Year Ended December 31,
(in thousands) 2002

2001

 2000

Cash Flows from Operating Activities:



Net income $ 83,122
$ 53,913 $ 32,793
Adjustments to reconcile net income to net cash provided
   by operating activities


   Amortization
14,042
15,860 9,226
   Depreciation
7,245
6,536 6,158
   Non-cash stock grant compensation
3,823
1,984 483
   Deferred income taxes
1,191
199 (2,721 )
   Net gains on sales of investments, fixed
      assets and customer accounts
1
(870 ) (712 )
   Minority interest in earnings
3,693
2,814 1,829
   Adjustment to conform fiscal year-end for pooled entities
–
385 –
Changes in operating assets and liabilities, net of effect
   from insurance agency acquisitions and disposals:


   Restricted cash (increase)
(29,468 ) (18,311 ) (12,051 )
   Premiums, commissions and fees receivable (increase)
(39,749 ) (2,611 ) (18,432 )
   Other assets, (increase) decrease
(4,404 ) 838 2,343
   Premiums payable to insurance companies increase
36,512
6,308 17,689
   Premium deposits and credits due customers increase
4,599
3,731 576
   Accounts payable increase (decrease)
526
2,279 (1,660 )
   Accrued expenses increase
13,318
4,306 7,316
   Other liabilities (decrease)
(1,140 ) (7,423 ) (570 )

Net cash provided by operating activities
93,311
69,938 42,267

Cash Flows from Investing Activities:




Additions to fixed assets
(7,275 ) (11,017 ) (5,553 )

Payments for businesses acquired, net of cash acquired
(120,926 ) (131,039 ) (17,651 )
Proceeds from sales of fixed assets and client accounts
4,923
1,619 1,755
Purchases of investments
(111 ) (3,006 ) (781 )
Proceeds from sales of investments
122
5,605 1,026
Net cash used in investing activities
(123,267 ) (137,838 ) (21,204 )

Cash Flows from Financing Activities:




Proceeds from long-term debt
–
90,062 493
Payments on long-term debt
(23,722 ) (33,297 ) (4,494 )
Proceeds from issuance of common stock, net of expenses
149,437
– –
Issuances of common stock for employee stock benefit plan
5,765
2,844 1,746
Purchase of common stock for employee stock benefit plan
(10,142 ) – (5,536 )
Net distributions from pooled entities
–
(849 ) (1,870 )
Cash dividends paid
(13,412 ) (9,718 ) (7,525 )
Cash distribution to minority interest shareholders
(2,771 ) (2,121 ) (1,597 )
Net cash provided by (used in) financing activities
105,155
46,921 (18,783 )
Net increase (decrease) in cash and cash equivalents
75,199
(20,979 ) 2,280
Cash and cash equivalents at beginning of year
16,048
37,027 34,747
Cash and cash equivalents at end of year $ 91,247
$ 16,048 $ 37,027

See accompanying notes to our consolidated financial statements.
©2003 Brown & Brown Insurance, Inc.