Good morning, and welcome to the Brown & Brown Fourth Quarter 2011 Earnings Release 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 performances. 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 have 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. With that said, I would now turn the call over to Mr. Powell Brown, our President and Chief Executive officer. Please go ahead, Sir.

Well, you’re close. It’s Hyatt Brown and good morning, everyone. We have here in the room Cory Walker, our Chief Financial Officer. We have Scott Penny, our Regional President & Chief Acquisitions Officer; and Chris Walker, who is President of Arrowhead and Regional Executive Vice President of Brown & Brown. We are actually calling you this morning from the New York Stock Exchange, where we will have the opportunity to ring the bell this morning at 9.30. And so we are going to have to have a hard cut off right around 9:00 so we can get up to the floor and to the rostrum. At the outset I would like to say that we are sorry that Powell cannot be with us today. He is on a temporary leave of absence for health reasons as you know and we look forward to him returning and being back in the saddle in a reasonable period of time. Having said that, I'll now turn over the call to Cory Walker.

Thanks, Hyatt. Our net income for the fourth quarter of 2011 was $36.5 million and that was a strong improvement over last year's fourth quarter net income of $32.1 million. Our earnings per share for the fourth quarter was $0.25 and that was up 13.6% from the $0.22 we earned in the fourth quarter of last year. Now, excluding that ridiculous line item, change in estimated acquisition earn out payable, which was a credit to income for both the quarter and the year-to-date income statement, the adjusted earnings per share for the fourth quarter of 2011 was $0.24 and that’s still up 9.1% from an adjusted $0.22 in last year's fourth quarter. From a revenue standpoint, our commissions and fees for the quarter increased 5.4% or $12.3 million to $241.4 million and that's up from the $229.1 million from last year. As always, we have these in our press release the internal growth table that shows the internal growth on core commissions and fees, which is excluding contingents as well as any small books of business sales, that kind of thing. And so on the fourth quarter of 2011, it shows that we received $4.8 million of profit-sharing contingent commission. That's $1.4 million less than the $6.4 million that we received last year in the fourth quarter. The difference was mainly due to the profit-sharing contingent commissions that were paid to FIU. FIU actually received more than what we had originally projected, but it was still down from last year, because if you remember in 2010, they'd actually received an additional profit sharing that was really kind of delayed from what normally would have been paid in 2009. Additionally, we did receive about $400,000 more contingency income in our Wholesale Brokerage division. Now look at the internal growth schedule. We…

Okay. Thanks, Cory. Very good report. We'll start off, I'm going to review Retail then Wholesale programs and then services. Looking first at Florida in Retail, the northern tier of Florida, which basically is Jacksonville, Pensacola, property rates new is flat to negative 5%. Renewal is flat to up 5% if it sticks. And there's a lot of pushback depending upon construction, depending on location et cetera, et cetera. Citizens wind rates are the same, no change. Multi-peril, now this is Citizens multi-peril. It has a small effect on us, a little and it has to do with writing of insurance, including the other EC, fire and EC perils in addition to wind on inferior construction, and those rates around the state are going up 15% to 20%. Workers' compensation, there's an 8% rate increase and the exposures are flat and less is construction. Construction is still going south, maybe 2% to 5%. Largest contractors flat to up just a little. GL and Auto is – the rates zero to plus 5% to minus 5%. It’s kind of wormy and the Umbrellas, the first $2 million looks like maybe a 5% increase. Now, one of the things that’s starting to happen and you'll probably hear me comment about this through my report, is that underwriting, believe it or not, is now starting to be in vogue again. Moving down to Central Florida, the I-4 corridor which would be Daytona Beach, Orlando, Tampa, St. Petersburg, property new minus 5% to minus 10%. Now don’t forget that the RMS 11 model has taken – its greatest impact is in the central part of Florida, away from the coast and companies are really adhering to that. Having said that, there are some new entrants in the property area and particularly in Central Florida.…

Thank you. (Operator instructions). We’ll take our first question from Ray Iardella with Macquarie. Ray Iardella – Macquarie Research Equities: Hey, how are you guys. So first question I guess on Arrowhead. Do you have the organic growth number for the fourth quarter?

Well, I think what we might do is, we have both Scott and we have Chris here. So who would like to answer that? Chris?

Sure. Good morning, Ray. Our growth rate overall if we look at 2010 to 2011 was about 7.4%. Ray Iardella – Macquarie Research Equities: Okay, that’s helpful. And then I guess some – maybe talking about the book, what percentage of the book of business is renewed on 01/01?

Of the Arrowhead book? Ray Iardella – Macquarie Research Equities: Yes, of the Arrowhead book, sorry.

Really, it’s dangerous to speak in generalities obviously about the book of business, because we write so much different lines of business. We have work comp. We have our commercial property book, et cetera. So it’s pretty well blended throughout the year. Certainly the work comp book is the book that tends to fall on big anniversary days. So January is a big date, as you expect, July is a date that's big for work comp, et cetera. So it’s a dangerous way to say, but it’s fairly well blended. It varies by which specific line of business we are talking about. Ray Iardella – Macquarie Research Equities: Okay, that’s helpful. I guess I’m trying to get a sense, since the transaction closed on January 9, whether or not any 01/01 renewals would be included in first quarter results?

Well, they will be. On the January book, we did have the pro rate, the revenue in January on 31 days and the rest of it will be in the first quarter. Ray Iardella – Macquarie Research Equities: Okay, that’s helpful. And then I guess next is, could you guys comment on contingence going forward in the year? I know it's difficult to project out, but just give us a sense of where contingents might be going year-over-year?

Well, that's a good question and it's kind of a guess. My sense and we've talked a lot about this is contingents probably will be down a little bit this year for the simple reason that loss ratios are going up, and we're not going to know that until much later in the year because our contingents come in February, March, April, and then they come in in July, and then they come in some in the last quarter. So my sense here is that they're going to be down because of loss ratios and also in the case of property, there has been a lot more properties that flowed into the non-standard, non-admitted market where we don't get contingents at the retail level. Now, how much is that reduction? I don't know. Ray Iardella – Macquarie Research Equities: Okay. Thanks.

And next we have Adam Klauber with William Blair.

Hey Adam, how are you? Adam Klauber - William Blair & Company: Good morning, Hyatt. Great. Thanks. Could you give us some detail on why specialty had such a good quarter compared to last quarter? Sorry, special programs.

You want to talk about that, Cory?

Yes, I am. On the professional program, obviously…

Special programs he said.

Did you say special or you say professional? Adam Klauber - William Blair & Company: I said special programs.

Okay. On special programs. Well, we had – of course in special programs we’ve got the professional lines and the special programs line, and we had obviously Proctor. As I have previously said in the third quarter that the first quarter was going to be the first quarter and eight quarters that they're really apples and apples comparison. And so they were actually up almost 1.8 million by themselves and that is because they have been – as I previously said in another call, they've been writing a lot of new accounts. And so they are doing very well. In addition to that, we did have our public entity group had done reasonably well and then on top of that we have a group called Acumen Re that does some reinsurance and they had actually done well. So those three components. Adam Klauber - William Blair & Company: Okay, that’s helpful. With Western still lagging somewhat, is that more rate or exposure? What's holding that back?

I think several things. It's both, but when you get into Western you've got Las Vegas and you’ve got Phoenix and then you have Southern California area. Those areas and we did have a substantial book of contractors out there, Adam, that's still not real strong. So it will come back, but it's going to be a little longer and also it's very competitive. When I talked about Phoenix, Arizona and you’ve got $0.06 property rate and the fact that workers' comp is now going down a little, it's a tough market, but it will slowly get better. Adam Klauber - William Blair & Company: Okay. And then also, in your initial remarks, Cory, I think you said earnings in the first quarter would be up maybe just a little. We would think with Arrowhead that you’d see some pretty good progress right away. Is there any reason that's lagging in the first quarter?

Well, I think it's mainly not Arrowhead. I mean, they're coming in, but as Hyatt had mentioned, it's going to be very choppy and I think we do have still some challenges based on what we're seeing just on our budget in some of the retail side of the business. So we'll just see how it shakes out. Adam Klauber - William Blair & Company: Okay. Thanks a lot for the help.

And next we have Sarah Dewitt with Barclays Capital.

Hey Sarah.

Hi. Good morning. My first question is, why do you expect first quarter '12 EPS to be similar to 1Q '11 given that organic growth has been improving and margins are expanding?

Well again, Sarah, basically what Hyatt was saying is that we do think first quarter is choppy and looking at what some of the fallout has still been last year. Our basic budget is showing us, from an earnings per share more flattish. I think that once you get past the first quarter, we feel good about the whole year. But I just think that first quarter is going to be more like the first quarter last year for generally the retail division still.

Okay. And then second, given your comments about the push to increase rates is intensifying and the economy is bottoming out. To what extent do you think you could return to positive organic growth in 2012?

Well, good question. We sure as heck are going to bust our backside to do that. But it’s not done until it’s done. So when it's done, we'll announce it.

Okay. Great. Thanks for the answers.

And next we have Meyer Shields with Stifel Nicolaus.

Thanks. Good morning all.

Hi. How are you?

I’m doing well. Yourself?

Good.

Can you quantify the contingent commissions associated with Arrowhead?

The total amount?

Yes, please.

Last year $105 million. No, oh contingent. I thought you said commission.

Oh no, I’m sorry.

It was a little bit over $4 million.

On that too – this is Chris Walker. We’ve gone to more of a predictive revenue model. So we’ve taken some of the contingents out of it and taken standard commission on front steps. So the number is about $4 million.

Okay, that’s very helpful. And Cory, you mentioned some stock grants that were given for Arrowhead and for some office leaders and I was wondering if you could quantify the impact on 2012 diluted shares?

Right. We think that on that portion of it, it would be a little over $3 million hitting our books.

Okay. Is it going to change the diluted share count or is it just the expense?

Say that again?

Will that change the diluted share count?

No, not initially. Not until they actually are vested in it.

Okay. Got it. Thank you very much.

All right. And next from Deutsche Bank we have Yaron Kinar.

Good morning. Can we talk a little bit about the national retail? I understand that clearly there still are some headwinds, but then again, we are seeing exposures general up in the U.S and we are seeing rates slightly improving. So does that simply mean, going back to your comment earlier, that the book of business in national is much more small business oriented than the rest of your book?

Well, it’s all kinds of things, depending on where you are and what's the size of the office and etcetera. But here is the situation. Our business is much more vanilla oriented than maybe some other businesses. We don’t have a lot of marine business as an example. That’s a very specialized area. And so when you get in the vanilla area and you get in businesses that are less than $50,000 in commissions, that's a happy hunting ground for regional companies. And there are companies that are not publicly owned, they're privately owned, they're mutual and self insured funds all over the United States. And so we represent many of those and anybody that's competitive, we always try and represent them. So I think there is more pressure on our book, plus the fact that we do have a pretty good slug of our business in the southeastern part of the United States and that's also recovering less rapidly than it has in the past. All of that will ultimately fix itself, but we certainly don't want to have people getting a very robust, rosy, sanguine attitude when we know that over the next three and six months, there is going to be a lot of bloodshed because you see with a risk bearer and you listen to the national risk bearers, if they renew 82% to 85% of their business, they're happy. Well, if we renew less than about 93% or 94% of our business, we're not very happy. And therefore, we’ve got to do whatever we’ve got to do to protect our customers, to protect our book-of-business. And I think we're in just a more competitive area.

Okay. And then maybe changing gears a little bit. Cory, I think you mentioned that you don't take the change in estimated acquisition earn-out payables as a number to take too seriously. And certainly, it's true for any one given quarter, but then if you look at the last two years, it does seem like there is a negative trend there. How much do you read into that in terms of the success of M&A and how do you think of that going forward?

This is actually a very important point and thanks for teeing up that question, because I think it's important to understand. What this number is coming from is that every time we make an acquisition, there's an earn-out component to it. What we have to do is stand on the date of acquisition and look out three years and come up with a prediction of how much do we think we're going pay them out on earn-out. Is it zero? Could it be $5 million? And we have to predict that and we use kind of a bell shaped curve and have all these projections at it. The acquisition could do well. Anything over zero, they're doing well. What this line does, it simply measures how good of a predictor I am. That's all it is measuring because we could say okay, we don't think we're going to have any earn-out and we’ll book it at zero and of course any earn-out that they have would then go through the P&L. So it is not a reflection at all at how well they're doing, because as long as they're doing better than zero, they're doing well. And so that's why I’m saying plus and minus is not even an indication of how well they're doing. It’s only how well did you predict? And so that's why I think I keep using the word ridiculous and it is. It is a capital transaction and yet they are forcing us to put it in as a P&L as if it’s some kind of earnings culmination process and it's not. And that's why I warn you that that's what why we have it in a separate line item, so you can't just ignore it. The fact is most of our acquisition have done well and they've all pretty much received earn-out. It’s just that sometime we think they are going to do better than they actually have, but it's clearly not an indication of whether they're doing well or not. Do you understand what I am saying?

Yes, I do. Thank you very much. Thanks for taking my questions.

Hey David, we can only take one more question because it’s 9:03 according to the New York Stock Exchange.

Okay. We’ll take our final question from Matthew Heimermann with JPMorgan.

Hey Matthew. Matthew Heimermann – JPMorgan: Hi. Nice to hear your voice. Actually just one question in the interest of time for Cory. You mentioned in the prepared remarks some of the benefits you’ve been seeing in terms of decreases in the underlying expense base because of staff attrition. Other efforts on rents, things like that I'd just be curious, if it feels like we are transitioning to an environment where economic prospects are a little better, potentially you’re getting a little bit of – you could get a tailwind at some point from rates. Some of those actions, bell tightening actions you've taken over the last couple of years. Is it possible we may see you actually sell some of those spaces that you let, that went unfilled for a while? Things like that that might change the underlying push in expenses. I just want to get a sense of how to think about leverage vis-à-vis revenue in other words.

Matt, that’s a good question and I think the point is that obviously the last three or four years have been incredibly difficult because of the evaporation of revenue and it forced every one of our branches to really analyze every aspect of their expenses and they’ve become more efficient and sometime the person retired and they decide not to replace that person right away and they got together as a team. Well, a lot of times what happens is people just realize that they can be more efficient. So the answer is that overall we are significantly more efficient today than we’ve ever been. Will we actually start to replace when our revenue start to move up and the headwinds are behind – the wind is in our sail so to speak. They may end up hiring back a account executive or account manager down the road. But it's going to be a very gradual process. The point being is that we have a very good leverage built into our model and the vast majority, the net increase that comes about simply because of our clients exposure units increase, will fall to the bottom line, 60% to 70%. Now, and it will be a stepped approach, but it will be very gradual and I think you’ll see, even like in this situation where we still had negative growth, our margins increased and I think you’ve seen that demonstrated quarter after quarter in our model and it will continue to be fishy. We will not lose that efficiency.

I think Matthew, to piggyback on that, we are more efficient today than we were two years ago, three years ago and we found that we can do things a little differently and still effectuate the same amount of renewal coverage, etcetera. So we are kind of bullish about the future in that respect. But thanks for the question and thank you all very much and good day and good luck. Thanks, David.

That does conclude today’s conference and we thank you for participating.