SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


☒			Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934


☐			Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

4211 W. Boy Scout Blvd., Suite 800, Tampa, Florida 33607

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.01 per share

BRP

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or ~~15 (d)~~15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐☒

Non-accelerated filer

☒☐

Smaller reporting company

☒☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~The number~~As of ~~outstanding~~ November 3, 2021, there were 56,932,244 shares of ~~the registrant’s~~ Class A common stock ~~$0.01 par value, as~~outstanding and 55,281,957 shares of ~~November 6, 2020 was approximately 33,988,164.~~Class B common stock outstanding.

Note Regarding Forward-Looking Statements

We have made statements in this report, including matters discussed under Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Part II, Item 1. Legal Proceedings, Part II, Item 1A. Risk Factors and in other sections of this report, that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under Part II, Item 1A. You should specifically consider the numerous risks outlined under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K filed with the SEC on March ~~24, 2020 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2020 filed with the SEC on May 13, 2020.~~11, 2021.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this report to conform our prior statements to actual results or revised expectations.

Commonly Used Defined Terms

The following terms have the following meanings throughout this Quarterly Report on Form 10-Q unless the context indicates or requires otherwise:

~~AgencyRM AgencyRM~~Amended LLC ~~a Medicare Partner effective February 1, 2020~~Agreement Third Amended and Restated Limited Liability Company Agreement of BRP, as amended

Book of Business Insurance policies bound by us on behalf of our Clients

Clients Our insureds

Colleagues Our employees

Exchange Act Securities Exchange Act of 1934, as amended

~~Fletcher Fletcher Financial Group, Inc., a Medicare Partner effective July 31, 2020~~

~~Highland Highland Risk Services, LLC, a Specialty Partner effective January 1, 2020~~

Insurance Company Partners Insurance companies with which we have a contractual relationship

~~IRP Insurance Risk Partners, LLC, a Middle Market Partner effective April 1, 2020~~

~~Lanier Lanier Upshaw, Inc., a Middle Market Partner effective January 1, 2020~~

~~MIA Medicare Insurance Advisors, Inc., a Medicare Partner effective July 31, 2020~~LIBOR London Interbank Offered Rate

MGA Managing General Agent

~~New~~ MSI Millennial Specialty Insurance, a 2019 Partner

JPM Credit Agreement Credit Agreement, dated as of October 14, 2020, between Baldwin Risk Partners, LLC, as borrower, JPMorgan Chase Bank, N.A., as the Administrative Agent, the Guarantors party thereto, the Lenders party thereto and the Issuing Lenders party thereto,

Old JPM Credit Agreement Fourth amended and restated credit agreement between Baldwin Risk Partners, LLC, as borrower, JPMorgan Chase Bank, N.A., as agent and lender, and the several banks and other financial institutions as lenders entered into on December 19, 2019, pursuant to an amendment and restatement agreement between Baldwin Risk Partners, LLC, as borrower, Cadence Bank, N.A., as existing agent and lender, JPMorgan Chase Bank, N.A., as successor agent and lender, and the several banks and other financial institutions as lenders entered into on December 19, 2019, as amended by the ~~Incremental Facility~~ Amendment No. 1 ~~entered into on March 12, 2020, the~~to Credit Agreement dated as of May 7, 2021, Amendment No. 2 to Credit Agreement ~~entered into on April 6, 2020~~dated as of June 2, 2021 and ~~the Incremental Facility~~ Amendment No. 3 ~~entered into June 18, 2020~~to Credit Agreement dated as of August 6, 2021

Operating Groups Our reportable segments

Partners Companies that we have acquired, or in the case of asset acquisitions, the producers

Partnerships Strategic acquisitions made by the Company

~~Pendulum Pendulum, LLC, a Specialty Partner effective May 1, 2020~~

~~Pre-IPO LLC Members Owners of LLC Units of Baldwin Risk Partners, LLC prior to our initial public offering~~

Risk Advisors Our producers

~~Rosenthal Rosenthal Bros., Inc., a Middle Market Partner effective June 1, 2020~~

SEC U.S. Securities and Exchange Commission

Securities Act Securities Act of 1933, as amended

~~SPG Southern Protective Group, LLC, a Middle Market Partner effective May 1, 2020~~

~~TBA/RBA Trinity Benefit Advisors, Inc./Russ Blakely & Associates, LLC, a Middle Market Partner effective June 1, 2020~~

Tax Receivable Agreement Tax Receivable Agreement between BRP Group, Inc. and the holders of LLC Units in Baldwin Risk Partners, LLC entered into on October 28, 2019

~~VibrantUSA VibrantUSA Inc., a Medicare Partner effective date of February 1, 2020~~

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets

Liabilities, Mezzanine Equity and Stockholders’ Equity

See accompanying Notes to Condensed Consolidated Financial Statements.

BRP GROUP, INC.

Condensed Consolidated Balance Sheets (Continued)

(Unaudited)

The following table presents the assets and liabilities of the Company’s consolidated variable interest entities, which are included on the condensed consolidated balance sheets above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated variable interest entities.


(in thousands)	(in thousands)	September 30, 2020		December 31, 2019		(in thousands)	September 30, 2021		December 31, 2020
Assets of Consolidated Variable Interest Entities That Can Only be Used to Settle the Obligations of Consolidated Variable Interest Entities:	Assets of Consolidated Variable Interest Entities That Can Only be Used to Settle the Obligations of Consolidated Variable Interest Entities:					Assets of Consolidated Variable Interest Entities That Can Only be Used to Settle the Obligations of Consolidated Variable Interest Entities:
Cash and cash equivalents	Cash and cash equivalents	$	122	$	47	Cash and cash equivalents	$	266	$	143
Premiums, commissions and fees receivable, net	Premiums, commissions and fees receivable, net	153		75		Premiums, commissions and fees receivable, net	216		130
Total current assets	Total current assets	275		122		Total current assets	482		273
Property and equipment, net	Property and equipment, net	23		31		Property and equipment, net	17		21
Other assets	Other assets	5		7		Other assets	5		5
Total assets	Total assets	$	303	$	160	Total assets	$	504	$	299
Liabilities of Consolidated Variable Interest Entities for Which Creditors Do Not Have Recourse to the Company:	Liabilities of Consolidated Variable Interest Entities for Which Creditors Do Not Have Recourse to the Company:					Liabilities of Consolidated Variable Interest Entities for Which Creditors Do Not Have Recourse to the Company:
Premiums payable to insurance companies	Premiums payable to insurance companies	$	1	$	6	Premiums payable to insurance companies	$	14	$	5
Producer commissions payable	Producer commissions payable	19		15		Producer commissions payable	12		17
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	7		29		Accrued expenses and other current liabilities	12		10
Total liabilities	Total liabilities	$	27	$	50	Total liabilities	$	38	$	32

See accompanying Notes to Condensed Consolidated Financial Statements.

BRP GROUP, INC.

Condensed Consolidated Statements of Comprehensive ~~Income (Loss)~~Loss

(Unaudited)


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands, except share and per share data)	(in thousands, except share and per share data)	2020		2019		2020		2019		(in thousands, except share and per share data)	2021		2020		2021		2020
Revenues:	Revenues:									Revenues:
Commissions and fees	Commissions and fees	$	65,843	$	38,383	$	171,270	$	101,280	Commissions and fees	$	135,556	$	65,843	$	408,090	$	171,270

Operating expenses:	Operating expenses:									Operating expenses:
Commissions, employee compensation and benefits	Commissions, employee compensation and benefits	48,469		26,788		122,280		67,068		Commissions, employee compensation and benefits	100,081		48,469		278,521		122,280
Other operating expenses	Other operating expenses	12,146		6,320		30,577		16,711		Other operating expenses	27,589		12,146		64,357		30,577
Amortization expense	Amortization expense	5,185		3,082		13,231		6,793		Amortization expense	12,596		5,185		33,875		13,231
Change in fair value of contingent consideration	Change in fair value of contingent consideration	6,455		535		12,697		(3,222)		Change in fair value of contingent consideration	11,341		6,455		23,163		12,697
Depreciation expense	Depreciation expense	258		184		663		460		Depreciation expense	753		258		1,920		663
Total operating expenses	Total operating expenses	72,513		36,909		179,448		87,810		Total operating expenses	152,360		72,513		401,836		179,448

Operating income (loss)	Operating income (loss)	(6,670)		1,474		(8,178)		13,470		Operating income (loss)	(16,804)		(6,670)		6,254		(8,178)

Other expense:	Other expense:									Other expense:
Interest expense, net	Interest expense, net	(922)		(3,785)		(2,554)		(8,998)		Interest expense, net	(6,940)		(922)		(18,431)		(2,554)
Other income (expense)		(23)		5		(23)		5
Other expense, net										Other expense, net	(478)		(23)		(1,535)		(23)
Total other expense	Total other expense	(945)		(3,780)		(2,577)		(8,993)		Total other expense	(7,418)		(945)		(19,966)		(2,577)

Income (loss) before income taxes		(7,615)		(2,306)		(10,755)		4,477
Loss before income taxes										Loss before income taxes	(24,222)		(7,615)		(13,712)		(10,755)
Income tax provision	Income tax provision	0		0		12		0		Income tax provision	—		—		—		12
Net income (loss)		(7,615)		(2,306)		(10,767)		4,477
Less: net income (loss) attributable to noncontrolling interests		(4,347)		(2,306)		(5,379)		4,477
Net loss										Net loss	(24,222)		(7,615)		(13,712)		(10,767)
Less: net loss attributable to noncontrolling interests										Less: net loss attributable to noncontrolling interests	(11,389)		(4,347)		(5,736)		(5,379)
Net loss attributable to BRP Group, Inc.	Net loss attributable to BRP Group, Inc.	$	(3,268)	$	0	$	(5,388)	$	0	Net loss attributable to BRP Group, Inc.	$	(12,833)	$	(3,268)	$	(7,976)	$	(5,388)

Comprehensive income (loss)		$	(7,615)	$	(2,306)	$	(10,767)	$	4,477
Comprehensive income (loss) attributable to noncontrolling interests		(4,347)		(2,306)		(5,379)		4,477
Comprehensive loss										Comprehensive loss	$	(24,222)	$	(7,615)	$	(13,712)	$	(10,767)
Comprehensive loss attributable to noncontrolling interests										Comprehensive loss attributable to noncontrolling interests	(11,389)		(4,347)		(5,736)		(5,379)
Comprehensive loss attributable to BRP Group, Inc.	Comprehensive loss attributable to BRP Group, Inc.	(3,268)		0		(5,388)		0		Comprehensive loss attributable to BRP Group, Inc.	(12,833)		(3,268)		(7,976)		(5,388)

Basic and diluted net loss per share		$	(0.10)			$	(0.22)
Basic and diluted weighted-average shares of Class A common stock outstanding		33,098,356				24,371,304
Basic and diluted loss per share										Basic and diluted loss per share	$	(0.28)	$	(0.10)	$	(0.18)	$	(0.22)
Weighted-average shares of Class A common stock outstanding - basic and diluted										Weighted-average shares of Class A common stock outstanding - basic and diluted	46,446,254		33,098,356		45,132,217		24,371,304

See accompanying Notes to Condensed Consolidated Financial Statements. 7

BRP GROUP, INC.

Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity

(Unaudited)


For the Three Months Ended September 30, 2021
	Stockholders’ Equity																	Mezzanine Equity
	Class A Common Stock			Class B Common Stock
(in thousands, except share data)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Notes Receivable from Stockholders		Non-controlling Interest		Total			Redeemable Non-controlling Interest
Balance at June 30, 2021	46,583,582	$	466	49,575,871	$	5	$	404,025	$	(19,489)	$	(306)	$	407,473	$	792,174	173	$	173
Net income (loss)	—	—		—	—		—		(12,833)		—		(11,439)		(24,272)			50
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs	9,200,000	92		—	—		159,101		—		—		109,128		268,321			—
Equity issued in business combinations	520,781	5		2,967,730	—		41,757		—		—		30,157		71,919			—
Share-based compensation, net of forfeitures	23,277	—		—	—		2,963		—		—		344		3,307			—
Redemption of Class B common stock	59,286	1		(59,286)	—		445		—		—		(446)		—			—
Repayment of stockholder notes receivable	—	—		—	—		—		—		43		—		43			—
Balance at September 30, 2021	56,386,926	$	564	52,484,315	$	5	$	608,291	$	(32,322)	$	(263)	$	535,217	$	1,111,492		$	223


For the Nine Months Ended September 30, 2021
	Stockholders’ Equity																Mezzanine Equity
	Class A Common Stock			Class B Common Stock
(in thousands, except share data)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Notes Receivable from Stockholders		Non-controlling Interest		Total		Redeemable Non-controlling Interest
Balance at December 31, 2020	44,953,166	$	450	49,828,383	$	5	$	392,139	$	(24,346)	$	(465)	$	402,087	$	769,870	$	98
Net income (loss)	—	—		—	—		—		(7,976)		—		(5,861)		(13,837)		125
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs	9,200,000	92		—	—		159,101		—		—		109,128		268,321		—
Equity issued in business combinations	737,065	7		2,967,730	—		43,616		—		—		32,010		75,633		—
Share-based compensation, net of forfeitures	1,184,897	12		—	—		10,942		—		—		349		11,303		—
Redemption of Class B common stock	311,798	3		(311,798)	—		2,493		—		—		(2,496)		—		—
Repayment of stockholder notes receivable	—	—		—	—		—		—		202		—		202		—
Balance at September 30, 2021	56,386,926	$	564	52,484,315	$	5	$	608,291	$	(32,322)	$	(263)	$	535,217	$	1,111,492	$	223

See accompanying Notes to Condensed Consolidated Financial Statements.

~~BRP GROUP, INC.~~

~~Condensed Consolidated Statements of Stockholders’/Members’ Equity (Deficit) and Mezzanine Equity~~

~~(Unaudited)~~

For the Three Months Ended September 30, 2020
Stockholders’ Equity
Mezzanine Equity
Class A Common Stock Class B Common Stock
(in thousands, except share data) Shares Amount Shares Amount APIC Accumulated Deficit Notes Receivable from Stockholders Non-controlling Interest Total Redeemable Non-controlling Interest
Balance at June 30, 2020 33,302,477 $ 333 45,458,763 $ 4 $ 235,520 $ (10,770) $ (573) $ 198,049 $ 422,563 $ 71
Net income (loss) — — — — — (3,268) — (4,369) (7,637) 22
Offering costs — — — — (28) — — — (28) —
Equity issued in business combinations 25,491 0 0 — 445 — — 0 445 —
Share-based compensation, net of forfeitures 393,848 4 — — 908 — — 285 1,197 —
Redemptions and repurchases of common stock 211,052 2 (211,052) — 799 — — (801) 0 —
Repayment of stockholder notes receivable — — — — — — 54 — 54 —
Contributions — — — — — — — — — 8
Balance at September 30, 2020 33,932,868 $ 339 45,247,711 $ 4 $ 237,644 $ (14,038) $ (519) $ 193,164 $ 416,594 $ 101

For the Nine Months Ended September 30, 2020
Stockholders’ Equity
Mezzanine Equity
Class A Common Stock Class B Common Stock
(in thousands, except share data) Shares Amount Shares Amount APIC Accumulated Deficit Notes Receivable from Stockholders Non-controlling Interest Total Redeemable Non-controlling Interest
Balance at December 31, 2019 19,362,984 $ 194 43,257,738 $ 4 $ 82,425 $ (8,650) $ (688) $ 163,966 $ 237,251 $ 23
Net income (loss) — — — — — (5,388) — (5,438) (10,826) 59
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs 13,225,000 132 (2,475,000) — 144,497 — — (9,398) 135,231 —
Equity issued in business combinations 513,025 5 4,805,572 — 8,117 — — 44,453 52,575 —
Share-based compensation, net of forfeitures 580,045 6 — — 2,600 — — 880 3,486 —
Redemptions and repurchases of common stock 251,814 2 (340,599) — 5 — — (1,299) (1,292) —
Repayment of stockholder notes receivable — — — — — — 169 — 169 —
Contributions — — — — — — — — — 19
Balance at September 30, 2020 33,932,868 $ 339 45,247,711 $ 4 $ 237,644 $ (14,038) $ (519) $ 193,164 $ 416,594 $ 101

~~See accompanying Notes to Condensed Consolidated Financial Statements.~~

BRP GROUP, INC.

Condensed Consolidated Statements of Stockholders’~~/Members’~~ Equity ~~(Deficit)~~ and Mezzanine Equity (Continued)

(Unaudited)

For the Three Months Ended September 30, 2019
Members’ Equity (Deficit) Mezzanine Equity
(in thousands)
Members’ Deficit
Notes Receivable from Members Noncontrolling Interest Total Redeemable Noncontrolling Interest Redeemable Members’ Capital
Balance at June 30, 2019 $ (128,869) $ (256) $ 2,424 $ (126,701) $ 65,906 $ 110,596
Net income (loss) (2,578) — (20) (2,598) 1,440 (1,148)
Contributions — — — — 1 —
Repayment of member notes receivable — 16 — 16 — —
Issuance and vesting of Management Incentive Units 303 — — 303 — —
Issuance of common units — — — 0 — —
Equity issued in business combinations — — — — 6,674 —
Change in the redemption value of redeemable interests (74,166) — — (74,166) 11,125 63,041
Distributions (732) — (17) (749) (2,538) (251)
Balance at September 30, 2019 $ (206,042) $ (240) $ 2,387 $ (203,895) $ 82,608 $ 172,238


For the Three Months Ended September 30, 2020
	Stockholders’ Equity																Mezzanine Equity
	Class A Common Stock			Class B Common Stock
(in thousands, except share data)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Notes Receivable from Stockholders		Non-controlling Interest		Total		Redeemable Non-controlling Interest
Balance at June 30, 2020	33,302,477	$	333	45,458,763	$	4	$	235,520	$	(10,770)	$	(573)	$	198,049	$	422,563	$	71
Net income (loss)	—	—		—	—		—		(3,268)		—		(4,369)		(7,637)		22
Offering costs	—	—		—	—		(28)		—		—		—		(28)		—
Equity issued in business combinations	25,491	—		—	—		445		—		—		—		445		—
Share-based compensation, net of forfeitures	393,848	4		—	—		908		—		—		285		1,197		—
Redemptions and repurchases of common stock	211,052	2		(211,052)	—		799		—		—		(801)		—		—
Repayment of stockholder notes receivable	—	—		—	—		—		—		54		—		54		—
Contributions	—	—		—	—		—		—		—		—		—		8
Balance at September 30, 2020	33,932,868	$	339	45,247,711	$	4	$	237,644	$	(14,038)	$	(519)	$	193,164	$	416,594	$	101

For the Nine Months Ended September 30, 2019
Members’ Equity (Deficit) Mezzanine Equity
(in thousands)
Members’ Deficit
Notes Receivable from Members Noncontrolling Interest Total Redeemable Noncontrolling Interest Redeemable Members’ Capital
Balance at December 31, 2018 $ (63,606) $ (90) $ 937 $ (62,759) $ 46,208 $ 39,354
Net income 119 — 112 231 3,761 485
Contributions — — — — 35 —
Contributions through issuance of member notes receivable — (310) 47 (263) 263 —
Repayment of member notes receivable — 160 — 160 — —
Issuance and vesting of Management Incentive Units 663 — — 663 — —
Issuance of common units 612 — 386 998 — 5,509
Repurchase of common units — — — — — (11,177)
Repurchase redemption value adjustments — — — — — (1,323)
Equity issued in business combinations — — 1,000 1,000 37,637 —
Change in the redemption value of redeemable interests (140,708) — — (140,708) 167 140,541
Distributions (3,122) — (95) (3,217) (5,463) (1,151)
Balance at September 30, 2019 $ (206,042) $ (240) $ 2,387 $ (203,895) $ 82,608 $ 172,238


For the Nine Months Ended September 30, 2020
	Stockholders’ Equity																Mezzanine Equity
	Class A Common Stock			Class B Common Stock
(in thousands, except share data)	Shares	Amount		Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Notes Receivable from Stockholders		Non-controlling Interest		Total		Redeemable Non-controlling Interest
Balance at December 31, 2019	19,362,984	$	194	43,257,738	$	4	$	82,425	$	(8,650)	$	(688)	$	163,966	$	237,251	$	23
Net income (loss)	—	—		—	—		—		(5,388)		—		(5,438)		(10,826)		59
Issuance of Class A common stock in offering, net of underwriting discounts and offering costs	13,225,000	132		(2,475,000)	—		144,497		—		—		(9,398)		135,231		—
Equity issued in business combinations	513,025	5		4,805,572	—		8,117		—		—		44,453		52,575		—
Share-based compensation, net of forfeitures	580,045	6		—	—		2,600		—		—		880		3,486		—
Redemptions and repurchases of common stock	251,814	2		(340,599)	—		5		—		—		(1,299)		(1,292)		—
Repayment of stockholder notes receivable	—	—		—	—		—		—		169		—		169		—
Contributions	—	—		—	—		—		—		—		—		—		19
Balance at September 30, 2020	33,932,868	$	339	45,247,711	$	4	$	237,644	$	(14,038)	$	(519)	$	193,164	$	416,594	$	101

See accompanying Notes to Condensed Consolidated Financial Statements.

BRP GROUP, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

For the Nine Months Ended September 30,
(in thousands) 2020 2019
Cash flows from operating activities:
Net income (loss) $ (10,767) $ 4,477
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 13,894 7,253
Change in fair value of contingent consideration 12,697 (3,222)
Share-based compensation expense 5,357 110
Payment of contingent earnout consideration in excess of purchase price accrual (1,727) 0
Amortization of deferred financing costs 384 1,117
Loss on extinguishment of debt 0 115
Issuance and vesting of Management Incentive Units 0 663
Participation unit compensation 0 150
Changes in operating assets and liabilities, net of effect of acquisitions:
Premiums, commissions and fees receivable, net (12,717) (441)
Prepaid expenses and other current assets 230 (921)
Due from related parties 2 73
Accounts payable, accrued expenses and other current liabilities 23,418 5,090
Other liabilities 0 105
Net cash provided by operating activities 30,771 14,569
Cash flows from investing activities:
Capital expenditures (4,135) (1,465)
Investment in business venture 0 (200)
Cash consideration paid for asset acquisitions, net of cash received (695) (671)
Cash consideration paid for business combinations, net of cash received (230,403) (99,486)
Net cash used in investing activities (235,233) (101,822)
Cash flows from financing activities:
Proceeds from issuance of Class A common stock, net of underwriting discounts 167,346 0
Repurchase/redemption of LLC Units and Class B common stock (32,610) 0
Payment of common stock offering costs (798) 0
Payment of contingent and guaranteed earnout consideration (1,192) (813)
Proceeds from revolving line of credit 185,637 68,464
Repayments of revolving line of credit (125,000) 0
Proceeds from related party debt 0 49,845
Payments on long-term debt 0 (204)
Payments of debt issuance costs and debt extinguishment costs (2,182) (15)
Proceeds from repayment of stockholder/member notes receivable 169 160
Repurchase of common units 0 (12,500)
Distributions 0 (9,831)
Other 19 1,662
Net cash provided by financing activities 191,389 96,768
Net increase (decrease) in cash and cash equivalents and restricted cash (13,073) 9,515
Cash and cash equivalents and restricted cash at beginning of period 71,071 7,995
Cash and cash equivalents and restricted cash at end of period $ 57,998 $ 17,510

~~See accompanying Notes to Condensed Consolidated Financial Statements.~~

BRP GROUP, INC.
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the Nine Months Ended September 30,
(in thousands) 2020 2019
Supplemental schedule of cash flow information:
Cash paid during the period for interest $ 2,309 $ 7,480
Disclosure of non-cash investing and financing activities:
Equity issued in business combinations $ 52,575 $ 38,637
Contingent earnout consideration issuances 26,612 29,117
Additions to property and equipment included in accrued expenses and other current liabilities 561 0
Change in the redemption value of redeemable interests 0 140,708
Capitalization of issuance to redeemable common member 0 5,509
Capitalization of offering costs 0 4,207
Debt issuance costs added to revolving line of credit 0 2,554
Transfer of long-term debt to revolving line of credit 0 1,820
Contingently returnable consideration for business combinations 0 321


	For the Nine Months Ended September 30,
(in thousands)	2021		2020
Cash flows from operating activities:
Net loss	$	(13,712)	$	(10,767)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	35,795		13,894
Change in fair value of contingent consideration	23,163		12,697
Share-based compensation expense	11,921		5,357
Amortization of deferred financing costs	2,301		384
Change in fair value of interest rate caps	1,159		—
Payment of contingent earnout consideration in excess of purchase price accrual	(602)		(1,727)
Other fair value adjustments	217		—
Changes in operating assets and liabilities, net of effect of acquisitions:
Premiums, commissions and fees receivable, net	(58,150)		(12,717)
Prepaid expenses and other current assets	(5,773)		230
Due from related parties	19		2
Accounts payable, accrued expenses and other current liabilities	30,703		23,418
Net cash provided by operating activities	27,041		30,771
Cash flows from investing activities:
Capital expenditures	(3,188)		(4,135)
Cash consideration paid for asset acquisitions, net of cash received	(1,575)		(695)
Cash consideration paid for business combinations, net of cash received	(218,818)		(230,403)
Net cash used in investing activities	(223,581)		(235,233)
Cash flows from financing activities:
Proceeds from issuance of Class A common stock, net of underwriting discounts	269,376		167,346
Redemption and repurchase of LLC Units and Class B common stock	—		(32,610)
Payment of common stock offering costs	(1,055)		(798)
Payment of contingent and guaranteed earnout consideration	(1,078)		(1,192)
Proceeds from revolving line of credit	120,000		185,637
Repayments of revolving line of credit	—		(125,000)
Proceeds from long-term debt	97,914		—
Payments on long-term debt	(2,250)		—
Payments of debt issuance costs	(693)		(2,182)
Purchase of interest rate caps	(6,461)		—
Proceeds from repayment of stockholder notes receivable	202		169
Other	—		19
Net cash provided by financing activities	475,955		191,389
Net increase (decrease) in cash and cash equivalents and restricted cash	279,415		(13,073)
Cash and cash equivalents and restricted cash at beginning of period	142,022		71,071
Cash and cash equivalents and restricted cash at end of period	$	421,437	$	57,998

See accompanying Notes to Condensed Consolidated Financial Statements. 10

BRP GROUP, INC.

Condensed Consolidated Statements of Cash Flows (Continued)

(Unaudited)


	For the Nine Months Ended September 30,
(in thousands)	2021		2020
Supplemental schedule of cash flow information:
Cash paid during the period for interest	$	15,177	$	2,309
Disclosure of non-cash investing and financing activities:
Equity issued in business combinations	$	75,634	$	52,575
Contingent earnout liabilities assumed in business combinations	60,865		26,612
Conversion of contingent earnout liability to related party notes payable	61,500		—
Noncash debt issuance costs incurred	3,823		—
Capital expenditures incurred but not yet paid	493		561

See accompanying Notes to Condensed Consolidated Financial Statements.

BRP GROUP, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Business and Basis of Presentation

BRP Group, Inc. (“BRP Group” ~~or the “Company”~~) was incorporated in the state of Delaware on July 1, 2019. BRP Group was formed for the purpose of completing an initial public offering of its common stock and related transactions in order to carry on the business of Baldwin Risk Partners, LLC (“BRP”) as a publicly-traded entity. On October 28, 2019, BRP Group completed an initial public offering of its Class A common stock (the “Initial Public Offering”) and became the sole managing member of BRP. The consolidated financial statements of BRP Group have been presented as a combination of the financial results of BRP Group and BRP as of the earliest period presented as discussed further under Principles of Consolidation below.

BRP Group is a diversified insurance agency and services organization that markets and sells insurance products and services to its customers throughout the U.S., although a significant portion of the Company’s business is concentrated in the southeastern U.S. BRP Group and its subsidiaries operate through four ~~reportable segments (“~~Operating ~~Groups”),~~Groups, including Middle Market, Specialty, MainStreet, and Medicare, which are discussed in more detail in Note 15.

~~Public Offering~~

~~On June 29, 2020,~~ The term the ~~Company completed a public offering of 13,225,000 shares of~~“Company” refers to BRP Group and its Class A common stock, including 1,725,000 shares sold pursuant to the underwriters’ over-allotment option. The shares were sold at an offering price of $13.25 per share for net proceeds of $166.5 million after deducting underwriting discounts and commissions of $7.9 million and offering expenses of $798,000.consolidated subsidiaries.

Principles of Consolidation

The consolidated financial statements include the accounts of BRP Group and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

As the sole manager of ~~BRP,~~Baldwin Risk Partners, LLC (“BRP”), BRP Group operates and controls all the business and affairs of BRP, and has the sole voting interest in, and controls the management of, BRP. Accordingly, BRP Group ~~began consolidating~~consolidates BRP in its consolidated financial statements, ~~as of the closing date of the Initial Public Offering,~~ resulting in a noncontrolling interest related to the ~~LLC Units~~membership interests of BRP (the “LLC Units”) held by BRP’s LLC members ~~(the “LLC Units”) on~~in its consolidated financial statements.

BRP and BRP Group were under the common control of the Company’s Chairman, Lowry Baldwin, before and immediately after the reorganization transactions undertaken in connection with the Initial Public Offering (the “Reorganization Transactions”). Prior to the Reorganization Transactions, Mr. Baldwin held a controlling interest in Baldwin Investment Group Holdings, LLC (“BIGH”), which was the controlling owner of BRP through its majority ownership of BRP’s common units. In addition, Mr. Baldwin was the sole shareholder of BRP Group. Upon reorganization, BRP Group became the sole managing member of BRP. Holders of the Class B common stock hold a majority of the voting power of BRP Group and stockholders of the then majority of the Class B common stock, including BIGH, executed a Voting Agreement in which they agreed to vote in the same manner as Mr. Baldwin. As a result, Mr. Baldwin continued to control BRP Group subsequent to the Initial Public Offering and Reorganization Transactions. Accordingly, we have accounted for the Reorganization Transactions as a transaction between entities under common control in accordance with Accounting Standards Codification (“ASC”) Topic 805-50, ~~Business Combinations - Related Issues, under which the financial information of BRP Group has been combined with that of BRP as of the earliest period presented.~~

The Company has prepared these consolidated financial statements in accordance with ~~ASC~~Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“Topic 810”). Topic 810 requires that if an enterprise is the primary beneficiary of a variable interest entity, the assets, liabilities, and results of operations of the variable interest entity should be included in the consolidated financial statements of the enterprise. The Company has recognized certain entities as variable interest entities of which the Company is the primary beneficiary and has included the accounts of these entities in the consolidated financial statements. Refer to Note 4 for additional information regarding the Company’s variable interest entities.

Topic 810 also requires that the equity of a noncontrolling interest shall be reported on the condensed consolidated balance sheets within total equity of the Company. Certain redeemable noncontrolling interests are reported on the condensed consolidated balance sheets as mezzanine equity. Topic 810 also requires revenues, expenses, gains, losses, net income or loss, and other comprehensive income or loss to be reported in the consolidated financial statements at consolidated amounts, which include amounts attributable to the owners of the parent and the noncontrolling interests.

~~Noncontrolling Interest~~Public Equity Offering

~~Noncontrolling interests are reported at historical cost basis adjusted for cumulative earnings or loss allocations and classified as~~On September 17, 2021, the Company completed a ~~component~~public offering of ~~stockholders’ equity on the condensed consolidated balance sheets. Noncontrolling interest as presented as~~9,200,000 shares of ~~September 30, 2020 and December 31, 2019 and for the nine months ended September 30, 2020 and 2019 consists of the noncontrolling interest holdings of BRP Group subsequent~~its Class A common stock, including 1,200,000 shares sold pursuant to the ~~Company’s reorganization in connection with the Initial Public Offering.~~underwriters’ over-allotment option. The ~~controlling interest holdings~~shares were sold at an offering price of ~~BRP~~$30.50 per share for ~~the period from January 1, 2019 through September 30, 2019 have been reclassified~~net proceeds of approximately $269.4 million after deducting underwriting discounts and commissions of $11.2 million. The Company used such proceeds to ~~noncontrolling interest holdings~~purchase 9,200,000 LLC Units. The Company also paid offering expenses of ~~BRP Group for presentation of activity for the three and nine months ended September 30, 2019.~~$1.1 million.

Unaudited Interim Financial Reporting

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. Accordingly, they do not include all the information and related notes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments, consisting of recurring accruals, considered necessary for fair statement have been included. The accompanying balance sheet for the year ended December 31, ~~2019~~2020 was derived from audited financial statements, but does not include all disclosures required by GAAP. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, ~~2019~~2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on March ~~24, 2020.~~11, 2021.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates underlying the accompanying consolidated financial statements include the application of guidance for revenue recognition, including determination of allowances for estimated policy ~~cancellations,~~cancellations; the determination of fair value in relation to business combinations and purchase price ~~allocation,~~allocation; impairment of long-lived assets including ~~goodwill, and~~goodwill; valuation of the Tax Receivable Agreement liability and income taxes; and share-based compensation.

~~Changes in Presentation~~

~~Certain prior year amounts have been reclassified to conform to current year presentation.~~

Recent Accounting Pronouncements

As an emerging growth company, the Jumpstart Our Business Startups ~~(“JOBS”~~Act of 2012 (the “JOBS Act”) ~~Act~~ permits the Company an extended transition period for complying with new or revised accounting standards affecting public companies. The Company ~~has~~ elected to use this extended transition period and adopt certain new accounting standards on the private company timeline, which means that the Company’s financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards on a non-delayed basis. The Company ~~has~~ elected the extended transition period for the adoption of the Accounting Standards Updates (“ASUs”) ~~below, except those where early adoption was both permitted~~below. The Company has determined that it will cease to be an emerging growth company as of December 31, 2021, and ~~elected.~~therefore, will need to comply with the public company timeline on that date.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The guidance in ASU 2016-02 supersedes the lease recognition requirements in ~~Accounting Standards Codification (“ASC”)~~ASC Topic 840, Leases. ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. The FASB has subsequently issued several additional ASUs related to leases, which improved upon, provided interpretation of and transition relief for the guidance issued in ASU 2016-02 and extended the adoption date for nonpublic business entities. This guidance iswill be effective for the ~~fiscal years beginning after~~Company on December ~~15,~~31, 2021 ~~and interim periods within fiscal years beginning after December 15, 2022,~~in conjunction with ~~early adoption permitted.~~its loss of emerging growth company status (discussed above). The Company will adopt ASU 2016-02 using the modified retrospective approach as of January 1, 2021. Although the Company is currently evaluating the full effect that the adoption of ~~this standard~~ASU 2016-02 will have on its consolidated financial ~~statements.~~statements, it expects to recognize significant right-of-use assets and lease liabilities, resulting in an increase to its total assets and total liabilities.

In June 2016, the FASB issued ASU No. 2016-13, Financial ~~Instruments -~~ Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Statements (“ASU 2016-13”), which amends the guidance for recognizing credit losses on financial instruments measured at amortized cost. ASU 2016-13 replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The FASB has subsequently issued several additional ASUs related to credit losses, which improved upon, provided interpretation of and transition relief for, the guidance issued in ASU 2016-13 and extended the adoption date for nonpublic business entities. This guidance will be effective for the Company on December 31, 2021 in conjunction with its loss of emerging growth company status (discussed above). The Company will adopt ASU 2016-13 using the modified retrospective approach as of January 1, 2021. The Company has determined that the cumulative effect of the adoption will be insignificant to its consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) to improve the accounting for acquired revenue contracts with customers in business combination by addressing diversity in practice and inconsistency related to (i) the recognition of an acquired contract liability and (ii) payment terms and their effect on subsequent revenue recognized by the acquirer. ASU 2021-08 requires that, at acquisition date, an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”) as if it had originated the contracts, while also taking into account how the acquiree applied Topic 606. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the full effect that the adoption of this standard will have on its consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“Topic 820”): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). This update modifies the disclosure requirements related to fair value measurement by removing certain disclosure requirements related to the fair value hierarchy. This update also modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted the guidance in ASU 2018-13 effective January 1, 2020, which impacted the presentation of the fair value measurements disclosure in Note 13 but did not otherwise impact the Company’s consolidated financial statements.

2. Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies from those that were disclosed for the year ended December 31, ~~2019~~2020 in the Company’s Annual Report on Form 10-K filed with the SEC on March ~~24, 2020,~~11, 2021, except as noted below.

~~Self-Insurance Reserve~~

Derivative Instruments

The Company ~~converted~~utilizes derivative financial instruments, consisting of interest rate caps, to ~~a self-insured health insurance plan beginning in March 2020 for which it carries an insurance program with specific retention levels~~manage the Company’s interest rate exposure. Derivative instruments are recognized as assets or ~~high per-claim deductibles for expected losses. The Company records a liability for all unresolved claims and for an estimate of incurred but not reported ("IBNR") claims~~liabilities at the anticipated cost that falls below its specified retention levels or per-claim deductible amounts. In establishing reserves, the Company considers actuarial assumptions and judgments regarding economic conditions and the frequency and severity of claims. The Company had an IBNR reserve of $1.1 million at September 30, 2020, which is included in accrued expenses and other current liabilitiesfair value on the condensed consolidated balance sheets. The Company has not designated these derivatives as hedging instruments for accounting purposes and, accordingly, the changes in fair value of these derivatives are recognized in earnings. Cash payments and receipts under the derivative instruments are classified within cash flows from financing activities on the accompanying statements of cash flows. The Company does not use derivative instruments for trading or speculative purposes.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. The Company manages this risk using high creditworthy financial institutions. Interest-bearing accounts and noninterest-bearing accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits exceed amounts insured by the FDIC. The Company has not experienced any losses from its deposits.

3. Business Combinations

The Company completed 1110 business combinations for an aggregate purchase price of ~~$317.7~~$387.5 million during the nine months ended September 30, ~~2020.~~2021. In accordance with ASC Topic 805, Business Combinations (“Topic 805”), total consideration was first allocated to the fair value of assets acquired, including liabilities assumed, with the excess being recorded as goodwill. For financial statement purposes, goodwill is not amortized but rather is evaluated for impairment at least annually or more frequently if an event or change in circumstances occurs that indicates goodwill may be impaired. Goodwill is deductible for tax purposes and will be amortized over a period of 15 years.

The recorded purchase price for ~~certain of the foregoing~~most business combinations includes an estimation of the fair value of contingent consideration obligations associated with potential earnout provisions, which are generally based on recurring ~~commissions and fees~~ revenue. The contingent earnout consideration amounts identified in the tables below are measured at fair value within Level 3 of the fair value hierarchy as discussed further in Note 13. Any subsequent changes in the fair value of contingent earnout liabilities will be recorded in the condensed consolidated statements of comprehensive ~~income (loss)~~loss when incurred.

The recorded purchase price for ~~certain~~many business combinations also includes an estimation of the fair value of ~~noncontrolling~~equity interests, which ~~are~~is calculated based on ~~a valuation~~the value of the ~~entity~~Company’s Class A common stock on the closing date taking into account a discount for lack of marketability. Any equity interests granted in shares of Class B common stock also include an upward adjustment for the cash flow associated with the ~~relevant percentage applied.~~Tax Receivable Agreement.

The Company completed the following 11 business combinations during the nine months ended September 30, ~~2020:~~2021:

•~~Lanier, a Middle Market Partner effective January 1, 2020, was made to expand the Company’s Middle Market presence in the healthcare, higher education, construction, property~~LeaseTrack Services LLC and ~~non-profit businesses throughout Florida and other states.~~

•~~Highland,~~Effective Coverage LLC (collectively, “LeaseTrack”), a Specialty Partner effective ~~January~~February 1, ~~2020, was made~~2021, provides a complementary service offering to ~~expand~~ the ~~Company’s Specialty presence in~~MGA of the ~~healthcare~~Future’s Master Tenant product for property managers and ~~cyber insurance businesses and to add capabilities within the real estate business.~~distribution partners.

•~~AgencyRM,~~Riley Financial, Inc. (operating as “Medicare Help Now”), a Medicare Partner effective ~~February~~March 1, ~~2020, was made to expand~~2021, further bolsters the Company’s Medicare business presence in ~~Texas.~~the Pacific Northwest.

•~~VibrantUSA,~~Tim Altman, Inc. (operating as “Only Medicare Solutions”), a Medicare Partner effective ~~February~~April 1, ~~2020, was made to expand~~2021, expands the Company’s Pacific Northwest Medicare Advantage presence.

•Seniors’ Insurance Services of Washington, Inc. (“Seniors’ Insurance Services”), a Medicare Partner effective April 30, 2021, strengthens and expands the Company’s Medicare ~~business~~ presence in ~~Washington.~~the Pacific Northwest.

•~~IRP,~~Mid-Continent Companies, Ltd. and Mid-Continent Securities Ltd. (collectively, “Mid-Continent”), a Middle Market Partner effective April ~~1, 2020, was made to expand~~30, 2021, expands the Company’s capabilities ~~within the energy~~ and ~~infrastructure business.~~Middle Market presence in Texas.

•~~Southern Protective~~RogersGray Inc. and Breakwater Brokerage, LLC, collectively, a Middle Market Partner, and Monomoy Insurance Group, LLC, a Specialty Partner (collectively, “RogersGray”), effective July 1, 2021, enhances and further expands the Company’s geographic footprint and product offerings in New England and the broader Northeast region.

•EBSME, LLC (“EBSME”), a Middle Market Partner effective ~~May 1, 2020, was made~~July 30, 2021, expands employee benefits service offerings to ~~expand~~ the ~~Company's risk consulting capabilities in the medical malpractice market.~~Company’s Middle Market clients.

•~~Pendulum,~~FounderShield LLC, AlphaRoot LLC, ReShield LLC, and Scale Underwriting Services LLC (collectively, “FounderShield”), a Specialty Partner effective ~~May 1, 2020, was made~~August 2, 2021, brings to ~~expand~~BRP Group unique expertise for rapidly-scaling companies in numerous high-growth industry verticals across the ~~Company's specialty risk consulting capabilities in the long-term care~~Technology & Fintech, Life Sciences and ~~senior living markets.~~Emerging Markets sectors.

•~~Rosenthal,~~The Capital Group, LLC, The Capital Group Association Consultants, LLC, US Underwriters, LLC, TCG Financial Management Company, LLC and The Capital Group Investment Advisory Services, LLC (collectively, “The Capital Group”), a Middle Market Partner effective ~~June 1, 2020, was made to expand~~August 2, 2021, adds scale and density in the ~~Company’s capabilities within the habitational real estate industry.~~critical D.C. Metro region.

•~~TBA/RBA,~~River Oak Risk, LLC and River Oak Risk Holdings, LLC (collectively “River Oak Risk”), a Specialty Partner effective August 4, 2021, expands the Company’s captive risk solutions for its Middle Market ~~Partner effective June 1, 2020, was made to expand the Company’s employee benefits business in Tennessee~~ and ~~across the Southeastern U.S.~~

•~~Fletcher, a Medicare Partner effective July 31, 2020, was made to expand the Company’s Medicare business presence in Washington.~~

•~~MIA, a Medicare Partner effective July 31, 2020, was made to expand the Company’s Medicare business presence in Tennessee.~~Specialty clients.

The operating results of these business combinations have been included in the condensed consolidated statements of comprehensive ~~income (loss)~~loss since their respective acquisition dates. The Company recognized total revenues and net ~~income~~loss from these business combinations of ~~$37.1~~$18.8 million and ~~$3.0~~$1.2 million, respectively, for the nine months ended September 30, ~~2020.~~2021.

Acquisition-related costs incurred in connection with these business combinations are recorded in other operating expenses in the condensed consolidated statements of comprehensive ~~income (loss).~~loss. The Company incurred acquisition-related costs from these business combinations of ~~$1.7~~$2.4 million for the nine months ended September 30, ~~2020.~~2021.

Due to the complexity of valuing the consideration paid and the purchase price allocation and the timing of these activities, certain amounts included in the consolidated financial statements may be provisional and subject to additional adjustments within the measurement period as permitted by Topic 805. Specifically, the Company's valuations of premiums, commissions and fees receivable in accordance with Topic 606 are estimates subject to change based on relevant factors over the policy period. The valuations of intangible assets are also estimates based on assumptions of factors such as discount rates and growth rates. Accordingly, these assets are subject to measurement period adjustments as determined after the passage of time. Any measurement period adjustments related to prior period business combinations are reflected as current period adjustments in accordance with Topic 805. Refer to Note 8 for information regarding measurement period adjustments recorded during the nine months ended September 30, 2021.

The table below provides a summary of the total consideration and the estimated purchase price allocations made for each of the business acquisitions that became effective during the nine months ended September 30, ~~2020.~~2021. The ~~"All Others"~~“All Others” column includes amounts for the ~~AgencyRM, VibrantUSA, Southern Protective Group, Pendulum, Fletcher~~Medicare Help Now, Only Medicare Solutions, Seniors’ Insurance Services, Mid-Continent and ~~MIA~~EBSME business combinations.

(in thousands) Lanier Highland IRP Rosenthal TBA/RBA All Others Totals
Cash consideration paid $ 24,450 $ 6,603 $ 26,223 $ 75,936 $ 76,272 $ 28,634 $ 238,118
Fair value of contingent earnout consideration 1,628 788 5,521 7,051 7,000 4,624 26,612
Fair value of equity interest 6,119 4,500 7,535 10,147 21,427 2,847 52,575
Deferred payment — — — — 300 59 359
Total consideration $ 32,197 $ 11,891 $ 39,279 $ 93,134 $ 104,999 $ 36,164 $ 317,664
Cash $ 2,413 $ 1,542 $ 1,694 $ 954 $ 0 $ 1,112 $ 7,715
Premiums, commissions and fees receivable 2,494 5,929 3,229 4,734 8,731 1,718 26,835
Property and equipment 294 0 123 0 0 26 443
Other assets 168 13 11 11 0 19 222
Intangible assets —
Purchased customer accounts 4,312 0 6,250 33,670 53,900 3,489 101,621
Distributor relationships 0 6,500 0 0 0 12,880 19,380
Carrier relationships 0 659 0 0 0 0 659
Software 0 0 0 0 0 565 565
Trade names 0 214 0 939 179 77 1,409
Goodwill 25,735 4,276 32,273 56,253 44,264 17,125 179,926
Total assets acquired 35,416 19,133 43,580 96,561 107,074 37,011 338,775
Premiums and producer commissions payable (2,954) (6,374) (4,301) (3,427) (2,075) (586) (19,717)
Accrued expenses and other current liabilities (265) (868) 0 0 0 (261) (1,394)
Total liabilities acquired (3,219) (7,242) (4,301) (3,427) (2,075) (847) (21,111)
Net assets acquired $ 32,197 $ 11,891 $ 39,279 $ 93,134 $ 104,999 $ 36,164 $ 317,664
Maximum potential contingent earnout consideration (1)
$ 11,000 $ 2,450 $ 44,399 $ 30,843 $ 30,147 $ 15,930 $ 134,769

~~__________~~

~~(1) IRP has an uncapped earnout. The maximum potential earnout consideration represented has been calculated assuming 50% compound annual revenue growth for three years.~~

Due to the complexity of valuing the consideration paid and the purchase price allocation and the timing of these activities, certain amounts included in the condensed consolidated financial statements may be provisional and subject to additional adjustments within the measurement period as permitted by Topic 805. Any measurement period adjustments related to prior period business combinations are reflected as current period adjustments in accordance with Topic 805.


(in thousands)	LeaseTrack		RogersGray		FounderShield		The Capital Group		River Oak Risk		All Others		Totals
Cash consideration paid	$	12,984	$	135,135	$	20,863	$	28,558	$	18,908	$	16,786	$	233,234
Fair value of contingent earnout consideration	6,116		18,976		18,033		10,006		5,163		2,571		60,865
Fair value of equity interest	1,652		39,765		14,624		13,393		3,574		2,626		75,634
Deferred payment	—		1,608		2,985		10,336		89		2,772		17,790
Total consideration	$	20,752	$	195,484	$	56,505	$	62,293	$	27,734	$	24,755	$	387,523

Cash	$	100	$	2,766	$	221	$	613	$	290	$	145	$	4,135
Restricted cash	2		4,211		3,199		—		160		—		7,572
Premiums, commissions and fees receivable	729		9,713		3,810		3,940		187		1,677		20,056
Property and equipment	43		1,324		—		—		—		—		1,367
Other assets	—		589		52		—		—		18		659
Intangible assets	5,200		76,169		9,402		26,399		5,085		12,722		134,977
Goodwill	15,026		109,053		45,810		32,251		22,797��		10,592		235,529
Total assets acquired	21,100		203,825		62,494		63,203		28,519		25,154		404,295
Premiums payable to insurance companies	(318)		(5,898)		(5,831)		—		—		—		(12,047)
Producer commissions payable	(4)		(749)		—		(906)		(111)		(395)		(2,165)
Accrued expenses and other current liabilities	(26)		(1,694)		(158)		(4)		(674)		(4)		(2,560)
Total liabilities acquired	(348)		(8,341)		(5,989)		(910)		(785)		(399)		(16,772)
Net assets acquired	$	20,752	$	195,484	$	56,505	$	62,293	$	27,734	$	24,755	$	387,523

Maximum potential contingent earnout consideration	$	8,500	$	72,446	$	77,554	$	29,888	$	26,402	$	17,897	$	232,687

The factors contributing to the recognition of the amount of goodwill are based on expanding business presence into new geographic locations and service markets, strategic benefits ~~that are~~ expected to be realized from acquiring the Partners’ assembled workforce and technology, in addition to other synergies gained from integrating the Partners’ operations into our consolidated structure.

The intangible assets acquired in connection with business combinations during the nine months ended September 30, ~~2020~~2021 have the following values and estimated weighted-average lives:


(in thousands, except weighted-average lives)	Amount			Weighted-Average Life
Purchased customer accounts	~~19.3~~$	117,200		18.1 years
Distributor relationships	~~20.0 years~~
~~Carrier relationships~~4,846			~~0.8~~20.0 years
Software	~~2.0~~8,834			5.0 years
Trade names	~~4.3~~4,097			5.0 years

Future annual estimated amortization expense over the next five years for intangible assets acquired in connection with business combinations during the nine months ended September 30, ~~2020~~2021 is as follows:


(in thousands)	(in thousands)	Amount		(in thousands)	Amount
For the remainder of 2020		$	2,092
2021		8,545
For the remainder of 2021				For the remainder of 2021	$	2,220
2022	2022	8,280		2022	10,102
2023	2023	8,132		2023	10,425
2024	2024	7,942		2024	10,670
2025				2025	10,904

The following unaudited pro forma consolidated results of operations are provided for illustrative purposes only and have been presented as if the acquisitions of ~~Lanier, Highland, AgencyRM, VibrantUSA, IRP, Southern Protective~~LeaseTrack, Medicare Help Now, Only Medicare Solutions, Seniors’ Insurance Services, Mid-Continent, RogersGray, EBSME, FounderShield, The Capital Group ~~Pendulum, Rosenthal, TBA/RBA, Fletcher~~ and ~~MIA~~River Oak Risk occurred on January 1, ~~2019.~~2020. This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had occurred on that date, nor of the results that may be obtained in the future.


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands, except per share data)	(in thousands, except per share data)	2020		2019		2020		2019		(in thousands, except per share data)	2021		2020		2021		2020
Pro forma results:	Pro forma results:									Pro forma results:
Revenues	Revenues	$	66,075	$	56,095	$	201,960	$	163,522	Revenues	$	137,830	$	83,182	$	446,454	$	224,440
Net income (loss)		(7,588)		(3,448)		(882)		5,647
Net loss										Net loss	(24,312)		(12,446)		(11,142)		(20,551)
Net loss attributable to BRP Group, Inc.	Net loss attributable to BRP Group, Inc.	(3,250)				(320)				Net loss attributable to BRP Group, Inc.	(12,877)		(5,337)		(6,732)		(8,940)

Basic and diluted loss per share	Basic and diluted loss per share	$	(0.10)			$	(0.01)			Basic and diluted loss per share	$	(0.28)	$	(0.16)	$	(0.15)	$	(0.36)
Weighted-average shares of Class A common stock outstanding - basic and diluted	Weighted-average shares of Class A common stock outstanding - basic and diluted	33,107				24,408				Weighted-average shares of Class A common stock outstanding - basic and diluted	46,633		33,835		45,589		25,106

4. Variable Interest Entities

Topic 810 requires a reporting entity to consolidate a variable interest entity (“VIE”) when the reporting entity has a variable interest or combination of variable interests that provide the entity with a controlling financial interest in the VIE. The Company continually assesses whether it has a controlling financial interest in each of its VIEs to determine if it is the primary beneficiary of the VIE and should, therefore, consolidate each of the VIEs. A reporting entity is considered to have a controlling financial interest in a VIE if it has (i) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb the losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

The Company determined that it is the primary beneficiary of its VIEs, which, at September 30, ~~2019, included The Villages Insurance Partners, LLC (“TVIP”)~~2021 and ~~the Company’s joint ventures, BKS-IPEO JV Partners, LLC (“iPEO”),~~December 31, 2020, include Laureate Insurance Partners, LLC (“Laureate”), BKS Smith, LLC (“Smith”), BKS MS, LLC (“Saunders”) and BKS Partners Galati Marine Solutions, LLC (“Galati”). In connection with the reorganization transactions and initial public offering in October 2019, the Company acquired the equity interests of TVIP and iPEO, which became wholly-owned subsidiaries of BRP and, accordingly, are no longer VIEs of the Company at September 30, 2020 and December 31, 2019. The Company has consolidated its VIEs into the consolidated financial statements.

Total revenues and expenses of the Company’s consolidated VIEs included in the condensed consolidated statements of comprehensive ~~income (loss)~~loss were $285,000 and $140,000, respectively, for the three months ended September 30, 2021 and $180,000 and $159,000, respectively, for the three months ended September 30, ~~2020 and $3.3 million and $2.4 million, respectively, for the three months ended September 30, 2019.~~2020. Total revenues and expenses of the Company’s consolidated VIEs included in the condensed consolidated statements of comprehensive ~~income (loss)~~loss were $748,000 and $457,000, respectively, for the nine months ended September 30, 2021 and $583,000 and $498,000, respectively, for the nine months ended September 30, 2020 and $11.1 million and $7.1 million, respectively, for the nine months ended September 30, 2019. The revenues and expenses of TVIP and iPEO are included in the revenues and expenses of the Company’s consolidated VIEs for the three and nine months ended September 30, 2019.2020.

The assets of the consolidated VIEs can only be used to settle the obligations of the consolidated VIEs and the creditors of the liabilities of the consolidated VIEs do not have recourse to the Company. The following tables provide a summary of the carrying amounts of the assets and liabilities of the Company’s consolidated VIEs at each of the balance sheet dates:


		At September 30, 2020									At September 30, 2021
(in thousands)	(in thousands)	Laureate		Smith		Saunders		Total		(in thousands)	Laureate		Smith		Saunders		Total
Assets	Assets									Assets
Cash and cash equivalents	Cash and cash equivalents	$	91	$	1	$	30	$	122	Cash and cash equivalents	$	231	$	9	$	26	$	266
Premiums, commissions and fees receivable, net	Premiums, commissions and fees receivable, net	6		64		83		153		Premiums, commissions and fees receivable, net	—		102		114		216
Total current assets	Total current assets	97		65		113		275		Total current assets	231		111		140		482
Property and equipment, net	Property and equipment, net	23		0		0		23		Property and equipment, net	17		—		—		17
Other assets	Other assets	5		0		0		5		Other assets	5		—		—		5
Total assets	Total assets	$	125	$	65	$	113	$	303	Total assets	$	253	$	111	$	140	$	504
Liabilities	Liabilities									Liabilities
Premiums payable to insurance companies	Premiums payable to insurance companies	$	0	$	0	$	1	$	1	Premiums payable to insurance companies	$	14	$	—	$	—	$	14
Producer commissions payable	Producer commissions payable	0		0		19		19		Producer commissions payable	1		—		11		12
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	7		0		0		7		Accrued expenses and other current liabilities	12		—		—		12
Total liabilities	Total liabilities	$	7	$	0	$	20	$	27	Total liabilities	$	27	$	—	$	11	$	38


		At December 31, 2019									At December 31, 2020
(in thousands)	(in thousands)	Laureate		Smith		Saunders		Total		(in thousands)	Laureate		Smith		Saunders		Total
Assets	Assets									Assets
Cash and cash equivalents	Cash and cash equivalents	$	46	$	1	$	0	$	47	Cash and cash equivalents	$	120	$	5	$	18	$	143
Premiums, commissions and fees receivable, net	Premiums, commissions and fees receivable, net	0		44		31		75		Premiums, commissions and fees receivable, net	3		52		75		130
Total current assets	Total current assets	46		45		31		122		Total current assets	123		57		93		273
Property and equipment, net	Property and equipment, net	31		0		0		31		Property and equipment, net	21		—		—		21
Other assets	Other assets	5		0		2		7		Other assets	5		—		—		5
Total assets	Total assets	$	82	$	45	$	33	$	160	Total assets	$	149	$	57	$	93	$	299
Liabilities	Liabilities									Liabilities
Premiums payable to insurance companies	Premiums payable to insurance companies	$	3	$	0	$	3	$	6	Premiums payable to insurance companies	$	4	$	—	$	1	$	5
Producer commissions payable	Producer commissions payable	2		5		8		15		Producer commissions payable	—		4		13		17
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	4		25		0		29		Accrued expenses and other current liabilities	10		—		—		10
Total liabilities	Total liabilities	$	9	$	30	$	11	$	50	Total liabilities	$	14	$	4	$	14	$	32

5. Revenue

The following table provides disaggregated commissions and fees revenue by major source:


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	(in thousands)	2020		2019		2020		2019		(in thousands)	2021		2020		2021		2020
Direct bill revenue (1)	Direct bill revenue (1)	$	26,996	$	17,664	$	77,535	$	53,258	Direct bill revenue (1)	$	58,582	$	26,996	$	203,302	$	77,535
Agency bill revenue (2)	Agency bill revenue (2)	28,130		14,253		64,815		31,084		Agency bill revenue (2)	53,495		28,130		136,271		64,815
Profit-sharing revenue (3)	Profit-sharing revenue (3)	3,535		1,587		11,285		7,877		Profit-sharing revenue (3)	8,105		3,535		26,572		11,285
Policy fee and installment fee revenue (4)	Policy fee and installment fee revenue (4)	4,051		2,719		11,086		5,112		Policy fee and installment fee revenue (4)	5,146		4,051		14,414		11,086
Consulting and service fee revenue (5)	Consulting and service fee revenue (5)	720		1,111		2,228		2,337		Consulting and service fee revenue (5)	5,343		720		16,349		2,228
Other income (6)	Other income (6)	2,411		1,049		4,321		1,612		Other income (6)	4,885		2,411		11,182		4,321
Total commissions and fees	Total commissions and fees	$	65,843	$	38,383	$	171,270	$	101,280	Total commissions and fees	$	135,556	$	65,843	$	408,090	$	171,270

(1) Direct bill revenue represents commission revenue earned by facilitating the arrangement between individuals or businesses and Insurance Company Partners by providing insurance placement services to Clients, primarily for private risk management, commercial risk management, employee benefits and Medicare insurance types.

(2) Agency bill revenue primarily represents commission revenue earned by facilitating the arrangement between individuals or businesses and Insurance Company Partners by providing insurance placement services to Clients. The Company acts as an agent on behalf of the Client for the term of the insurance policy.

(3) Profit-sharing revenue represents bonus-type revenue that is earned by the Company as a sales incentive provided by certain Insurance Company Partners.

(4) Policy fee revenue represents revenue earned for acting in the capacity of an MGA on behalf of the Insurance Company Partner and fulfilling certain services including delivery of policy documents, processing payments and other administrative functions. Installment fee revenue represents revenue earned by the Company for providing payment processing services on behalf of the Insurance Company Partner related to policy premiums paid on an installment basis.

(5) Service fee revenue is earned by receiving negotiated fees in lieu of a commission and consulting revenue is earned by providing specialty insurance consulting.

(6)Other income consists of Medicare marketing income that is based on agreed-upon cost reimbursement for fulfilling specific targeted marketing campaigns in addition to other fee income and premium financing income generated across all Operating Groups.

The application of ~~ASC~~ Topic 606~~Revenue from Contracts with Customers~~ ~~(“Topic 606”),~~ requires the use of management judgment. The following are the areas of most significant judgment as it relates to Topic 606:

•The Company considers the policyholders as representative of its customers in the majority of contractual relationships, with the exception of contracts in its Medicare operating segment, where the Insurance Company Partner is considered its customer.

•Contracts in the Medicare operating segment are multi-year arrangements in which the Company is entitled to renewal commissions. However, the Company has applied a constraint to renewal commission that limits revenue recognized on new policies to the policy year in effect, and revenue recognized on renewed policies to the receipt of periodic cash, when a risk of significant reversals exists based on: (i) insufficient history; and (ii) the influence of external factors outside of the Company’s control, including policyholder discretion over plans and Insurance Company Partner relationship, political influence, and a contractual provision, which limits the Company’s right to receive renewal commissions to ongoing compliance and regulatory approval of the relevant Insurance Company Partner and compliance with the Centers for Medicare and Medicaid Services.

•The Company recognizes separately contracted commissions revenue at the effective date of insurance placement and considers any ongoing interaction with the customer to be immaterial in the context of the contract.

•Variable consideration includes estimates of direct bill commissions, a reserve for policy cancellations and an estimate of profit-sharing revenue.

•Costs to obtain a contract are deferred and recognized over five years, which represents management’s estimate of the average period over which a Client maintains its initial coverage relationship with the original Insurance Company Partner.

•Due to the relatively short time period between the information gathering phase and binding insurance coverage, the Company has determined that costs to fulfill contracts are not significant. Therefore, costs to fulfill a contract are expensed as incurred.

6. Contract Assets and Liabilities

Contract assets arise when the Company recognizes revenue for amounts which have not yet been billed and contract liabilities relate to payments received in advance of performance under the contract before the transfer of a good or service to the customer. Contract assets are included in premiums, commissions and fees receivable, net and contract liabilities are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. The balances of contract assets and liabilities arising from contracts with customers are as follows:

During the nine months ended September 30, ~~2020,~~2021, the Company recognized revenue of ~~$5.2~~$11.4 million related to the contract liabilities balance at December 31, ~~2019.~~2020.

7. Deferred Commission Expense

The Company pays an incremental amount of compensation in the form of producer commissions on new business. In accordance with ASC Topic 340, Other Assets and Deferred Costs, these incremental costs are deferred and amortized over five years, which represents management’s estimate of the average benefit ~~period.~~period for new business. Deferred commission expense represents employee commissions that are capitalized and not yet ~~expensed.~~expensed and are included in other assets on the condensed consolidated balance sheets. The table below provides a rollforward of deferred commission expense for each of the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

8. Intangible Assets, Net and Goodwill

The Company recognizes certain separately identifiable intangible assets acquired in connection with business combinations and asset acquisitions. Refer to Note 3 for a summary of intangible assets acquired in connection with business combinations during the nine months ended September 30, ~~2020.~~2021. Intangible assets consist of the following:

(1)

During the nine months ended September 30, 2021, the Company recorded measurement period adjustments relating to certain businesses acquired in the fourth quarter of 2020, which decreased purchased customer accounts and trade names by $4.6 million and $156,000, respectively.

Amortization expense recorded for intangible assets was ~~$5.2~~$12.6 million and ~~$3.1~~$5.2 million for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$13.2~~$33.9 million and ~~$6.8~~$13.2 million for the nine months ended September 30, 2021 and 2020, ~~and 2019,~~ respectively.

Refer to Note 3 for a summary of goodwill recorded in connection with business combinations during the nine months ended September 30, ~~2020.~~2021. The changes in carrying value of goodwill by Operating Group for the period are as follows:

Measurement period adjustments (1)

(1) Measurement period adjustments relating to businesses acquired in the fourth quarter of 2020 increased accrued expenses and other current liabilities by $93,000, decreased property and equipment by $124,000, decreased premiums, commissions and fees receivable, net by $545,000 and decreased cash consideration by $2.5 million.

The Company has a syndicated credit agreement with JPMorgan as successor agent and lead arranger (the “Old JPM Credit Agreement”), which has a maturity date of September 23, 2024. At December 31, 2019, the Old JPM Credit Agreement provided for an aggregate borrowing capacity of $225.0 million under a revolving credit commitment (the “Revolving Credit Commitment”), of which no more than $65.0 million of the aggregate borrowing capacity is available for working capital purposes and the entirety of which is available to fund acquisitions.

On ~~March 12,~~October 14, 2020, the Company entered into a credit agreement with JPMorgan Chase Bank, N.A to provide senior secured credit facilities in an aggregate principal amount of $800.0 million (the "JPM Credit Agreement"), which consisted of (i) a term loan facility in the ~~Incremental~~principal amount of $400.0 million maturing in 2027 (the “Existing Term Loan B”) and (ii) a revolving credit facility with commitments in an aggregate principal amount of $400.0 million maturing in 2025 (the “Revolving Facility”).

The Existing Term Loan B accrued interest at LIBOR plus 400 basis points (“bps”) with a LIBOR floor of 75 bps. Borrowings under the Revolving Facility accrue interest at LIBOR plus 200 bps to LIBOR plus 300 bps based on the total net leverage ratio.

On May 7, 2021, the Company entered into Amendment No. 1 to the ~~Old~~JPM Credit Agreement, under which (a) the financial covenant requiring the Company to maintain a Total First Lien Net Leverage Ratio (as defined in the JPM Credit Agreement) at or below 5.00 to 1.00 was amended to increase such level to 6.00 to 1.00, and (b) the financial covenant requiring the Company to maintain a Debt Service Coverage Ratio (as defined in the JPM Credit Agreement) at or above 2.25 to 1.00 was removed.

On June 2, 2021, the Company entered into Amendment No. 2 to the JPM Credit Agreement to ~~increase the~~provide for a new senior secured first lien term loan facility in an aggregate ~~borrowing capacity to $300.0 million.~~principal amount of $500.0 million maturing in 2027 (the “New Term Loan B”). The Company ~~capitalized debt issuance costs related~~used a portion of the proceeds from the New Term Loan B to repay in full the ~~amendment of $230,000 during~~Company’s obligations under the ~~nine months ended September 30, 2020.~~

On June 18, 2020, the Company executed the Incremental Facility Amendment No. 3 to the Old JPM Credit Agreement, which (i) increased the aggregate borrowing capacity to $400.0 million and (ii) added a new lender to the syndicate. All otherExisting Term Loan B. The remaining terms of the ~~JPMorgan Credit Agreement remain~~New Term Loan B and the terms of the Revolving Facility remained relatively unchanged.

The ~~Company capitalized debt issuance costs related to the amendment of $1.7 million during the nine months ended September 30, 2020.~~

~~At September 30, 2020 and December 31, 2019, the variable rate in effect for the Old JPM Credit Agreement was the London Interbank Offered Rate (“LIBOR”) due~~New Term Loan B bears interest at LIBOR plus 350 bps, subject to a ~~repricing option.~~LIBOR floor of 50 bps. The applicable interest rate on the ~~Revolving Credit Commitment was 2.19% and 3.81%~~Term Loan B at September 30, ~~2020~~2021 was 4.00%.

On August 6, 2021, the Company entered into Amendment No. 3 to the JPM Credit Agreement, under which the aggregate principal amount of the Revolving Facility was increased from $400.0 million to $475.0 million. The other terms of the Revolving Facility and ~~December 31, 2019, respectively.~~the terms of the New Term Loan B remained unchanged.

The ~~Old~~outstanding borrowings on the Revolving Facility of $120.0 million had an applicable interest rate of 2.33% at September 30, 2021. The Revolving Facility is also subject to a commitment fee of 0.30% on the unused capacity of $355.0 million at September 30, 2021.

The JPM Credit Agreement requires the Company to meet certain financial covenants and comply with customary affirmative and negative covenants as listed in the underlying agreement. The Company was in compliance with these covenants at September 30, ~~2020. Refer~~2021.

The Company entered into interest rate caps to ~~Note 16 for~~mitigate its exposure to interest rate risk by limiting the impact of interest rate changes on cash flows. In March 2021, the Company executed three interest rate cap agreements, each with a notional amount of $300.0 million, which limit our interest rates by 0.75%, 1.50%, and 2.50%, expiring on March 10, 2022, March 10, 2024 and March 8, 2026, respectively. In August 2021, the Company executed two additional interest rate cap agreements, each with a notional amount of $100.0 million and interest rate cap of 3.00%, expiring on August 13, 2028. The interest rate caps are recorded at an aggregate fair value of $5.3 million at September 30, 2021 and are included as a component of other assets on the condensed consolidated balance sheets. The Company recorded a fair value loss of $334,000 and $1.2 million related to the ~~Old JPM Credit Agreement subsequent to~~interest rate caps for the three and nine months ended September 30, ~~2020.~~2021, respectively, which is included as a component of other expense, net in the condensed consolidated statements of comprehensive loss.

10. Related Party Transactions

In September 2021, the Company accelerated recognition of MSI’s maximum contingent earnout and entered into notes payable agreements with each of MSI’s shareholders for a combined principal amount of $61.5 million. The related party notes bear no interest and are payable in full on April 8, 2022.

The Company serves as a broker for Holding Company of the Villages, Inc. (“The Villages”)~~, a related party entity.~~ and certain affiliated entities. Commission revenue recorded as a result of ~~these~~ transactions with The Villages was ~~$339,000~~$1.0 million and ~~$537,000~~$339,000 for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$1.1~~$2.3 million and ~~$1.0~~$1.1 million for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

The Company serves as a broker for certain entities in which a member of our board of directors has a material interest. Commission revenue recorded as a result of these transactions was ~~$119,000~~$84,000 and ~~$152,000~~$119,000 for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$243,000~~$103,000 and ~~$270,000~~$243,000 for the nine months ended September 30, 2021 and 2020, respectively.

Two brothers of Lowry Baldwin, our Board Chair, earned $148,000 and ~~2019, respectively.~~$254,000 from the Company in Risk Advisor commissions during the nine months ended September 30, 2021.

The Company has various agreements to lease office space from wholly-owned subsidiaries of The Villages. Total rent expense incurred with respect to The Villages and its wholly-owned subsidiaries was ~~$128,000~~$129,000 and ~~$125,000~~$128,000 for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$412,000~~$390,000 and ~~$374,000~~$412,000 for the nine months ended September 30, 2021 and 2020, ~~and 2019,~~ respectively.

The Company has various agreements to lease office space from other related ~~parties.~~party entities. Total rent expense incurred with respect to related parties other than The Villages was ~~$368,000~~$636,000 and ~~$156,000~~$368,000 for the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$1.1~~$1.7 million and ~~$454,000~~$1.1 million for the nine months ended September 30, 2021 and 2020, ~~and 2019,~~ respectively.

~~LLC Unit Redemptions~~

In connection with the public offering of our Class A common stock in June 2020, we repurchased 1,875,000 LLC Units from Lowry Baldwin, the Company's Chairman, 450,000 LLC Units from Elizabeth Krystyn, one of the Company's founders, and 150,000 LLC Units from Laura Sherman, one of the Company's founders, at a price per LLC Unit equal to the price per share paid by the underwriters in the public offering.

11. Share-Based Compensation

Omnibus Incentive Plan and Partnership Inducement Award Plan

The Company has an Omnibus Incentive Plan (the “Omnibus Plan”) and a Partnership Inducement Award Plan (the “Inducement Plan” and collectively, the “Plans”) to motivate and reward ~~employees (“Colleagues”)~~Colleagues and other individuals, including those who join the Company through Partnerships, to perform at the highest level and contribute significantly to the Company’s success, thereby furthering the best interests of its shareholders. The Omnibus Plan ~~provides~~and the Inducement Plan provide for the Company to make awards of ~~1,948,414~~3,844,044 and 1,500,000 shares of Class A common stock, respectively, at September 30, ~~2020.~~ 2021.

During the nine months ended September 30, ~~2020,~~2021, the Company ~~granted~~made awards of restricted stock, unrestricted stock and performance-based restricted stock units under the Plans to its non-employee directors and Colleagues. Performance-based restricted stock unit awards were issued under the Omnibus Plan ~~to its non-employee directors, executives and Colleagues, including those executives and Colleagues who onboarded~~ in connection with ~~our Partnerships.~~the Long-Term Incentive Plan, which is discussed in further detail below. Shares of ~~restricted~~unrestricted stock issued to directors ~~and executives~~ during the nine months ended September 30, ~~2020 generally~~2021 were vested ~~immediately~~ upon issuance while ~~shares~~restricted stock issued to Colleagues, ~~and~~ Risk Advisors and executive officers generally either cliff vest after ~~2 to 5~~4 years or vest ratably over 3 to 5 years.

The following table summarizes the activity for non-vested awards granted by the Company under the ~~Omnibus Plan:~~Plans:

The total fair value of shares that vested and settled under the Plans during the nine months ended September 30, ~~2020~~2021 was ~~$1.9~~$5.7 million.

Share-based compensation includes expense recognized for management incentive units and advisor incentives, in addition to issuances under the Plans. The Company recognizes share-based compensation expense for the ~~Omnibus Plan~~Plans net of actual forfeitures. The Company recorded total share-based compensation expense of ~~$1.2~~$3.8 million and ~~$2.5~~$2.2 million ~~in connection with the Omnibus Plan and Management Incentive Units Plan~~ for the three months ended September 30, 2021 and 2020, respectively, and $11.9 million and $5.4 million for the nine months ended September 30, 2021 and 2020, respectively, which is included in commissions, employee compensation and benefits expense in the condensed consolidated statements of comprehensive ~~income (loss).~~loss.

Long-Term Incentive Plan

On May 3, 2021, the Company’s Compensation Committee approved a new form of performance-based restricted stock unit award agreement (the “Form PSU Award Agreement”) under the Company’s Omnibus Plan in connection with the granting of performance-based restricted stock unit (“PSU”) awards to its executive officers. The Form PSU Award Agreement provides for the granting of PSUs which generally vest in the quarter following the end of a performance period of three years. The number of PSUs, if any, that will be earned pursuant to a PSU award will depend on the level of performance achieved with respect to applicable performance goals during the performance period.

On May 3, 2021, the Compensation Committee awarded the Company’s executive officers incentive compensation awards of (i) PSUs with an aggregate target grant date value of $3.1 million and (ii) restricted stock with an aggregate grant date value of $1.0 million. The restricted stock will vest in equal annual installments over five years, with the first installment vesting on March 15, 2022. The incentive compensation awards have an aggregate maximum value of $8.8 million.

12. Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to BRP Group, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings (loss) per share is computed giving effect to all potentially dilutive shares of common stock.

During the periods presented, potentially dilutive securities include restricted stock awards and shares of Class B common stock that are cancellable upon the redemption or exchange, on a one-for-one basis, of LLC Units for shares of our Class A common stock.

The 1,801,394 shares of unvested restricted Class A common stock were excluded from the diluted calculation for the three and nine months ended September 30, 2021 and the 783,571 shares of unvested restricted Class A common stock were excluded from the diluted calculation for the three and nine months ended September 30, 2020 as their inclusion would have been anti-dilutive because the Company was in a net loss position during these periods. In addition, the 52,484,315 and 45,247,711 outstanding shares of Class B common stock as of September 30, 2021 and 2020, respectively, have been excluded from the diluted calculation for all periods presented because including them on an “if-converted” basis would have an anti-dilutive effect. The shares of Class B common stock do not share in the earnings or losses attributable to BRP Group, and therefore, are not participating securities. Accordingly, a separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been included. The 45,247,711 shares of Class B common stock have been excluded in computing diluted net earnings per share because including them on an “if-converted” basis would have an anti-dilutive effect. In addition, the 783,571 shares of unvested restricted Class A common stock were excluded from the diluted calculation, as their inclusion would have been anti-dilutive as the Company was in a net loss position.

The following is a calculation of the basic and diluted weighted-average number of shares of Class A common stock outstanding and ~~earnings~~loss per share for the three and nine months ended September 30, 2021 and 2020.

13. Fair Value Measurements

ASC Topic 820,Fair Value Measurement (“Topic 820”) established a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy under Topic 820 are described below:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2: Inputs to the valuation methodology are quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

~~An asset’s or liability’s~~The fair value measurement level for assets and liabilities within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis within each level of the fair value hierarchy:


(in thousands)	September 30, 2021		December 31, 2020
Level 2
Interest rate caps	$	5,302	$	—
Level 2 Assets	$	5,302	$	—
Level 3
Contingent earnout liabilities	$	180,945	$	164,819
Level 3 Liabilities	$	180,945	$	164,819

Methodologies used for assets and liabilities measured at fair value on a recurring basis within Level 3 of the fair value hierarchy at September 30, ~~2020~~2021 and December 31, ~~2019~~2020 are based on limited unobservable inputs. These methods may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The ~~following table summarizes the Company’s assets and liabilities measured at~~ fair value ~~on a recurring basis within each level~~ of ~~the fair value hierarchy:~~

(in thousands) September 30, 2020 December 31, 2019
Level 3
Contingently returnable consideration $ 299 $ 70
Level 3 Assets $ 299 $ 70
Contingent earnout liabilities $ 85,388 $ 48,769
Level 3 Liabilities $ 85,388 $ 48,769

~~The Company’s contingently returnable consideration~~interest rate caps was $5.3 million at September 30, ~~2020 and December 31, 2019 represents a contingent right of return from a Partner to reimburse the Company for a portion of the purchase price as part of the Partnership transaction.~~2021. The fair value of interest rate caps are determined using the ~~contingently returnable consideration is~~market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on ~~sales projections for the acquired entity, which are reassessed each reporting period. Based on the Company’s ongoing assessment~~an expectation of the fair value of contingently returnable consideration, the Company recorded a net increase in the estimated fair value of such asset of $229,000 for the nine months ended September 30, 2020. The Company has assessed the maximum refund relating to the contingently returnable consideration to be $1.3 million at September 30, 2020.future interest rates derived from observable market interest rate curves and volatilities.

The fair value of contingent earnout liabilities is based on sales projections for the acquired entities, which are reassessed each reporting period. Based on the Company’s ongoing assessment of the fair value of its contingent earnout ~~liability,~~liabilities, the Company recorded a net increase in the estimated fair value of such liabilities of ~~$12.9~~$23.2 million for the nine months ended September 30, ~~2020.~~2021. The Company has assessed the maximum estimated exposure to the contingent earnout liabilities to be ~~$233.6~~$682.6 million at September 30, ~~2020.~~2021.

The Company measures contingently returnable consideration and contingent earnout liabilities at fair value at each reporting period using significant unobservable inputs classified within Level 3 of the fair value hierarchy. The Company uses a probability weighted value analysis as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are sales projections over the earnout period, and the probability outcome percentages assigned to each scenario. Significant increases or decreases to either of these inputs would result in a significantly higher or lower asset or liability with a higher asset capped by the contractual maximum of the contingently returnable consideration and a higher liability capped by the contractual maximum of the contingent earnout liabilities. Ultimately, the asset and liability will be equivalent to the amount settled, and the difference between the fair value estimate and amount settled will be recorded in earnings for business combinations, or as a reduction of the cost of the assets acquired for asset acquisitions. Refer to Note 3 for additional information regarding ~~contingently returnable consideration and~~ contingent earnout consideration recorded in connection with business ~~acquisitions.~~combinations.

The fair value of the contingent earnout liabilities is based on the present value of the expected future payments to be made to Partners in accordance with the provisions outlined in the respective purchase agreements, which is a Level 3 fair value measurement. In determining fair value, the Company estimates the Partner’s future performance using financial projections developed by management for the Partner and market participant assumptions that were derived for revenue growth, or profitability based on earnings before income taxes, depreciation and amortization (“EBITDA”)., or the number of rental units tracked. Revenue and EBITDA growth rates generally ranged from 5%10% to 24% at September 30, 2021 and from 7% to 20%. at December 31, 2020. The Company estimates future payments using the earnout formula and performance targets specified in each purchase agreement and these financial projections. These payments are discounted to present value using a risk-adjusted rate that takes into consideration market-based rates of return that reflect the ability of the Partner to achieve the targets. These discount rates generally ranged from ~~6.00%~~5.25% to 18.50% at September 30, 2021 and from 5.00% to 18.00%. at December 31, 2020. Changes in financial projections, market participant assumptions for revenue growth and profitability, or the risk-adjusted discount rate, would result in a change in the fair value of contingent consideration.

The following table sets forth a summary of the changes in the fair value of the Company’s contingently returnable consideration and contingent earnout liabilities, which are measured at fair value on a recurring basis utilizing Level 3 assumptions in their valuation:

Contingently Returnable Consideration(1)

Settlement of contingent consideration (3)

~~Substantially all of the change in fair value of contingent~~__________

(1) There was no contingently returnable consideration ~~during~~at September 30, 2021 or December 31, 2020.

(2) During the nine months ended September 30, ~~2020~~2021, the Company recorded measurement period adjustments relating to businesses acquired in the fourth quarter of 2020. These adjustments decreased contingent earnout liabilities by $4.7 million, which offsets issuances of $60.9 million from business combinations in the current period.

(3) During the three and ~~2019~~nine months ended September 30, 2021, the Company settled $61.5 million if its contingent earnout liabilities through the issuance of related party notes payable. Refer to ~~assets and liabilities that were held at the end of the respective periods.~~

Note 10 for additional information.

Fair Value of Other Financial Instruments

The fair value of ~~the Revolving Credit Commitment~~long-term debt is classified as Level 2 within the fair value hierarchy. Fair value is based on an estimate using a discounted cash flow analysis based on current borrowing rates for similar types of borrowing arrangements. The fair value of ~~the Revolving Credit Commitment~~long-term debt was approximately ~~$98.8~~$481.6 million at September 30, 2021 compared to a carrying value of $498.8 million. The fair value of long-term debt was approximately $402.0 million at December 31, 2020 compared to a carrying value of ~~$101.0~~$399.0 million. The carrying ~~amount~~value of ~~the Revolving Credit Commitment~~long-term debt is netted against unamortized debt discount and issuance costs of ~~$40.4~~$16.4 million ~~approximated fair value~~and $13.6 million at September 30, 2021 and December 31, ~~2019 as a result of the Old JPM Credit Agreement having been amended and restated at market terms on December 19, 2019.~~2020, respectively, for balance sheet presentation.

14. Commitments and Contingencies

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

15. Segment Information

BRP Group’s business is divided into 4 Operating Groups: Middle Market, Specialty, MainStreet, and Medicare.

•Middle Market provides private risk management, commercial risk management and employee benefits solutions for mid-to-large size businesses and high net worth individuals and families.

•Specialty represents a wholesale co-brokerage platform that delivers specialty insurers, professionals, individuals and niche industry businesses expanded access to exclusive specialty markets, capabilities and programs requiring complex underwriting and placement. Specialty also represents a leading technology platform, MGA of the Future, which is a national renter’s insurance product distributed via sub-agent partners and property management software providers, which has expanded distribution capabilities for new products through our wholesale and retail networks.

•MainStreet offers personal insurance, commercial insurance and life and health solutions to individuals and businesses in their communities.

•Medicare offers consultation for government assistance programs and solutions, including traditional Medicare and Medicare Advantage, to seniors and Medicare-eligible individuals through a network of agents.

In the Middle Market, MainStreet, and Specialty Operating Groups, the Company generates commissions and fees from insurance placement under both agency bill and direct bill arrangements. In addition, the Company generates profit sharing income in each of those segments based on either the underlying book of business or performance, such as loss ratios. In the Middle Market Operating Group only, the Company generates fees from service fee and consulting arrangements. Service fee arrangements are in place with certain customers in lieu of commission arrangements.

In the Medicare Operating Group, the Company generates commissions and fees in the form of direct bill insurance placement and marketing income. Marketing income is earned through co-branded marketing campaigns with the Company’s Insurance Company Partners.

The Company’s chief operating decision maker, the chief executive officer, uses net income before interest, taxes, depreciation, amortization, and one-time transactional-related expenses or non-recurring items to manage resources and make decisions about the business.

Summarized financial information concerning the Company’s Operating Groups is shown in the following tables. The Corporate and Other non-reportable segment includes any expenses not allocated to the Operating Groups and corporate-related items, including related party and third-party interest expense. Intersegment revenue and expenses are eliminated through the Corporate and Other column. Service center expenses and other overhead are allocated to the Company’s Operating Groups based on either revenue or headcount as applicable to each expense.

(1) During the three months ended September 30, 2021, the Middle Market Operating Group recorded intercompany commissions and fees revenue from activity with the Specialty Operating Group of $604,000; the Specialty Operating Group recorded intercompany commissions and fees revenue from activity with itself of $41,000; the MainStreet Operating Group recorded intercompany commissions and fees revenue from activity with the Middle Market Operating Group of $121,000; and the Medicare Operating Group recorded intercompany commissions and fees revenue from activity with itself of $176,000. These intercompany commissions and fees are eliminated through Corporate and Other.


	For the Three Months Ended September 30, 2020
(in thousands)	Middle Market		Specialty		MainStreet		Medicare		Corporate and Other		Total
Commissions and fees	$	26,561	$	27,486	$	7,905	$	4,101	$	(210)	$	65,843
Net income (loss)	1,175		(1,278)		1,197		214		(8,923)		(7,615)


	For the Nine Months Ended September 30, 2021
(in thousands)	Middle Market		Specialty		MainStreet		Medicare		Corporate and Other		Total
Commissions and fees (1)	$	266,751	$	97,173	$	25,558	$	20,269	$	(1,661)	$	408,090
Net income (loss)	28,601		4,435		3,505		2,811		(53,064)		(13,712)

(1) During the nine months ended September 30, 2021, the Middle Market Operating Group recorded intercompany commissions and fees revenue from activity with the Specialty Operating Group of $1.1 million; the Specialty Operating Group recorded intercompany commissions and fees revenue from activity with itself of $41,000; the MainStreet Operating Group recorded intercompany commissions and fees revenue from activity with the Middle Market Operating Group of $212,000; and the Medicare Operating Group recorded intercompany commissions and fees revenue from activity with itself of $336,000. These intercompany commissions and fees are eliminated through Corporate and Other.


	For the Nine Months Ended September 30, 2020
(in thousands)	Middle Market		Specialty		MainStreet		Medicare		Corporate and Other		Total
Commissions and fees	$	69,311	$	64,358	$	23,917	$	13,894	$	(210)	$	171,270
Net income (loss)	11,789		(6,190)		3,397		2,661		(22,424)		(10,767)

For the Three Months Ended September 30, 2019
(in thousands) Middle Market Specialty MainStreet Medicare Corporate and Other Total
Commissions and fees $ 12,836 $ 16,732 $ 6,642 $ 2,173 $ 0 $ 38,383
Net income (loss) 295 2,190 1,016 388 (6,195) (2,306)

For the Nine Months Ended September 30, 2020
(in thousands) Middle Market Specialty MainStreet Medicare Corporate and Other Total
Commissions and fees $ 69,311 $ 64,358 $ 23,917 $ 13,894 $ (210) $ 171,270
Net income (loss) 11,789 (6,190) 3,397 2,661 (22,424) $ (10,767)

For the Nine Months Ended September 30, 2019
(in thousands) Middle Market Specialty MainStreet Medicare Corporate and Other Total
Commissions and fees $ 41,481 $ 32,497 $ 18,942 $ 8,360 $ 0 $ 101,280
Net income (loss) 10,475 1,590 4,596 2,833 (15,017) 4,477

(in thousands) Middle Market Specialty MainStreet Medicare Corporate and Other Total
Total assets at September 30, 2020 405,278 195,947 59,873 42,362 19,304 $ 722,764
Total assets at December 31, 2019 105,353 154,983 60,253 17,533 60,646 398,768


(in thousands)	Middle Market		Specialty		MainStreet		Medicare		Corporate and Other		Total
Total assets at September 30, 2021	$	1,495,044	$	328,005	$	60,896	$	56,609	$	292,555	$	2,233,109
Total assets at December 31, 2020	1,194,185		188,360		58,957		43,675		44,737		1,529,914

16. Subsequent Events

Business Partnerships

On October ~~12, 2020,~~1, 2021, the Company ~~filed a Certificate~~purchased certain assets and intellectual and intangible rights and assumed certain liabilities of ~~Amendment~~White Hill Plaza, Inc. (operating as K&S Insurance Agency, “K&S”) for upfront consideration consisting of $79.9 million of cash (which was reduced by the value of shares of Class A common stock issued to ~~its Amended and Restated Certificate of Incorporation~~K&S colleagues in connection with the ~~Secretary of~~Partnership) and 1,018,874 LLC Units (and the ~~State of Delaware to increase the number of authorized~~corresponding 1,018,874 shares of Class B common stock). K&S will also have the opportunity to receive additional contingent consideration payable in cash, shares of Class A common stock, ~~from 50,000,000~~or a combination of both at the Company’s sole option. The Partnership brings to ~~100,000,000.~~the Company deep expertise in the construction industry, and incremental scale in Texas. The Company has not yet completed its evaluation and determination of consideration paid, certain assets and liabilities acquired, or treatment of this transaction as either a business combination or asset acquisition in accordance with Topic 805.

On October ~~14, 2020,~~1, 2021, the Company ~~entered into~~purchased certain assets and intellectual and intangible rights and assumed certain liabilities of Jacobson, Goldfarb & Scott, Inc., including the equity interests of certain of its subsidiaries (collectively, operating as “JGS”) for upfront consideration consisting of $157.2 million of cash (which was reduced by the value of shares of Class A common stock issued to JGS colleagues in connection with the Partnership) and 1,821,625 LLC Units (and the corresponding 1,821,625 shares of Class B common stock). JGS will also have the opportunity to receive additional contingent consideration payable in cash, shares of Class A common stock, or a ~~new credit agreement with JPMorgan Chase Bank, N.A., to provide new senior secured credit facilities~~combination of both at the Company’s sole option. The Partnership expands the Company’s Specialty and Middle Market practice expertise in ~~an aggregate principal amount of $800.0 million. The amount consists of (i) a new term loan facility in the principal amount of $400.0 million maturing in 2027 (the “Term Loan B”)~~key markets and ~~(ii) a new revolving credit facility with commitments in an aggregate principal amount of $400.0 million maturing in 2025 (the “Revolving Facility”).~~industries, including Habitational Real Estate, Construction and Manufacturing & Distribution. The Company ~~used~~has not yet completed its evaluation and determination of consideration paid, certain assets and liabilities acquired, or treatment of this transaction as either a ~~portion of the proceeds from the Term Loan B to repay~~business combination or asset acquisition in ~~full the Company’s obligations under its Old JPM Credit Agreement and concurrently terminated the existing agreement.~~

~~Interest rates under the Revolving Facility will remain the same as the interest rates under the Old JPM Credit Agreement,~~accordance with borrowings accruing interest on amounts drawn at LIBOR plus 200 basis points (“bps”) to LIBOR plus 300 bps based on total net leverage ratio. The Term Loan B will bear interest at LIBOR plus 400 bps.Topic 805.

On November ~~5, 2020,~~4, 2021, the Company announced that, ~~Baldwin Krystyn Sherman Partners, LLC, a subsidiary of~~through its indirect subsidiaries (including Burnham Benefits Insurance Services, LLC), BRP Group has entered into an agreement to acquire substantially all of the ~~outstanding equity interests~~assets of ~~Insgroup, Inc.,~~Wood Gutmann & Bogart Insurance Brokers and certain of its affiliates and related entities (collectively, “WGB”). Based in Tustin, California, WGB is a ~~Houston, Texas based provider~~full-service middle-market brokerage firm providing a complete range of commercial, ~~property~~personal and ~~casualty insurance,~~ employee benefits ~~private risk services~~insurance products and ~~surety to middle-market companies and individuals.~~services. The Partnership is expected to close on ~~November 30, 2020,~~December 1, 2021, subject to certain closing conditions.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our ~~condensed~~ consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and ~~the~~in our Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2020 filed with the SEC on March 11, 2021. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A. Risk Factors and Note Regarding Forward-Looking Statements included elsewhere in this Quarterly Report on Form 10-Q and in ~~the~~our Annual Report on Form 10-K.

BRP Group, Inc. (“BRP Group,” the “Company,” “we,” “us” or “our”) is ~~a rapidly growing~~an independent insurance distribution firm delivering solutions that give our Clients the peace of mind to pursue their purpose, passion and dreams. We support our Clients, Colleagues, Insurance Company Partners and communities through the deployment of vanguard resources and capital to drive organic and inorganic growth. We are innovating the industry by taking a holistic and tailored approach to risk management, insurance and employee benefits. Our growth plan includes increased geographic representation across the U.S., expanded client value propositions and new lines of insurance to meet the needs of evolving lifestyles, business risks and healthcare funding. We are a destination employer supported by an award-winning culture, powered by exceptional people and fueled by industry-leading growth and innovation.

We represent over ~~500,000~~700,000 Clients across the United States and internationally. Our ~~more than 800~~2,400 Colleagues include approximately ~~250~~400 Risk Advisors, who are fiercely independent, relentlessly competitive and “insurance geeks.” We have ~~over 50~~approximately 100 offices in 18 states, all of which are equipped to provide diversified products and services to empower our ~~clients~~Clients at every stage through our four Operating Groups.

•Middle Market provides expertly-designed private risk management, commercial risk management and employee benefits solutions for mid-to-large-size businesses and high net worth individuals, as well as their families.

•MainStreet offers personal insurance, commercial insurance and life and health solutions to individuals and businesses in their communities.

•Medicare offers consultation for government assistance programs and solutions to seniors and Medicare-eligible individuals through a network of agents.

•Specialty delivers specialty insurers, professionals, individuals and niche industry businesses expanded access to exclusive specialty markets, capabilities and programs requiring complex underwriting and placement.

In 2011, we adopted the “Azimuth” as our corporate constitution. Named after a historical navigation tool used to find “true north,” the Azimuth asserts our core values, business basics and stakeholder promises. The ideals encompassed by the Azimuth support our mission to deliver indispensable, tailored insurance and risk management insights and solutions to our ~~clients.~~Clients. We strive to be regarded as the preeminent insurance advisory firm fueled by relationships, powered by people and exemplified by ~~client~~Client adoption and loyalty. This type of environment is upheld by the distinct vernacular we use to describe our services and culture. We are a firm, instead of an agency; we have Colleagues, instead of employees; we have Risk Advisors, instead of producers/agents. We serve ~~clients~~Clients instead of customers and we refer to our acquisitions as Partnerships. We refer to insurance brokerages that we have acquired, or in the case of asset acquisitions, the producers, as Partners.

The insurance brokerage market is seasonal and our results of operations are somewhat affected by seasonal trends. Our Adjusted EBITDA and Adjusted EBITDA Margins are typically highest in the first quarter and lowest in the fourth quarter. This variation is primarily due to fluctuations in our revenues, while overhead remains consistent throughout the year. Our revenues are generally highest in the first quarter due to the impact of contingent payments received in the first quarter from Insurance Company Partners that we cannot readily estimate before receipt without the risk of significant reversal and a higher degree of first quarter policy commencements and renewals in Medicare and certain Middle Market lines of business such as employee benefits and commercial. In addition, a higher proportion of our first quarter revenue is derived from our highest margin businesses. As discussed further below, the COVID-19 pandemic may skew these general trends due to reduced amounts of new business and reductions in business from existing Clients related to the pandemic.

Partnerships can significantly impact Adjusted EBITDA and Adjusted EBITDA Margins in a given year and may increase the amount of seasonality within the business, especially results attributable to Partnerships that have not been fully integrated into our business or owned by us for a full year.

On June 29, 2020, we completed a public offering of 13,225,000 shares of our Class A common stock, including 1,725,000 shares sold pursuant to the underwriters’ over-allotment option. The shares were sold at an offering price of $13.25 per share for net proceeds of $166.5 million after deducting underwriting discounts and commissions of $7.9 million and offering expenses of $798,000.

We utilize strategic acquisitions, which we refer to as Partnerships, to complement and expand our business. We source Partnerships through proprietary deal flow, competitive auctions and cultivated industry relationships. We are currently considering Partnership opportunities in all of our Operating Groups, including businesses to complement or expand our MGA of the Future that are valued at higher purchase price multiples than businesses in our other Operating Groups.

The financial impact of Partnerships may affect the comparability of our results from period to period. Our acquisition strategy also entails certain risks, including the risks that we may not be able to successfully source, value, close, integrate and effectively manage businesses that we acquire. To mitigate that risk, we have a professional team focused on finding new Partners and integrating new Partnerships. We plan to execute on numerous Partnerships annually as it is a key pillar in our long-term growth strategy over the next ten years.

We completed 11ten Partnerships for an aggregate purchase price of $387.5 million during the nine months ended September 30, 2021 and eleven Partnerships for an aggregate purchase price of $317.7 million during the nine months ended September 30, ~~2020 and six Partnerships for an aggregate purchase price of $174.1 million during the nine months ended September 30, 2019.~~2020. Partnerships completed during ~~2020~~2021 added ~~$26.8~~$20.1 million of premiums, commissions and fees receivable, ~~$123.6~~$135.0 million of intangible assets and ~~$179.9~~$235.5 million of goodwill to the condensed consolidated balance sheet.

We ~~borrowed~~entered into Amendment No. 2 to the JPM Credit Agreement in June 2021 for an ~~additional $185.6~~upsized, new $500 million ~~under~~senior secured first lien term loan facility maturing in 2027 (the “New Term Loan B”), which represented a $100 million increase in the aggregate principal amount of our existing senior secured first lien term loan facility, and Amendment No. 3 to the JPM Credit Agreement in August 2021 for an upsize of the aggregate principal amount of the revolving credit ~~commitment (the “Revolving Credit Commitment”) of the Old JPM Credit Agreement~~facility thereunder from $400.0 million to $475.0 million. These transactions provide us incremental capacity to assist in funding our Partnership pipeline with ~~funding acquisitions during 2020.~~a reduction in our cost of capital.

For additional information on the Partnerships that we have completed during ~~2020,~~2021, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1. Financial Statements of this report.

On November 5, 2020, we announced that we have entered into an agreement to acquire all of the outstanding equity interests of Insgroup, Inc. (“Insgroup”). The Partnership is expected to close on November 30, 2020, subject to certain closing conditions.

NOVEL CORONAVIRUS (COVID-19)

~~In March 2020,~~The extent to which the ~~World Health Organization declared a novel strain~~COVID-19 pandemic and the related economic impact may affect our financial condition or results of operations is uncertain. The extent of the ~~coronavirus,~~impact on our operational and financial performance will depend on various factors, including the availability, effectiveness and utilization of vaccines for COVID-19 ~~a pandemic. This~~and its variant strains, new information that may emerge concerning the severity of COVID-19 ~~outbreak has become increasingly widespread~~ and ~~severely restricted~~its variants, actions to contain or limit their spread, including any related federal, state or local governmental orders or restrictions and the ~~level~~duration, severity and spread of ~~economic activity around~~ the world. In response to this outbreak, the governments of many countries, states, cities and other geographic regions, including in the United States, have taken preventive or protective actions, such as imposing restrictions on travel and business operations and advising or requiring individuals to limit or forgo their time outside of their homes. In the United States, temporary closures of businesses have been ordered and numerous other businesses have temporarily closed voluntarily.outbreak.

Our Clients and Colleagues ~~are~~remain our first priority and we ~~have taken steps~~will continue to ~~ensure~~evaluate conditions with their safety ~~by implementing a remote work environment for the majority of our Colleagues without disruption to Client service.~~in mind. We have funded the BRP True North Colleague Fund to assist with relief for COVID-19 and other qualifying disasters for our Colleagues experiencing extraordinary hardship and are currently matching Colleague donations ~~dollar-for dollar.~~dollar-for-dollar.

We intend to continue to execute on our strategic plans and operational initiatives during the pandemic. However, given the uncertainty regarding the spread and severity of COVID-19 ~~the duration~~ and ~~scope of the government shutdowns,~~its variant strains, the nature of societal responses and the adverse effects on the national and global economy, the related financial impact on our business cannot be accurately predicted at this time. The national and global economies have rapidly contracted as a result of COVID-19. The decreased level of economic activity is leading to, and is likely to continue to lead to, a decline in exposure units and rising unemployment. In addition, the uncertainties associated with the protective and preventive measures being put in place or recommended by both governmental entities and other businesses, among other uncertainties, may result in delays or modifications to our plans and initiatives. See Part ~~II,~~I, Item 1A. “Risk Factors - The ongoing novel coronavirus (COVID-19) pandemic could and resulting government actions (including travel bans, lock downs, maximum occupancy limits and similar actions) could result in declines in business and increases in claims that could adversely affect our business, financial condition and results of operations” in our ~~Quarterly~~Annual Report on Form ~~10-Q for~~10-K filed with the ~~three months ended~~SEC on March ~~31, 2020.~~11, 2021.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2020~~2021 AND ~~2019~~2020

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements for the three and nine months ended September 30, ~~2020~~2021 and the related notes and other financial information included elsewhere in this ~~report~~. report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K ~~for~~filed with the ~~year ended December 31, 2019 and Part II, Item 1A. Risk Factors in our Quarterly Report~~SEC on ~~Form 10-Q for the three months ended~~ March ~~31, 2020.~~11, 2021.

The following is a discussion of our consolidated results of operations for ~~each of~~ the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020.

Commissions and Fees

We earn commissions and fees by facilitating the arrangement between Insurance Company Partners and individuals or businesses for the carrier to provide insurance to the insured party. Our commissions and fees are usually a percentage of the premium paid by the insured and generally depends on the type of insurance, the particular Insurance Company Partner and the nature of the services provided. Under certain arrangements with ~~clients,~~Clients, we earn pre-negotiated service fees in lieu of commissions. Additionally, we may also receive from Insurance Company Partners a profit-sharing commission, or straight override, which represent forms of variable consideration associated with the placement of coverage and are based primarily on underwriting results, but may also contain considerations for volume, growth or retention.

Commissions and fees increased ~~by $27.5~~$69.7 million and ~~$70.0~~$236.8 million for the three and nine months ended September 30, ~~2020~~2021 as compared to the same periods of ~~2019,~~2020, respectively. This increase was related to amounts attributable to Partners acquired during ~~2019~~2020 and ~~2020~~2021 prior to their having reached the twelve-month owned mark (such amounts, the “Partnership Contribution”) and organic growth. The Partnership Contribution accounted for ~~$19.6~~$52.7 million and ~~$54.6~~$195.9 million of the increase to commissions and fees for the quarter and year-to-date periods, respectively, and organic growth accounted for ~~$7.8~~$17.0 million and ~~$15.4~~$40.9 million of the increase for the quarter and year-to-date periods, respectively.

Major Sources of Commissions and Fees


(in thousands, except share and per share data)	(in thousands, except share and per share data)	September 30, 2020		December 31, 2019		(in thousands, except share and per share data)	September 30, 2021		December 31, 2020
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	50,220	$	67,689	Cash and cash equivalents	$	374,450	$	108,462
Restricted cash	Restricted cash	7,778		3,382		Restricted cash	46,987		33,560
Premiums, commissions and fees receivable, net	Premiums, commissions and fees receivable, net	98,345		58,793		Premiums, commissions and fees receivable, net	233,162		155,501
Prepaid expenses and other current assets	Prepaid expenses and other current assets	2,689		3,019		Prepaid expenses and other current assets	5,843		4,447
Due from related parties	Due from related parties	41		43		Due from related parties	—		19
Total current assets	Total current assets	159,073		132,926		Total current assets	660,442		301,989
Property and equipment, net	Property and equipment, net	7,791		3,322		Property and equipment, net	13,776		11,019
Other assets	Other assets	7,949		5,600		Other assets	20,847		11,084
Intangible assets, net	Intangible assets, net	203,555		92,450		Intangible assets, net	652,723		554,320
Goodwill	Goodwill	344,396		164,470		Goodwill	885,321		651,502
Total assets	Total assets	$	722,764	$	398,768	Total assets	$	2,233,109	$	1,529,914
Liabilities, Mezzanine Equity and Stockholders’ Equity	Liabilities, Mezzanine Equity and Stockholders’ Equity					Liabilities, Mezzanine Equity and Stockholders’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Premiums payable to insurance companies	Premiums payable to insurance companies	$	83,617	$	50,541	Premiums payable to insurance companies	$	175,486	$	135,576
Producer commissions payable	Producer commissions payable	12,019		7,470		Producer commissions payable	35,520		24,260
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	21,851		12,334		Accrued expenses and other current liabilities	62,283		47,490
Related party notes payable						Related party notes payable	61,500		—
Current portion of long-term debt						Current portion of long-term debt	5,000		4,000
Current portion of contingent earnout liabilities	Current portion of contingent earnout liabilities	7,065		2,480		Current portion of contingent earnout liabilities	43,975		6,094
Total current liabilities	Total current liabilities	124,552		72,825		Total current liabilities	383,764		217,420
Revolving lines of credit	Revolving lines of credit	101,000		40,363		Revolving lines of credit	120,000		—
Long-term debt, less current portion						Long-term debt, less current portion	477,341		381,382
Contingent earnout liabilities, less current portion	Contingent earnout liabilities, less current portion	78,323		46,289		Contingent earnout liabilities, less current portion	136,970		158,725
Other liabilities	Other liabilities	2,194		2,017		Other liabilities	3,319		2,419
Total liabilities	Total liabilities	306,069		161,494		Total liabilities	1,121,394		759,946
Commitments and contingencies (Note 14)	Commitments and contingencies (Note 14)					Commitments and contingencies (Note 14)
Mezzanine equity:	Mezzanine equity:					Mezzanine equity:
Redeemable noncontrolling interest	Redeemable noncontrolling interest	101		23		Redeemable noncontrolling interest	223		98
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 33,932,868 and 19,362,984 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		339		194
Class B common stock, par value $0.0001 per share, 50,000,000 shares authorized; 45,247,711 and 43,257,738 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		4		4
Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 56,386,926 and 44,953,166 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively						Class A common stock, par value $0.01 per share, 300,000,000 shares authorized; 56,386,926 and 44,953,166 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	564		450
Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 52,484,315 and 49,828,383 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively						Class B common stock, par value $0.0001 per share, 100,000,000 shares authorized; 52,484,315 and 49,828,383 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively	5		5
Additional paid-in capital	Additional paid-in capital	237,644		82,425		Additional paid-in capital	608,291		392,139
Accumulated deficit	Accumulated deficit	(14,038)		(8,650)		Accumulated deficit	(32,322)		(24,346)
Notes receivable from stockholders		(519)		(688)
Stockholder notes receivable						Stockholder notes receivable	(263)		(465)
Total stockholders’ equity attributable to BRP Group, Inc.	Total stockholders’ equity attributable to BRP Group, Inc.	223,430		73,285		Total stockholders’ equity attributable to BRP Group, Inc.	576,275		367,783
Noncontrolling interest	Noncontrolling interest	193,164		163,966		Noncontrolling interest	535,217		402,087
Total stockholders’ equity	Total stockholders’ equity	416,594		237,251		Total stockholders’ equity	1,111,492		769,870
Total liabilities, mezzanine equity and stockholders’ equity	Total liabilities, mezzanine equity and stockholders’ equity	$	722,764	$	398,768	Total liabilities, mezzanine equity and stockholders’ equity	$	2,233,109	$	1,529,914


(in thousands)	(in thousands)	September 30, 2020		December 31, 2019		(in thousands)	September 30, 2021		December 31, 2020
Contract assets	Contract assets	$	49,872	$	47,337	Contract assets	$	140,131	$	80,213
Contract liabilities	Contract liabilities	7,542		5,349		Contract liabilities	12,558		11,606


		For the Three Months Ended September 30,				For the Nine Months Ended September 30,					For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	(in thousands)	2020		2019		2020		2019		(in thousands)	2021		2020		2021		2020
Balance at beginning of period	Balance at beginning of period	$	4,060	$	3,094	$	3,621	$	2,882	Balance at beginning of period	$	6,036	$	4,060	$	4,751	$	3,621
Costs capitalized	Costs capitalized	540		599		1,649		1,280		Costs capitalized	3,966		540		6,152		1,649
Amortization	Amortization	(344)		(274)		(1,014)		(743)		Amortization	(587)		(344)		(1,488)		(1,014)
Balance at end of period	Balance at end of period	$	4,256	$	3,419	$	4,256	$	3,419	Balance at end of period	$	9,415	$	4,256	$	9,415	$	4,256


		September 30, 2020						December 31, 2019							September 30, 2021						December 31, 2020
(in thousands)	(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		(in thousands)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Purchased customer accounts(1)	Purchased customer accounts(1)	$	156,303	$	(15,692)	$	140,611	$	53,987	$	(9,143)	$	44,844	Purchased customer accounts(1)	$	616,144	$	(43,666)	$	572,478	$	501,512	$	(18,604)	$	482,908
Distributor relationships														Distributor relationships	37,226		(2,562)		34,664		32,380		(1,377)		31,003
Software	Software	31,161		(9,773)		21,388		30,590		(5,070)		25,520		Software	39,659		(16,334)		23,325		30,828		(10,801)		20,027
Distributor relationships		32,380		(1,093)		31,287		13,000		(331)		12,669
Trade names (1)														Trade names (1)	18,380		(2,802)		15,578		14,439		(932)		13,507
Carrier relationships	Carrier relationships	7,859		(945)		6,914		7,200		(170)		7,030		Carrier relationships	7,859		(1,181)		6,678		7,859		(984)		6,875
Trade names		4,022		(667)		3,355		2,613		(226)		2,387
Totals	Totals	$	231,725	$	(28,170)	$	203,555	$	107,390	$	(14,940)	$	92,450	Totals	$	719,268	$	(66,545)	$	652,723	$	587,018	$	(32,698)	$	554,320


(in thousands)	(in thousands)	Middle Market		Specialty		MainStreet		Medicare		Total		(in thousands)	Middle Market		Specialty		MainStreet		Medicare		Total
Balance at December 31, 2019		$	52,932	$	60,115	$	38,892	$	12,531	$	164,470
Balance at December 31, 2020												Balance at December 31, 2020	$	526,858	$	65,319	$	38,892	$	20,433	$	651,502
Goodwill of acquired businesses	Goodwill of acquired businesses	165,266		6,267		0		8,393		179,926		Goodwill of acquired businesses	143,266		88,022		—		4,241		235,529
Balance at September 30, 2020		$	218,198	$	66,382	$	38,892	$	20,924	$	344,396
Measurement period adjustments (1)												Measurement period adjustments (1)	(1,710)		—		—		—		(1,710)
Balance at September 30, 2021												Balance at September 30, 2021	$	668,414	$	153,341	$	38,892	$	24,674	$	885,321


For the Three Months Ended September 30, 2019
	Members’ Equity (Deficit)								Mezzanine Equity
(in thousands)	Members’ Deficit		Notes Receivable from Members		Noncontrolling Interest		Total		Redeemable Noncontrolling Interest		Redeemable Members’ Capital
Balance at June 30, 2019	$	(128,869)	$	(256)	$	2,424	$	(126,701)	$	65,906	$	110,596
Net income (loss)	(2,578)		—		(20)		(2,598)		1,440		(1,148)
Contributions	—		—		—		—		1		—
Repayment of member notes receivable	—		16		—		16		—		—
Issuance and vesting of Management Incentive Units	303		—		—		303		—		—
Issuance of common units	—		—		—		0		—		—
Equity issued in business combinations	—		—		—		—		6,674		—
Change in the redemption value of redeemable interests	(74,166)		—		—		(74,166)		11,125		63,041
Distributions	(732)		—		(17)		(749)		(2,538)		(251)
Balance at September 30, 2019	$	(206,042)	$	(240)	$	2,387	$	(203,895)	$	82,608	$	172,238


(in thousands)	Lanier		Highland		IRP		Rosenthal		TBA/RBA		All Others		Totals
Cash consideration paid	$	24,450	$	6,603	$	26,223	$	75,936	$	76,272	$	28,634	$	238,118
Fair value of contingent earnout consideration	1,628		788		5,521		7,051		7,000		4,624		26,612
Fair value of equity interest	6,119		4,500		7,535		10,147		21,427		2,847		52,575
Deferred payment	—		—		—		—		300		59		359
Total consideration	$	32,197	$	11,891	$	39,279	$	93,134	$	104,999	$	36,164	$	317,664

Cash	$	2,413	$	1,542	$	1,694	$	954	$	0	$	1,112	$	7,715
Premiums, commissions and fees receivable	2,494		5,929		3,229		4,734		8,731		1,718		26,835
Property and equipment	294		0		123		0		0		26		443
Other assets	168		13		11		11		0		19		222
Intangible assets													—
Purchased customer accounts	4,312		0		6,250		33,670		53,900		3,489		101,621
Distributor relationships	0		6,500		0		0		0		12,880		19,380
Carrier relationships	0		659		0		0		0		0		659
Software	0		0		0		0		0		565		565
Trade names	0		214		0		939		179		77		1,409
Goodwill	25,735		4,276		32,273		56,253		44,264		17,125		179,926
Total assets acquired	35,416		19,133		43,580		96,561		107,074		37,011		338,775
Premiums and producer commissions payable	(2,954)		(6,374)		(4,301)		(3,427)		(2,075)		(586)		(19,717)
Accrued expenses and other current liabilities	(265)		(868)		0		0		0		(261)		(1,394)
Total liabilities acquired	(3,219)		(7,242)		(4,301)		(3,427)		(2,075)		(847)		(21,111)
Net assets acquired	$	32,197	$	11,891	$	39,279	$	93,134	$	104,999	$	36,164	$	317,664

Maximum potential contingent earnout consideration (1)	$	11,000	$	2,450	$	44,399	$	30,843	$	30,147	$	15,930	$	134,769


		Shares	Weighted-Average Grant-Date Fair Value Per Share		Weighted-Average Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)			Shares	Weighted-Average Grant-Date Fair Value Per Share
Outstanding at December 31, 2019		330,244	$	14.00	3.66	$	677
Outstanding at December 31, 2020								Outstanding at December 31, 2020	826,027	$	15.92
Granted	Granted	645,843	14.71		2.15			Granted	1,395,334	28.82
Vested and settled	Vested and settled	(161,965)	11.45			54		Vested and settled	(265,572)	21.36
Forfeited	Forfeited	(30,551)	14.14					Forfeited	(48,979)	20.73
Outstanding at September 30, 2020		783,571	$	15.11	2.64	$	7,683
Outstanding at September 30, 2021								Outstanding at September 30, 2021	1,906,810	24.48


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands, except percentages)	2020			2019			2020			2019
Commissions and fees	$	65,843		$	38,383		$	171,270		$	101,280

Net income (loss)	$	(7,615)		$	(2,306)		$	(10,767)		$	4,477
Adjustments to net income (loss):
Amortization expense	5,185			3,082			13,231			6,793
Change in fair value of contingent consideration	6,455			535			12,697			(3,222)
Share-based compensation	2,240			382			5,357			773
Interest expense, net	922			3,785			2,554			8,998
Depreciation expense	258			184			663			460
Transaction-related Partnership expenses	2,904			500			6,772			1,535
Severance related to Partnership activity	(324)			—			89			300
Capital related expenses	—			1,124			1,000			2,214
Income tax provision	—			—			12			—
Other	899			92			1,733			391
Adjusted EBITDA (1)	$	10,924		$	7,378		$	33,341		$	22,719
Adjusted EBITDA Margin	17		%	19		%	19		%	22		%


Commissions and Fees by Operating Group (in thousands)
Commissions and Fees by Operating Group (in thousands, except percentages)																										Commissions and Fees by Operating Group (in thousands, except percentages)
		For the Three Months Ended September 30,												For the Nine Months Ended September 30,													For the Three Months Ended September 30,												For the Nine Months Ended September 30,
		2020				2019				Variance				2020				2019				Variance					2021				2020				Variance				2021				2020				Variance
Operating Group	Operating Group	Amount		Percent of Business		Amount		Percent of Business		Amount		%		Amount		Percent of Business		Amount		Percent of Business		Amount		%		Operating Group	Amount		Percent of Business		Amount		Percent of Business		Amount		%		Amount		Percent of Business		Amount		Percent of Business		Amount		%
Middle Market	Middle Market	$	26,561	40	%	$	12,836	33	%	$	13,725	107	%	$	69,311	40	%	$	41,481	41	%	$	27,830	67	%	Middle Market	$	80,087	59	%	$	26,561	40	%	$	53,526	202	%	$	266,751	65	%	$	69,311	40	%	$	197,440	285	%
Specialty	Specialty	27,486		42	%	16,732		44	%	10,754		64	%	64,358		38	%	32,497		32	%	31,861		98	%	Specialty	41,986		31	%	27,486		42	%	14,500		53	%	97,173		24	%	64,358		38	%	32,815		51	%
MainStreet	MainStreet	7,905		12	%	6,642		17	%	1,263		19	%	23,917		14	%	18,942		19	%	4,975		26	%	MainStreet	8,760		6	%	7,905		12	%	855		11	%	25,558		6	%	23,917		14	%	1,641		7	%
Medicare	Medicare	4,101		6	%	2,173		6	%	1,928		89	%	13,894		8	%	8,360		8	%	5,534		66	%	Medicare	5,665		4	%	4,101		6	%	1,564		38	%	20,269		5	%	13,894		8	%	6,375		46	%
Corporate and Other	Corporate and Other	(210)		—	%	—		—	%	(210)		—	%	(210)		—	%	—		—	%	(210)		—	%	Corporate and Other	(942)		(1)	%	(210)		—	%	(732)		n/m		(1,661)		—	%	(210)		—	%	(1,451)		n/m
		$	65,843			$	38,383			$	27,460			$	171,270			$	101,280			$	69,990				$	135,556			$	65,843			$	69,713			$	408,090			$	171,270			$	236,820


Other Operating Expenses by Operating Group (in thousands)
Other Operating Expenses by Operating Group (in thousands, except percentages)																										Other Operating Expenses by Operating Group (in thousands, except percentages)
		For the Three Months Ended September 30,												For the Nine Months Ended September 30,													For the Three Months Ended September 30,												For the Nine Months Ended September 30,
		2020				2019				Variance				2020				2019				Variance					2021				2020				Variance				2021				2020				Variance
Operating Group	Operating Group	Amount		Percent of Business		Amount		Percent of Business		Amount		%		Amount		Percent of Business		Amount		Percent of Business		Amount		%		Operating Group	Amount		Percent of Business		Amount		Percent of Business		Amount		%		Amount		Percent of Business		Amount		Percent of Business		Amount		%
Middle Market	Middle Market	$	4,046	33	%	$	2,257	36	%	$	1,789	79	%	$	9,665	32	%	$	6,254	37	%	$	3,411	55	%	Middle Market	$	13,508	49	%	$	4,046	33	%	$	9,462	234	%	$	31,564	49	%	$	9,665	32	%	$	21,899	227	%
Specialty	Specialty	1,658		14	%	848		13	%	810		96	%	4,454		15	%	2,256		14	%	2,198		97	%	Specialty	4,311		16	%	1,658		14	%	2,653		160	%	8,385		13	%	4,454		15	%	3,931		88	%
MainStreet	MainStreet	1,226		10	%	1,014		16	%	212		21	%	3,233		11	%	2,865		17	%	368		13	%	MainStreet	1,116		4	%	1,226		10	%	(110)		(9)	%	3,462		5	%	3,233		11	%	229		7	%
Medicare	Medicare	952		8	%	505		8	%	447		89	%	2,739		9	%	1,390		8	%	1,349		97	%	Medicare	1,113		4	%	952		8	%	161		17	%	3,619		6	%	2,739		9	%	880		32	%
Corporate and Other	Corporate and Other	4,264		35	%	1,696		27	%	2,568		151	%	10,486		34	%	3,946		24	%	6,540		166	%	Corporate and Other	7,541		27	%	4,264		35	%	3,277		77	%	17,327		27	%	10,486		34	%	6,841		65	%
		$	12,146			$	6,320			$	5,826			$	30,577			$	16,711			$	13,866				$	27,589			$	12,146			$	15,443			$	64,357			$	30,577			$	33,780


Amortization Expense by Operating Group (in thousands)
Amortization Expense by Operating Group (in thousands, except percentages)																										Amortization Expense by Operating Group (in thousands, except percentages)
		For the Three Months Ended September 30,												For the Nine Months Ended September 30,													For the Three Months Ended September 30,												For the Nine Months Ended September 30,
		2020				2019				Variance				2020				2019				Variance					2021				2020				Variance				2021				2020				Variance
Operating Group	Operating Group	Amount		Percent of Business		Amount		Percent of Business		Amount		%		Amount		Percent of Business		Amount		Percent of Business		Amount		%		Operating Group	Amount		Percent of Business		Amount		Percent of Business		Amount		%		Amount		Percent of Business		Amount		Percent of Business		Amount		%
Middle Market	Middle Market	$	2,120	41	%	$	552	18	%	$	1,568	284	%	$	4,075	31	%	$	1,349	20	%	$	2,726	202	%	Middle Market	$	8,811	70	%	$	2,120	41	%	$	6,691	n/m		$	23,722	70	%	$	4,075	100	%	$	19,647	n/m
Specialty	Specialty	2,331		45	%	2,036		66	%	295		14	%	7,022		53	%	4,339		64	%	2,683		62	%	Specialty	2,936		23	%	2,331		45	%	605		26	%	7,663		23	%	7,022		53	%	641		9	%
MainStreet	MainStreet	431		8	%	364		12	%	67		18	%	1,307		10	%	749		11	%	558		74	%	MainStreet	395		3	%	431		8	%	(36)		(8)	%	1,221		4	%	1,307		10	%	(86)		(7)	%
Medicare	Medicare	303		6	%	96		3	%	207		216	%	819		6	%	286		4	%	533		186	%	Medicare	452		4	%	303		6	%	149		49	%	1,266		4	%	819		6	%	447		55	%
Corporate and Other	Corporate and Other	—		—	%	34		1	%	(34)		(100)	%	8		—	%	70		1	%	(62)		(89)	%	Corporate and Other	2		—	%	—		—	%	2		—	%	3		—	%	8		—	%	(5)		n/m
		$	5,185			$	3,082			$	2,103			$	13,231			$	6,793			$	6,438				$	12,596			$	5,185			$	7,411			$	33,875			$	13,231			$	20,644


		Payments Due by Period											Payments Due by Period
(in thousands)	(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		(in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating leases (1)	Operating leases (1)	$	46,394	$	7,139	$	12,773	$	10,476	$	16,006	Operating leases (1)	$	81,394	$	13,285	$	22,955	$	19,464	$	25,690
Debt obligations payable (2)	Debt obligations payable (2)	517,892		16,750		33,500		33,500		434,142		Debt obligations payable (2)	744,451		27,502		54,103		170,209		492,637
Maximum future acquisition contingency payments (3)	Maximum future acquisition contingency payments (3)	233,574		57,572		164,902		11,100		—		Maximum future acquisition contingency payments (3)	682,564		64,479		593,863		24,222		—
Total	Total	$	797,860	$	81,461	$	211,175	$	55,076	$	450,148	Total	$	1,508,409	$	105,266	$	670,921	$	213,895	$	518,327


	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Value that may yet be Purchased under the Plans or Programs
July 1, 2020 to July 31, 2020	—	$	—	—	$	—
August 1, 2020 to August 31, 2020	1,458	17.45		—	—
September 1, 2020 to September 30, 2020	—	—		—	—
Total	1,458	$	17.45	—	$	—


Exhibit No.						Description of Exhibit
~~3.1~~						Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 15, 2020).
10.1						~~Incremental Facility~~ Amendment No. 3 to Credit Agreement, dated as of June 18, 2020, by and among Baldwin Risk Partners, LLC, a Delaware limited liability company, JPMorgan Chase Bank, N.A., as the Agent, the Lenders party thereto and the other parties thereto (incorporated herein by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 18, 2020).
~~10.2~~						~~Credit Agreement, dated as of October 14, 2020,~~August 6, 2021, by and among Baldwin Risk Partners, LLC, a Delaware limited liability company, JPMorgan Chase Bank, N.A., as the Administrative Agent, the Guarantors party thereto, the Lenders party thereto and the Issuing Lenders party thereto (incorporated herein by reference to Exhibit 10.1 ofto the registrant’s Current Report on Form 8-K ~~filed~~files with the Securities and Exchange Commission on ~~October 15, 2020)~~August 12, 2021).
31.1*						Certification of the Registrant’s Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934
31.2*						Certification of the Registrant’s Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934
32*						Certification of the Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*						XBRL Instance Document
101.SCH*						XBRL Taxonomy Extension Schema Document
101.CAL*						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*						XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document
104*						Cover Page Interactive Data File (formatted in inline XBRL and included in Exhibit 101)


		BRP GROUP, INC.

Date: November ~~12, 2020~~8, 2021	By:	/s/ Trevor L. Baldwin
		Trevor L. Baldwin
		Chief Executive Officer

Date: November ~~12, 2020~~8, 2021	By:	/s/ ~~Kristopher A. Wiebeck~~Bradford Hale
		~~Kristopher A. Wiebeck~~Bradford Hale
		Chief Financial Officer