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Share Name | Share Symbol | Market | Type |
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Newmark Group Inc | NASDAQ:NMRK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.115 | 1.14% | 10.185 | 10.18 | 10.19 | 10.35 | 10.13 | 10.25 | 276,480 | 18:55:14 |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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6531
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81-4467492
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(State or other Jurisdiction of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Class A Common Stock, $0.01 par value
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NMRK
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The NASDAQ Stock Market LLC
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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Class
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Outstanding at February 26, 2020
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Class A Common Stock, par value $0.01 per share
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156,118,828 shares
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Class B Common Stock, par value $0.01 per share
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21,285,533 shares
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Page
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PART I
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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ITEM 16.
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market conditions, transaction volumes, possible disruptions in trading, potential deterioration of equity and debt capital markets for commercial real estate and related services, impact of significant changes in interest rates and our ability to access the capital markets;
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pricing, commissions and fees, and market position with respect to any of our products and services and those of our competitors;
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the effect of industry concentration and reorganization, reduction of customers and consolidation;
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liquidity, regulatory requirements and the impact of credit market events;
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our relationship and transactions with Cantor Fitzgerald, L.P. (“Cantor”) and its affiliates, Newmark’s structure, including Newmark Holdings, L.P. (“Newmark Holdings”), which is owned by Newmark, Cantor, Newmark’s employee partners and other partners, and our operating partnership, which is owned jointly by us and Newmark Holdings and which we refer to as “Newmark OpCo,” any related transactions, conflicts of interest, or litigation, any loans to or from Newmark or Cantor, Newmark Holdings or Newmark OpCo, including the balances and interest rates thereof from time to time, competition for and retention of brokers and other managers and key employees;
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the impact of, and limitations on our ability to enter into certain transactions in order to preserve the tax-free treatment of, the November 2018 pro-rata distribution (the “Spin-Off”) by BGC Partners, Inc. (“BGC Partners” or “BGC”) to BGC stockholders of all of the shares of our common stock owned by BGC as of immediately prior to the effective time of the Spin-Off;
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our ability to maintain or develop relationships with independently owned offices or affiliated businesses or partners in our business;
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our ability to grow in other geographic regions and to manage our recent overseas growth;
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our ability to manage and to continue to integrate Berkeley Point Financial LLC (“Berkeley Point” or “BPF” and which operates under the name “Newmark Knight Frank” or “NKF”) which was transferred to us pursuant to the Separation and Distribution Agreement (as defined below);
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the impact of the separation, the Spin-Off and related transactions or any restructuring or similar transactions on our business and financial results in current or future periods, including with respect to any assumed liabilities or indemnification obligations with respect to such transactions, the integration of any completed acquisitions and the use of proceeds of any completed dispositions;
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the integration of acquired businesses with our business;
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the rebranding of our current businesses or risks related to any potential dispositions of all or any portion of our existing or acquired businesses;
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risks related to changes in our relationships with the Government Sponsored Enterprises (“GSEs”) and Housing and Urban Development (“HUD”), changes in prevailing interest rates and the risk of loss in connection with loan defaults;
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risks related to changes in the future of the GSEs, including changes in the terms of applicable conservatorships and changes in their capabilities;
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economic or geopolitical conditions or uncertainties, the actions of governments or central banks, including uncertainty regarding the nature, timing and consequences of the United Kingdom (“U.K.”)’s exit from the European Union (“EU”) following the withdrawal process, proposed transition period and related rulings, including potential reduction in investment in the U.K., and the pursuit of trade, border control or other related policies by the U.S. and/or other countries (including U.S. - China trade relations), political and labor unrest in France, Hong Kong, China and other jurisdictions, conflict in the Middle East, the impact of U.S. government shutdowns, elections, the impact of terrorist acts, acts of war or other violence or political unrest, as well as natural disasters or weather-related or similar events, including hurricanes as well as power failures, communication and transportation disruptions, and other interruptions of utilities or other essential services, and the impact of pandemics and other international health incidents;
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the effect on our business, clients, the markets in which we operate, and the economy in general of recent changes in the U.S. and foreign tax and other laws, including changes in tax rates, repatriation rules, and deductibility of interest, potential policy and regulatory changes in Mexico, sequestrations, uncertainties regarding the debt ceiling and the federal budget, and other potential political policies;
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the effect on our business of changes in interest rates, changes in benchmarks, including the phase out of the London Interbank Offering Rate (“LIBOR”), the level of worldwide governmental debt issuances, austerity programs, increases or decreases in deficits, and other changes to monetary policy, and potential political impasses or regulatory requirements, including increased capital requirements for banks and other institutions or changes in legislation, regulations and priorities;
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extensive regulation of our business and clients, changes in regulations relating to commercial real estate and other industries, and risks relating to compliance matters, including regulatory examinations, inspections, investigations and enforcement actions, and any resulting costs, increased financial and capital requirements, enhanced oversight, remediation, fines, penalties, sanctions, and changes to or restrictions or limitations on specific activities, operations, compensatory arrangements, and growth opportunities, including acquisitions, hiring, and new businesses, products, or services, as well as risks related to our taking actions to ensure that we and Newmark Holdings are not deemed investment companies under the Investment Company Act of 1940 (the “Investment Company Act”);
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factors related to specific transactions or series of transactions as well as counterparty failure;
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costs and expenses of developing, maintaining and protecting our intellectual property, as well as employment, regulatory, and other litigation, proceedings and their related costs, including related to acquisitions and other matters, including judgments, fines, or settlements paid, reputational risk, and the impact thereof on our financial results and cash flow in any given period;
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our ability to maintain continued access to credit and availability of financing necessary to support our ongoing business needs, including to refinance indebtedness, and the risks associated with the resulting leverage, as well as fluctuations in interest rates;
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certain other financial risks, including the possibility of future losses, indemnification obligations, assumed liabilities, reduced cash flows from operations, increased leverage and the need for short or long-term borrowings, including from Cantor, the ability of Newmark to refinance its indebtedness, or our access to other sources of cash relating to acquisitions, dispositions, or other matters, potential liquidity and other risks relating to our ability to maintain continued access to credit and availability of financing necessary to support ongoing business needs on terms acceptable to us, if at all, and risks associated with the resulting leverage, including potentially causing a reduction in credit ratings and the associated outlooks and increased borrowing costs as well as interest rate and foreign currency exchange rate fluctuations;
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risks associated with the temporary or longer-term investment of our available cash, including in Newmark OpCo, defaults or impairments on the Company’s investments, joint venture interests, stock loans or cash management vehicles and collectability of loan balances owed to us by partners, employees, Newmark OpCo or others;
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our ability to enter new markets or develop new products or services and to induce customers to use these products or services and to secure and maintain market share;
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our ability to enter into marketing and strategic alliances, business combinations, restructuring, rebranding or other transactions, including acquisitions, dispositions, reorganizations, partnering opportunities and joint ventures, the anticipated benefits of any such transactions, relationships or growth and the future impact of any such transactions, relationships or growth on other businesses and financial results for current or future periods, the integration of any completed acquisitions and the use of proceeds of any completed dispositions, the impact of amendments and/or terminations of any strategic arrangements, and the value of any hedging entered into in connection with consideration received or to be received in connection with such dispositions and any transfers thereof;
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our estimates or determinations of potential value with respect to various assets or portions of the Company’s business, including with respect to the accuracy of the assumptions or the valuation models or multiples used;
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our ability to hire and retain personnel, including brokers, salespeople, managers, and other professionals;
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our ability to effectively manage any growth that may be achieved, including outside of the U.S., while ensuring compliance with all applicable financial reporting, internal control, legal compliance, and regulatory requirements;
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our ability to identify and remediate any material weaknesses in internal controls that could affect the ability to properly maintain books and records, prepare financial statements and reports in a timely manner, control policies, practices and procedures, operations and assets, assess and manage the Company’s operational, regulatory and financial risks, and integrate acquired businesses and brokers, salespeople, managers and other professionals;
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the impact of unexpected market moves and similar events;
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information technology risks, including capacity constraints, failures, or disruptions in our systems or those of clients, counterparties, or other parties with which we interact, including cyber-security risks and incidents, compliance with regulations requiring data minimization and protection and preservation of records of access and transfers of data, privacy risk and exposure to potential liability and regulatory focus;
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our ability to meet expectations with respect to payment of dividends and repurchases of common stock or purchases of Newmark Holdings limited partnership interests or other equity interests in subsidiaries, including Newmark OpCo, including from Cantor or our executive officers, other employees, partners and others and the effect on the market for and trading price of our Class A common stock as a result of any such transactions;
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the effectiveness of our governance, risks management, and oversight procedures and the impact of any potential transactions or relationships with related parties;
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the impact of our environmental, social and governance (“ESG”) or “sustainability” ratings on the decisions by clients, investors , potential clients and other parties with respect to our business, investments in us or the market for and trading price of Newmark Class A common stock or other matters;
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the fact that the prices at which shares of our Class A common stock are or may be sold in offerings or other transactions may vary significantly, and purchasers of shares in such offerings or other transactions, as well as existing stockholders, may suffer significant dilution if the price they paid for their shares is higher than the price paid by other purchasers in such offerings or transactions;
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the effect on the market for and trading price of our Class A common stock of various offerings and other transactions, including offerings of Class A common stock and convertible or exchangeable securities, repurchases of shares of Class A common stock and purchases or redemptions of Newmark Holdings limited partnership interests or other equity interests in us or its subsidiaries, any exchanges by Cantor of shares of Class A common stock for shares of Class B common stock, any exchanges or redemptions of limited partnership units and issuances of shares of Class A common stock in connection therewith, including in corporate or partnership restructurings, payment of dividends on Class A common stock and distributions on limited partnership interests of Newmark Holdings and Newmark OpCo, convertible arbitrage, hedging, and other transactions engaged in by us or holders of outstanding shares, debt or other securities, share sales and stock pledge, stock loans, and other financing transactions by holders of shares or units (including by Cantor executive officers, partners, employees or others), including of shares acquired pursuant to employee benefit plans, unit exchanges and redemptions, corporate or partnership restructurings, acquisitions, conversions of Class B common stock and other convertible securities, stock pledge, stock loans, or other financing transactions, distributions from Cantor pursuant to Cantor’s distribution rights obligations and other distributions to Cantor partners, including deferred distribution rights shares;
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the effect of a potential restructuring of BGC’s partnership into a corporation on Newmark, including but not limited to, impacts on Newmark’s financial statements; and
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other factors, including those that are discussed under “Risk Factors,” to the extent applicable.
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ITEM 1.
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BUSINESS
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we offer a full suite of best-in-class real estate services and professionals to both investors/owners and occupiers,
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we deploy deeply embedded technology and use data-driven analytics to enable clients to better manage their real estate utilization and spend, enhancing the depth of our client relationships,
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we attract and retain market-leading professionals with the benefits of our partnership and equity-based compensation structure and high growth platform;
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we actively encourage cross-selling among our diversified business lines, and
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we continuously build out additional products and capabilities to capitalize on our market knowledge and client relationships.
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Berkeley Point, which focuses on origination, sale and servicing of multifamily and commercial mortgage loans, including loans with GSEs;
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the assets of Regency Capital Partners, a San Francisco-based real estate finance firm;
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Spring11, a New York-based commercial real estate due diligence firm;
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ten former offices of the Integra Realty Resources valuations network based in Washington, D.C., Baltimore, Wilmington, DE, New York/New Jersey, Philadelphia, Atlanta, Boston, Pittsburgh, Denver, and Los Angeles;
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Jackson Cooksey, a Dallas-based corporate tenant representation real estate agency;
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RKF, a New York-based firm specializing in retail leasing, investment sales and consulting services;
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MLG Commercial, a commercial real estate company offering both brokerage and property management services in Wisconsin;
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ACRES, a company that provides landlord and tenant representation, investment sales and asset management services focusing on the Utah, Boise and Reno markets; and
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Harper Dennis Hobbs Holdings Limited, a real-estate advisory firm based in London.(“Harper Dennis Hobbs”)
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Fannie Mae. As one of 25 lenders under the Fannie Mae DUS program, we are a multifamily approved seller/servicer for conventional, affordable and seniors loans that satisfy Fannie Mae’s underwriting and other eligibility requirements. Fannie Mae has delegated to us responsibility for ensuring that the loans originated under the Fannie Mae DUS program satisfy the underwriting and other eligibility requirements established from time to time by Fannie Mae. In exchange for this delegation of authority, we share up to one-third of the losses that may result from a borrower’s default. All of the Fannie Mae loans that we originate are sold, prior to loan funding, in the form of a Fannie Mae-insured security to third-party investors. We service all loans that we originate under the Fannie Mae DUS program.
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Freddie Mac. We are one of 22 Freddie Mac multifamily approved seller/servicer for conventional, affordable and seniors loans that satisfy Freddie Mac’s underwriting and other eligibility requirements. Under the program, we submit the completed loan underwriting package to Freddie Mac and obtain Freddie Mac’s commitment to purchase the loan at a specified price after closing. Freddie Mac ultimately performs its own underwriting of loans that we sell to Freddie Mac. Freddie Mac may choose to hold, sell or, as it does in most cases, later securitize such loans. We do not have any material risk-sharing arrangements on loans sold to Freddie Mac under the program. We also generally service loans that we originate under this Freddie Mac program.
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HUD/Ginnie Mae/FHA. As an approved HUD MAP and HUD LEAN lender and Ginnie Mae issuer, we provide construction and permanent loans to developers and owners of multifamily housing, affordable housing, senior housing and healthcare facilities. We submit a completed loan underwriting package to FHA and obtain FHA’s firm commitment to insure the loan. The loans are typically securitized into Ginnie Mae securities that are sold, prior to loan funding, to third-party investors. Ginnie Mae is a United States government corporation in HUD. Ginnie Mae securities are backed by the full faith and credit of the United States. In the event of a default on a HUD insured loan, HUD will reimburse approximately 99% of any losses of principal and interest on the loan and Ginnie Mae will reimburse the majority of remaining losses of principal and interest. The lender typically is obligated to continue to advance principal and interest payments and tax and insurance escrow amounts on Ginnie Mae securities until the HUD mortgage insurance claim has been paid and the Ginnie Mae security is fully paid. We also generally service all loans that we originate under these programs.
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As described under “Real Estate Investor/Owner Services and Products - Capital Markets,” we also offer our clients access to third party banks, insurance companies and other capital providers through our mortgage brokerage platform.
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Ranked #4 Top Brokerage Firm, Commercial Property Executive, 2019;
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Ranked #1 Top Sales Firm, Commercial Property Executive, 2019
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Ranked #4 Top Brokers in Sales of Office Properties, Real Estate Alert, 2019;
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Ranked #2 Top Brokers of Multifamily Properties, Real Estate Alert, 2019;
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Ranked #4 Top Overall Brokers, Real Estate Alert, 2019
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Ranked #4 Top Retail Brokers, Real Estate Alert, 2019
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Ranked #1 Brokerage Firm in Manhattan by Retail Deal Volume, outpacing its closest competitor by nearly 40 percent, The Real Deal, 2019
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Ranked #2 Top Apartment Brokers of the Top 25 in Investment Volume, Real Capital Analytics Survey, 2019;
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Ranked #5 Top Brokers of the Top 25 in Investment Volume, Real Capital Analytics Survey, 2019;
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Ranked #4 Top Office Brokers of the Top 25 in Investment Volume, Real Capital Analytics Survey, 2019;
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Ranked #4 Multifamily Freddie Mac Optigo® lender in 2019 by the agency, up from #10 in 2013, the year before we acquired this business;
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Ranked #1 Seniors Housing Freddie Mac Optigo® in 2019 by the agency
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Ranked among The Best of The Global Outsourcing 100® by the International Association of Outsourcing Professionals, 2019, for the 10th consecutive year
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Ranked #4 New York’s Largest Commercial Property Managers, Crain’s New York Business, 2019; and
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Winner of 16 REBNY Deal of the Year Awards in the last 15 Years, Real Estate Board of New York.
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Concurrently with the Separation and Contribution, we entered into the transactions described under “Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations-Separation, Initial Public Offering, and Spin-Off.”
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In March 2018, BGC Partners made an additional investment in us as described under “Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations- Separation, Initial Public Offering, and Spin-Off-BGC Partners March 2018 Investment by BGC.”
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The types of interests in Newmark, Newmark Holdings and Newmark OpCo outstanding following the completion of these transactions are described under “Current Organizational Structure.”
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A general decline in acquisition and disposition activity can lead to a reduction in the commissions and fees we receive for arranging such transactions, as well as in commissions and fees we earn for arranging the financing for acquirers.
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A general decline in the value and performance of commercial real estate and in rental rates can lead to a reduction in management and leasing commissions and fees. Additionally, such declines can lead to a reduction in commissions and fees that are based on the value of, or revenue produced by, the properties for which we provide services. This may include commissions and fees for appraisal and valuation, sales and leasing, and property and facilities management.
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Cyclicality in the commercial real estate markets may lead to volatility in our earnings, and the commercial real estate business can be highly sensitive to market perception of the economy generally and our industry specifically. Real estate markets are also thought to “lag” the broader economy. This means that, even when underlying economic fundamentals improve in a given market, it may take additional time for these improvements to translate into strength in the commercial real estate markets.
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In weaker economic environments, income-producing multifamily real estate may experience higher property vacancies, lower investor and tenant demand and reduced values. In such environments, we could experience lower transaction volumes and transaction sizes as well as fewer loan originations with lower relative principal amounts, as well as potential credit losses arising from risk-sharing arrangements with respect to certain GSE loans.
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Periods of economic weakness or recession, significantly rising interest rates, fiscal uncertainty, declining employment levels, declining demand for commercial real estate, falling real estate values, disruption to the global capital or credit markets, political uncertainty or the public perception that any of these events may occur, may negatively affect the performance of some or all of our business lines.
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Our ability to raise funding in the long-term or short-term debt capital markets or the equity capital markets, or to access secured lending markets could in the future be adversely affected by conditions in the United States and international economy and markets, with the cost and availability of funding adversely affected by illiquid credit markets and wider credit spreads and changes in interest rates.
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experiences its own financial problems;
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becomes bankrupt or insolvent, which can lead to our failure to be paid for services we have previously provided or funds we have previously advanced;
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decides to reduce its operations or its real estate facilities;
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makes a change in its real estate strategy, such as no longer outsourcing its real estate operations;
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decides to change its providers of real estate services; or
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merges with another corporation or otherwise undergoes a change of control, which may result in new management taking over with a different real estate philosophy or in different relationships with other real estate providers.
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potential disruption of our ongoing business and product, service and market development and distraction of management;
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difficulty retaining and integrating personnel and integrating administrative, operational, financial reporting, internal control, compliance, technology and other systems;
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the necessity of hiring additional managers and other critical professionals and integrating them into current operations;
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increasing the scope, geographic diversity and complexity of our operations;
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to the extent that we pursue these opportunities, exposure to political, economic, legal, regulatory, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization and/or foreign ownership restrictions, expropriation, price controls, capital controls, foreign currency fluctuations, regulatory and tax requirements, economic and/or political instability, geographic, time zone, language and cultural differences among personnel in different areas of the world, exchange controls and other restrictive government actions, as well as the outbreak of hostilities;
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the risks relating to integrating accounting and financial systems and accounting policies and the related risk of having to restate our historical financial statements;
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potential dependence upon, and exposure to liability, loss or reputational damage relating to systems, controls and personnel that are not under our control;
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addition of business lines in which we have not previously engaged;
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potential unfavorable reaction to our strategic alliance, acquisition, disposition or joint venture strategy by our customers, counterparties, and employees;
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the upfront costs associated with pursuing transactions and recruiting personnel, which efforts may be unsuccessful in the increasingly competitive marketplace for the most talented producers and managers;
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conflicts or disagreements between any strategic alliance or joint venture partner and us;
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exposure to potential unknown liabilities of any acquired business, strategic alliance or joint venture that are significantly larger than we anticipate at the time of acquisition, and unforeseen increased expenses or delays associated with acquisitions, including costs in excess of the cash transition costs that we estimate at the outset of a transaction;
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reduction in availability of financing due to tightened credit markets or credit ratings downgrades or defaults by us, in connection with strategic alliances, acquisitions, dispositions, joint ventures and other growth opportunities;
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a significant increase in the level of our indebtedness in order to generate cash resources that may be required to effect acquisitions;
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dilution resulting from any issuances of shares of our Class A common stock or limited partnership units in connection with strategic alliances, acquisitions, joint ventures and other growth opportunities in the event that these arrangements are amended or terminated;
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a reduction of the diversification of our business resulting from any dispositions;
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the necessity of replacing certain functions that are sold in dispositions;
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the cost of rebranding and the impact on our market awareness of dispositions;
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adverse effects on our liquidity as a result of payment of cash resources and/or issuance of shares of our Class A common stock or limited partnership units;
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the impact of any reduction in our asset base resulting from dispositions on our ability to obtain financing or the terms thereof; and
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a lag in the realization of financial benefits from these transactions and arrangements.
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unanticipated disruptions in service to our clients;
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slower response times;
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financial losses;
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litigation or other client claims; and
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regulatory actions.
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it may limit our ability to borrow money, dispose of assets or sell equity to fund our working capital, capital expenditures, dividend payments, debt service, strategic initiatives or other obligations or purposes;
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it may limit our flexibility in planning for, or reacting to, changes in the economy, the markets, regulatory requirements, our operations or business;
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it may impact our ability to obtain or maintain favorable credit ratings;
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it may expose us to a rising interest rate environment when we need to refinance our debt;
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our financial leverage may be higher than some of our competitors, which may place us at a competitive disadvantage;
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it may make us more vulnerable to downturns in the economy or our business;
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it may require a substantial portion of our cash flow from operations to make interest payments;
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it may make it more difficult for us to satisfy other obligations;
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it may increase the risk of a future downgrade of our credit ratings or otherwise impact our ability to obtain or maintain investment grade credit ratings, which could increase future debt costs and limit the future availability of debt financing;
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we may not be able to borrow additional funds or refinance existing debt as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our Class A common stock or purchase limited partnership units; and
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there would be a material adverse effect on our business, financial condition, results of operations and prospects if we were unable to service our indebtedness or obtain additional financing or refinance our existing debt on terms acceptable to us.
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create liens on certain assets;
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incur additional debt;
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make significant investments and acquisitions;
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consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;
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dispose of certain assets;
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pay additional dividends on or make additional distributions in respect of our capital stock or make restricted payments;
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repurchase shares of our Class A common stock or purchase limited partnership units;
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enter into certain transactions with our affiliates; and
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place restrictions on certain distributions from subsidiaries.
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Prior to the separation, our business had been operated by BGC Partners as part of its broader corporate organization, rather than as an independent company. BGC Partners or one of its affiliates had performed various corporate functions for us, including legal services, treasury, accounting, auditing, risk management, information technology, human resources, corporate affairs, tax administration, certain governance functions (including internal audit and compliance with the Sarbanes-Oxley Act) and external reporting. Our historical financial results for periods prior to the separation reflect allocations of corporate expenses from BGC Partners for these and similar functions. These allocations were less than the comparable expenses we believe we would have incurred had we operated as a separate public company.
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Until the completion of our IPO, our business was integrated with the other businesses of BGC Partners. Historically, we had shared economies of scale in costs, employees and vendor relationships. While we have entered into transitional arrangements that govern certain commercial and other relationships between BGC Partners and us after the separation, those transitional arrangements may not fully capture the benefits our business has enjoyed as a result of being integrated with the other businesses of BGC Partners.
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Generally, our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, had historically been satisfied as part of the enterprise-wide cash management policies of BGC Partners. We may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements.
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•
|
The cost of capital for our business may be higher than BGC Partners’ cost of capital prior to the separation.
|
•
|
improving strategic planning, increasing management focus and streamlining decision-making by providing the flexibility to implement our strategic plan and to respond more effectively to different client needs and the changing economic environment;
|
•
|
allowing us to adopt the capital structure, investment policy and dividend policy best suited to our financial profile and business needs;
|
•
|
creating an independent equity structure that will facilitate our ability to effect future acquisitions utilizing our Class A common stock; and
|
•
|
facilitating incentive compensation arrangements for employees more directly tied to the performance of our business, and enhancing employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives.
|
•
|
potential acquisitions and dispositions of businesses;
|
•
|
the issuance, acquisition or disposition of securities by us;
|
•
|
the election of new or additional directors to our Board of Directors;
|
•
|
the payment of dividends by us (if any), distribution of profits by Newmark OpCo and/or Newmark Holdings and repurchases of shares of our Class A common stock or purchases of Newmark Holdings limited partnership interests or other equity interests in our subsidiaries, including from Cantor or our executive officers, other employees, partners and others;
|
•
|
any loans to or from us or Cantor;
|
•
|
business operations or business opportunities of ours and Cantor’s that would compete with the other party’s business opportunities;
|
•
|
intellectual property matters;
|
•
|
business combinations involving us; and
|
•
|
the nature, quality and pricing of administrative services and transition services to be provided to or by BGC Partners or Cantor or their respective affiliates.
|
•
|
our quarterly or annual earnings, or those of other companies in our industry;
|
•
|
actual or anticipated fluctuations in our results of operations;
|
•
|
differences between our actual financial and operating results and those expected by investors and analysts;
|
•
|
changes in analysts’ recommendations or estimates or our ability to meet those estimates;
|
•
|
the prospects of our competition and of the commercial real estate market in general;
|
•
|
changes in general valuations for companies in our industry; and
|
•
|
changes in business, legal or regulatory conditions, or other general economic or market conditions and overall market fluctuations.
|
•
|
the requirement that a majority of its Board of Directors consist of independent directors;
|
•
|
the requirement that its director nominees be selected or recommended for the board’s selection by a majority of the board’s independent directors in a vote in which only independent directors participate or by a nominating committee comprised solely of independent directors, in either case, with a formal written charter or board resolutions, as applicable, addressing the nominations process and such related matters as may be required under the federal securities laws; and
|
•
|
the requirement that its compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
|
ITEM 5.
|
MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Period
|
Total
Number of Shares Repurchased/Purchased |
|
Average
Price Paid per Unit or Share |
|
Total Number of Shares Repurchased as Part of Publicly Announced Program
|
|
Approximate
Dollar Value of Units and Shares That May Yet Be Repurchased/ Purchased Under the Plan |
||||||
Repurchases/Purchases
|
|
|
|
|
|
|
|
||||||
October 1, 2019 - October 31, 2019
|
55,193
|
|
|
$
|
10.69
|
|
|
55,193
|
|
|
|
||
November 1, 2019 - November 30, 2019
|
80,000
|
|
|
12.40
|
|
|
80,000
|
|
|
|
|||
December 1, 2019 - December 31, 2019
|
490,404
|
|
|
13.33
|
|
|
490,404
|
|
|
|
|||
Total
|
625,597
|
|
|
$
|
12.97
|
|
|
625,597
|
|
|
$
|
157,413
|
|
•
|
Charges with respect to grants of exchangeability, which reflect the right of holders of limited partnership units with no capital accounts, such as LPUs and PSUs, to exchange these units into shares of common stock, or into partnership units with capital accounts, such as HDUs, as well as cash paid with respect to taxes withheld or expected to be owed by the unit holder upon such exchange. The withholding taxes related to the exchange of certain non-exchangeable units without a capital account into either common shares or units with a capital account may be funded by the redemption of preferred units such as PPSUs.
|
•
|
Charges with respect to preferred units. Any preferred units would not be included in the Company’s fully diluted share count because they cannot be made exchangeable into shares of common stock and are entitled only to a fixed distribution. Preferred units are granted in connection with the grant of certain limited partnership units that may be granted exchangeability or redeemed in connection with the grant of shares of common stock at ratios designed to cover any withholding taxes expected to be paid. This is an acceptable alternative to the common practice among public companies of issuing the gross amount of shares to employees, subject to cashless withholding of shares, to pay applicable withholding taxes.
|
•
|
GAAP equity-based compensation charges with respect to the grant of an offsetting amount of common stock or partnership units with capital accounts in connection with the redemption of non-exchangeable units, including PSUs and LPUs.
|
•
|
Charges related to amortization of RSUs and limited partnership units.
|
•
|
Charges related to grants of equity awards, including common stock or partnership units with capital accounts.
|
•
|
Allocations of net income to limited partnership units and FPUs. Such allocations represent the pro-rata portion of post-tax GAAP earnings available to such unit holders.
|
•
|
Amortization of intangibles with respect to acquisitions.
|
•
|
Gains attributable to originated mortgage servicing rights (which Newmark refers to as “OMSRs”).
|
•
|
Amortization of mortgage servicing rights (which Newmark refers to as “MSRs”). Under GAAP, the Company recognizes
|
•
|
Various other GAAP items that management views as not reflective of the Company's underlying performance for the given period, including non-compensation-related charges incurred as part of broad restructuring plans. Such GAAP items may include charges for exiting leases and/or other long-term contracts as part of cost-saving initiatives, as well as non-cash impairment charges related to assets, goodwill and/or intangibles created from acquisitions.
|
•
|
Unusual, one-time, non-ordinary or non-recurring gains or losses;
|
•
|
Non-cash GAAP asset impairment charges;
|
•
|
The impact of any unrealized non-cash mark-to-market gains or losses on “Other income (loss)” related to the variable share forward agreements with respect to Newmark’s expected receipt of the Nasdaq payments in 2020, 2021, and 2022 and the recently settled 2019 Nasdaq payment (the “Nasdaq Forwards”); and/or;
|
•
|
Mark-to-market adjustments for non-marketable investments;
|
•
|
Certain other non-cash, non-dilutive, and/or non-economic items.
|
•
|
The fully diluted share count includes the shares related to any dilutive instruments, but excludes the associated expense, net of tax, when the impact would be dilutive; or
|
•
|
The fully diluted share count excludes the shares related to these instruments, but includes the associated expense, net of tax.
|
•
|
Net income (loss) attributable to noncontrolling interest;
|
•
|
Provision (benefit) for income taxes;
|
•
|
OMSR revenue;
|
•
|
MSR amortization;
|
•
|
Other depreciation and amortization;
|
•
|
Equity-based compensation and allocations of net income to limited partnership units and FPUs;
|
•
|
Various other GAAP items that management views as not reflective of the Company’s underlying performance for the given period, including non-compensation-related charges incurred as part of broad restructuring plans. Such
|
•
|
Other non-cash, non-dilutive, and/or non-economic items, which may, in certain periods, include the impact of any unrealized non-cash mark-to-market gains or losses on “other income (loss)” related to the variable share forward agreements with respect to Newmark’s expected receipt of the Nasdaq payments in 2020, 2021, and 2022 and the recently settled 2019 Nasdaq payment (the “Nasdaq Forwards”), as well as mark-to-market adjustments for non-marketable investments; and
|
•
|
Interest expense.
|
•
|
Certain equity-based compensation charges that may be determined at the discretion of management throughout and up to the period-end;
|
•
|
Unusual, one-time, non-ordinary, or non-recurring items;
|
•
|
The impact of gains or losses on certain marketable securities, as well as any gains or losses related to associated mark-to- market movements and/or hedging including with respect to the Nasdaq Forwards. These items are calculated using period-end closing prices;
|
•
|
Non-cash asset impairment charges, which are calculated and analyzed based on the period-end values of the underlying assets. These amounts may not be known until after period-end;
|
•
|
Acquisitions, dispositions and/or resolutions of litigation, which are fluid and unpredictable in nature.
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017(1)
|
|
2016(1)
|
|
2015(1)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commissions
|
|
1,396,035
|
|
|
$
|
1,286,339
|
|
|
$
|
1,014,716
|
|
|
$
|
849,419
|
|
|
$
|
806,931
|
|
|
Gain from mortgage banking activities, net
|
|
198,085
|
|
|
182,264
|
|
|
206,000
|
|
|
193,387
|
|
|
115,304
|
|
|||||
Management services, servicing fees and other
|
|
624,012
|
|
|
578,976
|
|
|
375,734
|
|
|
307,177
|
|
|
278,012
|
|
|||||
Total revenues
|
|
2,218,132
|
|
|
2,047,579
|
|
|
1,596,450
|
|
|
1,349,983
|
|
|
1,200,247
|
|
|||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Compensation and employee benefits
|
|
1,275,988
|
|
|
1,161,985
|
|
|
987,701
|
|
|
849,975
|
|
|
816,268
|
|
|||||
Equity-based compensation and allocations of net
income to limited partnership units and FPUs
|
|
258,836
|
|
|
224,644
|
|
|
147,139
|
|
|
72,318
|
|
|
142,195
|
|
|||||
Total compensation and employee benefits
|
|
1,534,824
|
|
|
1,386,629
|
|
|
1,134,840
|
|
|
922,293
|
|
|
958,463
|
|
|||||
Operating, administrative and other
|
|
361,857
|
|
|
331,758
|
|
|
219,163
|
|
|
185,343
|
|
|
162,316
|
|
|||||
Fees to related parties
|
|
25,025
|
|
|
26,162
|
|
|
20,771
|
|
|
18,010
|
|
|
18,471
|
|
|||||
Depreciation and amortization
|
|
131,144
|
|
|
97,733
|
|
|
95,815
|
|
|
72,197
|
|
|
71,774
|
|
|||||
Total operating expenses
|
|
2,052,850
|
|
|
1,842,282
|
|
|
1,470,589
|
|
|
1,197,843
|
|
|
1,211,024
|
|
|||||
Other income (loss), net
|
|
80,954
|
|
|
127,293
|
|
|
73,927
|
|
|
15,279
|
|
|
(460
|
)
|
|||||
Income (loss) from operations
|
|
246,236
|
|
|
332,590
|
|
|
199,788
|
|
|
167,419
|
|
|
(11,237
|
)
|
|||||
Interest (expense) income, net
|
|
(32,088
|
)
|
|
(50,205
|
)
|
|
2,786
|
|
|
3,786
|
|
|
1,867
|
|
|||||
Income (loss) before income taxes and noncontrolling
interests
|
|
214,148
|
|
|
282,385
|
|
|
202,574
|
|
|
171,205
|
|
|
(9,370
|
)
|
|||||
Provision (benefit) for income taxes
|
|
52,436
|
|
|
90,487
|
|
|
57,478
|
|
|
3,993
|
|
|
(6,644
|
)
|
|||||
Consolidated net income (loss)
|
|
161,712
|
|
|
191,898
|
|
|
145,096
|
|
|
167,212
|
|
|
(2,726
|
)
|
|||||
Less: Net income (loss) attributable to noncontrolling
interests
|
|
44,407
|
|
|
85,166
|
|
|
604
|
|
|
(1,189
|
)
|
|
77
|
|
|||||
Net income (loss) to common stockholders
|
|
117,305
|
|
|
$
|
106,732
|
|
|
$
|
144,492
|
|
|
$
|
168,401
|
|
|
$
|
(2,803
|
)
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share
|
|
$
|
0.59
|
|
|
$
|
0.65
|
|
|
$
|
1.08
|
|
|
N/A
|
|
|
N/A
|
|
||
Fully diluted earnings per share
|
|
$
|
0.58
|
|
|
$
|
0.64
|
|
|
$
|
0.85
|
|
|
N/A
|
|
|
N/A
|
|
||
Basic weighted-average shares of common stock
outstanding
|
|
177,774
|
|
|
157,256
|
|
|
133,413
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Fully diluted weighted-average shares of common stock outstanding
|
|
185,016
|
|
|
163,810
|
|
|
138,398
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Dividends declared per share of common stock
|
|
$
|
0.40
|
|
|
$
|
0.36
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Dividends declared and paid per share of common stock
|
|
$
|
0.39
|
|
|
$
|
0.27
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Cash and cash equivalents
|
|
$
|
163,564
|
|
|
$
|
122,475
|
|
|
$
|
121,027
|
|
|
$
|
66,627
|
|
|
$
|
111,430
|
|
Total assets
|
|
$
|
3,201,599
|
|
|
$
|
3,454,157
|
|
|
$
|
2,273,007
|
|
|
$
|
2,534,688
|
|
|
$
|
1,657,930
|
|
Long-term debt
|
|
$
|
589,294
|
|
|
$
|
537,926
|
|
|
$
|
670,710
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Notes payable to related parties
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
412,500
|
|
|
$
|
690,000
|
|
|
$
|
—
|
|
Total liabilities
|
|
$
|
2,239,457
|
|
|
$
|
2,371,189
|
|
|
$
|
2,029,593
|
|
|
$
|
1,550,905
|
|
|
$
|
853,896
|
|
Total stockholders’ equity
|
|
$
|
940,625
|
|
|
$
|
1,056,798
|
|
|
$
|
222,318
|
|
|
$
|
983,783
|
|
|
$
|
804,034
|
|
(1)
|
Financial results have been retrospectively adjusted to include the financial results of Berkeley Point. See “Item 7 –– Management's Discussion and Analysis of Financial Condition and Results of Operations — Berkeley Point Acquisition and Investment in Real Estate LP”
|
•
|
the principal corporate transactions pursuant to which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark Group (defined below), the “BGC Group”) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the “Newmark Group”) the assets and liabilities of the BGC Group relating to BGC’s Real Estate Services business, including BGC’s interests in both BPF and Real Estate LP (together with the proportional distribution and assumption and repayment of indebtedness described in the following bullets, the (“Separation”);
|
•
|
the proportional distribution in the Separation of interests in Newmark Holdings to holders of interests in BGC Holdings;
|
•
|
the IPO;
|
•
|
the assumption and repayment of indebtedness by the BGC Group and the Newmark Group, as further described below;
|
•
|
the BGC Holdings distribution; and
|
•
|
the pro rata distribution in the Spin-Off of the shares of Newmark Class A common stock and the shares of Newmark Class B common stock held by BGC, pursuant to which shares of Newmark Class A common stock held by BGC would be distributed to the holders of shares of BGC Class A common stock and shares of Newmark Class B common stock held by BGC would be distributed to the holders of shares of BGC Class B common stock. The Spin-Off distribution is intended to qualify as generally tax-free for U.S. federal income tax purposes.
|
•
|
Sustained U.S. employment growth and rising home values have fueled the economy and generated demand for commercial real estate;
|
•
|
Technology, professional and business services and healthcare continued to power demand for office space;
|
•
|
E-commerce and supply-chain optimization has pushed industrial absorption to 39 consecutive quarters of positive net absorption, reflecting tenant and owner-user demand for warehouses and distribution centers;
|
•
|
Apartment rents benefited from sustained job growth and underlying demographic trends towards apartment living among two key age groups: millennials and baby boomers; and
|
•
|
Continued corporate employment growth, combined with increased leisure travel, generated demand for hotel room-nights.
|
•
|
Leasing and Other Commissions. We offer a diverse range of commercial real estate brokerage and advisory services, including tenant and agency representation, which includes comprehensive lease negotiations, strategic planning, site selection, lease auditing, and other financial and market analysis.
|
•
|
Capital Markets. Our real estate capital markets business specializes in the arrangement of acquisitions and dispositions of commercial properties, as well as providing other financial services, including the arrangement of debt and equity financing, and loan sale advisory.
|
•
|
Gains from Mortgage Banking Activities/Originations, Net. Gains from mortgage banking activities/originations are derived from the origination of loans with borrowers and the sale of those loans to investors.
|
•
|
Management Services, Servicing Fees and Other. We provide commercial services to tenants and landlords. In this business, we provide property and facilities management services along with project management, valuation and appraisal services and other consulting services, as well as technology, to customers who may also utilize our commercial real estate brokerage services. Servicing fees are derived from the servicing of loans originated by us as well as loans originated by third parties.
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Actual Results
|
|
Percentage of Total Revenues
|
|
Actual Results
|
|
Percentage of Total Revenues
|
|
Actual Results
|
|
Percentage of Total Revenues
|
|||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Leasing and other commissions
|
$
|
854,780
|
|
|
38.5
|
%
|
|
$
|
817,435
|
|
|
39.9
|
%
|
|
$
|
616,980
|
|
|
38.7
|
%
|
Capital markets
|
541,255
|
|
|
24.4
|
|
|
468,904
|
|
|
22.9
|
|
|
397,736
|
|
|
24.9
|
|
|||
Gains from mortgage banking activities/originations, net
|
198,085
|
|
|
8.9
|
|
|
182,264
|
|
|
8.9
|
|
|
206,000
|
|
|
12.9
|
|
|||
Management services, servicing fees and other
|
624,012
|
|
|
28.1
|
|
|
578,976
|
|
|
28.3
|
|
|
375,734
|
|
|
23.5
|
|
|||
Total revenues
|
2,218,132
|
|
|
100.0
|
|
|
2,047,579
|
|
|
100.0
|
|
|
1,596,450
|
|
|
100.0
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Compensation and employee benefits
|
1,275,988
|
|
|
57.5
|
|
|
1,161,985
|
|
|
56.7
|
|
|
987,701
|
|
|
61.9
|
|
|||
Equity-based compensation and allocations of net
income to limited partnership units and FPUs (1) |
258,836
|
|
|
11.7
|
|
|
224,644
|
|
|
11.0
|
|
|
147,139
|
|
|
9.2
|
|
|||
Total compensation and employee benefits
|
1,534,824
|
|
|
69.2
|
|
|
1,386,629
|
|
|
67.7
|
|
|
1,134,840
|
|
|
71.1
|
|
|||
Operating, administrative and other
|
361,857
|
|
|
16.3
|
|
|
331,758
|
|
|
16.2
|
|
|
219,163
|
|
|
13.7
|
|
|||
Fees to related parties
|
25,025
|
|
|
1.1
|
|
|
26,162
|
|
|
1.3
|
|
|
20,771
|
|
|
1.3
|
|
|||
Depreciation and amortization
|
131,144
|
|
|
5.9
|
|
|
97,733
|
|
|
4.8
|
|
|
95,815
|
|
|
6.0
|
|
|||
Total operating expenses
|
2,052,850
|
|
|
92.5
|
|
|
1,842,282
|
|
|
90.0
|
|
|
1,470,589
|
|
|
92.1
|
|
|||
Other income, net
|
80,954
|
|
|
3.6
|
|
|
127,293
|
|
|
6.2
|
|
|
73,927
|
|
|
4.6
|
|
|||
Income from operations
|
246,236
|
|
|
11.1
|
|
|
332,590
|
|
|
16.2
|
|
|
199,788
|
|
|
12.5
|
|
|||
Interest (expense) income, net
|
(32,088
|
)
|
|
(1.4
|
)
|
|
(50,205
|
)
|
|
(2.5
|
)
|
|
2,786
|
|
|
0.2
|
|
|||
Income before income taxes and noncontrolling interests
|
214,148
|
|
|
9.7
|
|
|
282,385
|
|
|
13.8
|
|
|
202,574
|
|
|
12.7
|
|
|||
Provision for income taxes
|
52,436
|
|
|
2.4
|
|
|
90,487
|
|
|
4.4
|
|
|
57,478
|
|
|
3.6
|
|
|||
Consolidated net income
|
161,712
|
|
|
7.3
|
|
|
191,898
|
|
|
9.4
|
|
|
145,096
|
|
|
9.1
|
|
|||
Less: Net income attributable to noncontrolling interests
|
44,407
|
|
|
2.0
|
|
|
85,166
|
|
|
4.2
|
|
|
604
|
|
|
—
|
|
|||
Net income available to common stockholders
|
$
|
117,305
|
|
|
5.3
|
%
|
|
$
|
106,732
|
|
|
5.2
|
%
|
|
$
|
144,492
|
|
|
9.1
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Actual Results
|
|
Percentage of Total Revenues
|
|
Actual Results
|
|
Percentage of Total Revenues
|
|
Actual Results
|
|
Percentage of Total Revenues
|
|||||||||
Issuance of common stock and exchangeability expenses
|
$
|
181,714
|
|
|
8.2
|
%
|
|
$
|
179,333
|
|
|
8.8
|
%
|
|
$
|
99,435
|
|
|
6.2
|
%
|
Allocations of net income
|
50,410
|
|
|
2.3
|
|
|
51,462
|
|
|
2.5
|
|
|
25,222
|
|
|
1.6
|
|
|||
Limited partnership units amortization
|
21,508
|
|
|
1.0
|
|
|
(7,938
|
)
|
|
(0.4
|
)
|
|
21,270
|
|
|
1.3
|
|
|||
RSU amortization
|
5,204
|
|
|
0.2
|
|
|
1,787
|
|
|
0.1
|
|
|
1,212
|
|
|
0.1
|
|
|||
Equity-based compensation and allocations of net income to limited partnership units and FPUs (2)
|
$
|
258,836
|
|
|
11.7
|
%
|
|
$
|
224,644
|
|
|
11.0
|
%
|
|
$
|
147,139
|
|
|
9.2
|
%
|
(2)
|
Reclassifications have been made to previously reported amounts to conform to the new presentation.
|
|
|
December 31, 2019
|
|
September 30, 2019 (1)
|
|
June 30, 2019
|
|
March 31, 2019
|
|
December 31, 2018
|
|
September 30, 2018 (1)
|
|
June 30, 2018
|
|
March 31, 2018
|
||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commissions
|
|
$
|
416,728
|
|
|
$
|
357,908
|
|
|
$
|
346,131
|
|
|
$
|
275,268
|
|
|
$
|
426,431
|
|
|
$
|
319,340
|
|
|
$
|
279,833
|
|
|
$
|
260,735
|
|
Gains from mortgage banking
activities/originations, net
|
|
49,316
|
|
|
72,332
|
|
|
45,091
|
|
|
31,346
|
|
|
49,501
|
|
|
51,972
|
|
|
41,877
|
|
|
38,914
|
|
||||||||
Management services, servicing
fees and other
|
|
166,320
|
|
|
156,394
|
|
|
160,256
|
|
|
141,042
|
|
|
155,759
|
|
|
147,497
|
|
|
144,909
|
|
|
130,811
|
|
||||||||
Total revenues
|
|
632,364
|
|
|
586,634
|
|
|
551,478
|
|
|
447,656
|
|
|
631,691
|
|
|
518,809
|
|
|
466,619
|
|
|
430,460
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compensation and employee
benefits
|
|
354,862
|
|
|
341,036
|
|
|
316,737
|
|
|
263,353
|
|
|
342,876
|
|
|
291,382
|
|
|
266,639
|
|
|
261,088
|
|
||||||||
Equity-based compensation and
allocations of net income to
limited partnership units and
FPUs
|
|
148,965
|
|
|
56,647
|
|
|
39,353
|
|
|
13,871
|
|
|
99,085
|
|
|
40,776
|
|
|
67,367
|
|
|
17,416
|
|
||||||||
Total compensation and
employee benefits
|
|
503,827
|
|
|
397,683
|
|
|
356,090
|
|
|
277,224
|
|
|
441,961
|
|
|
332,158
|
|
|
334,006
|
|
|
278,504
|
|
||||||||
Operating, administrative and
other
|
|
85,918
|
|
|
86,297
|
|
|
101,749
|
|
|
87,893
|
|
|
91,369
|
|
|
84,914
|
|
|
80,048
|
|
|
75,427
|
|
||||||||
Fees to related parties
|
|
3,990
|
|
|
7,088
|
|
|
7,222
|
|
|
6,725
|
|
|
6,323
|
|
|
6,644
|
|
|
6,301
|
|
|
6,894
|
|
||||||||
Depreciation and amortization
|
|
32,634
|
|
|
36,781
|
|
|
33,425
|
|
|
28,304
|
|
|
29,146
|
|
|
25,873
|
|
|
20,201
|
|
|
22,513
|
|
||||||||
Total operating expenses
|
|
626,369
|
|
|
527,849
|
|
|
498,486
|
|
|
400,146
|
|
|
568,799
|
|
|
449,589
|
|
|
440,556
|
|
|
383,338
|
|
||||||||
Other income (loss), net
|
|
(14,313
|
)
|
|
108,711
|
|
|
(3,726
|
)
|
|
(9,718
|
)
|
|
28,234
|
|
|
93,717
|
|
|
(365
|
)
|
|
5,707
|
|
||||||||
Income (loss) from operations
|
|
(8,318
|
)
|
|
167,496
|
|
|
49,266
|
|
|
37,792
|
|
|
91,126
|
|
|
162,937
|
|
|
25,698
|
|
|
52,829
|
|
||||||||
Interest expense, net
|
|
(8,141
|
)
|
|
(8,167
|
)
|
|
(8,081
|
)
|
|
(7,699
|
)
|
|
(14,705
|
)
|
|
(11,509
|
)
|
|
(10,582
|
)
|
|
(13,409
|
)
|
||||||||
Income (loss) before income taxes and
noncontrolling interests |
|
(16,459
|
)
|
|
159,329
|
|
|
41,185
|
|
|
30,093
|
|
|
76,421
|
|
|
151,428
|
|
|
15,116
|
|
|
39,420
|
|
||||||||
Provision (benefit) for income taxes
|
|
(132
|
)
|
|
36,760
|
|
|
9,121
|
|
|
6,687
|
|
|
36,862
|
|
|
35,870
|
|
|
10,822
|
|
|
6,933
|
|
||||||||
Consolidated net income (loss)
|
|
(16,327
|
)
|
|
122,569
|
|
|
32,064
|
|
|
23,406
|
|
|
39,559
|
|
|
115,558
|
|
|
4,294
|
|
|
32,487
|
|
||||||||
Less: Net income (loss) attributable to
noncontrolling interests |
|
(5,362
|
)
|
|
33,871
|
|
|
9,396
|
|
|
6,502
|
|
|
21,800
|
|
|
47,321
|
|
|
3,555
|
|
|
12,490
|
|
||||||||
Net income (loss) available to
common stockholders |
|
$(10,965)
|
|
$88,698
|
|
$22,668
|
|
$16,904
|
|
$17,759
|
|
$68,237
|
|
$739
|
|
$19,997
|
(1)
|
Amounts include the gains related to the Nasdaq Earn-out associated with the Nasdaq monetization transactions recorded in Other income (loss), net.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by (used in) operating activities
|
$
|
986,760
|
|
|
$
|
(332,367
|
)
|
|
$
|
853,637
|
|
Add back:
|
|
|
|
|
|
||||||
Loan originations - loans held for sale
|
8,783,225
|
|
|
8,612,671
|
|
|
8,844,768
|
|
|||
Loan sales - loans held for sale
|
(9,563,973
|
)
|
|
(8,002,872
|
)
|
|
(9,556,163
|
)
|
|||
Unrealized gains on loans held for sale
|
5,174
|
|
|
18,430
|
|
|
2,194
|
|
|||
Net cash provided by operating activities excluding activity from loan originations and sales (1) (2)
|
$
|
211,186
|
|
|
$
|
295,862
|
|
|
$
|
144,436
|
|
(1)
|
Includes payments for corporate taxes in the amounts of $95.1 million, $1.2 million and $0.0 million for the years ended December 31, 2019, 2018 and 2017, respectively.
|
(2)
|
Includes payments for new hires and producers in the amount of $161.9 million, $109.6 million, and $34.3 million for the years ended December 31, 2019, 2018 and 2017, respectively.
|
|
|
Rating
|
|
Outlook
|
Fitch Ratings Inc.
|
|
BBB-
|
|
Stable
|
Standards & Poor's
|
|
BB+
|
|
Stable
|
Kroll Bond Rating Agency
|
|
BBB-
|
|
Stable
|
Period
|
Total
Number of Shares Repurchased/Purchased |
|
Average
Price Paid per Unit or Share |
|
Total Number of Shares Repurchased as Part of Publicly Announced Program
|
|
Approximate
Dollar Value of Units and Shares That May Yet Be Repurchased/ Purchased Under the Plan |
||||||
Balance at beginning of period
|
50,000
|
|
|
$
|
9.73
|
|
|
50,000
|
|
|
$
|
199,514
|
|
January 1, 2019 - March 31, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||
April 1, 2019 - June 30, 2019
|
1,613,032
|
|
|
8.61
|
|
|
1,613,032
|
|
|
|
|||
July 1, 2019 - September 30, 2019
|
2,279,373
|
|
|
8.81
|
|
|
2,279,373
|
|
|
|
|||
October 1, 2019 - December 31, 2019
|
625,597
|
|
|
12.97
|
|
|
625,597
|
|
|
|
|
||
Total
|
4,568,002
|
|
|
$
|
9.32
|
|
|
4,568,002
|
|
|
$
|
157,413
|
|
|
Year Ended
December 31, 2019
|
|
Common stock outstanding(1)
|
177,774
|
|
Partnership units(2)
|
89,427
|
|
RSUs (Treasury stock method)
|
1,290
|
|
Newmark exchange shares
|
369
|
|
Total(3)
|
268,860
|
|
(1)
|
Common stock consisted of Class A shares, Class B shares and contingent shares for which all necessary conditions have been satisfied except for the passage of time. For the year ended December 31, 2019, the weighted-average number of Class A shares was 156.2 million shares, Class B shares was 21.3 million shares and approximately 0.2 million shares of contingent Class A common stock and limited partnership units were included in our fully diluted EPS computation because the conditions for issuance had been met by the end of the period.
|
(2)
|
Partnership units collectively include founding/working partner units, limited partnership units, and Cantor units, (see Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings”, to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for more information.) In general, these partnership units are potentially exchangeable into shares of Newmark Class A common stock. In addition, partnership units held by Cantor are generally exchangeable into shares of Newmark Class A common stock and/or for up to 23.1 million shares of Newmark Class B common stock. These partnership units also generally receive quarterly allocations of net income, after the deduction of the Preferred Distribution, based on their weighted-average pro rata share of economic ownership of the operating subsidiaries. As a result, these partnership units are included in the fully diluted share count calculation shown above.
|
(3)
|
For the year ended December 31, 2019, the weighted-average share count includes 84.5 million potentially anti-dilutive securities, which were excluded in the computation of fully diluted earnings per share.
|
|
Year Ended
December 31, 2019
|
|
Common stock outstanding
|
177,551
|
|
Partnership units
|
82,380
|
|
Newmark exchange shares
|
238
|
|
Other
|
674
|
|
Total
|
260,843
|
|
|
Total
|
|
Less than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More than
5 Years
|
||||||||||
Operating leases(1)
|
$
|
347,408
|
|
|
$
|
44,709
|
|
|
$
|
82,424
|
|
|
$
|
73,812
|
|
|
$
|
146,463
|
|
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises(2)
|
209,648
|
|
|
209,648
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt(3)
|
600,000
|
|
|
—
|
|
|
50,000
|
|
|
550,000
|
|
|
—
|
|
|||||
Interest on long-term debt(4)
|
134,000
|
|
|
35,569
|
|
|
69,081
|
|
|
29,350
|
|
|
—
|
|
|||||
Interest on warehouse facilities collateralized by U.S. Government Sponsored Enterprises(5)
|
5,404
|
|
|
5,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
1,296,460
|
|
|
$
|
295,330
|
|
|
$
|
201,505
|
|
|
$
|
653,162
|
|
|
$
|
146,463
|
|
(1)
|
Operating leases are related to rental payments under various non-cancelable leases principally for office space.
|
(2)
|
Warehouse facilities are collateralized by $215.3 million of loans held for sale, at fair value (See Note 21— “Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises” to our accompanying Consolidated Financial Statements in Part II, Item 8 in this Annual Report on Form 10-K) which loans were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance of and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities.
|
(3)
|
Long-term debt reflects long-term borrowings of $550.0 million 6.125% Senior Notes. The carrying amount of these notes was approximately $540.4 million. Long-term debt also includes the borrowings under the Credit Facility, which is assumed to be outstanding until the maturity date of the Credit Facility. The carrying amount of the borrowings under the Credit Facility is $48.9 million. (See Note 22 — “ Long-Term Debt” to our accompanying Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K.)
|
(4)
|
Reflects interest on the $550.0 million 6.125% Senior Notes until their maturity date of November 15, 2023, in addition to the borrowings of $50.0 million assumed to be outstanding until the maturity date of the Credit Facility. Interest on the borrowings under the Credit Facility was projected using the 1-month LIBOR rate plus 200 basis points.
|
(5)
|
Interest on the warehouse facilities collateralized by U.S. Government Sponsored Enterprises was projected by using the 1-month LIBOR rate plus their respective additional basis points, primarily 115 basis points above LIBOR, applied to their respective outstanding balances as of December 31, 2019, through their respective maturity dates. Their respective maturity dates range from June 2020 to October 2020, while one line has an open maturity date. The notional amount of these committed and uncommitted warehouse facilities was $1.8 billion at December 31, 2019. One warehouse facility, with an initial notional amount of $450.0 million, was temporarily increased by $350.0 million to $800.0 million for the period January 13, 2020 to March 30, 2020. Another warehouse facility, with an initial notional amount of $400.0 million, was temporarily increased by $100.0 million to $500.0 million for the period January 29, 2020 to March 13, 2020.
|
•
|
The underlying number of shares and the related strike price;
|
•
|
The maturity date; and
|
•
|
The implied volatility of Nasdaq’s stock price.
|
Input
|
|
Three Months Ended December 31, 2019
|
|
Three Months Ended September 30, 2019
|
|
Three Months Ended June 30, 2019
|
|
Three Months Ended March 31, 2019
|
|
Three Months Ended December 31, 2018
|
||||||||||
Number of shares per tranche
|
|
992,247
|
|
|
992,247
|
|
|
992,247
|
|
|
992,247
|
|
|
992,247
|
|
|||||
Strike price
|
|
$87.68 to $94.21
|
|
|
$87.68 to $94.21
|
|
|
$87.68 to $94.21
|
|
|
$87.68 to $94.21
|
|
|
$87.68 to $94.21
|
|
|||||
Maturity date
|
|
November 30, 2020 - November 30, 2022
|
|
November 29, 2019 - November 30, 2022
|
|
November 29, 2019 - November 30, 2022
|
|
November 29, 2019 - November 30, 2022
|
|
November 29, 2019 - November 30, 2022
|
||||||||||
Implied volatility - weighted-average
|
|
32.2
|
%
|
|
32.9
|
%
|
|
32.2
|
%
|
|
31.5
|
%
|
|
30.2
|
%
|
|||||
Period end stock price
|
|
$107.1
|
|
$99.35
|
|
$96.17
|
|
$87.49
|
|
$81.57
|
||||||||||
Dividend yield - weighted-average
|
|
1.76
|
%
|
|
1.89
|
%
|
|
1.95
|
%
|
|
2.01
|
%
|
|
2.16
|
%
|
|||||
Interest rate - weighted-average
|
|
1.70
|
%
|
|
1.62
|
%
|
|
1.82
|
%
|
|
2.35
|
%
|
|
2.61
|
%
|
|||||
Unrealized gains/(losses) due to the changes in fair value of the Nasdaq Forwards
|
|
$
|
(13,935
|
)
|
|
$
|
(8,214
|
)
|
|
$
|
(15,638
|
)
|
|
$
|
(13,329
|
)
|
|
$
|
12,675
|
|
Audited Financial Statements of Newmark Group Inc.:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets:
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
163,564
|
|
|
$
|
122,475
|
|
Restricted cash
|
58,308
|
|
|
64,931
|
|
||
Marketable securities
|
36,795
|
|
|
48,942
|
|
||
Loans held for sale, at fair value
|
215,290
|
|
|
990,864
|
|
||
Receivables, net
|
508,379
|
|
|
451,605
|
|
||
Receivables from related parties
|
—
|
|
|
20,498
|
|
||
Other current assets (see Note 19)
|
91,194
|
|
|
57,739
|
|
||
Total current assets
|
1,073,530
|
|
|
1,757,054
|
|
||
Goodwill
|
557,914
|
|
|
515,321
|
|
||
Mortgage servicing rights, net
|
413,644
|
|
|
411,809
|
|
||
Loans, forgivable loans and other receivables from employees and partners, net
|
403,710
|
|
|
285,532
|
|
||
Right-of-use assets
|
201,661
|
|
|
—
|
|
||
Fixed assets, net
|
98,016
|
|
|
78,805
|
|
||
Other intangible assets, net
|
45,226
|
|
|
35,769
|
|
||
Other assets (see Note 19)
|
407,898
|
|
|
369,867
|
|
||
Total assets
|
$
|
3,201,599
|
|
|
$
|
3,454,157
|
|
Liabilities, Redeemable Partnership Interests, and Equity:
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|||
Warehouse facilities collateralized by U.S. Government Sponsored Enterprises
|
$
|
209,648
|
|
|
$
|
972,387
|
|
Accrued compensation
|
343,845
|
|
|
366,506
|
|
||
Accounts payable, accrued expenses and other liabilities (see Note 29)
|
417,069
|
|
|
312,239
|
|
||
Securities loaned
|
36,735
|
|
|
—
|
|
||
Payables to related parties
|
38,090
|
|
|
13,507
|
|
||
Total current liabilities
|
1,045,387
|
|
|
1,664,639
|
|
||
Long-term debt
|
589,294
|
|
|
537,926
|
|
||
Right-of-use liabilities
|
227,942
|
|
|
—
|
|
||
Other long-term liabilities (see Note 29)
|
376,834
|
|
|
168,623
|
|
||
Total liabilities
|
2,239,457
|
|
|
2,371,188
|
|
||
Commitments and contingencies (see Note 31)
|
|
|
|
|
|
||
Redeemable partnership interests
|
21,517
|
|
|
26,170
|
|
||
Equity:
|
|
|
|
||||
Class A common stock, par value of $0.01 per share: 1,000,000,000 shares authorized;
160,833,463 and 156,966,336 shares issued at December 31, 2019 and December 31, 2018, respectively, and 156,265,461 and 156,916,336 shares outstanding at December 31, 2019 and December 31, 2018, respectively |
1,608
|
|
|
1,570
|
|
||
Class B common stock, par value of $0.01 per share: 500,000,000 shares authorized; 21,285,533 and 21,285,533
shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively |
212
|
|
|
212
|
|
||
Additional paid-in capital
|
318,165
|
|
|
285,071
|
|
||
Retained earnings
|
313,112
|
|
|
277,952
|
|
||
Contingent Class A common stock
|
1,461
|
|
|
3,250
|
|
||
Treasury stock at cost: 4,568,002 shares of Class A common stock at December 31, 2019 and 50,000 shares of
Class A common stock at December 31, 2018 |
(34,894
|
)
|
|
(486
|
)
|
||
Total stockholders’ equity
|
599,664
|
|
|
567,569
|
|
||
Noncontrolling interests
|
340,961
|
|
|
489,230
|
|
||
Total equity
|
940,625
|
|
|
1,056,799
|
|
||
Total liabilities, redeemable partnership interest, and equity
|
$
|
3,201,599
|
|
|
$
|
3,454,157
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Commissions
|
$
|
1,396,035
|
|
|
$
|
1,286,339
|
|
|
$
|
1,014,716
|
|
Gains from mortgage banking activities/originations, net
|
198,085
|
|
|
182,264
|
|
|
206,000
|
|
|||
Management services, servicing fees and other
|
624,012
|
|
|
578,976
|
|
|
375,734
|
|
|||
Total revenues
|
2,218,132
|
|
|
2,047,579
|
|
|
1,596,450
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Compensation and employee benefits
|
1,275,988
|
|
|
1,161,985
|
|
|
987,701
|
|
|||
Equity-based compensation and allocations of net income to limited partnership units
and FPUs
|
258,836
|
|
|
224,644
|
|
|
147,139
|
|
|||
Total compensation and employee benefits
|
1,534,824
|
|
|
1,386,629
|
|
|
1,134,840
|
|
|||
Operating, administrative and other
|
361,857
|
|
|
331,758
|
|
|
219,163
|
|
|||
Fees to related parties
|
25,025
|
|
|
26,162
|
|
|
20,771
|
|
|||
Depreciation and amortization
|
131,144
|
|
|
97,733
|
|
|
95,815
|
|
|||
Total operating expenses
|
2,052,850
|
|
|
1,842,282
|
|
|
1,470,589
|
|
|||
Other income, net
|
80,954
|
|
|
127,293
|
|
|
73,927
|
|
|||
Income from operations
|
246,236
|
|
|
332,590
|
|
|
199,788
|
|
|||
Interest (expense) income, net
|
(32,088
|
)
|
|
(50,205
|
)
|
|
2,786
|
|
|||
Income before income taxes and noncontrolling interests
|
214,148
|
|
|
282,385
|
|
|
202,574
|
|
|||
Provision for income taxes
|
52,436
|
|
|
90,487
|
|
|
57,478
|
|
|||
Consolidated net income
|
161,712
|
|
|
191,898
|
|
|
145,096
|
|
|||
Less: Net income attributable to noncontrolling interests
|
44,407
|
|
|
85,166
|
|
|
604
|
|
|||
Net income available to common stockholders
|
$
|
117,305
|
|
|
$
|
106,732
|
|
|
$
|
144,492
|
|
Per share data:
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
|
|
|
|
||||||
Net income available to common stockholders (1)
|
$
|
104,406
|
|
|
$
|
101,641
|
|
|
$
|
144,492
|
|
Basic earnings per share
|
$
|
0.59
|
|
|
$
|
0.65
|
|
|
$
|
1.08
|
|
Basic weighted-average shares of common stock outstanding
|
177,774
|
|
|
157,256
|
|
|
133,413
|
|
|||
Fully diluted earnings per share
|
|
|
|
|
|
||||||
Net income for fully diluted shares
|
$
|
108,160
|
|
|
$
|
105,571
|
|
|
$
|
117,217
|
|
Fully diluted earnings per share
|
$
|
0.58
|
|
|
$
|
0.64
|
|
|
$
|
0.85
|
|
Fully diluted weighted-average shares of common stock outstanding
|
185,016
|
|
|
163,810
|
|
|
138,398
|
|
(1)
|
Includes a reduction for dividends on preferred stock or units in the amount of $12.9 million and $5.1 million for the years ended December 31, 2019 and December 31, 2018, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Consolidated net income
|
$
|
161,712
|
|
|
$
|
191,898
|
|
|
$
|
145,096
|
|
Less: Comprehensive income attributable to noncontrolling interests, net of tax
|
44,407
|
|
|
85,166
|
|
|
604
|
|
|||
Comprehensive income available to common stockholders
|
$
|
117,305
|
|
|
$
|
106,732
|
|
|
$
|
144,492
|
|
|
Class A
Common
Stock
|
|
Class B
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Contingent
Class A
Common
Stock
|
|
Treasury
Stock
|
|
Retained
Earnings
|
|
BGC’s Net
Investment in
Newmark
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||||||
Balance, January 1, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
245,877
|
|
|
$
|
735,899
|
|
|
$
|
2,007
|
|
|
$
|
983,783
|
|
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,492
|
|
|
—
|
|
|
604
|
|
|
145,096
|
|
|||||||||
Distributions to BGC and noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(190,877
|
)
|
|
—
|
|
|
(71
|
)
|
|
(190,948
|
)
|
|||||||||
Purchase of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,092
|
|
|
(1,092
|
)
|
|
—
|
|
|||||||||
Noncontrolling interests in an entity acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,146
|
|
|
19,146
|
|
|||||||||
Debt assumed from BGC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,387,500
|
)
|
|
—
|
|
|
(1,387,500
|
)
|
|||||||||
Contributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
368,418
|
|
|
—
|
|
|
368,418
|
|
|||||||||
Transfer of pre-initial public offering (“IPO”) capital to redeemable partnership interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,096
|
)
|
|
—
|
|
|
(21,096
|
)
|
|||||||||
Issuance of shares in the Separation (Class A common stock, 115,593,787
shares); (Class B common stock, 15,840,049 shares) |
1,156
|
|
|
158
|
|
|
(245,815
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
303,187
|
|
|
(58,686
|
)
|
|
—
|
|
|||||||||
Proceeds from IPO, net of underwriting discounts and other expenses
(Class A common stock, 23,000,000 shares) |
230
|
|
|
—
|
|
|
295,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295,419
|
|
|||||||||
Equity-based compensation (Class A common stock, 600,000 shares)
|
—
|
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|||||||||
Balance, December 31, 2017
|
1,386
|
|
|
158
|
|
|
59,374
|
|
|
—
|
|
|
—
|
|
|
199,492
|
|
|
—
|
|
|
(38,092
|
)
|
|
222,318
|
|
|||||||||
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106,732
|
|
|
—
|
|
|
85,166
|
|
|
191,898
|
|
|||||||||
Cumulative effect of revenue standard adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,463
|
|
|
—
|
|
|
2,342
|
|
|
18,805
|
|
|||||||||
Reduction of earning distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,144
|
|
|
—
|
|
|
—
|
|
|
2,144
|
|
|||||||||
Dividends to common stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,788
|
)
|
|
—
|
|
|
—
|
|
|
(41,788
|
)
|
|||||||||
Preferred dividend on exchangeable preferred partnership units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,091
|
)
|
|
—
|
|
|
—
|
|
|
(5,091
|
)
|
|||||||||
Capital contributions to and from Cantor for equity-based compensation and other
|
—
|
|
|
—
|
|
|
27,920
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,376
|
|
|
45,296
|
|
|||||||||
Equity-based compensation and related issuance of Class A common stock
|
—
|
|
|
—
|
|
|
788
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
788
|
|
|||||||||
BGC's purchase of 16,606,726 exchangeable limited partnership units in Newmark Holdings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
241,960
|
|
|
241,960
|
|
|||||||||
Exchange of 14,831,234 exchangeable limited partnership units in Newmark Holdings and
6,903,876 limited partnership units in Newmark OpCo into an aggregate of 16,292,623 Class A and 5,445,488 Class B shares of Newmark common stock distributed in the Spin- Off and reallocation of capital |
163
|
|
|
54
|
|
|
194,614
|
|
|
(752
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194,079
|
)
|
|
—
|
|
|||||||||
Grant of exchangeability, redemption and issuance of limited partnership interests,
and issuance of 2,052,183 shares of Class A common stock |
21
|
|
|
—
|
|
|
6,009
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,170
|
|
|
106,200
|
|
|||||||||
Issuance of exchangeable preferred partnership units ("EPUs") in Newmark Opco
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
325,478
|
|
|
325,478
|
|
|||||||||
Earning distributions to limited partnership interests, redeemable partnership interests,
and other noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61,796
|
)
|
|
(61,796
|
)
|
|||||||||
Repurchase of 50,000 shares of Class A common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(486
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(486
|
)
|
|||||||||
Issuance of contingent limited partnership units
|
—
|
|
|
—
|
|
|
—
|
|
|
4,002
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,277
|
|
|
17,279
|
|
|||||||||
Other
|
—
|
|
|
—
|
|
|
(3,634
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,572
|
)
|
|
(6,206
|
)
|
|||||||||
Balance, December 31, 2018
|
1,570
|
|
|
212
|
|
|
285,071
|
|
|
3,250
|
|
|
(486
|
)
|
|
277,952
|
|
|
—
|
|
|
489,230
|
|
|
1,056,799
|
|
|||||||||
Consolidated net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
117,305
|
|
|
—
|
|
|
44,407
|
|
|
161,712
|
|
|||||||||
Dividends to common stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,245
|
)
|
|
—
|
|
|
—
|
|
|
(69,245
|
)
|
|||||||||
Preferred dividend on exchangeable preferred partnership units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,900
|
)
|
|
—
|
|
|
12,900
|
|
|
—
|
|
|||||||||
Earnings distributions to limited partnership interests and other noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(73,646
|
)
|
|
(73,646
|
)
|
|||||||||
Grant of exchangeability, redemption and issuance of Class A common
stock, 3,867,127 shares |
38
|
|
|
—
|
|
|
30,607
|
|
|
(1,789
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,758
|
)
|
|
(1,902
|
)
|
|||||||||
Repurchase of 4,518,002 shares of Class A common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,408
|
)
|
|
—
|
|
|
—
|
|
|
(7,692
|
)
|
|
(42,100
|
)
|
|||||||||
Redemption of EPUs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,480
|
)
|
|
(93,480
|
)
|
|||||||||
Other
|
—
|
|
|
—
|
|
|
2,487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,487
|
|
|||||||||
Balance, December 31, 2019
|
$
|
1,608
|
|
|
$
|
212
|
|
|
$
|
318,165
|
|
|
$
|
1,461
|
|
|
$
|
(34,894
|
)
|
|
$
|
313,112
|
|
|
$
|
—
|
|
|
$
|
340,961
|
|
|
$
|
940,625
|
|
|
Year Ended December 31,
|
||||||||
|
2019
|
|
2018
|
|
2017
|
||||
Dividends declared per share of common stock
|
$
|
0.40
|
|
|
$
|
0.36
|
|
|
N/A
|
Dividends declared and paid per share of common stock
|
$
|
0.39
|
|
|
$
|
0.27
|
|
|
N/A
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|||
Consolidated net income
|
$
|
161,712
|
|
|
$
|
191,898
|
|
|
$
|
145,096
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Gain on originated mortgage servicing rights
|
(103,160
|
)
|
|
(95,284
|
)
|
|
(120,970
|
)
|
|||
Depreciation and amortization
|
131,144
|
|
|
97,733
|
|
|
95,815
|
|
|||
Nasdaq recognition
|
(98,580
|
)
|
|
(85,135
|
)
|
|
(76,969
|
)
|
|||
Equity-based compensation and allocation of net income to limited partnership units and FPUs and issuance of common stock
|
258,836
|
|
|
224,644
|
|
|
10,000
|
|
|||
Employee loan amortization
|
38,987
|
|
|
27,743
|
|
|
34,420
|
|
|||
Deferred tax provision/(benefit)
|
(27,852
|
)
|
|
16,387
|
|
|
44,383
|
|
|||
Change in fair value of contingent consideration
|
728
|
|
|
374
|
|
|
2,675
|
|
|||
Realized gains on non-marketable investments, net
|
(12,159
|
)
|
|
(17,899
|
)
|
|
—
|
|
|||
Unrealized (gains) loss on loans held for sale
|
(5,174
|
)
|
|
(18,430
|
)
|
|
(2,194
|
)
|
|||
Income from an equity method investment
|
(7,250
|
)
|
|
(2,750
|
)
|
|
(1,562
|
)
|
|||
Provision for uncollectible accounts
|
1,817
|
|
|
3,530
|
|
|
6,099
|
|
|||
Realized (gains) loss on marketable securities
|
(4,056
|
)
|
|
(3,256
|
)
|
|
—
|
|
|||
Unrealized (gains) loss on marketable securities
|
(11,303
|
)
|
|
1,193
|
|
|
—
|
|
|||
Change in valuation of derivative asset
|
51,117
|
|
|
(19,002
|
)
|
|
636
|
|
|||
Loan originations—loans held for sale
|
(8,783,225
|
)
|
|
(8,612,671
|
)
|
|
(8,844,768
|
)
|
|||
Loan sales—loans held for sale
|
9,563,973
|
|
|
8,002,872
|
|
|
9,556,163
|
|
|||
Other
|
4,260
|
|
|
1,586
|
|
|
1,367
|
|
|||
Consolidated net income (loss), adjusted for non-cash and non-operating items
|
1,159,815
|
|
|
(286,467
|
)
|
|
850,191
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables, net
|
(52,021
|
)
|
|
(129,490
|
)
|
|
(57,175
|
)
|
|||
Loans, forgivable loans and other receivables from employees and partners
|
(161,897
|
)
|
|
(109,569
|
)
|
|
(34,321
|
)
|
|||
Other assets
|
(113,241
|
)
|
|
(9,924
|
)
|
|
36,086
|
|
|||
Accrued compensation
|
39,959
|
|
|
50,198
|
|
|
45,753
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
90,712
|
|
|
152,885
|
|
|
13,103
|
|
|||
Payables to related parties
|
23,433
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) operating activities
|
986,760
|
|
|
(332,367
|
)
|
|
853,637
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Payments for acquisitions, net of cash acquired
|
(33,939
|
)
|
|
(34,513
|
)
|
|
2,793
|
|
|||
Distributions from equity method investment
|
8,560
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from the sale of marketable securities
|
32,606
|
|
|
95,878
|
|
|
18,710
|
|
|||
Purchase of non-marketable investments
|
(28,000
|
)
|
|
(29,500
|
)
|
|
—
|
|
|||
Purchases of fixed assets
|
(34,526
|
)
|
|
(21,016
|
)
|
|
(19,069
|
)
|
|||
Payments to related parties
|
—
|
|
|
—
|
|
|
(375,000
|
)
|
|||
Borrowings from related parties
|
—
|
|
|
—
|
|
|
375,000
|
|
|||
Purchase of mortgage servicing rights
|
(1,489
|
)
|
|
(3,107
|
)
|
|
(2,055
|
)
|
|||
Net cash (used in) provided by investing activities
|
(56,788
|
)
|
|
7,742
|
|
|
379
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from warehouse facilities
|
8,783,225
|
|
|
8,612,671
|
|
|
8,844,768
|
|
|||
Principal payments on warehouse facilities
|
(9,545,964
|
)
|
|
(8,000,725
|
)
|
|
(8,742,295
|
)
|
|||
Proceeds from BGC's purchase of exchangeable limited partnership units in Newmark Holdings
|
—
|
|
|
241,960
|
|
|
—
|
|
|||
Proceeds from issuance of EPUs
|
—
|
|
|
262,169
|
|
|
—
|
|
|||
Payments to related parties
|
—
|
|
|
(858,428
|
)
|
|
(1,445,838
|
)
|
|||
Borrowings from related parties
|
—
|
|
|
372,950
|
|
|
698,919
|
|
|||
Settlement of pre-Spin-Off related party receivables
|
33,892
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from the IPO, net of underwriting discounts
|
—
|
|
|
(8,870
|
)
|
|
304,290
|
|
|||
Borrowing of debt
|
155,000
|
|
|
537,575
|
|
|
—
|
|
|||
Repayment of debt
|
(105,000
|
)
|
|
(670,710
|
)
|
|
(304,290
|
)
|
|||
Distributions of earnings to BGC
|
—
|
|
|
—
|
|
|
(101,731
|
)
|
|||
Pre-acquisition distributions relating to BPF acquisitions
|
—
|
|
|
—
|
|
|
(89,146
|
)
|
|||
Capital contribution
|
—
|
|
|
9,189
|
|
|
—
|
|
|||
Securities loaned
|
36,735
|
|
|
(57,623
|
)
|
|
57,623
|
|
|||
Treasury stock repurchases
|
(37,368
|
)
|
|
(486
|
)
|
|
—
|
|
|||
Earnings distributions to limited partnership interests and noncontrolling interests
|
(140,576
|
)
|
|
(46,490
|
)
|
|
(71
|
)
|
|||
Dividends to stockholders
|
(69,245
|
)
|
|
(41,787
|
)
|
|
—
|
|
|||
Prepayment penalty on debt
|
—
|
|
|
(6,954
|
)
|
|
—
|
|
|||
Payments on acquisition earn-outs
|
(4,837
|
)
|
|
(4,476
|
)
|
|
(18,940
|
)
|
|||
Payment of deferred financing costs
|
(1,368
|
)
|
|
(1,308
|
)
|
|
(1,485
|
)
|
|||
Net cash (used in) provided by financing activities
|
(895,506
|
)
|
|
338,657
|
|
|
(798,196
|
)
|
|||
Net increase in cash and cash equivalents and restricted cash
|
34,466
|
|
|
14,032
|
|
|
55,820
|
|
|||
Cash and cash equivalents and restricted cash at beginning of period
|
187,406
|
|
|
173,374
|
|
|
117,554
|
|
|||
Cash and cash equivalents and restricted cash at end of period
|
$
|
221,872
|
|
|
$
|
187,406
|
|
|
$
|
173,374
|
|
|
Year Ended December 31,
|
||||||||||
Supplemental disclosures of cash flow information:
|
2019
|
|
2018
|
|
2017
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
36,959
|
|
|
$
|
81,838
|
|
|
$
|
21,003
|
|
Taxes
|
$
|
95,089
|
|
|
$
|
1,165
|
|
|
$
|
46
|
|
Supplemental disclosure of noncash operating, investing and financing activities:
|
|
|
|
|
|
||||||
Right-of-use assets and liabilities
|
$
|
182,180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Treasury stock repurchase
|
$
|
4,732
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net assets contributed by BGC Partners’
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
368,418
|
|
Debt assumed from BGC
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,387,500
|
)
|
Accrued offering costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,870
|
|
(1)
|
Organization and Basis of Presentation
|
•
|
the principal corporate transactions pursuant to which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark Group (defined below), the “BGC Group”) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the “Newmark Group”) the assets and liabilities of the BGC Group relating to BGC’s Real Estate Services business, including BGC’s interests in both BPF and Real Estate LP (together with the proportional distribution and assumption and repayment of indebtedness described in the following bullets, the “Separation”);
|
•
|
the proportional distribution in the Separation of interests in Newmark Holdings to holders of interests in BGC Holdings;
|
•
|
the IPO;
|
•
|
the assumption and repayment of indebtedness by the BGC Group and the Newmark Group, as further described below;
|
•
|
the BGC Holdings distribution; and
|
•
|
the pro rata distribution in the Spin-Off of the shares of Newmark Class A common stock and the shares of Newmark Class B common stock held by BGC, pursuant to which shares of Newmark Class A common stock held by BGC would be distributed to the holders of shares of BGC Class A common stock and shares of Newmark Class B common stock held by BGC would be distributed to the holders of shares of BGC Class B common stock. The Spin-Off distribution is intended to qualify as generally tax-free for U.S. federal income tax purposes.
|
(a)
|
Basis of Presentation
|
•
|
Charges with respect to the grant of shares of common stock or limited partnership units, such as HDUs, including in connection with the redemption of non-exchangeable limited partnership units, including PSUs;
|
•
|
Charges with respect to grants of exchangeability, such as the right of holders of limited partnership units with no capital accounts, such as PSUs, to exchange the units into shares of common stock, or into partnership units with capital accounts, such as HDUs, as well as the cash paid in the settlement of the related preferred units to pay withholding taxes owed by the unit holder upon such exchange;
|
•
|
Preferred units are granted in connection with the grant of certain limited partnership units, such as PSUs, that may be granted exchangeability to cover the withholding taxes owed by the unit holder, rather than issuing the gross amount of shares to employees, subject to cashless withholding of shares to pay applicable withholding taxes;
|
•
|
Charges related to the amortization of RSUs and limited partnership units;
|
•
|
Allocations of net income to limited partnership units and founding/working partner units (“FPUs”), including the Preferred Distribution (as hereinafter defined).
|
(b)
|
Recently Adopted Accounting Pronouncements
|
(c)
|
New Accounting Pronouncements
|
(2)
|
Limited Partnership Interests in Newmark Holdings and BGC Holdings
|
(3)
|
Summary of Significant Accounting Policies
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Leasing and other commissions
|
$
|
854,780
|
|
|
$
|
817,435
|
|
|
$
|
616,980
|
|
Capital markets commissions
|
541,255
|
|
|
468,904
|
|
|
397,736
|
|
|||
Gains from mortgage banking activities/origination, net
|
198,085
|
|
|
182,264
|
|
|
206,000
|
|
|||
Management services, servicing fees and other
|
624,012
|
|
|
578,976
|
|
|
375,734
|
|
|||
Revenues
|
$
|
2,218,132
|
|
|
$
|
2,047,579
|
|
|
$
|
1,596,450
|
|
•
|
Level 1 measurements—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
•
|
Level 2 measurements—Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.
|
•
|
Level 3 measurements—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
|
Leasehold improvements and other fixed assets
|
|
shorter of the remaining term of lease or useful life
|
|
|
|
Software, including software development costs
|
|
3-5 years straight-line
|
|
|
|
Computer and communications equipment
|
|
3-5 years straight-line
|
•
|
The transfer must involve a financial asset, group of financial assets or a participating interest;
|
•
|
The financial assets must be isolated from the transferor and its consolidated affiliates as well as its creditors;
|
•
|
The transferee or beneficial interest holders must have the right to pledge or exchange the transferred financial assets; and
|
•
|
The transferor may not maintain effective control of the transferred assets.
|
(4)
|
Acquisitions
|
|
As of the
Acquisition Date
|
||
Assets
|
|
|
|
Cash and cash equivalents
|
$
|
1,391
|
|
Goodwill
|
43,804
|
|
|
Receivables, net
|
7,540
|
|
|
Other intangible assets, net
|
9,641
|
|
|
Other assets
|
614
|
|
|
Total assets
|
62,990
|
|
|
Liabilities
|
|
||
Accounts payable, accrued expenses and other liabilities
|
3,972
|
|
|
Accrued compensation
|
2,125
|
|
|
Total liabilities
|
6,097
|
|
|
Net assets acquired
|
$
|
56,893
|
|
|
As of the
Acquisition
Date
|
||
Assets
|
|
|
|
Cash and cash equivalents
|
$
|
1,110
|
|
Goodwill
|
42,188
|
|
|
Receivables, net
|
1,276
|
|
|
Fixed Assets, net
|
4,677
|
|
|
Other intangible assets, net
|
50,731
|
|
|
Other assets
|
2,894
|
|
|
Total assets
|
102,876
|
|
|
Liabilities
|
|
||
Accounts payable, accrued expenses and other liabilities
|
15,937
|
|
|
Accrued compensation
|
26,765
|
|
|
Total liabilities
|
42,702
|
|
|
Net assets acquired
|
$
|
60,174
|
|
(5)
|
Earnings Per Share and Weighted-Average Shares Outstanding
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|||
Net income available to common stockholders (1)
|
$
|
104,406
|
|
|
$
|
101,641
|
|
|
$
|
144,492
|
|
Basic weighted-average shares of common stock outstanding
|
177,774
|
|
|
157,256
|
|
|
133,413
|
|
|||
Basic earnings per share
|
$
|
0.59
|
|
|
$
|
0.65
|
|
|
$
|
1.08
|
|
(1)
|
Includes a reduction for dividends on preferred stock or units in the amount of $12.9 million and $5.1 million for the years ended December 31, 2019 and December 31, 2018.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017 (1)
|
||||||
Fully diluted earnings per share:
|
|
|
|
|
|
||||||
Net income available to common stockholders
|
$
|
104,406
|
|
|
$
|
101,641
|
|
|
$
|
144,492
|
|
Allocations of net income (loss) to limited partnership interests in Newmark Holdings, net of tax
|
3,754
|
|
|
3,930
|
|
|
(27,275
|
)
|
|||
Net income for fully diluted shares
|
$
|
108,160
|
|
|
$105,571
|
|
$117,217
|
||||
Weighted-average shares:
|
|
|
|
|
|
||||||
Common stock outstanding
|
177,774
|
|
|
157,256
|
|
|
133,413
|
|
|||
Partnership units (2)
|
5,583
|
|
|
5,717
|
|
|
4,725
|
|
|||
RSUs (Treasury stock method)
|
1,290
|
|
|
187
|
|
|
237
|
|
|||
Newmark exchange shares
|
369
|
|
|
650
|
|
|
23
|
|
|||
Fully diluted weighted-average shares of common stock outstanding
|
185,016
|
|
|
163,810
|
|
|
138,398
|
|
|||
Fully diluted earnings per share
|
$
|
0.58
|
|
|
$0.64
|
|
$0.85
|
(1)
|
Allocations of Net income (loss) to limited partnership interests in Newmark Holdings, net of tax consist solely of losses relating to the post-IPO period.
|
(2)
|
Partnership units collectively include founding/working partner units, limited partnership units, and Cantor and BGC units (See Note 2 — “Limited Partnership Interests in Newmark Holdings and BGC Holdings” for more information).
|
|
Year Ended December 31,
|
||||
|
2019
|
|
2018
|
||
Shares outstanding at beginning of period
|
156,916,336
|
|
|
138,593,787
|
|
Share issuances:
|
|
|
|
||
Issuance of Class A common stock in connection with The Spin-Off
|
—
|
|
|
16,292,623
|
|
LPU redemption/exchange (1)
|
2,052,416
|
|
|
1,709,048
|
|
Other issuances of Class A common stock
|
1,536,530
|
|
|
343,135
|
|
Issuance of Class A common stock for Newmark RSUs
|
278,181
|
|
|
27,743
|
|
Treasury stock repurchases
|
(4,518,002
|
)
|
|
(50,000
|
)
|
Shares outstanding at end of period
|
156,265,461
|
|
|
156,916,336
|
|
(1)
|
Because they were included in the Newmark’s fully diluted share count, if dilutive, any exchange of limited partnership interests into Class A common stock would not impact the fully diluted number of shares and units outstanding.
|
Period
|
Total
Number of Shares Repurchased/Purchased |
|
Average
Price Paid per Unit or Share |
|
Total Number of Shares Repurchased as Part of Publicly Announced Program
|
|
Approximate
Dollar Value of Units and Shares That May Yet Be Repurchased/ Purchased Under the Plan |
||||||
Balance at beginning of period
|
50,000
|
|
|
$
|
9.73
|
|
|
50,000
|
|
|
$
|
199,514
|
|
January 1, 2019 - March 31, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
||
April 1, 2019 - June 30, 2019
|
1,613,032
|
|
|
8.61
|
|
|
1,613,032
|
|
|
|
|||
July 1, 2019 - September 30, 2019
|
2,279,373
|
|
|
8.81
|
|
|
2,279,373
|
|
|
|
|||
October 1, 2019 - December 31, 2019
|
625,597
|
|
|
12.97
|
|
|
625,597
|
|
|
|
|
||
Total
|
4,568,002
|
|
|
$
|
9.32
|
|
|
4,568,002
|
|
|
$
|
157,413
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Balance at beginning of period:
|
$
|
26,170
|
|
|
$
|
21,096
|
|
Income allocation
|
5,288
|
|
|
6,779
|
|
||
Distributions of income
|
(5,355
|
)
|
|
(2,843
|
)
|
||
Redemptions
|
(927
|
)
|
|
(1,101
|
)
|
||
Issuance and other
|
(3,659
|
)
|
|
2,239
|
|
||
Balance at end of period
|
$
|
21,517
|
|
|
$
|
26,170
|
|
(7)
|
Marketable Securities
|
(8)
|
Investments
|
(9)
|
Capital and Liquidity Requirements
|
(10)
|
Loans Held for Sale, at Fair Value
|
|
Cost Basis
|
|
Fair Value
|
||||
December 31, 2019
|
$
|
210,116
|
|
|
$
|
215,290
|
|
December 31, 2018
|
972,434
|
|
|
990,864
|
|
(11)
|
Derivatives
|
|
As of December 31, 2019
|
|
|
As of December 31, 2018
|
|
||||||||||||||||||||
Derivative contract
|
Assets
|
|
Liabilities
|
|
Notional
Amounts
|
|
|
Assets
|
|
Liabilities
|
|
Notional
Amounts(1)
|
|
||||||||||||
Forward sale contracts
|
$
|
14,389
|
|
|
$
|
13,537
|
|
|
$
|
1,606,943
|
|
(1)
|
|
$
|
8,177
|
|
|
$
|
9,208
|
|
|
$
|
1,213,154
|
|
(1)
|
Nasdaq Forwards
|
26,502
|
|
|
—
|
|
|
267,480
|
|
|
|
77,619
|
|
|
—
|
|
|
360,960
|
|
|
||||||
Rate lock commitments
|
32,035
|
|
|
12,124
|
|
|
1,396,827
|
|
|
|
6,732
|
|
|
7,470
|
|
|
240,720
|
|
|
||||||
Total
|
$
|
72,926
|
|
|
$
|
25,661
|
|
|
$
|
3,271,250
|
|
|
|
$
|
92,528
|
|
|
$
|
16,678
|
|
|
$
|
1,814,834
|
|
|
(1)
|
Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of Newmark’s derivative activity, and does not represent anticipated losses.
|
|
Location of gain (loss) recognized
in income for derivatives
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|||||||
Derivatives not designed as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|||
Nasdaq Forwards
|
Other income (loss), net
|
|
$
|
(51,117
|
)
|
|
$
|
19,002
|
|
|
$
|
—
|
|
Rate lock commitments
|
Gains from mortgage banking activities/originations, net
|
|
21,916
|
|
|
935
|
|
|
1,953
|
|
|||
Rate lock commitments
|
Compensation and employee benefits
|
|
(2,004
|
)
|
|
(1,673
|
)
|
|
(1,420
|
)
|
|||
Forward sale contracts
|
Gains from mortgage banking activities/originations, net
|
|
851
|
|
|
(1,031
|
)
|
|
3,096
|
|
|||
Total
|
|
|
$
|
(30,354
|
)
|
|
$
|
17,233
|
|
|
$
|
3,629
|
|
(12)
|
Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit
|
(13)
|
Revenues from Contracts with Customers
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenues from contracts with customers:
|
|
|
|
||||
Leasing and other commissions
|
$
|
854,780
|
|
|
$
|
817,435
|
|
Capital markets commissions
|
541,255
|
|
|
468,904
|
|
||
Management services
|
446,367
|
|
|
414,447
|
|
||
Total
|
1,842,402
|
|
|
1,700,786
|
|
||
Other sources of revenue:
|
|
|
|
||||
Gains from mortgage banking activities/originations, net(1)
|
198,085
|
|
|
182,264
|
|
||
Servicing fees and other(1)
|
177,645
|
|
|
164,529
|
|
||
Total
|
$
|
2,218,132
|
|
|
$
|
2,047,579
|
|
(1)
|
Although these items have customers under contract, they were recorded as other sources of revenue as they were excluded from the scope of ASU No. 2014-9.
|
(14)
|
Gains from Mortgage Banking Activities/Originations, Net
|
|
For the Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Fair value of expected net future cash flows from servicing recognized at commitment, net
|
$
|
109,249
|
|
|
$
|
103,202
|
|
|
$
|
120,970
|
|
Loan originations related fees and sales premiums, net
|
88,836
|
|
|
79,062
|
|
|
85,030
|
|
|||
Total
|
$
|
198,085
|
|
|
$
|
182,264
|
|
|
$
|
206,000
|
|
(15)
|
Mortgage Servicing Rights, Net
|
|
For the Year Ended December 31,
|
||||||||||
Mortgage Servicing Rights
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning Balance
|
$
|
416,131
|
|
|
$
|
399,349
|
|
|
$
|
347,558
|
|
Additions
|
103,160
|
|
|
95,284
|
|
|
123,902
|
|
|||
Purchases from an affiliate
|
1,489
|
|
|
3,107
|
|
|
2,055
|
|
|||
Amortization
|
(88,114
|
)
|
|
(81,609
|
)
|
|
(74,166
|
)
|
|||
Ending Balance
|
$
|
432,666
|
|
|
$
|
416,131
|
|
|
$
|
399,349
|
|
|
|
|
|
|
|
||||||
Valuation Allowance
|
|
|
|
|
|
||||||
Beginning Balance
|
$
|
(4,322
|
)
|
|
$
|
(6,723
|
)
|
|
$
|
(7,742
|
)
|
Decrease (increase)
|
(14,700
|
)
|
|
2,401
|
|
|
1,019
|
|
|||
Ending Balance
|
$
|
(19,022
|
)
|
|
$
|
(4,322
|
)
|
|
$
|
(6,723
|
)
|
Net balance
|
$
|
413,644
|
|
|
$
|
411,809
|
|
|
$
|
392,626
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Servicing fees
|
$
|
104,305
|
|
|
$
|
103,365
|
|
|
$
|
95,373
|
|
Escrow interest and placement fees
|
22,417
|
|
|
18,293
|
|
|
9,328
|
|
|||
Ancillary fees
|
13,671
|
|
|
10,118
|
|
|
5,740
|
|
|||
Total
|
$
|
140,393
|
|
|
$
|
131,776
|
|
|
$
|
110,441
|
|
Balance, January 1, 2018
|
$
|
477,532
|
|
Acquisitions
|
40,157
|
|
|
Measurement period adjustments
|
(2,368
|
)
|
|
Balance, December 31, 2018
|
515,321
|
|
|
Acquisitions
|
43,804
|
|
|
Measurement period adjustments
|
(1,211
|
)
|
|
Balance, December 31, 2019
|
$
|
557,914
|
|
|
December 31, 2019
|
||||||||||||
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Weighted-
Average
Remaining
Life (Years)
|
||||||
Indefinite life:
|
|
|
|
|
|
|
|
|
|
|
|||
Trademark and trade names
|
$
|
11,350
|
|
|
$
|
—
|
|
|
$
|
11,350
|
|
|
N/A
|
License agreements (GSE)
|
5,390
|
|
|
—
|
|
|
5,390
|
|
|
N/A
|
|||
Definite life:
|
|
|
|
|
|
|
|
||||||
Trademark and trade names
|
10,511
|
|
|
(9,070
|
)
|
|
1,441
|
|
|
0.3
|
|||
Non-contractual customers
|
24,262
|
|
|
(6,109
|
)
|
|
18,153
|
|
|
0.8
|
|||
License agreements
|
4,981
|
|
|
(3,288
|
)
|
|
1,693
|
|
|
0.1
|
|||
Non-compete agreements
|
6,953
|
|
|
(2,434
|
)
|
|
4,519
|
|
|
0.7
|
|||
Contractual customers
|
3,052
|
|
|
(1,177
|
)
|
|
1,875
|
|
|
0
|
|||
Below market leases
|
941
|
|
|
(136
|
)
|
|
805
|
|
|
0.3
|
|||
Total
|
$
|
67,440
|
|
|
$
|
(22,214
|
)
|
|
$
|
45,226
|
|
|
0.7
|
|
December 31, 2018
|
||||||||||||
|
Gross
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Weighted-
Average
Remaining
Life (Years)
|
||||||
Indefinite life:
|
|
|
|
|
|
|
|
|
|
|
|||
Trademark and trade names
|
$
|
11,350
|
|
|
—
|
|
|
$
|
11,350
|
|
|
N/A
|
|
License agreements (GSE)
|
5,390
|
|
|
—
|
|
|
5,390
|
|
|
N/A
|
|||
Definite life:
|
|
|
|
|
|
|
|
||||||
Trademark and trade names
|
9,316
|
|
|
(6,706
|
)
|
|
2,610
|
|
|
0.5
|
|||
Non-contractual customers
|
11,323
|
|
|
(3,890
|
)
|
|
7,433
|
|
|
1.8
|
|||
License agreements
|
4,981
|
|
|
(2,292
|
)
|
|
2,689
|
|
|
0.4
|
|||
Non-compete agreements
|
6,267
|
|
|
(1,469
|
)
|
|
4,798
|
|
|
1.4
|
|||
Contractual customers
|
1,452
|
|
|
(849
|
)
|
|
603
|
|
|
0.1
|
|||
Below market leases
|
941
|
|
|
(45
|
)
|
|
896
|
|
|
0.5
|
|||
Total
|
$
|
51,020
|
|
|
$
|
(15,251
|
)
|
|
$
|
35,769
|
|
|
1.2
|
2020
|
$
|
5,952
|
|
2021
|
4,943
|
|
|
2022
|
2,904
|
|
|
2023
|
2,463
|
|
|
2024
|
1,909
|
|
|
Thereafter
|
10,315
|
|
|
Total
|
$
|
28,486
|
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
Leasehold improvements and other fixed assets
|
$
|
119,682
|
|
|
$
|
99,207
|
|
Software, including software development costs
|
21,538
|
|
|
21,417
|
|
||
Computer and communications equipment
|
23,028
|
|
|
16,605
|
|
||
Total, cost
|
164,248
|
|
|
137,229
|
|
||
Accumulated depreciation and amortization
|
(66,232
|
)
|
|
(58,424
|
)
|
||
Total, net
|
$
|
98,016
|
|
|
$
|
78,805
|
|
2020
|
$
|
44,709
|
|
2021
|
42,612
|
|
|
2022
|
39,812
|
|
|
2023
|
38,210
|
|
|
2024
|
35,602
|
|
|
Thereafter
|
146,463
|
|
|
Total lease payments
|
347,408
|
|
|
Less: Interest
|
92,282
|
|
|
Present value of lease liability
|
$
|
255,126
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Derivative assets
|
$
|
51,021
|
|
|
$
|
30,796
|
|
Prepaid expenses
|
15,251
|
|
|
15,570
|
|
||
Other taxes
|
22,483
|
|
|
9,992
|
|
||
Rent and other deposits
|
1,703
|
|
|
1,192
|
|
||
Other
|
736
|
|
|
189
|
|
||
Total
|
$
|
91,194
|
|
|
$
|
57,739
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets
|
$
|
182,781
|
|
|
$
|
149,938
|
|
Derivative assets
|
21,905
|
|
|
61,732
|
|
||
Equity method investment
|
99,966
|
|
|
101,275
|
|
||
Non-marketable investments
|
94,113
|
|
|
53,470
|
|
||
Other
|
9,133
|
|
|
3,452
|
|
||
Total
|
$
|
407,898
|
|
|
$
|
369,867
|
|
|
Committed
Lines
|
|
Uncommitted
Lines
|
|
Balance at December 31, 2019
|
|
Stated Spread
to One Month
LIBOR
|
|
Rate Type
|
||||||
Warehouse facility due June 17, 2020(1)
|
$
|
450,000
|
|
|
$
|
—
|
|
|
$
|
16,759
|
|
|
115 bps
|
|
Variable
|
Warehouse facility due June 17, 2020
|
—
|
|
|
300,000
|
|
|
—
|
|
|
110 bps
|
|
Variable
|
|||
Warehouse facility due September 25, 2020
|
200,000
|
|
|
—
|
|
|
8,097
|
|
|
115 bps
|
|
Variable
|
|||
Warehouse facility due October 9, 2020(2)
|
400,000
|
|
|
—
|
|
|
34,125
|
|
|
115 bps
|
|
Variable
|
|||
Fannie Mae repurchase agreement, open maturity
|
—
|
|
|
400,000
|
|
|
150,667
|
|
|
105 bps
|
|
Variable
|
|||
Total
|
$
|
1,050,000
|
|
|
$
|
700,000
|
|
|
$
|
209,648
|
|
|
|
|
|
(1)
|
The warehouse line was temporarily increased by $350.0 million to $800.0 million for the period January 13, 2020 to March 30, 2020.
|
(2)
|
The warehouse line was temporarily increased by $100.0 million to $500.0 million for the period January 29, 2020 to March 13, 2020.
|
|
Committed
Lines
|
|
Uncommitted
Lines
|
|
Balance at December 31, 2018
|
|
Stated Spread
to One Month
LIBOR
|
|
Rate Type
|
||||||
Warehouse facility due June 20, 2019
|
$
|
450,000
|
|
|
—
|
|
|
$
|
413,063
|
|
|
120 bps
|
|
Variable
|
|
Warehouse facility due September 25, 2019
|
200,000
|
|
|
—
|
|
|
113,452
|
|
|
120 bps
|
|
Variable
|
|||
Warehouse facility due October 10, 2019(1)
|
1,000,000
|
|
|
—
|
|
|
416,373
|
|
|
120 bps
|
|
Variable
|
|||
Fannie Mae repurchase agreement, open maturity
|
—
|
|
|
325,000
|
|
|
29,499
|
|
|
115 bps
|
|
Variable
|
|||
Total
|
$
|
1,650,000
|
|
|
$
|
325,000
|
|
|
$
|
972,387
|
|
|
|
|
|
(1)
|
The warehouse line was temporarily increased by $700.0 million to $1.0 billion for the period of November 30, 2018 to January 29, 2019. On January 29, 2019, the temporary increase was decreased by $400.0 million to $300.0 million for the period January 29, 2019 to April 1, 2019.
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
6.125% Senior Notes
|
$
|
540,377
|
|
|
$
|
537,926
|
|
Credit Facility
|
48,917
|
|
|
—
|
|
||
Total
|
$
|
589,294
|
|
|
$
|
537,926
|
|
Balance, January 1, 2018
|
$
|
54
|
|
Reversal of provision
|
(22
|
)
|
|
Balance, December 31, 2018
|
32
|
|
|
Reversal of provision
|
(17
|
)
|
|
Balance, December 31, 2019
|
$
|
15
|
|
|
For the years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Increase (decrease) to financial guarantee liability
|
$
|
(17
|
)
|
|
$
|
(22
|
)
|
|
$
|
(359
|
)
|
Decrease (increase) to credit enhancement asset
|
—
|
|
|
10
|
|
|
147
|
|
|||
Increase (decrease) to contingent liability
|
—
|
|
|
—
|
|
|
6
|
|
|||
Total
|
$
|
(17
|
)
|
|
$
|
(12
|
)
|
|
$
|
(206
|
)
|
•
|
Level 1 measurements—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
|
•
|
Level 2 measurements—Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly.
|
•
|
Level 3 measurements—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
|
|
As of December 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable securities
|
$
|
36,795
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,795
|
|
Nasdaq Forwards
|
—
|
|
|
—
|
|
|
26,502
|
|
|
26,502
|
|
||||
Loans held for sale, at fair value
|
—
|
|
|
215,290
|
|
|
—
|
|
|
215,290
|
|
||||
Rate lock commitments
|
—
|
|
|
—
|
|
|
32,035
|
|
|
32,035
|
|
||||
Forward sale contracts
|
—
|
|
|
—
|
|
|
14,389
|
|
|
14,389
|
|
||||
Total
|
$
|
36,795
|
|
|
$
|
215,290
|
|
|
$
|
72,926
|
|
|
$
|
325,011
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable, accrued expenses and other liabilities—contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,172
|
|
|
$
|
45,172
|
|
Rate lock commitments
|
—
|
|
|
—
|
|
|
12,124
|
|
|
12,124
|
|
||||
Forwards sale contracts
|
—
|
|
|
—
|
|
|
13,537
|
|
|
13,537
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,833
|
|
|
$
|
70,833
|
|
|
As of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable securities
|
$
|
48,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,942
|
|
Nasdaq Forwards
|
—
|
|
|
—
|
|
|
77,619
|
|
|
77,619
|
|
||||
Loans held for sale, at fair value
|
—
|
|
|
990,864
|
|
|
—
|
|
|
990,864
|
|
||||
Rate lock commitments
|
—
|
|
|
—
|
|
|
6,732
|
|
|
6,732
|
|
||||
Forwards sale contracts
|
—
|
|
|
—
|
|
|
8,177
|
|
|
8,177
|
|
||||
Total
|
$
|
48,942
|
|
|
$
|
990,864
|
|
|
$
|
92,528
|
|
|
$
|
1,132,334
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts payable, accrued expenses and other liabilities—contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,551
|
|
|
$
|
32,551
|
|
Rate lock commitments
|
—
|
|
|
—
|
|
|
7,470
|
|
|
7,470
|
|
||||
Forwards sale contracts
|
—
|
|
|
—
|
|
|
9,208
|
|
|
9,208
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,229
|
|
|
$
|
49,229
|
|
|
As of December 31, 2019
|
||||||||||||||||||||||
|
Opening
Balance
|
|
Total realized
and unrealized
gains (losses)
included in
Net income
|
|
Issuances
|
|
Settlements
|
|
Closing
Balance
|
|
Unrealized
gains (losses)
outstanding
as of
December 31,
2019
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rate lock commitments
|
$
|
6,732
|
|
|
$
|
32,035
|
|
|
$
|
—
|
|
|
$
|
(6,732
|
)
|
|
$
|
32,035
|
|
|
$
|
32,035
|
|
Forward sale contracts
|
8,177
|
|
|
14,389
|
|
|
—
|
|
|
(8,177
|
)
|
|
14,389
|
|
|
14,389
|
|
||||||
Nasdaq Forwards
|
77,619
|
|
|
(51,117
|
)
|
|
—
|
|
|
—
|
|
|
26,502
|
|
|
26,502
|
|
||||||
Total
|
$
|
92,528
|
|
|
$
|
(4,693
|
)
|
|
$
|
—
|
|
|
$
|
(14,909
|
)
|
|
$
|
72,926
|
|
|
$
|
72,926
|
|
|
Opening
Balance
|
|
Total realized
and unrealized
(gains) losses
included in
Net income
|
|
Issuances
|
|
Settlements
|
|
Closing
Balance
|
|
Unrealized
(gains) losses
outstanding
as of
December 31,
2019
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounts payable, accrued expenses and other liabilities – contingent consideration
|
$
|
32,551
|
|
|
$
|
2,287
|
|
|
$
|
14,957
|
|
|
$
|
(4,623
|
)
|
|
$
|
45,172
|
|
|
$
|
2,287
|
|
Rate lock commitments
|
7,470
|
|
|
12,124
|
|
|
—
|
|
|
(7,470
|
)
|
|
12,124
|
|
|
12,124
|
|
||||||
Forward sale contracts
|
9,208
|
|
|
13,537
|
|
|
—
|
|
|
(9,208
|
)
|
|
13,537
|
|
|
13,537
|
|
||||||
Total
|
$
|
49,229
|
|
|
$
|
27,948
|
|
|
$
|
14,957
|
|
|
$
|
(21,301
|
)
|
|
$
|
70,833
|
|
|
$
|
27,948
|
|
|
As of December 31, 2018
|
||||||||||||||||||||||
|
Opening
Balance
|
|
Total realized
and unrealized
gains (losses)
included in
Net income
|
|
Issuances
|
|
Settlements
|
|
Closing
Balance
|
|
Unrealized
gains (losses)
outstanding
as of
December 31,
2018
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rate lock commitments
|
$
|
2,923
|
|
|
$
|
6,732
|
|
|
$
|
—
|
|
|
$
|
(2,923
|
)
|
|
$
|
6,732
|
|
|
$
|
6,732
|
|
Forward sale contracts
|
3,753
|
|
|
8,177
|
|
|
—
|
|
|
(3,753
|
)
|
|
8,177
|
|
|
8,177
|
|
||||||
Nasdaq Forwards
|
—
|
|
|
19,002
|
|
|
58,617
|
|
|
—
|
|
|
77,619
|
|
|
19,002
|
|
||||||
Total
|
$
|
6,676
|
|
|
$
|
33,911
|
|
|
$
|
58,617
|
|
|
$
|
(6,676
|
)
|
|
$
|
92,528
|
|
|
$
|
33,911
|
|
|
Opening
Balance
|
|
Total realized
and unrealized
(gains) losses
included in
Net income
|
|
Issuances
|
|
Settlements
|
|
Closing
Balance
|
|
Unrealized
(gains) losses
outstanding
as of
December 31,
2018
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Accounts payable, accrued expenses and other liabilities – contingent consideration
|
$
|
23,711
|
|
|
$
|
700
|
|
|
$
|
12,615
|
|
|
$
|
(4,475
|
)
|
|
$
|
32,551
|
|
|
$
|
700
|
|
Rate lock commitments
|
2,390
|
|
|
7,470
|
|
|
—
|
|
|
(2,390
|
)
|
|
7,470
|
|
|
7,470
|
|
||||||
Forward sale contracts
|
657
|
|
|
9,208
|
|
|
—
|
|
|
(657
|
)
|
|
9,208
|
|
|
9,208
|
|
||||||
Total
|
$
|
26,758
|
|
|
$
|
17,378
|
|
|
$
|
12,615
|
|
|
$
|
(7,522
|
)
|
|
$
|
49,229
|
|
|
$
|
17,378
|
|
December 31, 2019
|
||||||||||||||
Level 3 assets and liabilities
|
|
Assets
|
|
Liabilities
|
|
Significant Unobservable
Inputs
|
|
Range
|
|
Weighted
Average
|
||||
Accounts payable, accrued expenses and other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Contingent consideration
|
|
$
|
—
|
|
|
$
|
45,172
|
|
|
Discount rate
|
|
0.3%-10.4%
|
(1)
|
8.6%
|
|
|
|
|
|
|
Probability of meeting earnout and contingencies
|
|
90%-100%
|
(1)
|
98.1%
|
||||
|
|
|
|
|
|
Financial forecast information
|
|
|
|
|
||||
Derivative assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||
Nasdaq Forwards
|
|
$
|
26,502
|
|
|
$
|
—
|
|
|
Implied volatility
|
|
25.7%-34.8%
|
(2)
|
32.2%
|
Forward sale contracts
|
|
$
|
14,389
|
|
|
$
|
13,537
|
|
|
Counterparty credit risk
|
|
N/A
|
|
N/A
|
Rate lock commitments
|
|
$
|
32,035
|
|
|
$
|
12,124
|
|
|
Counterparty credit risk
|
|
N/A
|
|
N/A
|
December 31, 2018
|
||||||||||||||
Level 3 assets and liabilities
|
|
Assets
|
|
Liabilities
|
|
Significant Unobservable
Inputs
|
|
Range
|
|
Weighted
Average
|
||||
Accounts payable, accrued expenses and other liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Contingent consideration
|
|
—
|
|
|
$
|
32,551
|
|
|
Discount rate
|
|
0.3%-10.4%
|
|
8.2%
|
|
|
|
|
|
|
|
Probability of meeting earnout and contingencies
|
|
99%-100%
|
(1)
|
99.6%
|
||||
|
|
|
|
|
|
Financial forecast information
|
|
|
|
|
||||
Derivative assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||
Nasdaq Forwards
|
|
$
|
77,619
|
|
|
$
|
—
|
|
|
Volatility
|
|
23.7%-34.8%
|
(2)
|
30.2%
|
Forward sale contracts
|
|
$
|
8,177
|
|
|
$
|
9,208
|
|
|
Counterparty credit risk
|
|
N/A
|
|
N/A
|
Rate lock commitments
|
|
$
|
6,732
|
|
|
$
|
7,470
|
|
|
Counterparty credit risk
|
|
N/A
|
|
N/A
|
(1)
|
Newmark’s estimate of contingent consideration as of December 31, 2019 and 2018 was based on the acquired business’ projected future financial performance, including revenues.
|
•
|
The underlying number of shares and the related strike price;
|
•
|
The maturity date; and
|
•
|
The implied volatility of Nasdaq’s stock price.
|
(a)
|
Service Agreements
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
U.S. federal
|
$
|
63,359
|
|
|
$
|
49,985
|
|
|
$
|
10,412
|
|
U.S. state and local
|
15,130
|
|
|
19,290
|
|
|
2,468
|
|
|||
Foreign
|
464
|
|
|
1,239
|
|
|
(3
|
)
|
|||
UBT
|
1,335
|
|
|
3,586
|
|
|
218
|
|
|||
Total
|
80,288
|
|
|
74,100
|
|
|
13,095
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
U.S. federal
|
(25,103
|
)
|
|
(9,972
|
)
|
|
56,648
|
|
|||
U.S. state and local
|
(4,025
|
)
|
|
24,092
|
|
|
(12,606
|
)
|
|||
Foreign
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||
UBT
|
1,291
|
|
|
2,267
|
|
|
341
|
|
|||
Total
|
(27,852
|
)
|
|
16,387
|
|
|
44,383
|
|
|||
Provision for income taxes
|
$
|
52,436
|
|
|
$
|
90,487
|
|
|
$
|
57,478
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Tax expense at federal statutory rate
|
$
|
44,971
|
|
|
$
|
59,297
|
|
|
$
|
70,901
|
|
Non-controlling interest
|
(15,097
|
)
|
|
(26,257
|
)
|
|
(66,344
|
)
|
|||
Incremental impact of foreign taxes compared to the federal rate
|
(145
|
)
|
|
44
|
|
|
(44
|
)
|
|||
Other permanent differences
|
9,915
|
|
|
9,948
|
|
|
(1,740
|
)
|
|||
U.S. state and local taxes, net of U.S. federal benefit
|
12,271
|
|
|
13,353
|
|
|
1,050
|
|
|||
New York City UBT
|
2,627
|
|
|
3,119
|
|
|
561
|
|
|||
Amortization of intangibles
|
—
|
|
|
—
|
|
|
(1,183
|
)
|
|||
Revaluation of deferred taxes related to tax reform
|
—
|
|
|
—
|
|
|
64,658
|
|
|||
Other rate change
|
2,457
|
|
|
23,001
|
|
|
(15,348
|
)
|
|||
Section 453A interest
|
1,640
|
|
|
2,003
|
|
|
4,285
|
|
|||
Valuation allowance
|
2,902
|
|
|
1,281
|
|
|
594
|
|
|||
Return to Provision Adjustments
|
(7,981
|
)
|
|
2,341
|
|
|
(376
|
)
|
|||
Other
|
(1,124
|
)
|
|
2,357
|
|
|
464
|
|
|||
Provision for income tax
|
$
|
52,436
|
|
|
$
|
90,487
|
|
|
$
|
57,478
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax asset
|
|
|
|
|
|
||
Basis difference of investments
|
$
|
54,445
|
|
|
$
|
55,847
|
|
Deferred compensation
|
153,978
|
|
|
114,758
|
|
||
Other deferred and accrued expenses
|
7,655
|
|
|
9,600
|
|
||
Net Operating loss and credit carry-forwards
|
4,216
|
|
|
1,297
|
|
||
Total deferred tax asset
|
220,294
|
|
|
181,502
|
|
||
Valuation Allowance
|
(3,973
|
)
|
|
(1,297
|
)
|
||
Deferred tax asset, net of allowance
|
216,321
|
|
|
180,205
|
|
||
Deferred tax liability
|
|
|
|
||||
Depreciation and amortization
|
30,156
|
|
|
19,518
|
|
||
Other
|
3,384
|
|
|
10,749
|
|
||
Deferred tax liability(1)
|
33,540
|
|
|
30,267
|
|
||
Net deferred tax asset
|
$
|
182,781
|
|
|
$
|
149,938
|
|
Balance, January 1, 2018
|
$
|
208
|
|
Increases for prior year tax positions
|
—
|
|
|
Decreases for prior year tax positions
|
—
|
|
|
Increases for current year tax positions
|
—
|
|
|
Decreases related to settlements with taxing authorities
|
—
|
|
|
Decreases related to a lapse of applicable statute of limitations
|
—
|
|
|
Balance, December 31, 2018
|
208
|
|
|
Increases for prior year tax positions
|
—
|
|
|
Decreases for prior year tax positions
|
—
|
|
|
Increases for current year tax positions
|
—
|
|
|
Decreases related to settlements with taxing authorities
|
—
|
|
|
Decreases related to a lapse of applicable statute of limitations
|
—
|
|
|
Balance, December 31, 2019
|
$
|
208
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Accounts payable and accrued expenses
|
$
|
189,172
|
|
|
$
|
113,713
|
|
Outside broker payable
|
74,280
|
|
|
59,918
|
|
||
Payroll taxes payable
|
45,612
|
|
|
39,620
|
|
||
Corporate and other taxes payable
|
69,237
|
|
|
77,858
|
|
||
Derivative liability
|
25,661
|
|
|
16,678
|
|
||
Contingent consideration
|
13,107
|
|
|
4,452
|
|
||
Total
|
$
|
417,069
|
|
|
$
|
312,239
|
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Payroll taxes payable
|
$
|
41,355
|
|
|
$
|
31,055
|
|
Accrued compensation
|
278,399
|
|
|
35,103
|
|
||
Contingent consideration
|
32,065
|
|
|
28,099
|
|
||
Credit enhancement deposit
|
25,000
|
|
|
25,000
|
|
||
Financial guarantee liability
|
15
|
|
|
32
|
|
||
Deferred rent
|
—
|
|
|
49,334
|
|
||
Total
|
$
|
376,834
|
|
|
$
|
168,623
|
|
(30)
|
Compensation
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Issuance of common stock and exchangeability expenses
|
$
|
181,714
|
|
|
$
|
179,333
|
|
|
$
|
99,435
|
|
Allocations of net income (1)
|
50,410
|
|
|
51,462
|
|
|
25,222
|
|
|||
Limited partnership units amortization
|
21,508
|
|
|
(7,938
|
)
|
|
21,270
|
|
|||
RSU amortization
|
5,204
|
|
|
1,787
|
|
|
1,212
|
|
|||
Equity-based compensation and allocations of net income to limited partnership units
and FPUs (2)
|
$
|
258,836
|
|
|
$
|
224,644
|
|
|
$
|
147,139
|
|
(1)
|
Certain limited partnership units receive quarterly allocations of net income and are generally contingent upon services being provided by the unit holders, including the Preferred Distribution.
|
(2)
|
Reclassifications have been made to previously reported amounts to conform to the new presentation (See Note 1 — “Organization and Basis of Presentation”).
|
|
BGC Holdings
|
|
Newmark Holdings
|
|
||
Balance, January 1, 2017
|
53,407,627
|
|
|
—
|
|
|
Granted
|
13,976,871
|
|
|
—
|
|
|
Redeemed/exchanged units
|
(2,668,048
|
)
|
|
—
|
|
|
Forfeited units/other
|
(7,535
|
)
|
|
—
|
|
|
Balance, December 31, 2017
|
64,708,915
|
|
|
29,413,143
|
|
(1)
|
Granted
|
2,872,825
|
|
|
19,141,943
|
|
|
Redeemed/exchanged units
|
(5,650,292
|
)
|
|
(3,793,351
|
)
|
|
Forfeited units/other
|
(60,479
|
)
|
|
(28,248
|
)
|
|
Balance, December 31, 2018
|
61,870,969
|
|
|
44,733,487
|
|
|
Granted
|
319,586
|
|
|
13,813,204
|
|
|
Redeemed/exchanged units
|
(3,938,134
|
)
|
|
(2,487,885
|
)
|
|
Forfeited units/other
|
(2,198,720
|
)
|
|
4,742,046
|
|
|
Balance, December 31, 2019
|
56,053,701
|
|
|
60,800,852
|
|
|
|
|
|
|
|
||
Total exchangeable units:
|
|
|
|
|
||
December 31, 2018
|
25,999,302
|
|
|
9,251,052
|
|
|
December 31, 2019
|
24,692,695
|
|
|
10,108,598
|
|
|
(1)
|
Represents the pre-IPO Newmark employees share-equivalent limited partnership units in BGC Holdings.
|
|
BGC
Units
|
|
Newmark
Units
|
||
Regular units
|
54,500,896
|
|
|
56,932,154
|
|
Preferred units
|
1,552,805
|
|
|
3,868,698
|
|
Balance, December 31, 2019
|
56,053,701
|
|
|
60,800,852
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
BGC Holdings units
|
620,903
|
|
|
18,325,470
|
|
|
6,452,077
|
|
Newmark Holdings units
|
2,310,384
|
|
|
6,927,961
|
|
|
—
|
|
Total
|
2,931,287
|
|
|
25,253,431
|
|
|
6,452,077
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Issuance of common stock and exchangeability expenses
|
$
|
35,499
|
|
|
$
|
142,333
|
|
|
$
|
99,435
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Notional Value(1)
|
$
|
261,025
|
|
|
$
|
223,665
|
|
Estimated fair value of the post-termination payout(2)
|
$
|
58,149
|
|
|
$
|
30,655
|
|
Outstanding limited partnership units in BGC Holdings
|
6,251,816
|
|
|
8,443,218
|
|
||
Outstanding limited partnership units in BGC Holdings - unvested
|
1,508,510
|
|
|
3,256,894
|
|
||
Outstanding limited partnership units in Newmark Holdings
|
17,097,639
|
|
|
10,520,196
|
|
||
Outstanding limited partnership units in Newmark Holdings - unvested
|
9,357,822
|
|
|
6,820,930
|
|
(1)
|
Beginning January 1, 2018, Newmark began granting stand-alone limited partnership units in Newmark Holdings to Newmark employees.
|
(2)
|
Included in “Other long-term liabilities” on the accompanying consolidated balance sheets.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Limited partnership units amortization
|
$
|
21,508
|
|
|
$
|
(7,938
|
)
|
|
$
|
21,270
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Notional Value
|
$
|
194,995
|
|
|
$
|
37,000
|
|
Estimated fair value of limited partnership units (1)
|
$
|
182,800
|
|
|
$
|
37,000
|
|
(1)
|
Included in “Other long-term liabilities” on the accompanying consolidated balance sheets.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Issuance of common stock and exchangeability expenses
|
$
|
146,215
|
|
|
$
|
37,000
|
|
|
$
|
—
|
|
|
BGC RSUs(1)
|
|
Newmark RSUs(2)
|
|||||||||||||||||
|
Restricted
Stock Units |
Weighted-
Average Grant Date Fair Value
Per Share
|
Fair
Value
Amount
|
Weighted-
Average Remaining Contractual Term (Years) |
|
Restricted
Stock Units |
Weighted-
Average Grant Date Fair Value
Per Share
|
Fair
Value
Amount
|
Weighted-
Average Remaining Contractual Term (Years) |
|||||||||||
Balance, January 1, 2017
|
285,725
|
|
$
|
7.56
|
|
$
|
2,160
|
|
1.75
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
Granted
|
269,754
|
|
10.37
|
|
2,797
|
|
|
|
—
|
|
—
|
|
—
|
|
|
|||||
Settled units (delivered shares)
|
(151,844
|
)
|
7.73
|
|
(1,174
|
)
|
|
|
—
|
|
—
|
|
—
|
|
|
|||||
Forfeited units
|
(57,097
|
)
|
8.75
|
|
(499
|
)
|
|
|
—
|
|
—
|
|
—
|
|
|
|||||
Balance, December 31, 2017
|
346,538
|
|
$
|
9.48
|
|
$
|
3,284
|
|
1.85
|
|
—
|
|
$
|
—
|
|
$
|
—
|
|
—
|
|
Granted
|
3,439
|
|
7.64
|
|
26
|
|
|
|
264,532
|
|
13.54
|
|
3,582
|
|
|
|||||
Settled units (delivered shares)
|
(147,006
|
)
|
9.17
|
|
(1,348
|
)
|
|
|
(8,109
|
)
|
13.36
|
|
(108
|
)
|
|
|||||
Forfeited units
|
(34,296
|
)
|
10.01
|
|
(343
|
)
|
|
|
(36,536
|
)
|
13.71
|
|
(501
|
)
|
|
|||||
Balance, December 31, 2018
|
168,675
|
|
$
|
9.77
|
|
$
|
1,619
|
|
0.98
|
|
219,887
|
|
$
|
13.52
|
|
$
|
2,973
|
|
2.28
|
|
Granted
|
—
|
|
—
|
|
—
|
|
|
|
4,766,611
|
|
7.42
|
|
35,344
|
|
|
|||||
Settled units (delivered shares)
|
(107,820
|
)
|
9.38
|
|
(1,011
|
)
|
|
|
(109,007
|
)
|
11.70
|
|
(1,275
|
)
|
|
|||||
Forfeited units
|
(14,048
|
)
|
10.02
|
|
(141
|
)
|
|
|
(193,920
|
)
|
8.67
|
|
(1,681
|
)
|
|
|||||
Balance, December 31, 2019
|
46,807
|
|
$
|
9.97
|
|
$
|
467
|
|
0.25
|
|
4,683,571
|
|
$
|
7.55
|
|
$
|
35,361
|
|
5.69
|
(1)
|
RSUs granted to these individuals generally vest over a two- to four-year period
|
(2)
|
Beginning January 1, 2018, Newmark began granting stand-alone Newmark RSUs to Newmark employees and the awards vest ratably over the two- to eight-year vesting period into shares of Newmark Class A common stock.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
RSU amortization
|
$
|
5,204
|
|
|
$
|
1,787
|
|
|
$
|
1,212
|
|
(a)
|
Contractual Obligations and Commitments
|
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
||||||||||
Operating leases(1)
|
$
|
347,408
|
|
|
$
|
44,709
|
|
|
$
|
82,424
|
|
|
$
|
73,812
|
|
|
$
|
146,463
|
|
Warehouse facilities(2)
|
209,648
|
|
|
209,648
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt(3)
|
600,000
|
|
|
—
|
|
|
50,000
|
|
|
550,000
|
|
|
—
|
|
|||||
Interest on long-term debt(4)
|
134,000
|
|
|
35,569
|
|
|
69,081
|
|
|
29,350
|
|
|
—
|
|
|||||
Interest on warehouse facilities(5)
|
5,404
|
|
|
5,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,296,460
|
|
|
$
|
295,330
|
|
|
$
|
201,505
|
|
|
$
|
653,162
|
|
|
$
|
146,463
|
|
(1)
|
Operating leases are related to rental payments under various non-cancelable leases principally for office space, net of sublease payments to be received. The total amount of sublease payments to be received is $1.9 million over the life of the agreement.
|
(2)
|
The warehouse facilities are collateralized by $215.3 million of loans held for sale, at fair value, which loans were either under commitment to be purchased by Freddie Mac or had confirmed forward trade commitments for the issuance of and purchase of Fannie Mae or Ginnie Mae mortgage-backed securities.
|
(3)
|
Long-term debt reflects long-term borrowings of 6.125% Senior Notes and the Credit Facility. The carrying amount of the 6.125% Senior Notes and the Credit Facility were $540.4 million and $48.9 million as of December 31, 2019, respectively. See Note 22 — “Long-Term Debt” for more information regarding these obligations.
|
(4)
|
Reflects interest on the $550 million 6.125% Senior Notes until their maturity date of November 15, 2023.
|
(5)
|
Interest on the warehouse facilities was projected by using the 1 month LIBOR rate plus their respective additional basis points, primarily 115 basis points above LIBOR, applied to their respective outstanding balances as of December 31, 2019, through their respective maturity dates. Their respective maturity dates range from June to October 2019, while one line has an open maturity date. The notional amount of these committed and uncommitted warehouse facilities was $1.8 billion at December 31, 2019. One of these lines was temporarily increased by $350.0 million for the period January 13, 2020 to March 30, 2020 and another line was temporarily increased by $100.0 million for the period January 29, 2020 to March 13, 2020. See Note 21 — “Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises” for more information.
|
(b)
|
Contingent Payments Related to Acquisitions
|
(c)
|
Contingencies
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
|
Exhibit Title
|
|
|
|
1.1
|
|
|
|
|
|
2.1
|
|
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
10.7
|
|
Exhibit
Number
|
|
Exhibit Title
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
Exhibit
Number |
|
Exhibit Title
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
32.1
|
|
|
|
|
|
101
|
|
The following materials from Newmark Group, Inc.’s Annual Report on Form 10-K for the period ended December 31, 2019 are formatted in inline eXtensible Business Reporting Language (iXBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows (vi) Notes to the Consolidated Financial Statements, and (vii) Schedule I, Parent Company Only Financial Statements. The XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the iXBRL document.
|
|
|
|
104
|
|
The cover page from this Annual Report on Form 10-K, formatted in Inline XBRL.
|
|
|
|
ITEM 16.
|
FORM 10-K SUMMARY
|
Newmark Group, Inc.
|
|
|
|
|
|
By:
|
/s/ Howard W. Lutnick
|
|
Name:
|
Howard W. Lutnick
|
|
Title:
|
Chairman
|
|
Signature
|
|
Capacity in Which Signed
|
|
Date
|
|
|
|
|
|
/s/ Howard W. Lutnick
Howard W. Lutnick
|
|
Chairman (Principal Executive Officer)
|
|
February 28, 2020
|
|
|
|
|
|
/s/ Barry Gosin
Barry Gosin
|
|
Chief Executive Officer
|
|
February 28, 2020
|
|
|
|
|
|
/s/ Michael J. Rispoli
Michael J. Rispoli
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 28, 2020
|
|
|
|
|
|
/s/ Virginia S. Bauer
Virginia S. Bauer
|
|
Director
|
|
February 28, 2020
|
|
|
|
|
|
/s/ Peter F. Cervinka
Peter F. Cervinka
|
|
Director
|
|
February 28, 2020
|
|
|
|
|
|
/s/ Michael Snow
Michael Snow
|
|
Director
|
|
February 28, 2020
|
|
|
|
|
|
/s/ Kenneth A. McIntyre
Kenneth A. McIntyre
|
|
Director
|
|
February 28, 2020
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Assets:
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
101
|
|
|
$
|
24
|
|
Total current assets
|
101
|
|
|
24
|
|
||
Investment in subsidiaries
|
543,412
|
|
|
501,000
|
|
||
Receivables from related party
|
589,294
|
|
|
593,517
|
|
||
Other assets
|
179,813
|
|
|
152,027
|
|
||
Total assets
|
$
|
1,312,620
|
|
|
$
|
1,246,568
|
|
Liabilities:
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
74,564
|
|
|
$
|
84,436
|
|
Payable to related parties
|
49,098
|
|
|
56,637
|
|
||
Total current liabilities
|
123,662
|
|
|
141,073
|
|
||
Long-term debt
|
589,294
|
|
|
537,926
|
|
||
Total liabilities
|
712,956
|
|
|
678,999
|
|
||
Total stockholders’ equity
|
599,664
|
|
|
567,569
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,312,620
|
|
|
$
|
1,246,568
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Interest income
|
$
|
39,069
|
|
|
$
|
27,249
|
|
|
$
|
1,433
|
|
Total revenue
|
39,069
|
|
|
27,249
|
|
|
1,433
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Professional and consulting fees
|
763
|
|
|
277
|
|
|
—
|
|
|||
Interest expense
|
39,069
|
|
|
27,249
|
|
|
1,499
|
|
|||
Other expenses
|
930
|
|
|
344
|
|
|
—
|
|
|||
Total expenses
|
40,762
|
|
|
27,870
|
|
|
1,499
|
|
|||
Loss from operations before income taxes
|
(1,693
|
)
|
|
(621
|
)
|
|
(66
|
)
|
|||
Equity income of subsidiaries
|
168,358
|
|
|
190,826
|
|
|
199,166
|
|
|||
Provision for income taxes
|
49,360
|
|
|
83,473
|
|
|
54,608
|
|
|||
Net income available to common stockholders
|
$
|
117,305
|
|
|
$
|
106,732
|
|
|
$
|
144,492
|
|
Per share data:
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
|
|
|
|
||||||
Net income available to common stockholders(1)
|
$
|
104,406
|
|
|
$
|
101,641
|
|
|
$
|
144,492
|
|
Basic earnings per share
|
$
|
0.59
|
|
|
$
|
0.65
|
|
|
$
|
1.08
|
|
Basic weighted-average shares of common stock outstanding
|
177,774
|
|
|
157,256
|
|
|
133,413
|
|
|||
Fully diluted earnings per share
|
|
|
|
|
|
||||||
Net income for fully diluted shares
|
$
|
108,160
|
|
|
$
|
105,571
|
|
|
$
|
117,217
|
|
Fully diluted earnings per share
|
$
|
0.58
|
|
|
$
|
0.64
|
|
|
$
|
0.85
|
|
Fully diluted weighted-average shares of common stock outstanding
|
185,016
|
|
|
163,810
|
|
|
138,398
|
|
(1)
|
Includes a reduction for dividends on preferred stock or units in the amount of $12.9 million and $5.1 million for the years ended December 31, 2019 and December 31, 2018, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
117,305
|
|
|
$
|
106,732
|
|
|
$
|
144,492
|
|
Total other comprehensive income, net of tax
|
117,305
|
|
|
106,732
|
|
|
144,492
|
|
|||
Comprehensive income available to common stockholders
|
$
|
117,305
|
|
|
$
|
106,732
|
|
|
$
|
144,492
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
||||
Net income (loss)
|
$
|
117,305
|
|
|
$
|
106,732
|
|
|
144,492
|
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Equity income from subsidiaries
|
(168,358
|
)
|
|
(190,826
|
)
|
|
(199,166
|
)
|
|||
Deferred tax provision/(benefit)
|
(29,127
|
)
|
|
14,197
|
|
|
47,548
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables from subsidiaries
|
4,223
|
|
|
22,717
|
|
|
(2,342
|
)
|
|||
Payable to subsidiaries
|
(7,539
|
)
|
|
120,483
|
|
|
1,157
|
|
|||
Other assets
|
2,711
|
|
|
(1,655
|
)
|
|
—
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
(9,873
|
)
|
|
68,123
|
|
|
8,311
|
|
|||
Net cash (used in) provided by operating activities
|
(90,658
|
)
|
|
139,771
|
|
|
—
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Payments for acquisitions, net of cash acquired
|
(17,726
|
)
|
|
(6,691
|
)
|
|
—
|
|
|||
Contribution to subsidiary
|
—
|
|
|
—
|
|
|
(304,290
|
)
|
|||
Net cash used in investing activities
|
(17,726
|
)
|
|
(6,691
|
)
|
|
(304,290
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Distributions from subsidiaries
|
236,074
|
|
|
107,000
|
|
|
—
|
|
|||
Proceeds from the Initial Public Offering, net of underwriting discounts
|
—
|
|
|
—
|
|
|
304,290
|
|
|||
Repayment of long-term debt
|
(105,000
|
)
|
|
(670,710
|
)
|
|
(304,290
|
)
|
|||
Borrowings of long-term debt
|
155,000
|
|
|
537,926
|
|
|
—
|
|
|||
Reinvestment of cash in subsidiaries
|
(71,000
|
)
|
|
(65,000
|
)
|
|
—
|
|
|||
Dividends to stockholders
|
(69,245
|
)
|
|
(41,787
|
)
|
|
—
|
|
|||
Treasury stock repurchases
|
(37,368
|
)
|
|
(486
|
)
|
|
—
|
|
|||
Repayment of related party receivable
|
—
|
|
|
—
|
|
|
304,290
|
|
|||
Net cash provided by (used in) financing activities
|
108,461
|
|
|
(133,057
|
)
|
|
304,290
|
|
|||
Net cash and cash equivalents
|
77
|
|
|
23
|
|
|
—
|
|
|||
Cash and cash equivalents at beginning of period
|
24
|
|
|
1
|
|
|
1
|
|
|||
Cash and cash equivalents at end of period
|
$
|
101
|
|
|
$
|
24
|
|
|
$
|
1
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
36,959
|
|
|
$
|
21,751
|
|
|
$
|
—
|
|
Taxes
|
$
|
90,813
|
|
|
$
|
1,165
|
|
|
$
|
—
|
|
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
|
|
||||||
Treasury stock repurchases
|
$
|
4,732
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net assets contributed by BGC Partners’
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
795,497
|
|
Note receivable from related parties
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
975,000
|
|
Debt assumed from BGC
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
975,000
|
|
Accrued offering costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,870
|
|
(1)
|
Organization and Basis of Presentation
|
•
|
the principal corporate transactions pursuant to which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark Group (defined below), the “BGC Group”) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the “Newmark Group”) the assets and liabilities of the BGC Group relating to BGC’s Real Estate Services business, including BGC’s interests in both BPF and Real Estate LP (together with the proportional distribution and assumption and repayment of indebtedness described in the following bullets the “Separation”);
|
•
|
the proportional distribution in the Separation of interests in Newmark Holdings to holders of interests in BGC Holdings;
|
•
|
the IPO;
|
•
|
the assumption and repayment of indebtedness by the BGC Group and the Newmark Group, as further described below;
|
•
|
the BGC Holdings distribution; and
|
•
|
the pro rata distribution in the Spin-Off of the shares of Newmark Class A common stock and the shares of Newmark Class B common stock held by BGC, pursuant to which shares of Newmark Class A common stock held by BGC would be distributed to the holders of shares of BGC Class A common stock and shares of Newmark Class B common stock held by BGC would be distributed to the holders of shares of BGC Class B common stock. The Spin-Off distribution is intended to qualify as generally tax-free for U.S. federal income tax purposes.
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets (1)
|
179,501
|
|
|
150,373
|
|
||
Prepaid assets
|
312
|
|
|
1,654
|
|
||
Total
|
$
|
179,813
|
|
|
$
|
152,027
|
|
(1)
|
Deferred tax assets are primarily comprised of book-tax difference associated with deferred compensation awards as well as the basis difference between BPF’s net assets and its tax basis.
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Corporate taxes payable
|
67,700
|
|
|
79,079
|
|
||
Accrued interest
|
4,369
|
|
|
5,149
|
|
||
Other
|
2,495
|
|
|
208
|
|
||
Total
|
$
|
74,564
|
|
|
$
|
84,436
|
|
1 Year Newmark Chart |
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