change in fair value on estimated acquisition earn-out payables		(247	)		(1,146	)		4,981			10
Interest expense accretion		561			481			1,593			1,503

Net change in earnings from estimated acquisition earn-out payables		314			(665	)		6,574			1,513

Balance as of September 30, 2014	$	52,326		$	46,690		$	52,326		$	46,690