The following discussion of Newmark's financial condition and results of
operations should be read together with Newmark's accompanying unaudited
condensed consolidated financial statements and related notes, as well as the
caution "Special Note Regarding Forward-Looking Information" relating to
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), included in
Newmark's Annual report on Form 10-K and in this report. When used herein, the
terms "Newmark," the "Company," "we," "us," and "our" refer to Newmark Group,
Inc. and its consolidated subsidiaries.

This discussion summarizes the significant factors affecting our results of
operations and financial condition during the six months ended June 30, 2021 and
2020. We operate in one reportable segment, real estate services. This
discussion is provided to increase the understanding of, and should be read in
conjunction with, our accompanying unaudited condensed consolidated financial
statements and the notes thereto included elsewhere in this report.

Overview


Newmark is a full-service commercial real estate services business. We offer a
diverse array of integrated services and products designed to meet the full
needs of both real estate investors/owners and occupiers. Our investor/owner
services and products include capital markets, which consists of investment
sales, debt and structured finance and loan sales, agency leasing, property
management, valuation and advisory, commercial real estate due diligence
consulting and advisory services and government sponsored enterprise ("GSE")
lending and loan servicing, mortgage broking and equity-raising. Our occupier
services and products include tenant representation, real estate management
technology systems, workplace and occupancy strategy, global corporate
consulting services, project management, lease administration and facilities
management. We enhance these services and products through innovative real
estate technology solutions and data analytics that enable our clients to
increase their efficiency and profits by optimizing their real estate portfolio.
We have relationships with many of the world's largest commercial property
owners, real estate developers and investors, as well as Fortune 500 and Forbes
Global 2000 companies.

We generate revenues from commissions on leasing and capital markets transactions, consulting and technology user fees, property and facility management fees, and mortgage origination and loan servicing fees.



Our growth to date has been focused in North America. As of June 30, 2021, we
had nearly 5,900 employees, including more than 1,800 revenue-generating
producers in over 142 offices in more than 110 cities. In addition, Newmark has
licensed its name to 11 commercial real estate providers that operate out of 18
offices in certain locations where Newmark does not have its own offices.

The discussion of our financial results reflects only the business owned by us
and does not include the results for Knight Frank or for the independently owned
offices that use some variation of the Newmark name in their branding or
marketing.

We are a leading capital markets business in the United States. We have access
to many of the world's largest owners of commercial real estate, and this will
drive growth throughout the life cycle of each real estate asset by allowing us
to provide best-in-class agency leasing and property management during the
ownership period. We also provide investment sales and arrange debt and equity
financing to assist owners in maximizing the return on investment in each of
their real estate assets. Specifically, with respect to multifamily assets, we
are a leading GSE lender by loan origination volume and servicer with a
servicing portfolio of approximately $69.0 billion as of June 30, 2021 (of which
3.2% relates to special servicing). This servicing portfolio provides a steady
stream of income over the life of the serviced loans.

We continue to invest in the business by adding high profile and talented
producers and other revenue-generating professionals. Historically, newly hired
commercial real estate producers tend to achieve dramatically higher
productivity in their second and third years with our company, although we incur
related expenses immediately. As our newly hired producers increase their
production, we expect our commission revenue and earnings growth to accelerate,
thus reflecting our operating leverage.

Our pre-tax margins are impacted by the mix of revenues generated. For example,
servicing revenues tend to have higher pre-tax margins than Newmark as a whole,
and margins from "Gains from mortgage banking activities/originations, net" tend
to be lower as we retain rights to service loans over time. Capital markets
transactions tend to have higher pre-tax margins
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than leasing advisory transactions. Pre-tax earnings margins on our property and
facilities management, along with certain of our other Global Corporate Services
("GCS") products, are at the lower end of margins for our business as a whole.

Business Environment
The commercial real estate services industry and certain of Newmark's businesses
continued to be adversely impacted by the COVID-19 pandemic in the first half of
2021. The pandemic and these containment measures have had a negative impact on
businesses around the world. However, during 2021, activity in the U.S. economy
has picked up rapidly. As of July 30, 2021, approximately half of the American
population has been fully vaccinated against COVID-19, and more than 57 percent
has received at least one dose, however there are increasing cases in some
populations due to different strains of the virus. Companies are requiring
employees to come back to the office as business and the government is
reopening. Newmark had second quarter 2021 revenues of $629.9 million. In
response to the impact of the COVID-19 pandemic, we took actions to permanently
reduce expenses for support and operations functions which we expect to improve
our operating margins as business activity accelerates.

The US economy saw a sharp contraction starting in mid-March of 2020, which
triggered a dramatic decline in certain of our businesses. Although there
continues to be some uncertainty around COVID-19, the measures taken by the
federal and state governments and the speed and voracity of a recovery appear to
be positive. Our capital markets have shown significant growth, as our
investments in people have coincided with the rebounding economy. COVID-19 has
created new opportunities in our management and consulting businesses, which
continued to performed well during the second quarter of 2021 as our clients
turned to Newmark for advice on their real estate portfolios, including new
environmental safety requirements, managing costs associated with implementing
these new standards as well as assessing facility and employee readiness as
companies plan their return to offices in the wake of the pandemic. In addition,
consulting fee revenues from tenant restructuring and portfolio optimization are
expected to continue in the near-term. In early 2021, we hired a head of global
corporate services to expand this critical offerings for occupiers as they
formulate their post pandemic real estate plans.

Impact of COVID-19 on Employees
Newmark has taken steps to help its employees during this global pandemic and
subsequent recovery. These policies and practices protect the health, safety and
welfare of the Company's workforce while enabling employees to maintain a high
level of performance. Certain of these items are summarized below.
•Effective June 1, 2021, we welcomed our employees back to our offices subject
to CDC and state and local guidelines in each location;
•We are focused on maximizing productivity regardless of where our employees
work. In all cases, the Company has mandated appropriate social distancing
measures;
•The Company has developed standardized procedures for reopening its offices
safely in accordance with state and local regulatory requirements;
•The Company provides ongoing informational COVID-19-related messages and
notices;
•Where applicable, Newmark has applied and is continuing to apply more frequent
and vigorous hygiene and sanitation measures and providing personal protective
equipment (PPE);
•Nonessential business travel has been restricted while personal travel has been
discouraged, particularly in areas most affected by the pandemic;
•The Company's medical plans have waived applicable member cost sharing for all
medically necessary diagnostic testing related to COVID-19;
•The Company also introduced zero co-pay telemedicine for COVID-related visits
for participants in the U.S. medical plans and their dependents. Newmark has
encouraged the use of telemedicine during the pandemic;
•The Company has reminded employees about its Employee Assistance Program and
the ways it can assist them during this challenging time;
•Newmark provides paid leave in accordance with its policies and applicable
COVID-19 related laws and regulations.

Impact of COVID-19 on Newmark's Clients


  Newmark has helped its clients manage their real estate portfolios during the
pandemic and as the economy recovers in the following ways; providing consulting
and advisory services for tenants that need assistance with implementing
policies with respect to social distancing, workplace strategy, and portfolio
strategies; continuing to assist clients in determining what their real estate
needs will be in the short, medium, and long term and how they can devise and
implement related strategies; helping commercial real estate owners and
investors with respect to appraisals and continuing to help in select ways for
them to preserve and create value. The Company has also helped and is continuing
to help them navigate new requirements resulting
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from the pandemic, including with respect to cleaning, social distancing, remote
working, and a return to the office. Newmark's professionals are in constant
communication with many of the largest institutions in the world to discuss debt
and asset strategies in this rapidly evolving environment.

Knotel Acquisition
On March 24, 2021, Newmark acquired the business of Knotel, Inc ("Knotel"), a
global flexible workspace provider. Newmark agreed to provide approximately
$19.8 million of debtor-in-possession financing as part of a $70 million credit
bid to acquire the business through Knotel's Chapter 11 sales process, subject
to approval of the U.S. Bankruptcy Court. On March 18, 2021, the United States
Bankruptcy Court approved the transaction under Section 363 of the United States
Bankruptcy Code. See Note 4 - "Acquisitions" to our accompanying Consolidated
Financial Statements included in Part I, Item I of this Quarterly Report on Form
10-Q for additional information.

Debt Credit Agreements
On November 6, 2018, Newmark closed its offering of $550.0 million aggregate
principal amount of 6.125% Senior Notes due 2023 ("6.125% Senior Notes"). The
6.125% Senior Notes are general senior unsecured obligations of Newmark. The
6.125% Senior Notes, which were priced on November 1, 2018 at 98.94% to yield
6.375%, were offered and sold by Newmark in a private offering exempt from the
registration requirements under the Securities Act. Newmark received net
proceeds of $537.6 million, net of debt issue costs and debt discount. The
6.125% Senior Notes bear an interest rate of 6.125% per annum, payable on each
May 15 and November 15, beginning on May 15, 2019 and will mature on November
15, 2023. Newmark used the net proceeds to repay the remaining balance of the
Converted Term Loan of $133.9 million, the balance of the Intercompany Credit
Agreement of $130.5 million, and a portion of the 2019 Promissory Note (as
defined below). The 6.125% Senior Notes were subsequently exchanged for notes
with substantially similar terms that were registered under the Securities Act.
As of June 30, 2021 and December 31, 2020, the carrying amount of the 6.125%
Senior Notes was $544.0 million and $542.8 million, respectively.

On November 28, 2018, Newmark entered into a credit agreement by and among Newmark, the several financial institutions from time to time party thereto, as Lenders, and Bank of America N.A., as administrative agent (the "Credit Agreement"). The Credit Agreement provides for a $250.0 million three-year unsecured senior revolving credit facility (the "Credit Facility").



On February 26, 2020, Newmark entered into an amendment to the Credit Agreement
(the "Amended Credit Agreement"), increasing the size of the Credit Facility to
$425.0 million ("the Credit Facility") and extending the maturity date to
February 26, 2023. The interest rate on the Credit Facility was reduced to LIBOR
plus 1.75% per annum, subject to a pricing grid linked to Newmark's credit
ratings from Standard & Poor's and Fitch.

On March 16, 2020, Newmark entered into a second amendment to the Credit
Agreement (the "Second Amended Credit Agreement"), increasing the size of the
Credit Facility to $465.0 million. The interest rate on the Amended Credit
Facility is LIBOR plus 1.75% per annum, subject to a pricing grid linked to
Newmark's credit ratings from Standard & Poor's and Fitch. As of June 30, 2021
and December 31, 2020, the carrying amount of the Credit Facility was
$138.2 million and $137.6 million, respectively. On July 22, 2021, Newmark paid
down the remaining balance of the Credit Facility in the amount of $140.0
million.

On June 16, 2020, the Company's Board of Directors and its Audit Committee
authorized a debt repurchase program for the repurchase by the Company in the
amount of up to $50.0 million of the Company's 6.125% Senior Notes and any
future debt securities issued by the Company hereafter (collectively, "Company
debt securities"). Repurchases of Company debt securities, if any, are expected
to reduce future cash interest payments, as well as future amounts due at
maturity or upon redemption.
Under the authorization, the Company may make repurchases of Company debt
securities for cash from time to time in the open market or in privately
negotiated transactions upon such terms and at such prices as management may
determine. Additionally, the Company is authorized to make any such repurchases
of Company debt securities through Cantor Fitzgerald & Co. ("Cantor") (or its
affiliates), in its capacity as agent or principal, or such other broker-dealers
as management shall determine to utilize from time to time upon customary market
terms or commissions.

As of June 30, 2021, the Company had $50.0 million remaining from its debt repurchase authorization.



On June 19, 2020, Newmark established a $125.0 million sublimit line of credit
to fund potential principal and interest servicing advances on its Fannie Mae
portfolio during the forbearance period related to the Coronavirus Aid, Relief,
and
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Economic Security Act ("CARES Act"). The sublimit is now included within the
Company's existing $450 million warehouse facility due June 15, 2022. The
advance line will provide 100% of the principal and interest advance payment at
a rate of 1-month LIBOR plus 1.80% and will be collateralized by Fannie Mae's
commitment to repay advances. Newmark has four Fannie Mae loans that were
delinquent, with $15.5 thousand of advances outstanding as of June 30, 2021.

On November 30, 2018, Newmark entered into an unsecured credit agreement (the
"Cantor Credit Agreement") with Cantor. The Cantor Credit Agreement provides for
each party to issue loans to the other party in the lender's discretion.
Pursuant to the Cantor Credit Agreement, the parties and their respective
subsidiaries (with respect to CFLP, other than BGC Partners, Inc. ("BGC") and
its subsidiaries) may borrow up to an aggregate principal amount of $250.0
million from each other from time to time at an interest rate which is the
higher of Cantor's or Newmark's short-term borrowing rate then in effect, plus
1.0%. As of June 30, 2021, the Company did not have an outstanding balance under
this facility.

Credit Ratings


  Newmark has a stand-alone BBB+ stable credit rating from JCRA, BBB- stable
credit ratings from Fitch Ratings, Inc. and Kroll Bond Rating Agency, and a BB+
stable credit rating from Standard & Poor's.

Nasdaq Monetization Transactions
On June 28, 2013, BGC sold certain assets of its on-the-run, electronic
benchmark U.S. Treasury platform ("eSpeed") to Nasdaq, Inc ("Nasdaq"). The total
consideration received in the transaction included $750.0 million in cash paid
upon closing and an Earn-out of up to 14,883,705 shares of Nasdaq shares to be
paid ratably over 15 years (subject to acceleration and present value discount
as discussed below), provided that Nasdaq, as a whole, produces at least $25.0
million in consolidated gross revenues each year. Nasdaq generated gross
revenues of approximately $5.6 billion in 2020. The remaining rights under the
Nasdaq Earn-out were transferred to Newmark on September 28, 2017. See Note 7 -
"Marketable Securities" to our accompanying Consolidated Financial Statements
included in Part I, Item I of this Quarterly Report on Form 10-Q for additional
information.

Exchangeable Preferred Partnership Units and Forward Contracts
On June 18, 2018, Newmark's principal operating subsidiary, Newmark OpCo, issued
$175.0 million of exchangeable preferred partnership units ("EPUs") in a private
transaction to the Royal Bank of Canada ("RBC"). Newmark received $152.9 million
of cash with respect to this transaction.

On September 26, 2018, Newmark entered into a second agreement to issue $150.0 million of additional EPUs to RBC, similar to the June 18, 2018 transaction (together the "Newmark OpCo Preferred Investment"). Newmark received $113.2 million of cash with respect to this transaction.



The EPUs were issued in four tranches and are separately convertible by either
RBC or Newmark into a fixed number of shares of Newmark Class A common stock,
subject to a revenue hurdle in each of the fourth quarters of 2020 through 2022
for each of the respective four tranches. The ability to convert the EPUs into
Newmark Class A common stock is subject to the special purpose vehicle (the
"SPV") SPV's option to settle the postpaid forward contracts as described below.
As the EPUs represent equity ownership of a consolidated subsidiary of Newmark,
they have been included in "Noncontrolling interests" on our accompanying
unaudited condensed consolidated balance sheets and unaudited condensed
consolidated statements of changes in equity. The EPUs are entitled to a
preferred payable-in-kind dividend, which is recorded as accretion to the
carrying amount of the EPUs through "Retained earnings" on our accompanying
unaudited condensed consolidated statements of changes in equity and are
reductions to "Net income (loss) available to common stockholders" for the
purpose of calculating earnings per share.

Contemporaneously with the issuance of the EPUs, the SPV that is a consolidated
subsidiary of Newmark entered into variable postpaid forward contracts with RBC
(together, the "Nasdaq Forwards"). The SPV is an indirect subsidiary of Newmark
whose sole assets are the Nasdaq Earn-outs for 2019 through 2022. The Nasdaq
Forwards provide the SPV the option to settle using up to 992,247 Nasdaq shares,
to be received by the SPV pursuant to the Nasdaq Earn-out (see Note 7 -
"Marketable Securities" to our accompanying unaudited condensed consolidated
financial statements included in Part I, Item I of this Quarterly Report on Form
10-Q ), or Newmark Class A common stock, in exchange for either cash or
redemption of the EPUs, notice of which must be provided to RBC prior to
November 1 of each year from 2019 through 2022.

In September 2020, the SPV notified RBC of its decision to settle the second
Nasdaq Forward using the Nasdaq shares the SPV received in November 2020 in
exchange for the second tranche of the EPUs, which resulted in a payable to RBC
that was settled upon receipt of Nasdaq Earn-out shares. The fair value of the
Nasdaq shares that Newmark received was $121.9 million. On November 30, 2020,
Newmark settled the second Nasdaq Forward with 741,505 Nasdaq shares, with a
fair value of $93.5 million and Newmark retained 250,742 Nasdaq shares. Newmark
sold 27,134 and 250,742 of the Nasdaq shares during
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the three and six months ended June 30, 2021. There were no remaining Nasdaq shares from the shares received from Nasdaq in 2020.



In September 2019, the SPV notified RBC of its decision to settle the first
Nasdaq Forward using the Nasdaq shares the SPV received in November 2019 in
exchange for the first tranche of the EPUs, which resulted in a payable to RBC
that was settled upon receipt of Nasdaq Earn-out shares. The fair value of the
Nasdaq shares that Newmark received was $98.6 million. On December 2, 2019,
Newmark settled the first Nasdaq Forward with 898,685 Nasdaq shares, with a fair
value of $93.5 million and Newmark retained 93,562 Nasdaq shares. These
remaining Nasdaq shares were sold during the three months ended March 31, 2020.

Acceleration of Nasdaq Earn-out
On February 2, 2021, Nasdaq announced that it entered into a definitive
agreement to sell its U.S. fixed income business to Tradeweb Markets, Inc
("Tradeweb"). On June 25, 2021, Nasdaq announced the close of the sale of its
U.S. fixed income business, which accelerated Newmark's receipt of Nasdaq
shares. Newmark received 6,222,340 Nasdaq shares, with a fair value of $1,093.9
million based on the closing price on June 30, 2021, included in "Other (loss)
income, net" on the accompanying unaudited condensed consolidated statement of
operations.

On June 25, 2021, the SPV notified RBC of its decision to settle the third and
fourth Nasdaq Forwards using the Nasdaq shares the SPV received on June 25,
2021. On July 2, 2021, Newmark settled the third and the fourth Nasdaq Forwards
with 944,329 Nasdaq shares, with a fair value of $166.0 million based on the
closing price of June 30, 2021. Newmark recorded a payable to RBC for this
amount as of June 30, 2021.

2021 Equity Event and Share Count Reduction
In connection with the acceleration of the Nasdaq Earn-out, on June 28, 2021,
the Compensation Committee of Newmark's Board of Directors (the "Compensation
Committee") approved a plan to expedite the tax deductible exchange and
redemption of a substantial number of limited partnership units held by partners
of the Company (the "2021 Equity Event"). The 2021 Equity Event also accelerated
certain compensation expenses resulting in $428.6 million of compensation
charges. These partnership units were settled using a $12.50 share price. In
July 2021, the Compensation Committee approved increasing to $13.01 the price to
settle certain units.

Some of the key components of the approved plan were as follows:



•8.3 million and 8.0 million compensatory limited partnership units,
respectively, of Newmark Holdings, L.P. ("Newmark Holdings") and BGC Holdings,
L.P. ("BGC Holdings") held by our partners who are employees were redeemed or
exchanged .

•23.2 million and 17.4 million compensatory limited partnership units,
respectively, of Newmark Holdings and BGC Holdings held by our partners who are
independent contractors were redeemed or exchanged. We also accelerated the
payment of related withholding taxes to them with respect to their Newmark
units. Independent contractors received one BGC Class A common share for each
redeemed non-preferred BGC unit or cash and are responsible for paying any
related withholding taxes.

•Partners with nonexchangeable non-preferred compensatory units exchanged or
redeemed in connection with the 2021 Equity Event generally received restricted
Class A common shares of Newmark and/or BGC to the extent tax deductible. A
portion of the BGC Class A common shares received by independent contractors
were unrestricted to facilitate their payment of withholding taxes.

•The issuance of Newmark Class A common stock related to the 2021 Equity Event reflected the June 30, 2021 exchange ratio of 0.9403.



•Newmark Holdings and BGC Holdings limited partnership interests with rights to
convert into HDUs for cash were also redeemed in connection with the 2021 Equity
Event.

Refer to the section 'Certain Other Related Party Transactions' for the specific
transactions with respect to our executive officers which are included in the
above summary.




Certain Other Related Party Transactions


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Transactions with Executive Officers and Directors
On March 16, 2021, pursuant to the Newmark standing policy for Mr. Lutnick, the
Compensation Committee granted exchange rights and/or monetization rights with
respect to rights available to Mr. Lutnick. Mr. Lutnick elected to waive such
rights one-time with such future opportunities to be cumulative. The aggregate
number of Mr. Lutnick's units for which he waived exchange rights or other
monetization rights is 4,423,457 non-exchangeable Newmark Holdings PSUs/NPSUs,
inclusive of the PSUs receiving an HDU conversion right and 1,770,016
non-exchangeable Newmark Holdings PPSUs with an aggregate determination amount
of $21.6 million at that time, inclusive of the PPSUs receiving an HDU
conversion right.

On March 16, 2021, the Company redeemed 30,926 non-exchangeable Newmark Holdings
PSUs held by Mr. Merkel for zero and in connection therewith issued 28,962
shares of our Class A common stock. On the same day, the Company repurchased
these shares from Mr. Merkel at the closing price of our Class A common stock of
$11.09 per share under our stock buyback program. The total payment delivered to
Mr. Merkel was $0.3 million, less applicable taxes and withholdings. The
Compensation Committee approved these transactions.

On March 16, 2021, the Compensation Committee granted Mr. Gosin exchange rights
into shares of Class A common stock with respect to 526,828 previously awarded
non-exchangeable Newmark Holdings PSUs and 30,871 non-exchangeable Newmark
Holdings APSUs held by Mr. Gosin (which, based on the closing price of the Class
A common stock of $11.09 per share on such date and using the exchange ratio of
0.9365, had a value of $5.8 million in the aggregate). In addition, on March 16,
2021, the Compensation Committee approved removing the sale restrictions on Mr.
Gosin's remaining 178,232 restricted shares of Class A common stock in BGC
(which were originally issued in 2013) and associated 82,680 remaining
restricted shares of Newmark Class A common stock (issued as a result of the
Company spin-off in November 2018).

On March 16, 2021, the Compensation Committee granted Mr. Rispoli (i) exchange
rights into shares of Class A common stock with respect to 6,043 previously
awarded non-exchangeable Newmark Holdings PSUs held by Mr. Rispoli (which, based
on the closing price of the Class A common stock of $11.09 per share on such
date and using the exchange ratio of 0.9365, had a value of $0.6 million); and
(ii) exchange rights into cash with respect to 4,907 previously awarded
non-exchangeable Newmark Holdings PPSUs held by Mr. Rispoli (which had an
average determination price of $15.57 per unit, for a total of $76,407 in the
aggregate to be paid for taxes when (i) is exchanged).

On April 27, 2021, the Compensation Committee approved an additional
monetization opportunity for Mr. Merkel: (i) 73,387 of Mr. Merkel's 145,384
non-exchangeable Newmark Holdings PSUs were redeemed for zero, (ii) 19,426 of
Mr. Merkel's 86,649 non-exchangeable Newmark Holdings PPSUs were redeemed for a
cash payment of $173,863, and (iii) 68,727 shares of our Class A common stock
were issued to Mr. Merkel. On the same day, the 68,727 shares of our Class A
common stock were repurchased from Mr. Merkel at $10.67 per share, the closing
price of our Class A common stock on that date, under our stock buyback program.
The total payment delivered to Mr. Merkel was $0.8 million, less applicable
taxes and withholdings.

The specific transactions approved by the Compensation Committee, in connection
with the 2021 Equity Event, with respect to our executive officers are set forth
below. All of the transactions included in the 2021 Equity Event with respect to
Messrs. Lutnick, Gosin and Rispoli, are based on (i) the price for Newmark Class
A common stock of $12.50 per share, as approved by the Compensation Committee;
(ii) the price of BGC Partners Class A common stock of $5.86; and (iii) the
price of Nasdaq common stock of $177.11.

Howard W. Lutnick, Chairman



On June 28, 2021, the Compensation Committee approved the following for Howard
W. Lutnick, the Company's Chairman: (i) the exchange of 279,725 exchangeable
Newmark Holdings PSUs (currently in the share count) into 263,025 shares of
Newmark Class A common stock based on the current exchange ratio of 0.9403; (ii)
the redemption of 193,530 exchangeable Newmark Holdings PPSUs for a cash payment
of $1.5 million, to be remitted to the applicable tax authorities to the extent
necessary for payment in connection with the delivery of the Newmark Class A
common stock in (i) above; (iii) the redemption of 2,909,819 non-exchangeable
Newmark Holdings PSUs, pursuant to Mr. Lutnick's rights under his existing
standing policy and issuance of 2,736,103 shares of Newmark Class A common stock
to him based upon the current exchange ratio of 0.9403; (iv) the redemption of
793,398 non-exchangeable Newmark Holdings PPSUs pursuant to Mr. Lutnick's rights
under his existing standing policy for a cash payment of $8.8 million, to be
remitted to the applicable tax authorities to the extent necessary for payment
in connection with the delivery of the above Newmark Class A common stock in
(iii) above; (v) the conversion of 552,482.62 non-exchangeable Newmark Holdings
PSUs with the right to exchange PSUs into HDUs ("H-Rights") into 552,482.62
non-exchangeable HDUs and redemption of such HDUs for their capital account,
paid in the form of Nasdaq shares; (vi) the redemption of 602,462.94
non-exchangeable PPSUs for a cash payment of $8.0 million, to be remitted to the
applicable tax authorities to the extent necessary for payment in connection
with the delivery of above Newmark
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Holdings HDU cash payment; (vii) the exchange of 520,380 exchangeable BGC
Holdings PSUs into 520,380 shares of BGC Class A common stock; (viii) the
redemption of 425,766 exchangeable BGC Holdings PPSUs for a cash payment of $1.5
million, to be remitted to the applicable tax authorities to the extent
necessary for payment in connection with the delivery of the above BGC shares in
(viii); (ix) the redemption of 88,636 non-exchangeable BGC Holdings PSUs
pursuant to Mr. Lutnick's rights under his existing standing policy, and the
issuance of 88,636 shares of BGC Class A common stock; (x) the conversion of
1,131,774 non-exchangeable BGC Holdings PSUs with H-Rights into 1,131,774
non-exchangeable BGC Holdings HDUs; (xi) the redemption of 1,018,390
non-exchangeable BGC Holdings PPSUs with rights to redeem for cash in connection
with the exercise of above BGC Holdings HDUs for a cash payment of $8.0 million,
to be remitted to the applicable tax authorities to the extent necessary for
payment in connection with the delivery of above BGC Holdings HDU cash payment;
and (xii) the issuance of 29,059 shares of Newmark Class A common stock.


Barry M. Gosin, Chief Executive Officer



On June 28, 2021, the Compensation Committee approved the following for Barry M.
Gosin, the Company's Chief Executive Officer: (i) the exchange of 1,531,061.84
exchangeable Newmark Holdings units (comprised of 1,438,597.37 exchangeable
Newmark Holdings PSUs and 92,464.47 exchangeable Newmark Holdings APSUs) into
1,439,658 shares of Newmark Class A common stock based upon the current exchange
ratio of 0.9403; (ii) the redemption of 60,753.97 exchangeable Newmark Holdings
PPSUs for a cash payment of $0.8 million, to be remitted to the applicable tax
authorities to the extent necessary for payment in connection with the delivery
of the Newmark shares in (i) above; (iii) the conversion of 443,871.60
non-exchangeable Newmark Holdings PSUs with H-Rights into 443,871.60
non-exchangeable Newmark Holdings HDUs, less any taxes and withholdings in
excess of $5.4 million, and redemption of such HDUs for their Capital Account,
paid in the form of Nasdaq shares; (iv) the redemption of 539,080.23
non-exchangeable Newmark Holdings PPSUs for cash in connection with the delivery
of the Newmark Holdings HDU cash payment in (iii) above; (v) the exchange of
3,348,706 exchangeable BGC Holdings units (comprised of 3,147,085 exchangeable
BGC Holdings PSUs and 201,621 Exchangeable BGC Holdings APSUs) into 3,348,706
shares of BGC Class A common stock; (vi) the redemption of 80,891 exchangeable
BGC Holdings PPSUs for a cash payment of $0.3 million, to be remitted to the
applicable tax authorities to the extent necessary for payment in connection
with the delivery of the BGC shares in (v) above; (vii) the conversion of
1,592,016 non-exchangeable BGC Holdings PSUs with H-Rights to into 1,592,016
non-exchangeable BGC Holdings HDUs, less applicable taxes and withholdings in
excess of the BGC Holdings PPSU value in (viii) below; (viii) the redemption of
264,985 non-exchangeable BGC Holdings PPSUs with rights to redeem for cash in
connection with exercise of above BGC Holdings HDUs for a cash payment of $1.1
million, to be remitted to the applicable tax authorities in connection with the
delivery of the BGC Holdings HDU cash payment in (vii) above; and (ix) the
issuance of 12,500 Newmark Class A common stock.


Michael J. Rispoli, Chief Financial Officer



On June 28, 2021, the Compensation Committee approved the following for Mr.
Michael Rispoli, the Company's Chief Financial Officer: (i) the exchange of
23,124 exchangeable Newmark Holdings PSUs into 21,744 shares of Newmark Class A
common stock based on the current exchange ratio of 0.9403; (ii) the redemption
of 18,668.77 exchangeable Newmark Holdings PPSUs for a cash payment of $0.2
million, to be remitted to the applicable tax authorities to the extent
necessary for payment in connection with the delivery of the Newmark shares in
(i) above; (iii) the redemption of 6,000 non-exchangeable Newmark Holdings PSUs
and the issuance of 5,642 restricted shares of Newmark Class A common stock
based upon the current exchange ratio of 0.9403; (iv) the conversion of 5,846
non-exchangeable Newmark Holdings PSUs with H-Rights into 5,846 non-exchangeable
Newmark Holdings HDUs and the redemption of such HDUs for their capital account,
paid in the form of Nasdaq shares; (v) the redemption of 4,917 non-exchangeable
Newmark Holdings PPSUs with rights to redeem for cash in connection with the
exercise of above Newmark Holdings HDUs for a cash payment of $0.1 million, to
be remitted to the applicable tax authorities to the extent necessary for
payment in connection with the delivery of the HDU cash payment in (iv) above;
(vi) the exchange of 36,985 exchangeable BGC Holdings PSUs into 36,985 shares of
BGC Class A common stock; (vii) the redemption of 29,791 exchangeable BGC
Holdings PPSUs for a cash payment of $0.1 million to the applicable tax
authorities to the extent necessary for payment in connection with the delivery
of the BGC shares in (vi) above; and (viii) the issuance of 383 shares of
Newmark Class A common stock.


Stephen M. Merkel, Chief Legal Officer



On June 28, 2021 the Compensation Committee also approved the following for
Stephen M. Merkel, the Company's Chief Legal Officer: (i) the redemption of
51,124.28 non-exchangeable Newmark Holdings PSUs and issuance of 48,072 shares
of Newmark Class A common stock based upon the current exchange ratio of 0.9403;
and (ii) the redemption of 46,349.87 non-
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exchangeable Newmark Holdings PPSUs for a cash payment of $0.3 million, to be
remitted to the applicable tax authorities to the extent necessary in connection
with the issuance of the shares above.


Retirement Fund Purchase
On April 27, 2021, a Keough retirement account held by Mr. Lutnick purchased
5,154 shares of our Class A common stock from us at the closing price of our
Class A common stock on that date of $10.67 per share. The transaction was
approved by our Audit Committee.

Pre-IPO intercompany agreements
In December 2017, prior to our Separation and IPO, all intercompany arrangements
and agreements that were previously approved by the Audit Committee of BGC
Partners with respect to BGC Partners and its subsidiaries and Cantor and its
subsidiaries were also approved by our Board of Directors with respect to the
relationships between us and our subsidiaries and Cantor and its subsidiaries
following our IPO on the terms and conditions approved by the BGC Audit
Committee during such time that our business was owned by BGC Partners. These
arrangements include, but are not limited to, the following: (i) an
authorization to provide Cantor real estate and related services, including real
estate advice, brokerage, property or facilities management, valuation and
advisory and other services; (ii) an authorization to enter into brokerage and
similar agreements with respect to the provision of ordinary course brokerage
services in circumstances in which such entities customarily provide brokerage
services to third-party customers; (iii) an authorization to enter into
agreements with Cantor and/or its affiliates, to provide services, including
finding and reviewing suitable acquisition or partner candidates, structuring
transactions and negotiating and due diligence services in connection with
acquisitions and other business strategies in commercial real estate and other
businesses from time to time; and (iv) an arrangement to jointly manage exposure
to changes in foreign exchange rates. Please see the section entitled "Certain
Relationships and Related Transactions, and Director Independence" in the
Company's Amendment No.1 to the Annual Report on Form 10-K/A for the fiscal year
ended December 31, 2019 filed on April 28, 2020 for a description of these and
other approved arrangements.

Transfer of Employees to Newmark
In connection with the expansion of our mortgage brokerage and lending
activities, Newmark entered into an agreement with Cantor pursuant to which five
former employees of its affiliate, CCRE, transferred to Newmark, effective as of
May 1, 2018. In connection with this transfer of employees, Cantor paid $6.9
million to Newmark in October 2018 and Newmark Holdings issued $6.7 million of
limited partnership units and $0.2 million of cash in the form of a cash
distribution agreement to the employees. In addition, Newmark Holdings issued
$2.2 million of Newmark Holdings partnership units with a capital account and
$0.5 million of limited partnership units in exchange for the cash payment from
Cantor to Newmark of $2.2 million. In consideration for the Cantor payment,
Newmark has agreed to return up to a maximum of $3.3 million to Cantor based on
the employees' production during their first two years of employment with
Newmark. In July 2020, Newmark paid Cantor $3.3 million based on the employees'
production. Newmark has agreed to allow certain of these employees to continue
to provide consulting services to Cantor in exchange for a forgivable loan which
was directly paid by Cantor to these employees.

Services Agreement with CFE Dubai
As the Company does not yet have a presence in Dubai, in May 2020, the Audit
Committee of the Company authorized Newmark & Company Real Estate, Inc.
("Newmark & Co."), a subsidiary of Newmark, to enter into an agreement with
Cantor Fitzgerald Europe (DIFC Branch) ("CFE Dubai") pursuant to which CFE Dubai
will employ and support an individual who is a resident of Dubai in order to
enhance Newmark's capital markets platform, in exchange for a fee. CFE Dubai and
Newmark & Co. negotiated a Services Agreement memorializing the arrangement
between the parties (the "Services Agreement"). The Services Agreement provides
that Newmark & Co. will reimburse CFE Dubai for the individual's fully allocated
costs, plus a mark-up of seven percent (7%). In addition, the Audit Committee of
the Company authorized the Company and its subsidiaries to enter into similar
arrangements in respect of any jurisdiction, in the future, with Cantor and its
subsidiaries, provided that the applicable agreements contain customary terms
for arrangements of this type and that the mark-up charged by the party
employing one or more individuals for the benefit of the other is between 3% and
7.5%, depending on the level of support required for the employed individual(s).

Sublease to BGC
In May 2020 RKF Retail Holdings LLC, a subsidiary of the Company, entered into a
one-year sublease to BGC U.S. OpCo of approximately 21,000 rentable square feet
of excess space in New York City. Under the terms of the sublease, BGC U.S. OpCo
will pay a fixed rent amount of $1.1 million in addition to all operating and
tax expenses attributable to the lease. In connection with this agreement, the
Company received $0.4 million from BGC for the six months ended June 30, 2021.


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GSE loans and related party limits
In February 2019, the Audit Committee of the Company authorized Newmark and its
subsidiaries to originate and service GSE loans to Cantor and its affiliates
(other than BGC) and service loans originated by Cantor and its affiliates
(other than BGC) on prices, rates and terms no less favorable to Newmark and its
subsidiaries than those charged by third parties. The authorization is subject
to certain terms and conditions, including but not limited to: (i) a maximum
amount up to $100.0 million per loan, (ii) a $250.0 million limit on loans that
have not yet been acquired or sold to a GSE at any given time, and (iii) a
separate $250.0 million limit on originated Fannie Mae loans outstanding to
Cantor at any given time.

Transaction with CCRE Lending
On July 22, 2019, Cantor Commercial Real Estate Lending, L.P. ("CCRE Lending"),
a wholly-owned subsidiary of Real Estate LP, made a $146.6 million commercial
real estate loan (the "Loan") to a single-purpose company (the "Borrower") in
which Barry Gosin, Newmark's Chief Executive Officer, owns a 19% interest. The
Loan is secured by the Borrower's interest in property in Pennsylvania that is
subject to a ground lease. While CCRE Lending initially provided the full loan
amount, on August 16, 2019, a third-party bank purchased approximately 80% of
the Loan value from CCRE Lending, with CCRE Lending retaining approximately 20%.
The Loan matures on August 6, 2029, and is payable monthly at a fixed interest
rate of 4.38% per annum. Newmark provided certain commercial loan brokerage
services to the Borrower in the ordinary course of its business, and the
Borrower paid Newmark a fee, as the broker of the Loan, of $0.7 million. The
Newmark Audit Committee approved the commercial loan brokerage services and the
related fee amount received.

Transactions related to ordinary course real estate services
On November 4, 2020, the Audit Committee of the Board of Directors authorized
entities in which executive officers have a non-controlling interest to engage
Newmark to provide ordinary course real estate services to them as long as
Newmark's fees are consistent with the fees that Newmark ordinarily charges for
these services.

Arrangement with View, Inc.
On November 30, 2020, we entered into an arrangement to assist View, Inc.
("View") in the sale of its products and services to real estate clients in
exchange for commissions. View, Inc. is a Silicon Valley-based producer of
high-efficiency dynamic glass that controls light, heat, and glare, providing
unobstructed views and privacy using a low voltage control system. In connection
with the arrangement, View also agreed to engage us as its exclusive provider of
real estate services for a period of at least five years. While View is not
under common control with us, it was, at the time that the agreement was
executed, the target of a merger with CF Finance Acquisition Corp. II, a special
purpose acquisition company sponsored by Cantor.

Special Purpose Acquisition Company
As previously reported, in April 2021, Newmark OpCo and Cantor entered into
various arrangements pursuant to which they agreed to co-sponsor a special
purpose acquisition company, named Newmark Acquisition Corp. (the "SPAC"), in
which certain of our executive officers are executive officers and are expected
to be directors. Pursuant to a purchase agreement, Newmark OpCo purchased from
Cantor a 75% equity interest in an entity now known as Newmark Acquisition
Holdings, LLC, the sponsor of the SPAC (the "Sponsor"), for $18.8 thousand, with
Cantor retaining the remaining 25% equity interest in the Sponsor. Pursuant to
an amended and restated limited liability company agreement of the Sponsor,
Newmark OpCo is the managing member of the Sponsor, and Newmark OpCo and Cantor
have agreed to make additional equity contributions to the Sponsor in order to
fund the obligations of the Sponsor with respect to the SPAC in proportion to
their equity ownership in the Sponsor. Also, in April 2021, the Sponsor agreed
to lend to the SPAC up to $0.3 million without interest in order to cover
expenses related to any initial public offering of the SPAC; the maturity date
of the loans is the earlier of the consummation of the initial public offering
of the SPAC and December 31, 2021.

Other Related Party Transactions
As part of the Knotel acquisition, Newmark assigned the rights to acquire
certain Knotel assets to a subsidiary of Cantor, on the terms that if the
subsidiary monetized the sale of these assets, Newmark would receive 10% of the
proceeds of the sale after the subsidiary recoups its investment in the assets.

On June 28, 2021, the Audit Committee authorized Newmark to hire a son of its
Chairman as a full-time employee of its Knotel business with an annual base
salary of $125,000 and an annual discretionary bonus of up to 30%. The
arrangement includes a potential profit participation consistent with other
entrepreneurial arrangements in the event of certain liquidity events related to
businesses developed by him.

Key Business Drivers
Key drivers for U.S. commercial real estate services companies include the
overall health of the U.S. economy, institutional ownership of commercial real
estate as an investible asset class, and the ability to attract and retain
talent. In our capital markets business, the availability of credit and
certainty of valuations to investors are key drivers. In our multifamily
business, demographic and economic factors are driving increased demand for new
apartments, with an estimated 4.6 million needed by 2030, according to a 2017
study commissioned by the National Multifamily Housing Council and National
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Apartment Association. In 2021, the National Association of Realtors said the
U.S. has not constructed enough housing to keep up with population growth for
many years, and that the country has a deficit of 1.1 million units in buildings
with two to four units and of 2.4 million units in buildings of at least five
units. according to "U.S. Housing Market Needs 5.5 Million More Units, Says New
Report" from the Wall Street Journal. This strong demand for new housing should
continue to drive investment sales, GSE multifamily lending and other mortgage
brokerage and growth in our servicing portfolio over time.

Our GSE origination business is impacted by the lending caps imposed by the
Federal Housing Finance Agency (the "FHFA"). On November 17, 2020, the FHFA
announced that the 2021 multifamily loan purchase caps for Fannie Mae and
Freddie Mac will be $70 billion for each GSE. The cap structure allows the GSEs
to offer a combined total of no more than $140 billion in lending support to the
multifamily market in 2021, as compared to the $159 billion delivered in 2020.
The 2021 caps require at least 50 percent of the Enterprises' multifamily
business to be mission-driven, affordable housing. Despite lower industry
volumes in 2021 Newmark believes it will continue to gain market share.

Economic Outlook in the United States
COVID-19 has adversely affected the economic outlook since the first through
fourth quarters of 2020. Following a 3.5% contraction in 2020, the U.S. economy
expanded by 6.5% annualized during the second quarter of 2021, according to a
preliminary estimate from the U.S. Department of Commerce. The consensus is for
U.S. gross domestic product to expand by 6.9% in 2021, 3.2% in 2022 and 2.3% in
2023, according to a recent Wall Street Journal survey of economists.

According to a preliminary report from the Bureau of Labor Statistics, the
monthly average of payroll jobs increased by approximately 567,000 on a net
basis during the second quarter of 2021. The unemployment rate declined to 5.9%
in June 2021 from a high of 14.8 % in April of 2020, but still higher than the
4.4% from March 2020.

The ten-year Treasury yield increased by approximately 79 basis points to 1.45%
as of June 30, 2021 versus the year-earlier date. Ten-year Treasury yields have
remained well below their 50-year average of approximately 6.14%.On June 16,
2021, the Federal Open Market Committee ("FOMC") decided to maintain the target
range for the federal funds rate at 0 to 0.25% through the end of 2022. The
committee said that it will aim to achieve inflation moderately above 2 percent
for some time that inflation averages 2 over time and longer-term inflation
expectations remain well anchored at 2 percent. The FOMC expects short-term
rates to average approximately 0.1% through the end of 2022 and to approximately
0.6% in 2023. The FOMC also stated that it will continue to purchase at least
$120 billion a month in agency mortgage-backed securities and U.S. Treasuries as
part of its quantitative easing program, which should hold down long-term
interest rates. Economists therefore generally expect U.S. interest rates to
remain relatively low by historical standards for the foreseeable future.

Market Statistics
According to preliminary estimates from Real Capital Analytics ("RCA"), prices
for commercial real estate were up by 10% year-over-year as of June 30, 2021.
These price increases were driven by concentrated activity in certain market
segments such as multifamily, life science, and industrial. In the second
quarter of 2021, RCA currently estimates that second quarter 2021 U.S.
investment sales and financing volumes grew by approximately 176% year-on-year.
In comparison, our quarterly investment sales volumes were up by 246.4%
year-on-year.

According to a February 2021 Mortgage Bankers Association ("MBA") forecast,
originations of commercial/multifamily loans of all types are projected to
increase 11% in 2021. In comparison, our non-originated mortgage brokerage was
up by 640.1 % compared with the year earlier quarter. Multifamily debt placement
drove Newmark's largest-ever quarterly combined (originated and non-originated)
debt volumes of $11.1 billion, which were up by 198.2% year-on-year. The Company
helped its clients navigate lower GSE multifamily loan activity by placing a
record amount of their multifamily debt with non-agency lenders in the quarter.

Newmark's loan origination volumes are driven more by the GSE multifamily
financing volumes than the activity level of the overall commercial mortgage
market. Overall industry GSE multifamily origination volumes decreased by 38.0%
in the second quarter of 2021 compared with the second quarter of 2020. The GSE
multifamily volume statistics for the industry are based on when loans are sold
and/or securitized, and typically lag those reported by Newmark and its
competitors by 30 to 45 days.

Regulatory Environment
See "Business-Regulation" in Part I, Item 1 of this Annual Report on Form 10-K
for information related to our regulatory environment.

Liquidity

See "-Financial Position, Liquidity and Capital Resources" herein for information related to our liquidity and capital resources.

Financial Overview


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Revenues


We derive revenues from the following general four sources:
•Leasing and Other Commissions. We offer a diverse range of commercial real
estate brokerage and advisory services, including tenant and agency
representation, which includes comprehensive lease negotiations, strategic
planning, site selection, lease auditing, and other financial and market
analysis.
•Capital Markets. Our real estate capital markets business specializes in the
arrangement of acquisitions and dispositions of commercial properties, as well
as providing other financial services, including the arrangement of debt and
equity financing, and loan sale advisory.
•Gains from Mortgage Banking Activities/Originations, Net. Gains from mortgage
banking activities/originations are derived from the origination of loans with
borrowers and the sale of those loans to investors.
•Management Services, Servicing Fees and Other. We provide commercial services
to tenants and landlords. In this business, we provide property and facilities
management services along with project management, valuation and advisory
services and other consulting services, as well as technology, to customers who
may also utilize our commercial real estate brokerage services. Servicing fees
are derived from the servicing of loans originated by us as well as loans
originated by third parties.

Fees are generally earned when a lease is signed. In many cases, landlords are
responsible for paying the fees. In capital markets, fees are earned and
recognized when the sale of a property closes, and title passes from seller to
buyer for investment sales and when debt or equity is funded to a vehicle for
debt and equity transactions. Gains from mortgage banking
activities/originations, net are recognized when a derivative asset is recorded
upon the commitment to originate a loan with a borrower and sell the loan to an
investor. The derivative is recorded at fair value and includes loan origination
fees, sales premiums and the estimated fair value of the expected net servicing
cash flows. Gains from mortgage banking activities/originations, net are
recognized net of related fees and commissions to affiliates or third-party
brokers. For loans we broker, revenues are recognized when the loan is closed.
Servicing fees are recognized on an accrual basis over the lives of the related
mortgage loans. We typically receive monthly management fees based upon a
percentage of monthly rental income generated from the property under
management, or in some cases, the greater of such percentage or a minimum agreed
upon fee. We are often reimbursed for our administrative and payroll costs, as
well as certain out-of-pocket expenses, directly attributable to properties
under management. We follow accounting principles generally accepted in the
U.S., or "U.S. GAAP", which provides guidance when accounting for reimbursements
from clients and when accounting for certain contingent events for Leasing and
Capital Markets transactions. See Note 3 - "Summary of Significant Accounting
Policies" to our Consolidated Financial Statements included in Part I, Item I of
this Quarterly Report on Form 10-Q for a more detailed discussion.

Expenses


Compensation and Employee Benefits
The majority of our operating costs consist of cash and non-cash compensation
expenses, which include base salaries, producer commissions based on production,
forgivable loans for term contracts, discretionary and other bonuses and all
related employee benefits and taxes. Our employees consist of commissioned
producers, executives and other administrative support. Our producers are
largely compensated based on the revenue they generate for the firm, keeping
these costs variable in nature.

As part of our compensation plans, certain employees have been granted limited
partnership units in Newmark Holdings and BGC Holdings, which generally receive
quarterly allocations of net income and are generally contingent upon services
being provided by the unit holders. Certain Newmark employees also hold
non-distribution earnings units (e.g. NPSUs and NREUs, collectively "N Units")
that do not participate in quarterly partnership distributions and are not
allocated any items of profit or loss. These N Units vest into distribution
earnings units over a 4-year period. As prescribed in U.S. GAAP guidance, the
quarterly allocations of net income on such limited partnership units are
reflected as a component of compensation expense under "Equity-based
compensation and allocations of net income to limited partnership units and
FPUs" in our accompanying unaudited condensed consolidated statements of
operations. During 2019, Newmark simplified its compensation structure when
hiring new personnel by issuing restricted stock units in lieu of limited
partnership units. Newmark continues to monitor its compensation policy and make
changes where necessary to attract industry leading producers to Newmark.

Newmark granted conversion rights on outstanding limited partnership units in
Newmark Holdings and BGC Holdings to Newmark employees to convert the limited
partnership units to a capital balance within Newmark Holdings or BGC Holdings.
Generally, such units are not considered share-equivalent limited partnership
units and are not in the fully diluted share count.

Certain of these limited partnership units entitle the holders to receive
post-termination payments. These limited partnership units are accounted for as
post-termination liability awards under U.S. GAAP guidance, which requires that
we
                                       69
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record an expense for such awards based on the change in value at each reporting
period and include the expense in our accompanying unaudited condensed
consolidated statements of operations as part of "Equity-based compensation and
allocations of net income to limited partnership units and FPUs". The liability
for limited partnership units with a post-termination payout amount is included
in "Other long-term liabilities" on our accompanying unaudited condensed
consolidated balance sheets.

Certain limited partnership units are granted exchangeability into Class A
common stock or may be redeemed in connection with the grant of shares of Class
A common stock. At the time exchangeability is granted, or the shares are
issued, Newmark recognizes an expense based on the fair value of the award on
that date, which is included in "Equity-based compensation and allocations of
net income to limited partnership units and FPUs" in our accompanying unaudited
condensed consolidated statements of operations.

Our employees have been awarded preferred partnership units ("Preferred Units")
in Newmark Holdings and BGC Holdings. Each quarter, the net profits of Newmark
Holdings and BGC Holdings are allocated to such units at a rate of either
0.6875% (which is 2.75% per calendar year) or such other amount as set forth in
the award documentation (the "Preferred Distribution"), which is deducted before
the calculation and distribution of the quarterly partnership distribution for
the remaining partnership units in Newmark Holdings and BGC Holdings,
respectively. The Preferred Units are not entitled to participate in partnership
distributions other than with respect to the Preferred Distribution. Preferred
Units may not be made exchangeable into our Class A common stock and are only
entitled to the Preferred Distribution, and accordingly they are not included in
our fully diluted share count. The quarterly allocations of net income on
Preferred Units are also reflected in compensation expense under "Equity-based
compensation and allocations of net income to limited partnership units and
FPUs" in our accompanying unaudited condensed consolidated statements of
operations. After deduction of the Preferred Distribution, the remaining
partnership units generally receive quarterly allocation of net income based on
their weighted-average pro rata share of economic ownership of the operating
subsidiaries. In addition, Preferred Units are granted in connection with the
grant of certain limited partnership units, such as PSUs, that may be granted
exchangeability to cover the withholding taxes owed by the unit holder upon such
exchange. This is an acceptable alternative to the common practice among public
companies of issuing the gross amount of shares to employees, subject to
cashless withholding of shares to pay applicable withholding taxes.

We have entered into various agreements with certain of our employees and
partners whereby these individuals receive loans, which may be either wholly or
in part repaid from the distribution earnings that the individual receives on
their limited partnership interests in BGC Holdings and Newmark Holdings. The
forgivable portion of these loans is recognized as compensation expense over the
life of the loan.

From time to time, we may also enter into agreements with employees and partners
to grant bonus and salary advances or other types of loans. These advances and
loans are repayable in the timeframes outlined in the underlying agreements. In
addition, we also enter into deferred compensation agreements with employees
providing services to us. The costs associated with such plans are generally
amortized over the period in which they vest. (See Note 30 - "Compensation" and
Note 31 - "Commitment and Contingencies", to our accompanying unaudited
condensed consolidated financial statements included in Part I, Item I of this
Quarterly Report on Form 10-Q).

Other Operating Expenses
We have various other operating expenses. We incur leasing, equipment and
maintenance expenses. We also incur selling and promotion expenses, which
include entertainment, marketing and travel-related expenses. We incur
communication expenses, professional and consulting fees for legal, audit and
other special projects, and interest expense related to short-term operational
funding needs, and notes payable and collateralized borrowings.

We pay fees to Cantor for performing certain administrative and other support,
including charges for occupancy of office space, utilization of fixed assets and
accounting, operations, human resources, legal services and technology
infrastructure support. Management believes that these charges are a reasonable
reflection of the utilization of services rendered. However, the expenses for
these services are not necessarily indicative of the expenses that would have
been incurred if we had not obtained these services from Cantor. In addition,
these charges may not reflect the costs of services we may receive from Cantor
in the future.

Other Income, Net
Other income, net is comprised of the gains associated with the Earn-out shares
related to the Nasdaq Transaction and the movements related to the impact of any
unrealized non-cash mark-to-market gains or losses related to the Nasdaq
Forwards. Additionally, other income includes gains (losses) on equity method
investments which represent our pro rata share of the net gains (losses) on
investments over which we have significant influence but which we do not
control, and the mark-to-market gains or losses on the non-marketable
investments.
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Provision for Income Taxes
We incur income tax expenses based on the location, legal structure, and
jurisdictional taxing authorities of each of our subsidiaries. Certain of the
Company's entities are taxed as U.S. partnerships and are subject to the
Unincorporated Business Tax (which we refer to as "UBT") in New York City. U.S.
federal and state income tax liability or benefit related to the partnership
income or loss, with the exception of UBT, rests with the partners (see Note 2 -
"Limited Partnership Interests in Newmark Holdings and BGC Holdings", to our
accompanying unaudited condensed consolidated financial statements included in
Part I, Item I of this Quarterly Report on Form 10-Q) rather than the
partnership entity. Our accompanying unaudited condensed consolidated financial
statements include U.S. federal, state and local income taxes on Newmark's
allocable share of the U.S. results of operations. Outside of the U.S., we
operate principally through subsidiary corporations subject to local income
taxes.

Impact of Adopting Lease Guidance
On January 1, 2019, Newmark adopted Accounting Standards Codification 842,
Leases ("ASC 842"), which provides guidance on the accounting and disclosure for
accounting for leases. Newmark has elected the optional transition method, and
pursuant to this transition method, financial information will not be updated
and the disclosures required under the new standard will not be provided for
dates and periods prior to January 1, 2019. Newmark has elected the package of
"practical expedients," which permits Newmark not to reassess under the new
standard its prior conclusions about lease identification, lease classification
and initial direct costs. Newmark has elected the short-term lease recognition
exemption for all leases that qualify, and has elected the practical expedient
to not separate lease and non-lease components for all leases other than real
estate leases.

The adoption of ASC 842 on January 1, 2019 resulted in the recognition of
Right-of-use ("ROU") assets of approximately $178.8 million and Right-of-use
liabilities of approximately $226.7 million, with no effect on beginning
retained earnings.
The adoption of the new guidance did not have a significant impact on our
accompanying unaudited condensed consolidated statements of operations,
consolidated statements of changes in equity, and consolidated statements of
cash flows.

See Note 3 - "Summary of Significant Accounting Policies" and Note 18 - "Leases"
to our accompanying unaudited condensed consolidated financial statements
included in Part I, Item I of this Quarterly Report on Form 10-Q , for further
information.

Impact of Adopting Credit Loss Guidance
On January 1, 2020, Newmark adopted Accounting Standards Codification 326,
Financial Instrument-Credit Losses: Measurement of Credit Losses on Financial
Instruments ("ASC 326"), which provides guidance on the accounting and
disclosure for accounting for expected credit losses on financial instruments.

The adoption of ASC 326 on January 1, 2020, on a pre-tax basis, resulted in a
decrease in assets of $8.0 million, an increase in liabilities of $17.9 million
and a decrease in beginning retained earnings of $25.9 million.

See Note 3 - "Summary of Significant Accounting Policies" and Note 23 - "Financial Guarantee Liability" to our accompanying unaudited condensed consolidated financial statements included in Part I, Item I of this Quarterly Report on Form 10-Q , for further information.


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Results of Operations



The following table sets forth our unaudited condensed consolidated statements
of operations data expressed as a percentage of total revenues for the periods
indicated (in thousands):

                                                                               Three Months Ended June 30,                                                                           Six Months Ended June 30,
                                                                  2021                                              2020                                              2021                                              2020
                                                                          Percentage of                                     Percentage of                                     Percentage of                                     Percentage of
                                                Actual Results            Total Revenues           Actual Results           Total Revenues           Actual Results           Total Revenues           Actual Results           Total Revenues
Revenues:
Leasing and other commissions                 $    184,346                        29.3   %       $       120,079                    31.3   %       $       331,779                    29.3   %       $       260,517                    30.0   %
Capital markets                                    184,756                        29.3                    52,959                    13.8                   306,159                    27.0                   180,882                    20.8
Gains from mortgage banking
activities/originations, net                        41,260                         6.6                    69,071                    18.0                    88,653                     7.8                   119,494               

13.8


Management services, servicing fees and
other                                              219,509                        34.8                   141,609                    36.9                   407,260                    35.9                   306,754                    35.4
Total revenues                                     629,871                       100.0                   383,718                   100.0                 1,133,851                   100.0                   867,647                   100.0
Expenses:
Compensation and employee benefits                 541,397                        86.0                   230,518                    60.1                   830,471                    73.2                   530,775                

61.2


Equity-based compensation and
allocations of net income to limited
partnership units and FPUs (1)                     267,532                        42.5                    10,860                     2.8                   281,780                    24.9                    23,774                

2.7


Total compensation and employee
benefits                                           808,929                       128.4                   241,378                    62.9                 1,112,251                    98.1                   554,549                

63.9


Operating, administrative and other                135,008                        21.4                    61,012                    15.9                   242,183                    21.4                   153,293                    17.7
Fees to related parties                              5,782                         0.9                     5,205                     1.4                    12,032                     1.1                    11,017                     1.3
Depreciation and amortization                       30,868                         4.9                    28,946                     7.5                    51,921                     4.6                    74,986                     8.6
Total operating expenses                           980,587                       155.7                   336,541                    87.7                 1,418,387                   125.1                   793,845                    91.5
Other income/(loss), net                         1,086,812                       172.5                   (36,389)                   (9.5)                1,084,602                    95.7                   (34,951)                   (4.0)
Income from operations                             736,096                       116.9                    10,788                     2.8                   800,066                    70.6                    38,852                     4.5
Interest (expense) income, net                      (8,723)                       (1.4)                  (10,056)                   (2.6)                  (17,536)                   (1.5)                  (19,085)               

(2.2)


Income before income taxes and
noncontrolling interests                           727,373                       115.5                       732                     0.2                   782,530                    69.0                    19,767                     2.3
Provision for income taxes                         142,182                        22.6                        88                       -                   152,761                    13.5                     4,886                     0.6
Consolidated net income                            585,191                        92.9                       644                     0.2                   629,769                    55.5                    14,881                     1.7
Less: Net income attributable to
noncontrolling interests                           145,447                        23.1                       330                     0.1                   156,920                    13.8                     6,387                

0.7


Net income available to common
stockholders                                  $    439,744                        69.8   %       $           314                     0.1   %       $       472,849                    41.7   %       $         8,494                     1.0   %

(1)The components of Equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in thousands):


                                                                  Three Months Ended June 30,                                                                    Six Months Ended June 30,
                                                        2021                                            2020                                          2021                                          2020
                                                                  Percentage of            Actual            Percentage of                                    Percentage of            Actual            Percentage of
                                       Actual Results            Total Revenues           Results           Total Revenues           Actual Results          Total Revenues           Results           Total Revenues

Issuance of common stock and
exchangeability expenses            $     242,324                        38.5   %       $     306                    0.1   %       $    243,542                      21.5   %       $   8,425                    1.0   %
Allocations of net income to
limited partnership units and
FPUs                                       14,293                         2.3                 983                    0.3                 24,926                       2.2               1,532                    0.2
Limited partnership units
amortization                                6,466                         1.0               6,011                    1.6                  5,866                       0.5               7,906                    0.9
RSU amortization                            4,449                         0.7               3,560                    0.9                  7,447                       0.7               5,911                    0.7
Equity-based compensation and
allocations of net income to
limited partnership units and
FPUs                                $     267,532                        42.5   %       $  10,860                    2.8   %       $    281,781                      24.9   %       $  23,774                    2.7   %


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Three months ended June 30, 2021 compared to the three months ended June 30, 2020



Revenues

Leasing and Other Commissions
Leasing and other commission revenues increased by $64.3 million, or 53.5%, to
$184.3 million for the three months ended June 30, 2021 as compared to the three
months ended June 30, 2020. due to greatly increased demand across all major
property types and, in particular, continued strength in life science and
industrial.

Capital Markets
Capital markets revenue increased by $131.8 million, or 248.9%, to $184.8
million for the three months ended June 30, 2021 as compared to the three months
ended June 30, 2020. Newmark's overall notional volumes from investment sales,
mortgage brokerage, and multifamily originations increased by 225.2% to $27.5
billion and outperformed the industry, which saw combined volumes across U.S.
investment sales and financing grow by approximately 47.0% year-on-year.
Multifamily debt placement drove Newmark's largest ever combined debt volumes of
$11.1 billion, which was an increase of 198.2%. The Company helped its clients
navigate lower GSE multifamily loan activity by placing a record amount of their
multifamily debt with non-agency lenders in the quarter.

Gains from Mortgage Banking Activities/Originations, Net
Gains from mortgage banking activities, net decreased by $27.8 million, or
40.3%, to $41.3 million for the three months ended June 30, 2021 as compared to
the three months ended June 30, 2020. GSE volumes were down industry-wide 39.7%
year-over-year.

A portion of our gains from mortgage banking activities, net, relate to non-cash
gains attributable to OMSRs. We recognize OMSR gains equal to the fair value of
servicing rights retained on mortgage loans originated and sold. For the three
months ended June 30, 2021 and 2020, we recognized $25.8 million and
$42.1 million, respectively, of non-cash gains related to OMSRs.

Management Services, Servicing Fees and Other
Management services, servicing fees and other revenue increased $77.9 million,
or 55.0%, to $219.5 million for the three months ended June 30, 2021 as compared
to the three months ended June 30, 2020. The increase included a $54.4 million
increase in pass-through revenues as we continued to focus on growing these
recurring and predictable businesses.

Expenses


Compensation and Employee Benefits
Compensation and employee benefits expense increased by $310.9 million, or
134.9%, to $541.4 million for the three months ended June 30, 2021 as compared
to the three months ended June 30, 2020. The increase in the three months ended
June 30, 2021 included $187.8 million related to the 2021 Equity Event, higher,
commission based expenses directly attributable to our significant increase in
commission-based .revenues, and an increase in support and operational expenses
related to the resumption of normalized business activity on the part of us and
our clients, as well as from our acquisition of Knotel.

Equity-based compensation and allocations of net income to limited partnership
units and FPUs
Equity-based compensation and allocations of net income to limited partnership
units and FPUs increased by $256.7 million, to $267.5 million for the three
months ended June 30, 2021 as compared to the three months ended June 30, 2020.
The increase in the three months ended June 30, 2021 was primarily due to the
2021 Equity Event.

Operating, Administrative and Other
Operating, administrative and other expenses increased $74.0 million, or 121.3%,
to $135.0 million for the three months ended June 30, 2021 as compared to the
three months ended June 30, 2020 due to $54.4 million of increased pass-through
expenses tied to non-fee revenue growth and higher support and operational
expenses related to the resumption of normalized business activity on the part
of our clients. as well as the acquisition of Knotel.

Fees to Related Parties
Fees to related parties increased by $0.6 million, or 11.1%, to $5.8 million for
the three months ended June 30, 2021 as compared to the three months ended June
30, 2020.


Depreciation and Amortization
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Depreciation and amortization for the three months ended June 30, 2021 increased
by $1.9 million, or 6.6%, to $30.9 million as compared to the three months ended
June 30, 2020. The increase was due to an increase in depreciation and
intangible asset amortization as a result of the Knotel acquisition.

Because Newmark recognizes OMSR gains equal to the fair value of servicing
rights retained on mortgage loans originated and sold, it also amortizes MSRs in
proportion to the net servicing revenue expected to be earned. Subsequent to the
initial recording, MSRs are amortized and carried at the lower of amortized cost
or fair value. The MSR valuation allowance decreased by $4.7 million for the
three months ended June 30, 2021 as compared to a $0.7 million increase for the
three months ended June 30, 2020. Scheduled mortgage servicing rights
amortization increased by $4.2 million due to growth in the mortgage servicing
assets. For the three months ended June 30, 2021 and 2020, our revenue included
$25.8 million and $42.1 million, respectively, and our expenses included
$22.7 million and $23.9 million, respectively, of MSR amortization. The decline
in the MSR amortization resulted from the decrease in the MSR valuation
allowance by $4.7 million due to the increase in short-term interest rates and
slower prepayment speeds during the three months ended June 30, 2021 as compared
to a $0.7 million increase for the three months ended June 30, 2020, Scheduled
mortgage servicing rights amortization increased by $4.2 million due to growth
in the mortgage servicing assets.

Other Income (loss), Net
Other income (loss), net of $1,086.8 million in the three months ended June 30,
2021 was primarily related to $1,108.0 million of gains from the Nasdaq Earn-out
and $2.5 million of income from non-marketable investment, partially offset by,

Other income (loss), net of $(36.4) million in the three months ended June 30,
2020 resulted from a mark-to-market loss related to the Nasdaq Forwards of $22.5
million, which Nasdaq Forwards are a hedge against potential downside risk from
a decline in the share price of Nasdaq's common stock, while allowing the
Company to retain all the potential upside from any related share price
appreciation related to the annual Nasdaq Earn-out. The value of the Nasdaq
Forwards moves inversely with the price of Nasdaq common stock. Additionally,
other income, net was negatively impacted by an unrealized loss of $10.0 million
relating to non-marketable investments carried under the measurement alternative
and $4.0 million of equity losses from Real Estate LP.

Interest (Expense) Income, Net Interest expense, net decreased by $1.3 million, or 13.3%, to $8.7 million during the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 due to a lower outstanding balance on the Credit Facility.



Provision for Income Taxes
Provision for income taxes increased by $142.1 million, to $142.2 million for
the three months ended June 30, 2021 as compared to the three months ended June
30, 2020. This increase was primarily driven by higher pre-tax earnings. In
general, our consolidated effective tax rate can vary from period to period
depending on, among other factors, the geographic and business mix of our
earnings.

Net income attributable to noncontrolling interests Net income attributable to noncontrolling interests increased by $145.1 million, or 43933.1%, to $145.4 million for the three months ended June 30, 2021.

Six Months Ended June 30, 2021 compared to six months ended June 30, 2020

Revenues



Leasing and Other Commissions
Leasing and other commission revenues increased by $71.3 million, or 27.4%, to
$331.8 million for the six months ended June 30, 2021 as compared to the six
months ended June 30, 2020, due to greatly increased demand across all major
property types and, in particular, continued strength in life science and
industrial.

Capital Markets
Capital markets revenue increased by $125.3 million, or 69.3%, to $306.2 million
for the six months ended June 30, 2021 as compared to the six months ended June
30, 2020. This increase was primarily due to higher investment sales and
mortgage brokerage volumes, which increased 57.5% and 148.9%, respectively,
year-over-year.

Gains from Mortgage Banking Activities/Originations, Net Gains from mortgage banking activities, net decreased by $30.8 million, or 25.8%, to $88.7 million for the six months ended June 30, 2021 as compared to the six months ended June 30, 2020. The decrease was primarily due to lower origination


                                       74
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volumes and product mix.



A portion of our gains from mortgage banking activities, net, relate to non-cash
gains attributable to OMSRs. We recognize OMSR gains equal to the fair value of
servicing rights retained on mortgage loans originated and sold. For the six
months ended June 30, 2021 and 2020, we recognized $54.5 million and
$71.5 million, respectively, of non-cash gains related to OMSRs.

Management Services, Servicing Fees and Other
Management services, servicing fees and other revenue increased $100.5 million,
or 32.8%, to $407.3 million for the six months ended June 30, 2021 as compared
to the six months ended June 30, 2020. The increase was primarily due to higher
pass-through revenues, valuation and advisory fees, and servicing fees.

Expenses


Compensation and Employee Benefits
Compensation and employee benefits expense increased by $299.7 million, or
56.5%, to $830.5 million for the six months ended June 30, 2021 as compared to
the six months ended June 30, 2020. The increase in the six months was due to
higher commission-based revenues and the 2021 Equity Event.

Equity-based compensation and allocations of net income to limited partnership
units and FPUs
Equity-based compensation and allocations of net income to limited partnership
units and FPUs increased by $258.0 million, or 1,085.2%, to $281.8 million for
the six months ended June 30, 2021 as compared to the six months ended June 30,
2020 as a result of the 2021 Equity Event..

Operating, Administrative and Other
Operating, administrative and other expenses increased $88.9 million, or 58.0%,
to $242.2 million for the six months ended June 30, 2021 as compared to the six
months ended June 30, 2020 due to increased pass-through expenses tied to
non-fee revenue growth and higher additional support and operational expenses
related to the resumption of normalized business activity on the part of us and
our clients, as well as from our acquisition of Knotel. In addition, there was a
$12.8 million acquisition related earn-out reversal which was recorded in the
half quarter of 2020.

Fees to Related Parties
Fees to related parties increased by $1.0 million, or 9.2%, to $12.0 million for
the six months ended June 30, 2021 as compared to the six months ended June 30,
2020.

Depreciation and Amortization
Depreciation and amortization for the six months ended June 30, 2021 decreased
by $23.1 million, or 30.8%, to $51.9 million as compared to the six months ended
June 30, 2020 due to lower MSR amortization.

Because Newmark recognizes OMSR gains equal to the fair value of servicing
rights retained on mortgage loans originated and sold, it also amortizes MSRs in
proportion to the net servicing revenue expected to be earned. Subsequent to the
initial recording, MSRs are amortized and carried at the lower of amortized cost
or fair value. For the three months ended June 30, 2021 and 2020, our expenses
included $37.8 million and $63.3 million, respectively, of MSR amortization. The
decline in the MSR amortization resulted from the decrease in the MSR valuation
allowance by $15.9 million due to the increase in short-term interest rates and
slower prepayment speeds during the six months ended June 30, 2021 as compared
to an $18.2 million increase for the six months ended June 30, 2020, Scheduled
mortgage servicing rights amortization increased by $8.6 million due to growth
in the mortgage servicing assets.

Other Income (loss), Net
Other income (loss), net of $1,084.6 million in the six months ended June 30,
2021 was primarily related to the Nasdaq Earn-out net of mark-to-market loss on
the Nasdaq Forwards of $12.4 million.

Other income (loss), net of $(35.0) million in the six months ended June 30,
2020 resulted from an unrealized loss of $26.8 million relating to
non-marketable investments carried under the measurement alternative, $4.0
million of equity losses from Real Estate LP and $2.2 million of realized losses
from the sale of Nasdaq shares.


Interest (Expense) Income, Net
Interest expense, net decreased by $1.5 million, or 8.1%, to $17.5 million
during the six months ended June 30, 2021 as compared to the six months ended
June 30, 2020.
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Provision for Income Taxes
Provision for income taxes increased by $147.9 million, to $152.8 million for
the six months ended June 30, 2021 as compared to the six months ended June 30,
2020. This increase was primarily driven by higher pre-tax earnings. In general,
our consolidated effective tax rate can vary from period to period depending on,
among other factors, the geographic and business mix of our earnings.

Net income attributable to noncontrolling interests
Net income attributable to noncontrolling interests increased by $150.5 million,
to $156.9 million for the six months ended June 30, 2021 as compared to the six
months ended June 30, 2020 due to higher earnings.




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QUARTERLY RESULTS OF OPERATIONS



The following table sets forth our quarterly results of operations for the
indicated periods (in thousands). Results of any period are not necessarily
indicative of results for a full year and may, in certain periods, be affected
by seasonal fluctuations in our business. Certain reclassifications have been
made to prior period amounts to conform to the current period's presentation.
                                                                                         December 31,        September 30,                                                        December 31,        September 30,
                                          June 30, 2021           March 31, 2021             2020                2020              June 30, 2020           March 31, 2020             2019               2019 (1)            June 30, 2019
Revenues:
Commissions                             $      369,102          $       268,836          $  328,645          $  197,903          $      173,038          $       268,362          $  416,728          $   357,908          $      346,131
Gains from mortgage banking
  activities/originations, net                  41,260                   47,393             100,228              91,192                  69,071                   50,422              49,316               72,332                

45,091

Management services, servicing fees


   and other                                   219,509                  187,751             172,553             146,829                 141,609                  165,146             166,320              156,394                 160,256
Total revenues                                 629,871                  503,980             601,426             435,924                 383,718                  483,930             632,364              586,634                 551,478
Expenses:
Compensation and employee
  benefits                                     541,397                  289,074             362,676             253,908                 230,518                  300,257             354,862              341,036                 316,737

Equity-based compensation and

allocations of net income to


  limited partnership units and FPUs           267,532                   14,248              56,215              50,769                  10,860                   12,914             148,965               56,647                

39,353

Total compensation and


  employee benefits                            808,929                  303,322             418,891             304,677                 241,378                  313,171             503,827              397,683               

356,090


Operating, administrative and other            135,008                  107,175              79,322              61,790                  61,012                   92,281              85,918               86,297                 101,749
Fees to related parties                          5,782                    6,250               5,447               6,109                   5,205                    5,812               3,990                7,088                   7,222
Depreciation and amortization                   30,868                   21,053              36,580              29,627                  28,946                   46,039              32,634               36,781                  33,425
Total operating expenses                       980,587                  437,800             540,240             402,203                 336,541                  457,303             626,369              527,849                 498,486
Other income (loss), net                     1,086,812                   (2,210)            (58,367)            108,608                 (36,389)                   1,438             (14,313)             108,711                  (3,726)
Income (loss) from operations                  736,096                   63,970               2,819             142,329                  10,788                   28,065              (8,318)             167,496                

49,266


Interest expense, net                           (8,723)                  (8,813)             (9,111)             (9,532)                (10,056)                  (9,030)             (8,141)              (8,167)               

(8,081)

Income (loss) before income taxes and


  noncontrolling interests                     727,373                   55,157              (6,292)            132,797                     732                   19,035             (16,459)             159,329                

41,185


Provision (benefit) for income taxes           142,182                   10,579              (1,165)             33,272                      88                    4,797                (132)              36,760                

9,121


Consolidated net income (loss)                 585,191                   44,578              (5,127)             99,525                     644                   14,238             (16,327)             122,569                

32,064

Less: Net income (loss) attributable to


  noncontrolling interests                     145,447                   11,473              (1,346)             24,176                     330                    6,056              (5,362)              33,871                

9,396

Net income (loss) available to


  common stockholders                   $      439,744          $        33,105          $   (3,781)         $   75,349          $          314          $         8,182          $  (10,965)         $    88,698          $       22,668

(1)Amounts include the gains related to the Nasdaq Earn-out associated with the Nasdaq monetization transactions recorded in Other income (loss), net.


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Financial Position, Liquidity and Capital Resources

Overview

The primary source of liquidity for our business is the cash flow provided by our operations and the Nasdaq shares.



Our future capital requirements will depend on many factors, including our
growth, the expansion of our sales and marketing activities, our expansion into
other markets and our results of operations. To the extent that existing cash,
cash from operations and credit facilities, and Nasdaq shares are insufficient
to fund our future activities, we may need to raise additional funds through
public equity or debt financing. As of June 30, 2021, our long-term debt
consists of our 6.125% Senior Notes with a carrying amount of $544.0 million and
$138.2 million outstanding under the Credit Facility. The Credit Facility was
repaid in full subsequent to June 30, 2021.

Financial Position
Total assets were $4.6 billion at June 30, 2021 and $4.0 billion at December 31,
2020.

Total liabilities were $3.0 billion at June 30, 2021 and $3.0 billion at December 31, 2020.

Liquidity


We expect to generate cash flows from operations to fund our business and to
meet our short-term liquidity requirements, which we define as the next twelve
months. As of June 30, 2021, we had $165.7 million of cash and cash equivalents,
$325.0 million of availability on our revolver. In July of 2021, we repaid the
remaining balance on the revolver in the amount of $140.0 million increasing the
availability to $465.0 million.

On June 25, 2021, Nasdaq announced the close of the sale of its U.S. fixed
income business, which accelerated Newmark's receipt of Nasdaq shares. Newmark
received 6,222,340 Nasdaq shares, with a fair value of $1,093.9 million based on
the closing price on June 30, 2021, included in "Other (loss) income, net" on
the accompanying unaudited condensed consolidated statement of operations.

On June 25, 2021, the SPV notified RBC of its decision to settle the third and
fourth Nasdaq Forwards using the Nasdaq shares the SPV received on June 25,
2021. On July 2, 2021, Newmark settled the third and the fourth Nasdaq Forwards
with 944,329 Nasdaq shares, with a fair value of $166.0 million based on the
closing price of June 30, 2021. Newmark recorded a payable to RBC for this
amount as of June 30, 2021.

We expect to use approximately $201.0 million to reduce our fully diluted share
count by 16.1 million and approximately $327.0 million primarily for taxes
related to Nasdaq and 2021 Equity Event. As a result, based on the closing price
of Nasdaq stock as of August 5, 2021, we expect to retain approximately $457.0
million from our receipt, of Nasdaq shares in the Nasdaq Earn-out. Over time, we
expect to use the liquidity from the Nasdaq shares and our cash flow to
repurchase additional shares of our Class A common stock and limited partnership
interests, reduce our debt, and invest in growing our business.

Borrowing facility



On August 2, 2021, our subsidiary Newmark OpCo, entered into a Master Repurchase
Agreement (the "Repurchase Agreement") with CF Secured, LLC ("CF Secured"), an
affiliate of Newmark's majority stockholder, Cantor, pursuant to which Newmark
may seek, from time-to-time, to execute short-term secured financing
transactions. Repurchase Agreements effect equity financing. The Company, under
the Repurchase agreement, may seek to sell securities, in this case common
shares of Nasdaq, owned by the Company, to CF Secured, under the Repurchase
Agreement, and agrees to repurchase those securities on a date certain at a
repurchase price generally equal to the original purchase price plus interest.

Pursuant to the Repurchase Agreement, the Company and CF Secured agreed to enter
into a repurchase transaction, wherein CF Secured will deliver the cash of such
repurchase transaction to the Company on an overnight basis at an initial rate
of 0.95% per annum (approximately 1.00% less expensive than Newmark's revolving
credit facility), and the Company will deliver to CF Secured the number of
shares of Nasdaq as collateral so that the market value of such shares equals
130% of such cash proceeds. The Nasdaq shares will be marked to market daily,
and the minimum maintenance margin requirement, should the share price decline,
will be 120% of such cash proceeds. The Company will be required to transfer
additional collateral (securities and/or cash) in the event of a margin
percentage decline below 120%.

The initial repurchase or financing transaction was executed on August 2, 2021
and consisted of Newmark receiving $260 million in cash and Newmark delivering
1,818,000 Nasdaq shares as collateral. The repurchase transaction may be rolled
over daily (or for a term greater than one day at a time), subject to terms
mutually acceptable to the Company and CF Secured,
                                       78
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including the rate and minimum margin requirement, both of which can fluctuate
based upon general funding rates and other factors in the repurchase funding
market.

The Repurchase Agreement is subject to ongoing compliance with various covenants
and contains customary events of default. If an event of default occurs, the
repurchase date for each transaction under the Repurchase Agreement may be
accelerated to the date of default. For events of default relating to insolvency
and receivership, the repurchase date for each transaction under the Repurchase
Agreement is automatically accelerated to the date of default.

Newmark still receives dividends on the common shares of Nasdaq it owns, including those shares used as collateral.



The Company intends to utilize the cash proceeds from the repurchase transaction
to help fund the cash portion of the 2021 Equity Event and to pay taxes. The
Company expects to repay the cash proceeds under the repurchase transaction with
the proceeds of periodic sales of Nasdaq shares and from its operating cash.

The Repurchase Agreement and related initial repurchase transaction are on market terms and rates and were approved by Newmark's Audit Committee.



Managing our multifamily GSE mortgage business through the pandemic
We are a lender for Multifamily, Seniors, Healthcare, Student, and Manufactured
Housing Community (MHC) assets through Fannie Mae, Freddie Mac, and FHA.
•These loans are guaranteed by the respective capital source and pre-sold by us
prior to the commitment of any corporate funds. We take no interest rate risk on
the origination and sale of these loans.
•The pre-sold loans are funded at a 100% advance rate via bank warehouse
facilities and are generally held for a period of 30-45 days prior to the
consummation of a sale at an annualized carry rate of approximately 50 basis
points. As of June 30, 2021, we had $1.5 billion of warehouse loan funding
available through multiple banking partners.
•We also service loans for Fannie Mae, Freddie Mac, FHA, and various life
insurance companies, banks, CMBS and other lenders.
•We share credit losses on a pari passu basis with Fannie Mae (weighted average
loss sharing is approximately 30%) on our $24.8 billion portfolio. In the event
of an actual credit loss, all losses are allocated between the two parties based
on the contractual loss sharing arrangement. Although we share credit losses on
our Fannie Mae DUS portfolio, we view our originated servicing portfolio to be
conservative in terms of relevant credit metrics such as debt service coverage,
original loan-to-value and market and borrower quality.


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Following enactment of the CARES Act on March 27, 2020, Fannie Mae, Freddie Mac
and Ginnie Mae announced forbearance of loan payment programs. Newmark only has
advancing obligations under Fannie Mae and Ginnie Mae. Effective July 1, 2020,
Fannie announced an update to their forbearance of loan payment program:
•Forbearance of payments can extend up to six monthly payments and then must be
repaid back up to a period of 24 months. To be eligible, borrowers must
demonstrate a hardship directly related to COVID-19.
•While the forbearance rate remains difficult to predict, we would be required
to advance up to $4.8 million for each 1% increase in the forbearance rate based
on the CARES Act forbearance period.
•As of June 30, 2021, Newmark had six loans totaling $94.0 million in
outstanding principal balance where we have $0.4 million in outstanding
servicing advances.
•Newmark has a $125 million line of credit with Bank of America within its
$400.0 million warehouse facility to fund principal and interest servicing
advances during the forbearance period related to the CARES Act.
•We have a contractual right to be reimbursed in full by Fannie Mae and Ginnie
Mae for all servicer advances made during the COVID-19 forbearance program.

Long-term debt
Long-term debt consisted of the following (in thousands):
                                     June 30, 2021       December 31, 2020
              6.125% Senior Notes   $      543,996      $          542,772
              Credit Facility              138,164                 137,613
              Total                 $      682,160      $          680,385



6.125% Senior Notes
On November 2, 2018, Newmark announced the pricing of an offering of $550.0
million aggregate principal amount of 6.125% Senior Notes due 2023, which closed
on November 6, 2018. The 6.125% Senior Notes were offered and sold in a private
offering exempt from the registration requirements under the Securities Act. The
6.125% Senior Notes are general senior unsecured obligations of Newmark. These
6.125% Senior Notes were priced at 98.94% to yield 6.375%. The 6.125% Senior
Notes bear an interest rate of 6.125% per annum, payable on each May 15 and
November 15, beginning on May 15, 2019 and will mature on November 15, 2023. The
6.125% Senior Notes were subsequently exchanged for notes with substantially
similar terms that were registered under the Securities Act.

Credit Facility
On November 28, 2018, Newmark entered into the Credit Agreement by and among
Newmark, the several financial institutions from time to time party thereto, as
Lenders, and Bank of America N.A., as administrative agent. The Credit Agreement
was amended on February 26, 2020 to increase the size of the facility and extend
the maturity date to February 26, 2023. The Amended Credit Agreement provided
for a $425.0 million three-year unsecured senior revolving credit facility. The
Credit Agreement was again amended on March 16, 2020 to increase the size of the
facility. The Amended Credit Agreement provides for a $465.0 million three-year
unsecured senior revolving credit facility. As of June 30, 2021, the carrying
value of borrowings outstanding under the Amended Credit Agreement was $138.2
million. Borrowings under the Amended Credit Facility will bear an annual
interest equal to, at Newmark's option, either (a) London Interbank Offered Rate
("LIBOR") for specified periods, or upon the consent of all Lenders, such other
period that is 12 months or less, plus an applicable margin, or (b) a base rate
equal to the greatest of (i) the federal funds rate plus 0.5%, (ii) the prime
rate as established by the administrative agent, and (iii) one-month LIBOR plus
1.0%. The applicable margin is 1.75% with respect to LIBOR borrowings and 0.75%
with respect to base rate borrowings, both of which can be up to 0.50% higher
depending upon Newmark's credit rating. The Amended Credit Facility also
provides for an unused facility fee. In July of 2021, Newmark paid down the
balance of the Credit Facility in the amount of $140.0 million.

Cantor Credit Agreement
On November 30, 2018, Newmark entered into an unsecured credit agreement with
Cantor. The Cantor Credit Agreement provides for each party to issue loans to
the other party in the lender's discretion. Pursuant to the Cantor Credit
Agreement, the parties and their respective subsidiaries (with respect to CFLP,
other than BGC and its subsidiaries) may borrow up to an aggregate principal
amount of $250.0 million from each other from time to time at an interest rate
which is the higher of CFLP's or Newmark's short-term borrowing rate then in
effect, plus 1.0%. As of June 30, 2021, there were no borrowings outstanding
under the Cantor Credit Agreement.
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Warehouse Facilities Collateralized by U.S. Government Sponsored Enterprises
As of June 30, 2021, Newmark had $1.5 billion of committed loan funding
available through three commercial banks and an uncommitted $400.0 million
Fannie Mae loan repurchase facility. Consistent with industry practice, these
warehouse facilities are short-term, requiring annual renewal. These warehouse
facilities are collateralized by an assignment of the underlying mortgage loans
originated under its various lending programs and third-party purchase
commitments and are recourse only to our wholly-owned subsidiary, Berkeley Point
Capital, LLC. As of June 30, 2021 and December 31, 2020, we had $410.2 million
and $1,061.2 million outstanding under "Warehouse facilities collateralized by
U.S. Government Sponsored Enterprises" on our accompanying unaudited condensed
consolidated balance sheets.

Cash Flows
Cash flows from operations excluding activity from loan originations and sales,
net were as follows (in thousands):
                                                                 Six Months Ended June
                                                                          30,
                                                                             2021                    2020
Net cash provided by (used in) operating activities                   $       785,142          $     (955,095)
Add back:
Loan originations - loans held for sale                                     3,283,534               5,059,288
Loan sales - loans held for sale                                           (3,960,169)             (4,210,307)
Unrealized gains on loans held for sale                                         5,821                  25,158

Net cash provided by (used in) operating activities excluding activity from loan originations and sales (1)(2)

                                                                $     

114,328 $ (80,956)




(1) Includes payments for corporate taxes in the amount of $18.7 million and
$20.6 million for the six months ended June 30, 2021 and 2020, respectively.
(2) Includes payments for new hires and producers of $11.0 million and $61.0
million for the six months ended June 30, 2021 and 2020, respectively.
Cash Flows for the Six Months Ended June 30, 2021
For the six months ended June 30, 2021, we generated $785.1 million of cash from
operations. However, excluding activity from loan originations and sales, net
cash generated from operating activities for the six months ended June 30, 2021
was $114.3 million. We had consolidated net income of $629.8 million,
$770.6 million of negative adjustments to reconcile net income to net cash
provided by operating activities (excluding activity from loan originations and
sales) and $255.2 million of positive changes in operating assets and
liabilities. The negative adjustment to reconcile the net income to net cash
provided by operating activities was primarily the result of $1,108 million from
the Nasdaq Earn-out. offset by equity-based compensation of $296.1 million. The
positive change in operating assets and liabilities included $33.7 million of
decrease in loans, forgivable loans and other receivables from employees, a
$31.2 million increases in receivables, net, a decrease in other assets of $82.9
million, a $123.4 million increase in accounts payable, accrued expenses and
other liabilities, a $118.9 million increase in accrued compensation and an
decrease in payable to related parties of $4.7 million. Cash used in investing
activities was $14.2 million, primarily related to $43.5 million of payments for
acquisitions, net of cash acquired, partially offset by $35.4 million of
proceeds from the sale of marketable securities. Cash used in financing
activities of $791.7 million primarily related to $651.0 million of net
repayments on the warehouse facilities collateralized by U.S. Government
Sponsored Enterprises, $37.4 million of payments to Deutsche Bank related to
Berkeley Point, $33.3 million for repayment of securities loaned, $11.4 million
in earning distributions to limited partnership interests and other
noncontrolling interests, and $3.7 million in dividends to stockholders.

Cash Flows for the Six Months Ended June 30, 2020
For the six months ended June 30, 2020, we used $955.1 million of cash for
operations. However, excluding activity from loan originations and sales, net
cash used by operating activities for the six months ended June 30, 2020, was
$81.0 million. We had consolidated net income of $14.9 million, $100.6 million
of positive adjustments to reconcile net income to net cash used by operating
activities (excluding activity from loan originations and sales) and $196.4
million of negative changes in operating assets and liabilities. The negative
change in operating assets and liabilities included $115.8 million of increases
in loans, forgivable loans and other receivables from employees and partners
primarily related to hiring, $73.4 million of increases in other payables, and
decreases in accrued compensation of $99.8 million, offset by a $98.1 million
increase in receivables, net. Cash provided by investing activities was $16.6
million, primarily related to $34.6 million of proceeds from the sale of
marketable securities, partially offset by $12.0 million in purchases of fixed
assets and $5.9 million of payments for acquisitions, net of cash acquired. We
had $1.1 billion of cash provided by financing activities primarily due to net
borrowings on the warehouse facilities collateralized by U.S. Government
Sponsored Enterprises of $5.1 billion and borrowing of $365.0 million under the
Credit Facility, partially offset by $4.2 billion in principal payment on
warehouse facilities, repayment of $36.7 million of securities loaned,
distributions to limited partnership interests and other noncontrolling
interests of $74.4 million and dividends to stockholder of $19.6 million.


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Credit Ratings

As of June 30, 2021, our public long-term credit ratings and associated outlooks are as follows:


                                                   Rating       Outlook
                    Fitch Ratings Inc.              BBB-        Stable
                    JCRA                            BBB+        Stable
                    Kroll Bond Rating Agency        BBB-        Stable
                    Standard & Poor's               BB+         Stable



Credit ratings and associated outlooks are influenced by several factors,
including but not limited to: operating environment, earnings and profitability
trends, the prudence of funding and liquidity management practices, balance
sheet size/composition and resulting leverage, cash flow coverage of interest,
composition and size of the capital base, available liquidity, outstanding
borrowing levels and the firm's competitive position in the industry. A credit
rating and/or the associated outlook can be revised upward or downward at any
time by a rating agency if such rating agency decides that circumstances warrant
such a change. Any reduction in our credit ratings and/or the associated outlook
could adversely affect the availability of debt financing on terms acceptable to
us, as well as the cost and other terms upon which we are able to obtain any
such financing. In addition, credit ratings and associated outlooks may be
important to customers or counterparties when we compete in certain markets and
when we seek to engage in certain transactions. In connection with certain
agreements, interest rates on our notes may incur increases of up to 2% in the
event of a credit ratings downgrade.

Regulatory Requirements
Newmark is subject to various capital requirements in connection with
seller/servicer agreements that Newmark has entered into with the various GSEs.
Failure to maintain minimum capital requirements could result in Newmark's
inability to originate and service loans for the respective GSEs and could have
a direct material adverse effect on our accompanying unaudited condensed
consolidated financial statements. As of June 30, 2021, Newmark has met all
capital requirements. As of June 30, 2021, the most restrictive capital
requirement was Fannie Mae's net worth requirement. Newmark exceeded the minimum
requirement by $355.5 million.

Certain of Newmark's agreements with Fannie Mae allow Newmark to originate and
service loans under Fannie Mae's Delegated Underwriting and Servicing ("DUS")
Program. These agreements require Newmark to maintain sufficient collateral to
meet Fannie Mae's restricted and operational liquidity requirements based on a
pre-established formula. Certain of Newmark's agreements with Freddie Mac allow
Newmark to service loans under Freddie Mac's Targeted Affordable Housing ("TAH")
Program. These agreements require Newmark to pledge sufficient collateral to
meet Freddie Mac's liquidity requirement of 8% of the outstanding principal of
TAH loans serviced by Newmark. As of June 30, 2021 and December 31, 2020,
Newmark has met all liquidity requirements.

In addition, as a servicer for Fannie Mae, the Government National Mortgage
Association ("Ginnie Mae") and FHA, Newmark is required to advance to investors
any uncollected principal and interest due from borrowers. As of June 30, 2021
and December 31, 2020, outstanding borrower advances were $0.8 million and $0.8
million, respectively, and are included in "Other assets" in our accompanying
unaudited condensed consolidated balance sheets.

On September 9, 2019, the U.S. Department of the Treasury issued a Housing
Reform Plan (the "Plan") in response to a March 27, 2019 Presidential Memorandum
soliciting reforms in the housing financing system designed to minimize taxpayer
exposure to future bailouts. The primary recommendations of the Plan are: (i)
that existing government support for the secondary markets should be explicitly
defined, tailored and paid for; (ii) that the GSEs' conservatorship should come
to an end; (iii) the implementation of reforms necessary to ensure that the
GSEs, and any successors, are appropriately capitalized to withstand a severe
economic downturn and that shareholders and unsecured creditors, rather than
U.S. taxpayers, bear the losses; (iv) that the GSEs should continue to support
affordable housing at a reasonable economic return that may be less than the
return earned on other activities; (v) that the FHFA and the U.S. Department of
Housing and Urban Development should clearly define the appropriate roles and
overlap between the GSEs and the Federal Housing Administration so as to avoid
duplication and (vi) that measures should be implemented to "level the playing
field" between the GSEs and private sector competitors. Additionally, in
September 2019, FHFA announced a cap of $200 billion as the maximum volume for
combined Fannie Mae and Freddie Mac multifamily volume through the end of 2020,
of which 37.5% must meet certain affordability requirements. The foregoing
proposals may have the effect of impacting the volume of business that we may do
with Fannie Mae and Freddie Mac. Additionally, the potential increase in our
proportion of affordable business and the potential implementation of a fee to
be charged in connection with the government's offer of a guarantee may alter
the economics of the business and, accordingly, may impact our financial
results.

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See "Regulation" in Part I, Item I of this Quarterly Report on Form 10-Q for additional information related to our regulatory environment.

Equity


Repurchase Program
On February 17, 2021, our Board increased its authorized share repurchases of
Newmark Class A Common stock and purchases of limited partnership interests in
Newmark's subsidiaries to $400.0 million. This authorization includes
repurchases of shares or purchase of units from executive officers, other
employees and partners, including of BGC and Cantor, as well as other affiliated
persons or entities. From time to time, Newmark may actively continue to
repurchase shares and/or purchase units. During the three and six months ended
June 30, 2021, Newmark repurchased 3,613,098 and 4,492,341 shares of Class A
common stock, respectively, at an average price of $12.81 and $12.36,
respectively. As of June 30, 2021, Newmark had $342.4 million remaining from its
share repurchase and unit purchase authorization.

The following table details Newmark's unit redemptions and share repurchases for
cash, under the new program, and does not include unit redemptions and/or
cancellations in connection with the grant of shares Newmark's Class A common
stock. The gross unit redemptions and share repurchases of Newmark's Class A
common stock during the six months ended June 30, 2021 were as follows (in
thousands except units, shares and per share amounts):
                                                                                   Approximate
                                                                                  Dollar Value
                                                                                  of Units and
                                                                                   Shares That
                                                                                   May Yet Be
                                              Total                Average        Repurchased/
                                            Number of            Price Paid         Purchased
                                             Shares               per Unit         Under the
                                      Repurchased/Purchased       or Share           Program
 Redemptions
 January 1, 2021 - March 31, 2021                 -             $         -
 April 1, 2021 - June 30, 2021              167,894             $     11.91
 Total Redemptions                          167,894             $     11.91

Repurchases


 January 1, 2021 - March 31, 2021           879,243             $     10.58
 April 1, 2021 - June 30, 2021            3,613,098             $     12.81
 Total Repurchases                        4,492,341             $     12.36

 Total Redemptions and Repurchases        4,660,235             $     12.34

$ 342,365





On August 5, 2021, the Board and Audit Committee authorized the $400.0 million
Newmark share repurchase and unit redemption Authorization, which may include
purchases from Cantor, its partners or employees or other affiliated persons or
entities.

Fully Diluted Share Count
Our fully diluted weighted-average share count follows (in thousands):
                                                        June 30,
                                                  2021              2020
               Common stock outstanding(1)      184,190           178,523
               Partnership units(2)              83,337            86,867
               RSUs (Treasury stock method)       3,582                22
               Newmark exchange shares            1,195               228

               Total(3)                         272,304           265,640


(1)Common stock consisted of Class A shares and Class B shares. For the six
months ended June 30, 2021, the weighted-average number of Class A shares was
162.9 million shares and Class B shares was 21.3 million that were included in
our fully diluted EPS computation because the conditions for issuance had been
met by the end of the period.
(2)Partnership units collectively include FPUs, limited partnership units, and
Cantor units, (see Note 2 - "Limited Partnership Interests in Newmark Holdings
and BGC Holdings", to our Consolidated Financial Statements in Part I, Item I of
this Quarterly Report on Form 10-Q for more information). In general, these
partnership units are potentially exchangeable into shares of Newmark Class A
common stock. In addition, partnership units held by Cantor are generally
exchangeable into shares of Newmark Class A common stock and/or for up to 22.7
million shares of Newmark Class B common stock. These partnership units also
generally receive quarterly allocations of net income, after the deduction of
the Preferred Distribution, based on their weighted-average pro rata share of
economic ownership of the operating subsidiaries. As a result, these partnership
units are included in the fully diluted share count calculation shown above.
(3)For six months ended June 30, 2021, there were no potentially anti-dilutive
securities included in the weighted-average share count, which would excluded in
the computation of fully diluted earnings per share.
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Our fully diluted period-end (spot) share count were as follows (in thousands):
                                                      June 30,
                                                2021              2020
                 Common stock outstanding     201,022           179,043
                 Partnership units             49,654            85,450
                 Newmark RSUs                       -                54
                 Newmark exchange shares        1,175               225
                 Other                              -               378
                 Total                        251,851           265,150



Contingent Payments Related to Acquisitions
Newmark completed acquisitions for which contingent cash consideration of $18.4
million. The contingent cash liability is recorded at fair value as deferred
consideration on our accompanying unaudited condensed consolidated balance
sheets.

Equity Method Investments
Newmark has an investment in Real Estate LP, a joint venture with Cantor in
which Newmark has a less than majority ownership and has the ability to exert
significant influence over the operating and financial policies. As of June 30,
2021, Newmark had $88.3 million in this equity method investment, which
represents a 27% ownership in Real Estate LP.

Registration Statements
On March 28, 2019, we filed a registration statement on Form S-3 pursuant to
which CF&Co may make offers and sales of our 6.125% Senior Notes in connection
with ongoing market-making transactions which may occur from time to time. Such
market-making transactions in these securities may occur in the open market or
may be privately negotiated at prevailing market prices at a time of resale or
at related or negotiated prices. Neither CF&Co, nor any of our affiliates, has
any obligation to make a market in our securities, and CF&Co or any such other
affiliate may discontinue market-making activities at any time without notice.
Newmark does not receive any proceeds from market-making activities in these
securities by CF&Co (or any of its affiliates).

We have an effective registration statement on Form S-4, with respect to the
offer and sale of up to 20.0 million shares of our Class A common stock from
time to time in connection with business combination transactions, including
acquisitions of other businesses, assets, properties or securities. As of June
30, 2021, we have issued [760,910 million shares of our Class A common stock
under this registration statement.

As of June 30, 2021 and December 31, 2020, Newmark was committed to fund
approximately $0.7 billion and $0.4 billion, respectively, which is the total
remaining draws on construction loans originated by Newmark under the Housing
and Urban Development ("HUD") 221(d)4, 220 and 232 programs, rate locked loans
that have not been funded, and forward commitments, as well as the funding for
Fannie Mae structured transactions. Newmark also has corresponding commitments
to sell these loans to various purchasers as they are funded.

Critical Accounting Policies and Estimates
The preparation of our accompanying unaudited condensed consolidated financial
statements in conformity with U.S. GAAP guidance requires management to make
estimates and assumptions that affect the reported amounts of the assets and
liabilities, revenues and expenses, and the disclosure of contingent assets and
liabilities in our accompanying unaudited condensed consolidated financial
statements. These accounting estimates require the use of assumptions about
matters, some which are highly uncertain at the time of estimation. To the
extent actual experience differs from the assumptions used, our accompanying
unaudited condensed consolidated balance sheets, consolidated statements of
operations and consolidated statements of cash flows could be materially
affected. We believe that of our significant accounting policies, the following
policies involve a higher degree of judgment and complexity.

Revenue Recognition
We derive our revenues primarily through commissions from brokerage services,
gains from mortgage banking activities/originations, net, revenues from real
estate management services, servicing fees and other revenues. Revenue from
contracts with customers is recognized when, or as, we satisfy our performance
obligations by transferring the promised goods
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or services to the customers as determined by when, or as, the customer obtains
control of that good or service. A performance obligation may be satisfied over
time or at a point in time. Revenue from a performance obligation satisfied over
time is recognized by measuring our progress in satisfying the performance
obligation as evidenced by the transfer of the goods or services to the
customer. Revenue from a performance obligation satisfied at a point in time is
recognized at the point in time when the customer obtains control over the
promised good or service. The amount of revenue recognized reflects the
consideration we expect to be entitled to in exchange for those promised goods
or services (i.e., the "transaction price"). In determining the transaction
price, we consider consideration promised in a contract that includes a variable
amount, referred to as variable consideration, and estimate the amount of
consideration due to us. Additionally, variable consideration is included in the
transaction price only to the extent that it is probable that a significant
reversal in the amount of cumulative revenue recognized will not occur. In
determining when to include variable consideration in the transaction price, we
consider all information (historical, current and forecast) that is available,
including the range of possible outcomes, the predictive value of past
experiences, the time period of when uncertainties expect to be resolved and the
amount of consideration that is susceptible to factors outside of our influence.

We also use third-party service providers in the provision of its services to
customers. In instances where a third-party service provider is used, we perform
an analysis to determine whether we are acting as a principal or an agent with
respect to the services provided. To the extent that we are acting as a
principal, the revenue and the expenses incurred are recorded on a gross basis.
In instances where we are acting as an agent, the revenue and expenses are
presented on a net basis within the revenue line item.

In some instances, we perform services for customers and incur out-of-pocket
expenses as part of delivering those services. Our customers agree to reimburse
us for those expenses, and those reimbursements are part of the contract's
transaction price. Consequently, these expenses and the reimbursements of such
expenses from the customer are presented on a gross basis because the services
giving rise to the out-of-pocket expenses do not transfer a good or service. The
reimbursements are included in the transaction price when the costs are
incurred, and the reimbursements are due from the customer.

MSRs, Net
We initially recognize and measure the rights to service mortgage loans at fair
value and subsequently measure them using the amortization method. We recognize
rights to service mortgage loans as separate assets at the time the underlying
originated mortgage loan is sold, and the value of those rights is included in
the determination of the gains on loans held for sale. Purchased MSRs, including
MSRs purchased from CCRE, are initially recorded at fair value, and subsequently
measured using the amortization method.

We receive up to a 3-basis point servicing fee and/or up to a 1-basis point
surveillance fee on certain Freddie Mac loans after the loan is securitized in a
Freddie Mac pool ("Freddie Mac Strip"). The Freddie Mac Strip is also recognized
at fair value and subsequently measured using the amortization method, but is
recognized as a MSR at the securitization date.

MSRs are assessed for impairment, at least on an annual basis, based upon the
fair value of those rights as compared to the amortized cost. Fair values are
estimated using a valuation model that calculates the present value of the
future net servicing cash flows. In using this valuation method, we incorporate
assumptions that management believes market participants would use in estimating
future net servicing income. The fair value estimates are sensitive to
significant assumptions used in the valuation model such as prepayment rates,
cost of servicing, escrow earnings rates, discount rates and servicing
multiples, which are affected by expectations about future market or economic
conditions derived, in part, from historical data. It is reasonably possible
that such estimates may change. We amortize the MSRs in proportion to, and over
the period of, the projected net servicing income. For purposes of impairment
evaluation and measurement, we stratify MSRs based on predominant risk
characteristics of the underlying loans, primarily by investor type (Fannie
Mae/Freddie Mac, FHA/GNMA, CMBS and other). To the extent that the carrying
value exceeds the fair value of a specific MSR strata, a valuation allowance is
established, which is adjusted in the future as the fair value of MSRs increases
or decreases. Reversals of valuation allowances cannot exceed the previously
recognized impairment up to the amortized cost.

Equity-Based and Other Compensation
Discretionary Bonus: A portion of our compensation and employee benefits expense
comprises discretionary bonuses, which may be paid in cash, equity, partnership
awards or a combination thereof. We accrue expense in a period based on revenues
in that period and on the expected combination of cash, equity and partnership
units. Given the assumptions used in estimating discretionary bonuses, actual
results may differ.

Restricted Stock Units: We account for equity-based compensation under the fair
value recognition provisions of U.S. GAAP guidance. Restricted stock units
(which we refer to as "RSUs") provided to certain employees are accounted for as
equity awards, and in accordance with U.S. GAAP guidance, we are required to
record an expense for the portion of the RSUs
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that is ultimately expected to vest. Further, U.S. GAAP guidance requires
forfeitures to be estimated at the time of grant and revised, if necessary, in
subsequent periods if actual forfeitures differ from those estimates. Because
significant assumptions are used in estimating employee turnover and associated
forfeiture rates, actual results may differ from our estimates under different
assumptions or conditions.

The fair value of RSU awards to employees is determined on the date of grant,
based on the fair value of our Class A common stock. Generally, RSUs granted by
us as employee compensation do not receive dividend equivalents; as such, we
adjust the fair value of the RSUs for the present value of expected forgone
dividends, which requires us to include an estimate of expected dividends as a
valuation input. This grant-date fair value is amortized to expense ratably over
the awards' vesting periods. For RSUs with graded vesting features, we have made
an accounting policy election to recognize compensation cost on a straight-line
basis. The amortization is reflected as non-cash equity-based compensation
expense in our accompanying unaudited condensed consolidated statements of
operations.

Restricted Stock: Restricted stock provided to certain employees is accounted
for as an equity award, and as per U.S. GAAP guidance, we are required to record
an expense for the portion of the restricted stock that is ultimately expected
to vest. We have granted restricted stock that is not subject to continued
employment or service; however, transferability is subject to compliance with
our and our affiliates' customary non-compete obligations. Such shares of
restricted stock are generally saleable by partners in 5 to 10 years. Because
the restricted stock is not subject to continued employment or service, the
grant-date fair value of the restricted stock is expensed on the date of grant.
The expense is reflected as non-cash equity-based compensation expense in our
accompanying unaudited condensed consolidated statements of operations.

Limited Partnership Units: Limited partnership units in Newmark Holdings and BGC
Holdings are held by Newmark employees and receive quarterly allocations of net
income and are generally contingent upon services being provided by the unit
holders. As discussed above, preferred units in Newmark Holdings and BGC
Holdings are not entitled to participate in partnership distributions other than
with respect to a distribution at a rate of either 0.6875% (which is 2.75% per
calendar year) or such other amount as set forth in the award documentation. The
quarterly allocations of net income to such limited partnership units are
reflected as a component of compensation expense under "Equity-based
compensation and allocations of net income to limited partnership units and
FPUs" in our accompanying unaudited condensed consolidated statements of
operations.

Certain of these limited partnership units entitle the holders to receive
post-termination payments equal to the notional amount in four equal yearly
installments after the holder's termination. These limited partnership units are
accounted for as post-termination liability awards under U.S. GAAP guidance,
which requires that Newmark record an expense for such awards based on the
change in value at each reporting period and include the expense in our
accompanying unaudited condensed consolidated statements of operations as part
of "Equity-based compensation and allocations of net income to limited
partnership units and FPUs." The liability for limited partnership units with a
post-termination payout is included in "Other long-term liabilities" on our
accompanying unaudited condensed consolidated balance sheets.

Certain limited partnership units held by Newmark employees are granted
exchangeability into Class A common stock or may be redeemed in connection with
the grant of shares of Class A common stock. At the time exchangeability is
granted, or the shares are issued, Newmark recognizes an expense based on the
fair value of the award on that date, which is included in "Equity-based
compensation and allocations of net income to limited partnership units and
FPUs" in our accompanying unaudited condensed consolidated statements of
operations.

Employee Loans: We have entered into various agreements with certain of our
employees and partners whereby these individuals receive loans that may be
either wholly or in part repaid from distributions that the individuals receive
on some or all of their limited partnership interests or may be forgiven over a
period of time. Cash advance distribution loans are documented in formal
agreements and are repayable in timeframes outlined in the underlying
agreements. We intend for these advances to be repaid in full from the future
distributions on existing and future awards granted. The allocations of net
income to the awards are treated as compensation expense and the proceeds from
distributions are used to repay the loan. The forgivable portion of any loans is
recognized as compensation expense in our accompanying unaudited condensed
consolidated statements of operations over the life of the loan. We review the
loan balances each reporting period for collectability. If we determine that the
collectability of a portion of the loan balances is not expected, we recognize a
reserve against the loan balances. Actual collectability of loan balances may
differ from our estimates. As of June 30, 2021 and December 31, 2020, the
aggregate balance of employee loans, net of reserve, was $451.2 million and
$454.3 million, respectively, and is included as "Loans, forgivable loans and
other receivables from employees and partners, net" in our accompanying
unaudited condensed consolidated balance sheets. Compensation expense for the
above-mentioned employee loans for the three and six months ended June 30, 2021
was $19.5 million and $36.8 million, respectively, compared with $17.5 million
and $31.9 million, respectively, for the three and six months ended June 30,
2020. The compensation expense related to these loans was included
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as part of "Compensation and employee benefits" in our accompanying unaudited
condensed consolidated statements of operations.
Goodwill
Goodwill is the excess of the purchase price over the fair value of identifiable
net assets acquired in a business combination. As prescribed in U.S. GAAP
guidance, Intangibles - Goodwill and Other Intangible Assets, goodwill is not
amortized, but instead is periodically tested for impairment. We review goodwill
for impairment on an annual basis during the fourth quarter of each fiscal year
or whenever an event occurs, or circumstances change that could reduce the fair
value of a reporting unit below its carrying amount.

When reviewing goodwill for impairment, we first assess qualitative factors to
determine whether it is more likely than not that the fair value of a reporting
unit is less than its carrying amount, including goodwill. If the results of the
qualitative assessment indicate that it is more likely than not that the fair
value of a reporting unit is less than its carrying amount, or if we choose to
bypass the qualitative assessment, we perform a quantitative goodwill impairment
analysis as follows.

The quantitative goodwill impairment test, used to identify both the existence
of impairment and the amount of impairment loss, compares the fair value of a
reporting unit with its carrying amount, including goodwill. If the carrying
amount of a reporting unit exceeds its fair value, an impairment loss should be
recognized in an amount equal to that excess, limited to the total amount of
goodwill allocated to that reporting unit. If the estimated fair value of a
reporting unit exceeds its carrying value, goodwill is deemed not to be
impaired. To estimate the fair value of the reporting unit, we use a discounted
cash flow model and data regarding market comparables. The valuation process
requires significant judgment and involves the use of significant estimates and
assumptions. These assumptions include cash flow projections, estimated cost of
capital and the selection of peer companies and relevant multiples. Because
significant assumptions and estimates are used in projecting future cash flows,
choosing peer companies and selecting relevant multiples, actual results may
differ from our estimates under different assumptions or conditions.

Credit Losses
The CECL methodology, which became effective on January 1, 2020, requires us to
estimate lifetime expected credit losses by incorporating historical loss
experience, as well as current and future economic conditions over a reasonable
and supportable period beyond the balance sheet date. The adoption of CECL
resulted in the recognition of reserves relating to our loss sharing guarantee
provided to Fannie Mae under the DUS Program which was previously accounted for
under the incurred loss model, which generally required that a loss be incurred
before it was recognized. Additional reserves were recognized for our
receivables from customers including certain employee receivables carried at
amortized cost.

The expected credit loss is modeled based on our historical loss experience
adjusted to reflect current conditions. A significant amount of judgment is
required in the determination of the appropriate reasonable and supportable
period, the methodology used to incorporate current and future macroeconomic
conditions, determination of the probability of and exposure at default, all of
which are ultimately used in measuring the quantitative components of our
reserves. Beyond the reasonable and supportable period, we estimate expected
credit losses using our historical loss rates. We also consider whether to
adjust the quantitative reserves for certain external and internal qualitative
factors, which consequentially may increase or decrease the reserves for credit
losses and receivables. In order to estimate credit losses, assumptions about
current and future economic conditions are incorporated into the model using
multiple economic scenarios that are weighted to reflect the conditions at each
measurement date.

During the six months ended June 30, 2021, there was a decrease of $6.3 million
in our reserves. These reserves were based on macroeconomic forecasts are
critical inputs into our model and material movements in variables such as, the
U.S. unemployment rate and U.S. GDP growth rate could significantly affect our
estimated expected credit losses. These macroeconomic forecasts, under different
conditions or using different assumptions or estimates, could result in
significantly different changes in reserves for credit losses. It is difficult
to estimate how potential changes in specific factors might affect the overall
reserves for credit losses and current results may not reflect the potential
future impact of macroeconomic forecast changes.

Income Taxes
Newmark accounts for income taxes using the asset and liability method as
prescribed in U.S. GAAP guidance, Income Taxes. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to basis
differences between our accompanying unaudited condensed consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis. Certain of Newmark's entities are taxed as U.S.
partnerships and are subject to UBT in New York City. Therefore, the tax
liability or benefit related to the partnership income or loss except for UBT
rests with the partners, rather than the partnership entity. As such, the
partners' tax liability or benefit is not reflected in our accompanying
unaudited condensed consolidated financial statements. The tax-related assets,
liabilities, provisions or benefits included in our
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accompanying unaudited condensed consolidated financial statements also reflect
the results of the entities that are taxed as corporations, either in the U.S.
or in foreign jurisdictions.

Newmark provides for uncertain tax positions based upon management's assessment
of whether a tax benefit is more likely than not to be sustained upon
examination by tax authorities. Management is required to determine whether a
tax position is more likely than not to be sustained upon examination by tax
authorities, including resolution of any related appeals or litigation
processes, based on the technical merits of the position. Because significant
assumptions are used in determining whether a tax benefit is more likely than
not to be sustained upon examination by tax authorities, actual results may
differ from Newmark's estimates under different assumptions or conditions.
Newmark recognizes interest and penalties related to uncertain tax positions in
"Provision for income taxes" in our accompanying unaudited condensed
consolidated statements of operations.

A valuation allowance is recorded against deferred tax assets if it is deemed
more likely than not that those assets will not be realized. In assessing the
need for a valuation allowance, Newmark considers all available evidence,
including past operating results, the existence of cumulative losses in the most
recent fiscal years, estimates of future taxable income and the feasibility of
tax planning strategies.

The measurement of current and deferred income tax assets and liabilities is
based on provisions of enacted tax laws and involves uncertainties in the
application of tax regulations in the U.S. and other tax jurisdictions. Because
Newmark's interpretation of complex tax law may impact the measurement of
current and deferred income taxes, actual results may differ from these
estimates under different assumptions regarding the application of tax law.

Derivative Financial Instruments
We have loan commitments to extend credit to third parties. The commitments to
extend credit are for mortgage loans at a specific rate (rate lock commitments).
These commitments generally have fixed expiration dates or other termination
clauses and may require a fee. We are committed to extend credit to the
counterparty as long as there is no violation of any condition established in
the commitment contracts.

We simultaneously enter into an agreement to deliver such mortgages to third-party investors at a fixed price ("forward sale contracts").



Both the commitment to extend credit and the forward sale commitment qualify as
derivative financial instruments. We recognize all derivatives on our
accompanying unaudited condensed consolidated balance sheets as assets or
liabilities measured at fair value. The change in the derivatives fair value is
recognized in current period earnings.

Newmark entered into variable postpaid forward contracts as a result of the
Nasdaq Forwards. These contracts qualify as derivative financial instruments.
The Nasdaq Forwards provide Newmark with the ability to redeem the EPUs for
Nasdaq stock, and as these instruments are not legally detachable, they
represent single financial instruments. The financial instruments' EPU
redemption feature for Nasdaq shares is not clearly and closely related to the
economic characteristics and risks of Newmark's EPU equity host instruments,
and, therefore, it represents an embedded derivative that is required to be
bifurcated and recorded at fair value on our accompanying unaudited condensed
consolidated balance sheets, with all changes in fair value recorded as a
component of "Other income (loss), net" on our accompanying unaudited condensed
consolidated statements of operations. See Note 11 - "Derivatives", to our
accompanying unaudited condensed consolidated financial statements in Part I,
Item I of this Quarterly Report on Form 10-Q for additional information.

Recent Accounting Pronouncements
See Note 1 - "Organization and Basis of Presentation", to our accompanying
unaudited condensed consolidated financial statements in Part I, Item I of this
Quarterly Report on Form 10-Q , for information regarding recent accounting
pronouncements.

Capital Deployment Priorities, Dividend Policy and Repurchase and Redemption Program

Our near-term capital allocation priorities are to return capital to stockholders through share and unit repurchases and to invest in growth and margin expansion at attractive returns.



Traditionally, our dividend policy provides that we expect to pay a quarterly
cash dividend to our common stockholders based on our post-tax Adjusted Earnings
per fully diluted share. Please see below for a detailed definition of post-tax
Adjusted Earnings per fully diluted share. Beginning in the first quarter of
2020, and for all of the quarterly periods in 2020, the Board reduced the
quarterly dividend to $0.01 per share out of an abundance of caution in order to
strengthen the
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Company's balance sheet as the real estate markets face difficult and unprecedented macroeconomic conditions due to the COVID-19 pandemic. Additionally, during 2020, Newmark Holdings reduced its distributions to or on behalf of its partners.



Any dividends, if and when declared by our Board, will be paid on a quarterly
basis. The dividend to our common stockholders is expected to be calculated
based on post-tax Adjusted Earnings allocated to us and generated over the
fiscal quarter ending prior to the record date for the dividend. No assurance
can be made, however, that a dividend will be paid each quarter. The
declaration, payment, timing, and amount of any future dividends payable by us
will be at the sole discretion of our Board. With respect to any distributions
which are declared, amounts paid to or on behalf of partners will at least cover
their related tax payments. Whether any given post-tax amount is equivalent to
the amount received by a stockholder also on an after-tax basis depends upon
stockholders' and partners' domiciles and tax status.

We received 6,222,340 Nasdaq shares worth $1,093.9 million as of June 30, 2021.
On July 2, 2021, we settled the third and fourth Nasdaq Forwards with 944,329
Nasdaq shares worth $166.0 million. Pursuant to the 2021 Equity Event, our fully
diluted share count reduced by 16.1, million and we expect to use approximately
$528.0 million for redemption of limited partnership units and anticipated
payment of corporate taxes related to the receipt of the Nasdaq shares. Net of
these cash payments, we expect to retain approximately $400 million. In July, we
used a portion of the receipt to repay the remaining $140.0 million outstanding
on our revolving credit facility. See "Liquidity" above.

We are a holding company, with no direct operations, and therefore we are able
to pay dividends only from our available cash on hand and funds received from
distributions from Newmark OpCo. Our ability to pay dividends may also be
limited by regulatory considerations as well as by covenants contained in
financing or other agreements. In addition, under Delaware law, dividends may be
payable only out of surplus, which is our net assets minus our capital (as
defined under Delaware law), or, if we have no surplus, out of our net profits
for the fiscal year in which the dividend is declared and/or the preceding
fiscal year. Accordingly, any unanticipated accounting, tax, regulatory or other
charges against net income may adversely affect our ability to declare and pay
dividends. While we intend to declare and pay dividends quarterly, there can be
no assurance that our Board will declare dividends at all or on a regular basis
or that the amount of our dividends will not change.

Non-GAAP Financial Measures
This document contains non-GAAP financial measures that differ from the most
directly comparable measures calculated and presented in accordance with
Generally Accepted Accounting Principles in the United States ("GAAP"). Non-GAAP
financial measures used by the Company include "Adjusted Earnings before
noncontrolling interests and taxes", which is used interchangeably with "pre-tax
Adjusted Earnings"; "Post-tax Adjusted Earnings to fully diluted shareholders",
which is used interchangeably with "post-tax Adjusted Earnings"; "Adjusted
EBITDA"; and "Liquidity". The definitions of these terms are below.

Adjusted Earnings Defined
Newmark uses non-GAAP financial measures, including "Adjusted Earnings before
noncontrolling interests and taxes" and "Post-tax Adjusted Earnings to fully
diluted shareholders", which are supplemental measures of operating results used
by management to evaluate the financial performance of the Company and its
consolidated subsidiaries. Newmark believes that Adjusted Earnings best reflect
the operating earnings generated by the Company on a consolidated basis and are
the earnings which management considers when managing its business.
As compared with "Income (loss) before income taxes and noncontrolling
interests" and "Net income (loss) for fully diluted shares", both prepared in
accordance with GAAP, Adjusted Earnings calculations primarily exclude certain
non-cash items and other expenses that generally do not involve the receipt or
outlay of cash by the Company and/or which do not dilute existing stockholders.
In addition, Adjusted Earnings calculations exclude certain gains and charges
that management believes do not best reflect the ordinary results of Newmark.
Adjusted Earnings is calculated by taking the most comparable GAAP measures and
making adjustments for certain items with respect to compensation expenses,
non-compensation expenses, and other income, as discussed below.

Calculations of Compensation Adjustments for Adjusted Earnings and Adjusted
EBITDA
Treatment of Equity-Based Compensation under Adjusted Earnings and Adjusted
EBITDA
The Company's Adjusted Earnings and Adjusted EBITDA measures exclude all GAAP
charges included in the line item "Equity-based compensation and allocations of
net income to limited partnership units and FPUs" (or "equity-based
compensation" for purposes of defining the Company's non-GAAP results) as
recorded on the Company's GAAP Consolidated Statements of Operations and GAAP
Consolidated Statements of Cash Flows. These GAAP equity-based compensation
charges reflect the following items:
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•Charges with respect to grants of exchangeability, which reflect the right of
holders of limited partnership units with no capital accounts, such as LPUs and
PSUs, to exchange these units into shares of common stock, or into partnership
units with capital accounts, such as HDUs, as well as cash paid with respect to
taxes withheld or expected to be owed by the unit holder upon such exchange. The
withholding taxes related to the exchange of certain non-exchangeable units
without a capital account into either common shares or units with a capital
account may be funded by the redemption of preferred units such as PPSUs.
•Charges with respect to preferred units. Any preferred units would not be
included in the Company's fully diluted share count because they cannot be made
exchangeable into shares of common stock and are entitled only to a fixed
distribution. Preferred units are granted in connection with the grant of
certain limited partnership units that may be granted exchangeability or
redeemed in connection with the grant of shares of common stock at ratios
designed to cover any withholding taxes expected to be paid. This is an
acceptable alternative to the common practice among public companies of issuing
the gross amount of shares to employees, subject to cashless withholding of
shares, to pay applicable withholding taxes.
•GAAP equity-based compensation charges with respect to the grant of an
offsetting amount of common stock or partnership units with capital accounts in
connection with the redemption of non-exchangeable units, including PSUs and
LPUs.
•Charges related to amortization of RSUs and limited partnership units.
•Charges related to grants of equity awards, including common stock or
partnership units with capital accounts.
•Allocations of net income to limited partnership units and FPUs. Such
allocations represent the pro-rata portion of post-tax GAAP earnings available
to such unit holders.
The amount of certain quarterly equity-based compensation charges is based upon
the Company's estimate of such expected charges during the annual period, as
described further below under "Methodology for Calculating Adjusted Earnings
Taxes".
Virtually all of Newmark's key executives and producers have equity or
partnership stakes in the Company and its subsidiaries and generally receive
deferred equity or limited partnership units as part of their compensation. A
significant percentage of Newmark's fully diluted shares are owned by its
executives, partners, and employees. The Company issues limited partnership
units as well as other forms of equity-based compensation, including grants of
exchangeability into shares of common stock, to provide liquidity to its
employees, to align the interests of its employees and management with those of
common stockholders, to help motivate and retain key employees, and to encourage
a collaborative culture that drives cross-selling and growth.
All share equivalents that are part of the Company's equity-based compensation
program, including REUs, PSUs, LPUs, certain HDUs, and other units that may be
made exchangeable into common stock, as well as RSUs (which are recorded using
the treasury stock method), are included in the fully diluted share count when
issued or at the beginning of the subsequent quarter after the date of grant.
Generally, limited partnership units other than preferred units are expected to
be paid a pro-rata distribution based on Newmark's calculation of Adjusted
Earnings per fully diluted share.
Certain Other Compensation-Related Items under Adjusted Earnings and Adjusted
EBITDA
Newmark also excludes various other GAAP items that management views as not
reflective of the Company's underlying performance for the given period from its
calculation of Adjusted Earnings and Adjusted EBITDA. These may include
compensation-related items with respect to cost-saving initiatives, such as
severance charges incurred in connection with headcount reductions as part of
broad restructuring and/or cost savings plans.
The Company also excludes compensation charges related to non-cash GAAP gains
attributable to originated mortgage servicing rights (which Newmark refers to as
"OMSRs") because these gains are also excluded from Adjusted Earnings and
Adjusted EBITDA.
Excluded Compensation-Related Items to Related to the 2021 Equity Event under
Adjusted Earnings and Adjusted EBITDA (Beginning in Third Quarter 2021)
Newmark does not view the compensation charges related to 2021 Equity Event that
were not equity-based compensation as being reflective of its ongoing operations
(the "Impact of the 2021 Equity Event"). These consisted of charges relating to
cash paid to independent contractors for their withholding taxes and the cash
redemption of HDUs. These were recorded as expenses based on Newmark's current
non-GAAP results, but will be excluded in the recast non-GAAP results beginning
in the third quarter of 2021 for the following reasons:
•But for the 2021 Equity Event, the items comprising such charges would have
otherwise been settled in shares and been recorded as equity-based compensation
in future periods. Had this occurred, such amounts would have been
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excluded from Adjusted Earnings and Adjusted EBITDA, and would also have
resulted in higher fully diluted share counts, all else equal.
•Newmark views the fully diluted share count reduction to be economically
similar to the common practice among public companies of issuing the net amount
of common shares to employees for their vested stock-based compensation, selling
a portion of the gross shares pay applicable withholding taxes, and separately
making open market repurchases of common shares.
•There was nothing comparable to the 2021 Equity Event in 2020 and nothing
similar is currently contemplated after 2021.
Calculation of Non-Compensation Expense Adjustments for Adjusted Earnings
Newmark's calculation of pre-tax Adjusted Earnings excludes non-cash GAAP
charges related to the following:
•Amortization of intangibles with respect to acquisitions.
•Amortization of mortgage servicing rights (which Newmark refers to as "MSRs").
Under GAAP, the Company recognizes OMSRs equal to the fair value of servicing
rights retained on mortgage loans originated and sold. Subsequent to the initial
recognition at fair value, MSRs are carried at the lower of amortized cost or
fair value and amortized in proportion to the net servicing revenue expected to
be earned. However, it is expected that any cash received with respect to these
servicing rights, net of associated expenses, will increase Adjusted Earnings
and Adjusted EBITDA in future periods.
•Various other GAAP items that management views as not reflective of the
Company's underlying performance for the given period, including
non-compensation-related charges incurred as part of broad restructuring and/or
cost savings plans. Such GAAP items may include charges for exiting leases
and/or other long-term contracts as part of cost-saving initiatives, as well as
non-cash impairment charges related to assets, goodwill and/or intangibles
created from acquisitions.
Non-Cash Adjustment for Originated Mortgage Servicing Rights Revenue for
Adjusted Earnings
Newmark's calculation of pre-tax Adjusted Earnings excludes non-cash GAAP gains
attributable to OMSRs. Beginning in the fourth quarter of 2020, OMSRs are no
longer included in non-compensation adjustments for Adjusted Earnings but
instead shown as a separate line item in the Company's "Reconciliation of GAAP
Net Income Available to Common Stockholders to Adjusted Earnings Before
Noncontrolling Interests and Taxes and GAAP Fully Diluted EPS to Post-Tax
Adjusted EPS". This presentation has no impact on previously reported Adjusted
Earnings.
Calculation of Other (income) losses for Adjusted Earnings and Adjusted EBITDA
Adjusted Earnings calculations also exclude certain other non-cash,
non-dilutive, and/or non-economic items, which may, in some periods, include:
•Unusual, one-time, non-ordinary or non-recurring gains or losses.
•Non-cash GAAP asset impairment charges.
•The impact of any unrealized non-cash mark-to-market gains or losses on "Other
income (loss)" related to the variable share forward agreements with respect to
Newmark's expected receipt of the Nasdaq payments in 2021 and 2022 and the
recently settled 2020 Nasdaq payment (the "Nasdaq Forwards").
•Mark-to-market adjustments for non-marketable investments.
•Certain other non-cash, non-dilutive, and/or non-economic items.
Due to the recent sale of Nasdaq's U.S. fixed income business, the Nasdaq
Earn-out and related Forward settlements were accelerated, less certain
previously disclosed adjustments. Because these shares were originally expected
to be received over a 15 year period ending in 2027, the Earn-out has been
included in calculations of Adjusted Earnings and Adjusted EBITDA. Due to the
acceleration of the Earn-out and the Nasdaq Forwards, the Company now views
results excluding items related to the Earn-out to be a better reflection of the
underlying performance of Newmark's ongoing operations. Therefore, beginning
with the third quarter of 2021, "Other (income) loss" for Adjusted Earnings and
Adjusted EBITDA will also exclude the impact of the below items, which may
collectively be referred to as the "Impact of Nasdaq".
•Realized gains related to the accelerated receipt on June 25, 2021 of Nasdaq
shares.
•Realized gains or losses and unrealized mark-to-market gains or losses with
respect to Nasdaq shares received prior to the Earn-out acceleration.
•Dividend income on Nasdaq shares.
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•The impact of any unrealized non-cash mark-to-market gains or losses on "Other
income (loss)" related to the variable share forward agreements with respect to
Newmark's expected receipt of the Nasdaq payments in 2021 and 2022 and the
recently settled 2020 Nasdaq payment (the "Nasdaq Forwards"). This item was
historically excluded under the previous non-GAAP definitions.
•Other items related to the Earn-out.
Methodology for Calculating Adjusted Earnings Taxes
Although Adjusted Earnings are calculated on a pre-tax basis, Newmark also
reports post-tax Adjusted Earnings to fully diluted shareholders. The Company
defines post-tax Adjusted Earnings to fully diluted shareholders as pre-tax
Adjusted Earnings reduced by the non-GAAP tax provision described below and net
income (loss) attributable to noncontrolling interest for Adjusted Earnings.
The Company calculates its tax provision for post-tax Adjusted Earnings using an
annual estimate similar to how it accounts for its income tax provision under
GAAP. To calculate the quarterly tax provision under GAAP, Newmark estimates its
full fiscal year GAAP income before noncontrolling interests and taxes and the
expected inclusions and deductions for income tax purposes, including expected
equity-based compensation during the annual period. The resulting annualized tax
rate is applied to Newmark's quarterly GAAP income before income taxes and
noncontrolling interests. At the end of the annual period, the Company updates
its estimate to reflect the actual tax amounts owed for the period.
To determine the non-GAAP tax provision, Newmark first adjusts pre-tax Adjusted
Earnings by recognizing any, and only, amounts for which a tax deduction applies
under applicable law. The amounts include charges with respect to equity-based
compensation; certain charges related to employee loan forgiveness; certain net
operating loss carryforwards when taken for statutory purposes; and certain
charges related to tax goodwill amortization. These adjustments may also reflect
timing and measurement differences, including treatment of employee loans;
changes in the value of units between the dates of grants of exchangeability and
the date of actual unit exchange; variations in the value of certain deferred
tax assets; and liabilities and the different timing of permitted deductions for
tax under GAAP and statutory tax requirements.
After application of these adjustments, the result is the Company's taxable
income for its pre-tax Adjusted Earnings, to which Newmark then applies the
statutory tax rates to determine its non-GAAP tax provision. Newmark views the
effective tax rate on pre-tax Adjusted Earnings as equal to the amount of its
non-GAAP tax provision divided by the amount of pre-tax Adjusted Earnings.
Generally, the most significant factor affecting this non-GAAP tax provision is
the amount of charges relating to equity-based compensation. Because the charges
relating to equity-based compensation are deductible in accordance with
applicable tax laws, increases in such charges have the effect of lowering the
Company's non-GAAP effective tax rate and thereby increasing its post-tax
Adjusted Earnings.
Newmark incurs income tax expenses based on the location, legal structure, and
jurisdictional taxing authorities of each of its subsidiaries. Certain of the
Company's entities are taxed as U.S. partnerships and are subject to the
Unincorporated Business Tax ("UBT") in New York City. Any U.S. federal and state
income tax liability or benefit related to the partnership income or loss, with
the exception of UBT, rests with the unit holders rather than with the
partnership entity. The Company's consolidated financial statements include U.S.
federal, state, and local income taxes on the Company's allocable share of the
U.S. results of operations. Outside of the U.S., Newmark is expected to operate
principally through subsidiary corporations subject to local income taxes. For
these reasons, taxes for Adjusted Earnings are expected to be presented to show
the tax provision the consolidated Company would expect to pay if 100% of
earnings were taxed at global corporate rates.
Calculations of Pre- and Post-Tax Adjusted Earnings per Share
Newmark's pre-tax Adjusted Earnings and post-tax Adjusted Earnings per share
calculations assume either that:
•The fully diluted share count includes the shares related to any dilutive
instruments, but excludes the associated expense, net of tax, when the impact
would be dilutive; or
•The fully diluted share count excludes the shares related to these instruments,
but includes the associated expense, net of tax.
The share count for Adjusted Earnings excludes certain shares and share
equivalents expected to be issued in future periods but not yet eligible to
receive dividends and/or distributions. Each quarter, the dividend payable to
Newmark's stockholders, if any, is expected to be determined by the Company's
Board of Directors with reference to a number of factors, including post-tax
Adjusted Earnings per share. Newmark may also pay a pro-rata distribution of net
income to limited partnership units, as well as to Cantor for its noncontrolling
interest. The amount of this net income, and therefore of these payments per
unit, would be determined using the above definition of Adjusted Earnings per
share on a pre-tax basis.
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The declaration, payment, timing, and amount of any future dividends payable by
the Company will be at the discretion of its Board of Directors using the fully
diluted share count. In addition, the non-cash preferred dividends are excluded
from Adjusted Earnings per share as Newmark expected to redeem the related
exchangeable preferred limited partnership units ("EPUs") with Nasdaq shares.
For more information on any share count adjustments, see the table in the
Company's most recent financial results press release titled "Fully Diluted
Weighted-Average Share Count for GAAP and Adjusted Earnings."
Management Rationale for Using Adjusted Earnings
Newmark's calculation of Adjusted Earnings excludes the items discussed above
because they are either non-cash in nature, because the anticipated benefits
from the expenditures are not expected to be fully realized until future
periods, or because the Company views results excluding these items as a better
reflection of the underlying performance of Newmark's ongoing operations.
Management uses Adjusted Earnings in part to help it evaluate, among other
things, the overall performance of the Company's business, to make decisions
with respect to the Company's operations, and to determine the amount of
dividends payable to common stockholders and distributions payable to holders of
limited partnership units. Dividends payable to common stockholders and
distributions payable to holders of limited partnership units are included
within "Distributions to stockholders" and "Earnings distributions to limited
partnership interests and noncontrolling interests," respectively, in our
unaudited, condensed, consolidated statements of cash flows.
The term "Adjusted Earnings" should not be considered in isolation or as an
alternative to GAAP net income (loss). The Company views Adjusted Earnings as a
metric that is not indicative of liquidity, or the cash available to fund its
operations, but rather as a performance measure. Pre- and post-tax Adjusted
Earnings, as well as related measures, are not intended to replace the Company's
presentation of its GAAP financial results. However, management believes that
these measures help provide investors with a clearer understanding of Newmark's
financial performance and offer useful information to both management and
investors regarding certain financial and business trends related to the
Company's financial condition and results of operations. Management believes
that the GAAP and Adjusted Earnings measures of financial performance should be
considered together.
For more information regarding Adjusted Earnings, see the section the Company's
most recent financial results press release titled "Reconciliation of GAAP
Income to Adjusted Earnings and GAAP Fully Diluted EPS to Post-tax Adjusted
EPS", including the related footnotes, for details about how Newmark's non-GAAP
results are reconciled to those under GAAP.
Adjusted EBITDA Defined
Newmark also provides an additional non-GAAP financial performance measure,
"Adjusted EBITDA", which it defines as GAAP "Net income (loss) available to
common stockholders", adjusted for the following items:
•Net income (loss) attributable to noncontrolling interest.
•Provision (benefit) for income taxes.
•OMSR revenue.
•MSR amortization.
•Compensation charges related to OMSRs.
•Other depreciation and amortization.
•Equity-based compensation and allocations of net income to limited partnership
units and FPUs.
•Various other GAAP items that management views as not reflective of the
Company's underlying performance for the given period. These may include
compensation-related items with respect to cost-saving initiatives, such as
severance charges incurred in connection with headcount reductions as part of
broad restructuring and/or cost savings plans; charges for exiting leases and/or
other long-term contracts as part of cost-saving initiatives; and non-cash
impairment charges related to assets, goodwill and/or intangibles created from
acquisitions.
•Other non-cash, non-dilutive, and/or non-economic items, which may, in certain
periods, include the impact of any unrealized non-cash mark-to-market gains or
losses on "other income (loss)" related to the variable share forward agreements
with respect to Newmark's expected receipt of the Nasdaq payments in 2021 and
2022 and the recently settled 2020 Nasdaq payment (the "Nasdaq Forwards"), as
well as mark-to-market adjustments for non-marketable investments.
•Interest expense.
Beginning with the third quarter of 2021, calculation of Adjusted EBITDA will
also exclude the "Impact of Nasdaq" and the "Impact of the 2021 Equity Event",
which are defined above.
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Newmark's calculation of Adjusted EBITDA excludes certain items discussed above
because they are either non-cash in nature, because the anticipated benefits
from the expenditures are not expected to be fully realized until future
periods, or because the Company views excluding these items as a better
reflection of the underlying performance Newmark's ongoing operations. The
Company's management believes that its Adjusted EBITDA measure is useful in
evaluating Newmark's operating performance, because the calculation of this
measure generally eliminates the effects of financing and income taxes and the
accounting effects of capital spending and acquisitions, which would include
impairment charges of goodwill and intangibles created from acquisitions. Such
items may vary for different companies for reasons unrelated to overall
operating performance. As a result, the Company's management uses this measure
to evaluate operating performance and for other discretionary purposes. Newmark
believes that Adjusted EBITDA is useful to investors to assist them in getting a
more complete picture of the Company's financial results and operations.
Since Newmark's Adjusted EBITDA is not a recognized measurement under GAAP,
investors should use this measure in addition to GAAP measures of net income
when analyzing Newmark's operating performance. Because not all companies use
identical EBITDA calculations, the Company's presentation of Adjusted EBITDA may
not be comparable to similarly titled measures of other companies. Furthermore,
Adjusted EBITDA is not intended to be a measure of free cash flow or GAAP cash
flow from operations because the Company's Adjusted EBITDA does not consider
certain cash requirements, such as tax and debt service payments.
For more information regarding Adjusted EBITDA, see the section of the Company's
most recent financial results press release titled "Reconciliation of GAAP
Income to Adjusted EBITDA", including the related footnotes, for details about
how Newmark's non-GAAP results are reconciled to those under GAAP EPS.
Timing of Outlook for Certain GAAP and Non-GAAP Items
Newmark anticipates providing forward-looking guidance for GAAP revenues and for
certain non-GAAP measures from time to time. However, the Company does not
anticipate providing an outlook for other GAAP results. This is because certain
GAAP items, which are excluded from Adjusted Earnings and/or Adjusted EBITDA,
are difficult to forecast with precision before the end of each period. The
Company therefore believes that it is not possible for it to have the required
information necessary to forecast GAAP results or to quantitatively reconcile
GAAP forecasts to non-GAAP forecasts with sufficient precision without
unreasonable efforts. For the same reasons, the Company is unable to address the
probable significance of the unavailable information. The relevant items that
are difficult to predict on a quarterly and/or annual basis with precision and
may materially impact the Company's GAAP results include, but are not limited,
to the following:
•Certain equity-based compensation charges that may be determined at the
discretion of management throughout and up to the period-end.
•Unusual, one-time, non-ordinary, or non-recurring items.
•The impact of gains or losses on certain marketable securities, as well as any
gains or losses related to associated mark-to- market movements and/or hedging.
These items are calculated using period-end closing prices.
•Non-cash asset impairment charges, which are calculated and analyzed based on
the period-end values of the underlying assets. These amounts may not be known
until after period-end.
•Acquisitions, dispositions, and/or resolutions of litigation, which are fluid
and unpredictable in nature.
Liquidity Defined
Newmark may also use a non-GAAP measure called "liquidity". The Company
considers liquidity to be comprised of the sum of cash and cash equivalents,
marketable securities, and reverse repurchase agreements (if any), less
securities lent out in securities loaned transactions and repurchase agreements.
The Company considers liquidity to be an important metric for determining the
amount of cash that is available or that could be readily available to the
Company on short notice.

For more information regarding liquidity, see the section of the Company's most
recent financial results press release titled "Liquidity Analysis", including
any related footnotes, for details about how Newmark's non-GAAP results are
reconciled to those under GAAP.


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OUR ORGANIZATIONAL STRUCTURE



Current Organizational Structure
As of June 30, 2021, there were 189,765,883 shares of Newmark Class A common
stock issued and 179,736,458 outstanding. Cantor and CFGM held no shares of
Newmark Class A common stock. Each share of Newmark Class A common stock is
generally entitled to one vote on matters submitted to a vote of our
stockholders. As of June 30, 2021, Cantor and CFGM held 21,285,533 shares of
Newmark Class B common stock representing all of the outstanding shares of
Newmark Class B common stock. The shares of Newmark Class B common stock held by
Cantor and CFGM as of June 30, 2021, represented approximately 54.2% of our
total voting power. Each share of Newmark Class B common stock is generally
entitled to the same rights as a share of Newmark Class A common stock, except
that, on matters submitted to a vote of our stockholders, each share of Newmark
Class B common stock is entitled to 10 votes. The Newmark Class B common stock
generally votes together with the Newmark Class A common stock on all matters
submitted to a vote of our stockholders. We expect to retain our dual class
structure, and there are no circumstances under which the holders of Newmark
Class B common stock would be required to convert their shares of Newmark Class
B common stock into shares of Newmark Class A common stock. Our amended and
restated certificate of incorporation referred to herein as our certificate of
incorporation does not provide for automatic conversion of shares of Newmark
Class B common stock into shares of Newmark Class A common stock upon the
occurrence of any event.

We hold the Newmark Holdings general partnership interest and the Newmark
Holdings special voting limited partnership interest, which entitle us to remove
and appoint the general partner of Newmark Holdings and serve as the general
partner of Newmark Holdings, which entitles us to control Newmark Holdings.
Newmark Holdings, in turn, holds the Newmark OpCo general partnership interest
and the Newmark OpCo special voting limited partnership interest, which entitle
Newmark Holdings to remove and appoint the general partner of Newmark OpCo, and
serve as the general partner of Newmark OpCo, which entitles Newmark Holdings
(and thereby us) to control Newmark OpCo. In addition, as of June 30, 2021, we
directly held Newmark OpCo limited partnership interests consisting of
approximately 51,257,651 units representing approximately 79.8% of the
outstanding Newmark OpCo limited partnership interests (not including EPUs). We
are a holding company that holds these interests, serves as the general partner
of Newmark Holdings and, through Newmark Holdings, acts as the general partner
of Newmark OpCo. As a result of our ownership of the general partnership
interest in Newmark Holdings and Newmark Holdings' general partnership interest
in Newmark OpCo, we consolidate Newmark OpCo's results for financial reporting
purposes.

Cantor, founding partners, working partners and limited partnership unit holders
directly hold Newmark Holdings limited partnership interests. Newmark Holdings,
in turn, holds Newmark OpCo limited partnership interests and, as a result,
Cantor, founding partners, working partners and limited partnership unit holders
indirectly have interests in Newmark OpCo limited partnership interests.

The Newmark Holdings limited partnership interests held by Cantor and CFGM are
designated as Newmark Holdings exchangeable limited partnership interests. The
Newmark Holdings limited partnership interests held by the founding partners are
designated as Newmark Holdings founding partner interests. The Newmark Holdings
limited partnership interests held by the working partners are designated as
Newmark Holdings working partner interests. The Newmark Holdings limited
partnership interests held by the limited partnership unit holders are
designated as limited partnership units.

Each unit of Newmark Holdings limited partnership interests held by Cantor and
CFGM is generally exchangeable with us for a number of shares of Class B common
stock (or, at Cantor's option or if there are no additional authorized but
unissued shares of Class B common stock, a number of shares of Class A common
stock) equal to the exchange ratio.

As of June 30, 2021, 4,598,029 founding/working partner interests were
outstanding. These founding/working partners were issued in the Separation to
holders of BGC Holdings founding/working partner interests, who received such
founding/working partner interests in connection with BGC Partners' acquisition
of the BGC Partners business from Cantor in 2008. The Newmark Holdings limited
partnership interests held by founding/working partners are not exchangeable
with us unless (1) Cantor acquires Cantor units from Newmark Holdings upon
termination or bankruptcy of the founding/working partners or redemption of
their units by Newmark Holdings (which it has the right to do under certain
circumstances), in which case such interests will be exchangeable with us for
shares of Newmark Class A common stock or Newmark Class B common stock as
described above, or (2) Cantor determines that such interests can be exchanged
by such founding/working partners with us for Newmark Class A common stock, with
each Newmark Holdings unit exchangeable for a number of shares of Newmark Class
A common stock equal to the exchange ratio (which was initially one, but is
subject to adjustment as set forth in the Separation and Distribution
Agreement), on terms and conditions to be determined by Cantor (which exchange
of certain interests Cantor expects to permit from time to time). Cantor has
provided that certain founding/working partner interests are exchangeable with
us for Class A common stock, with each Newmark Holdings unit exchangeable for a
number of shares of Newmark Class A common stock equal to the exchange ratio
(which was initially one, but is subject to adjustment as set forth in the
Separation
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and Distribution Agreement), in accordance with the terms of the Newmark
Holdings limited partnership agreement. Once a Newmark Holdings founding/working
partner interest becomes exchangeable, such founding/working partner interest is
automatically exchanged upon a termination or bankruptcy with us for Newmark
Class A common stock.

Further, we provide exchangeability for partnership units under other
circumstances in connection with (1) our partnership redemption, compensation
and restructuring programs, (2) other incentive compensation arrangements and
(3) business combination transactions.

As of June 30, 2021, 25,997,674 limited partnership units were outstanding
(including founding/working partner interests and working partner interests, and
units held by Cantor). Limited partnership units will be only exchangeable with
us in accordance with the terms and conditions of the grant of such units, which
terms and conditions are determined in our sole discretion, as the Newmark
Holdings general partner, with the consent of the Newmark Holdings exchangeable
limited partnership interest majority in interest, in accordance with the terms
of the Newmark Holdings limited partnership agreement.

The exchange ratio between Newmark Holdings limited partnership interests and
our common stock was initially one. However, this exchange ratio will be
adjusted in accordance with the terms of the Separation and Distribution
Agreement if our dividend policy and the distribution policy of Newmark Holdings
are different. As of June 30, 2021, the exchange ratio was 0.9403.

With each exchange, our direct and indirect interest in Newmark OpCo will
proportionately increase because, immediately following an exchange, Newmark
Holdings will redeem the Newmark Holdings unit so acquired for the Newmark OpCo
limited partnership interest underlying such Newmark Holdings unit.

The profit and loss of Newmark OpCo and Newmark Holdings, as the case may be,
are allocated based on the total number of Newmark OpCo units (not including
EPUs) and Newmark Holdings units, as the case may be, outstanding.

The following diagram illustrates the ownership structure of Newmark as of June
30, 2021. The diagram does not reflect the various subsidiaries of Newmark,
Newmark OpCo or Cantor (including certain operating subsidiaries that are
organized as corporations whose equity is either wholly-owned by Newmark or
whose equity is majority-owned by Newmark with the remainder owned by Newmark
OpCo) or the results of any exchange of Newmark Holdings exchangeable limited
partnership interests or, to the extent applicable, Newmark Holdings founding
partner interests, Newmark Holdings working partner interests or Newmark
Holdings limited partnership units. In addition, the diagram does not reflect
the Newmark OpCo exchangeable preferred limited partnership units, or EPUs,
since they are not allocated any gains or losses of Newmark OpCo for tax
purposes and are not entitled to regular distributions from Newmark OpCo.

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                    STRUCTURE OF NEWMARK AS OF JUNE 30, 2021
                    [[Image Removed: nmrk-20210630_g1.jpg]]
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Shares of Newmark Class B common stock are convertible into shares
of Newmark Class A common stock at any time in the discretion of the holder on a
one-for-one basis. Accordingly, if Cantor and CFGM converted all of their shares
of Newmark Class B common stock into shares of Newmark Class A common stock,
Cantor and CFGM would hold 88.5% of the voting power in Newmark and the
stockholders of Newmark other than Cantor and CFGM would hold 11.5% of the
voting power in Newmark (and the indirect economic interests in Newmark OpCo
would remain unchanged). In addition, if Cantor and CFGM continued to
hold shares of Newmark Class B common stock and if Cantor exchanged all of the
exchangeable limited partnership units held by Cantor for shares of
Newmark Class B common stock, Cantor and CFGM would hold 74.0% of the voting
power in Newmark, and the stockholders of Newmark other than Cantor and CFGM
would hold 26.0% of the voting power in Newmark.

The diagram reflects Newmark Class A common stock and Newmark Holdings
partnership unit activity from January 1, 2021 through June 30, 2021 as follows:
(a) an aggregate of 2,797,270 limited partnership units granted by Newmark
Holdings; (b) 4,492,341 shares of Newmark Class A common stock repurchased by
us; (c) 38,856 shares of Newmark Class A common stock forfeited; (d)
1,243,608 shares of Newmark Class A common stock issued for vested restricted
stock units; (e) 369,488 shares of Class A common stock issued by us under our
acquisition shelf Registration Statement on Form S-4 (Registration
No. 333-231616), but not the 19,004,007 of such shares remaining available for
issuance by us under such Registration Statement; (h) 77,233 terminated limited
partnership units; (i) 18,137,416 shares of Newmark Class A common stock issued
in exchange for 34,152,232 limited partnership units in relation to the Nasdaq
transaction, and (j) 167,894 purchased limited partnership units.

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