RYAN SPECIALTY HOLDINGS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

The following discussion and analysis summarizes the significant factors
affecting the consolidated operating results, financial condition, liquidity,
and cash flows of the Company as of and for the periods presented below. The
following discussion and analysis should be read in conjunction with our
Consolidated Financial Statements and the related notes included elsewhere in
this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K for the
year ended December 31, 2021 which was filed with the SEC on March 16, 2022. The
discussion contains forward-looking statements that are based on the beliefs of
management, as well as assumptions made by, and information currently available
to, our management. Actual results could differ materially from those discussed
in or implied by forward-looking statements as a result of various factors,
including those discussed below and in our Annual Report on Form 10-K,
particularly in the sections entitled "Risk Factors" and "Information Concerning
Forward-Looking Statements."

The following discussion provides commentary on the financial results derived
from our unaudited financial statements for the three and nine months ended
September 30, 2022 and 2021 prepared in accordance with U.S. GAAP. In addition,
we regularly review the following Non-GAAP measures when assessing performance:
Organic revenue growth rate, Adjusted compensation and benefits expense,
Adjusted compensation and benefits expense ratio, Adjusted general and
administrative expense, Adjusted general and administrative expense ratio,
Adjusted EBITDAC, Adjusted EBITDAC margin, Adjusted net income, Adjusted net
income margin and Adjusted diluted earnings per share. See "Non-GAAP Financial
Measures and Key Performance Indicators" for further information.

                                    Overview

Founded by Patrick G. Ryan in 2010, we are a service provider of specialty
products and solutions for insurance brokers, agents, and carriers. We provide
distribution, underwriting, product development, administration, and risk
management services by acting as a wholesale broker and a managing underwriter
or a program administrator with delegated authority from insurance carriers. Our
mission is to provide industry-leading innovative specialty insurance solutions
for insurance brokers, agents, and carriers.

For retail insurance agents and brokers, we assist in the placement of complex
or otherwise hard-to-place risks. For insurance carriers, we work with retail
and wholesale insurance brokers to source, onboard, underwrite, and service
these same types of risks. A significant majority of the premiums we place are
bound in the E&S market, which includes Lloyd's of London. There is often
significantly more flexibility in terms, conditions, and rates in the E&S market
relative to the Admitted or "standard" insurance market. We believe that the
additional freedom to craft bespoke terms and conditions in the E&S market
allows us to best meet the needs of our trading partners, provide unique
solutions, and drive innovation. We believe our success has been achieved by
providing best-in-class intellectual capital, leveraging our trusted and
long-standing relationships, and developing differentiated solutions at a scale
unmatched by many of our competitors.

                      Significant Events and Transactions

Corporate Structure

We are a holding company and our sole material asset is a controlling equity
interest in New LLC, which is also a holding company and its sole material asset
is a controlling equity interest in the LLC. The Company operates and controls
the business and affairs of, and consolidates the financial results of, the LLC
through New LLC. We conduct our business through the LLC. As the LLC is
substantively the same as New LLC, for the purpose of this discussion, we will
refer to both New LLC and the LLC as the "LLC."

The LLC is a limited liability company taxed as a partnership for income tax
purposes, and its taxable income or loss is passed through to its members,
including the Company. The LLC is subject to income taxes on its taxable income
in certain foreign countries, in certain state and local jurisdictions that
impose income taxes on partnerships, and on the taxable income of its U.S.
corporate subsidiaries. As a result of our ownership of LLC Common Units, we are
subject to U.S. federal, state, and local income taxes with respect to our
allocable share of any taxable income of the LLC and are taxed at the prevailing
corporate tax rates. We intend to cause the LLC to make distributions in an
amount sufficient to allow us to pay our tax obligations and operating expenses,
including distributions to fund any ordinary course payments due under the Tax
Receivable Agreement. See "Liquidity and Capital Resources - Tax Receivable
Agreement" for additional information about the TRA.

COVID-19

While the COVID-19 pandemic, which was first recognized as a pandemic by the
World Health Organization on March 11, 2020, has had a significant detrimental
effect on numerous segments of the global economy, and we were forced to
transition to a largely remote work environment during its peak, it provided
opportunities for many aspects of our Wholesale Brokerage, Binding Authority,
and Underwriting Management Specialties. We believe the pandemic resulted in an
increased flow of submissions into the E&S market and a further hardening of E&S
insurance rates (which had already been happening since 2019), thereby yielding
higher premiums.

                                       35
--------------------------------------------------------------------------------

While we believe our business and operations have thus far performed at a high
level of efficiency throughout the pandemic, the final impact of the pandemic
remains uncertain, particularly if the pandemic persists beyond current
expectations, new variants of the virus continue to develop, vaccines and
boosters are either not widely embraced or prove to be less effective than
anticipated and/or the global economy does not recover as expected, especially
in light of current inflationary trends and other challenging macroeconomic
conditions. The effects could yet have a material impact on our results of
operations. See "Risk Factors-Risks Related to Our Business and Industry" in our
Annual Report on Form 10-K for a discussion of the risks related to the COVID-19
pandemic or other similar health epidemics.

                     Key Factors Affecting Our Performance

Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to:

Pursue Strategic Acquisitions

We have successfully integrated businesses complementary to our own to increase
both our distribution reach and our product and service capabilities. We
continuously evaluate acquisitions and intend to further pursue targeted
acquisitions that complement our product and service capabilities or provide us
access to new markets. We have previously made, and intend to continue to make,
acquisitions with the objective of enhancing our human capital and product and
service capabilities, entering natural adjacencies, and expanding our geographic
footprint. Our ability to successfully pursue strategic acquisitions is
dependent upon a number of factors, including sustained execution of a
disciplined and selective acquisition strategy which requires acquisition
targets to have a cultural and strategic fit, competition for these assets,
purchase price multiples that we deem appropriate and our ability to effectively
integrate targeted companies or assets and grow our business. We do not have
agreements or commitments for any material acquisitions at this time.

Deepen and Broaden our Relationships with Retail Broker Trading Partners

We have deep engagement with our retail broker trading partners and we believe
we have the ability to transact in even greater volume with nearly all of them.
For example, in 2021, our revenue derived from the Top 100 firms (as ranked by
Business Insurance) expanded faster than our Organic revenue growth rate of
22.4%. Our ability to deepen and broaden relationships with our retail broker
trading partners and increase sales is dependent upon a number of factors,
including client satisfaction with our distribution reach and our product
capabilities, retail brokers continuing to require or desire our services,
competition, pricing, economic conditions, and spending on our product
offerings.

Build our National Binding Authority Business

We believe there is substantial opportunity to continue to grow our Binding
Authority Specialty, as we believe that both M&A consolidation and panel
consolidation are in nascent stages in the binding authority market. Our ability
to grow our Binding Authority Specialty is dependent upon a number of factors,
including the quality of our services and product offerings, marketing and sales
efforts to drive new business prospects and execution, new product offerings,
the pricing and quality of our competitors' offerings, and the growth in demand
of the insurance products.

Invest in Operation and Growth

We have invested heavily in building a durable business that is able to adapt to
the continuously evolving E&S market and intend to continue to do so. We are
focused on enhancing the breadth of our product and service offerings as well as
developing and launching new solutions to address the evolving needs of the
specialty insurance industry and markets. Our future success is dependent on our
ability to successfully develop, market, and sell existing and new products and
services to both new and existing trading partners.

Generate Commission Regardless of the State of the Specialty Insurance Market

We earn commissions, which are calculated as a percentage of the total insurance
policy premium, and fees. Changes in the insurance market or specialty lines
that are our focus, characterized by a period of increasing (or declining)
premium rates, could positively (or negatively) impact our profitability.

Managing Changing Macroeconomic Conditions

Growth in certain lines of business, such as project-based construction and M&A
transactional liability insurance, is partially dependent on a variety of
macroeconomic factors inasmuch as binding the underlying insurance coverage is
subject to the underlying activity occurring. In periods of economic growth and
liquid credit markets, this underlying activity can accelerate and provide
tailwinds to our growth. In periods of economic decline and tight credit
markets, this underlying activity can slow or be delayed and provide headwinds
to our growth. As interest rates have rapidly risen, leading to friction in debt
markets, we have started to observe

                                       36
--------------------------------------------------------------------------------

some delays to both construction projects and M&A activity which, in turn,
pauses the binding of construction and M&A transactional liability insurance
policies. We believe over time these lines of business will continue to grow as
the economy steadies and again grows.

Leverage the Growth of the E&S Market

The growing relevance of the E&S market has been driven by the rapid emergence
of large, complex, high-hazard, and otherwise hard-to-place risks across many
lines of insurance. This trend continued with 21 named storms during the 2021
Atlantic hurricane season producing estimated damages of more than $70 billion,
hurricane Ian in 2022, expected to be one of Florida's costliest storms, over
7.8 million acres burned in 2021 through wildfires in the United States,
escalating jury verdicts and social inflation, a proliferation of cyber threats,
novel health risks, and the transformation of the economy to a "digital first"
mode of doing business. We believe that as the complexity of the E&S market
continues to escalate, wholesale brokers and managing underwriters that do not
have sufficient scale, or the financial and intellectual capital to invest in
the required specialty capabilities, will struggle to compete effectively. This
will further the trend of market share consolidation among the wholesale firms
with these capabilities. We will continue to invest in our intellectual capital
to innovate and offer custom solutions and products to better address these
evolving market fundamentals.

Although we believe this growth will continue, we recognize that the growth of
the E&S market might not be linear as risks can and do shift between the E&S and
non-E&S markets as market factors change and evolve. For example, we benefited
from a rapid increase in both the rate and flow of public company D&O policies
into the wholesale channel in 2020 and 2021. Throughout 2022 as the public
company D&O insurance markets stabilized, IPO markets have slowed, and new
insurance capital that previously entered the market has impacted the public
company D&O space, public company D&O rate decreases have accelerated. We
believe these factors have also created opportunities for retailers to place
some of that coverage directly.

Address Costs of Being a Public Company

As we are in the early stages of our operation as a public company, we will
continue to implement changes in certain aspects of our business and develop,
manage and train management level and other employees to comply with ongoing
best practices or requirements for public companies. We have incurred new
expenses as a public company, including public reporting obligations, expenses
for complying with securities laws and regulations, SOX compliance expenses,
additional headcount, increased professional fees for accounting, proxy
statements, stockholder meetings, stock exchange fees, transfer agent fees, SEC
and FINRA filing fees, legal fees, franchise taxes and insurance expenses.

                                       37
--------------------------------------------------------------------------------

                  Summary of Financial Performance Highlights

                       Three Months Ended
                          September 30,                     Change                  Nine Months Ended September 30,                 Change

(in thousands,
except
percentages and
per share data)       2022             2021             $             %               2022                   2021               $             %
GAAP financial
measures
Total revenue      $  411,996       $  352,766      $  59,230          16.8 %   $      1,290,178       $      1,054,236     $ 235,942          22.4 %
Compensation and
benefits              274,108          286,538        (12,430 )        (4.3 )            858,439                737,825       120,614          16.3
General and
administrative         48,991           38,754         10,237          26.4              139,851                 96,984        42,867          44.2
Total operating
expenses              350,652          353,496         (2,844 )        (0.8 )          1,079,919                922,861       157,058          17.0
Operating income
(loss)                 61,344             (730 )       62,074           n/m              210,259                131,375        78,884          60.0
Net income
(loss)                 29,279          (32,590 )       61,869           n/m              117,475                 27,016        90,459           n/m
Net income
(loss)
attributable to
Ryan Specialty
Holdings, Inc.         11,745           (1,334 )       13,079           n/m               43,157                 55,822       (12,665 )       (22.7 )
Compensation and
benefits expense
ratio (1)                66.5 %           81.2 %                                            66.5 %                 70.0 %
General and
administrative
expense ratio
(2)                      11.9 %           11.0 %                                            10.8 %                  9.2 %
Net income
(loss) margin             7.1 %           (9.2 )%                                            9.1 %                  2.6 %
Earnings (loss)
per share (3)      $     0.11       $    (0.16 )                                $           0.40       $          (0.16 )
Diluted earnings
(loss) per share
(3)                $     0.09       $    (0.16 )                                $           0.37       $          (0.16 )
Non-GAAP
financial
measures*
Organic revenue
growth rate              13.7 %           28.9 %                                            18.7 %                 25.6 %
Adjusted
compensation and
benefits expense   $  247,095       $  212,590      $  34,505          16.2 %   $        769,253       $        625,452     $ 143,801          23.0 %
Adjusted
compensation and
benefits expense
ratio                    60.0 %           60.3 %                                            59.6 %                 59.3 %
Adjusted general
and
administrative
expense            $   48,084       $   35,153      $  12,931          36.8 %   $        130,774       $         88,870     $  41,904          47.2 %
Adjusted general
and
administrative
expense ratio            11.7 %           10.0 %                                            10.1 %                  8.4 %
Adjusted EBITDAC   $  116,817       $  105,023      $  11,794          11.2 %   $        390,151       $        339,914     $  50,237          14.8 %
Adjusted EBITDAC
margin                   28.4 %           29.8 %                                            30.2 %                 32.2 %
Adjusted net
income             $   66,560       $   62,949      $   3,611           5.7 

% $ 237,774 $ 209,739 $ 28,035 13.4 % Adjusted net income margin

            16.2 %           17.8 %                                            18.4 %                 19.9 %
Adjusted diluted
earnings per
share              $     0.25       $     0.24                                  $           0.88       $           0.78




* For a definition and a reconciliation of Organic revenue growth rate, Adjusted
compensation and benefits, Adjusted compensation and benefits expense ratio,
Adjusted general and administrative expense, Adjusted general and administrative
expense ratio, Adjusted EBITDAC, Adjusted EBITDAC margin, Adjusted net income,
Adjusted net income margin, and Adjusted diluted earnings per share to the most
directly comparable GAAP measure, see "Non-GAAP Financial Measures and Key
Performance Indicators."

(1)

Compensation and benefits ratio is defined as Compensation and benefits expense divided by Total revenue.

                                       38
--------------------------------------------------------------------------------

(2)

General and administrative expense ratio is defined as General and administrative expense divided by Total revenue.

(3)

See "Note 12, Earnings (Loss) Per Share" of the unaudited quarterly consolidated financial statements for further discussion of how these metrics are calculated.

Comparison of the Three Months Ended September 30, 2022 and 2021

•

Revenue increased $59.2 million or 16.8% period-over-period to $412.0 million.

•

Compensation and benefits expense decreased $12.4 million, or 4.3% period-over-period, and the Compensation and benefits expense ratio decreased 14.7%, from 81.2% to 66.5%.

•

General and administrative expense increased $10.2 million, or 26.4% period-over-period, and the General and administrative expense ratio increased 0.9%, from 11.0% to 11.9%.

•

Total operating expenses decreased $2.8 million or 0.8% period-over-period to $350.7 million.

•

Operating income (loss) increased $62.1 million period-over-period to $61.3 million.

•

Net income (loss) increased by $61.9 million to period-over-period to $29.3 million.

•

Net income (loss) margin was 7.1% for the quarter, compared to (9.2)% in the same quarter last year.

•

Earnings (loss) per share and Diluted earnings (loss) per share were $0.11 and
$0.09, respectively, for the three months ended September 30, 2022, compared to
$(0.16) and $(0.16), respectively, in the same quarter last year.

•

Organic revenue growth rate for the quarter was 13.7%, compared to 28.9% in the same quarter last year-see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

•

Adjusted compensation and benefits expense increased $34.5 million, or 16.2%
period-over-period, and the Adjusted compensation and benefits expense ratio
decreased 0.3% from 60.3% to 60.0% - see "Non-GAAP Financial Measures and Key
Performance Indicators" for further information.

•

Adjusted general and administrative expense increased $12.9 million, or 36.8%
period-over-period, and the Adjusted general and administrative expense ratio
increased 1.7% from 10.0% to 11.7% - see "Non-GAAP Financial Measures and Key
Performance Indicators" for further information.

•

Adjusted EBITDAC increased 11.2% period-over-period to $116.8 million- see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

•

Adjusted EBITDAC margin decreased 1.4% period-over-period from 29.8% to 28.4% -
see "Non-GAAP Financial Measures and Key Performance Indicators" for further
information.

•

Adjusted net income increased 5.7% period-over-period to $66.6 million - see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

•

Adjusted net income margin decreased 1.6% period-over-period from 17.8% to 16.2%
- see "Non-GAAP Financial Measures and Key Performance Indicators" for further
information.

•

Adjusted diluted earnings per share was $0.25 for the three months ended September 30, 2022, compared to $0.24 in the same quarter last year -see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

Comparison of the Nine Months Ended September 30, 2022 and 2021

•

Revenue increased $235.9 million or 22.4% period-over-period to $1,290.2 million.

•

Compensation and benefits expense increased $120.6 million, or 16.3% period-over-period, and the Compensation and benefits expense ratio decreased 3.5%, from 70.0% to 66.5%.

•

General and administrative expense increased $42.9 million, or 44.2% period-over-period, and the General and administrative expense ratio increased 1.6%, from 9.2% to 10.8%.

•

Total operating expenses increased $157.1 million or 17.0% period-over-period to $1,079.9 million.

•

Operating income (loss) increased $78.9 million period-over-period to $210.3 million.

•

Net income (loss) increased by $90.5 million to period-over-period to $117.5 million.

•

Net income (loss) margin was 9.1% for the period, compared to 2.6% in the same period last year.

                                       39
--------------------------------------------------------------------------------

•

Earnings (loss) per share and Diluted earnings (loss) per share were $0.40 and
$0.37, respectively, for the nine months ended September 30, 2022, compared to
$(0.16) and $(0.16), respectively, in the same quarter last year.

•

Organic revenue growth rate for the period was 18.7%, compared to 25.6% in the same period last year-see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

•

Adjusted compensation and benefits expense increased $143.8 million, or 23.0%
period-over-period, and the Adjusted compensation and benefits expense ratio
increased 0.3% from 59.6% to 59.3% - see "Non-GAAP Financial Measures and Key
Performance Indicators" for further information.

•

Adjusted general and administrative expense increased $41.9 million, or 47.2%
period-over-period, and the Adjusted general and administrative expense ratio
increased 1.7% from 8.4% to 10.1% - see "Non-GAAP Financial Measures and Key
Performance Indicators" for further information.

•

Adjusted EBITDAC increased 14.8% period-over-period to $390.2 million- see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

•

Adjusted EBITDAC margin decreased 2.0% period-over-period from 32.2% to 30.2% -
see "Non-GAAP Financial Measures and Key Performance Indicators" for further
information.

•

Adjusted net income increased 13.4% period-over-period to $237.8 million - see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

•

Adjusted net income margin decreased 1.5% period-over-period from 19.9% to 18.4%
- see "Non-GAAP Financial Measures and Key Performance Indicators" for further
information.

•

Adjusted diluted earnings per share was $0.88 for the nine months ended September 30, 2022, compared to $0.78 in the same period last year -see "Non-GAAP Financial Measures and Key Performance Indicators" for further information.

                      Components of Results of Operations

Revenue

Net Commissions and Fees

Net commissions and fees are derived primarily by commissions from our three
Specialties and are paid for our role as an intermediary in facilitating the
placement of coverage in the insurance distribution chain. Net commissions and
fees are generally calculated as a percentage of the total insurance policy
premium placed, but we also receive supplemental commissions based on the volume
placed or profitability of a book of business. We share a portion of these
commissions with the retail insurance broker and recognize revenue on a net
basis. Additionally, carriers may also pay us a contingent commission or
volume-based commission, both of which represent forms of contingent or
supplemental consideration associated with the placement of coverage and are
based primarily on underwriting results, but may also contain considerations for
only volume, growth and/or retention. Although we have compensation arrangements
called contingent commissions in all three Specialties that are based in whole
or in part on the underwriting performance, we do not take any direct insurance
risk other than through our equity method investment in Geneva Re through Ryan
Investment Holdings, LLC. We also receive loss mitigation and other fees, some
of which are not dependent on the placement of a risk.

In our Wholesale Brokerage and Binding Authority Specialties, we generally work
with retail insurance brokers to secure insurance coverage for their clients,
who are the ultimate insured party. Our Wholesale Brokerage and Binding
Authority Specialties generate revenues through commissions and fees, as well as
through supplemental commissions, which may be contingent commissions or
volume-based commissions, from clients. Commission rates and fees vary depending
upon several factors, which may include the amount of premium, the type of
insurance coverage provided, the particular services provided to a client or
carrier, and the capacity in which we act. Payment terms are consistent with
current industry practice.

In our Underwriting Management Specialty, we generally work with retail
insurance brokers and often other wholesale brokers to secure insurance coverage
for the ultimate insured party. Our Underwriting Management Specialty generates
revenues through commissions and fees and through contingent commissions from
clients. Commission rates and fees vary depending upon several factors including
the premium, the type of coverage, and additional services provided to the
client. Payment terms are consistent with current industry practice.

Fiduciary Investment Income

                                       40
--------------------------------------------------------------------------------

Fiduciary investment income consists of interest earned on insurance premiums
and surplus lines taxes that are held in a fiduciary capacity, in Cash and cash
equivalents, until disbursed.

Expenses

Compensation and Benefits

Compensation and benefits is our largest expense. It consists of (i) salary,
incentives and benefits paid and payable to employees, and commissions paid and
payable to our producers; and (ii) equity-based compensation associated with the
grants of awards to employees, executive officers and directors. We operate in
competitive markets for human capital and we need to maintain competitive
compensation levels in order to maintain and grow our talent base.

General and Administrative

General and administrative expense includes travel and entertainment expenses,
office expenses, accounting, legal, insurance and other professional fees, and
other costs associated with our operations. Our occupancy-related costs and
professional services expenses, in particular, generally increase or decrease in
relative proportion to the number of our employees and the overall size and
scale of our business operations.

Amortization

Amortization expense consists primarily of amortization related to intangible assets we acquired in connection with our acquisitions. Intangible assets consist of customer relationships, trade names, and internally developed software.

Interest Expense, Net

Interest expense, net consists of interest payable on indebtedness, amortization of the Company's interest rate cap, imputed interest on finance leases and contingent consideration, and amortization of deferred debt issuance costs, offset by interest income on the Company's Cash and cash equivalents balances.

Other Non-Operating Loss (Income)

In 2022, Other non-operating loss (income) includes a change related to the TRA
liability caused by an update in our blended state tax rates. In 2021, Other
non-operating loss includes the change in fair value of the embedded derivatives
on the Redeemable Preferred Units. This change in fair value was due to the
occurrence of a Realization Event in the third quarter of 2021, which was
defined as a Qualified Public Offering or a Sale Transaction in the Onex
Purchase Agreement. It also includes the expense associated with the
extinguishment of a portion of our deferred debt issuance costs on the term debt
in the first quarter of 2021.

Income Tax Expense (Benefit)

Income tax expense (benefit) includes tax on the Company's allocable share of
any net taxable income from the LLC, from certain state and local jurisdictions
that impose taxes on partnerships, as well as earnings from our foreign
subsidiaries and C-Corporations subject to entity level taxation.

Non-Controlling Interest

For the periods prior to March 31, 2021, our financial statements included the
non-controlling interest related to the net income attributable to Ryan Re.
Post-IPO, we report a non-controlling interest based on the LLC Common Units not
owned by the Company. Net income (loss) and Other comprehensive income (loss) is
attributed to the non-controlling interests based on the weighted average LLC
Common Units outstanding during the period and is presented on the Consolidated
Statements of Income. Refer to "Note 10, Stockholders' and Members' Equity" of
the unaudited quarterly consolidated financial statements for more information.



                                       41

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

                             Results of Operations

Below is a summary table of the financial results and Non-GAAP measures that we find relevant to our business operations:

                                  Three Months Ended
                                     September 30,                     Change                   Nine Months Ended September 30,                  Change
(in thousands, except
percentages and per share
data)                            2022             2021             $             %                2022                   2021               $             %
Revenue
Net commissions and fees      $  407,551       $  352,610      $  54,941

15.6 % $ 1,284,459 $ 1,053,800 $ 230,659

     21.9 %
Fiduciary investment income        4,445              156          4,289       2,749.4                 5,719                    436         5,283        1,211.7
Total revenue                 $  411,996       $  352,766      $  59,230          16.8 %    $      1,290,178       $      1,054,236     $ 235,942           22.4 %
Expenses
Compensation and benefits        274,108          286,538        (12,430 )        (4.3 )             858,439                737,825       120,614      

16.3

General and administrative        48,991           38,754         10,237          26.4               139,851                 96,984        42,867           44.2
Amortization                      25,667           26,982         (1,315 )        (4.9 )              78,563                 82,095        (3,532 )         (4.3 )
Depreciation                       1,463            1,179            284          24.1                 3,903                  3,601           302            8.4
Change in contingent
consideration                        423               43            380         883.7                  (837 )                2,356        (3,193 )       -135.5

Total operating expenses $ 350,652 $ 353,496 $ (2,844 )

(0.8 )% $ 1,079,919 $ 922,861 $ 157,058

    17.0 %
Operating income (loss)       $   61,344       $     (730 )    $  62,074       (8503.3 )%   $        210,259       $        131,375     $  78,884           60.0 %
Interest expense, net             28,864           21,193          7,671          36.2                75,462                 60,224        15,238           25.3
Loss (income) from equity
method investment in
related party                       (144 )           (176 )           32         (18.2 )                 414                   (610 )       1,024         (167.9 )
Other non-operating loss
(income)                             (66 )         16,211        (16,277 )      (100.4 )               6,832                 45,547       (38,715 )        (85.0 )
Income (loss) before income
taxes                         $   32,690       $  (37,958 )    $  70,648        (186.1 )%   $        127,551       $         26,214     $ 101,337          386.6 %
Income tax expense
(benefit)                          3,411           (5,368 )        8,779        (163.5 )              10,076                   (802 )      10,878       (1,356.4 )
Net income (loss)             $   29,279       $  (32,590 )    $  61,869        (189.8 )%   $        117,475       $         27,016     $  90,459          334.8 %
GAAP financial measures
Revenue                       $  411,996       $  352,766      $  59,230

      16.8 %    $      1,290,178       $      1,054,236     $ 235,942           22.4 %
Compensation and benefits        274,108          286,538        (12,430 )        (4.3 )             858,439                737,825       120,614      

16.3

General and administrative        48,991           38,754         10,237          26.4               139,851                 96,984        42,867           44.2
Net income (loss)             $   29,279       $  (32,590 )    $  61,869        (189.8 )%   $        117,475       $         27,016     $  90,459          334.8 %
Compensation and benefits
expense ratio                       66.5 %           81.2 %                                             66.5 %                 70.0 %
General and administrative
expense ratio                       11.9 %           11.0 %                                             10.8 %                  9.2 %
Net income (loss) margin             7.1 %           (9.2 )%                                             9.1 %                  2.6 %
Earnings (loss) per share     $     0.11       $    (0.16 )                                 $           0.40       $          (0.16 )
Diluted earnings (loss) per
share                         $     0.09       $    (0.16 )                                 $           0.37       $          (0.16 )
Non-GAAP financial
measures*
Organic revenue growth rate         13.7 %           28.9 %                                             18.7 %                 25.6 %
Adjusted compensation and
benefits expense              $  247,095       $  212,590      $  34,505          16.2 %    $        769,253       $        625,452     $ 143,801           23.0 %
Adjusted compensation and
benefits expense ratio              60.0 %           60.3 %                                             59.6 %                 59.3 %
Adjusted general and
administrative expense        $   48,084       $   35,153      $  12,931          36.8 %    $        130,774       $         88,870     $  41,904           47.2 %
Adjusted general and
administrative expense
ratio                               11.7 %           10.0 %                                             10.1 %                  8.4 %
Adjusted EBITDAC              $  116,817       $  105,023      $  11,794          11.2 %    $        390,151       $        339,914     $  50,237           14.8 %
Adjusted EBITDAC margin             28.4 %           29.8 %                                             30.2 %                 32.2 %
Adjusted net income           $   66,560       $   62,949      $   3,611           5.7 %    $        237,774       $        209,739     $  28,035           13.4 %
Adjusted net income margin          16.2 %           17.8 %                                             18.4 %                 19.9 %
Adjusted diluted earnings
per share                     $     0.25       $     0.24                                   $           0.88       $           0.78


* These measures are Non-GAAP. Please refer to the section entitled "Non-GAAP
Financial Measures and Key Performance Indicators" below for definitions and
reconciliations to the most directly comparable GAAP measure.

                                       42
--------------------------------------------------------------------------------

        Comparison of the Three Months Ended September 30, 2022 and 2021

Revenue

Net Commissions and Fees

Net commissions and fees increased by $54.9 million or 15.6% from $352.6 million
to $407.6 million for the three months ended September 30, 2022 as compared to
the same period in the prior year. The two main drivers of the revenue increase
are 13.7% of organic revenue growth and 2.8% growth from the Keystone and Crouse
acquisitions.

                                 Three Months Ended September 30,
(in thousands, except                    % of                        % of
percentages)               2022         total          2021         total               Change
Wholesale Brokerage     $  267,222         65.6 %   $  229,146         65.0 %   $   38,076        16.6 %
Binding Authorities         55,607         13.6         52,795         15.0          2,812         5.3
Underwriting                84,722         20.8         70,669         20.0         14,053        19.9
Management
Total net commissions   $  407,551                  $  352,610                  $   54,941        15.6 %
and fees


Wholesale Brokerage net commissions and fees increased by $38.1 million or 16.6%
period-over-period, primarily due to organic growth within this Specialty for
the quarter as well as contributions from the Crouse acquisition.

Binding Authority net commissions and fees increased by $2.8 million or 5.3%
period-over-period, primarily due to organic growth within the Specialty for the
quarter as well as contributions from the Crouse acquisition.

Underwriting Management net commissions and fees increased by $14.1 million or
19.9% period-over-period, primarily due to organic growth within the Specialty
for the quarter as well as contributions from the Keystone acquisition.

The following table sets forth our revenue by type of commission and fees:

                                   Three Months Ended September 30,
(in thousands, except                      % of                      % of
percentages)                  2022         total        2021         total              Change
Net commissions and         $ 394,934        96.9 %   $ 338,335        96.0 %   $   56,599        16.7 %
policy fees
Supplemental and                5,289         1.3         8,313         2.4         (3,024 )     (36.4 )
contingent commissions
Loss mitigation and other       7,328         1.8         5,962         1.7          1,366        22.9
fees
Total net commissions and   $ 407,551                 $ 352,610                 $   54,941        15.6 %
fees


Net commissions and policy fees grew 16.7%, slightly higher than the overall net
commissions and fee revenue growth of 15.6% for the three months ended September
30, 2022 as compared to the same period in the prior year. The main drivers of
this growth continue to be the acquisition of new business and expansion of
ongoing client relationships in response to the increasing demand for new,
complex E&S products as well as the inflow of risks from the admitted market
into the E&S market. In aggregate, we experienced stable commission rates
period-over-period.

Supplemental and contingent commissions decreased 36.4% period-over-period driven by the performance of risks placed on eligible business earning profit-based or volume-based commissions.

Loss mitigation and other fees grew 22.9% period-over-period primarily due to
captive management and other risk management service fees from the placement of
alternative risk insurance solutions in 2022.

Expenses

Compensation and Benefits

Compensation and benefits expense decreased by $12.4 million or 4.3% from $286.5
million to $274.1 million for the three months ended September 30, 2022 compared
to the same period in 2021. The following were the principal drivers of this
decrease:

•

A $45.1 million decrease from IPO related compensation expense, which reflects
charges associated with both the revaluation of existing equity grants at the
time of our IPO as well as expense related to the new awards issued in

                                       43
--------------------------------------------------------------------------------

connection with the IPO. The expense associated with both the revaluation of
existing awards as well as the issuance of new equity awards both directly
relate to the Organizational Transactions and IPO, however, amounts related to
each will continue to be expensed over future periods as the underlying awards
vest;

•

Commissions increased $19.3 million or 18.3% period-over-period, driven by the 15.6% increase in Net Commissions and Fees discussed above;

•

The remaining increase of $13.4 million was driven by (i) the addition of 371 employees compared to the same period prior year, and (ii) growth in the business. Overall headcount increased to 3,798 full-time employees as of September 30, 2022 from 3,427 as of September 30, 2021.

The net impact of revenue growth and the factors above resulted in a Compensation and benefits expense ratio decrease of 14.7% from 81.2% to 66.5% period-over-period.

In general, we expect to continue to experience a rise in commissions, salaries, incentives and benefits expense commensurate with our expected growth in business volume, revenue, and headcount.

General and Administrative

General and administrative expense increased by $10.2 million or 26.4% from
$38.8 million to $49.0 million for the three months ended September 30, 2022 as
compared to the same period in the prior year. A main driver of this increase
was $7.0 million of increased travel and entertainment expense as travel
restrictions associated with the pandemic began to lift compared to the same
period in 2021. The remaining increase of $3.2 million was driven by growth in
the business. Such expenses incurred to accommodate both organic and inorganic
revenue growth include IT, occupancy, and professional services. The net impact
of revenue growth and the factors listed above resulted in a General and
administrative expense ratio increase of 0.9% from 11.0% to 11.9%
period-over-period.

Amortization

Amortization expense decreased by $1.3 million or 4.9% from $27.0 million to
$25.7 million for the three months ended September 30, 2022 compared to the same
period in the prior year. The main driver for the decrease is certain previously
acquired intangible assets became fully amortized. Our intangible assets
decreased by $26.6 million when comparing the balance as of September 30, 2022
to the balance as of September 30, 2021.

Interest Expense, Net

Interest expense, net increased $7.7 million or 36.2% from $21.2 million to
$28.9 million for the three months ended September 30, 2022 compared to the same
period in the prior year. The main drivers of the change in Interest expense,
net for the three months ended September 30, 2022 is the issuance of $400.0
million of senior secured notes on February 3, 2022 and an increase in the
floating rate applied to our Term Loan. On April 7, 2022 the Company entered
into an interest rate cap agreement to manage its exposure to interest rate
fluctuations related to the Company's Term Loan for an upfront cost of $25.5
million. The interest rate cap has a $1,000.0 million notional amount, 2.75%
strike, and terminates on December 31, 2025. For the twelve months ended
December 31, 2022 we expect to incur approximately $4.5 million of interest
expense associated with the upfront cost amortization of the cap. For the twelve
months ended December 31, 2023, 2024, and 2025 we expect to incur approximately
$7.0 million of interest expense related to the cap.

Other Non-Operating Loss (Income)

Other non-operating loss (income) decreased by $16.3 million to income of $0.1
million for the three months ended September 30, 2022 as compared to a loss of
$16.2 million in the same period in the prior year. For the three months ended
September 30, 2021 Other non-operating loss includes a $16.3 million change in
the fair value of the embedded derivatives of our Redeemable Preferred Units.

Income (Loss) Before Income Taxes

Due to the factors above, Income (loss) before income taxes increased $70.7 million from a loss of $38.0 million to income of $32.7 million for the three months ended September 30, 2022 compared to the same period in the prior year.

                                       44
--------------------------------------------------------------------------------

Income Tax Expense (Benefit)

Income tax expense (benefit) increased $8.8 million from a benefit of $5.4
million to an expense of $3.4 million for the three months ended September 30,
2022 as compared to the same period in the prior year due to the Company being
allocated pre-tax book loss for the post-IPO period ended September 30, 2021 and
pre-tax book income for the three months ended September 30, 2022. The income
tax expense in the current period is offset by a tax benefit recognized as a
result of Staking RSU vesting and the resulting increase in the Company's tax
basis in excess of GAAP basis.

Net Income (loss)

Net income (loss) increased $61.9 million from a loss of $32.6 million to income
of $29.3 million for the three months ended September 30, 2022 compared to the
same period in the prior year as a result of the factors described above.

        Comparison of the Nine Months Ended September 30, 2022 and 2021

Revenue

Net Commissions and Fees

Net commissions and fees increased by $230.7 million or 21.9% from $1,053.8 million to $1,284.5 million for the nine months ended September 30, 2022 as compared to the same period in the prior year. The two main drivers of the revenue increase are 18.7% of organic revenue growth and 3.0% growth from the Keystone and Crouse acquisitions.

                                   Nine Months Ended September 30,
(in thousands,                           % of                           % of
except percentages)      2022           total           2021           total                Change

Wholesale Brokerage   $   841,273           65.5 %   $   676,229           64.2 %   $ 165,044          24.4 %
Binding Authorities       178,351           13.9         161,436           15.3        16,915          10.5
Underwriting              264,835           20.6         216,135           20.5        48,700          22.5
Management
Total Net
commissions and       $ 1,284,459                    $ 1,053,800                    $ 230,659          21.9 %
fees

Wholesale Brokerage net commissions and fees increased by $165.0 million or 24.4% period-over-period, primarily due to organic growth within this Specialty for the quarter as well as contributions from the Crouse acquisition.

Binding Authority net commissions and fees increased by $16.9 million or 10.5%
period-over-period, primarily due to organic growth within the Specialty for the
quarter as well as contributions from the Crouse acquisition.

Underwriting Management net commissions and fees increased by $48.7 million or
22.5% period-over-period, primarily due to organic growth within the Specialty
for the quarter as well as contributions from the Keystone acquisition.

The following table sets forth our revenue by type of commission and fees:

                                    Nine Months Ended September 30,
(in thousands,                            % of                           % of
except percentages)       2022           total           2021           total                 Change
Net commissions and    $ 1,226,396           95.5 %   $ 1,007,192           95.6 %   $ 219,204           21.8 %
policy fees
Supplemental and
contingent                  39,339            3.1          29,849            2.8         9,490           31.8
commissions
Loss mitigation and         18,723            1.5          16,759            1.6         1,964           11.7
other fees
Total net              $ 1,284,459                    $ 1,053,800                    $ 230,659           21.9 %
commissions and fees


Net commissions and policy fees grew 21.8%, slightly lower than the overall net
commissions and fee revenue growth of 21.9% for the nine months ended September
30, 2022 as compared to the same period in the prior year. The main drivers of
this growth continue to be the acquisition of new business and expansion of
ongoing client relationships in response to the increasing demand for new,
complex E&S products as well as the inflow of risks from the admitted market
into the E&S market. In aggregate, we experienced stable commission rates period
over period.

Supplemental and contingent commissions increased 31.8% period-over-period driven by the performance of risks placed on eligible business earning profit-based or volume-based commissions.

                                       45
--------------------------------------------------------------------------------

Loss mitigation and other fees grew 11.7% period-over-period primarily due to
captive management and other risk management service fees from the placement of
alternative risk insurance solutions in 2022.

Expenses

Compensation and Benefits

Compensation and benefits expense increased by $120.6 million or 16.3% from
$737.8 million to $858.4 million for the nine months ended September 30, 2022
compared to the same period in 2021. The following were the principal drivers of
this increase:

•

Commissions increased $77.6 million or 24.4% period-over-period, driven by the 21.9% increase in Net Commissions and Fees discussed above;

•

The remaining increase of $43.0 million was driven by a $72.7 million increase
generated from (i) the addition of 371 employees compared to the same period
prior year, and (ii) growth in the business. This growth was offset by a $14.5
million decrease to Initial public offering related expense, a $8.5 million
decrease to Restructuring and related expense, and a $6.7 million decrease to
Acquisition related long-term incentive compensation. Overall headcount
increased to 3,798 full-time employees as of September 30, 2022 from 3,427 as of
September 30, 2021.

The net impact of revenue growth and the factors above resulted in a Compensation and benefits expense ratio decrease of 3.5% from 70.0% to 66.5% period-over-period.

In general, we expect to continue to experience a rise in commissions, salaries, incentives and benefits expense commensurate with our expected growth in business volume, revenue, and headcount.

General and Administrative

General and administrative expense increased by $42.9 million or 44.2% from
$97.0 million to $139.9 million for the nine months ended September 30, 2022 as
compared to the same period in the prior year. A main driver of this increase
was $20.4 million of increased travel and entertainment expense as travel
restrictions associated with the pandemic began to lift compared to the same
period in 2021. Insurance expense contributed $4.9 million to the
period-over-period increase due to increased costs associated with being a
public company. The remaining increase of $17.6 million was driven by growth in
the business. Such expenses incurred to accommodate both organic and inorganic
revenue growth include IT, occupancy, and professional services. The net impact
of revenue growth and the factors listed above resulted in General and
administrative expense ratio increase of 1.6% from 9.2% to 10.8%
period-over-period.

Amortization

Amortization expense decreased by $3.5 million or 4.3% from $82.1 million to
$78.6 million for the nine months ended September 30, 2022 compared to the same
period in the prior year. The main driver for the decrease is certain previously
acquired intangible assets became fully amortized. Our intangible assets
decreased by $26.6 million when comparing the balance as of September 30, 2022
to the balance as of September 30, 2021.

Interest Expense, Net

Interest expense, net increased $15.2 million or 25.3% from $60.2 million to
$75.5 million for the nine months ended September 30, 2022 compared to the same
period in the prior year. The main drivers of the change in Interest expense,
net for the nine months ended September 30, 2022 was the issuance of $400.0
million of senior secured notes on February 3, 2022 and an increase in the
floating rate applied to our Term Loan. On April 7, 2022 the Company entered
into an interest rate cap agreement to manage its exposure to interest rate
fluctuations related to the Company's Term Loan for an upfront cost of $25.5
million. The interest rate cap has a $1,000.0 million notional amount, 2.75%
strike, and terminates on December 31, 2025. For the twelve months ended
December 31, 2022 we expect to incur approximately $4.5 million of interest
expense associated with the upfront cost amortization of the cap. For the twelve
months ended December 31, 2023, 2024, and 2025 we expect to incur approximately
$7.0 million of interest expense related to the cap.

Other Non-Operating Loss (Income)

Other non-operating loss (income) decreased by $38.7 million to $6.8 million for
the nine months ended September 30, 2022 as compared to a loss of $45.5 million
in the same period in the prior year. For the nine months ended September 30,
2022 Other non-operating loss includes a $7.2 million charge related to the
change in the TRA liability caused by a change in our blended state tax rates.
For the nine months ended September 30, 2021 Other non-operating loss includes a
$36.9 million change in the fair value of the

                                       46
--------------------------------------------------------------------------------

embedded derivatives of our Redeemable Preferred Units as well as $8.6 million
of debt issuance costs written off due to the extinguishment of a portion of the
term debt in connection with a repricing.

Income (Loss) Before Income Taxes

Due to the factors above, Income (loss) before income taxes increased $101.3
million from $26.2 million to $127.6 million for the nine months ended September
30, 2022 compared to the same period in the prior year.

Income Tax Expense (Benefit)

Income tax expense (benefit) increased $10.9 million from a benefit of $0.8
million to an expense of $10.1 million for the nine months ended September 30,
2022 as compared to the same period in the prior year due to the Company being
allocated pre-tax book loss for the post-IPO period ended September 30, 2021 and
pre-tax book income for the nine months ended September 30, 2022, offset by an
increase in the Company's state tax rate resulting in a tax benefit recognized
related to the increase in our Deferred tax assets in the first quarter of 2022.

Net Income (Loss)

Net income (loss) increased $90.5 million from $27.0 million to $117.5 million
for the nine months ended September 30, 2022 compared to the same period in the
prior year as a result of the factors described above.

           Non-GAAP Financial Measures and Key Performance Indicators

In assessing the performance of our business, we use non-GAAP financial measures
that are derived from our consolidated financial information, but which are not
presented in our consolidated financial statements prepared in accordance with
GAAP. We consider these non-GAAP financial measures to be useful metrics for
management and investors to facilitate operating performance comparisons from
period to period by excluding potential differences caused by variations in
capital structures, tax positions, depreciation, amortization and certain other
items that we believe are not representative of our core business. We use the
following non-GAAP measures for business planning purposes, in measuring our
performance relative to that of our competitors, to help investors to understand
the nature of our growth, and to enable investors to evaluate the run-rate
performance of the Company. Non-GAAP financial measures should be viewed as
supplementing, and not as an alternative or substitute for, the consolidated
financial statements prepared and presented in accordance with GAAP. The
footnotes to the reconciliation tables below should be read in conjunction with
the unaudited consolidated quarterly financial statements. Industry peers may
provide similar supplemental information but may not define similarly-named
metrics in the same way we do and may not make identical adjustments.

Organic Revenue Growth Rate

Organic revenue growth rate represents the percentage change in revenue, as compared to the same period for the year prior, adjusted for revenue attributable to recent acquisitions during the first 12 months of Ryan Specialty's ownership, and other adjustments such as contingent commissions, fiduciary investment income, and the impact of changes in foreign exchange rates.

A reconciliation of Organic revenue growth rate to Total revenue growth rate,
the most directly comparable GAAP measure, for each of the periods indicated is
as follows (in percentages):


                                             Three Months Ended September 30,
                                              2022                    2021
Total revenue growth rate (GAAP) (1)               16.8 %                    49.0 %
Less: Mergers and acquisitions (2)                 (2.8 )                   (18.8 )
Change in other (3)                                (0.3 )                    (1.3 )
Organic revenue growth rate (Non-GAAP)             13.7 %                   

28.9 %

(1)

September 30, 2022 revenue of $412.0 million less September 30, 2021 revenue of
$352.8 million is a $59.2 million period-over-period change. The change, $59.2
million, divided by the September 30, 2021 revenue of $352.8 million is a total
revenue change of 16.8%. September 30, 2021 revenue of $352.8 million less
September 30, 2020 revenue of $236.8 million is a $116.0 million
period-over-period change. The change, $116.0 million, divided by the September
30, 2020 revenue of $236.8 million is a total revenue change of 49.0%. See
"Comparison of the Three Months Ended September 30, 2022 and 2021" for further
details.

                                       47
--------------------------------------------------------------------------------

(2)

The acquisitions adjustment excludes net commission and fees revenue generated
during the first 12 months following an acquisition. The total adjustment for
the three months ended September 30, 2022 and three months ended September 30,
2021 was $9.9 million and $44.4 million, respectively.

(3)

The other adjustments exclude the period-over-period change in contingent
commissions, fiduciary investment income, and foreign exchange rates. The total
adjustment for the three months ended September 30, 2022 and three months ended
September 30, 2021 was $0.9 million and $2.9 million, respectively.

                                             Nine Months Ended September 

30,

                                              2022                    2021
Total revenue growth rate (GAAP) (1)               22.4 %                   52.5 %
Less: Mergers and acquisitions (2)                 (3.0 )                  (26.7 )
Change in other (3)                                (0.7 )                   (0.2 )
Organic revenue growth rate (Non-GAAP)             18.7 %                   

25.6 %

(1)

September 30, 2022 revenue of $1,290.2 million less September 30, 2021 revenue
of $1,054.2 million is a $235.9 million period-over-period change. The change,
$235.9 million, divided by the September 30, 2021 revenue of $1,054.2 million is
a total revenue change of 22.4%. September 30, 2021 revenue of $1,054.2 million
less September 30, 2020 revenue of $691.3 million is a $362.9 million
period-over-period change. The change, $362.9 million, divided by the September
30, 2020 revenue of $691.3 million is a total revenue change of 52.5%. See
"Comparison of the Nine Months Ended September 30, 2022 and 2021" for further
details.

(2)

The acquisitions adjustment excludes net commission and fees revenue generated
during the first 12 months following an acquisition. The total adjustment for
the nine months ended September 30, 2022 and nine months ended September 30,
2021 was $31.5 million and $184.4 million, respectively.

(3)

The other adjustments exclude the period-over-period change in contingent
commissions, fiduciary investment income, and foreign exchange rates. The total
adjustment for the nine months ended September 30, 2022 and nine months ended
September 30, 2021 was $7.0 million and $1.2 million, respectively.

Adjusted Compensation and Benefits Expense and Adjusted Compensation and Benefits Expense Ratio

We define Adjusted compensation and benefits expense as Compensation and
benefits expense adjusted to reflect items such as (i) equity-based
compensation, (ii) acquisition and restructuring related compensation expense,
and (iii) other exceptional or non-recurring items, as applicable. The most
comparable GAAP financial metric is Compensation and benefits expense. Adjusted
compensation and benefits expense ratio is defined as Adjusted compensation and
benefits expense as a percentage of Total revenue. The most comparable GAAP
financial metric is Compensation and benefits expense ratio.

A reconciliation of Adjusted compensation and benefits expense and Adjusted compensation and benefits expense ratio to Compensation and benefits expense and Compensation and benefits expense ratio, the most directly comparable GAAP measures, for each of the periods indicated, is as follows:

                                                            Three Months Ended September 30,
(in thousands, except percentages)                             2022         

2021

Total revenue                                            $        411,996       $        352,766
Compensation and benefits expense                        $        274,108       $        286,538
Acquisition-related expense                                           (21 )                    -
Acquisition related long-term incentive compensation               (7,383 )              (10,333 )
Restructuring and related expense                                     (19 )                 (895 )
Amortization and expense related to discontinued                   (1,533 )               (1,759 )
prepaid incentives
Equity-based compensation                                          (5,530 )               (3,371 )
Initial public offering related expense                           (12,527 )              (57,590 )
Adjusted compensation and benefits expense (1)           $        247,095       $        212,590
Compensation and benefits expense ratio                              66.5 %                 81.2 %
Adjusted compensation and benefits expense ratio                     60.0 %                 60.3 %




                                       48

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

(1)

Adjustments to Compensation and benefits expense are described in the footnotes
of the reconciliation of Adjusted EBITDAC to Net income in "Adjusted EBITDAC and
Adjusted EBITDAC Margin".

                                                             Nine Months Ended September 30,
(in thousands, except percentages)                             2022         

2021

Total revenue                                            $      1,290,178       $      1,054,236
Compensation and benefits Expense                        $        858,439       $        737,825
Acquisition-related expense                                          (122 )                    -
Acquisition related long-term incentive compensation              (22,181 )              (28,837 )
Restructuring and related expense                                    (724 )               (9,246 )
Amortization and expense related to discontinued                   (5,075 )               (5,441 )
prepaid incentives
Equity-based compensation                                         (18,009 )              (11,259 )
Initial public offering related expense                           (43,075 )              (57,590 )
Adjusted compensation and benefits expense (1)           $        769,253       $        625,452
Compensation and benefits expense ratio                              66.5 %                 70.0 %
Adjusted compensation and benefits expense ratio                     59.6 %                 59.3 %

(1)

Adjustments to Compensation and benefits expense are described in the footnotes
of the reconciliation of Adjusted EBITDAC to Net income in "Adjusted EBITDAC and
Adjusted EBITDAC Margin".

Adjusted General and Administrative Expense and Adjusted General and Administrative Expense Ratio

We define Adjusted general and administrative expense as General and
administrative expense adjusted to reflect items such as (i) acquisition and
restructuring general and administrative related expense, and (ii) other
exceptional or non-recurring items, as applicable. The most comparable GAAP
financial metric is General and administrative expense. Adjusted general and
administrative expense ratio is defined as Adjusted general and administrative
expense as a percentage of Total revenue. The most comparable GAAP financial
metric is General and administrative expense ratio.

A reconciliation of Adjusted general and administrative expense and Adjusted
general and administrative expense ratio to General and administrative expense
and General and administrative expense ratio, the most directly comparable GAAP
measures, for each of the periods indicated is as follows:

                                                            Three Months Ended September 30,
(in thousands, except percentages)                             2022         

2021

Total revenue                                            $        411,996       $        352,766
General and administrative expense                       $         48,991       $         38,754
Acquisition-related expense                                          (716 )                 (106 )
Restructuring and related expense                                       -                 (2,465 )
Initial public offering related expense                              (191 )               (1,030 )

Adjusted general and administrative expense (1) $ 48,084

     $         35,153
General and administrative expense ratio                             11.9 %                 11.0 %
Adjusted general and administrative expense ratio                    11.7 %                 10.0 %

(1)

Adjustments to General and administrative expense are described in the footnotes
of the reconciliation of Adjusted EBITDAC to Net income in "Adjusted EBITDAC and
Adjusted EBITDAC Margin".

                                       49
--------------------------------------------------------------------------------

                                                            Nine Months Ended September 30,
(in thousands, except percentages)                            2022          

2021

Total revenue                                           $      1,290,178       $      1,054,236
General and administrative expense                      $        139,851       $         96,984
Acquisition-related expense                                       (2,767 )               (2,128 )
Restructuring and related expense                                 (4,993 )               (4,286 )
Other non-recurring expense                                            -                   (354 )
Initial public offering related expense                           (1,317 )               (1,346 )

Adjusted general and administrative expense (1) $ 130,774

    $         88,870
General and administrative expense ratio                            10.8 %                  9.2 %
Adjusted general and administrative expense ratio                   10.1 %                  8.4 %

(1)

Adjustments to General and administrative expense are described in the footnotes
of the reconciliation of Adjusted EBITDAC to Net income in "Adjusted EBITDAC and
Adjusted EBITDAC Margin".

Adjusted EBITDAC and Adjusted EBITDAC Margin

We define Adjusted EBITDAC as Net income (loss) before Interest expense, net,
Income tax expense (benefit), Depreciation, Amortization, and Change in
contingent consideration, adjusted to reflect items such as (i) equity-based
compensation, (ii) acquisition and restructuring related expenses, and (iii)
other exceptional or non-recurring items, as applicable. Total revenue less
Adjusted compensation and benefits expense and Adjusted general and
administrative expense is equivalent to Adjusted EBITDAC. The most directly
comparable GAAP financial metric is Net income (loss). Adjusted EBITDAC margin
is defined as Adjusted EBITDAC as a percentage of Total revenue. The most
comparable GAAP financial metric is Net income (loss) margin. These measures
start with consolidated Net income (loss) and do not deduct earnings related to
the non-controlling interest in Ryan Re for the period of time prior to March
31, 2021 when we did not own 100% of the business or the non-controlling
interest attributed to the retained ownership of the LLC.

A reconciliation of Adjusted EBITDAC and Adjusted EBITDAC margin to Net income
(loss) and Net income (loss) margin, the most directly comparable GAAP measures,
for each of the periods indicated is as follows:

                                                            Three Months Ended September 30,
(in thousands, except percentages)                             2022                   2021
Total revenue                                            $        411,996       $        352,766
Net income (loss)                                        $         29,279       $        (32,590 )
Interest expense, net                                              28,864                 21,193
Income tax expense (benefit)                                        3,411                 (5,368 )
Depreciation                                                        1,463                  1,179
Amortization                                                       25,667                 26,982
Change in contingent consideration                                    423                     43
EBITDAC                                                  $         89,107       $         11,439
Acquisition-related expense (1)                                       737                    106
Acquisition related long-term incentive compensation                7,383                 10,333

(2)

Restructuring and related expense (3)                                  19                  3,360
Amortization and expense related to discontinued                    1,533                  1,759
prepaid incentives (4)
Other non-operating loss (income) (5)                                 (66 )               16,211
Equity-based compensation (6)                                       5,530                  3,371
IPO related expenses (7)                                           12,718                 58,620
(Income) from equity method investments in related                   (144 )                 (176 )
party
Adjusted EBITDAC                                         $        116,817       $        105,023
Net income (loss) margin (8)                                          7.1 %                 (9.2 )%
Adjusted EBITDAC margin                                              28.4 %                 29.8 %




                                       50

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

(1)

Acquisition-related expense includes diligence, transaction-related, and
integration costs. Compensation and benefits expenses were de minimis for the
three months ended September 30, 2022, while General and administrative expenses
contributed to $0.7 million and $0.1 million of the acquisition-related expense
for the three months ended September 30, 2022 and 2021, respectively.

(2)

Acquisition related long-term incentive compensation arises from long-term incentive plans associated with acquisitions.

(3)

Restructuring and related expense consists of Compensation and benefits were de
minimis for the three months ended September 30, 2022 and $0.9 million for the
three months ended September 30, 2021, and General and administrative costs
including occupancy and professional services fees of $2.5 million for the three
months ended September 30, 2021, related to the Restructuring Plan. The
Compensation and benefits expense includes severance as well as employment costs
related to services rendered between the notification and termination dates. See
"Note 5, Restructuring" of the unaudited quarterly consolidated financial
statements for further discussion. The remaining costs that preceded the
Restructuring Plan were associated with organizational design, other severance,
and non-recurring lease costs.

(4)

Amortization and expense related to discontinued prepaid incentive programs -
see "Note 14, Employee Benefit Plans, Prepaid and Long-Term Incentives" of the
unaudited quarterly consolidated financial statements for further discussion.

(5)

For the three months ended September 30, 2022, Other non-operating loss (income)
includes $0.1 million of sublease income. For the three months ended September
30, 2021, Other non-operating loss (income) includes the change in fair value of
the embedded derivatives on the Redeemable Preferred Units. This change in fair
value of $16.3 million was due to the occurrence of a Realization Event in the
third quarter of 2021, which is defined in the Onex Purchase Agreement as a
Qualified Public Offering or a Sale Transaction.

(6)

Equity-based compensation reflects non-cash equity-based expense.

(7)

IPO related expenses include $0.2 million and $1.0 million of General and
administrative expense associated with the preparations for Sarbanes-Oxley
compliance, tax, and accounting advisory services on IPO-related structure
changes for the three months ended September 30, 2022 and 2021, respectively,
and compensation-related expense of $12.5 million and $57.6 million for the
three months ended September 30, 2022 and 2021, respectively, primarily related
to the revaluation of existing equity awards at IPO as well as expense for new
awards issued at IPO.

(8)

Net income (loss) margin is Net income (loss) as a percentage of Total revenue.

                                                             Nine Months Ended September 30,
(in thousands, except percentages)                             2022                   2021
Total revenue                                            $      1,290,178       $      1,054,236
Net income (loss)                                        $        117,475       $         27,016
Interest expense, net                                              75,462                 60,224
Income tax expense (benefit)                                       10,076                   (802 )
Depreciation                                                        3,903                  3,601
Amortization                                                       78,563                 82,095
Change in contingent consideration                                   (837 )                2,356
EBITDAC                                                  $        284,642       $        174,490
Acquisition-related expense (1)                                     2,889                  2,128
Acquisition related long-term incentive compensation               22,181                 28,837

(2)

Restructuring and related expense (3)                               5,717                 13,532
Amortization and expense related to discontinued                    5,075                  5,441
prepaid incentives (4)
Other non-operating loss (income) (5)                               6,832                 45,547
Equity-based compensation (6)                                      18,009                 11,259
Other non-recurring expense (7)                                         -                    354
IPO related expenses (8)                                           44,392                 58,936
(Income) from equity method investments in related                    414                   (610 )
party
Adjusted EBITDAC (9)                                     $        390,151       $        339,914
Net income (loss) margin (10)                                         9.1 %                  2.6 %
Adjusted EBITDAC margin                                              30.2 %                 32.2 %


(1)
Acquisition-related expense includes diligence, transaction-related, and
integration costs. Compensation and benefits expenses were $0.1 million for the
nine months ended September 30, 2022, while General and administrative expenses
contributed to $2.8

                                       51
--------------------------------------------------------------------------------

million and $2.1 million of the acquisition-related expense for the nine months ended September 30, 2022 and 2021, respectively.

(2)

Acquisition related long-term incentive compensation arises from long-term incentive plans associated with acquisitions.

(3)

Restructuring and related expense consists of Compensation and benefits of $0.7
million and $9.2 million for the nine months ended September 30, 2022 and 2021,
respectively, and General and administrative costs including occupancy and
professional services fees of $5.0 million and $4.3 million for the nine months
ended September 30, 2022 and 2021, respectively, related to the Restructuring
Plan. The Compensation and benefits expense includes severance as well as
employment costs related to services rendered between the notification and
termination dates. See "Note 5, Restructuring" of the unaudited quarterly
consolidated financial statements for further discussion. The remaining costs
that preceded the Restructuring Plan were associated with organizational design,
other severance, and non-recurring lease costs.

(4)

Amortization and expense related to discontinued prepaid incentive programs -
see "Note 14, Employee Benefit Plans, Prepaid and Long-Term Incentives" of the
unaudited quarterly consolidated financial statements for further discussion.

(5)

For the nine months ended September 30, 2022, Other non-operating loss (income)
includes a $7.2 million charge related to the change in the TRA liability caused
by a change in our blended state tax rates. For the nine months ended September
30, 2021, Other non-operating loss (income) includes the change in fair value of
the embedded derivatives on the Redeemable Preferred Units. This change in fair
value of $36.9 million was due to the occurrence of a Realization Event in the
third quarter of 2021, which is defined in the Onex Purchase Agreement as a
Qualified Public Offering or a Sale Transaction. For the nine months ended
September 30, 2021, Other non-operating loss (income) also includes expense of
$8.6 million associated with the extinguishment of a portion of our deferred
debt issuance costs on the term debt.

(6)

Equity-based compensation reflects non-cash equity-based expense.

(7)

Other non-recurring expense includes one-time impacts that do not reflect the
core performance of the business, including General and administrative expenses
of $0.4 million for the nine months ended September 30, 2021. Other
non-recurring items include one-time professional services costs associated with
term debt repricing, one-time non-income tax charges, and tax and accounting
consultancy costs associated with potential structure changes.

(8)

IPO related expenses include $1.3 million and $1.3 million of General and
administrative expense associated with the preparations for Sarbanes-Oxley
compliance, tax, and accounting advisory services on IPO-related structure
changes for the nine months ended September 30, 2022 and 2021, respectively, and
compensation-related expense of $43.1 million and $57.6 million for nine months
ended September 30, 2022 and 2021, respectively, primarily related to the
revaluation of existing equity awards at IPO as well as expense for new awards
issued at IPO.

(9)

Consolidated Adjusted EBITDAC does not reflect a deduction for the Adjusted EBITDAC associated with the non-controlling interest in Ryan Re for the period of time prior to March 31, 2021 when we did not own 100% of Ryan Re.

(10)

Net income (loss) margin is Net income (loss) as a percentage of Total revenue.

Adjusted Net Income and Adjusted Net Income Margin

We define Adjusted net income as tax-effected earnings before amortization and
certain items of income and expense, gains and losses, equity-based
compensation, acquisition related long-term incentive compensation,
acquisition-related expenses, costs associated with the IPO, and certain
exceptional or non-recurring items. The most comparable GAAP financial metric is
Net income (loss). Adjusted net income margin is calculated as Adjusted net
income as a percentage of Total revenue. The most comparable GAAP financial
metric is Net income (loss) margin. These measures start with consolidated Net
income (loss) and do not deduct earnings related to the non-controlling interest
in Ryan Re for the period of time prior to March 31, 2021 when we did not own
100% of the business or the non-controlling interest attributed to the retained
ownership of the LLC.

Following the IPO the Company is subject to United States federal income taxes,
in addition to state, local, and foreign taxes, with respect to our allocable
share of any net taxable income of the LLC. For comparability purposes, this
calculation incorporates the impact of federal and state statutory tax rates on
100% of our adjusted pre-tax income as if the Company owned 100% of the LLC.


                                       52
--------------------------------------------------------------------------------

A reconciliation of Adjusted net income and Adjusted net income margin to Net
income (loss) and Net income (loss) margin, the most directly comparable GAAP
measures, for each of the periods indicated is as follows:

                                                           Three Months Ended September 30,
(in thousands, except percentages)                            2022                   2021
Total revenue                                           $        411,996       $        352,766
Net income (loss)                                       $         29,279       $        (32,590 )
Income tax expense (benefit)                                       3,411                 (5,368 )
Amortization                                                      25,667                 26,982
Amortization of deferred debt issuance costs (1)                   3,033                  2,777
Change in contingent consideration                                   423                     43
Acquisition-related expense (2)                                      737                    106
Acquisition related long-term incentive compensation               7,383                 10,333

(3)

Restructuring and related expense (4)                                 19                  3,360
Amortization and expense related to discontinued                   1,533                  1,759
prepaid incentives (5)
Other non-operating loss (income) (6)                                (66 )               16,211
Equity-based compensation (7)                                      5,530                  3,371
IPO related expenses (8)                                          12,718                 58,620
(Income) / loss from equity method investments in                   (144 )                 (176 )
related party
Adjusted income before income taxes                     $         89,523       $         85,428
Adjusted tax expense (9)                                         (22,963 )              (22,479 )
Adjusted net income                                     $         66,560       $         62,949
Net income (loss) margin (10)                                        7.1 %                 (9.2 )%
Adjusted net income margin                                          16.2 %                 17.8 %


(1)

Interest expense, net includes amortization of deferred debt issuance costs.

(2)

Acquisition-related expense includes diligence, transaction-related, and
integration costs. Compensation and benefits expenses were de minimis for the
three months ended September 30, 2022, while General and administrative expenses
contributed to $0.7 million and $0.1 million of the acquisition-related expense
for the three months ended September 30, 2022 and 2021, respectively.

(3)

Acquisition related long-term incentive compensation arises from long-term incentive plans associated with acquisitions.

(4)

Restructuring and related expense consists of Compensation and benefits were de
minimis for the three months ended September 30, 2022 and $0.9 million for the
three months ended September 30, 2021, and General and administrative costs
including occupancy and professional services fees of $2.5 million for the three
months ended September 30, 2021, related to the Restructuring Plan. The
Compensation and benefits expense includes severance as well as employment costs
related to services rendered between the notification and termination dates. See
"Note 5, Restructuring" of the unaudited quarterly consolidated financial
statements for further discussion. The remaining costs that preceded the
Restructuring Plan were associated with organizational design, other severance,
and non-recurring lease costs.

(5)

Amortization and expense related to discontinued prepaid incentive programs -
see "Note 14, Employee Benefit Plans, Prepaid and Long-Term Incentives" of the
unaudited quarterly consolidated financial statements for further discussion.

(6)

For the three months ended September 30, 2022, Other non-operating loss (income)
includes $0.1 million of sublease income. For the three months ended September
30, 2021, Other non-operating loss (income) includes the change in fair value of
the embedded derivatives on the Redeemable Preferred Units. This change in fair
value of $16.3 million was due to the occurrence of a Realization Event in the
third quarter of 2021, which is defined in the Onex Purchase Agreement as a
Qualified Public Offering or a Sale Transaction.

(7)

Equity-based compensation reflects non-cash equity-based expense.

(8)

IPO related expenses include $0.2 million and $1.0 million of General and
administrative expense associated with the preparations for Sarbanes-Oxley
compliance, tax, and accounting advisory services on IPO-related structure
changes for the three months ended September 30, 2022 and 2021, respectively,
and compensation-related expense of $12.5 million and $57.6 million for the
three months ended September 30, 2022 and 2021, respectively, primarily related
to the revaluation of existing equity awards at IPO as well as expense for new
awards issued at IPO.

                                       53
--------------------------------------------------------------------------------

(9)

The Company is subject to United States federal income taxes, in addition to
state, local, and foreign taxes, with respect to our allocable share of any net
taxable income of the LLC. For the three months ended September 30, 2022 this
calculation of adjusted tax expense is based on a federal statutory rate of 21%
and a combined state income tax rate net of federal benefits of 4.65% on 100% of
our adjusted income before income taxes as if the Company owned 100% of the LLC.
For the three months ended September 30, 2021 this calculation of adjusted tax
expense is based on a federal statutory rate of 21% and a combined state income
tax rate net of federal benefits of 5.31% on 100% of our adjusted income before
income taxes as if the Company owned 100% of the LLC.

(10)

Net income (loss) margin is Net income (loss) as a percentage of Total revenue.

                                                             Nine Months Ended September 30,
(in thousands, except percentages)                             2022                   2021
Total revenue                                            $      1,290,178       $      1,054,236
Net income (loss)                                        $        117,475       $         27,016
Income tax expense (benefit)                                       10,076                   (802 )
Amortization                                                       78,563                 82,095
Amortization of deferred debt issuance costs (1)                    9,017                  8,546
Change in contingent consideration                                   (837 )                2,356
Acquisition-related expense (2)                                     2,889                  2,128
Acquisition related long-term incentive compensation               22,181                 28,837

(3)

Restructuring and related expense (4)                               5,717                 13,532
Amortization and expense related to discontinued                    5,075                  5,441
prepaid incentives (5)
Other non-operating loss (income) (6)                               6,832                 45,547
Equity-based compensation (7)                                      18,009                 11,259
Other non-recurring items (8)                                           -                    354
IPO related expenses (9)                                           44,392                 58,936
(Income) / loss from equity method investments in                     414                   (610 )
related party
Adjusted income before income taxes                      $        319,803       $        284,635
Adjusted tax expense (10)                                         (82,029 )              (74,896 )
Adjusted net income                                      $        237,774       $        209,739
Net income (loss) margin (11)                                         9.1 %                  2.6 %
Adjusted net income margin                                           18.4 %                 19.9 %


(1)

Interest expense, net includes amortization of deferred debt issuance costs.

(2)

Acquisition-related expense includes diligence, transaction-related, and
integration costs. Compensation and benefits expenses were $0.1 million for the
nine months ended September 30, 2022, while General and administrative expenses
contributed to $2.8 million and $2.1 million of the acquisition-related expense
for the nine months ended September 30, 2022 and 2021, respectively.

(3)

Acquisition related long-term incentive compensation arises from long-term incentive plans associated with acquisitions.

(4)

Restructuring and related expense consists of Compensation and benefits of $0.7
million and $9.2 million for the nine months ended September 30, 2022 and 2021,
respectively, and General and administrative costs including occupancy and
professional services fees of $5.0 million and $4.3 million for the nine months
ended September 30, 2022 and 2021, respectively, related to the Restructuring
Plan. The Compensation and benefits expense includes severance as well as
employment costs related to services rendered between the notification and
termination dates. See "Note 5, Restructuring" of the unaudited quarterly
consolidated financial statements for further discussion. The remaining costs
that preceded the Restructuring Plan were associated with organizational design,
other severance, and non-recurring lease costs.

(5)

Amortization and expense related to discontinued prepaid incentive programs -
see "Note 14, Employee Benefit Plans, Prepaid and Long-Term Incentives" of the
unaudited quarterly consolidated financial statements for further discussion.

(6)

For the nine months ended September 30, 2022, Other non-operating loss (income)
includes a $7.2 million charge related to the change in the TRA liability caused
by a change in our blended state tax rates. For the nine months ended September
30, 2021, Other non-operating loss (income) includes the change in fair value of
the embedded derivatives on the Redeemable Preferred Units. This change in fair
value of $36.9 million was due to the occurrence of a Realization Event in the
third quarter of 2021, which is defined in the Onex Purchase Agreement as a
Qualified Public Offering or a Sale Transaction. For the nine months

                                       54
--------------------------------------------------------------------------------

ended September 30, 2021, Other non-operating loss (income) also includes expense of $8.6 million associated with the extinguishment of a portion of our deferred debt issuance costs on the term debt.

(7)

Equity-based compensation reflects non-cash equity-based expense.

(8)

Other non-recurring expense includes one-time impacts that do not reflect the
core performance of the business, including General and administrative expenses
of $0.4 million for the nine months ended September 30, 2021. Other
non-recurring items include one-time professional services costs associated with
term debt repricing, one-time non-income tax charges, and tax and accounting
consultancy costs associated with potential structure changes.

(9)

IPO related expenses include $1.3 million and $1.3 million of General and
administrative expense associated with the preparations for Sarbanes-Oxley
compliance, tax, and accounting advisory services on IPO-related structure
changes for the nine months ended September 30, 2022 and 2021, respectively, and
compensation-related expense of $43.1 million and $57.6 million for nine months
ended September 30, 2022 and 2021, respectively, primarily related to the
revaluation of existing equity awards at IPO as well as expense for new awards
issued at IPO.

(10)

The Company is subject to United States federal income taxes, in addition to
state, local, and foreign taxes, with respect to our allocable share of any net
taxable income of the LLC. For the nine months ended September 30, 2022, this
calculation of adjusted tax expense is based on a federal statutory rate of 21%
and a combined state income tax rate net of federal benefits of 4.65% on 100% of
our adjusted income before income taxes as if the Company owned 100% of the LLC.
For the nine months ended September 30, 2021, this calculation of adjusted tax
expense is based on a federal statutory rate of 21% and a combined state income
tax rate net of federal benefits of 5.31% on 100% of our adjusted income before
income taxes as if the Company owned 100% of the LLC.

(11)

Net income (loss) margin is Net income (loss) as a percentage of Total revenue.

Adjusted Diluted Earnings per Share

We define Adjusted diluted earnings per share as Adjusted net income divided by
diluted shares outstanding after adjusting for the effect of the exchange of
100% of the outstanding LLC Common Units (together with the shares of Class B
common stock) into shares of Class A common stock and the effect of unvested
equity awards. The most directly comparable GAAP financial metric is Diluted
earnings per share.

A reconciliation of Adjusted diluted earnings per share to Diluted earnings per
share, the most directly comparable GAAP measure, for each of the periods
indicated is as follows:

                                                           Three Months Ended September 30, 2022
                                                                     Adjustments
                                        Less: Net
                                         income                                                          Plus:
                                      attributed to      Plus: Net income                               Dilutive
                                     dilutive awards     (loss) attributed                             impact of
                                           and                  to             Plus: Adjustments        unvested          Adjusted
(in thousands,                        substantively       non-controlling       to Adjusted net          equity            diluted
except per share                      vested shares          interests               income              awards         earnings per
data)                 U.S. GAAP            (1)                  (2)                   (3)                 (4)               share
Numerator:
Net income (loss)
attributable
to Class A common
shareholders-
diluted               $   24,824     $       (13,079 )   $          17,534     $           37,281     $          -     $        66,560
Denominator:
Weighted-average
shares
of Class A common
stock
outstanding-
diluted                  266,352                   -                     -                      -            4,153             270,505
Net income (loss)
per
share of Class A
common stock-
diluted               $     0.09     $         (0.05 )   $            0.07     $             0.14     $          -     $          0.25


(1)
Adjustment removes the impact of Net income (loss) attributed to dilutive awards
and substantively vested RSUs to arrive at Net income (loss) attributable to
Ryan Specialty Holdings, Inc. See "Note 12, Earnings (Loss) Per Share" of the
unaudited quarterly consolidated financial statements.

(2)

For comparability purposes, this calculation incorporates the Net income (loss)
that would be outstanding if all LLC Common Units (together with shares of Class
B common stock) were exchanged for shares of Class A common stock. 144,085
weighted average outstanding LLC Common Units were considered dilutive for the
three months ended September 30, 2022 and included in the 266,352
Weighted-average shares outstanding within Diluted EPS. See "Note 12, Earnings
(Loss) Per Share" of the unaudited quarterly consolidated financial statements.

                                       55
--------------------------------------------------------------------------------

(3)

Adjustments to Adjusted net income are described in the footnotes of the reconciliation of Adjusted net income to Net income (loss) in "Adjusted Net Income and Adjusted Net Income Margin."

(4)

For comparability purposes and to be consistent with the treatment of the
adjustments to arrive at Adjusted net income, the dilutive effect of unvested
equity awards is calculated using the treasury stock method as if the weighted
average unrecognized cost associated with the awards was $0 over the period,
less any unvested equity awards determined to be dilutive within the Diluted
earnings per share calculation disclosed in "Note 12, Earnings (Loss) Per Share"
of the unaudited quarterly consolidated financial statements.

                                                       Three Months Ended September 30, 2021
                                                                  Adjustments
                                                          Plus:
                                                        Impact of
                                      Plus: Net          all LLC
                                       income            Common
                                   attributable to        Units                               Plus: Dilutive
                                   the LLC before       exchanged      Plus: Adjustments        impact of            Adjusted
(in thousands,                           the           for Class A      to Adjusted net      unvested equity         diluted
except per share                   Organizational        shares             income                awards           earnings per
data)               U.S. GAAP       Transactions           (1)                (2)                  (3)                share
Numerator:
Net income (loss)
attributable
to Class A common
shareholders-
diluted             $  (17,115 )   $        15,781     $   (31,256 )   $          95,539     $              -     $       62,949
Denominator:
Weighted-average
shares
of Class A common
stock
outstanding-
diluted                105,309                   -         142,727                     -               19,684            267,721
Net income (loss)
per
share of Class A
common stock-
diluted             $    (0.16 )   $          0.15     $     (0.12 )   $            0.39     $          (0.02 )   $         0.24


(1)
For comparability purposes, this calculation incorporates the Net income (loss)
and weighted average shares of Class A common stock that would be outstanding if
all LLC Common Units (together with shares of Class B common stock) were
exchanged for shares of Class A common stock. See "Note 12, Earnings (Loss) Per
Share" of the unaudited quarterly consolidated financial statements.

(2)

Adjustments to Adjusted net income are described in the footnotes of the reconciliation of Adjusted net income to Net income (loss) in "Adjusted Net Income and Adjusted Net Income Margin."

(3)

For comparability purposes and to be consistent with the treatment of the
adjustments to arrive at Adjusted net income, the dilutive effect of unvested
equity awards is calculated using the treasury stock method as if the weighted
average unrecognized cost associated with the awards was $0 over the period,
less any unvested equity awards determined to be dilutive within the Diluted
earnings per share calculation disclosed in "Note 12, Earnings (Loss) Per Share"
of the unaudited quarterly consolidated financial statements.

                                                         Nine Months Ended September 30, 2022
                                                                    Adjustments
                                                                                                       Plus:
                                                         Plus: Net income                             Dilutive
                                   Less: Net income      (loss) attributed          Plus:            impact of
                                     attributed to              to              Adjustments to        unvested          Adjusted
(in thousands,                      dilutive awards       non-controlling        Adjusted net          equity           diluted
except per share                   and substantively         interests              income             awards         earnings per
data)               U.S. GAAP      vested shares (1)            (2)                  (3)                (4)              share
Numerator:
Net income (loss)
attributable
to Class A common
shareholders-
diluted             $   98,565     $         (55,408 )   $          74,318     $        120,299     $          -     $      237,774
Denominator:
Weighted-average
shares
of Class A common
stock
outstanding-
diluted                265,071                     -                     -                    -            5,011            270,082
Net income (loss)
per
share of Class A
common stock-
diluted             $     0.37     $           (0.21 )   $            0.28     $           0.46     $      (0.02 )   $         0.88




                                       56

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

(1)

Adjustment removes the impact of Net income (loss) attributed to dilutive awards
and substantively vested RSUs to arrive at Net income (loss) attributable to
Ryan Specialty Holdings, Inc. See "Note 12, Earnings (Loss) Per Share" of the
unaudited quarterly consolidated financial statements.

(2)

For comparability purposes, this calculation incorporates the Net income (loss)
that would be outstanding if all LLC Common Units (together with shares of Class
B common stock) were exchanged for shares of Class A common stock. 144,004
weighted average outstanding LLC Common Units were considered dilutive for the
three months ended September 30, 2022 and included in the 265,071
Weighted-average shares outstanding within Diluted EPS. See "Note 12, Earnings
(Loss) Per Share" of the unaudited quarterly consolidated financial statements.

(3)

Adjustments to Adjusted net income are described in the footnotes of the reconciliation of Adjusted net income to Net income (loss) in "Adjusted Net Income and Adjusted Net Income Margin."

(4)

For comparability purposes and to be consistent with the treatment of the
adjustments to arrive at Adjusted net income, the dilutive effect of unvested
equity awards is calculated using the treasury stock method as if the weighted
average unrecognized cost associated with the awards was $0 over the period,
less any unvested equity awards determined to be dilutive within the Diluted
earnings per share calculation disclosed in "Note 12, Earnings (Loss) Per Share"
of the unaudited quarterly consolidated financial statements.

                                                       Nine Months Ended September 30, 2021
                                                                  Adjustments
                                     Plus: Net        Plus: Impact
                                      income           of all LLC
                                  attributable to     Common Units           Plus:            Plus: Dilutive
                                  the LLC before      exchanged for      Adjustments to         impact of           Adjusted
(in thousands,                          the              Class A         

Adjusted net unvested equity diluted except per share

                  Organizational         shares              income               awards          earnings per
data)              U.S. GAAP       Transactions            (1)                (2)                  (3)                share
Numerator:
Net income
(loss)
attributable
to Class A
common
shareholders-
diluted            $  (17,115 )   $        75,387     $     (31,256 )   $        182,723     $              -     $     209,739
Denominator:
Weighted-average
shares
of Class A
common stock
outstanding-
diluted               105,309                   -           142,727                    -               19,684           267,721
Net income
(loss) per
share of Class A
common stock-
diluted            $    (0.16 )   $          0.72     $       (0.44 )   $           0.74     $          (0.06 )   $        0.78


(1)
For comparability purposes, this calculation incorporates the Net income (loss)
and weighted average shares of Class A common stock that would be outstanding if
all LLC Common Units (together with shares of Class B common stock) were
exchanged for shares of Class A common stock. See "Note 12, Earnings (Loss) Per
Share" of the unaudited quarterly consolidated financial statements.

(2)

Adjustments to Adjusted net income are described in the footnotes of the reconciliation of Adjusted net income to Net income (loss) in "Adjusted Net Income and Adjusted Net Income Margin."

(3)

For comparability purposes and to be consistent with the treatment of the
adjustments to arrive at Adjusted net income, the dilutive effect of unvested
equity awards is calculated using the treasury stock method as if the weighted
average unrecognized cost associated with the awards was $0 over the period,
less any unvested equity awards determined to be dilutive within the Diluted
earnings per share calculation disclosed in "Note 12, Earnings (Loss) Per Share"
of the unaudited quarterly consolidated financial statements.

                        Liquidity and Capital Resources

Liquidity describes the ability of a company to generate sufficient cash flows
to meet the cash requirements of its business operations. We believe that the
balance sheet and strong cash flow profile of the business provides adequate
liquidity. The primary sources of liquidity are Cash and cash equivalents on the
Consolidated Balance Sheets, cash flows provided by operations, and debt
capacity available under our Revolving Credit Facility, Term Loan, and Senior
Secured Notes (together "Credit Facility"). The primary uses of liquidity are
operating expenses, seasonal working capital needs, business combinations,
capital expenditures, obligations under the TRA, taxes, and distributions to LLC
Unitholders. We believe that cash and cash equivalents, cash flows from
operations, and amounts available under our Credit Facility will be sufficient
to meet liquidity needs, including principal and interest payments on

                                       57
--------------------------------------------------------------------------------

debt obligations, capital expenditures, and anticipated working capital
requirements, for the next 12 months and beyond. Our future capital requirements
will depend on many factors including continuance of historical working capital
levels and capital expenditure needs, investment in de novo offerings, and the
flow of deals in our merger and acquisition program.

We may be required to seek additional equity or debt financing. In the event
that additional financing is required from outside sources, we may not be able
to raise it on terms acceptable to us or at all. If we are unable to raise
additional capital or generate cash flows necessary to expand our operations,
this could reduce our ability to compete successfully and harm the results of
our operations.

Cash and cash equivalents on the Consolidated Balance Sheets includes funds
available for general corporate purposes. Fiduciary cash and receivables cannot
be used for general corporate purposes. Insurance premiums, claims funds, and
surplus lines taxes are held in a fiduciary capacity and the obligation to remit
these funds is recorded as Fiduciary liabilities in the Consolidated Balance
Sheets. We will recognize fiduciary amounts due to others as fiduciary
liabilities and fiduciary amounts collectible and held on behalf of others,
including insurance carriers, other insurance intermediaries, surplus lines
taxing authorities, clients, and insurance policy holders, as Fiduciary cash and
receivables in the Consolidated Balance Sheets.

In our capacity as an insurance broker or agent, we collect premiums from
insureds and, after deducting our commission, remit the premiums to the
respective insurance markets and carriers. We also collect claims prefunding or
refunds from carriers on behalf of insureds, which are then returned to the
insureds, and surplus lines taxes, which are then remitted to surplus lines
taxing authorities. Insurance premiums, claims funds, and surplus lines taxes
are held in a fiduciary capacity. The levels of Fiduciary cash and receivables
and Fiduciary liabilities can fluctuate significantly depending on when we
collect the premiums, claims prefunding, and refunds, make payments to markets,
carriers, surplus lines taxing authorities, and insureds, and collect funds from
clients and make payments on their behalf, and upon the impact of foreign
currency movements. Fiduciary cash, because of its nature, is generally held in
very liquid securities with a focus on preservation of principal. To minimize
investment risk, we and our subsidiaries maintain cash holdings pursuant to an
investment policy which contemplates all relevant rules established by states
with regard to fiduciary cash and is approved by our Board of Directors. The
policy requires broad diversification of holdings across a variety of
counterparties utilizing limits set by our Board of Directors, primarily based
on credit rating and type of investment. Fiduciary cash and receivables included
cash of $704.9 million and $635.6 million as of September 30, 2022 and 2021,
respectively, and fiduciary receivables of $1,442.0 million and $1,281.0 million
as of September 30, 2022 and 2021, respectively. While we may earn interest
income on fiduciary cash held in cash and investments, the fiduciary cash may
not be used for general corporate purposes. Of the $833.0 million of Cash and
cash equivalents on the Consolidated Balance Sheets as of September 30, 2022,
$130.2 million is held in fiduciary accounts representing collected revenue and
is available to be transferred to operating accounts and used for general
corporate purposes.

Credit Facilities

We expect to have sufficient financial resources to meet our business
requirements for the next 12 months. Although cash from operations is expected
to be sufficient to service our activities, including servicing our debt and
contractual obligations, and financing capital expenditures, we have the ability
to borrow under our Revolving Credit Facility to accommodate any timing
differences in cash flows. Additionally, under current market conditions, we
believe that we could access capital markets to obtain debt financing for
longer-term funding, if needed.

On September 1, 2020, we entered into the Credit Agreement with leading
institutions, including JPMorgan Chase Bank, N.A., the Administrative Agent, for
Term Loan borrowings totaling $1,650.0 million and a Revolving Credit Facility
totaling $300.0 million, in connection with financing the All Risks Acquisition.
Borrowings under our Revolving Credit Facility are permitted to be drawn for our
working capital and other general corporate financing purposes and those of
certain of our subsidiaries. Borrowings under our Credit Agreement are
unconditionally guaranteed by various subsidiaries and are secured by a lien and
security interest in substantially all of our assets.

On July 26, 2021, we entered into an amendment to our Credit Agreement, which
provided for an increase in the size of our Revolving Credit Facility from
$300.0 million to $600.0 million. Interest on the upsized Revolving Credit
Facility bore interest at the Eurocurrency Rate (LIBOR) plus a margin that
ranged from 2.50% to 3.00%, based on the first lien net leverage ratio defined
in our Credit Agreement. No other significant terms under our agreement
governing the Revolving Credit Facility were changed in connection with such
amendment.

On February 3, 2022, the LLC issued $400.0 million of senior secured notes. The notes have a 4.375% interest rate and will mature on February 1, 2030.

On April 29, 2022 the Company entered into the Fourth Amendment to the Credit
Agreement on its Term Loan and Revolving Credit Facility to transition its LIBOR
rate to a Benchmark Replacement of Adjusted Term SOFR plus a Credit Spread
Adjustment of 10 basis points, 15 basis points, or 25 basis points for the
one-month, three-month, or six-month borrowing periods, respectively.

                                       58
--------------------------------------------------------------------------------

As of September 30, 2022, the interest rate on the Term Loan was SOFR plus 3.00%, subject to a 75 basis point floor.

As of September 30, 2022, we were in compliance with all of the covenants under
our Credit Agreement and there were no events of default for the nine months
ended September 30, 2022.

See "Note 9, Debt" in the notes to our unaudited quarterly consolidated financial statements for further information regarding our debt arrangements.

Tax Receivable Agreement

In connection with the Organizational Transactions and IPO, the Company entered
into a TRA with current and certain former LLC Unitholders. The TRA provides for
the payment by the Company to current and certain former LLC Unitholders, of 85%
of the net cash savings, if any, in U.S. federal, state and local income taxes
that the Company realizes (or is deemed to realize in certain circumstances) as
a result of (i) certain increases in the tax basis of the assets of the LLC
resulting from purchases or exchanges of LLC Common Units ("Exchange Tax
Attributes"), (ii) certain tax attributes of the LLC that existed prior to the
IPO ("Pre-IPO M&A Tax Attributes"), (iii) certain favorable "remedial"
partnership tax allocations to which the Company becomes entitled to (if any),
and (iv) certain other tax benefits related to the Company entering into the
TRA, including tax benefits attributable to payments that the Company makes
under the TRA ("TRA Payment Tax Attributes"). The Company recognizes a liability
on the Consolidated Balance Sheets based on the undiscounted estimated future
payments under the TRA.

Due to the uncertainty of various factors, we cannot precisely quantify the
likely tax benefits we will realize as a result of the LLC Common Unit exchanges
and the resulting amounts we are likely to pay out to current and certain former
LLC Unitholders pursuant to the TRA; however, we estimate that such tax benefits
and the related TRA payments may be substantial. As set forth in the table
below, and assuming no changes in the relevant tax law and that we earn
sufficient taxable income to realize all cash tax savings that are subject to
the TRA as a result of transaction, we expect future payments under the TRA as a
result of transactions as of September 30, 2022 will be $302.4 million in
aggregate. Future payments in respect to subsequent exchanges would be in
addition to these amounts and are expected to be substantial. The foregoing
amounts are merely estimates and the actual payments could differ materially. In
the event of a permissible early termination of the TRA the Company is required
to pay to each holder of the TRA an early termination payment equal to the
discounted present value of all unpaid TRA Payments. The Company has not made
and is not likely to make an election for an early termination. We expect to
fund future TRA payments with tax distributions from the LLC that come from cash
on hand and cash generated from operations.

                                        Exchange Tax      Pre-IPO M&A Tax     TRA Payment Tax
(in thousands)                         Attributes (1)     Attributes (2)      Attributes (3)       TRA Liabilities
Balance at December 31, 2021           $      136,704     $        83,389     $        52,007     $         272,100
Exchange of LLC Common Units                   15,857               2,199               5,033                23,089
Remeasurement - change in state rate            2,884               1,759               2,530                 7,173
Payments                                            -                   -                   -                     -
Balance at September 30, 2022          $      155,445     $        87,347     $        59,570     $         302,362



Total expected estimated tax savings from each of the tax attributes associated
with the TRA are (1) Exchange Tax Attributes of $182.9 million, (2) Pre-IPO M&A
Tax Attributes of $102.8 million, and (3) TRA Payment Tax Attributes of $70.1
million. The Company will retain the benefit of 15% of these cash savings.

Comparison of Cash Flows for the Nine Months Ended September 30, 2022 and 2021

Cash and cash equivalents increased $419.4 million from $413.7 million at September 30, 2021 to $833.1 million at September 30, 2022. A summary of our cash flows provided by and used for continuing operations from operating, investing, and financing activities is as follows:

Cash Flows from Operating Activities

Net cash provided by operating activities during the nine months ended September
30, 2022 decreased $3.4 million from the nine months ended September 30, 2021 to
$151.0 million. Net income increased $90.5 million, Commissions and fees
receivable decreased $18.3 million, and Non-cash equity-based compensation
increased $14.2 million, all increasing cash flows from operating activities
during the nine months ended September 30, 2022 compared with the same period in
the prior year. This was offset by a $131.3 million decrease in Other current
and non-current assets and accrued liabilities associated with the final payment
of the All Risks Long-Term Incentive Plans during the nine months ended
September 30, 2022 compared with the same period in the prior year.

                                       59
--------------------------------------------------------------------------------

Cash Flows from Investing Activities

Cash flows used for investing activities during the nine months ended September
30, 2022 were $11.7 million, a decrease of $333.8 million compared to the $345.5
million of cash flows used for investing activities during the nine months ended
September 30, 2021. The main driver of the cash flows used for investing
activities in the nine months ended September 30, 2022 was $12.0 million of
capital expenditures, compared to the $343.2 million acquisition of the
Preferred Blocker Entity from Onex, $6.4 million of capital expenditures, and a
$4.1 million offset related to Prepaid incentive repayments for the nine months
ended September 30, 2021.

Cash Flows from Financing Activities

Cash flows provided by financing activities during the nine months ended
September 30, 2022 were $260.3 million, a decrease of $85.8 million compared to
cash flows provided by financing activities of $346.1 million during the nine
months ended September 30, 2021. The main drivers of cash flows provided by
financing activities during the nine months ended September 30, 2022 were the
Bond issuance of $394.0 million, offset by the net change in fiduciary
liabilities of $54.8 million, the cash distributions to LLC Unitholders of $32.7
million, payment of interest rate cap premium of $25.5 million, the repayment of
term debt of $12.4 million, and the payment of contingent consideration of $6.2
million. The main drivers of cash flows provided by financing activities during
the nine months ended September 30, 2021 was the issuance of Class A common
stock in the IPO of $1,455.2 million and the net change in fiduciary liabilities
of $52.4 million, offset by the repurchase of pre-IPO LLC units and Alternative
TRA payments of $780.4 million, the repurchase of Class A common stock in the
IPO of $183.6 million, the repurchase of Redeemable Preferred Units from the
Founder Group for $78.3 million, $48.4 million in cash paid for the remaining
53% non-controlling common equity interest in Ryan Re, $47.0 million of cash
distributions paid to pre-IPO unitholders, and $12.4 million repayment of term
debt.

                    Contractual Obligations and Commitments

Our principal commitments consist of contractual obligations in connection with
investing and operating activities. These obligations are described within "Note
8, Leases" and "Note 9, Debt" in the notes to our unaudited consolidated
financial statements and provide further description on provisions that create,
increase, or accelerate obligations, or other pertinent data to the extent
necessary for an understanding of the timing and amount of the specified
contractual obligations.

Within Current accrued compensation and Non-current accrued compensation we have
various long-term incentive compensation agreements accrued for. These
agreements are typically associated with an acquisition. Below we have outlined
the liabilities accrued as of September 30, 2022, the projected future expense,
and the projected timing of future cash outflows associated with these
arrangements.

Long-term Incentive Compensation Agreements (in thousands)

                            September 30, 2022
Current accrued compensation             $                  -
Non-current accrued compensation                          171
Total liability                          $                171
Projected future expense                                  484
Total projected future cash outflows     $                656

               Projected Future Cash Outflows
(in thousands)
2022                                     $                  -
2023                                                        -
2024                                                        -
2025                                                        -
Thereafter                               $                656


Within "Note 4, Mergers and Acquisitions" in the notes to our unaudited
consolidated financial statements we discuss various contingent consideration
arrangements and their impact. Below we have outlined the liabilities accrued as
of September 30, 2022, the projected future expense, and the projected timing of
future cash outflows associated with these contingent consideration agreements.

                                       60
--------------------------------------------------------------------------------

                       Contingent Consideration
(in thousands)                                      September 30, 2022
Current accounts payable and accrued liabilities   $              7,388
Other non-current liabilities                                    19,969
Total liability                                    $             27,357
Projected future expense                                          5,577
Total projected future cash outflows               $             32,934

                    Projected Future Cash Outflows
(in thousands)
2022                                               $                  -
2023                                                              7,837
2024                                                                  -
2025                                                             25,097
Thereafter                                         $                  -


For further discussion, see "Note 4, Mergers and Acquisitions," "Note 8,
Leases," "Note 9, Debt," "Note 14, Employee Benefit Plans, Prepaid and Long-Term
Incentives," and "Note 17, Commitments and Contingencies" of the notes to our
unaudited consolidated financial statements.

                   Critical Accounting Policies and Estimates

The methods, assumptions, and estimates that we use in applying the accounting
policies may require us to apply judgments regarding matters that are inherently
uncertain. We consider an accounting policy to be a critical estimate if: (i)
the Company must make assumptions that were uncertain when the judgment was
made, and (ii) changes in the estimate assumptions, or selection of a different
estimate methodology, could have a significant impact on our financial position
and the results that we will report in the consolidated financial statements.
While we believe that the estimates, assumptions, and judgments are reasonable,
they are based on information available when the estimate was made. The
accounting policies that we believe reflect our more significant estimates,
judgments, and assumptions that are most critical to understanding and
evaluating our reported financial results are: revenue recognition, fair value,
and goodwill and intangibles.

Our critical accounting policies are described under the heading "Management's
Discussion and Analysis of Financial Condition and Results of
Operations-Critical Accounting Policies" in the Annual Report on Form 10-K for
the year ended December 31, 2021 filed with the SEC on March 16, 2022.
Additionally, the changes, if any, to our critical accounting policies and
estimates disclosed in the Annual Report on Form 10-K for the year ended
December 31, 2021 are included in "Note 2, Significant Accounting Policies," to
our unaudited consolidated financial statements.

                        Recent Accounting Pronouncements

For a description of any recently adopted accounting pronouncements and recently
issued accounting standards not yet adopted, see "Note 2, Significant Accounting
Policies" in the notes to our unaudited consolidated financial statements.

© Edgar Online, source Glimpses