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RYAN SPECIALTY GROUP REPORTS THIRD QUARTER 2021 RESULTS

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  • RYAN

- Total Revenue grew 49.0% year-over-year to $352.8 million -

- Organic Revenue Growth Rate of 28.9% year-over-year -

- Net Loss of $32.6 million related to one-time costs of Initial Public Offering -

- Adjusted EBITDAC grew 55.9% year-over-year to $105.0 million -

- Adjusted Net Income grew 51.1% year-over-year to $62.9 million -

- Raised full year 2021 outlook for Organic Revenue Growth Rate and Adjusted EBITDAC Margin -

CHICAGO, November 11, 2021--(BUSINESS WIRE)--Ryan Specialty Group Holdings, Inc. (NYSE: RYAN) ("Ryan Specialty" or the "Company"), a leading international specialty insurance firm, today announced results for the third quarter ended September 30, 2021.

Third Quarter 2021 Highlights

  • Total Revenue grew 49.0% year-over-year to $352.8 million, compared to $236.8 million in the prior-year period

  • Organic Revenue Growth Rate* was 28.9% for the quarter, compared to 13.6% for the same quarter last year

  • Net Loss of $32.6 million, compared to Net Income of $10.8 million in the prior-year period. Net Loss included $58.6 million of one-time costs incurred by the Company in the third quarter of 2021 primarily related to the Company’s completed initial public offering ("IPO"). Net Loss per Share was $0.16

  • Adjusted EBITDAC* increased 55.9% to $105.0 million, compared to $67.4 million in the prior-year period

  • Adjusted EBITDAC Margin* rose 140 basis points year-over-year to 29.8%

  • Adjusted Net Income* increased 51.1% to $62.9 million, compared to $41.7 million in the prior-year period. Adjusted Diluted Earnings per Share for the third quarter of 2021 was $0.24

"The Ryan Specialty team didn’t miss a beat as we completed our IPO and debuted on the NYSE," said Patrick G. Ryan, Founder, Chairman and Chief Executive Officer of Ryan Specialty Group. "We delivered a very strong financial performance across the board, with organic revenue growth for the quarter eclipsing 28% driven by our extraordinary talent, differentiated platform, ongoing broker consolidation, and a robust E&S market. In addition, our platform’s scalability facilitated another quarter of improved margins on a year-over-year basis. With the integration of All Risks in the home stretch and our exceptionally talented team of specialists, we are well positioned to maintain our momentum and execute on all phases of our game plan."

Summary of Third Quarter Results

Three months ended
September 30,

Change

(in thousands, except percentages)

2021

2020

$

%

GAAP financial measures

Total revenue

$

352,766

$

236,811

$

115,955

49.0%

Compensation and benefits

286,538

162,981

123,557

75.8

General and administrative

38,754

31,370

7,384

23.5

Total operating expenses

353,496

210,985

142,511

67.5

Operating income (loss)

(730)

25,826

(26,556)

(102.8)

Net income (loss)

(32,590)

10,796

(43,386)

(401.9)

Net income (loss) attributable to members

(1,334)

10,211

(11,545)

(113.1)

Compensation and Benefits Expense Ratio

81.2%

68.8%

General and Administrative Expense Ratio

11.0%

13.2%

Net Income (Loss) Margin

(9.2)%

4.6%

Earnings (Loss) per Share

$

(0.16)

Diluted Earnings (Loss) per Share

$

(0.16)

Non-GAAP financial measures*

Organic Revenue Growth Rate

28.9%

13.6%

Adjusted Compensation and Benefits
Expense

$

212,590

$

149,058

$

63,532

42.6%

Adjusted Compensation and Benefits
Expense Ratio

60.3%

62.9%

Adjusted General and Administrative
Expense

$

35,153

$

20,393

$

14,760

72.4%

Adjusted General and Administrative
Expense Ratio

10.0%

8.6%

Adjusted EBITDAC

$

105,023

$

67,360

$

37,663

55.9%

Adjusted EBITDAC Margin

29.8%

28.4%

Adjusted Net Income

$

62,949

$

41,664

$

21,285

51.1%

Adjusted Net Income Margin

17.8%

17.6%

Adjusted Diluted Earnings per Share

$

0.24

*

For a definition and a reconciliation of Organic Revenue Growth Rate, Adjusted Compensation and Benefits Expense, Adjusted Compensation and Benefits Ratio, Adjusted General and Administrative Expense, Adjusted General and Administrative Expense Ratio, Adjusted EBITDAC, Adjusted EBITDAC Margin, Adjusted Net Income, and Adjusted Net Income Margin, and Adjusted Diluted Earnings per Share to the most directly comparable GAAP measure, see "Non-GAAP Financial Measures and Key Performance Indicators" below.

Third Quarter 2021 Review*

Total revenue for the third quarter of 2021 was $352.8 million, an increase of 49.0% compared to $236.8 million in the prior-year period. This increase was primarily driven by strong organic growth as well as the All Risks acquisition, which was completed on September 1, 2020. Organic revenue growth of 28.9%, was driven by new client wins, expanded relationships with existing clients, an overall expansion of the E&S market, and premium rate increases.

Total operating expenses for the third quarter of 2021 were $353.5 million, a 67.5% increase compared to the prior-year period. This was primarily due to an increase in compensation and benefits expense, which is heavily correlated to revenue growth as many of Ryan Specialty’s producers are compensated based on a percentage of the revenue they generate for the Company. Additionally, the Company recognized IPO-related compensation expense of $57.6 million. This IPO-related compensation expense reflects several one-time payments made at the IPO, the revaluation of existing equity grants at IPO, as well as the first period of expense related to one-time IPO awards. General and administrative expense also rose compared to the prior-year period to accommodate revenue growth, while amortization of intangible assets increased as a result of the All Risks acquisition.

Net loss for the third quarter of 2021 was $32.6 million, compared to net income of $10.8 million in the prior-year period. The reduction was due to certain non-operating charges in connection with the IPO, amortization from the acquired intangible assets from the All Risks acquisition, and increased interest expense in connection with the debt used to fund the All Risks acquisition.

Adjusted EBITDAC of $105.0 million grew 55.9% from $67.4 million in the prior-year period. Adjusted EBITDAC Margin for the quarter was 29.8%, a 140 basis point improvement compared to the prior-year period. The increases in Adjusted EBITDAC and Adjusted EBITDAC Margin were primarily driven by revenue growth creating operating leverage in compensation and benefits expense, as well as continued execution of the Company’s restructuring plan, partially offset by increased General and Administrative expense. The restructuring plan, which the Company initiated in 2020, is anticipated to achieve $25 million in cumulative annualized cost savings when fully actioned by June 30, 2022.

Adjusted Net Income for the third quarter of 2021 rose 51.1% to $62.9 million, compared to $41.7 million in the prior-year period. Adjusted Net Income Margin rose 20 basis points to 17.8%, reflecting operating leverage as revenue growth outpaced growth in operating expenses.

*

For the definition of each of the non-GAAP measures referred to above as well as a reconciliation of such non-GAAP measures to their most directly comparable GAAP measures, see "Non-GAAP Financial Measures and Key Performance Indicators" below.

Review of Third Quarter 2021 Revenue by Specialty

Wholesale Brokerage net commissions and fees increased by 48.3% to $229.1 million, compared to $154.5 million in the prior-year period. This increase was primarily due to strong organic growth within the specialty, as well as revenue from the All Risks acquisition, which was included in the organic growth calculation beginning September 1st.

Binding Authority net commissions and fees grew by 46.1% to $52.8 million, compared to $36.1 million in the prior-year period. This increase was primarily due to strong organic growth within the specialty, as well as revenue from the All Risks acquisition, which was included in the organic growth calculation beginning September 1st.

Underwriting Management net commissions and fees increased by 53.4% to $70.7 million, compared to $46.1 million in the prior-year period. This increase was primarily due to strong organic growth within the specialty, as well as revenue from the All Risks acquisition, which was included in the organic growth calculation beginning September 1st.

Liquidity and Financial Condition

As of September 30, 2021, the Company had cash and cash equivalents of $413.7 million and outstanding debt principal of $1.6 billion.

Full Year 2021 Outlook*

The Company is raising its full year 2021 outlook for both Organic Revenue Growth Rate and Adjusted EBITDAC Margin:

  • Organic Revenue Growth Rate for full year 2021 is now expected to be between 21.5% - 22.5%, compared to the Company’s prior outlook of between 18.0% - 20.0%.

  • Adjusted EBITDAC Margin for full year 2021 is now expected to be between 31.5% - 32.0%, compared to the Company’s prior outlook of between 30.0% - 30.5%.

*

For a definition of Organic Revenue Growth Rate and Adjusted EBITDAC Margin as well as an explanation of the Company’s inability to provide reconciliations of these forward-looking non-GAAP measures, see "Non-GAAP Financial Measures and Key Performance Indicators" below.

Conference Call Information

Ryan Specialty will host a conference call today at 5:00 PM ET to discuss these results. A live audio webcast of the conference call will be available on the Company’s website at ryansg.com in its Investors section.

The dial-in number for the conference call is (877) 451-6152 (toll-free) or (201) 389-0879 (international). Please dial the number 10 minutes prior to the scheduled start time.

A webcast replay of the call will be available on the Company’s website at ryansg.com in its Investors section for one year following the call.

About Ryan Specialty Group

Founded by Patrick G. Ryan in 2010, Ryan Specialty Group (NYSE: RYAN) is a rapidly growing service provider of specialty products and solutions for insurance brokers, agents and carriers. Ryan Specialty Group provides distribution, underwriting, product development, administration and risk management services by acting as a wholesale broker and a managing underwriter. Our mission is to provide industry-leading innovative specialty insurance solutions for insurance brokers, agents and carriers. Learn more at ryansg.com.

Forward-Looking Statements

All statements in this release and in the corresponding earnings call that are not historical are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve substantial risks and uncertainties. For example, all statements the Company makes relating to its estimated and projected costs, expenditures, cash flows, growth rates and financial results or its plans and objectives for future operations, growth initiatives, or strategies and the statements under the caption "Full Year 2021 Outlook" are forward-looking statements. Words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "can have," "likely" and variations of such words and similar expressions are intended to identify such forward-looking statements. All forward-looking statements are subject to risks and uncertainties, known and unknown, that may cause actual results to differ materially from those that the Company expected. Specific factors that could cause such a difference include, but are not limited to, those disclosed previously in the Company’s filings with the Securities and Exchange Commission ("SEC") that include, but are not limited to: the Company’s potential failure to develop a succession plan for the senior management team, including Patrick G. Ryan; the Company’s failure to recruit and retain revenue producers; the cyclicality of, and the economic conditions in, the markets in which the Company operates; conditions that result in reduced insurer capacity; the potential loss of the Company’s relationships with insurance carriers or its clients, becoming dependent upon a limited number of insurance carriers or clients or the failure to develop new insurance carrier and client relationships; significant competitive pressures in each of the Company’s businesses; decreases in the premiums or commission rates set by insurers, or actions by insurers seeking repayment of commissions; decreases in the amounts of supplemental or contingent commissions the Company receives; the Company’s inability to collect its receivables; the potential that the Company’s underwriting models contain errors or are otherwise ineffective; any damage to the Company’s reputation; decreases in current market share as a result of disintermediation within the insurance industry; impairment of goodwill; the inability to maintain rapid growth or to generate sufficient revenue to achieve and maintain profitability; the impact if the Company’s MGU programs are terminated or changed; the risks associated with the evaluation of potential acquisitions and the integration of acquired businesses as well as introduction of new products, lines of business and markets; the occurrence of natural or man-made disasters; being subject to E&O claims as well as other contingencies and legal proceedings; the impact on the Company’s operations and financial condition from the effects of the current COVID-19 pandemic; the impact of breaches in security that cause significant system or network disruptions; not being able to generate sufficient cash flow to service all of the Company’s indebtedness and being forced to take other actions to satisfy its obligations under such indebtedness; and the impact of being unable to refinance the Company’s indebtedness.

For more detail on the risk factors that may affect the Company’s results, see the section entitled "Risk Factors" in our Prospectus filed in connection with our IPO with the Securities and Exchange Commission on July 23, 2021, and in other documents that we file with, or furnish to, the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Given these factors, as well as other variables that may affect the Company’s operating results, you are cautioned not to place undue reliance on these forward-looking statements, not to assume that past financial performance will be a reliable indicator of future performance, and not to use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this press release and on the related earnings call relate only to events as of the date hereof. We do not undertake, and expressly disclaim, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

Non-GAAP Financial Measures and Key Performance Indicators

In assessing the performance of our business, we use non-GAAP financial measures that are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with GAAP. We use these non-GAAP financial measures when planning, monitoring and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures, tax positions, depreciation, amortization and certain other items that we believe are not representative of our core business. We use the following non-GAAP measures for business planning purposes, in measuring our performance relative to that of our competitors, to help investors to understand the nature of our growth, and to enable investors to evaluate the run-rate performance of the Company. Non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP.

Organic Revenue Growth Rate: Organic Revenue Growth Rate represents the percentage change in revenue, as compared to the same period for the year prior, adjusted for revenue attributable to acquisitions during their first 12 months of the Company’s ownership, and other adjustments such as contingent commissions, fiduciary investment income, and foreign exchange rates. The most directly comparable GAAP financial metric is Total Revenue Growth Rate.

Adjusted Compensation and Benefits Expense: Adjusted Compensation and Benefits Expense represents Compensation and Benefits Expense adjusted to reflect items such as (i) equity-based compensation, (ii) acquisition and restructuring related compensation expenses, and (iii) other exceptional or non-recurring compensation expenses, as applicable. The most directly comparable GAAP financial metric is Compensation and Benefits Expense.

Adjusted General and Administrative Expense: Adjusted General and Administrative Expense represents General and Administrative Expense adjusted to reflect items such as (i) acquisition and restructuring related general and administrative expenses, and (ii) other exceptional or non-recurring general and administrative expenses, as applicable. The most directly comparable GAAP financial metric is General and Administrative Expense.

Adjusted Compensation and Benefits Expense Ratio: Adjusted Compensation and Benefits Expense Ratio represents the Adjusted Compensation and Benefits Expense as a percentage of total revenue. The most directly comparable GAAP financial metric is Compensation and Benefits Expense Ratio.

Adjusted General and Administrative Expense Ratio: Adjusted General and Administrative Expense Ratio represents the Adjusted General and Administrative Expense as a percentage of total revenue. The most directly comparable GAAP financial metric is General and Administrative Expense Ratio.

Adjusted EBITDAC: Adjusted EBITDAC is defined as Net Income before interest expense, income tax expense, depreciation, amortization, and change in contingent consideration, adjusted to reflect items such as (i) equity-based compensation, (ii) acquisition-related expenses, and (iii) other exceptional or non-recurring items, as applicable. The most directly comparable GAAP financial metric is Net Income.

Adjusted EBITDAC Margin: Adjusted EBITDAC Margin is defined as Adjusted EBITDAC as a percentage of total revenue. The most directly comparable GAAP financial metric is Net Income Margin.

Adjusted Net Income: Adjusted Net Income is tax-effected earnings before amortization and certain items of income and expense, gains and losses, equity-based compensation, acquisition-related expenses, and certain exceptional or non-recurring items. The Company will be subject to United States federal income taxes, in addition to state, local, and foreign taxes, with respect to our allocable share of any net taxable income of Ryan Specialty Group, LLC. For comparability purposes, this calculation incorporates the impact of federal and state statutory tax rates on 100% of our adjusted pre-tax income as if the Company owned 100% of Ryan Specialty Group, LLC. The most directly comparable GAAP financial metric is Net Income.

Adjusted Net Income Margin: Adjusted Net Income Margin is defined as Adjusted Net Income as a percentage of total revenue. The most directly comparable GAAP financial metric is Net Income Margin.

Adjusted Diluted Earnings per Share: Adjusted Diluted Earnings per Share is defined as Adjusted Net Income divided by diluted shares outstanding after adjusting for the effect of the exchange of 100% of the outstanding common units of New RSG Holdings, LLC (together with the shares of Class B common stock) into shares of Class A common stock and the effect of unvested equity awards. The most directly comparable GAAP financial metric is Diluted Earnings per Share. The reconciliation of the above non-GAAP measures to their most directly comparable GAAP financial measure is set forth in the reconciliation table accompanying this release.

With respect to the Organic Revenue Growth Rate and Adjusted EBITDAC Margin outlook presented in the "Full Year 2021 Outlook" section of this press release, the Company is unable to provide a comparable outlook for, or a reconciliation to, Total Revenue Growth Rate or Net Income because it cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. Its inability to do so is due to the inherent difficulty in forecasting the timing of items that have not yet occurred and quantifying certain amounts that are necessary for such reconciliation, including variations in effective tax rate, expenses to be incurred for acquisition activities and other one-time or exceptional items.

Consolidated Statements of Income (Unaudited)

Three months ended
September 30,

Nine months ended
September 30,

(in thousands, except percentages)

2021

2020

2021

2020

Revenue

Net commissions and fees

$

352,610

$

236,683

$

1,053,800

$

689,833

Fiduciary investment income

156

128

436

1,494

Total revenue

$

352,766

$

236,811

$

1,054,236

$

691,327

Expenses

Compensation and benefits

286,538

162,981

737,825

461,094

General and administrative

38,754

31,370

96,984

81,755

Amortization

26,982

15,640

82,095

34,789

Depreciation

1,179

1,029

3,601

2,658

Change in contingent consideration

43

(35)

2,356

997

Total operating expenses

$

353,496

$

210,985

$

922,861

$

581,293

Operating income (loss)

$

(730)

$

25,826

$

131,375

$

110,034

Interest expense

21,193

10,859

60,224

26,295

Income from equity method investment in
related party

176

326

610

413

Other non-operating (loss) income

(16,211)

(1,574)

(45,547)

(4,066)

Income (loss) before income taxes

$

(37,958)

$

13,719

$

26,214

$

80,086

Income tax expense (benefit)

(5,368)

2,923

(802)

6,085

Net income (loss)

$

(32,590)

$

10,796

$

27,016

$

74,001

GAAP financial measures

Revenue

$

352,766

$

236,811

$

1,054,236

$

691,327

Compensation and benefits

286,538

162,981

737,825

461,094

General and administrative

38,754

31,370

96,984

81,755

Net Income (loss)

$

(32,590)

$

10,796

$

27,016

$

74,001

Compensation and Benefits Expense Ratio

81.2%

68.8%

70.0%

66.7%

General and Administrative Expense Ratio

11.0%

13.2%

9.2%

11.8%

Net Income (loss) Margin

(9.2)%

4.6%

2.6%

10.7%

Earnings (loss) per Share

$

(0.16)

$

(0.16)

Diluted Earnings (loss) per Share

$

(0.16)

$

(0.16)

Non-GAAP Financial Measures (unaudited)

Three months ended
September 30,

Nine months ended
September 30,

(in thousands, except percentages)

2021

2020

2021

2020

Non-GAAP financial measures*

Organic Revenue Growth Rate

28.9%

13.6%

25.6%

19.8%

Adjusted Compensation and Benefits Expense

$

212,590

$

149,058

$

625,452

$

434,209

Adjusted Compensation and Benefits Expense Ratio

60.3%

62.9%

59.3%

62.8%

Adjusted General and Administrative Expense

$

35,153

$

20,393

$

88,870

$

65,366

Adjusted General and Administrative Expense Ratio

10.0%

8.6%

8.4%

9.5%

Adjusted EBITDAC

$

105,023

$

67,360

$

339,914

$

191,752

Adjusted EBITDAC Margin

29.8%

28.4%

32.2%

27.7%

Adjusted Net Income

$

62,949

$

41,664

$

209,739

$

121,261

Adjusted Net Income Margin

17.8%

17.6%

19.9%

17.5%

Adjusted Diluted Earnings per Share

$

0.24

$

0.78

Consolidated Statements of Financial Position (Unaudited – All balances presented in thousands, except unit and par value data

September 30, 2021

December 31, 2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

413,695

$

312,651

Commissions and fees receivable – net

171,862

177,699

Fiduciary assets

1,916,585

1,978,152

Prepaid incentives – net

7,738

8,842

Other current assets

21,039

16,006

Total current assets

$

2,530,919

$

2,493,350

NON-CURRENT ASSETS

Goodwill

1,223,957

1,224,196

Other intangible assets

527,804

604,764

Prepaid incentives – net

27,044

36,199

Equity method investment in related party

47,087

47,216

Property and equipment – net

15,034

17,423

Lease right-of-use assets

80,295

93,941

Deferred tax assets

395,805

-

Other non-current assets

10,511

12,293

Total non-current assets

$

2,327,537

$

2,036,032

TOTAL ASSETS

$

4,858,456

$

4,529,382

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS'/MEMBERS’ EQUITY

CURRENT LIABILITIES

Accounts payable and accrued liabilities

78,777

115,573

Accrued compensation

335,923

349,558

Operating lease liabilities

18,811

19,880

Short-term debt and current portion of long-term debt

26,769

19,158

Fiduciary liabilities

1,916,585

1,978,152

Total current liabilities

$

2,376,865

$

2,482,321

NON-CURRENT LIABILITIES

Accrued compensation

69,121

Operating lease liabilities

69,928

83,737

Long-term debt

1,568,410

1,566,192

Deferred tax liabilities

379

577

Tax receivable agreement liabilities

282,470

-

Other non-current liabilities

5,306

16,709

Total non-current liabilities

$

1,926,493

$

1,736,336

TOTAL LIABILITIES

$

4,303,358

$

4,218,657

MEZZANINE EQUITY

Preferred units ($1.00 par value; 0 issued and outstanding at September 30, 2021 and
260,000,000 issued and outstanding at December 31, 2020)

$

$

239,635

STOCKHOLDERS'/MEMBERS’ EQUITY

Members' interest

67,088

Class A common stock ($0.001 par value; 1,000,000,000 shares authorized, 109,903,867
shares issued and outstanding at September 30, 2021)

110

Class B common stock ($0.001 par value; 1,000,000,000 shares authorized, 149,162,107
shares issued and outstanding at September 30, 2021)

149

Class X common stock ($0.001 par value; 10,000,000 shares authorized, 640,784 shares
issued and 0 outstanding at September 30, 2021)

Preferred stock ($0.001 par value; 500,000,000 shares authorized, 0 shares issued and
outstanding at September 30, 2021)

Additional paid-in capital

327,805

Accumulated deficit

(17,115)

Accumulated other comprehensive income

1,760

2,702

Total stockholders' equity attributable to Ryan Specialty Group Holdings, Inc. /members’ equity

$

312,709

$

69,790

Non-controlling interests

242,389

1,300

Total stockholders'/members’ equity

555,098

71,090

TOTAL LIABILITIES, MEZZANINE AND STOCKHOLDERS'/MEMBERS’ EQUITY

$

4,858,456

$

4,529,382

Consolidated Statements of Cash Flows (Unaudited)

Nine months ended September 30,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$

27,016

$

74,001

Adjustments to reconcile net income to cash flows from (used for) operating activities:

Loss (gain) from equity method investment

(610)

(413)

Amortization

82,095

34,789

Depreciation

3,601

2,658

Prepaid and deferred compensation expense

34,960

12,559

Non-cash equity based compensation

46,877

6,355

Amortization of deferred debt issuance costs

8,546

1,758

Deferred income taxes

(5,860)

(56)

Loss on extinguishment of existing debt

8,634

1,708

Change (net of acquisitions and divestitures) in:

Commissions and fees receivable - net

6,004

17,669

Accrued interest

602

19

Other current assets and accrued liabilities

27,751

(121,565)

Other non-current assets and accrued liabilities

(85,241)

(27,218)

Total cash flows provided by operating activities

$

154,375

$

2,264

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for acquisitions - net of cash acquired

(808,546)

Asset acquisitions

(343,158)

(5,236)

Prepaid incentives issued – net of repayments

4,136

(6,213)

Equity method investment in related party

(23,500)

Capital expenditures

(6,429)

(10,596)

Total cash flows used for investing activities

$

(345,451)

$

(854,091)

CASH FLOWS FROM FINANCING ACTIVITIES

Contributions of members' equity and preferred equity

118,936

Purchase of remaining interest in Ryan Re

(48,368)

Payment of contingent consideration

(4,495)

Equity repurchases from pre-IPO unitholders

(3,880)

(44,957)

Repurchase of preferred equity

(78,256)

Cash distribution to pre-IPO unitholders

(47,039)

(45,705)

Repayment of term debt

(12,375)

(140,625)

Repayment of unsecured promissory notes

(1,108)

Borrowing of term debt

1,650,000

Repayment of subordinated notes

(25,000)

Repayments on revolving credit facilities

(428,697)

Finance lease and other costs paid

(108)

230

Debt issuance costs paid

(1,893)

(70,484)

Repurchase of Class A common stock in the IPO

(183,616)

Repurchase of pre-IPO LLC Units and payment of Alternative TRA Payments

(780,352)

Issuance of Class A common stock in the IPO, net of offering costs paid

1,455,184

Total cash flows provided by financing activities

$

293,694

$

1,013,698

Effect of changes in foreign exchange rates on cash and cash equivalents

(1,574)

(1,095)

NET CHANGE IN CASH AND CASH EQUIVALENTS

$

101,044

$

160,776

CASH AND CASH EQUIVALENTS—Beginning balance

$

312,651

$

52,016

CASH AND CASH EQUIVALENTS—Ending balance

$

413,695

$

212,792

Supplemental cash flow information:

Interest and financing costs paid

$

51,050

$

23,641

Income taxes paid

$

6,341

$

5,811

Issuance of Class A common stock in connection with Common Blocker Merger

$

21

$

Issuance of Class X common stock in connection with Common Blocker Merger

$

1

$

Exchange of Founders’ subordinated promissory notes for equity issued

$

$

(74,990)

Preferred equity issued in exchange for Founders’ subordinated promissory notes

$

$

74,270

Common equity issued in exchange for Founders’ subordinated promissory notes

$

$

7,661

Loss on extinguishment of Founders’ subordinated promissory notes

$

$

(6,941)

Common equity issued as consideration for business combination

$

$

102,000

Net Commissions and Fees

Three months ended September 30,

(in thousands, except percentages)

...

% of
total

2020

% of
total

Change

Wholesale Brokerage

$

229,146

65.0%

$

154,484

65.3%

$

74,662