BROWN & BROWN, INC. 10-Q

ITEM 2 — Management’s Discussion and Analysis o f Financial Condition and Results of Operations The following discussion updates the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and the two discussions should be read together. GENERAL Company Overview — Third Quarter of 2026 The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related Notes to those Financial Statements included elsewhere in this Quarterly Report on Form 10-Q, which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition, please see “Information Regarding Non-GAAP Financial Measures” below regarding important information on non-GAAP financial measures contained in our discussion and analysis. We are a diversified insurance agency, wholesale brokerage, insurance programs, specialty insurance business and service organization headquartered in Daytona Beach, Florida. As an insurance intermediary, our principal sources of revenue are commissions paid by insurance companies and, to a lesser extent, fees paid directly by customers. Commission revenues generally represent a percentage of the premium paid by an insured and are affected by fluctuations in both premium rate levels charged by insurance companies and the insureds’ underlying “insurable exposure units,” which are units that insurance companies use to measure or express insurance exposed to risk (such as property values, sales or payroll levels) to determine what premium to charge the insured. Insurance companies establish these premium rates based upon many factors, including loss experience, risk profile and reinsurance rates paid by such insurance companies, none of which we control. We also participate in captive insurance facilities for the purpose of having additional capacity to place coverage, driving additional revenues and to participate in underwriting results, and to limit the Company's exposure to claims expenses through reinsurance or by only participating in certain tranches of the underwriting. We also operate registered insurance companies to support our national flood insurance program and to support our cross-collateralized segregated captive cell businesses. We do not participate in earnings of the collateralized segregated captive cells. The volume of business from new and existing customers, fluctuations in insurable exposure units, changes in premium rate levels, changes in general economic and competitive conditions, a reduction of purchased limits, or the occurrence of catastrophic weather events all affect our revenues. For example, higher levels of inflation, an increase in the value of insurable exposure units or a general decline in economic activity, could increase or decrease the value of insurable exposure units. Furthermore, increasing costs of litigation settlements and awards could cause some customers to seek higher levels of insurance coverage. Historically, we have grown our revenues as a result of our focus on new business, customer retention and acquisitions. We foster a strong, decentralized sales and service culture, which enables responsiveness to changing business conditions and drives accountability for results. The term “core commissions and fees” excludes Contingents; and therefore, it represents the revenues earned directly from specific insurance policies sold, and specific fee-based services rendered. The net change in core commissions and fees reflects the aggregate changes attributable to: (i) net new and lost accounts; (ii) net changes in our customers’ exposure units, deductibles or insured limits; (iii) net changes in insurance premium rates or the commission rate paid to us by our carrier partners; (iv) the net change in fees paid to us by our customers and (v) any businesses acquired or disposed of. We also earn Contingents, which are commissions based primarily on underwriting results, but in select situations may reflect additional considerations for volume, growth and/or retention. These commissions, which are included in our commissions and fees in the Condensed Consolidated Statements of Income, are estimated and accrued throughout the year based on actual premiums written and knowledge, to the extent it is available, of losses incurred. Payments are primarily received in the first and second quarters of each subsequent underwriting year, based upon prior year(s) underwriting results, but may differ from the amount estimated and accrued due to the lack of complete visibility regarding loss information until they are received. Over the last three years, Contingents have averaged approximately 4.4% of total commissions and fee revenues. Fee revenues primarily relate to services other than securing coverage for our customers, and for fees negotiated in lieu of commissions. Fee revenues are generated by: (i) our Specialty Distribution segment, which earns fees primarily for the issuance of insurance policies on behalf of insurance carriers and (ii) our Retail segment in our large-account customer base, where we primarily earn fees for securing insurance for our customers, in our F&I businesses where we earn fees for assisting our customers with creating and selling warranty and service risk management programs and fees for Medicare Set-aside services, Social Security disability services and Medicare benefits advocacy services. Annual fee revenues as a percentage of our total commissions and fees, represented 22.2% in 2025 and 21.1% in 2024. For the three months ended September 30, 2026, our total commissions and fees growth rate was 9.7%. Our consolidated Organic Revenue increased by 1.2% and our Organic Revenue with Contingents growth rate was 1.5%. Historically, investment and other income has consisted primarily of interest earnings on operating cash and where permitted, on premiums collected and held in a fiduciary capacity before being remitted to insurance companies. Our policy as it relates to the Company’s capital is to invest available funds in high-quality, short-term money-market funds and fixed income investment securities. Investment income also includes gains and losses realized from the sale of investments. Other income primarily reflects other miscellaneous revenues. 28 Income before income taxes for the three months ended September 30, 2026 increased from the third quarter of 2025 by $9 million or 2.9%, driven by increased Contingents, leveraging our expense base, synergies realized from the acquisition of Accession, acquisitions completed in the past twelve months and the change in mark-to-market of escrow liability. This growth was partially offset by the change in estimated acquisition earn-out payables. Information Regarding Non-GAAP Financial Measures In the discussion and analysis of our results of operations, in addition to reporting financial results in accordance with generally accepted accounting principles (“GAAP”), we provide references to the following non-GAAP financial measures as defined in Regulation G of the SEC rules: Organic Revenue, Organic Revenue with Contingents, EBITDAC, EBITDAC Margin, EBITDAC - Adjusted and EBITDAC Margin - Adjusted. We present these measures because we believe such information is of interest to the investment community. We believe they provide additional meaningful methods to evaluate the Company’s operating performance from period to period on a basis that may not be otherwise apparent on a GAAP basis due to the impact of certain items that have a high degree of variability, that we believe are not indicative of ongoing performance and that are not easily comparable from period to period. This non-GAAP financial information should be considered in addition to, not in lieu of, the Company’s consolidated income statements and balance sheets as of the relevant date. Consistent with Regulation G, a description of such information is provided below and tabular reconciliations of this supplemental non-GAAP financial information to our most comparable GAAP information are contained in this Quarterly Report on Form 10-Q under “Results of Operations - Segment Information.” We view Organic Revenue and Organic Revenue growth (including Organic Revenue with Contingents and its growth) as important indicators when assessing and evaluating our performance on a consolidated basis and for each of our two segments, because they allow us to determine a comparable, but non-GAAP, measurement of revenue growth that is associated with the revenue sources that were a part of our business in both the current and prior year and that are expected to continue in the future. We also view EBITDAC, EBITDAC - Adjusted, EBITDAC Margin and EBITDAC Margin - Adjusted as important indicators when assessing and evaluating our performance, as they present more comparable measurements of our operating margins in a meaningful and consistent manner. As disclosed in our most recent proxy statement, we use Organic Revenue growth, and EBITDAC Margin - Adjusted as key performance metrics for our short-term and long-term incentive compensation plans for executive officers and other key employees. Non-GAAP Revenue Measures • Organic Revenue is our core commissions and fees less: (i) the core commissions and fees earned for the first twelve months by newly acquired operations; (ii) divested business (core commissions and fees generated from offices, books of business or niches sold or terminated during the comparable period); (iii) Foreign Currency Translation (as defined below) and (iv) the Litigation-Related Impact. The term “core commissions and fees” excludes Contingents; and therefore, represents the revenues earned directly from specific insurance policies sold and specific fee-based services rendered. Growth of Organic Revenue can be expressed as a dollar amount or a percentage rate. • Organic Revenue with Contingents is Organic Revenue plus Organic Contingents (as defined below). Growth of Organic Revenue with Contingents can be expressed as a dollar amount or a percentage rate. Non-GAAP Earnings Measures • EBITDAC is defined as income before interest, income taxes, depreciation, amortization and the change in estimated acquisition earn-out payables. • EBITDAC Margin is defined as EBITDAC divided by total revenues. • EBITDAC - Adjusted is defined as EBITDAC, excluding (i) (gain)/loss on disposal (as defined below), (ii) Acquisition/Integration Costs (as defined below) and (iii) mark-to-market of escrow liability (as defined below). • EBITDAC Margin - Adjusted is defined as EBITDAC - Adjusted divided by total revenues. Definitions Related to Certain Components of Non-GAAP Measures • “Acquisition/Integration Costs” means the acquisition and integration costs (e.g., costs associated with regulatory filings; costs for third-party professional services, including legal, accounting, consulting, financial advisory and due diligence; costs and fees associated with entry into the bridge financing commitment; costs of integrating or streamlining processes and information technology systems, including data migration and system integration; costs associated with optimizing vendor agreements and leased office space, including exit costs related to location combinations; and employment-related costs, including severance payments, costs associated with the transition of certain legacy compensation programs, retention-related compensation expenses, and incentive payments) arising out of our acquisition of Accession and acquisitions previously completed by Accession, which are not considered to be normal, recurring or part of ongoing operations. 29 • “Foreign Currency Translation” means the period-over-period impact of foreign currency translation, which is calculated by applying current-year foreign exchange rates to the various functional currencies in our business to our reporting currency of U.S. dollars for the same period in the prior year. • “(Gain)/loss on disposal” is a caption on our consolidated statements of income which reflects net proceeds received as compared to the net book value related to sales of books of business and other divestiture transactions. • “ Mark-to-market of escrow liability ” is a caption on our consolidated statements of income which reflects the non-cash change in the fair value associated with certain shares of the Company’s common stock held in escrow. The change is driven by fluctuations in our stock price between the beginning of the period and the end of the period. These escrowed shares represent a portion of the merger consideration payable in connection with our acquisition of Accession. The escrowed shares secure certain indemnification obligations of the Accession equity holders related to businesses that are in run-off or discontinued. • “Litigation-Related Impact” means the core commissions and fees attributable to (i) the loss of specifically identified customer accounts and (ii) new business generated in the prior year by certain former employees, in each case in connection with the conduct of a competitor that is the subject of pending litigation in multiple jurisdictions. • “Organic Contingents” are Contingents, less (i) Contingents earned for the first twelve months by newly acquired stand-alone operations and (ii) Contingents earned from divested stand-alone operations (Contingents generated from stand-alone operations sold or terminated during the comparable period). Our industry peers may provide similar supplemental non-GAAP information with respect to one or more of these measures, although they may not use the same or comparable terminology and may not make identical adjustments and, therefore, comparability may be limited. This supplemental non-GAAP financial information should be considered in addition to, and not in lieu of, the Company ' s Condensed Consolidated Financial Statements. Acquisitions Part of our business strategy is to attract high-quality insurance intermediaries and service organizations to join our operations. From 1993 through the third quarter of 2026, we acquired 736 insurance intermediary operations. Critical Accounting Policies We have had no changes to our Critical Accounting Policies as described in our most recent Form 10-K for the year ended December 31, 2025. We believe that of our significant accounting and reporting policies, the more critical policies include our accounting for revenue recognition, business combinations and purchase price allocations, intangible asset impairments, non-cash stock-based compensation and reserves for litigation. In particular, the accounting for these areas is subject to uncertainty, because it requires significant use of judgment to be made by management. Different assumptions in the application of these policies could result in material changes in our consolidated financial position or consolidated results of operations. Refer to Note 1 in the “Notes to Consolidated Financial Statements” in our Annual Report on Form 10-K for the year ended December 31, 2025 for details regarding our critical and significant accounting policies. 30 RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025 The following discussion and analysis regarding results of operations and liquidity and capital resources should be considered in conjunction with the accompanying Condensed Consolidated Financial Statements and related Notes. Financial information relating to our condensed consolidated financial results is as follows: Three months ended September 30, Nine months ended September 30, (in millions, except percentages) 2026 2025 % Change 2026 2025 % Change REVENUES Core commissions and fees $ 1,620 $ 1,477 9.7 % $ 4,972 $ 4,022 23.6 % Profit-sharing contingent commissions 80 73 9.6 % 262 161 62.7 % Investment and other income 25 56 (55.4 %) 68 112 (39.3 %) Total revenues 1,725 1,606 7.4 % 5,302 4,295 23.4 % EXPENSES Employee compensation and benefits 857 793 8.1 % 2,602 2,116 23.0 % Other operating expenses 307 276 11.2 % 866 672 28.9 % (Gain)/loss on disposal — — — % — 1 (100.0 %) Amortization 110 93 18.3 % 337 196 71.9 % Depreciation 18 14 28.6 % 53 37 43.2 % Interest 100 100 — % 299 197 51.8 % Change in estimated acquisition earn-out payables 27 11 145.5 % (7 ) 18 (138.9 %) Mark-to-market of escrow liability (14 ) 8 NMF (83 ) 8 NMF Total expenses 1,405 1,295 8.5 % 4,067 3,245 25.3 % Income before income taxes 320 311 2.9 % 1,235 1,050 17.6 % Income taxes 79 82 (3.7 %) 278 251 10.8 % Net income before non-controlling interests 241 229 5.2 % 957 799 19.8 % Less: Net income attributable to non-controlling interests 1 2 3 9 Net income attributable to the Company $ 240 $ 227 5.7 % $ 954 $ 790 20.8 % Income Before Income Taxes Margin (1) 18.6 % 19.4 % 23.3 % 24.4 % EBITDAC - Adjusted (2) $ 597 $ 587 1.7 % $ 1,927 $ 1,594 20.9 % EBITDAC Margin - Adjusted (2) 34.6 % 36.6 % 36.3 % 37.1 % Organic Revenue growth rate (2) 1.2 % 3.5 % 0.3 % 4.6 % Organic Revenue with Contingents growth rate (2) 1.5 % 4.2 % 1.5 % 5.9 % Employee compensation and benefits relative to total revenues 49.7 % 49.4 % 49.1 % 49.3 % Other operating expenses relative to total revenues 17.8 % 17.2 % 16.3 % 15.6 % (1) "Income Before Income Taxes Margin" is defined as income before income taxes divided by total revenues. (2) A non-GAAP financial measure. NMF = Not a meaningful figure 31 Commissions and Fees Commissions and fees, including Contingents and earned premiums, for the three months ended September 30, 2026 increased $150 million to $1,700 million, or 9.7%, over the same period in 2025. Core commissions and fees revenue for the third quarter of 2026 increased $143 million or 9.7%, composed of: (i) $17 million of net new and renewal business, which reflected an overall Organic Revenue growth rate of 1.2%; (ii) $156 million from acquisitions that had no comparable revenues in the same period of 2025 and an offsetting decrease from (iii) $13 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months; (iv) $16 million related to the Litigation-Related Impact and (v) a decrease from the impact of Foreign Currency Translation of $2 million. Contingents for the third quarter of 2026 increased by $7 million, or 9.6%, compared to the same period in 2025. This increase was driven primarily by (i) improved underwriting results for our carrier partners, (ii) growth in premium volume and qualifying for certain Contingents that we did not qualify for in the prior year, (iii) recent acquisitions and (iv) our enhanced carrier engagement model. The Organic Revenue with Contingents growth rate was 1.5%. Commissions and fees, including Contingents and earned premiums, for the nine months ended September 30, 2026, increased $1,051 million to $5,234 million, or 25.1%, over the same period in 2025. Core commissions and fees revenue for the nine months ended September 30, 2026 increased $950 million or 23.6%, composed of: (i) $10 million of net new and renewal business, which reflected an overall Organic Revenue growth rate of 0.3%; (ii) $985 million from acquisitions that had no comparable revenues in the same period of 2025; (iii) an increase from the impact of Foreign Currency Translation of $19 million and an offsetting decrease from (iv) $20 million related to commissions and fees revenue from businesses or books of business divested in the preceding twelve months and (v) $44 million related to the Litigation-Related Impact. Contingents for the nine months ended September 30, 2026 increased by $101 million, or 62.7%, compared to the same period in 2025. This increase was driven primarily by (i) improved underwriting results for our carrier partners, (ii) growth in premium volume and qualifying for certain Contingents that we did not qualify for in the prior year, (iii) recent acquisitions and (iv) our enhanced carrier engagement model. The Organic Revenue with Contingents growth rate was 1.5%. Investment and Other Income Investment and other income for the three months ended September 30, 2026 decreased $31 million from the same period in 2025. Investment and other income for the nine months ended September 30, 2026 decreased $44 million, from the same period in 2025. These decreases were driven substantially by $42 million of interest income generated by the proceeds of the Company's follow-on common stock offering and senior notes issuance in June 2025, held in preparation for the closing of the Company's acquisition of Accession, and to a lesser extent lower average interest rates, each partially offset by acquisitions that had no comparable investment and other income in the same period of 2025. Employee Compensation and Benefits Employee compensation and benefits expense as a percentage of total revenues was 49.7% for the three months ended September 30, 2026 as compared to 49.4% for the three months ended September 30, 2025, an increase of 8.1%, or $64 million. This increase included $78 million of compensation costs related to acquisitions that had no comparable costs in the same period of 2025. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2026 and 2025 decreased by $14 million. This underlying employee compensation and benefits expense decrease was primarily related to: (i) lower non-cash stock-based compensation expense driven by the Company's performance; (ii) a decrease in claims costs within our self-insured health plan; (iii) a decrease in commissions, base compensation and bonuses resulting from the Litigation-Related Impact; (iv) the year-over-year decrease of approximately $18 million in the value of deferred compensation liabilities driven by changes in the market prices of our deferred compensation plan, with such amount substantially offset within other operating expenses as we hold assets to fund these liabilities; partially offset by (v) an increase in staff costs attributable to new hires and annual compensation increases. Employee compensation and benefits expense as a percentage of total revenues was 49.1% for the nine months ended September 30, 2026 as compared to 49.3% for the nine months ended September 30, 2025, an increase of 23.0%, or $486 million. This increase included $522 million of compensation costs related to acquisitions that had no comparable costs in the same period of 2025. Therefore, employee compensation and benefits expense attributable to those offices that existed in the same time periods of 2026 and 2025 decreased by $36 million. This underlying employee compensation and benefits expense decrease was primarily related to: (i) lower non-cash stock-based compensation expense driven by the Company's performance; (ii) a decrease in claims costs within our self-insured health plan; (iii) a decrease in commissions, base compensation and bonuses resulting from the Litigation-Related Impact (iv) the year-over-year decrease of approximately $8 million in the value of deferred compensation liabilities driven by changes in the market prices of our deferred compensation plan, with such amount substantially offset within other operating expenses as we hold assets to fund these liabilities; partially offset by (v) an increase in staff costs attributable to new hires and annual compensation increases. Other Operating Expenses Other operating expenses represented 17.8% of total revenues for the third quarter of 2026, as compared to 17.2% for the third quarter of 2025. Other operating expenses for the third quarter of 2026 increased $31 million, or 11.2%, from the same period of 2025. This change includes: (i) $28 million of other operating expenses related to acquisitions that had no comparable costs in the same period of 2025; (ii) the year-over-year increase of approximately $18 million in the value of assets held to fund the associated liabilities within our deferred 32 compensation plan, which was substantially offset within employee compensation and benefits, as noted above and (iii) increased information technology-related costs; partially offset by (iv) a decrease in Acquisition/Integration Costs. Other operating expenses represented 16.3% of total revenues for the nine months ended September 30, 2026, as compared to 15.6% for the nine months ended September 30, 2025. Other operating expenses for the first nine months of 2026 increased $194 million, or 28.9%, from the same period of 2025. This change includes: (i) $173 million of other operating expenses related to acquisitions that had no comparable costs in the same period of 2025; (ii) the year-over-year increase of approximately $8 million in the value of assets held to fund the associated liabilities within our deferred compensation plan, which was substantially offset within employee compensation and benefits, as noted above and (iii) increased information technology-related costs. (Gain)/Loss on Disposal Gain on disposal was zero for the third quarter of 2026 which was consistent with the third quarter of 2025. (Gain)/loss on disposal for the nine months ended September 30, 2026, increased $1 million from the nine months ended September 30, 2025. Although we do not routinely sell businesses or customer accounts, we periodically sell an office or a book of business (one or more customer accounts) that we believe does not produce reasonable margins or demonstrate a potential for adequate growth, or because doing so is in the Company’s best interest. Amortization Amortization expense for the third quarter of 2026 increased $17 million, or 18.3%, compared to the third quarter of 2025. Amortization expense for the nine months ended September 30, 2026, increased $141 million, or 71.9%, compared to the nine months ended September 30, 2025. This change reflects the amortization of new intangibles from businesses acquired within the past twelve months, net of certain intangible assets becoming fully amortized or written off in the (Gain)/Loss on disposal. Depreciation Depreciation expense for the third quarter of 2026 increased $4 million, or 28.6%, compared to the third quarter of 2025. Depreciation expense for the nine months ended September 30, 2026 increased $16 million, or 43.2%, compared to the nine months ended September 30, 2025. Changes in depreciation expense reflect net additions of fixed assets resulting from businesses acquired in the past twelve months and the addition of fixed assets resulting from business initiatives, partially offset by the impact of fixed assets that became fully depreciated or written off in the gain or loss on disposal. Interest Expense Interest expense for the third quarter of 2026 was consistent with the third quarter of 2025. Interest expense for the nine months ended September 30, 2026 increased $102 million, or 51.8%, compared to the first nine months of 2025. The increase is due to higher debt resulting from a debt issuance in the second quarter of 2025 to fund the Transaction, which was partially offset by decreases in the floating rate benchmark used on our adjustable-rate debt. Change in Estimated Acquisition Earn-Out Payables ASC 805 - Business Combinations is the authoritative guidance requiring an acquirer to recognize 100% of the fair value of acquired assets, including goodwill, and assumed liabilities (with only limited exceptions) upon initially obtaining control of an acquired entity. Additionally, the fair value of contingent consideration arrangements (such as earn-out purchase price arrangements) at the acquisition date must be included in the purchase price consideration. The recorded purchase price for acquisitions includes an estimation of the fair value of liabilities associated with any potential earn-out provisions. Subsequent changes in these earn-out obligations are required to be recorded in the Condensed Consolidated Statements of Income when incurred or reasonably estimated. Estimations of potential earn-out obligations are typically based upon future earnings of the acquired operations or entities, usually for periods ranging from one to three years. The net charge or credit to the Condensed Consolidated Statements of Income for the period is the combination of the net change in the estimated acquisition earn-out payables liability, and the accretion of the present value discount on those liabilities. As of September 30, 2026 and 2025, the fair values of the estimated acquisition earn-out payables were re-evaluated based upon projected operating results and measured at fair value on a recurring basis using unobservable inputs (Level 3) as defined in ASC 820 - Fair Value Measurement. The resulting net changes, as well as the interest expense accretion on the estimated acquisition earn-out payables were as follows: Three months ended September 30, Nine months ended September 30, (in millions) 2026 2025 2026 2025 Change in fair value $ 23 $ 10 $ (22 ) $ 14 Interest expense accretion 4 1 15 4 Net change in earnings from estimated acquisition earn-out payables $ 27 $ 11 $ (7 ) $ 18 33 For the three months and nine months ended September 30, 2026, the fair value of estimated earn-out payables was re-evaluated and resulted in an increase of $23 million and a decrease of $22 million, respectively, which generated charges and credits, respectively, to the Condensed Consolidated Statements of Income. These adjustments were primarily related to revised estimates for companies acquired in the Transaction. As of September 30, 2026, estimated acquisition earn-out payables totaled $326 million, of which $140 million was recorded as accounts payable and $186 million was recorded as other non-current liabilities. Income Taxes The effective tax rate on income from operations for the three months ended September 30, 2026 and 2025 was 24.7% and 26.4%, respectively. The effective tax rate on income from operations for the nine months ended September 30, 2026 and 2025 was 22.5% and 23.9%, respectively. The decrease for the three and nine months ended September 30, 2026 was driven by the non-taxable treatment of the mark-to-market of escrow liability. 34 RESULTS OF OPERATIONS — SEGMENT INFORMATION As discussed in Note 12 to the Condensed Consolidated Financial Statements, we operate two reportable segments: Retail and Specialty Distribution. On a segmented basis, changes in amortization, depreciation and interest expenses generally result from activity associated with acquisitions. Likewise, other income consists primarily of miscellaneous income; and therefore, it can fluctuate between comparable periods. As such, management primarily focuses on Organic Revenue growth, the growth in Contingents and EBITDAC Margin when evaluating the operational efficiency of a segment. The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the three months ended September 30, 2026 and 2025, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the three months ended September 30, 2026 and 2025, including by segment, are as follows: 2026 Retail (1) Specialty Distribution Total (in millions) 2026 2025 2026 2025 2026 2025 Commissions and fees $ 969 $ 877 $ 731 $ 673 $ 1,700 $ 1,550 Total change $ 92 $ 58 $ 150 Total growth % 10.5 % 8.6 % 9.7 % Contingents $ (24 ) $ (18 ) $ (56 ) $ (55 ) $ (80 ) $ (73 ) Core commissions and fees $ 945 $ 859 $ 675 $ 618 $ 1,620 $ 1,477 Acquisitions (91 ) (65 ) (156 ) Dispositions (10 ) (3 ) (13 ) Foreign Currency Translation (1 ) — (1 ) Litigation-Related Impact (16 ) — (16 ) Organic Revenue (2) $ 854 $ 832 $ 610 $ 615 $ 1,464 $ 1,447 Organic Revenue growth (2) $ 22 $ (5 ) $ 17 Organic Revenue growth rate (2) 2.6 % (0.8 )% 1.2 % Organic Contingents $ 17 $ 18 $ 62 $ 55 $ 79 $ 73 Organic Revenue with Contingents (2) $ 871 $ 850 $ 672 $ 670 $ 1,543 $ 1,520 Organic Revenue with Contingents growth (2) $ 21 $ 2 $ 23 Organic Revenue with Contingents growth rate (2) 2.5 % 0.3 % 1.5 % (1) The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 12 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items. (2) A non-GAAP financial measure. The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the three months ended September 30, 2025 and 2024, including by segment, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the three months ended September 30, 2025 and 2024, including by segment, are as follows: 35 2025 Retail (1) Specialty Distribution Total (in millions) 2025 2024 2025 2024 2025 2024 Commissions and fees $ 877 $ 639 $ 673 $ 516 $ 1,550 $ 1,155 Total change $ 238 $ 157 $ 395 Total growth % 37.2 % 30.4 % 34.2 % Contingents $ (18 ) $ (8 ) $ (55 ) $ (19 ) $ (73 ) $ (27 ) Core commissions and fees $ 859 $ 631 $ 618 $ 497 $ 1,477 $ 1,128 Acquisitions (210 ) (97 ) (307 ) Dispositions (3 ) (3 ) Foreign Currency Translation 4 1 5 Litigation-Related Impact — — — Organic Revenue (2) $ 649 $ 632 $ 521 $ 498 $ 1,170 $ 1,130 Organic Revenue growth (2) $ 17 $ 23 $ 40 Organic Revenue growth rate (2) 2.7 % 4.6 % 3.5 % Organic Contingents $ 7 $ 7 $ 38 $ 29 $ 45 $ 36 Organic Revenue with Contingents (2) $ 656 $ 639 $ 559 $ 527 $ 1,215 $ 1,166 Organic Revenue with Contingents growth (2) $ 17 $ 32 $ 49 Organic Revenue with Contingents growth rate (2) 2.7 % 6.1 % 4.2 % (1) The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 12 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items. (2) A non-GAAP financial measure. The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the nine months ended September 30, 2026 and 2025, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the nine months ended September 30, 2026 and 2025, including by segment, are as follows: 2026 Retail (1) Specialty Distribution Total (in millions) 2026 2025 2026 2025 2026 2025 Commissions and fees $ 3,112 $ 2,474 $ 2,122 $ 1,709 $ 5,234 $ 4,183 Total change $ 638 $ 413 $ 1,051 Total growth % 25.8 % 24.2 % 25.1 % Contingents (80 ) (40 ) (182 ) (121 ) (262 ) (161 ) Core commissions and fees $ 3,032 $ 2,434 $ 1,940 $ 1,588 $ 4,972 $ 4,022 Acquisitions (597 ) (388 ) (985 ) Dispositions (12 ) (8 ) (20 ) Foreign Currency Translation 16 3 19 Litigation-Related Impact (44 ) — (44 ) Organic Revenue (2) $ 2,435 $ 2,394 $ 1,552 $ 1,583 $ 3,987 $ 3,977 Organic Revenue growth (2) $ 41 $ (31 ) $ 10 Organic Revenue growth rate (2) 1.7 % (2.0 )% 0.3 % Organic Contingents $ 49 $ 39 $ 164 $ 122 $ 213 $ 161 Organic Revenue with Contingents (2) $ 2,484 $ 2,433 $ 1,716 $ 1,705 $ 4,200 $ 4,138 Organic Revenue with Contingents growth (2) $ 51 $ 11 $ 62 Organic Revenue with Contingents growth rate (2) 2.1 % 0.6 % 1.5 % (1) The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 12 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items. (2) A non-GAAP financial measure. The reconciliation of commissions and fees included in the Condensed Consolidated Statements of Income to Organic Revenue and Organic Revenue with Contingents, both non-GAAP financial measures, for the nine months ended September 30, 2025 and 2024, and the growth rates for Organic Revenue and Organic Revenue with Contingents for the nine months ended September 30, 2025 and 2024, including by segment, are as follows: 36 2025 Retail (1) Specialty Distribution Total (in millions) 2025 2024 2025 2024 2025 2024 Commissions and fees $ 2,474 $ 2,086 $ 1,709 $ 1,459 $ 4,183 $ 3,545 Total change $ 388 $ 250 $ 638 Total growth % 18.6 % 17.1 % 18.0 % Contingents (40 ) (30 ) (121 ) (80 ) (161 ) (110 ) Core commissions and fees $ 2,434 $ 2,056 $ 1,588 $ 1,379 $ 4,022 $ 3,435 Acquisitions (312 ) (117 ) (429 ) Dispositions (10 ) — (10 ) Foreign Currency Translation 9 2 11 Litigation-Related Impact — — — Organic Revenue (2) $ 2,122 $ 2,055 $ 1,471 $ 1,381 $ 3,593 $ 3,436 Organic Revenue growth (2) $ 67 $ 90 $ 157 Organic Revenue growth rate (2) 3.3 % 6.5 % 4.6 % Organic Contingents $ 38 $ 30 $ 116 $ 73 $ 154 $ 103 Organic Revenue with Contingents (2) $ 2,160 $ 2,085 $ 1,587 $ 1,454 $ 3,747 $ 3,539 Organic Revenue with Contingents growth (2) $ 75 $ 133 $ 208 Organic Revenue with Contingents growth rate (2) 3.6 % 9.1 % 5.9 % (1) The Retail segment includes commissions and fees reported as “Other” in the Segment Information table in Note 12 of the Notes to the Condensed Consolidated Financial Statements, which includes corporate and consolidation items. (2) A non-GAAP financial measure. 37 The reconciliation of income before income taxes, included in the Condensed Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the three months ended September 30, 2026, including by segment, is as follows: (in millions) Retail Specialty Distribution Other Total Total Revenues $ 978 $ 739 $ 8 $ 1,725 Income before income taxes 147 243 (70 ) 320 Income Before Income Taxes Margin (1) 15.0 % 32.9 % NMF 18.6 % Amortization 65 45 — 110 Depreciation 11 6 1 18 Interest 7 10 83 100 Change in estimated acquisition earn-out payables 18 9 — 27 EBITDAC (2) 248 313 14 575 EBITDAC Margin (2) 25.4 % 42.4 % NMF 33.3 % (Gain)/loss on disposal — — — — Acquisition/Integration Costs 27 7 2 36 Mark-to-market of escrow liability — — (14 ) (14 ) EBITDAC - Adjusted (2) $ 275 $ 320 $ 2 $ 597 EBITDAC Margin - Adjusted (2) 28.1 % 43.3 % NMF 34.6 % (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues. (2) A non-GAAP financial measure. NMF = Not a meaningful figure The reconciliation of income before income taxes, included in the Condensed Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the three months ended September 30, 2025, including by segment, is as follows: (in millions) Retail Specialty Distribution Other Total (1) Total Revenues $ 883 $ 681 $ 42 $ 1,606 Income before income taxes 164 255 (108 ) 311 Income Before Income Taxes Margin (1) 18.6 % 37.4 % NMF 19.4 % Amortization 66 27 — 93 Depreciation 8 5 1 14 Interest (11 ) 9 102 100 Change in estimated acquisition earn-out payables 10 1 — 11 EBITDAC (2) 237 297 (5 ) 529 EBITDAC Margin (2) 26.8 % 43.6 % NMF 32.9 % (Gain)/loss on disposal — — — — Acquisition/Integration Costs 10 2 38 50 Mark-to-market of escrow liability — — 8 8 EBITDAC - Adjusted (2) $ 247 $ 299 $ 41 $ 587 EBITDAC Margin - Adjusted (2) 28.0 % 43.9 % NMF 36.6 % (3) (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues. (2) A non-GAAP financial measure. (3) Amount reflects the positive impact of approximately $29 million of interest income earned from the proceeds of the Company’s follow-on common stock offering and senior notes issuance in June 2025, held in preparation for the closing of the Company’s acquisition of Accession. NMF = Not a meaningful figure 38 The reconciliation of income before income taxes, included in the Condensed Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the nine months ended September 30, 2026, including by segment, is as follows: (in millions) Retail Specialty Distribution Other Total Total Revenues $ 3,134 $ 2,142 $ 26 $ 5,302 Income before income taxes 670 717 (152 ) 1,235 Income Before Income Taxes Margin (1) 21.4 % 33.5 % NMF 23.3 % Amortization 204 133 337 Depreciation 31 18 4 53 Interest 19 27 253 299 Change in estimated acquisition earn-out payables (1 ) (6 ) — (7 ) EBITDAC (2) 923 889 105 1,917 EBITDAC Margin (2) 29.5 % 41.5 % NMF 36.2 % (Gain)/loss on disposal — — — — Acquisition/Integration Costs 68 19 6 93 Mark-to-market of escrow liability — — (83 ) (83 ) EBITDAC - Adjusted (2) $ 991 $ 908 $ 28 $ 1,927 EBITDAC Margin - Adjusted (2) 31.6 % 42.4 % NMF 36.3 % (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues. (2) A non-GAAP financial measure. NMF = Not a meaningful figure The reconciliation of income before income taxes, included in the Condensed Consolidated Statements of Income, to EBITDAC, a non-GAAP measure, and EBITDAC - Adjusted, a non-GAAP measure, and Income Before Income Taxes Margin to EBITDAC Margin, a non-GAAP measure, and EBITDAC Margin - Adjusted, a non-GAAP measure, for the nine months ended September 30, 2025, including by segment, is as follows: (in millions) Retail Specialty Distribution Other Total (1) Total Revenues $ 2,487 $ 1,731 $ 77 $ 4,295 Income before income taxes 575 654 (179 ) 1,050 Income Before Income Taxes Margin (1) 23.1 % 37.8 % NMF 24.4 % Amortization 139 57 — 196 Depreciation 19 14 4 37 Interest 19 27 151 197 Change in estimated acquisition earn-out payables 13 5 — 18 EBITDAC (2) 765 757 (24 ) 1,498 EBITDAC Margin (2) 30.8 % 43.7 % NMF 34.9 % (Gain)/loss on disposal 1 — — 1 Acquisition/Integration Costs 10 2 75 87 Mark-to-market of escrow liability — — 8 8 EBITDAC - Adjusted (2) $ 776 $ 759 $ 59 $ 1,594 EBITDAC Margin - Adjusted (2) 31.2 % 43.8 % NMF 37.1 % (3) (1) “Income Before Income Taxes Margin” is defined as income before income taxes divided by total revenues. (2) A non-GAAP financial measure. (3) Amount reflects the positive impact of approximately $42 million of interest income earned from the proceeds of the Company’s follow-on common stock offering and senior notes issuance in June 2025, held in preparation for the closing of the Company’s acquisition of Accession. NMF = Not a meaningful figure 39 Retail Segment The Retail segment provides a broad range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers, and non-insurance risk-mitigating products through our F&I businesses. Approximately 77% of the Retail segment’s commissions and fees revenue is commission based. Financial information relating to our Retail segment is as follows: Three months ended September 30, Nine months ended September 30, (in millions, except percentages) 2026 2025 % Change 2026 2025 % Change REVENUES Core commissions and fees $ 945 $ 859 10.0 % $ 3,032 $ 2,436 24.5 % Profit-sharing contingent commissions 24 18 33.3 % 80 40 100.0 % Investment and other income 9 6 50.0 % 22 11 100.0 % Total revenues 978 883 10.8 % 3,134 2,487 26.0 % EXPENSES Employee compensation and benefits 550 493 11.6 % 1,678 1,326 26.5 % Other operating expenses 180 153 17.6 % 533 395 34.9 % (Gain)/loss on disposal — — — % — 1 100.0 % Amortization 65 66 (1.5 %) 204 139 46.8 % Depreciation 11 8 37.5 % 31 19 63.2 % Interest 7 (11 ) (163.6 %) 19 19 — % Change in estimated acquisition earn-out payables 18 10 80.0 % (1 ) 13 (107.7 %) Total expenses 831 719 15.6 % 2,464 1,912 28.9 % Income before income taxes $ 147 $ 164 (10.4 %) $ 670 $ 575 16.5 % Income Before Income Taxes Margin (1) 15.0 % 18.6 % 21.4 % 23.1 % EBITDAC - Adjusted (2) $ 275 $ 247 11.3 % $ 991 $ 776 27.7 % EBITDAC Margin - Adjusted (2) 28.1 % 28.0 % 31.6 % 31.2 % Organic Revenue growth rate (2) 2.6 % 2.7 % 1.7 % 3.3 % Organic Revenue with Contingents growth rate (2) 2.5 % 2.7 % 2.1 % 3.6 % Employee compensation and benefits relative to total revenues 56.2 % 55.8 % 53.5 % 53.3 % Other operating expenses relative to total revenues 18.4 % 17.3 % 17.0 % 15.9 % (1) "Income Before Income Taxes Margin" is defined as income before income taxes divided by total revenues. (2) A non-GAAP financial measure. NMF = Not a meaningful figure The Retail segment’s total revenues for the three months ended September 30, 2026 increased 10.8%, or $95 million, as compared to the same period in 2025, to $978 million. The $86 million increase in core commissions and fees revenue was driven by: (i) approximately $91 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; (ii) an increase of $21 million related to net new and renewal business; (iii) an offsetting decrease from the impact of Foreign Currency Translation of $1 million; (iv) an offsetting decrease of $10 million related to commissions and fees recorded in 2025 from businesses since divested; and (v) an offsetting decrease of $16 million related to the Litigation-Related Impact. Contingents for the third quarter of 2026 increased $6 million to $24 million, as compared to the same period in 2025. This increase was due to acquisitions completed within the last twelve months. The Retail segment’s total commissions and fees increased by 10.5%. The Organic Revenue growth rate was 2.6% and the Organic Revenue with Contingents growth rate was 2.5% for the third quarter of 2026. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth on renewals of existing customers. Income before income taxes for the three months ended September 30, 2026 decreased 10.4%, or $17 million, as compared to the same period in 2025, to $147 million. The primary factors driving this decrease were: (i) an increase in intercompany interest expense; (ii) an increase in estimated acquisition earn-out payables; (iii) Acquisition/Integration Costs; and (iv) an increase in depreciation expense; partially offset by (v) the profit associated with the net increase in revenue as described above. EBITDAC - Adjusted for the three months ended September 30, 2026 increased 11.3%, or $28 million, as compared to the same period in 2025, to $275 million. EBITDAC Margin - Adjusted for the three months ended September 30, 2026 increased to 28.1% from 28.0% in the 40 same period in 2025. The change in EBITDAC Margin - Adjusted was primarily driven by: (i) acquisition synergy realization; and (ii) leveraging our expense base. The Retail segment’s total revenues for the nine months ended September 30, 2026 increased 26.0%, or $647 million, as compared to the same period in 2025, to $3,134 million. The $596 million increase in core commissions and fees revenue was driven by: (i) approximately $597 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; (ii) an increase of $41 million related to net new and renewal business; (iii) an increase from the impact of Foreign Currency Translation of $16 million; (iv) an offsetting decrease of $12 million related to commissions and fees recorded in 2025 from businesses since divested; and (v) an offsetting decrease of $44 million related to the Litigation-Related Impact. Contingents for the nine months of 2026 increased 100.0%, or $40 million, as compared to the same period in 2025, to $80 million. This increase was due to acquisitions completed within the last twelve months and qualifying for Contingents this year that we did not qualify for in the prior year. The Retail segment’s total commissions and fees increased by 25.7%. The Organic Revenue growth rate was 1.7% and the Organic Revenue with Contingents growth rate was 2.1% for the first nine months of 2026. The Organic Revenue growth rate was driven by net new business written during the preceding twelve months and growth from renewals of existing customers. Income before income taxes for the nine months ended September 30, 2026 increased 16.5%, or $95 million, as compared to the same period in 2025, to $670 million. The primary factors driving this increase were: (i) a decrease in estimated acquisition earn-out payables; and (ii) the profit associated with the net increase in revenue as described above, partially offset by (iii) an increase in depreciation expense; (iv) an increase in amortization expense; and (v) Acquisition/Integration Costs. EBITDAC - Adjusted for the nine months ended September 30, 2026 increased 27.7%, or $215 million, as compared to the same period in 2025, to $991 million. EBITDAC Margin - Adjusted for the nine months ended September 30, 2026 increased to 31.6% from 31.2% in the same period in 2025. The increase in EBITDAC Margin - Adjusted was primarily driven by: (i) increased Contingents; (ii) leveraging our expense base; and (iii) lower compensation as a result of employee departures associated with the Litigation-Related Impact. Specialty Distribution Segment The Specialty Distribution segment is composed of three divisions; our programs business, operating as Arrowhead Programs; our wholesale brokerage business, operating as Bridge Specialty Group; and our specialty program business, operating as Arrowhead Specialty . Arrowhead Programs manages a diverse portfolio of professional liability, personal lines, commercial lines, public entity and specialty programs supported by over 100 well-capitalized insurance carriers. In most cases, the insurance carriers that support these programs have delegated underwriting and, in many instances, claims-handling authority. These programs are generally distributed through a global network of independent agents and brokers, including Brown & Brown retail agents, and offer targeted products and services designed for businesses, individuals, specific industries, trade groups, professions, public entities, municipalities, and niche markets. This division also operates our write-your-own flood insurance carrier, WNFIC and participates in a quota share captive and an excess of loss layer captive. WNFIC’s underwriting business consists of policies written on behalf of and fully ceded to the NFIP, as well as excess flood policies, which are fully reinsured in the private market. Bridge Specialty Group offers global wholesale brokerage and delegated binding/underwriting capabilities across multiple lines, to independent agents and brokers, including Brown & Brown retail agents. Our teams across the globe provide deep industry knowledge and expertise, for placements across multiple lines of coverage based on access to admitted, excess and surplus lines carriers, as well as the Lloyd’s markets in the United Kingdom. Arrowhead Specialty offers solutions across affinity organizations, administrative services, captives, reinsurance, travel/accident, warranty, and life & health. Arrowhead Programs' and Arrowhead Specialty's captives businesses provide additional underwriting capacity that enables growth in core commissions and fees and allow us to participate in underwriting results with limited exposure to claims expenses. The Company has traditionally participated in underwriting profits through Contingents. These captives purchase reinsurance or participate in limited tranches of the underwriting risk in order to limit the Company's exposure to claims expenses. Approximately 81% of the Specialty Distribution segment’s commissions and fees revenue is commission based. 41 Financial information relating to our Specialty Distribution segment is as follows: Three months ended September 30, Nine months ended September 30, (in millions, except percentages) 2026 2025 % Change 2026 2025 % Change REVENUES Core commissions and fees $ 675 $ 618 9.2 % $ 1,940 $ 1,588 22.2 % Profit-sharing contingent commissions 56 55 1.8 % 182 121 50.4 % Investment and other income 8 8 — % 20 22 (9.1 )% Total revenues 739 681 8.5 % 2,142 1,731 23.7 % EXPENSES Employee compensation and benefits 282 252 11.9 % 828 653 26.8 % Other operating expenses 144 132 9.1 % 425 321 32.4 % (Gain)/loss on disposal — — — % — — — % Amortization 45 27 66.7 % 133 57 133.3 % Depreciation 6 5 20.0 % 18 14 28.6 % Interest 10 9 11.1 % 27 27 — % Change in estimated acquisition earn-out payables 9 1 NMF (6 ) 5 NMF Total expenses 496 426 16.4 % 1,425 1,077 32.3 % Income before income taxes $ 243 $ 255 (4.7 )% $ 717 $ 654 9.6 % Income Before Income Taxes Margin (1) 32.9 % 37.4 % 33.5 % 37.8 % EBITDAC - Adjusted (2) $ 320 $ 299 7.0 % $ 908 $ 759 19.6 % EBITDAC Margin - Adjusted (2) 43.3 % 43.9 % 42.4 % 43.8 % Organic Revenue growth rate (2) (0.8 %) 4.6 % (2.0 %) 6.5 % Organic Revenue with Contingents growth rate (2) 0.3 % 6.1 % 0.6 % 9.1 % Employee compensation and benefits relative to total revenues 38.2 % 37.0 % 38.7 % 37.7 % Other operating expenses relative to total revenues 19.5 % 19.4 % 19.8 % 18.5 % (1) "Income Before Income Taxes Margin" is defined as income before income taxes divided by total revenues. (2) A non-GAAP financial measure. NMF = Not a meaningful figure The Specialty Distribution segment’s total revenues for the three months ended September 30, 2026 increased 8.5%, or $58 million, as compared to the same period in 2025, to $739 million. The $57 million increase in core commissions and fees revenue was driven by: (i) approximately $65 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; partially offset by: (ii) a $5 million decrease in net new business, renewal business, and fee revenues; and (iii) a $3 million decline in core commission and fees revenue from dispositions that had no comparable revenues in the same period of 2026. Contingents for the third quarter of 2026 increased approximately $1 million as compared to the third quarter of 2025. The Specialty Distribution segment’s total commissions and fees increased by 8.6%, with Organic Revenue decreasing 0.8% and Organic Revenue with Contingents increasing 0.3% for the three months ended September 30, 2026. The Organic Revenue with Contingents growth was driven by: (i) increased Contingents; (ii) net new and retained business; and (iii) exposure unit expansion; which were partially offset by (iv) declining rates on catastrophe ("CAT") property. Income before income taxes for the three months ended September 30, 2026 decreased 4.7%, or $12 million, as compared to the same period in 2025, to $243 million due to: (i) increased amortization expense; (ii) an increase in estimated acquisition earn-out payables; (iii) Acquisition/Integration Costs; (iv) increased depreciation expense; and (v) increased intercompany interest expense; partially offset by (vi) the growth of EBITDAC - Adjusted described below. EBITDAC - Adjusted for the three months ended September 30, 2026 increased 7.0%, or $21 million, from the same period in 2025, to $320 million. EBITDAC Margin - Adjusted for the three months ended September 30, 2026 decreased to 43.3% from 43.9% in the same period in 2025. EBITDAC Margin - Adjusted decreased due to: (i) the decline in Organic Revenue; and (ii) investments to increase our capabilities in Europe; partially offset by: (iii) the increase in Contingents. 42 The Specialty Distribution segment’s total revenues for the nine months ended September 30, 2026 increased 23.7%, or $411 million, as compared to the same period in 2025, to $2,142 million. The $352 million increase in core commissions and fees revenue was driven by: (i) approximately $388 million related to the core commissions and fees revenue from acquisitions that had no comparable revenues in the same period of 2025; and (ii) an increase from the impact of Foreign Currency Translation of $3 million; partially offset by: (iii) a $31 million decrease in net new business, renewal business, and fee revenues; and (iv) an $8 million decline in core commission and fees revenue from dispositions that had no comparable revenues in the same period of 2026. Contingents for the nine months ended September 30, 2026 increased approximately $61 million, or by 50.4%, as compared to the same period in 2025. This increase is a result of favorable loss ratios and to a lesser extent acquisitions completed in the past twelve months. The Specialty Distribution segment’s total commissions and fees increased by 24.2% with Organic Revenue decreasing 2.0% and Organic Revenue with Contingents increasing 0.6%, for the nine months ended September 30, 2026. The Organic Revenue with Contingents growth was driven by: (i) increased Contingents; (ii) net new and retained business; and (iii) exposure unit expansion; which were partially offset by (iv) declining rates on CAT property. Income before income taxes for the nine months ended September 30, 2026 increased 9.6%, or $63 million to $717 million, from the same period in 2025. Income before income taxes increased due to: (i) the growth of EBITDAC - Adjusted described below; and (ii) a decrease in estimated acquisition earn-out payables; partially offset by: (iii) increased amortization expense; (iv) Acquisition/Integration Costs; and (v) increased depreciation expense. EBITDAC - Adjusted for the nine months ended September 30, 2026 increased 19.6%, or $149 million to $908 million, as compared to the same period in 2025. EBITDAC Margin - Adjusted for the nine months ended September 30, 2026 decreased to 42.4% from 43.8% in the same period in 2025. EBITDAC Margin - Adjusted decreased due to: (i) the decline in Organic Revenue; and (ii) investments to increase our capabilities in Europe; partially offset by: (iii) the increase in Contingents; and (iv) disciplined expense management. Other As discussed in Note 12 of the Notes to Condensed Consolidated Financial Statements, the “Other” line items in the Segment Information table include any revenue and expenses not allocated to reportable segments, and corporate-related items, including the intercompany interest expense charges to reporting segments. LIQUIDITY AND CAPITAL RESOURCES The Company seeks to maintain a conservative balance sheet and strong liquidity profile. Our capital requirements to operate as an insurance intermediary are low, and we have been able to grow and invest in our business through a combination of cash that has been generated from operations, the disciplined use of debt and the issuance of equity as part of the purchase price consideration to acquire certain businesses. We have the ability to utilize our Revolving Credit Facility under the Third Amended and Restated Credit Agreement (the “Third Amended and Restated Credit Agreement”), which as of September 30, 2026 provided additional capacity for up to $975 million in available cash. We believe that we have access to additional funds, if needed, through the capital markets or private placements to obtain further debt financing under the current market conditions. The Company believes that its existing cash, cash equivalents, short-term investment portfolio and funds generated from operations, together with the funds available under the Revolving Credit Facility will be sufficient to satisfy its normal liquidity needs, including principal payments on our long-term debt, for the next twelve months and in the long term. The Revolving Credit Facility contains an expansion option for up to an additional $1,000 million of borrowing capacity, subject to the approval of participating lenders. Including the expansion options under all existing credit agreements, the Company has access to up to $1,975 million of incremental borrowing capacity as of September 30, 2026. Cash and cash equivalents totaled $1,099 million at September 30, 2026 reflecting an increase of $20 million from the $1,079 million balance at December 31, 2025. This increase was primarily driven by previously acquired businesses. Operating Cash Flows Our operating cash flows are primarily derived from the net income generated during the period adjusted for non-cash expenses, which include depreciation, amortization, changes in estimated acquisition earn-out payables, mark-to-market escrow liability, non-cash stock-based compensation and deferred income taxes while excluding gains and losses on sales/disposals of investments, businesses, fixed assets and customer accounts, payments on acquisition earn-outs in excess of original estimated payables and changes in working capital which relate primarily to the timing of payments of accrued liabilities and receipts of receivables from commissions and fees related to our revenues. Our ratio of current assets to current liabilities was 1.14 and 1.04 for September 30, 2026 and December 31, 2025, respectively. Cash flows generated from operating activities totaled $1,140 million and $1,006 million for the nine months ended September 30, 2026 and 2025, respectively, representing an increase of $134 million. Operating cash flows generated in 2026 included $957 million from net income before non-controlling interests with $498 million of non-cash adjustments, offset by $315 million from changes in working capital. The growth in cash from operations is primarily due to higher earnings, including the contribution from acquired businesses, partially offset by changes in working capital and higher acquisition-related earn-out payments. 43 Investing Cash Flows Cash flows used for investing activities were $125 million and $7,701 million for the nine months ended September 30, 2026 and 2025, respectively, a decrease of $7,576 million. Acquisitions During the nine months ended September 30, 2026, the Company completed 18 acquisitions (including book purchases) and paid $41 million net of cash acquired, and including cash and cash equivalents held in a fiduciary capacity. Net cash paid for acquisitions decreased $7,618 million in the nine months ended September 30, 2026, from $7,659 million during the same period in 2025 primarily due to the acquisition of Accession in the prior-year period. Dispositions The Company received $3 million from the sale of businesses, fixed assets and customer accounts during the nine months ended September 30, 2026, compared to $10 million proceeds received in the same period in 2025. The decrease is attributed to smaller sales of businesses in the current period. Capital Expenditures Capital expenditures amounted to $77 million and $48 million in the nine months ended September 30, 2026 and 2025, respectively, and included purchases of furniture and fixtures, leasehold improvements related to office moves and hardware and software purchases related to information technology investments. Financing Cash Flows Net cash flows used in financing activities totaled $989 million and net cash flows provided by financing activities totaled $7,851 million in the nine months ended September 30, 2026 and 2025, respectively. The year-over-year change was primarily driven by the proceeds from the Company's follow-on common stock offering and senior notes issuance in June 2025 which were used to acquire Accession in 2025, and current-year share repurchases and deferred contingent consideration payments in 2026. Fiduciary Receivables and Liabilities Fiduciary cash represents funds in the Company's possession collected from customers to be remitted to insurance companies and funds from insurance companies to be distributed to insureds for the settlement of claims or refunds. The net change in fiduciary cash is represented by the net change in fiduciary liabilities and fiduciary receivables and is presented as cash flows from financing activities in the statement of cash flows. Changes in fiduciary receivables and liabilities resulted in net cash used in financing activities of $14 million and $145 million in the nine months ended September 30, 2026 and 2025, respectively. Acquisition Earn-outs Deferred contingent consideration payments totaled $241 million and $78 million during the nine months ended September 30, 2026 and 2025, respectively, including $199 million and $77 million, respectively, classified as financing activities related to acquisition earn-outs associated with original acquisition-date estimates. Dividends During the nine months ended September 30, 2026 and 2025, the Company paid cash dividends of $169 million and $137 million, respectively, an increase of $32 million, or 23.4%. On October 21, 2026, the Board of Directors approved a quarterly cash dividend of $0.18 per share to be paid on November 11, 2026. Debt Net cash proceeds from long-term debt totaled $141 million in the nine months ended September 30, 2026, compared to net cash proceeds of $3,936 million in the same period of 2025. Total debt at September 30, 2026 was $7,759 million net of unamortized discount and debt issuance costs, which was an increase of $146 million compared to December 31, 2025. The increase includes the drawdown of $225 million on the Revolving Credit Facility and the amortization of discounted debt related to our various unsecured senior notes and debt issuance cost amortization of $8 million, offset by $84 million of payments on outstanding term loan and Revolving Credit Facility balances and an additional $3 million of deferred financing costs associated with the Third Amended and Restated Credit Agreement. 44 On June 5, 2026, the Company entered into the Third Amended and Restated Credit Agreement with the lenders named therein, JPMorgan Chase Bank, N.A. as administrative agent, Bank of America, N.A., Truist Bank and BMO Bank N.A. as co-syndication agents, and U.S. Bank National Association, Fifth Third Bank, National Association, Wells Fargo Bank, National Association, PNC Bank, National Association, HSBC Bank USA, National Association, Citizens Bank, N.A., The Huntington National Bank, and Barclays Bank PLC as co-documentation agents. The Third Amended and Restated Credit Agreement amended and restated the credit agreement dated October 27, 2021, which amended and restated the prior credit agreement, terminated the Company's existing term loan facility, and refinanced the outstanding borrowings thereunder into new term loan facilities. The agreement increased revolving credit commitments from $800 million to $1.25 billion and extended the maturity date to June 5, 2031. The agreement also provides for a $250 million term loan due June 5, 2029 and a $250 million term loan due June 5, 2031. Total borrowings outstanding under the facilities were approximately $772 million as of September 30, 2026. During the nine months ended September 30, 2026, the Company made $6 million of scheduled principal payments on its Second Amended and Restated Credit Agreement term loan. On June 5, 2026, the remaining $163 million outstanding under the term loan was refinanced and consolidated into the Third Amended and Restated Credit Agreement. During the nine months ended September 30, 2026, the Company repaid $25 million of principal related to the Term Loans issued under the Term A-2 Loan Commitment (“Term A-2 Loans”). Upon execution of the Third Amended and Restated Credit Agreement on June 5, 2026, the remaining $338 million outstanding was refinanced and consolidated into the new credit facility. During the first quarter, the Company drew $225 million on the Revolving Credit Facility in connection with a share repurchase program. The Company has repaid $50 million of the balance as of June 30, 2026. There is an outstanding balance of $275 million on the Revolving Credit Facility as of September 30, 2026. During the three months ended September 30, 2026, the Company made a $3 million scheduled principal payment on the five-year term loan under the Third Amended and Restated Credit Agreement. Common Stock On February 12, 2026, the Company entered into an accelerated share repurchase agreement ("ASR") with an investment bank to purchase an aggregate $250 million of the Company's common stock. The program ended on March 9, 2026 and during the period, the Company received a total of 3,574,890 shares of the Company's common stock. During the three months ended June 30, 2026, the Company repurchased an additional 4,279,712 shares for $250 million. During the three months ended September 30, 2026, the Company repurchased an additional 3,630,098 shares for $250 million. At September 30, 2026, the remaining amount authorized by our board of directors for share repurchases was approximately $650 million. Contractual Cash Obligations As of September 30, 2026, our contractual cash obligations were as follows: Payments Due by Period (in millions) Total Less than 1 year 1-3 years 4-5 years After 5 years Long-term debt $ 7,822 $ 413 $ 1,140 $ 1,969 $ 4,300 Other liabilities (1) 859 35 597 42 185 Operating leases 412 78 131 95 108 Interest obligations 4,047 374 694 562 2,417 Maximum future acquisition contingent payments (2) 583 208 375 — — Total contractual cash obligations (3) $ 13,723 $ 1,108 $ 2,937 $ 2,668 $ 7,010 (1) Includes the escrow liability which is included within “Other Long-Term Liabilities” issued in connection with the Transaction. The liability reflects the fair value of shares and cash held in escrow to secure certain indemnification obligations of the Accession equityholders related to businesses that are in run-off or discontinued. Once all claims related to certain indemnification matters described in the Merger Agreement are resolved, the remaining amount in the escrow account will be released to the equityholders. The Company believes this escrow, plus other available funds, is sufficient to cover any potential costs associated with those specified matters subject to indemnification under the Merger Agreement. The fair value of the escrow liability is remeasured at each reporting date, with changes recognized in earnings. The timing and amount of any future settlement remains subject to the achievement of contractual milestones and may vary from the amounts disclosed. The value as of September 30, 2026, was $541 million. (2) Includes $326 million of current and non-current estimated acquisition earn-out payables. Earn-out payables for acquisitions not denominated in U.S. dollars are measured at the current foreign exchange rate. Certain acquisition agreements include provisions with no maximum potential earn-out amount. The amount recorded for these acquisitions as of September 30, 2026 is $214 million. 45 (3) Does not include approximately $60 million of current liability for a dividend of $0.18 per share approved by the Board of Directors on October 21, 2026 to be paid on November 11, 2026. 46 ITEM 3. Quantitative and Qualita tive Disclosures About Market Risk Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates, foreign exchange rates and equity prices. We are exposed to market risk through our investments, revolving credit line, term loan agreements and international operations. Our invested assets are held primarily as cash and cash equivalents, restricted cash, available-for-sale marketable debt securities, non-marketable debt securities, certificates of deposit, U.S. Treasury securities, and professionally managed short duration fixed income funds. These investments are subject to interest rate risk. The fair value of our invested assets at September 30, 2026 and December 31, 2025 approximated their respective carrying values due to their short-term duration and therefore, such market risk is not considered to be material. We do not actively invest or trade in equity securities. In addition, we generally dispose of any significant equity securities received in conjunction with an acquisition shortly after the acquisition date. As of September 30, 2026, we had $772 million outstanding under the Third Amended and Restated Credit Agreement tied to the Secured Overnight Financing Rate (“SOFR”). These agreements bear interest on a floating basis and are therefore subject to changes in the associated interest expense. The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our Condensed Consolidated Financial Statements. The majority of our international operations do not have material transactions in currencies other than their functional currency which would expose the Company to transactional currency rate risk. We are subject to translation exchange rate risk having businesses operating outside of the U.S. in the following functional currencies, British pounds, Canadian dollar, euros and, to a lesser extent, other currencies. Based upon our foreign currency rate exposure as of September 30, 2026, an immediate 10% hypothetical change of foreign currency exchange rates would not have a material effect on our Condensed Consolidated Financial Statements.