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MarketScreener Homepage  >  Equities  >  Nasdaq  >  BRP Group, Inc.    BRP

BRP GROUP, INC.

(BRP)
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BRP : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

08/13/2020 | 04:22pm EST
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 Annual Report
on Form 10-K. 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 Annual Report on Form 10-K.
THE COMPANY
BRP Group, Inc. ("BRP Group," the "Company," "we," "us" or "our") is a rapidly
growing 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 Clients across the United States and internationally.
Our more than 800 Colleagues include approximately 250 Risk Advisors, who are
fiercely independent, relentlessly competitive and "insurance geeks." We have
over 50 offices, all of which are equipped to provide diversified products and
services to empower our 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. We strive to be regarded
as the preeminent insurance advisory firm fueled by relationships, powered by
people and exemplified by 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
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.

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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 $166.6 million after deducting
underwriting discounts and commissions of $7.9 million and offering expenses of
$769,000.
PARTNERSHIPS
We utilize strategic acquisitions, which we refer to as Partnerships, to
complement and expand our business. 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, 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 nine Partnerships for an aggregate purchase price of $309.4 million
during the six months ended June 30, 2020 and three Partnership for an aggregate
purchase price of $140.6 million during the six months ended June 30, 2019.
Partnerships completed during 2020 added $26.8 million of premiums, commissions
and fees receivable, $124.3 million of intangible assets and $171.1 million of
goodwill to the condensed consolidated balance sheet. We borrowed an additional
$185.6 million under the revolving credit commitment (the "Revolving Credit
Commitment") of the JPMorgan Credit Agreement to assist with funding
acquisitions during 2020.
Certain Partnerships that were completed during 2020 are discussed in greater
detail below. For additional information on the Partnerships that we have
completed during 2020, see Note 3 to our condensed consolidated financial
statements included in Part I, Item 1. Financial Statements of this report.
Effective June 1, 2020, we purchased certain assets and intellectual and
intangible rights and assumed certain liabilities of Rosenthal, a Middle Market
Partner, for cash consideration of $75.9 million and fair value of
noncontrolling interest of $10.1 million and fair value of contingent earnout
consideration of $7.1 million. The Partnership was made to expand our
capabilities within the real estate industry.
Effective June 1, 2020, we purchased certain assets and intellectual and
intangible rights and assumed certain liabilities of TBA/RBA, a Middle Market
Partner, for cash consideration of $76.3 million, fair value of noncontrolling
interest of $21.4 million, fair value of contingent earnout consideration of
$7.0 million and a deferred payment of $300,000. The Partnership was made to
expand our employee benefits business in Tennessee and across the Southeastern
U.S.
NOVEL CORONAVIRUS (COVID-19)
In March 2020, the World Health Organization declared a novel strain of the
coronavirus, COVID-19, a pandemic. This COVID-19 outbreak has become
increasingly widespread and severely restricted the level 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.
Our Clients and Colleagues are our first priority and we have taken steps to
ensure their safety by implementing a remote work environment for the majority
of our Colleagues without disruption to Client service. 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.
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, 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, Item 1A. "Risk Factors - The ongoing novel coronavirus
(COVID-19) pandemic 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 Report on Form 10-Q for the three months ended
March 31, 2020.

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RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019
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 six months ended June 30, 2020 and the
related notes and other financial information included elsewhere in this 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 the year ended December 31, 2019
and Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the
three months ended March 31, 2020.
The following is a discussion of our consolidated results of operations for each
of the three and six months ended June 30, 2020 and 2019.
                        For the Three Months Ended June
                                      30,                                For the Six Months Ended June 30,
(in thousands)              2020               2019         Variance         2020               2019          Variance

Revenues:

Commissions and fees $ 51,268$ 33,060$ 18,208$ 105,427$ 62,897$ 42,530


Operating expenses:
Commissions, employee
compensation and
benefits                    39,263              23,994        15,269         73,811               40,280        33,531
Other operating
expenses                     9,546               6,389         3,157         18,431               10,391         8,040
Amortization expense         4,450               2,835         1,615          8,046                3,711         4,335
Change in fair value
of contingent
consideration                4,581                (971 )       5,552          6,242               (3,757 )       9,999
Depreciation expense           240                 149            91            405                  276           129
Total operating
expenses                    58,080              32,396        25,684        106,935               50,901        56,034

Operating income
(loss)                      (6,812 )               664        (7,476 )       (1,508 )             11,996       (13,504 )

Interest expense, net       (1,047 )            (3,623 )       2,576         (1,632 )             (5,213 )       3,581

Income (loss) before
income taxes                (7,859 )            (2,959 )      (4,900 )       (3,140 )              6,783        (9,923 )
Income tax provision             -                   -             -             12                    -            12
Net income (loss)           (7,859 )            (2,959 )      (4,900 )       (3,152 )              6,783        (9,935 )
Less: net income
(loss) attributable to
noncontrolling
interests                   (4,271 )            (2,959 )      (1,312 )       (1,032 )              6,783        (7,815 )
Net loss attributable
to BRP Group, Inc.     $    (3,588 )       $         -     $  (3,588 )$   (2,120 )     $            -     $  (2,120 )


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, 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.

                                       29
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Commissions and fees increased by $18.2 million and $42.5 million for the three
and six months ended June 30, 2020 as compared to the same periods of 2019,
respectively. This increase was related to amounts attributable to Partners
acquired during 2019 and 2020 prior to their having reached the twelve-month
owned mark (such amounts, the "Partnership Contribution") and organic growth.
The Partnership Contribution accounted for $12.1 million and $34.9 million of
the increase to commissions and fees for the quarter and year-to-date periods,
respectively, and organic growth accounted for $6.1 million and $7.6 million,
respectively.
Major Sources of Commissions and Fees
The following table sets forth our commissions and fees by major source by
amount for the periods indicated:
                        For the Three Months Ended                    For 

the Six Months Ended

                                 June 30,                                     June 30,
(in thousands)              2020           2019         Variance         2020           2019         Variance
Direct bill revenue     $    22,430$  15,990$    6,440$    50,539$  35,594$   14,945
Agency bill revenue          20,256        12,261          7,995          36,685        16,831         19,854
Profit-sharing
revenue                       2,626         1,837            789           7,750         6,290          1,460
Policy fee and
installment fee
revenue                       3,653         2,393          1,260           7,035         2,393          4,642
Consulting and
service fee revenue             793           579            214           1,508         1,226            282
Other income                  1,510             -          1,510           1,910           563          1,347
Total commissions and
fees                    $    51,268$  33,060$   18,208     $   

105,427 $ 62,897$ 42,530



Direct bill revenue represents commission revenue earned by providing insurance
placement services to clients, primarily for private risk management, commercial
risk management, employee benefits and Medicare insurance types. Direct bill
revenue increased by $6.4 million and $14.9 million for the three and six months
ended June 30, 2020 as compared to the same periods of 2019, respectively. The
Partnership Contribution accounted for $5.2 million and $12.1 million of the
increase to direct bill revenue for the quarter and year-to-date periods,
respectively. Organic growth for direct bill revenue was $1.3 million and $2.9
million for the quarter and year-to-date periods, respectively. Organic growth
for direct bill revenue was negatively impacted by $0.2 million for the
year-to-date period as a result of incremental cancellation reserves related to
COVID-19.
Agency bill revenue primarily represents commission revenue earned by providing
insurance placement services to clients wherein we act as an agent on behalf of
the Client. Agency bill revenue increased by $8.0 million and $19.9 million for
the three and six months ended June 30, 2020 as compared to the same periods of
2019, respectively. The Partnership Contribution accounted for $5.2 million and
$16.2 million of the increase to agency bill revenue for the quarter and
year-to-date periods, respectively. Organic growth for agency bill revenue was
$2.8 million and $3.6 million for the quarter and year-to-date periods,
respectively. Organic growth for agency bill revenue was negatively impacted by
$0.1 million for the year-to-date period as a result of incremental cancellation
reserves related to COVID-19.
Profit-sharing revenue represents bonus-type or contingent revenue that is
earned by us as a sales incentive provided by certain Insurance Company
Partners. Profit-sharing revenue increased by $0.8 million and $1.5 million for
the three and six months ended June 30, 2020 as compared to the same periods of
2019, respectively. The Partnership Contribution accounted for $0.6 million and
$1.9 million of the increase to profit-sharing revenue for the quarter and
year-to-date periods, respectively. Profit-sharing revenue generated by legacy
businesses increased by $0.1 million for the quarter but decreased by $0.5
million for the year-to-date period as a result of expected higher loss ratios
in our Middle Market and MainStreet Operating Groups during the first half of
2020 and decreased underwriting in the Florida market by some of our Insurance
Company Partners. We expect that rate pressure in the Florida market will
increase base commissions and fees towards the end of 2020 and into 2021.

                                       30
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Policy fee and installment fee revenue represents revenue earned for acting in
the capacity of an MGA and providing payment processing and services and other
administrative functions on behalf of Insurance Company Partners. Policy fee and
installment fee revenue increased by $1.3 million and $4.6 million during the
three and six months ended June 30, 2020 as compared to the same periods of
2019, respectively, from our "MGA of the Future," which was acquired April 1,
2019 and resides in our Specialty Operating Group.
Commissions, Employee Compensation and Benefits
Commissions, employee compensation and benefits is our largest expense. It
consists of (a) base compensation comprising salary, bonuses and benefits paid
and payable to Colleagues, commissions paid to Colleagues and outside
commissions paid to others; and (b) equity-based compensation associated with
the grants of restricted interest awards to senior management, Risk Advisors and
executives. We expect to continue to experience a general rise in commissions,
employee compensation and benefits expense commensurate with expected growth in
our sales and headcount and as a result of increasing employee compensation
related to ongoing public company costs. We operate in competitive markets for
human capital and need to maintain competitive compensation levels as we expand
geographically and create new products and services.
Our compensation arrangements with our employees contain significant bonus or
commission components driven by the results of our operations. Therefore, as we
grow commissions and fees, we expect compensation costs to rise.
Commissions, employee compensation and benefits expenses increased by $15.3
million and $33.5 million for the three and six months ended June 30, 2020 as
compared to the same periods of 2019, respectively. The Partnership Contribution
accounted for $7.8 million and $22.1 million of the increase to commissions,
employee compensation and benefits for the quarter and year-to-date periods,
respectively. In addition, we had increased compensation for the quarter and
year-to-date periods of $2.4 million and $4.0 million, respectively, as a result
of 2019 and 2020 hiring for new roles necessary as a public company and to
support our growth and $1.7 million and $2.7 million, respectively, related to
share-based compensation expense.
On August 7, 2020, the Compensation Committee of the Board of Directors approved
a cash transaction bonus of $1.0 million payable to Kris Wiebeck, the Company's
Chief Financial Officer, in recognition of Mr. Wiebeck's successful leadership
and execution of the Company's recently completed public offering of Class A
common stock.
Other Operating Expenses
Other operating expenses include travel, accounting, legal and other
professional fees, placement fees, rent, office expenses, depreciation and other
costs associated with our operations. Our occupancy-related costs and
professional services expenses, in particular, generally increase or decrease in
relative proportion to the number of our employees and the overall size and
scale of our business operations. In addition, we have invested in the expansion
of our Tampa offices to accommodate our growth plans, which has resulted in an
increase to rent expense beginning in April 2020. Certain corporate expenses are
allocated to the Operating Groups.
Other operating expenses increased by $3.2 million and $8.0 million for the
three and six months ended June 30, 2020 as compared to the same periods of
2019, respectively. These increases were primarily attributable to operating
expenses such as additional rent and increased software costs, professional
fees, and other expenses. The Partnership Contribution accounted for $1.2
million and $3.2 million of the increase to other operating expenses for the
quarter and year-to-date periods, respectively. Additionally, we had public
company costs of $0.8 million and $1.5 million for the quarter and year-to-date
periods, respectively, and higher professional fees related to being a public
company.
Amortization Expense
Amortization expense increased by $1.6 million and $4.3 million for the three
and six months ended June 30, 2020 as compared to the same periods of 2019,
respectively. These increases were driven by amortization related to Partners
acquired over the past year, including $1.3 million and $1.8 million related to
intangible assets capitalized in connection with Partners acquired during 2020
for the quarter and year-to-date periods, respectively, and $0.3 million and
$2.5 million related to intangible assets capitalized in connection with
Partners acquired during 2019 for the quarter and year-to-date periods,
respectively.
Change in Fair Value of Contingent Consideration
Change in fair value of contingent consideration was $4.6 million for the three
months ended June 30, 2020 as compared to $(1.0) million for the same period of
2019. The change in fair value of contingent consideration results from
fluctuations in the value of the relevant measurement basis, normally revenue or
EBITDA, of our Partners. We had significantly higher estimates for the
contingent earnout liabilities of two Partners during the second quarter of 2020
related to growth of their business during the period under consolidation.

                                       31
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Change in fair value of contingent consideration was $6.2 million for the six
months ended June 30, 2020 as compared to $(3.8) million for the same period of
2019. We had significantly higher estimates for the contingent earnout
liabilities of three Partners during the first six months of 2020 related to
growth of their business during the period under consolidation, offset in part
by a decrease in estimates for one Partner. We had lower estimates for the
contingent earnout liabilities of certain Partners during the first six months
of 2019.
Interest Expense, Net
Interest expense, net decreased by $2.6 million and $3.6 million for the three
and six months ended June 30, 2020 as compared to the same periods of 2019,
respectively, resulting from a significantly lower interest rate in effect for
borrowings under the Revolving Credit Commitment in effect during 2020 compared
to interest rates in effect for credit facilities in place during the first six
months of 2019. The applicable interest rate on the Revolving Credit Commitment
was 2.19% at June 30, 2020.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA, Adjusted EBITDA Margin, Organic Revenue, Organic Revenue
Growth, Adjusted Net Income and Adjusted Diluted Earnings Per Share ("EPS"), are
not measures of financial performance under GAAP and should not be considered
substitutes for GAAP measures, including commissions and fees (for Organic
Revenue and Organic Revenue Growth), net income (loss) (for Adjusted EBITDA and
Adjusted EBITDA Margin) net income (loss) attributable to BRP Group, Inc. (for
Adjusted Net Income) or diluted earnings (loss) per share (for Adjusted Diluted
EPS), which we consider to be the most directly comparable GAAP measures. These
non-GAAP financial measures have limitations as analytical tools, and when
assessing our operating performance, you should not consider these non-GAAP
financial measures in isolation or as substitutes for commissions and fees, net
income (loss) or other consolidated income statement data prepared in accordance
with GAAP. Other companies in our industry may define or calculate these
non-GAAP financial measures differently than we do, and accordingly these
measures may not be comparable to similarly titled measures used by other
companies.
Adjusted EBITDA eliminates the effects of financing, depreciation, amortization
and change in fair value of contingent consideration. We define Adjusted EBITDA
as net income (loss) before interest, taxes, depreciation, amortization, change
in fair value of contingent consideration and certain items of income and
expense, including share-based compensation expense, transaction-related
expenses related to Partnerships including severance, and certain non-recurring
costs, including those related to raising capital. We believe that Adjusted
EBITDA is an appropriate measure of operating performance because it eliminates
the impact of expenses that do not relate to business performance, and that the
presentation of this measure enhances an investor's understanding of our
financial performance.
Adjusted EBITDA Margin is Adjusted EBITDA divided by commissions and fees.
Adjusted EBITDA is a key metric used by management and our board of directors to
assess our financial performance. We believe that Adjusted EBITDA is an
appropriate measure of operating performance because it eliminates the impact of
expenses that do not relate to business performance, and that the presentation
of this measure enhances an investor's understanding of our financial
performance. We believe that Adjusted EBITDA Margin is helpful in measuring
profitability of operations on a consolidated level.
Adjusted EBITDA and Adjusted EBITDA Margin have important limitations as
analytical tools. For example, Adjusted EBITDA and Adjusted EBITDA Margin:
•      do not reflect any cash capital expenditure requirements for the assets
       being depreciated and amortized that may have to be replaced in the
       future;

• do not reflect changes in, or cash requirements for, our working capital

needs;

• do not reflect the impact of certain cash charges resulting from matters

we consider not to be indicative of our ongoing operations;

• do not reflect the interest expense or the cash requirements necessary to

       service interest or principal payments on our debt;


•      do not reflect share-based compensation expense and other non-cash
       charges; and


•      exclude certain tax payments that may represent a reduction in cash
       available to us.



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We calculate Organic Revenue Growth based on commissions and fees for the
relevant period by excluding the first twelve months of commissions and fees
generated from new Partners. Organic Revenue Growth is the change in Organic
Revenue period-to-period, with prior period results adjusted for Organic
Revenues that were excluded in the prior period because the relevant Partners
had not yet reached the twelve-month owned mark, but which have reached the
twelve-month owned mark in the current period. For example, revenues from a
Partner acquired on June 1, 2019 are excluded from Organic Revenue for 2019.
However, after June 1, 2020, results from June 1, 2019 to December 31, 2019 for
such Partners are compared to results from June 1, 2020 to December 31, 2020 for
purposes of calculating Organic Revenue Growth in 2020. Organic Revenue Growth
is a key metric used by management and our board of directors to assess our
financial performance. We believe that Organic Revenue and Organic Revenue
Growth are appropriate measures of operating performance as they allow investors
to measure, analyze and compare growth in a meaningful and consistent manner.
Adjusted Net Income is presented for the purpose of calculating Adjusted Diluted
EPS. We define Adjusted Net Income as net income (loss) attributable to BRP
Group, Inc. adjusted for amortization, change in fair value of contingent
consideration and certain items of income and expense, including share-based
compensation expense, transaction-related expenses related to Partnerships
including severance, and certain non-recurring costs that, in the opinion of
management, significantly affect the period-over-period assessment of operating
results, and the related tax effect of those adjustments.
Adjusted Diluted EPS measures our per share earnings excluding certain expenses
as discussed above and assuming all shares of Class B common stock were
exchanged for Class A common stock. Adjusted Diluted EPS is calculated as
Adjusted Net Income divided by adjusted dilutive weighted-average shares
outstanding. We believe Adjusted Diluted EPS is useful to investors because it
enables them to better evaluate per share operating performance across reporting
periods.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net
income (loss), which we consider to be the most directly comparable GAAP
financial measure to Adjusted EBITDA and Adjusted EBITDA Margin:
                                           For the Three Months Ended June 30,           For the Six Months Ended June 30,
(in thousands, except percentages)            2020                     2019                  2020                  2019
Commissions and fees                  $          51,268         $          33,060     $        105,427$       62,897

Net income (loss)                     $          (7,859 )       $          (2,959 )   $         (3,152 )     $        6,783
Adjustments to net income (loss):
Amortization expense                              4,450                     2,835                8,046                3,711
Change in fair value of contingent
consideration                                     4,581                      (971 )              6,242               (3,757 )
Share-based compensation                          1,978                       261                3,117                  391
Interest expense, net                             1,047                     3,623                1,632                5,213
Depreciation expense                                240                       149                  405                  276
Transaction-related Partnership
expenses                                          2,020                       313                3,868                  570
Severance related to Partnership
activity                                            360                       300                  413                  300
Capital related expenses                          1,000                     1,008                1,000                1,046
Income tax provision                                  -                         -                   12                    -
Other                                               568                         -                  834                  155
Adjusted EBITDA                       $           8,385         $           4,559     $         22,417       $       14,688
Adjusted EBITDA Margin                               16 %                      14 %                 21 %                 23 %



                                       33
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Organic Revenue and Organic Revenue Growth
The following table reconciles Organic Revenue to commissions and fees, which we
consider to be the most directly comparable GAAP financial measure to Organic
Revenue:
                                            For the Three Months Ended June 30,           For the Six Months Ended June 30,
(in thousands, except percentages)             2020                     2019                  2020                  2019
Commissions and fees                   $          51,268         $          33,060     $        105,427$       62,897
Partnership commissions and fees (1)             (12,064 )                 (13,947 )            (34,932 )            (19,305 )
Organic Revenue                        $          39,204         $          19,113     $         70,495       $       43,592
Organic Revenue Growth (2)             $           6,130         $             417     $          7,584       $        3,110
Organic Revenue Growth % (2)                          19 %                       2 %                 12 %                  8 %


__________

(1) Includes the first twelve months of such commissions and fees generated from

newly acquired Partners.

(2) Organic Revenue for the three and six months ended June 30, 2019 used to

calculate Organic Revenue Growth for the three and six months ended June 30,

2020 was $33.1 million and $62.9 million, which is adjusted to reflect

revenues from Partnerships that reached the twelve-month owned mark during

    the three and six months ended June 30, 2020.



                                       34
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Adjusted Net Income and Adjusted Diluted EPS
The following table reconciles Adjusted Net Income to net income (loss)
attributable to BRP Group, Inc. and reconciles Adjusted Diluted EPS to diluted
loss per share attributable to BRP Group, Inc. Class A common stock:
                                                            For the Three Months    For the Six Months
(in thousands, except per share data)                       Ended June 30, 2020    Ended June 30, 2020
Net income (loss) attributable to BRP Group, Inc.           $       (3,588 )$       (2,120 )
Net income (loss) attributable to noncontrolling
interests                                                           (4,271 )               (1,032 )
Amortization expense                                                 4,450                  8,046
Change in fair value of contingent consideration                     4,581                  6,242
Share-based compensation                                             1,978                  3,117
Transaction-related Partnership expenses                             2,020                  3,868
Capital related expenses                                             1,000                  1,000
Amortization of deferred financing costs                               119                    195
Severance related to Partnership activity                              360                    413
Other                                                                  568                    834
Adjusted pre-tax income                                              7,217                 20,563
Adjusted income taxes (1)                                              715                  2,036
Adjusted Net Income                                         $        6,502$       18,527

Weighted-average shares of Class A common stock
outstanding - diluted                                               20,426                 19,960

Dilutive effect of unvested restricted shares of Class A common stock

                                                           365                    344
Exchange of Class B shares (2)                                      45,466                 44,503
Adjusted dilutive weighted-average shares outstanding               66,257                 64,807

Adjusted Diluted EPS                                        $         0.10         $         0.29

Diluted loss per share                                      $        (0.18

) $ (0.11 ) Effect of exchange of Class B shares and net income attributable to noncontrolling interests per share

                    0.06                   0.06
Other adjustments to net income per share                             0.23                   0.37
Adjusted income taxes per share                                      (0.01 )                (0.03 )
Adjusted Diluted EPS                                        $         0.10         $         0.29


___________

(1) Represents corporate income taxes at assumed effective tax rate of 9.9%

applied to adjusted pre-tax income.

(2) Assumes the full exchange of Class B shares for Class A common stock pursuant

    to the Amended LLC Agreement.




                                       35
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RESULTS OF OPERATIONS BY OPERATING GROUP
Commissions and Fees
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, BRP 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 following table sets forth our commissions and fees by Operating Group by
amount and as a percentage of our commissions and fees:
                                                         Commissions and 

Fees by Operating Group (in thousands)

                           For the Three Months Ended June 30,                                            For the Six Months Ended June 30,
                             2020                         2019                Variance                     2020                         2019                Variance
                                   Percent of                Percent of                                          Percent of                Percent of
Operating Group      Amount         Business      Amount      Business      Amount     %           Amount         Business      Amount      Business      Amount     %
Middle Market   $       20,718       40 %       $ 12,106       37 %       $  8,612     71 %   $       42,750       41 %       $ 28,645       46 %       $ 14,105     49 %
Specialty               19,456       38 %         12,934       39 %          6,522     50 %           36,872       35 %         15,765       25 %         21,107    134 %
MainStreet               7,704       15 %          5,769       17 %          1,935     34 %           16,012       15 %         12,300       20 %          3,712     30 %
Medicare                 3,390        7 %          2,251        7 %          1,139     51 %            9,793        9 %          6,187       10 %          3,606     58 %
                $       51,268$ 33,060$ 18,208$      105,427$ 62,897$ 42,530


Commissions and fees increased across all Operating Groups for the three months
ended June 30, 2020 as compared to the same period of 2019. The Partnership
Contribution accounted for $6.7 million, $2.5 million, $1.7 million and $1.2
million of the increase to commissions and fees in the Middle Market, Specialty,
MainStreet and Medicare Operating Groups, respectively. The remaining variances
in the Middle Market, Specialty and MainStreet Operating Groups are attributable
to organic growth. Our Middle Market Operating Group is most likely to feel the
impact of the pandemic should the economic contraction persist and businesses
act to further reduce their workforces.
Commissions and fees increased across all Operating Groups for the six months
ended June 30, 2020 as compared to the same period of 2019. The Partnership
Contribution accounted for $11.7 million, $16.4 million, $3.1 million and $3.7
million of the increase to commissions and fees in the Middle Market, Specialty,
MainStreet and Medicare Operating Groups, respectively. The remaining variances
in the Middle Market, Specialty and MainStreet Operating Groups are attributable
to Organic Growth. In addition, we had a small reduction in our organic revenue
for the Medicare Operating Group during the period due to reduced revenues in
some of our divisions. Continued COVID-19 protocols, including social
distancing, may reduce our Medicare agents' abilities to meet person-to-person
in our normal venues, which could impact our ability to sell new business during
the 2021 Annual Enrollment Period and our first quarter 2021 commissions and
fees.
The Middle Market and MainStreet Operating Groups had lower contingent revenue
during the six months ended June 30, 2020 as compared to the same period of 2019
related to poor loss trends in our Florida-based personal lines businesses and
private risk business in the first half of 2020 in addition to decreased
underwriting in the Florida market by our Insurance Company Partners. We expect
rate pressure in the Florida market to increase base commissions and fees
towards the end of 2020 and into 2021 for those Operating Groups; however, rate
pressure may also impact client retention in those periods.
Policies in force for Specialty's MSI Partnership grew by 131,423, or 42%, to
445,988 at June 30, 2020 from 314,565 at June 30, 2019.

                                       36
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Commissions, Employee Compensation and Benefits
The following table sets forth our commissions, employee compensation and
benefits by Operating Group by amount and as a percentage of our commissions,
employee compensation and benefits:
                                             Commissions, Employee 

Compensation and Benefits by Operating Group (in thousands)

                               For the Three Months Ended June 30,                                           For the Six Months Ended June 30,
                                 2020                         2019                Variance                     2020                        2019                Variance
                                       Percent of                Percent of                                         Percent of                Percent of
Operating Group          Amount         Business      Amount      Business      Amount     %          Amount         Business      Amount      Business      Amount     %
Middle Market       $       13,463       34 %       $  9,157       38 %       $  4,306     47 %   $      26,083       35 %       $ 17,753       44 %       $  8,330     47 %
Specialty                   15,330       39 %          9,305       39 %          6,025     65 %          28,131       38 %         11,858       29 %         16,273    137 %
MainStreet                   4,810       12 %          3,286       14 %          1,524     46 %           8,772       12 %          6,369       16 %          2,403     38 %
Medicare                     2,215        6 %          1,302        5 %            913     70 %           5,231        7 %          2,990        7 %          2,241     75 %
Corporate and Other          3,445        9 %            944        4 %          2,501    265 %           5,594        8 %          1,310        3 %          4,284    327 %
                    $       39,263$ 23,994$ 15,269$      73,811$ 40,280$ 33,531


Commissions, employee compensation and benefits expenses increased across all
Operating Groups for the three months ended June 30, 2020 as compared to the
same period of 2019. The Partnership Contribution accounted for $3.9 million,
$2.1 million, $0.9 million and $1.0 million of the increase to commissions,
employee compensation and benefits expenses in the Middle Market, Specialty,
MainStreet and Medicare Operating Groups, respectively. Commissions, employee
compensation and benefits expenses also increased in the Middle Market,
Specialty and MainStreet Operating Groups as a result of continued investments
in Growth Services to support our growth, which costs are primarily allocated
among the Operating Groups.
Commissions, employee compensation and benefits expenses increased across all
Operating Groups and in Corporate and Other for the six months ended June 30,
2020 as compared to the same period of 2019. The Partnership Contribution
accounted for $6.7 million, $11.7 million, $1.5 million and $2.2 million of the
increase to commissions, employee compensation and benefits expenses in the
Middle Market, Specialty, MainStreet and Medicare Operating Groups,
respectively. Commissions, employee compensation and benefits expenses also
increased in the Middle Market, Specialty and MainStreet Operating Groups as a
result of continued investments in Growth Services to support our growth, which
costs are primarily allocated among the Operating Groups.
Commissions, employee compensation and benefits expenses for Corporate and Other
increased as a result of hiring new roles necessary as a public company and due
to $1.7 million and $2.7 million of additional share-based compensation expense
incurred during the quarter and year-to-date periods, respectively.
Other Operating Expenses
The following table sets forth our other operating expenses by Operating Group
by amount and as a percentage of our other operating expenses:
                                                    Other Operating 

Expenses by Operating Group (in thousands)

                        For the Three Months Ended June 30,                                         For the Six Months Ended June 30,
                           2020                        2019               Variance                    2020                        2019                Variance
Operating                       Percent of               Percent of                                        Percent of                Percent of
Group             Amount         Business     Amount      Business     Amount     %          Amount         Business      Amount      Business     Amount     %
Middle Market $       2,878       30 %       $ 2,205       35 %       $   673     31 %   $       5,619       30 %       $  3,997       38 %       $ 1,622     41 %
Specialty             1,313       14 %         1,053       16 %           260     25 %           2,796       15 %          1,408       14 %         1,388     99 %
MainStreet            1,010       11 %           925       14 %            85      9 %           2,007       11 %          1,851       18 %           156      8 %
Medicare                997       10 %           412        6 %           585    142 %           1,787       10 %            885        9 %           902    102 %
Corporate and
Other                 3,348       35 %         1,794       28 %         1,554     87 %           6,222       34 %          2,250       22 %         3,972    177 %
              $       9,546$ 6,389$ 3,157$      18,431$ 10,391$ 8,040



                                       37
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Other operating expenses increased across all Operating Groups for the three
months ended June 30, 2020 as compared to the same period of 2019. The
Partnership Contribution accounted for $0.9 million and $0.3 million of the
increase to other operating expenses in the Middle Market and Medicare Operating
Groups, respectively.
Other operating expenses increased across all Operating Groups for the six
months ended June 30, 2020 as compared to the same period of 2019. The
Partnership Contribution accounted for $1.6 million, $1.0 million, $0.1 million
and $0.5 million other operating expenses in the Middle Market, Specialty,
MainStreet and Medicare Operating Groups, respectively.
Other operating expenses in Corporate and Other, including professional fees,
insurance, colleague education, travel and dues and subscriptions, increased
primarily as a result of being a public company during 2020.
Amortization Expense
The following table sets forth our amortization by Operating Group by amount and
as a percentage of our amortization:
                                                         Amortization 

Expense by Operating Group (in thousands)

                              For the Three Months Ended June 30,                                          For the Six Months Ended June 30,
                                 2020                        2019               Variance                     2020                        2019               Variance
                                      Percent of               Percent of                                         Percent of               Percent of
Operating Group         Amount         Business     Amount      Business     Amount      %          Amount         Business     Amount      Business     Amount      %
Middle Market       $       1,384       31 %       $   496       17 %       $   888    179  %   $       1,955       24 %       $   797       21 %       $ 1,158    145  %
Specialty                   2,325       52 %         2,036       72 %           289     14  %           4,691       58 %         2,303       62 %         2,388    104  %
MainStreet                    445       10 %           191        7 %           254    133  %             876       11 %           385       10 %           491    128  %
Medicare                      291        7 %            94        3 %           197    210  %             516        6 %           190        5 %           326    172  %
Corporate and Other             5        - %            18        1 %           (13 )  (72 )%               8        - %            36        1 %           (28 )  (78 )%
                    $       4,450$ 2,835$ 1,615$       8,046$ 3,711$ 4,335


Amortization expense increased across all Operating Groups for the three months
ended June 30, 2020 as compared to the same period of 2019. These increases were
driven by amortization related to Partners acquired over the past year,
including $0.9 million, $0.3 million and $0.1 million related to intangible
assets capitalized in connection with Partners acquired during 2020 in the
Middle Market, Specialty and Medicare Operating Groups, respectively, and $0.3
million related to intangible assets capitalized in connection with Partners
acquired during 2019 in the MainStreet Operating Group.
Amortization expense increased across all Operating Groups for the six months
ended June 30, 2020 as compared to the same period of 2019. These increases were
driven by amortization related to Partners acquired over the past year,
including $1.0 million, $0.6 million and $0.2 million related to intangible
assets capitalized in connection with Partners acquired during 2020 in the
Middle Market, Specialty and Medicare Operating Groups, respectively, and $0.2
million, $1.8 million and $0.5 million related to intangible assets capitalized
in connection with Partners acquired during 2019 in the Middle Market, Specialty
and MainStreet Operating Groups, respectively.

                                       38
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Change in Fair Value of Contingent Consideration
The following table sets forth our change in fair value of contingent
consideration by Operating Group by amount and as a percentage of our change in
fair value of contingent consideration:
                                          Change in Fair Value of 

Contingent Consideration by Operating Group (in thousands)

                         For the Three Months Ended June 30,                                           For the Six Months Ended June 30,
                            2020                       2019                Variance                     2020                         2019                Variance
                                Percent of                Percent of                                        Percent of                  Percent of
Operating Group    Amount        Business      Amount      Business     Amount      %          Amount        Business       Amount       Business     Amount      %
Middle Market   $       444       10 %       $ (2,116 )    218  %      $ 2,560   (121 )%   $    (1,722 )    (28 )%        $  (4,234 )   113  %       $ 2,512    (59 )%
Specialty             3,671       80 %          1,295     (133 )%        2,376    183  %         6,118       98  %              777     (21 )%         5,341    n/m
MainStreet              427        9 %             16       (2 )%          411    n/m            2,054       33  %               31      (1 )%         2,023    n/m
Medicare                 39        1 %           (166 )     17  %          205   (123 )%          (208 )     (3 )%             (331 )     9  %           123    (37 )%
                $     4,581$   (971 )$ 5,552$     6,242$  (3,757 )$ 9,999


__________
n/m not meaningful


The change in fair value of contingent consideration results from fluctuations
in the value of the relevant measurement basis, normally revenue or EBITDA of
our Partners. The Specialty Operating Groups recorded a significant expense
during the second quarter of 2020 as a result of a higher estimate for the
contingent consideration liabilities of our MSI Partner related to growth of the
business.
The Specialty and MainStreet Operating Groups recorded significant expenses
during the six months ended June 30, 2020 as a result of higher estimates for
the contingent consideration liabilities of the MSI and Foundation Insurance
Partners, respectively, related to growth of the businesses. The Middle Market
Operating Group recorded significant income during the same period as a result
of a decrease in estimates for the contingent consideration liability of one
Partner due to decreased growth of the business.
LIQUIDITY AND CAPITAL RESOURCES
Our primary liquidity needs for the foreseeable future will include cash to
(i) provide capital to facilitate the organic growth of our business and to fund
future Partnerships, (ii) pay operating expenses, including cash compensation to
our employees and expenses related to being a public company, (iii) make
payments under the Tax Receivable Agreement, (iv) pay interest and principal due
on borrowings under the JPMorgan Credit Agreement, (v) pay contingent earnout
liabilities, and (vi) pay income taxes. We have historically financed our
operations and funded our debt service through the sale of our insurance
products and services. In addition, we financed significant cash needs to fund
growth through the acquisition of Partners through debt financing.
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 $166.6 million after deducting
underwriting discounts and commissions of $7.9 million and offering expenses of
$769,000.
At June 30, 2020, our cash and cash equivalents were $194.4 million. We believe
that our cash and cash equivalents, cash flow from operations and available
borrowings under the JPMorgan Credit Agreement will be sufficient to fund our
working capital and meet our commitments for the foreseeable future. However, we
expect that we will require additional funding to continue to execute on our
Partnership strategy. Such funding could include the incurrence of additional
debt or the issuance of equity. Additional funds may not be available on a
timely basis, on favorable terms, or at all, and such funds, if raised, may not
be sufficient to enable us to continue to implement our long-term Partnership
strategy. If we are not able to raise funds when needed, we could be forced to
delay or reduce the number of Partnerships that we complete.
See Part II, Item 1A. "Risk Factors - The ongoing novel coronavirus (COVID-19)
pandemic 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 Report on Form 10-Q for the three months ended March 31, 2020.

                                       39
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JPMorgan Credit Agreement
As of June 30, 2020, we had an aggregate borrowing capacity of $400.0 million
under the Revolving Credit Commitment of the JPMorgan Credit Agreement, which
matures on September 23, 2024 and of which no more than $65.0 million is
available for working capital purposes and the entirety of which is available to
fund acquisitions permitted under the JPMorgan Credit Agreement. The outstanding
balance of the Revolving Credit Commitment was $226.0 million at June 30, 2020.
In July 2020, we repaid $125.0 million of debt under the Revolving Credit
Commitment with proceeds received from the offering.
The Revolving Credit Commitment is collateralized by a first priority lien on
substantially all the assets of the Company, including a pledge of all equity
securities of each of its subsidiaries. The interest rate of the Revolving
Credit Commitment is based on, depending on the type of loan, the Eurodollar
rate or the Alternative Base Rate, plus, in each case, a margin based on Total
Leverage Ratio (as defined in the JPMorgan Credit Agreement), as set forth in
the pricing grid below, provided that under no circumstances will the LIBO Rate
(as defined in the JPMorgan Credit Agreement) used in the determination of the
Eurodollar rate be less than 0.00% or the Alternate Base Rate be less than
1.00%:
                                                           Applicable Margin for
                                Applicable Margin for       Alternate Base Rate
  Total Net Leverage Ratio         Eurodollar Loans                Loans
          < 2.50x                      200 bps                    100 bps
      ? 2.50x < 3.00x                  225 bps                    125 bps
      ? 3.00x < 3.75x                  250 bps                    150 bps
          ? 3.75x                      300 bps                    200 bps


At June 30, 2020 and December 31, 2019, the variable rate in effect for the
JPMorgan Credit Agreement was the London Interbank Offered Rate ("LIBOR") due to
a pricing option and the applicable interest rate on the Revolving Credit
Commitment was 2.19% and 3.81%, respectively.
The JPMorgan Credit Agreement contains covenants that, among other things,
restrict our ability to make certain restricted payments, incur additional debt,
engage in certain asset sales, mergers, acquisitions or similar transactions,
create liens on assets, engage in certain transactions with affiliates, change
our business, make certain investments or restrict BRP's ability to make
dividends or other distributions to BRP Group.
In addition, the JPMorgan Credit Agreement contains financial covenants
requiring us to maintain our Total Leverage Ratio (as defined in the JPMorgan
Credit Agreement) at or below 5.00 to 1.00 up to but excluding September 21,
2022 (with scheduled annual step downs to 4.75 to 1.00 and 4.50 to 1.00
beginning in 2022 and with step ups of 0.50 to 1.00 and 0.25 to 1.00 for the
first and second quarters, respectively, after any Material Acquisition (as
defined in the JPMorgan Credit Agreement)), Debt Service Coverage Ratio (as
defined in the JPMorgan Credit Agreement) at or above 2.00 to 1.00 up to but
excluding September 21, 2022 (with scheduled annual step ups to 2.25 to 1.00 and
2.50 to 1.00 beginning in 2022) and Senior Leverage Ratio (as defined in the
JPMorgan Credit Agreement) at or below 4.50 to 1.00 up to but excluding
September 21, 2022 (with scheduled annual step downs to 4.25 to 1.00 and 4.00 to
1.00 beginning in 2022 and with step ups of 0.50 to 1.00 and 0.25 to 1.00 for
the first and second quarters, respectively, after any Material Acquisition).
Contractual Obligations
The following table represents our contractual obligations, aggregated by type,
at June 30, 2020:
                                                           Payments Due by Period
                                                  Less than                                     More than
(in thousands)                       Total         1 year        1-3 years      3-5 years        5 years
Operating leases (1)              $  46,715$     6,816$   12,530$   10,248$    17,121
Debt obligations payable (2)        247,012           4,944          9,888        232,180               -
Maximum future acquisition
contingency payments (3)            227,333          35,594        179,702         12,037               -
Total                             $ 521,060$    47,354$  202,120$  254,465$    17,121

__________

(1) The Company leases facilities and equipment under noncancelable operating

leases. Rent expense was $2.7 million and $1.9 million for the six months

ended June 30, 2020 and 2019, respectively.

(2) Represents scheduled debt obligations and estimated interest payments.

(3) Includes $78.5 million of current and noncurrent estimated contingent earnout

    liabilities at June 30, 2020.



                                       40
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Tax Receivable Agreement
We expect to obtain an increase in our share of our tax basis of the assets when
BRP's LLC Units are redeemed or exchanged for shares of BRP Group's Class A
common stock. This increase in tax basis may have the effect of reducing the
future amounts paid to various tax authorities. The increase in tax basis may
also decrease gains (or increase losses) on future dispositions of certain
capital assets to the extent tax basis is allocated to those capital assets.
We entered into a Tax Receivable Agreement on October 28, 2019 (the "Tax
Receivable Agreement") that provides for the payment by us to the parties to the
Tax Receivable Agreement of 85% of the amount of cash savings, if any, in U.S.
federal, state and local income tax or franchise tax that we actually realize as
a result of (i) any increase in tax basis in BRP Group's assets and (ii) tax
benefits related to imputed interest deemed arising as a result of payments made
under the tax receivable agreement.
During the six months ended June 30, 2020, we redeemed and repurchased LLC Units
and shares of Class B common stock, which triggered an increase in BRP Group's
tax basis but did not result in a tax benefit to the LLC Unit holders.
SOURCES AND USES OF CASH
The following table summarizes our cash flows from operating, investing and
financing activities for the periods indicated:
                                                    For the Six Months Ended June 30,
(in thousands)                                          2020                  2019           Variance

Net cash provided by operating activities $ 43,644 $

      8,862     $   34,782
Net cash used in investing activities                    (227,426 )            (77,541 )     (149,885 )
Net cash provided by financing activities                 317,147               76,513        240,634
Net increase in cash and cash equivalents and
restricted cash                                           133,365                7,834        125,531
Cash and cash equivalents and restricted cash at
beginning of period                                        71,071                7,995         63,076
Cash and cash equivalents and restricted cash at
end of period                                    $        204,436$       15,829$  188,607


Operating Activities
The primary sources and uses of cash for operating activities are net income
adjusted for non-cash items and changes in assets and liabilities, or operating
working capital. Net cash provided by operating activities increased $34.8
million for the six months ended June 30, 2020 as compared to the same period of
2019 driven by a net increase in cash flows provided by growing premiums payable
balances and an increase in net income (loss) adjusted for noncash items, offset
in part by losses in revenues from profit-sharing and fees.
Investing Activities
The primary sources and uses of cash for investing activities relate to cash
consideration paid to fund Partnerships and other investments, as well as
capital expenditures. Net cash used in investing activities increased $149.9
million for the six months ended June 30, 2020 as compared to the same period of
2019. Cash consideration paid to fund Partnerships increased $148.2 million as a
result of an increase in the number and size of Partnerships we completed during
the first half of 2020 compared to the same period of 2019.
Financing Activities
The primary sources and uses of cash for financing activities relate to the
issuance of our Class A common stock, borrowings from and repayment to our
credit agreements, payment of debt issuance costs, payment of contingent and
guaranteed earnout consideration, distributions and contributions, and other
equity transactions. Net cash provided by financing activities increased $240.6
million for the six months ended June 30, 2020 as compared to the same period of
2019. During 2020, we received net proceeds of $135.3 million from the public
offering of our Class A common stock after deducting underwriting discounts and
commissions, offering expenses and the repurchase of LLC Units from our Chairman
and other founders. In addition, net proceeds provided by borrowings on our
Credit Agreements increased $91.1 million primarily as a result of borrowings to
fund the two Partnerships during the second quarter of 2020.

                                       41

--------------------------------------------------------------------------------



CRITICAL ACCOUNTING ESTIMATES
In preparing our financial statements in accordance with GAAP, we are required
to make estimates and assumptions that affect the amounts of assets,
liabilities, revenue, expenses, disclosure of contingent assets and liabilities
and accompanying disclosures. We evaluate our estimates and assumptions on an
ongoing basis. These estimates are based on historical experience and various
other assumptions that we believe to be reasonable under the circumstances;
although, actual results may differ from these estimates and assumptions. To the
extent that there are differences between our estimates and actual results, our
financial condition, results of operations and cash flows will be affected.
There have been no material changes in our critical accounting policies during
the three months ended June 30, 2020 as compared to those disclosed in the
Critical Accounting Estimates section under Management's Discussion and Analysis
of Financial Condition and Results of Operations of our Annual Report on Form
10-K filed with the SEC on March 24, 2020.
EMERGING GROWTH COMPANY STATUS
We are an emerging growth company, as defined in the Jumpstart Our Business
Startups ("JOBS") Act, and we may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies
that are not emerging growth companies. Section 107 of the JOBS Act provides
that an emerging growth company can take advantage of the extended transition
period for the implementation of new or revised accounting standards. We have
elected to use the extended transition period for complying with new or revised
accounting standards and as a result of this election, our financial statements
may not be comparable to companies that comply with public company effective
dates. We have also elected to take advantage of some of the reduced regulatory
and reporting requirements of emerging growth companies pursuant to the JOBS
Act, including not being required to comply with the auditor attestation
requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation and exemptions from the
requirements of holding non-binding advisory votes on executive compensation and
golden parachute payments, if applicable.
We may take advantage of these exemptions up until the last day of the fiscal
year following the fifth anniversary of our initial public offering or such
earlier time that we are no longer an emerging growth company. We would cease to
be an emerging growth company if we have more than $1.07 billion in annual
revenue, we have more than $700.0 million in market value of our stock held by
non-affiliates (and we have been a public company for at least 12 months and
have filed one annual report on Form 10-K) or we issue more than $1.0 billion of
non-convertible debt securities over a three-year period.
RECENT ACCOUNTING PRONOUNCEMENTS
Please refer to Note 1 to our condensed consolidated financial statements
included in Part I, Item 1. Financial Statements of this report for a discussion
of recent accounting pronouncements that may impact us.

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11/12BRP GROUP, INC. : Unregistered Sale of Equity Securities (form 8-K)
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11/05BRP : to Acquire Insgroup, Inc.
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11/05BRP Group, Inc. to Acquire Insgroup, Inc.
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10/15BRP : to Report Third Quarter 2020 Results on Thursday, November 12, 2020
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