Good morning and welcome to the Brown & Brown Incorporated earnings conference call. Today's call is being recorded. Please note that certain information discussed during this call including answers given in response to your questions may relate to future results and events or otherwise be forward-looking in nature and reflect our current views with respect to future events, including financial performance and that such statements are intended to fall within the Safe Harbor provisions of the securities laws. Actual results or events in the future are subject to a number of risks and uncertainties and may differ materially from those currently anticipated or desired or referenced in any forward-looking statements made as a result of a number of factors including those risks and uncertainties that has been or will be identified from time-to-time in the company's reports filed with the Securities and Exchange Commission. Additional discussion of these and other factors affecting the company's business and prospects are contained in the company's filings with the Securities and Exchange Commission. Listeners are cautioned that any such forward-looking statements are not guarantees of future performance and that actual results and events may differ from those indicated in this call, such differences may be material. With that said, I will now turn the call over to Mr. Hyatt Brown, Chairman and Chief Executive Officer.

Good morning everyone, we have Powell Brown and Jim Henderson and Cory Walker here and we’re going to lead off with Cory for the financials.

Thanks Hyatt, our net income for the fourth quarter was $33.4 million which was slightly more then the $33 million we earned in the fourth quarter of 2007. Total revenues for the quarter were up 6.8% to $232.1 million versus the $217.2 million in the fourth quarter of 2007. Commissions and fees for the quarter also increased by 7.8% or $16.7 million of net new commissions and fees. Total core commissions and fees which excludes profit sharing contingent commissions for the fourth quarter of 2008 increased $15.8 million over last year. However within that net growth number is $25.7 million of revenue from acquisitions. The good news is that we had another excellent year in terms of acquisitions. The bad news is the continued soft market and now the weaker economy that created another quarter of negative internal growth in the core commissions and fees. The net loss of $9.9 million of core commissions and fees on a same store sales basis reflects a negative 4.6% overall internal growth rate but that’s an improvement from last quarter of negative 5.1%. The specific internal growth rates by business segment is listed in the press release and Hyatt and Powel and Jim will talk about that in a little bit. Moving to our investment income we earned $1.7 million less in 2008 fourth quarter compared to the 2007 quarter and that’s exclusively due to the financial market meltdown that caused us to move most of our cash investments into the safest available vehicles that carried little or no interest returns. Other income was $1.3 million compared to $1.4 million last year and again most of these gains relate to sales of various books of businesses that we do in the normal course of operations. Our pretax margins for the fourth quarter of…

Thanks, good report Cory. Looking into the retail business in talking to our various profit centers and also in attending sales meetings in profit centers, I hear the following question which is a little different and the question is, is that the best you can do? That is a question being asked to underwriters who are trying to either flat rates or increase rates slightly. So let’s talk about Florida and then we’ll move around the country and the retail and then Powell will talk about programs and wholesale etc. Looking at the Daytona, Jacksonville, let’s say upper east coast property tends to be flattish, casualty is flattish, to down just a little. Exposure units, down 10% to 30% in some cases. New business and this is true around the country if you’re going to get a new account away from someone, you’re going to have to be 15% to 25% below expiring and there are situations where that occurs because an account moves from let’s say not admitted to admitted, or there is some change in the exposure unit etc. so it may not be quite as [virile] the down slope as you might think. Autos are flat. Same thing going up into Jacksonville, across to the northern tier of Florida which is generally a more, a less competitive area from the standpoint of prices either going up or going down. They’ve always been a little more stable in that area. Exposures are down. Market for general liability is eroding, maybe 10% to 12%. Large condos are flat. The umbrella market is down about 10%. Moving into Orlando and the spine of Florida, there is business still moving from not admitted to admitted. Renewal rates on casualty is fairly flattish and maybe down to 5%. Exposure units however are…

Thank you Hyatt, on transactional brokerage cat property in Florida, rates are down slightly to flat. Underwriters are beginning to push back on additional underwriting data and some insured’s are buying less limits. In the Gulf Coast region rates are flat, underwriters are pushing for underwriting data. Insured’s seem to be trying to keep premiums flat, they’re either buying less limits are having higher deductibles. Carolinas and Virginia, that’s lagging slightly, rates are down 5% to 10% and there continues to be standard market intrusion there. Quake market out in the west is trending up. Casualty across the country is very soft, down 10% to 25% and exposures are down, professional liability is soft, down 5% to 20% except if you are a financial institution or a mortgage related company where they are flat to up. In binding authority in Florida property is flat with slight firming, casualty is flat, rates are flat, exposures are down typically there. In the personal lines arena the lowered valued homes, rates tend to be flat with Citizens and the take out companies continuing to be very competitive. And the higher valued homes are firming somewhat. The binding authority in Florida for professional liability rates are up slightly but exposures are down. In Texas the rates are soft except the property rates in the Houston area, the mid Atlantic and the western United States rates are soft. In professional national programs it was up 4.8% for Q4. The lawyers rates are down 5% to 10%, dental rates are flat and other national, other professional programs rates are typically down 10% plus with exposures down as well. In special programs were up 7.8%. Public entity rates across the country in Q4 are typically down 5% to 15%. At FIU [wind[ rates were stable in Q4,…

Thanks before I ask Jim to talk about the mergers and acquisitions, I’d like to also include an insertion relative to employee benefits. As you all know about 15% of our revenues country wide are employee benefits. The norm is that a risk bearer will come in with a 9% to 15% up and then there’s of course a lot of negotiation. Employee count is down in many areas and so when you get into the employee benefit final revenue base, its really down 2% to up let’s say 4%or 5%. So its kind of in that range.

Thank you Hyatt and good morning everyone. The M&A activity continues to be a success story for the growth of our revenues and earnings, 2008 was the most active year in the company’s history in terms of the numbers of transactions with the closing of 45 agencies. In a recent publication, Brown & Brown was listed as representing 13.4% of all announced transactions on agency acquisitions in 2008. In terms of purchase revenues, 2008 was the third largest in company history with $115.4 million in forward annualized revenues. Forty-three of the 45 transactions were in the property and casualty and employee benefits retail agencies. Perhaps the most important quality of these acquisitions is that the earnings performance are in line with our expectations and margins comparable to the existing operations. In 2008 we continued to strength our M&A transaction capability. We added to our staff increasing the number of individuals in our legal, financial, and quality control teams to handle an increased number of transactions given the opportunity. With respect to deal pricing we have experienced a moderate improvement in pricing of agencies with the multiples of EBITDA in 2008 in the range of 5.5 to 6.5. This compares to a range of some 6 to 7.5 that was in the market in 2006 and 2007. With respect to other acquires, the number of announced deals by banks and thrifts decreased in 2008 to some 41 transactions compared to 50 announced in 2007 and 55 transactions by this group in 2006. And indeed some banks have made decisions to exit the agency business. In 2008 we did end up owning two different operations previously owned by banks. The soft market conditions and a challenging economy have driven down the agency’s top line and target revenues and earnings. The result is is that this is a very good point in the market cycle to purchase agency. Caution has and will be exercised to pay though for actual delivered revenues. My last comment on the M&A is that in the current environment cash is king. Our high margins and resulting cash flow is the perfect companion to our long standing M&A program. In 2008 we made cash payments of $263 million on acquisitions, $238 million of those payments was funded from operations with only $25 million from new borrowed funds. With substantial cash flows and substantial lines of credit we have adequate dry [power] to continue to finance our acquisition program. With those comments I’ll turn it back over to Hyatt for wrap up and then open for questions.

Thanks Jim, good report. Looking into the future, anybody’s guess is what’s going to happen on the exposure units. The economy is a question mark and we don’t know how to forecast the economy. As regards market discipline, that seems to be firming and there is another little piece of that that is going to have an impact and that is that the regional companies and particularly those that are kind of in the middle part of the United States have had some cat losses that they did not expect and that were greater by some sort of multiple then any other year in recent history. So that’s caused some oops kind of things and therefore there is a feeling maybe this is a good time to be a little more conservative. So we’ll see how all that works out. Acquisition opportunities, there seems to be a lot of those and the economy is driving some of them. But others are just looking to join a middle market firm that has an excellent record and that they identify with our core values. So we are feeling pretty good. This coming year is going to be a difficult year but so what. Having said that, we’ll open it up for questions.

(Operator Instructions) Your first question comes from the line of Mark Hughes - SunTrust Robinson Humphrey

What do you think the effect in Florida will be from a State Farm pulling out and then what are the prospects for Citizen raising rates in 2010.

Well number one they, the pull out of State Farm has caused a lot of turmoil. We are getting as everybody is lots and lots of phone calls from irate State Farm policy holders and we do have some capacity although a lot of that business is going to go by definition into some of the take out companies at substantially higher rates then what are being currently charged by State Farm. Now currently the situation is that we think that the Citizens is going to raise rates 10% in 2010, 10% in 2011 and 10% in 2012. That’s not done yet so we’ll see. Now there is a substantial angst now occurring in Florida among the bankers of Florida for the simple reason that it does not appear and I guess Jim can talk to this a little later in our teleconference, there is a substantial fear that by having more and more homes and other properties go into Citizens and the fact that the state currently probably can’t raise the money to pay for a bad hurricane then what happens to the banks who are kind of holding the bag out there waiting for someone to pay them. So we have a little bit of an angst going on. The pull out of State Farm I think is going to occur over a two year period. I haven’t really found out and I’m sure exactly who knows about that yet. But it is not like tomorrow they’re all gone, its going to be phased out.

And then if you could sort aggregate your comments from across the country what do you think the impact from rates versus exposure units was in the quarter when you look at your organic growth.

Well if I had to guess and we don’t have a statistical ability to get into this, I would say that across the country exposure units were a greater impact then rates.

Your next question comes from the line of Keith Alexander – JPMorgan Keith Alexander – JPMorgan: My first question is how would the proposed changes to the FHTF impact your company over the next year.

Well if the hurricane cat fund is increased at some $29 billion with a [tickle] layer over $30 billion the [scurvy] is that now that likely the state of that unit could not borrow funds to match its obligations in the short-term to the companies its reinsuring. So with that, there’s discussions about possibly reducing the capacity of the cat fund back to a level for which in fact can be bonded and can be supported so the carriers know exactly where they’re at. That component likely represents an increase in rates in the state of Florida to achieve that. So the cycle there is that the Governor specifically has indicated he’s not happy about that outcome with it so the, whether it is unlikely that the cat fund with the total level of capacity offered cannot offer immediate liquidity to the reinsurers on the current structure. So different avenues that’s looked at is to either additional assessment capability or prefunding to provide that capability. So in the meantime it would appear that the pricing would maybe have to go up some in order to deal with removing capacity currently offered by the cat fund in the longer term. Keith Alexander – JPMorgan: And in the last quarter you mentioned that looking at 2009 you were starting to get a little bit better of a rosy picture, is there any change to you view as things sit now.

Well I think going back all the way to January of 2008 we kind of thought by year end the pricing would firm and therefore the market would become a little more favorable. Pricing has firmed a little but the exposure units are way down relative to whatever we thought was going to occur. Looking into 2009 we think its going to be a tough year but strange things happen and what’s going to happen in the economy, well will the stimulus package have effect the last quarter of the year, gosh anybody’s guess is as good as ours. So whatever it is we’re prepared to handle it. Keith Alexander – JPMorgan: My next question is about the program business which seems to be a bright spot, can you tell me briefly what trends are driving this business.

When you really get right down to it, it is selling more business. When you get right down to it. And as I said earlier the leader in the clubhouse has been Proctor Financial which is a somewhat counter cyclical as we’ve talked about in past earnings calls relative to a lot of the forced placed business. But really in all the programs both professional and special programs its selling more business and the winner is Proctor Financial.

I think also in some of our program business the units, the actual businesses are smaller. For instance in the dental area the average premium for a dental package is $2800 to $3000, that’s kind of hard for someone to get at in terms of competition and the pricing is then sort of flat. It was down 10% last year but its flat this year. So that’s another component but every one of the programs as we said has got to grow and they are in most cases.

Your next question comes from the line of Eli Leminger – Stifel Nicolaus Eli Leminger – Stifel Nicolaus : The $20 million you’ve allocated for recruitment but how much of that have you already recognized in your income statement.

Well we recognize it as we expense it and we’re talking about prospectively. We’ve always had a pretty aggressive recruitment program. One of the things that we’re finding today is, is that there are very good people from other businesses that are available to us who already have business experience, they’re just not in the insurance business and so we find that as a very fertile hunting ground. Eli Leminger – Stifel Nicolaus : Do you expect to expense more of that in the first half of 2009.

Well we’re going to use it up and even exceed that based on our ability to acquire those people and of course this is a country wide sort of recruitment. It varies by location based on the size of the location and the ability for that location to mentor new people. We just don’t bring in people and drop them there, there is a training program. We have ramped up two additional Brown & Brown universities, we have one in Orlando, [Tom Fenwall] is responsible for. We now have one in Syracuse, New York that [Bob Messina] is responsible for and we’ve this year recently cranked out one in Orange, California where [Mark Sahorian] is responsible. So we’re trying to make doggone sure that when we bring in these quality people that we given them an injection very quickly of (a) the culture, (b) what you need to learn and how you need to learn in order to be a competent insurance person, and then (c) getting them used to soliciting business which is in some cases the most difficult part. Eli Leminger – Stifel Nicolaus : I was wondering if you could speak a bit about your outlook for contingents in 2009 and any contingent shift from 1Q09 to 4Q08.

Well number one contingents are contingents and we don’t know what they’re going to be. We think they’re probably going to be okay. Cory do we know of any shifting, I don’t think we do.

No, if anything maybe the fourth quarter will be a little bit less then what we had this fourth quarter and then of course the question is, as I think the first quarter of last year we had a pretty good amount come in. That could potentially be a bit less. Eli Leminger – Stifel Nicolaus : Can you speak a bit about the impact of declining payrolls and policy cancellations on your reserve for commission refunds and what are you anticipating for 2009.

Our reserve is relatively conservative approach. We take an actual four quarter running cancellation amount and so I don’t really see that significantly changing. If it does change it changed slightly over a quarter. I think it will be interesting for you to compare our level of reserve to some of our competitors and I think you’ll see that its pretty conservative. So I don’t think you’ll see a big change for us.

Your next question comes from the line of Nikolai Fisken - Stephens Inc.

Listening to all the exposure unit talk on the call, is it, would you think that internal growth can be better in 2009 versus 2008.

That’s anybody’s call. We don’t really know, maybe, it might be a little better but that’s a maybe and the thing that is a question mark in our minds is how quickly is the stimulus plan going to start to stimulate.

And on the earnings front you are basically down a little bit 2008 versus 2007, on the apples to apples that Cory gave, how about an outlook for 2009. It appears as though its going to be tough to have earnings flat or up.

Of course we don’t really know but I think, haven’t you estimated $1.12.

Correct.

Okay well, everybody’s got to pay their money and take their choice and you all are the ones that are really very capable of figuring it out and we’re just going to do what we’re going to do.

Can you give us some commentary around Florida Workers’ Comp.

Yes, the reason for that strange thing happening is that the Supreme Court overturned a portion of the law having to do with the involvement of the Plaintiffs borrower and now the Plaintiffs borrower is back in with all kinds of opportunities and that’s going to force losses up and so we think that the rates are going to go up 6% to 7% as of April 1 based on that change in the law. But you know it hasn’t happened yet, we’re not there yet.

On pricing, we keep on hearing from the underwriters that pricing is improving, but we really haven’t really seen it through your commentary, what would be your response to all these carriers saying that pricing is getting better.

Well you know what they don’t tell you and you already know this is that they only talk about the pricing on what they renewed. They don’t talk about the pricing on what they lost and secondly on a new account where they discounted it 20% or 25%, less then a renewal that’s sitting beside it, they don’t give you that comparison either because it’s a brand new piece of business. So the answer is they are trying to be more disciplined, there is no question about that. And in some places, yes it is having an impact. It is probably, we never had as big as down swoop in some of the less metropolitan areas in terms of pricing and so we’re not having as big a pressure up so there is greater stability in some areas. And of course what I think you know is sitting out there, I’ve always believed that when you had a downturn in the economy that you get an increase in Workers’ Comp losses. And so far that hasn’t shown up or at least it hasn’t been reflected in pricing. I think that’s going to be something that’s going to hit the risk bearers in the back of the head and it happens almost over night and they say, my golly all of a sudden we have these awful losses and then rates kind of go a rye. So that’s the area that I think is going to be the most sensitive in the next 12 months to maybe 15 months.

Your next question comes from the line of Unspecified Analyst – RBC Capital Markets Unspecified Analyst – RBC Capital Markets : Just a question about the commentary you made around the increasing the budget to hire more internally just wondering if you could talk about any areas of focus there geography wise and is that really going to effect your M&A plans, in order words are you going to allocate more toward internal and pull back on acquisitions or would you be able to do both.

The answer is yes we can do both and no it doesn’t impact our M&A plans. We don’t really have a regional specific plan on the allocation of those funds. We’re in the talent business and we want to get it where ever we can get it into our system and bring high quality people into the team. And so we are not, I would want to clarify, we’re not out looking for teams of people from other insurance brokers. That’s not our style and you’re aware of that but we’re looking, these are people many of them have significant work experience in other industries who understand sales and understand about building and breaking relationships and we believe that they have talent and we want to bring them on to our team and get them on the street selling insurance. So in summary, no it doesn’t impact our M&A ability, two it doesn’t, its not a regional thing and three its all about talent and we’re not out searching for people from other firms. Unspecified Analyst – RBC Capital Markets : So basically the outlook for M&A is unchanged from the last quarter, still pretty optimistic about what you’re going to do this year.

Correct. Unspecified Analyst – RBC Capital Markets : The reduction you talked about in full time employees was that even weighted throughout the year or did you see more in the fourth quarter as the economy started to slow down or was that just based on the acquisitions you made.

Its not based on acquisitions, those were offices that were here both years. That’s a gradual process that occurs every month as each one of our leaders at our profit centers look at their operations and try to become more efficient and a lot of, I would suspect the majority of those are just through attrition where people have left for a variety of reasons and the profit center leader and their department leaders have made the choice to say, hey during this tough time let’s just see if we can do without that one person that left and we’ll pull together and you take this and you take that and they just become more efficient. So that’s really where it comes from.

As the top line continues to receive pressure on growth in fact we go back and really take a look at the budget on a quarterly basis or sometimes monthly and then readdress people in operations and business segments based upon the revenue base there so, this environment really mandates that we go back and do those even more frequently during the year in terms of assessing redundant staff. Unspecified Analyst – RBC Capital Markets : Are you seeing a lot of customers just drop coverage all together, what kind of impact have you seen in the fourth quarter, have you seen much of that at all.

No, we’ve had some bankruptcies just like everybody has but its not that broad based. When you say drop coverage, there are some people who have had umbrellas that have gone from $10 to $5 million, that sort of thing but that’s not substantial. The other thing is is that the exposure units if a person has a payroll of let’s say $2 million and that payroll is estimated for this coming year at a $1.5 million then basically the premium, that’s Workers’ Comp I’m talking about is probably going to be about 25% less. However one of the things that we are and I’m sure you know this, we are very, very sensitive to accounts receivable and we have not had an increase particularly in our accounts receivable. Now we’re watching them closely but it just hasn’t happened. And of course for any company where they give extended terms, this kind of a marketplace is pretty difficult. We don’t do that. We finance insurance premiums when people can’t pay them and those are financed without recourse to Brown & Brown.

Your next question comes from the line of Michael Grasher - Piper Jaffray

The M&A pricing, you spoke to a bit, I think you said 5.5 to 6.5 times what’s the rest of the market looking like or maybe you can talk a bit more about the competitive nature of the deals.

Well it seems to be less players out there. This offering numbers that really are just outliers. When banks made big push to get into the business they were really paying extraordinary numbers for our foundation agencies to establish a home base and then likewise the venture capital money, paid extraordinary multiples to establish their base. Those two components are pretty much how the system [inaudible] so you’re back to more traditional buyers at agencies, the public brokers and then regional’s and local fold in deals and that multiple has backed off without those outliers being in the market so we have, obviously very cautious on the pricing. And we have been able to, we’ve been traditionally a 6 times player and 2006, 2007 we had to go a little above that 6 to 6.5, we stopped there in our pricing to transactions. We are now able to get back to more of our traditional pricing.

Any thoughts around or I guess information on the impact of AIG maybe is having in the marketplace right now.

We hear as you probably do about these outliers where they are being very, very competitive. We hear about that periodically but we’re not seeing them doing something that is unusual or different for AIG. They are a strong competitor. They are in certain areas of their business evaluating the limits that they are able to put up where in the past they may have put up a $50 million umbrella limit, they may be evaluating that and saying they can only put up $25. And on property historically they put up 30 or 25, maybe they’re putting up 15. Those are in certain instances but they continue to be very competitive. Obviously there have been some people that have decided to leave and go to other carriers but they have a lot of good people that are still on that team and we continue to do business with them. So not a lot of change since we talked in Q3 or after Q3 on AIG.

If I understood you correctly it sounds like the transfer of talent equates to the transfer of risk.

The transfer of talent presents more options ultimately for our clients which is we want to make sure and give our clients options. Some of those people when they go to these new places are not yet so called up and running with their suite of products so some of that will come online later in the year. But AIG is going to have their own position on risk and how much they want to retain and then some of that is going to be driven by them and some of that is going to be driven by the market and then there are these people that have gone to other places that will also drive options in the market which many of those will be competing against AIG we believe.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Thank you very much everyone and we’ll be talking to you in April, bye.