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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 9 Income Taxes Significant components of the provision for income taxes for the years ended December 31 are as follows:
(in thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 109,893 |  |  | $ | 94,007 |  |  | $ | 75,522 |
State |  |  | 15,482 |  |  |  | 13,438 |  |  |  | 11,852 |
Foreign |  |  | 109 |  |  |  | 805 |  |  |  | 669 |
Total current provision |  |  | 125,484 |  |  |  | 108,250 |  |  |  | 88,043 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 5,987 |  |  |  | 28,469 |  |  |  | 27,348 |
State |  |  | 1,440 |  |  |  | 3,723 |  |  |  | 5,375 |
Foreign |  |  | (58 | ) |  |  | 55 |  |  |  | — |
Total deferred provision |  |  | 7,369 |  |  |  | 32,247 |  |  |  | 32,723 |
Total tax provision |  | $ | 132,853 |  |  | $ | 140,497 |  |  | $ | 120,766 |
A reconciliation of the differences between the effective tax rate and the federal statutory tax rate for the years ended December 31 is as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Federal statutory tax rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal income tax benefit |  |  | 3.3 |  |  |  | 3.5 |  |  |  | 4.3 |
Non-deductible employee stock purchase plan expense |  |  | 0.3 |  |  |  | 0.3 |  |  |  | 0.3 |
Non-deductible meals and entertainment |  |  | 0.4 |  |  |  | 0.3 |  |  |  | 0.3 |
Other, net |  |  | 0.1 |  |  |  | 0.2 |  |  |  | (0.3 | )
Effective tax rate |  |  | 39.1 | % |  |  | 39.3 | % |  |  | 39.6 | %
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for income tax reporting purposes. Significant components of Brown & Brown’s current deferred tax assets as of December 31 are as follows:
(in thousands) |  | 2014 |  |  | 2013 |
Current deferred tax assets: |  |  |  |  |  |  |  |
Deferred profit-sharing contingent commissions |  | $ | 10,335 |  |  | $ | 9,713 |
Net operating loss carryforwards |  |  | 951 |  |  |  | 8,408 |
Accruals and reserves |  |  | 14,145 |  |  |  | 11,155 |
Total current deferred tax assets |  | $ | 25,431 |  |  | $ | 29,276 |
Significant components of Brown & Brown’s non-current deferred tax liabilities and assets as of December 31 are as follows:
(in thousands) |  | 2014 |  |  | 2013 |
Non-current deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed assets |  | $ | 10,368 |  |  | $ | 11,651 |
Net unrealized holding gain on available-for-sale securities |  |  | 56 |  |  |  | — |
Intangible assets |  |  | 364,938 |  |  |  | 306,009 |
Total non-current deferred tax liabilities |  |  | 375,362 |  |  |  | 317,660 |
Non-current deferred tax assets: |  |  |  |  |  |  |  |
Deferred compensation |  |  | 31,580 |  |  |  | 22,598 |
Net operating loss carryforwards |  |  | 2,796 |  |  |  | 3,843 |
Valuation allowance for deferred tax assets |  |  | (511 | ) |  |  | (485 | )
Total non-current deferred tax assets |  |  | 33,865 |  |  |  | 25,956 |
Net non-current deferred tax liability |  | $ | 341,497 |  |  | $ | 291,704 |
Income taxes paid in 2014, 2013 and 2012 were $118,290,000, $110,191,000, and $80,622,000, respectively. At December 31, 2014, Brown & Brown had net operating loss carryforwards of $212,000 and $78,870,000 for federal and state income tax reporting purposes, respectively, portions of which expire in the years 2015 through 2034. The federal carryforward is derived from insurance operations acquired by Brown & Brown in 2001. The state carryforward amount is derived from the operating results of certain subsidiaries and from the 2012 and 2013 stock acquisitions of Arrowhead General Insurance Agency Superholding Corp and Beecher Carlson Holdings, Inc. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in thousands) |  | 2014 |  |  | 2013 |  |  | 2012 |
Unrecognized tax benefits balance at January 1 |  | $ | 391 |  |  | $ | 294 |  |  | $ | 806 |
Gross increases for tax positions of prior years |  |  | — |  |  |  | 232 |  |  |  | 222 |
Gross decreases for tax positions of prior years |  |  | (21 | ) |  |  | — |  |  |  | (409 | )
Settlements |  |  | (257 | ) |  |  | (135 | ) |  |  | (325 | )
Unrecognized tax benefits balance at December 31 |  | $ | 113 |  |  | $ | 391 |  |  | $ | 294 |
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2014 and 2013, the Company had approximately $66,000 and $121,000 of accrued interest and penalties related to uncertain tax positions, respectively. The total amount of unrecognized tax benefits that would affect the Company’s effective tax rate if recognized was $113,000 as of December 31, 2014 and $391,000 as of December 31, 2013. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. As a result of a 2006 Internal Revenue Service (“IRS”) audit, the Company agreed to accrue at each December 31, for tax purposes only, a known amount of profit-sharing contingent commissions represented by the actual amount of profit-sharing contingent commissions received in the first quarter of the related year, with a true-up adjustment to the actual amount received by the end of the following March. Since this method for tax purposes differs from the method used for book purposes, it will result in a current deferred tax asset as of December 31 each year which will reverse by the following March 31 when the related profit-sharing contingent commissions are recognized for financial accounting purposes. The Company is subject to taxation in the United States and various state jurisdictions. The Company is also subject to taxation in the United Kingdom. In the United States, federal returns for fiscal years 2011 through 2014 remain open and subject to examination by the IRS. The Company files and remits state income taxes in various states where the Company has determined it is required to file state income taxes. The Company’s filings with those states remain open for audit for the fiscal years 2009 through 2014. In the United Kingdom, the Company’s filings remain open for audit for the fiscal years 2013 and 2014. Subsequent to December 31, 2014, the Internal Revenue Service has notified Beecher Carlson Holdings, Inc. of a federal corporate income tax audit for the short period January 1, 2013 through June 30, 2013. The short period filing is a pre-acquisition tax filing for which Brown & Brown, Inc. is indemnified against by the sellers of Beecher Carlson Holdings, Inc. We are currently not aware of any potential adjustments for the audit period. The Company’s 2009 through 2012 State of Oregon tax returns are currently under audit. The audit has been substantially completed as of December 31, 2014 and is awaiting final settlement payment with the State of Oregon. Amounts estimated to be due to the State of Oregon as a result of the audit have been reserved by the Company. There are no other federal or state income tax audits as of December 31, 2014.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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