I'd like to say to our directors, on behalf of myself and on behalf of all the officers, Powell, and all of the team members of Brown & Brown, we really appreciate all the good work. This is a very collegial group of people. We work together very well, and they have brought lots of good ideas to us. We are very, very fortunate to have such an outstanding group of people. Now I would like to introduce the officers, and as I introduce, if you're here, please stand. If you're not here, don't stand. First of all, I'm Hyatt Brown, and I'm Chairman of the Board. Powell Brown, who is President and Chief Executive Officer. Linda Downs, Chief Operating Officer and Regional President. Charlie Leidecker, Regional Division President. Scott Penny, Chief Acquisition Officer and Regional President. Tony Cernia, Regional President. Sam Boone, Regional Executive Vice President.
Ken Masters, Regional Executive Vice President. Chris Walker, Regional Executive Vice President. Andy Watts, Executive Vice President and Chief Financial Officer and Treasurer. Bob Lloyd, Vice President and General Counsel. Laurel Grammig, Vice President, Secretary, Chief Compliance and Regulatory Officer. Rich Freeborn, Vice President. Cathy Colangelo, Regional Vice President. Nick Peraginski, Regional Vice President. Tony Grippa, Regional Vice President. Tommy Huval, Regional Vice President. Rich Hudson, Regional Vice President, and David Lott, Vice President. Those are your officers. Let's give them a round of applause. Also in the audience, we have three members from Deloitte & Touche, who are our accounting firm. First of all, we have Peter Pruitt. Peter, if you would rise, please. He is the partner on our account, and he's also the managing partner for Florida and Puerto Rico.
His daddy and I are old friends and fraternity brothers from the old days, and has an insurance background. John Nix also is a partner from Deloitte. Excuse me, John Gordon. Phil Nix. Excuse me, Phil. That's good. Let's give him a round of applause. We'll now ask Laurel Grammig to act as secretary of the meeting. Are we duly called? Is this an official meeting? Laurel, where are you? Good.
Thank you. A certified list of all shareholders of Brown & Brown as of the close of business on the record date, that's been certified by our transfer agent as true and correct.
We have a quorum. Is that correct?
Yes. The number of shares of capital stock outstanding and entitled to vote on the record date was 145,421,961. Of this amount, 131,879,862 shares, which represents approximately 91% of the total number of shares outstanding, are represented at this meeting.
Thank you very much. 91%. I think that was the same as last year, so we have a robust vote. Thank you very much to all of our shareholders. Now we're convened and lawfully convened at that. In the interest of saving time, the chair will entertain a motion to dispense with the reading of the minutes and approve them. Is there a motion?
Second.
Move second. Is there any further discussion? Without objection, show its adoption. I will entertain also a motion to the appointment of two individuals to act as inspectors of voting. Their duties will be to decide upon the qualification of voters, to accept the votes, and to count and ascertain the number of shares voting for and against each proposal. Is there a motion?
I, [inaudible] be appointed as inspectors of voting.
Is there a second? Without objection, show them as being the inspector. Let's see. The inspectors have previously filed their oaths as also the secretary. We'll now turn to vote on the nomination of the board of directors as set forth in the proxy statement. Most of you have already submitted proxies by mail or today if you came in. If you have not turned in your proxy or if you wish to change your vote, please raise your hand and the inspectors will see that you receive ballots and that they are collected after you've voted. Are there any people who would like to vote or change their vote? Hearing and seeing none, the results are closed. Laurel, would you please announce the results of the voting?
Yes. Each of the 12 nominees for the board of directors has received at least 108,227,565 votes, which is sufficient in each case for election. Additionally, the approval of the ratification of Deloitte & Touche as the company's independent registered public accountant for the fiscal year ending December 31, 2014, has received 130,910,538 votes, sufficient for approval. Finally, the approval on an advisory basis of the compensation of the named executive officers has received 119,498,786 votes, sufficient for approval.
Thank you, Madam Secretary. Again, a robust vote. That concludes the scheduled business. Is there any other business to come before the meeting? Hearing none, I declare the meeting adjourned. Now I will call upon Powell Brown, who is our president, to give us.
Morning, everybody. Before we begin, someone in the room will ask what I did with my finger I'll preempt by saying, on Sunday I was riding my bike and I pulled up to a stoplight and I lost my balance. Over I went in front of 35 people, I somehow got my hand under myself. That's the story and I'm sticking to it. Good morning. I will tell you that 2013, I believe was a Andy will, in a moment, talk a little bit about a credit facility that we've just put together, and that's going to help us close Wright. Wright is a large acquisition that we should close this quarter, and it does three things. One, it is in the flood servicing business. We, on behalf of the U.S. government, write approximately 20% of all the flood policies in America.
The big states would be Florida, Louisiana, and Texas, we, on behalf of the government, write 20% of those policies. We are not a risk bearer. The first $250,000 is borne by the U.S. government, as you know. Then there are excess flood riders. That's the majority of this operation is based in St. Petersburg. It has 200 teammates that will be joining us. Second part is a public entity business or businesses where they, or soon to be we, administer insurance reciprocals in the state of New York. That's where they have programs that write customized package policies for New York and schools and municipalities in the state of New York through separate insurance reciprocals. The final piece is a program piece, much like Arrowhead and the rest of our operations.
In that, they have a national schools program where they write Pre-K to 12 public and private, small colleges and universities, typically under 10,000 lives or students. The reason I bring this up before I bring our new CFO up is this, we are very disciplined and people ask why are we different? One of the reasons we are different is we are very disciplined in our business strategy and our intent when we make the money is to invest the money in something we think one and one equals three or more. If we think one and one only makes two, we believe that we probably shouldn't do the deal. The underlying theme on any transaction that we take this money, shareholder money, and reinvest it on behalf of the team is this, there has to be a cultural fit.
If there is not a cultural fit, regardless of what the numbers look like, regardless of what the growth profile looks like, we shouldn't do the deal. With that, I'd like to call on Andy to give us a financial overview. Andy Watts, our new CFO.
Morning, everyone. Can everyone hear me okay? Turn this off. Perfect. Everyone, you guys know the rules about forward-looking, we can move forward on those. Powell said we had a great year, and I think as we go through this presentation, I hope that you're going to really appreciate why we think it was a really, really good year. We delivered almost $1.4 billion of revenue last year, which is an outstanding achievement for this team. That is with 6.7% organic growth, which means how much did our businesses grow last year that we owned in 2013? If we even take out the benefit that we received of the revenues for Superstorm Sandy last year in our Colonial Claims business of almost $18 million, we still grew 4%. This is in a really choppy market. We're very proud of our accomplishment on the top line.
Powell talked about our margins. We moved them forward just about half a percent to 33.7%, a number that we're very proud of, and it really speaks to the power of our operating model. We have very strong diversified revenue cash flow. Last year, we delivered almost $370 million of cash flow from operations, which really allows us to make sure we can invest back in our business without taking on a lot of debt. Powell talked about the proven acquisition strategy. It is with laser focus that we buy businesses. We want to make sure if we're going to buy them, that they have the right cultural fit, but also that they have the right financial performance to make sure that they match with the rest of our company. All of those that we did this year are performing very well. Our strong balance sheet.
We ended up at the end of the year with about $480 million of debt on our books, which is a large number, but it's a very small percentage of our EBITDA ratio at just over 1%. That says we try to finance as much as we can from our core operations. Our 20th year of consecutive dividend increase is something we're very proud of. We think this is a great performance for 2013. Our revenues. We've now had, in the last 10 years, a compounded annual growth rate of just over 12%, something that every year we focus on making sure we're growing the top line through acquisitions as well as organically. This growth this year was split almost equally between our acquired revenues as well as organic revenue growth. We've got a very good mix inside of the business.
Let me go a little bit deeper, talk about our four divisions inside the organization. Let me first start with retail. At $730 million last year in revenues, it represents just a little over 50% of our total company, so has a large impact on our performance. It grew 14.5% in 2013 and grew 1.5% on an organic basis. We've had a lot of excitement inside of this business. We had the commercial lines that did very well, growing over 5% last year, but also had a lot of headwinds with the employee benefits program and a number of the issues in the marketplace that's out there. Continuing to do very well and posted really nice results for the first quarter. Our National Programs business, $292 million. Just a great performance last year.
Delivered 13.5% organic growth for the organization, primarily out of two new programs that were launched for the auto aftermarket business. We're very pleased with all the work that's going on in that area. Wholesale brokerage. Tony's here in the audience. Another great year for that business. Last year, 2012, they grew 6.1%. They backed it up this year with organic growth of 12.6%. Really doing very well in a challenging market out there on rates. All of that team is performing outstanding. Services business, $132 million. Had great growth on the top line. A tremendous amount of that was from our Superstorm Sandy claims that we did last year. As I mentioned, $18 million. If we back that out, that business was relatively flat last year. We've got some new business coming on in this year, which will continue to drive growth.
We're very pleased with it. Talk about revenue from acquisitions. In the last 10 years, we have spent almost a billion dollars on acquisitions. $143 million last year we pulled in from acquired revenue versus $150 million the year before. We continue to be very focused on our acquisitions to make sure that if we are going to bring them on board, they need to perform, they need to deliver our top-line performance, as well as the operating margins that we're looking for. Our EBITDA margins. Good way to think about EBITDA is this is our earnings once you extract most of the non-cash items such as amortization and depreciation. Gives a good indication of what's out there. If you look at it, we improved this year another 40 basis points, and that was off of the last two years, where we were down a little bit.
Now as we're starting to get the revenue growth back into the organization, we're starting to get a little bit of margin expansion, which is what we like to see in the business as we get flow-through. Very proud of that number. Our operating statistics. Powell talked about EBITDA. I like to talk about cash since I'm the CFO. I like cash in the bank. What this slide here presents is what percentage of every dollar that we generate are available to invest in our business. What this says is that our cash from operations, every dollar, almost $0.29 converts into cash that we can invest. That is a extremely high number. When you look at this compared to our competitors, we range anywhere from 225%-275% better than all of our competitors. That's the power of the Brown & Brown business model.
Something that we're going to continue to focus on as we go forward. Our net income. While we had nice growth on the top line, we continue to watch our costs to make sure that we're flowing it through the bottom line. Another year of good net income growth to $217 million, with a compounded annual growth rate of 7.6%. You're starting to get the theme. All these are going up. We had a very good year. Our earnings per share, another strong year at $1.48, which was 17.5% growth over the prior year, and that is now five years of growth in our earnings per share after a challenge at the back end of 2009. Our annual dividends. This looks like a nice ski slope, actually. This is 20 years of continued growth in our dividend, something we're very proud of.
Another 11% increase over the previous year to $0.37 for every share that's outstanding. Let me shift gears now and talk about our new credit facility. We closed this back in the first part of April. The reason why we put a new facility in place is we're becoming a much larger company. It means that the credit that we require as an organization to help fuel our growth needs to continue to mature. What we wanted to do was to go out there, be able to refinance some of our current facilities, and be able to put a capability in place for our organization to allow us to swing up and down as we generate cash, as well as being able to pay for acquisitions that are out there. We closed the facility for $1.3 billion.
We're very pleased to have 17 new banks participating in that. We were heavily oversubscribed, we upsized the facility by $100 million. We thought that was a good opportunity. We had a lot of banks with a lot of interest. As I always say, you always want to take money when somebody wants to give it to you, not when you need it, which is a good thing. We have the ability to expand this by another $500 million if necessary. The pricing on this is we got very good interest rate. It's the LIBOR rate right now, which is running about 50 basis points for everyone, plus another 137%. We're just a little over 2.25%. If anyone has a mortgage at 2.25%, you're pretty happy with that, right?
That's what we're going to pay on our interest rates now for the next five years, unless the interest rates move significantly. Currently, we're planning to close this with the right acquisition, which will be hopefully in the next few weeks, and we'll be paying off about $230 million of debt at that point. We're very, very pleased. We think this positions the organization well to help fuel the growth in 2014 and beyond. With that, Powell, I'm going to turn it back over to you.
I would like to make a comment back on this slide before we go any further. Relative to the new credit facility, some people have asked myself and Andy, what is the appropriate amount of debt? How comfortable are you with that, knowing that we have been very conservative relative to debt in the past, and that's not changing. Basically, this will enable us to fuel our growth opportunities, both internal and by acquisition in the future. What I've said publicly, and I will reiterate, is this. We feel comfortable if we have the debt to EBITDA of 1.5x-2.5x. We have the capability to go above that in this facility, but it would be on a short-term basis, and we would pay that down into that range.
For anybody that was wondering about that, I wanted to clarify that right up front. As we get to be a larger organization and we have new teammates, the only constant is change. I'd like to talk a little bit about some of the things that we're doing internally, which is so important to the growth and the success of Brown & Brown going forward. We've got to recruit, engage, reward our teammates. The most important thing are our teammates. We have to give them opportunities to rise and take on more responsibility and earn a good living and create an opportunity for wealth creation down the road, which we believe we are doing. We got to leverage our capabilities for our clients. As we get bigger, we're trying to use the knowledge collectively in the systems to the benefit of our clients.
We do that well now, but we can do it even better. Improve our carrier relationships. It's something that the senior leadership team has been working on over the last 18-24 months, and they've improved greatly, but they can further improve. We don't have any one carrier that is as dominant as a percentage of our premium. I would tell you that our largest carrier, we write about $650 million of premium width, and then it drops down into the 500 and 400 and 300 type size ranges in terms of our trading partners. Selective acquisition strategy. We talked slightly about that earlier. Cultural fit is the most important thing. We get this question often from analysts, are you going to go international? It sounds sexy. We're not a sexy business. We have invested. We started a de novo business in London.
We would consider the right opportunity that was beyond our borders, but it might be Canada, it might be somewhere else. It's not something that we're jumping up and down to try to become an international business. We think there are just a perfect amount of opportunities to continue to invest in here in the United States now and in the future. I'll tell you that acquisition landscape, and you'll see in a moment, continues to be good. I would say that the cost of acquisitions has moved up slightly. It's something that we have to always consider and look at as we consider those strategic acquisitions. Invest in internal growth opportunities. That's where we will hire an individual or a group of individuals to come into an office to grow that business on a strategic basis.
We do that all the time, but sometimes we maybe don't talk as much about it externally as we do internally. I want to make sure and say that whether it's Charlie in retail, Charlie Leidecker, or Tony Strianese in wholesale, or Chris Walker in National Programs, or Sam in services, and others, we're always looking at opportunities to add new teammates who can help us grow our business and service our clients. We think that we're really well positioned for organic growth in the future. We would say that the economy, as you know, is still choppy in the middle market. What we talk about internally, and I would share with you, is our clients, what we're seeing, are still reticent to make large capital expenditures.
If the option is to buy a $3 million piece of new equipment or to spend $30,000 on the maintenance of that equipment, they're more apt to spend the $30,000 and push off the potential $3 million capital expenditure. We continue to see that. We are seeing more additional premiums on audit. That's a positive thing. Typically, you see that as the economy is moving up. When the economy is moving down, you see more return premiums. Exposure units, as I said, are increasing slowly, but choppy in areas. The one area that we see where rates are under significant pressure now is in coastal property. Coastal property rates, as we talked about in our earnings call, were down 5%-10%. Some large accounts were down more than that in the first quarter. We're starting to see more pressure in that area now.
In our wholesale division, that's a big part of their business, but they're going to just continue to write lots of new business and work with their clients. When rates are down 15-plus percent or more in that area, that will change some dynamics that we're seeing there. With our new credit facility, Andy joined the team officially on March 3rd, and Scott Penny and Vaughn Stoll set the work that they had already put in motion on our new credit facility right in his lap. In a very short order, he's had to get up to speed on how to sell insurance and the difference between wholesale and retail, but oh, by the way, we need you to work with these 17 banking partners and put this facility together. We're really pleased with the facility and the partners that are in it.
Several of those partners are here in the room this morning. It is a combination of longstanding relationships that have helped us grow our business and some new relationships. Some of those have old friends from other relationships. I will tell you that we look at our banking partners like we do our risk-bearing partners or our insurance company partners because they will enable us to invest in our business in a very thoughtful way going forward. I would already just say thank you to all of those people, whether you're here in the audience or elsewhere, for everything you do for us. The pipeline continues to be good in acquisitions. I get asked this a lot on analyst calls, and I'd like to say that my response is always the same. If you asked me a year ago, it was good.
If you ask me a year from now, it will be good. If you ask me today, it's good. I'm not trying to be flippant. What I'm trying to say is this, there are lots of opportunities out there. The question is there a cultural fit? Does it make financial sense to come to some sort of price that actually makes sense? I alluded to, there's upward pressure on that, we continue to evaluate that on every single transaction. There are still lots of good opportunities out there. I will tell you that in the early 2000s, the biggest competitor that we would find in terms of buying acquisitions was banks. Banks from 2000 to 2007 were typically the most competitive operation.
Today, it's a combination of other large publicly traded firms, two of those that were on the list earlier, and firms that are private equity backed. Once again, a private equity-backed play is short-term or shorter term in nature, three to seven years typically. They can put businesses together, but it's not going to be in perpetuity because they're going to sell that ultimately to someone else. We, on the other hand, when we make an acquisition, we think of it like a marriage. It's forever. When we do that, we're looking internally at the teammates who are going to join and how do they treat their teammates, the new teammates, their carrier partners, and specifically their clients. We're excited, and as I alluded to about Wright, which I discussed a little bit, and Pacific Resources, which I haven't discussed.
Pacific Resources is an organization in Chicago which basically does ancillary benefits for large companies. That would be things like life insurance, disability, vision, and related. It is not a health business. They don't sell health at the present time. They go to Fortune 1000 companies and show them how they can structure in a very creative way, very competitive plan to help them buy those coverages more efficiently, and they've been really successful. It's interesting, the two leaders are both named Paul Barden and Paul Rogers, and we're excited for them to join, hopefully this month, but we know it'll be this quarter. We said at the end of the year last year, in terms of our releasing our fourth quarter in January, our fourth quarter results, that we would grow the business this year by 4%. That's what our budget showed.
For many of you who've been coming to this meeting, that might surprise you because we typically don't give growth guidance. We don't, and we don't intend to in the future, but we did this time, and it is for one particular reason. At the end of the fourth quarter, one of our business units, that was retail, did not perform organically like some external parties perceived it would. We had very little growth in that segment in Q4. In Q1, we grew at 2.5%, and we're very pleased with that. We've said that our retail grows at a low to mid-single digit internal growth rate. I would tell you that piece, that single piece, one division, about 53% of our business in one quarter, has impacted the way that the street has viewed our stock.
The movement that you have seen, I would contend, in our stock price over the last, let's say, 90 days, is driven, we think, directly by several things. One, the organic growth rates of our business, but specifically the lack of organic growth in Q4. Now we've had 2.5% in Q1. The first thing. The second thing is we have a large non-recurring revenue stream that Andy referred to from Superstorm Sandy in one of our businesses called Colonial Claims. That was $16.2 million, which didn't recur in the first quarter of this year, that we had last year in 2013. The final piece is on a business that we acquired in Atlanta called Beecher Carlson. A component of that business has large account revenue in it. Typically, these are Fortune 2000 companies, and about $50 million of the $70 million that we acquired is fee revenue.
The other 20% is commission. That business has a lumpy nature to it. The big quarters are the fourth quarter and the second quarter. The lower quarters are the first and the third. Interestingly enough, their expense profile looks pretty flat across all four quarters, but you have some revenue disparity. We talked about the change in the revenue disparity at the end of Q4, but very few people seem to get that, the analysts, we've tried to do a better job to make sure they understand what that is going forward. We're very pleased with Beecher and all those teammates that joined that. With that, I'd like to wrap my prepared comments up and turn it open to questions.
Please ask any questions about something that you have either seen here this morning or more importantly, something you haven't. We have a microphone that we'd like you to ask the question into so it can be broadcast on the web. If you just raise your hand. Who would like to ask a question this morning? I can't believe that I've answered every single question that you might have. Are you sure nobody has any questions? Okay. Hearing none, I'd like to say a couple things. Thank you very much first and foremost for coming today. We appreciate your confidence in Brown & Brown as shareholders and potentially as our clients, if you are, we appreciate that very much, and as our teammates. It is something that we work really hard on is our culture.
As we become a bigger organization, although there will be components of our business that will have to evolve and change, there are components that will have to absolutely stay the same. I would tell you that our culture is one of those differentiating components of our organization, and it's something that I personally feel very strongly about and something that I work on all the time with our teammates. I will tell you that we believe that the opportunities going forward, both hopefully at a little uptick in the economy, the investment opportunities, be it through internal growth or through acquisition, are good.