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Business Combinations (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Purchase Price Allocation for Current Year Acquisitions and Adjustments Made for Prior Year Acquisitions

The following table summarizes the purchase price allocations made as of the date of each acquisition for current year acquisitions and adjustments made during the measurement period for prior year acquisitions. During the measurement periods, the Company will adjust assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of those assets and liabilities as of that date. These adjustments are made in the period in which the amounts are determined and the current period income effect of such adjustments will be calculated as if the adjustments had been completed as of the acquisition date.

(in thousands)
Name		Business segment		Effective date of acquisition		Cash paid				Common stock issued				Other payable				Recorded earn-out payable				Net assets acquired				Maximum potential earn- out payable
Smith Insurance Associates,    Inc. (Smith)		Retail		February 1, 2019		$	20,129			$	—			$	—			$	2,704			$	22,833			$	4,550
Donald P. Pipino Company,    LTD (Pipino)		Retail		February 1, 2019			16,420				—				135				9,821				26,376				12,996
AGA Enterprises, LLC d/b/a Cossio Insurance Agency (Cossio)		Retail		March 1, 2019			13,990				—				10				696				14,696				2,000
Medval, LLC (Medval)		Services		March 1, 2019			29,106				—				100				1,684				30,890				2,500
United Development Systems, Inc. (United)		Retail		May 1, 2019			18,987				—				388				3,268				22,643				8,625
Twinbrook Insurance Brokerage, Inc.    (Twinbrook)		Retail		June 1, 2019			26,251				—				400				1,565				28,216				5,073
Innovative Risk Solutions, Inc. (IRS)		Retail		July 1, 2019			26,435				—				2,465				6,109				35,009				9,000
WBR Insurance Agency, LLC et al (WBR)		Retail		August 1, 2019			10,667				—				203				2,197				13,067				4,575
West Ridge Insurance Agency, Inc. d/b/a Yozell    Associates (Yozell)		Retail		August 1, 2019			13,030				—				470				768				14,268				6,730
CKP Insurance, LLC (CKP)		Retail		August 1, 2019			89,190				20,000				4,000				38,093				151,283				76,500
Poole Professional Ltd. Insurance Agents and Brokers et al (Poole)		Retail		October 1, 2019			32,358				—				75				4,556				36,989				6,850
VerHagen Glendenning & Walker LLP (VGW)		Retail		October 1, 2019			23,032				—				1,498				2,385				26,915				8,170
Other		Various		Various			36,665				—				2,391				9,026				48,082				14,454
Total						$	356,260			$	20,000			$	12,135			$	82,872			$	471,267			$	162,023

The following table summarizes the purchase price allocation made as of the date of each acquisition for current year acquisitions and significant adjustments made during the measurement period for prior year acquisitions:

(in thousands)
Name		Business segment		Effective date of acquisition		Cash paid				Common stock issued				Other payable				Recorded earn-out payable				Net assets acquired				Maximum potential earn- out payable
Opus Advisory    Group, LLC (Opus)		Retail		February 1, 2018		$	20,400			$	—			$	200			$	2,384			$	22,984			$	3,600
Kerxton Insurance    Agency, Inc. (Kerxton)		Retail		March 1, 2018			13,176				—				1,490				2,080				16,746				2,920
Automotive Development    Group, LLC (ADG)		Retail		May 1, 2018			29,471				—				559				17,545				47,575				20,000
Servco Pacific,    Inc. (Servco)		Retail		June 1, 2018			76,245				—				—				934				77,179				7,000
Tower Hill Prime    Insurance Company    (Tower Hill)		National Programs		July 1, 2018			20,300				—				—				1,188				21,488				7,700
Health Special    Risk, Inc. (HSR)		National Programs		July 1, 2018			20,132				—				—				1,991				22,123				9,000
Professional Disability    Associates, LLC (PDA)		Services		July 1, 2018			15,025				—				—				9,818				24,843				17,975
Finance & Insurance    Resources, Inc. (F&I)		Retail		September 1, 2018			44,940				—				410				9,121				54,471				19,500
Rodman Insurance    Agency, Inc. (Rodman)		Retail		November 1, 2018			31,121				—				261				3,720				35,102				9,850
The Hays Group,    Inc. et al (Hays)		Retail		November 16, 2018			605,000				100,000				—				19,600				724,600				25,000
Dealer Associates,    Inc. (Dealer)		Retail		December 1, 2018			28,825				—				1,175				3,100				33,100				12,125
Other		Various		Various			30,293				—				1,367				5,896				37,556				12,998
Total						$	934,928			$	100,000			$	5,462			$	77,377			$	1,117,767			$	147,668

The following table summarizes the purchase price allocation made as of the date of each acquisition for current year acquisitions and significant 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
Other		Various		Various		$	41,471			$	11,708			$	6,921			$	60,100			$	27,451
Total						$	41,471			$	11,708			$	6,921			$	60,100			$	27,451

Estimated Fair Values of Aggregate Assets and Liabilities Acquired

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period of the prior year acquisitions.

(in thousands)		Smith				Pipino				Cossio				Medval				United				Twinbrook				IRS				WBR				Yozell				CKP
Cash		$	—			$	—			$	—			$	3,217			$	—			$	—			$	—			$	—			$	—			$	—
Other current assets			680				819				236				1,708				477				919				1,375				449				1,781				9,170
Fixed assets			39				112				29				50				20				85				11				10				12				193
Goodwill			16,042				16,765				10,010				19,108				15,111				18,935				24,938				9,096				8,904				110,495
Purchased customer accounts			6,500				11,360				4,403				7,300				7,065				8,557				8,800				4,022				3,550				32,274
Non-compete agreements			41				11				21				1				11				12				11				34				21				21
Other assets			—				772				—				15				—				—				—				—				—				—
Total assets acquired			23,302				29,839				14,699				31,399				22,684				28,508				35,135				13,611				14,268				152,153
Other current liabilities			(469	)			(3,463	)			(3	)			(480	)			(41	)			(292	)			(126	)			(166	)			—				(870	)
Other liabilities			—				—				—				(29	)			—				—				—				(378	)			—				—
Total liabilities assumed			(469	)			(3,463	)			(3	)			(509	)			(41	)			(292	)			(126	)			(544	)			—				(870	)
Net assets acquired		$	22,833			$	26,376			$	14,696			$	30,890			$	22,643			$	28,216			$	35,009			$	13,067			$	14,268			$	151,283

(in thousands)		Poole				VGW				Other				Total
Cash		$	—			$	—			$	—			$	3,217
Other current assets			938				1,190				(6,786	)			12,956
Fixed assets			4				20				(130	)			455
Goodwill			28,233				16,595				34,314				328,546
Purchased customer accounts			10,359				9,092				15,020				128,302
Non-compete agreements			33				34				161				412
Other assets			—				—				(732	)			55
Total assets acquired			39,567				26,931				41,847				473,943
Other current liabilities			(2,578	)			(16	)			6,235				(2,269	)
Other liabilities			—				—				—				(407	)
Total liabilities assumed			(2,578	)			(16	)			6,235				(2,676	)
Net assets acquired		$	36,989			$	26,915			$	48,082			$	471,267

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition and adjustments made during the measurement period of the prior year acquisitions.

(in thousands)		Opus				Kerxton				ADG				Servco				Tower Hill				HSR				PDA				F&I				Rodman				Hays
Cash		$	—			$	—			$	—			$	8,188			$	—			$	3,114			$	(248	)		$	—			$	—			$	—
Other current assets			1,215				663				1,500				7,769				—				818				1,762				999				1,062				36,254
Fixed assets			11				10				67				179			$	—			$	124			$	310			$	34			$	45			$	4,936
Goodwill			16,414				12,423				35,769				54,429				—				18,737				16,547				36,423				26,572				456,217
Purchased customer    accounts			5,008				4,712				9,751				16,442				21,468				5,516				7,700				16,611				10,129				218,600
Non-compete    agreements			21				22				21				1				20				65				82				21				51				2,600
Other assets			315				419				467				1,478				—				21				6				383				542				13,977
Total assets    acquired			22,984				18,249				47,575				88,486				21,488				28,395				26,159				54,471				38,401				732,584
Other current liabilities			—				(1,503	)			—				(11,307	)			—				(5,930	)			(1,093	)			—				(3,299	)			(7,984	)
Other liabilities			—				—				—				—				—				(342	)			(223	)			—				—				—
Total liabilities    assumed			—				(1,503	)			—				(11,307	)			—				(6,272	)			(1,316	)			—				(3,299	)			(7,984	)
Net assets acquired		$	22,984			$	16,746			$	47,575			$	77,179			$	21,488			$	22,123			$	24,843			$	54,471			$	35,102			$	724,600

(in thousands)		Dealer				Other				Total
Cash		$	—			$	—			$	11,054
Other current assets			552				323				52,917
Fixed assets			13				100				5,829
Goodwill			21,467				22,712				717,710
Purchased customer accounts			10,986				15,085				342,008
Non-compete agreements			21				297				3,222
Other assets			226				754				18,588
Total assets acquired			33,265				39,271				1,151,328
Other current liabilities			(165	)			(1,715	)			(32,996	)
Other liabilities			—				—				(565	)
Total liabilities assumed			(165	)			(1,715	)			(33,561	)
Net assets acquired		$	33,100			$	37,556			$	1,117,767

The following table summarizes the estimated fair values of the aggregate assets and liabilities acquired as of the date of each acquisition.

(in thousands)		Total
Other current assets		$	601
Fixed assets			69
Goodwill			42,172
Purchased customer accounts			18,738
Non-compete agreements			721
Total assets acquired			62,301
Other current liabilities			(1,512	)
Deferred income tax, net			(689	)
Total liabilities assumed			(2,201	)
Net assets acquired		$	60,100

Unaudited Proforma Results

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)		Year Ended December 31,
(in thousands, except per share data)		2019				2018
Total revenues		$	2,447,401			$	2,120,867
Income before income taxes		$	545,182			$	496,076
Net income		$	412,974			$	369,277
Net income per share:
Basic		$	1.47			$	1.33
Diluted		$	1.46			$	1.31
Weighted average number of shares outstanding:
Basic			272,471				270,971
Diluted			274,616				275,521

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)		Year Ended December 31,
(in thousands, except per share data)		2018				2017
Total revenues		$	2,259,812			$	2,193,169
Income before income taxes		$	504,664			$	503,927
Net income		$	375,670			$	447,796
Net income per share:
Basic		$	1.35			$	1.60
Diluted		$	1.33			$	1.57
Weighted average number of shares outstanding:
Basic			270,971				272,580
Diluted			275,521				277,586

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)		Year Ended December 31,
(in thousands, except per share data)		2017				2016
Total revenues		$	1,891,701			$	1,784,776
Income before income taxes		$	453,397			$	429,490
Net income		$	401,908			$	261,133
Net income per share:
Basic		$	1.44			$	0.93
Diluted		$	1.41			$	0.92
Weighted average number of shares outstanding:
Basic			272,580				272,278
Diluted			277,586				275,608

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 years ended December 31, 2019, 2018 and 2017 were as follows:

		Year Ended December 31,
(in thousands)		2019				2018				2017
Balance as of the beginning of the period		$	89,924			$	36,175			$	63,821
Additions to estimated acquisition earn-out payables from new acquisitions			82,872				77,377				6,920
Payments for estimated acquisition earn-out payables			(9,917	)			(26,597	)			(43,766	)
Subtotal			162,879				86,955				26,975
Net change in earnings from estimated acquisition earn-out    payables:
Change in fair value on estimated acquisition earn-out    payables			(7,298	)			603				6,874
Interest expense accretion			5,932				2,366				2,326
Net change in earnings from estimated acquisition earn-    out payables			(1,366	)			2,969				9,200
Balance as of December 31,		$	161,513			$	89,924			$	36,175

X

- 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

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 2
-Subparagraph (h)(2)
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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.

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+ References

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