Good morning and welcome to the Brown & Brown 2014 Second Quarter Earnings Call. Today's call is being recorded. Please note that certain information discussed during today's call, including information contained in the slide presentation posted in connection with this call and including answers given in response to your questions, may relate to future results and events or otherwise be forward-looking in nature. Such statements reflect our current views with respect to future events, including those related to the company's anticipated financial results for the second quarter of 2014 and are intended to fall within the Safe Harbor provisions of the security 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. Such factors include company's determination as it finalizes our financial results for the second quarter of 2014 that its financial results differ from the current preliminary unaudited numbers set forth in the press release issued yesterday, other factors that the company may not have currently identified or quantified, or those risks and uncertainties 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 as well as additional information regarding forward-looking statements is contained in the slide presentation posted in connection with this call and in the company's filings with the Securities and Exchange Commission. We disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. With that said, I would like to now turn the call over to Powell Brown, President and Chief Executive Officer. You may begin.

Thank you, Tina. Good morning, everybody, and thanks for joining us for our Q2 earnings release call. We're very pleased with our results this quarter, both topline and bottomline. So let's get straight into the highlights for the quarter. We delivered $397.8 million of revenue for the quarter and growth of 22.1%. Our organic revenue grew 3.8% after backing out prior year impact of Hurricane Sandy, claims within the Colonial Claims business. We're proud of this performance and are seeing pockets of modest growth. However, rates continue to be under pressure. And in spite of this, we continued to deliver growth in every one of our divisions. We grew our earnings per share by 16.7% versus the prior year. As we noted previously, there is a seasonal nature to Beecher Carlson large account business. As such, we adjusted for this business in our Q1 earnings release to provide a more meaningful comparison to prior year. To be consistent, we've adjusted for this impact on the Q2 results even as this business did generate significant profit this quarter. Due to the materiality, we're also adjusting for the impact of Wright Insurance Group acquisition, which we completed in May in order to arrive at a more comparative EPS growth. With these three adjustments, our adjusted EPS is $0.38 versus $0.35 for an 8.6% increase. This compares nicely to the adjusted total revenue increase of 9.1%, which you'll see when Andy goes deeper into our financials. In addition to Wright, we completed four acquisitions during the quarter with the combined annual revenue from these acquisitions being approximately $157 million. We were impressed with the early results from all of the acquisitions and we're excited about the opportunities that these acquisitions bring to Brown & Brown and our new team mates. To conclude on…

Great. Thank you, Powell. Good morning, everyone. Let me now discuss our financial highlights and talk about some of the key metrics of the quarter. Our total revenues grew 22.1%. However, when you remove the $2.1 million of revenue last year related to Hurricane Sandy within our Colonial Claims business, the Beecher Carlson large account business and Wright, we grew the topline 9.1%. We believe the removal of these three large items gives a more clear picture of our comparative financial performance. When we remove the Hurricane Sandy impact, our organic revenues increased by 3.8% year-over-year. We continue to have a disciplined approach to profitable revenue growth. And so from an EBITDAC perspective, we delivered strong flow-through with an increase of 10.3% versus the 9.1% revenue increase. As we've said previously, not every quarter will show margin expansion as there'll be stepped-in investments that we're required to make in order to help grow the organization. We're focused on growing revenues and ensuring our margins increase modestly over time. On an as reported basis, our earnings per share increased 16.7%. And excluding Hurricane Sandy, Beecher Carlson and Wright, it increased by 8.6%. Moving to Slide number 7, I'd like to highlight the key components of our revenue performance for the quarter. Our total revenue increased by $72.1 million year-over-year or 22.1%. A large portion of this growth came from our net acquisitions and dispositions. The largest components were the Beecher Carlson acquisition and Wright. We also realized a $4.8 million decrease related to contingence and guaranteed supplemental commissions. $5 million of this was related to our FIU business. As you'll remember from our Q1 call that we recognized this amount in Q1 of this year versus in the second quarter last year. I wanted to note that during the past four…

Thank you, Andy, great report. We're well positioned for a continued organic growth even though the market does remain a little inconsistent. The pipeline for acquisition candidates remains good. Each division is well positioned for organic growth and incremental margin expansion. We had a great quarter of acquisitions and are very pleased with each of these. We're pleased with the strong performance of Beecher and Wright and we reaffirm our target of 4% organic growth for the year excluding the impact of Hurricane Sandy. So, Tina, I'd like to turn it back over to you to open it up for questions.

(Operator Instructions) We will take our first question from Sarah DeWitt from Barclays.

First on the Beecher Carlson acquisition, how would you say the large account business is performing versus your expectations, because it looks like it was dilutive to earnings by $0.01 year-to-date? And I was just to reconcile that versus your comments that the overall business hit your 5% to 7% accretion estimate for the past 12 months.

Well, the answer is, Sarah, it performed really well in Q4, Q1 and Q2. And so as you remember, we talked about in Q3 of last year that as the senior management team of Beecher was focused on culminating a transaction with us, they weren't able to basically put as much time into new business. And so they were a little short in Q3. So we're very pleased with the results.

I'd probably also clarify when you talk about the margins similar to what you probably saw in the Wholesale business where we're making investments. We are investing in the large business right now. You may have seen back in May we did a press release on a number of areas where we're trying to grow the business around our mergers and acquisitions, our new ZOOM offering that we have, Cyber Liability, property risk control. So there's a number of areas we're investing that will continue to grow in the future.

How much excess cash do you have available for buybacks and M&A and how should we think about the timing of the $200 million share buyback authorization?

So we finished the quarter just a little over $300 million of cash. And for the back-end of the year, if we were to execute the program, we would be able to fund substantially every bit of that from operations in the back year if we complete it by the end of the year.

So it's reasonable to assume you could do $200 million in the second half?

From a cash flow perspective, yes, that is reasonable. That's not to say that we would do it though.

We'll take our next question from Elyse Greenspan with Wells Fargo.

I was hoping to first of all spend a little bit more time, I guess, talking about what you're seeing just in terms of the economy. I know when you look the 4% organic growth that you guys are looking for the full year, it assumes maybe consistent/a little bit above pickup. And then in particular, when we look at the Retail segment as we kind of bring Beecher online into the growth numbers, how would you expect the growth go kind of from where it's trending from here on a quarterly basis forward for the back half of the year?

To your first comment, we're seeing and we see this through a number of our divisions, but most notably through Retail and Wholesale. So in certain pockets of the country, there're areas where the economy is zooming. And let me give you an example. Miami is booming right now. There's all kinds of construction. There's no glut of condos anymore. All of that has been absorbed and there's 50 condo towers being built in Miami alone. That said, that's not indicative of every place. So you could go Naples, Florida, and it would be much lower, 90 miles across the Everglades. Or you could go to a place like San Antonio, Texas, where the economy has been somewhat stable throughout the economic downturn because of healthcare in that community and government spending. So having said that, it really depends on where you are in the country. I would tell you that in the Retail standpoint, we are continuing to see more additional premiums on audits than return premiums. So that's a positive indication. That's an anecdotal evidence, but I'm just telling you that's one of the things that we're seeing on a broad basis. The second thing is in the Wholesale, Andy referred to the pickup in construction activity. So we're seeing lots of builders' risk policies on new projects and liability on smaller or new contractors in terms of liability to work on these projects. That said, it goes up and down in different areas around the country. As it relates to the second half of the year, included in Beecher and all around, we reiterate what we have said before, which is Retail is a low to mid single-digit organic growth business. That has not changed. So some quarters it will be up a little bit, some quarters it will be down a little bit. But the margin continues to be very good and we're very pleased with all of our team mates in Retail, which is now 51% of the company in more diversified company in regards to the actual businesses that we have all in the United States and one business in London.

You guys have started mentioning some of the investments that you've been making in the organization and how that's kind of going to offset some of the margin improvement. Just any more commentary you want to provide about that, the magnitude of the growth we might see in your expenses maybe on an organic basis going forward. And then just in terms of margins, as Wright comes on, even with these investments, do you still think that overall we'll still see margin improvement on a consolidated basis?

Well, Elyse, the short answer is we're working and thinking around how we want to talk about our internal investments to you and everybody else. The idea though is you know and we know that in order to grow our business organically, we have to make internal investments along the way, which we have done historically. But we are going to do some additional internal investments that we're excited about. Andy alluded to several of those within the Beecher operation. But as we've said, we're very pleased with the margin where we are. We do believe that there're incremental improvement possibilities. Some of that will be offset in our step-up in internal investment, which we anticipate will yield more internal growth. We'll probably provide more information going forward in the future. But at this time, that's all we're going to be saying.

We'll take our next question from Ken Billingsley, Compass Point.

On Slide 15, just want to clarify this. You say that it is adjusted for corporate overhead. That corporate overhead, is that an allocation of existing cost already at the firm or were these new corporate overhead costs that are being excluded from that margin?

It's a combination. So we did have some incremental overhead. And then some of it is existing allocated down to the business. As you probably remember off of previous calls, we allocate all of our overhead down to all of our businesses. So we try to understand a fully loaded basis.

Can you give a dollar amount on what the adjustment is?

No, we wouldn't go into that level of granularity on it, Ken.

When you talk about the stock buyback plan of being opportunistic with the $200 million that's been put in place that one of the reasons is that M&A deals are getting too expensive. Could you expand on what you're seeing there and what's going on from an M&A perspective? You talk about a strong pipeline, but what does that mean from a purchase standpoint?

What I would tell you is the evolution, and I think I've said this before, of the acquisition space has been interesting in a sense that prior to 2000, the big acquirers were really publicly-traded brokers typically. From 2000 to 2007, it was banks. And now, many of those banks are reevaluating their position and/or figuring out if they want to continue to hold that asset. The final in 2007 and forward as a result of the very low interest rate, you have the significant participation of private equity, which is the three to seven year typically participation in that space. And so there is a lot of activity around acquisitions. And so we look at the share repurchase as another potential investment opportunity of our capital, as Andy talked about. There continues to be slight upward pressure on prices. Those prices typically are defined at certain breakpoints. Breakpoints would be maybe under $20 million in revenue and $20 million to $50 million or $75 million and then above that. And so as I said, we have a disciplined model, as you know. And ultimately, what we're interested in is first and foremost the cultural fit. If the fit is not there for our culture, we don't do the deal. The second thing is, is there a way to come to a mutually agreeable price in terms of the purchase that works. And so we do that on all of our acquisitions and look at that very closely. And so like I said, we continue to evaluate all kinds of interesting opportunities out there and are excited to continue to do so. But if in fact purchase price multiples go up further or if on an individual deal that we think fits culturally if someone else puts a number out there that doesn't seem to make sense financially to us, we're not going to do it.

What we're trying to make sure that we can do with all of this is when we look at our capital, it's not endless in nature, we have to allocate it around and we're trying to make sure we optimize the returns on it. And we're going to be looking at all of our items, as we have historically, and make sure that we get hopefully the best returns that we can. And with the current multiples that we're trading at and if you look at some of the larger acquisitions that are out there, when they start pushing on these multiples north of 10, the IRR starts to point towards the direction of a share purchase, because you're going to eliminate all of the integration risk around all of it. So there's a lot of rigor that we put into every one of these deals, in addition to what Powell said, to make sure financially we're doing the right thing for the organization and for our shareholders.

Another question I have is on your organic growth estimate of 4% for the year of the Slide 6 and the last slide. Is that an adjusted organic growth number?

That does not include Colonial Claims impact in Q1. That's correct.

I'm assuming it wouldn't include Wright either.

Remember, any acquisition is not included in organic growth until having been on the team for 12 months. So it includes Beecher and it includes any acquisition that rolls on that was acquired in the prior 12 months once they pass the 12-month anniversary.

And, Ken, for clarity, it's only going to include Beecher for the six-month time right now, for the second half of the year, not for the first half, okay?

So looking from an adjusted standpoint, will there have to be some accelerated growth in certain segments or are you pretty much on target? I think it was 3.8% now adjusted. But once you had Beecher in there, are you expecting some larger organic growth in one segment versus another?

Remember, as I said earlier, in Retail, we think that's a low to middle single-digit organic growth business. And we believe that that's a broad statement, applies also to the company as a whole. At the present time, Wholesale has been enjoying significant organic growth, as you've seen last year and the first part of this year. But I think that each one of those divisions will continue to make up a part of us achieving that goal going forward. And as you know, we've talked about that was a one-year only indication. So going forward, we will not be giving organic growth guidance. We've been saying that from the beginning, but I just wanted to clarify that.

Last question is, so our acquisition growth was higher than we had estimated. Was there better revenue growth coming from acquisitions that you expected, or could it possibly be a timing issue of when we put those revenues in our model versus maybe we thought it was coming in third quarter, and it came in the second quarter? Can you just talk about some expectations from maybe where revenues came from acquisitions?

Ken, probably two good points there is when we look through everybody's models, (inaudible) was a little light on our acquired revenue. Most of that was the other acquisitions that we did during the quarter. And I think just not getting that estimate correct. So that would be one. From the businesses that we acquired, all of them are performing right in line with our expectations. So we're very pleased with each of those. You shouldn't read anything into that from an unusual perspective that we were higher than everybody out there and therefore change anything for the third quarter.

We'll take our next question from Josh Shanker, Deutsche Bank.

I feel I'm getting a little bit of mixed signals from you on the buyback. When I think about Brown & Brown, you like to buy businesses ideally maybe six to eight times EBITDA when they work for you. You're also an age where you're doing large transactions of big companies where you're paying more for that. Why be cagey about a $200 million buyback of your own stock when you're trading at eight times EBITDA? Or at least how are you thinking about it?

I wouldn't say we're cagey about it. And the reason why we're just cautious as to committing to it a time is we haven't agreed upon when we're actually going to enter into the market or how we're going to go about it either in an open market purchase or an accelerated share repurchase on the timing. So that's the only reason why we're being cagey. But from a financial perspective, we're definitely not.

And additionally, when you talk about the step investments, there was a question asked about it before, but I think that there's some concern that you guys have of reaching a critical mass where you might need to reorganize the business in some ways. Is there any potential for a significant investment to improve technology or infrastructure? Or how do we have to think about concerns about spend going forward?

Josh, one of the things that I think we said the last time is with Andy being the new CFO, some people get nervous that Andy is going to want to spend $50 million or $100 million on a technology investment, which we talked about when we were seeing if there was a cultural fit of Andy joining the team, which there is a cultural fit. And so Andy is not keen on going and spending that kind of money on a technology. However, technology is something that we continue to look at in how we as an organization use it more effectively to the benefit of not only our team mates, but specifically our clients. So what I think you should read into that is the following. Internal investments prior to this call have been just not talked about that much and assumed and basic. And we, Andy and I, are now going to talk a little bit more about them, because it's an integral part of our strategy to grow the business. And that growth is both internal and external. And so we will make investments at times where we believe that there're a great good opportunities to grow organically and expand businesses that are already having success. So I don't want you to go read too much into that. And it's something that after we've thought a little bit more about it and what we're doing, we're going to talk a little bit about that too, not in extreme amount, but we're going to talk about that too, because it's an important part of how we maintain our culture and grow our business organically.

Josh, I would probably add to that on the technology front is we will make some investments there over time. If you look historically, we spent somewhere around $20 million to $25 million on capital. We have a conservative approach to many things that we do that would also be as to how we make our investments in technology when we do these. It's going to be in a very prudent fashion across the organization. There'll probably be some uptick in that number over the coming years. But don't think that it means we're going to go spend $50 million or $100 million all in one shot. That's just not our approach, nor is that my personal approach on things on what to do it that way.

We'll take our next question from Mark Hughes of the SunTrust.

Any reason to think those investments will accelerate in the third quarter?

Don't know. We've made some investments already in Beecher Carlson. And so we know about those that were made in Q2. But we continually evaluate internal investment opportunities throughout the quarter.

But at this point, you have no specific plans to accelerate those investments?

Nothing that we're aware of at the present time other than normal investments.

I think in the third quarter call last year, you talked about a hole at Beecher Carlson of about $3.9 million related to the distraction from getting the deal done. Can we assume that hole will be filled in this quarter, which would presumably have a nice impact on the Retail organic growth?

The answer to the question is Q3 of last year was a tough quarter for the Beecher team. Some of that revenue may have been one-time in nature. So the number might be slightly different than what you're referring to. But we anticipate Beecher having what we think would be a fine quarter. You can see what the organic growth was for the year, and I wouldn't want you to get ahead of yourself. So that's what I would say relative to that comment.

And then finally on the group benefits business, you talked about I think rates perhaps being up by over 10%. How much of that is translating into your revenue? What's the group benefits' organic growth overall roughly?

We don't break that out, Mark. I appreciate the question. I would tell you that as you know, last year, we did about $225 million of total revenue in employee benefits. We then completed a transaction in Q2 of Pacific Resources, Paul Barden and Paul Rogers' team. And we're really pleased with them joining. So we have now over $250 million of employee benefits revenue in aggregate. The large account revenue of that is about $70 million plus or minus a little bit in terms of the health, I should say. And it depends on the account. Many of those accounts in that segment are on commission. So there would be some flow-through. But there are some that are on fees or flat amounts defined by the client. So it just depends.

We'll take our next question from Kai Pan, Morgan Stanley.

My first question is on your debt level. Now currently your debt-to-EBITDA ratio probably to the higher end of your range. Just wondering, does that limit your ability to raise additional debt in case a larger acquisition comes your way?

As you probably see, right now we're running at about 2.3 times debt-to-EBITDA. We don't believe that with our current financial position that we would have any issues with raising additional capital. We still have plenty of room on the revolver if the right strategic deal came along, and I say if it came along. So we don't have any concerns on that front. We want to operate within that 1.5 to 2.5 range. That's where we're comfortable. But again, we do have the ability to jump above that if the right deal came along, but we're not expecting anything on that front.

So going forward, would you let these debt levels sort of maintain or you would pay it down?

Over time, we would look to pay it down. We don't fluctuate back and forth if we have a smaller deal that we need to buy during the quarter. It may go up a little bit and then go back down. And that's really the benefit of having a revolver, so we can spring up and down with this.

And then on the integration, the acquisitions, historically like the Brown culture has been let the acquired company run relatively autonomously to preserve entrepreneurial culture. So now as you're yourself getting bigger and the acquisition you're doing is getting bigger, is there any change of philosophy that you're probably more involved in terms of integration of the company you're acquiring?

What I would say is no, and remember the initial basis of that is cultural fit upfront. And so it's not a one-time discussion about culture and how we do things and they do things. It's an ongoing discussion with the new team mates that join our team. And so if you look at Wright as an example, we have a number of new team mates that are coming to our leadership council meeting that's being held over the next couple of days in Orlando. And they continue to heard about how we do things and we hear about things that may be doing that we can implement some of their best practices in some of their segments if it would help improve our business. So it's a two-way street. Remember it's very important when we have an acquisition that there is a person in the organization who is responsible for kind of ushering them into the system. And so you could use the term sponsor. You could use whatever term you want to use. But that person helps share additional parts of our culture and talking with people internally and encouraging them to come to the right events where they would be exposed to other people, like-mind, to share ideas and learn additional things. So at the present time, no, we don't believe so. But as we continue to get larger, we're going to continue to evolve. But we want to maintain the culture that we have, which as you referred to is a decentralized entrepreneurial culture, which puts a premium on performance.

We'll take our next question from Dan Farrell, Sterne, Agee.

Andy, I apologize if I may have missed this in your comments. But did you mention why non-cash stock expense declined from 7.5 level that it had been running at, and can you give us a sense of what a reasonable run rate would be?

During the quarter, one of the things that we were looking at is we went back over the last five years on all of the tranches that we'd given up for all the SIPs. We've refined our estimate on forfeitures underneath of there. And again, it just takes a lot of data to get through and so that's allowed us to hone in on that a little bit tighter than where we were in the past. On a go-forward run rate, we would anticipate somewhere in the range of $6 million to $7 million on a quarterly basis. But it's really dependent upon the number of participants that we have in the plan.

And then just a couple balance sheet questions. Unrestricted cash, the $309 million, how much would you say of that would actually be through usable cash? And then just another question on your sort of debt leverage comments. When you're looking at your debt to EBITDA range that you feel comfortable with, do you look at sort of gross or net of unrestricted cash, because it would seem net of the unrestricted cash, you're actually pretty close to the lower end.

So as I mentioned, we're a little over $300 million of total cash, and it would be just a bit under $200 million, in that range, would be, let's call it, unrestricted which is really Brown & Brown cash. As you probably know, cash falls in two categories for us, which is traditional GAAP and then we've got what sits in the premium trust accounts. So the latter is not part of the numbers I was talking about in there. The 2.3 is on a gross basis. If you bring it all the way down to a net basis, yeah, we would be materially lower on there. So again, we generally kind of take a bit of a conservative approach on how we look at things.

We'll take our next question from Ryan Byrnes, Janney Capital.

The Beecher organic growth has outpaced the core Retail Brown book. I'm just trying to figure out why they've been able to achieve 5.5% organic versus, let's say, 2% for the BRO book. And I guess is that Beecher organic sustainable going forward?

The first thing is Beecher Carlson's business has been primarily built through internal investments and either existing offices or opening an office with a shared service platform, number one. And so they are leveraging capabilities in that area across the country, which they've done a very good job and we anticipate them to continue to do a very good job. That's number one. Number two, we do think that they have the ability to grow nicely in the future. We have not done any additional acquisitions there yet. That doesn't mean we wouldn't. But as opposed to the acquisitions, we've done internal investments, as Andy alluded to, going forward more recently. I think that those organic growth numbers are reasonable plus or minus slightly going forward on their large accounts under business, yes.

And it sounds like you guys are kind of applying the Beecher model down to the rest of your book a little bit by spending money internally to spur organic growth. Is that the correct way to think about it?

I don't want you to think that we didn't do that before. This is not an epiphany as a result of Steve Denton and his team joining, although they've done some great stuff and helped us think around some things differently. I would say this. We have always invested in our business. And you may have heard us talk about an allocation of our revenues each year towards a people fund. And so we have continued to do that even through the economic downturn. But we continue to look at that even more closely and there'll be times where we will exceed the allocated amount. And that's what we're really referring to. So once again, I think that there'll be more color in the future on that as we figure out exactly how we want to present the information to you and all the others. But just suffice it to say that we are looking to allocate our capital, as Andy said, one of three buckets, external acquisitions, internal investments and/or to our shareholders through one of the two mechanisms, either share repurchase or dividends or both. And so the internal investment is something that we think that we can continue to generate and help grow our business organically, which we're interested in doing.

The Beecher large business is about $75 million on annualized basis. So when we compare the growth on the total business, just keep in mind you're comparing that with a business that's $700 million. So it's a little bit like apples and oranges from a growth perspective. We'd love to see the other $700 million growing 5%, but that needs a lot of tailwind from the market.

And then just my last one is the organic growth, obviously in the Wholesale unit has been very strong. I was just a little surprised by its continued strength obviously with a good percentage of the book coming from property cat stuff. Are you guys fully seeing that headwind of rates down 15% to 20% in your organic numbers? I just wanted to see why that's not more of a headwind for you guys.

Well, I think, Ryan, what it does is it speaks to the talent inside of our Wholesale business and businesses. Tony Strianese and Kathy Colangelo and Neal Abernathy and the rest of the team have done a great job. And so we may see a bigger impact in Q3. But we're in hurricane season, and I think that as I alluded to if there is not a big wind event somewhere in the coastal area this year, there's going to be continued pressure on that. Now do we know if it's going to be more than that, I don't know. It would be purely speculative, but it sure isn't going to go up if there is not an event. So we watch it closely, but we think that there's an opportunity for it to continue to grow organically. But we are mindful of exactly what you're saying.

And so if I think about that book, I would think that the prop cat organic is probably very low mid-single digits and then the rest of the group book is growing double-digits. Is that hitting on all cylinders? Is that the way to think about it?

I think it depends on the office, and there're still scenarios where you could have offices that focus on large cat business. Even though the rates are going down, they're writing a lot of new buy office in a mixed basis. But it really depends on their ability to retain their existing business and write a lot of new business.

We'll take our next question from John Campbell with Stephens Incorporated.

Just digging in a little bit more on the National Programs side, can you guys just give us a brief update on Proctor and just maybe how the claims have trended lately and just any update on the Proctor contingent commissions?

As you know, that space has continued to be sort of bumping all around. We're very pleased with our capabilities and what we're doing from a new business standpoint there. I would tell you that the interesting thing about that space, as you know, is you have some clients which are not their financial owners of large mortgage portfolios that may trim the portfolio or sell part of it. We are not giving any guidance, to your second point, on the contingencies. But I would tell you that we've invested in that business from a technology standpoint and continue to look and brought some additional good people on to the team, which has even further enhanced our capabilities to handle upper middle market and larger accounts of which we're competing and can be successful against kind of the two big 800-pound gorillas in that space. So Proctor is doing well and we think it can continue to do even better in the future.

And so I guess you guys are not going to provide guidance on the contingent commission side, but can you tell us maybe how that just trended year-over-year just looking at 2Q '13?

We don't have it right here, John. We'd have to get it for you.

You guys have talked at length about some of the internal investments. And it does sound like we'll get additional color on that in the future. But just curious over, just call it, the last half year, could you guys just give us an idea of headcount trends, kind of where you're adding additional heads by segment, and then if it's net new heads, if it's to fill in holes from attrition, or if it's because you guys see good market opportunities? Just looking for any additional color there.

The answer is yes. I mean I'm not trying to be funny, John. Like I said, we are doing, I would say, all of the above. There are investments in people that are occurring in every single one of our divisions, number one. There are opportunistic investments occurring in every single one of our divisions over and beyond the normal hiring that we're doing. That could be attributable to retirement. It could be a result of a departure. It could be as a result of adding to a very, very successful team and trying to supercharge an area to grow. Or it can be in an area where we actually are expanding our capabilities. And so as an example, Andy may reference, inside of Beecher, we've made several recent investments, one of which is in a capability that we didn't prior otherwise had in Brown & Brown in an M&A experience standpoint. And so we're very pleased that we have four new people that have joined the team in New York City relative to that. And so like I said, I don't want you to read too much into it, John. Here is the deal. As you know, we have tried and will continue to try to invest in our business in the most beneficial manner. We have not historically talked about internal investment, because we thought it was sort of understood. And as we make some of these larger investments, we will probably need to give some color around that. But it's all under the guys and the understanding that we're trying to grow our business more organically.

Our next question is from Mark Hughes with SunTrust.

Andy, did you give guidance for the contingent commissions for the third quarter?

I did not. Very good listening, Mark. So no, I didn't. We forget that question might come up. Rather than giving a specific for the third quarter, let us just give you an idea of the full year outlook is last year we were right about $51 million. Based upon what we're seeing right now, we would probably be in that range or slightly below is kind of an estimate. So therefore you can figure out what Q3 and Q4 would look like.

Would the distribution be similar, you think, in Q3 and Q4?

We're not expecting anything really unusual by those quarters. Obviously there could be some movement back and forth. So we're looking at on a full year basis.

We have no further questions in the queue at this time.

Thank you very much. And you all have a nice day. We look forward to talking to you next quarter. Good day.

Thank you.